Only performers will stay here, says Infosys boss

Company moving focus from productivity of group or project to individual, says Murthy

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Infosys Executive Chairman N R Narayana Murthy has taken a tough stand on non-performers, saying non-performance will not be tolerated.

“Performance is absolutely essential for us. We will provide all the help to people to perform better and, if for any reason they are not able to perform, well, then, we will have to bid good-bye to them,” Murthy said while addressing analysts at the Bank of America Merrill Lynch investor conference held in Mumbai on Wednesday.

Infosys is currently working on a lot of tools and technology to enhance an individual’s productivity, he said. “Earlier, we focused on group or project productivity but over a period we have realised that it is not the way ahead and that we need to focus more on individual productivity to see to it that Infosys has a competitive advantage in the industry.”

In the past few months, the company has witnessed some high-level exits. The attrition of the company has also been much ahead of competition. On the recent high-level exits, Murthy said, “Barring some rare exceptions, let me assure you, nobody who was adding value to the company had to leave. That’s the reality. Unfortunately, these were the people who were deriving very high salaries and not giving results and so there was no growth.” Infosys saw exits of eight high-level officials since Murthy resumed office in June 2013.

Infosys, he said, will identify high performers and encourage them to better their performance and at the same time, also make note of low performers and give them an opportunity to do well. Infosys witnessed sharp increase in employee attrition during the December 2013 quarter, in line with expectations. Attrition on the last 12-month basis was 18.1 per cent during the third quarter, against 15.1 per cent a year ago and 17.3 per cent in the second quarter. The company’s headcount declined by 1,823 in the third quarter to 158,404.

“The company has mounted several programmes to measure individual productivity that will help Infosys enhance margins, have more talent and better our value,” said Murthy.

“Even though the company’s cost optimisation efforts for the past six months have started to yield results, as its margins have moved up by 1.5 percent, there is a lot of fat we need to remove and we will do whatever necessary to ensure that the company performs well,” he said.

Regarding the firm’s strategy going ahead, Murthy said although he did not see anything wrong with Infosys’ existing strategy, there would be a change in the execution of the same. “We haven’t changed the Infosys strategy. There is nothing wrong with it. We will go for consulting business solution, which will yield large projects since our 33 per cent revenue comes from that, but we will enhance our focus on getting large outsourcing projects,” he said.

On being asked about the chief executive officer (CEO) transition process at Infosys, he said: “A new CEO will be in place by the time S D Shibulal is ready to leave, which is March 2015, and I will be available to ensure there is proper transition,” he said. On whether Infosys will lead the industry in next 36 months, Murthy said: “There is a desire to get back to the industry-led growth rates. However, what that growth rate will be, we will let you know as and how things move ahead based on industry structure, market outlook and other things. But we will not be laggards — that much I can tell you.”

“The company has improved on three parameters in recent months, quality of delivery, response time to client and quality of proposals. The company would also be reasonable in pricing, targeting large deals,” Murthy noted.