1 Strategies for Business Excellence Competency-based HR Practices Strategies for Business Excellence Competency-based HR Practices Hema Ravichandar Senior Vice President - HRD

2 Certain statements in this release concerning our future growth prospects are forward-looking statements which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward- looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, This filing is available at Infosys may, from time to time, make additional written and oral forward looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company Safe Harbour

3 Strategic HR  ‘ Having the right HR structures and practices in place helps people to make the right choices to support your strategy’ Michel Porter  ‘ An integrated HR approach is essential, linking company strategy, pay systems and employee behaviour’ Ed Lawler  ‘ Put all the business strategies on one wall and HR programmes on the other wall and hope to hell they line up’ Senior VP HR, Amoco Oil

4 Alignment of All HR Practices Integrated HR Management to Meet Organizational Objectives Achieved by Having Competency Based Practices The HR Imperative

5 Competencie s Selection Training & Development Training & Development Performance management Performance management Reward Integrated Approach to Competency based People Practices in Infosys

6 Role Family Hierarchy: Project Management

7 Embracing the Role-based Structure  Training  Recruitment  Performance & Potential Appraisal  Broad banding & Organizational Progression* Role- based Structure Role- based Structure  Competencies * Effective July 1, 2002

8 Job/grade Mismatch Unreal Expectations Based on Tenure and not Performance GRADE TENURE PROMOTION OLD The JE Evolution The Job Evaluation Evolution NOW Performance in Current Job Competency for Next Role NEXT JOB Org. Requirement for Job from Promotion Model JOB Growth Based on Ability Connected With Org. Growth

9 Integrated Performance Management A : 10% Way above expectations B+ & B: 80%Meets or exceeds expectations B- & C : 10%Below expectations, needs Improvement Yes ILITE ILITE Trn g Records Signed off Training Plan No Banding No Banding in Performagic at the PU/Department Level Top 10% Bottom 10% Others Reward High Potentials Talent Council Reward High Potentials Talent Council Communication thru the system Could move to Performance Improvement Plan Communication thru the system Could move to Performance Improvement Plan Compensation Benefit System Band 1 (High) -10%, Band 2 (Medium) - 80%, Band 3 (Low) - 10%. Band 1 (High) -10%, Band 2 (Medium) - 80%, Band 3 (Low) - 10%. 1. Individual Compensation Structuring 2. Promotion Decision Performagic Do an appraisal and fix the ratings (based on suggested %) Do an appraisal and fix the ratings (based on suggested %) Set Objectives based on unit objectives Review the objectives as an ongoing process Potential Evaluation for all (for PA and above) considered for role change/ promotion Integrating Competency Building to Create a Culture of HPOE Integrating Competency Building to Create a Culture of HPOE

10 Relationship between Compensation and Competence Competence of Staff Fix Pay Develop Potential Review the cost/benefit Line of best fit Compensation Band

11 Specific Initiatives to Strengthen People Practices under PCMM  Base-lining of Competencies to Drive Improvement Programs  Tracking of Career Aspirations  Goal Flow Down & Objective Setting of All Employees  Formal Mentoring Program  Metrics Driven HR Operation  People Practices Innovation a Way of Life Infosys Technologies Has Been Assessed at Level 5 on the PCMM Model by KPMG, Becoming the First Company in the World to Be Assessed at the Optimizing Level on the Updated Version 2.0 of the Model.

12 Finally…Integrating HR Strategy with Business Strategy VISION MISSION PERFORMANCE GOALS VALUES ACTIONS BEHAVIOURS OBJECTIVES ATTITUDES

13 Awards & Accolades  Recent Awards Won  Data Quest-idc INDIA SURVEY: Indian It's Best Employers, September 2002: Second Year Running  Business Today- Hewitt Best Employers in India, Jan 2002: Second Year Running  People Capability Maturity Model, Level 5 Aug 2002  Infosys Assessed at Level 5 on the PCMM Model by KPMG, Becoming the First Company in the World to Be Assessed at the Optimising Level on the Updated Version 2.0 of the Model

14 Thank You