GE’s Talent Machine : The Making of a CEO
Founded in 1878 by Thomas Edison, General Electric is nowadays a leading business in electrical generation, distribution and use in America and in the world. The company has been experimenting successful business models since its creation, and its human resources policy has been considered for a century one of the most sophisticated. It consists in a strong focus on human potential through executive development to the top ranks of the firm: this performance based meritocracy has made GE a “CEO factory” for the company and for all corporate America. In 2001, Jeff Immelt, the company’s new leader was faced with the problem of how to keep this talent machine humming.
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In the last half of the 20th century, four CEOS made GE’s HR management one of the most successful in the world. Confronted to a strong diversification (due to World War II), Ralph J. Cordiner (1950-1963) implemented a thorough decentralization of the business decisions, created the first corporate management university and heightened GE’s dialogue with its executives (self-evaluation, performance evaluation, career forecasts, succession plans…). His successor, Fred J. Borch (1963-1972) intensively diversified GE and accompanied the operation with the creation of the Executive Manpower Staff to centralize the high potentials of the company. Reginald H. Jones (1972-1981) first reduced the role of HR in strategic planning but ended up aggregating business groups according to the sector, thus facilitating again the succession plans. John F. Welch, Jr. (1981-2001) restructured GE and based the HR policy on the company’s performance through executive rankings and stock options. He heav...
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... cruelty of GE’s HR policy is out-of-date.
The Human Relations movement (circa 1929-1951) proved the importance of job-oriented interpersonal skills for compatible relationships between the employees, those in management positions and the customer, and applying mechanical evaluation systems to a global human network may be, in a way, fair (because it fills the gaps between divisions with different working methods), but it is not attractive anymore. GE would be able to become one of the best working places in the world again if it displayed some incentives to creativity and personal development (outside of the company). It is not rewarding anymore for a high potential executive to work at GE, an ageing, highly polluting firm which focuses solely on performance: it is the company itself that has to rethink its image and its commitment to the happiness of its workers.
The optimal scenario of the AHA would be to have a differentiated workforce that would consist of identifying "A" players and "A" positions throughout the organization where wealth or value is created to contribute to the bottom line of generating the billion-dollar goal by 2010 and placing those players in all positions throughout the organization. However, the reality is that the best action for the AHA due to budgetary and time constraints is to make strategic investments in the workforce that will have high impact and drive desired results by putting the right people in the right places and not the right people everywhere. The AHA did this by creating a new talent framework driven by eight operational goals to help build the foundation for how they will identify their "A" players and positions for strategic investment. The objecti...
In order to become more technology and marketing driven, one of Immelt’s goal was to encourage employees to be more risk taking. Grant (1996) refers routine as interface pattern between individuals to build specific knowledge and transfer it to the organization. GE changed its previous routines and slowed down the job rotation. GE recruited external marketing leaders that demanded more employment budget. Multi-disciplinary divisions were created as GE aimed to be more customer-oriented, resulting in increase of training budget.
GE discovered a humongous gap within the management structure and established a plan to fill the break. The three levels of management implemented with GE is to ensure proper the training and information flow between corp...
The aim of this report is to evaluate current Human Resource Practices within Steel Co and identify weaknesses that the current model possesses. Performance and Reward management tools available will be evaluated in order to make recommendations on how the Management tools could compliment the system that Steel Co currently employs.
In the CEO and Leadership role fixed mindset people want to be the one on top, so that when they compare themselves to the others they can feel above the rest. They don’t worry about having a great team as long as they are viewed as great. The fixed mindset CEO doesn’t put much value into mentoring or employee development, where the growth mindset on the other hand has a deep concern with personnel development and motivating and mentoring their team of employees. Throughout this chapter many large nationally known corporations are mentioned and those corporations with fixed mindset
Noe, Raymond A., et al. Human Resource Management: Gaining a Competitive Advantage. 7th ed. New York: McGraw-Hill/Irwin, 2010. Print.
Whether an organization consists of five or 25,000 employees, human resources management is vital to the success of the organization. HR is important to all managers because it provides managers with the resources – the employees – necessary to produce the work for the managers and the organization. Beyond this role, HR is capable of becoming a strong strategic partner when it comes to “establishing the overall direction and objectives of key areas of human resource management in order to ensure that they not only are consistent with but also support the achievement of business goals.” (Massey, 1994, p. 27)
A wide-ranging Human Resource Management Strategy plays a fundamental role in the attainment of an organisation 's overall strategic objective and perceptibly illustrates that the human resources function fully understand and support the route along which an organisation is moving. A comprehensive HRM Strategy will also sustain other specific strategic objectives undertaken by the marketing, financial, operational and technology departments.
Changing Roles. Traditionally, HR has been an administrative position-processing paperwork, benefits, hiring and firing, and compensation. However, recently HRM has moved from a traditional to a strategic role, the emphasis is on catering to the needs of consumers and workers. Before, HR was seen as the enemy and employees believed that HR’s main purpose was to protect management. Now, the position requires HRM to be more people oriented and protect their human capitol, the staff. In addition, human resource management has to be business savvy and think of themselves as strategic partners in the 21st century.
Ulrich, D., Younger, J., and Brockbank, W. 2008. “The twenty-first century HR organization.” Human Resource Management, 47, pp.829-850.
In this paper we have chosen to explore Procter and Gamble (P&G), a multinational corporation which has lead the way in creating one of the best human resource management systems to date. By using P&G, we are seeking to provide an example of how current multinational companies make decisions to manage their human resources (HR) activities, in search of effective management of their HR costs and in search of professional HR management.
Cultivating a taste for failure and chaos Schmidt encourages it: “Please fail very quickly—so that you can try again.. he had praised an executive who made a several-million-dollar blunder: “‘I’m so glad you made this mistake. Because I want to run a company where we are moving too quickly and doing too much, not being too cautious and doing too little. If we don’t have any of these mistakes, we’re just not taking enough risk.’”
The third stage in HRM development which began in the late 1970?s and early 1980?s was the realisation that effective HRM could give an organisation competitive advantage. Within this stage HRM is viewed as important for both strategy formulation and implementation. For example 3M?s noted scientists enable the company to pursue a differentiation strategy based on innovative products. At the competitive stage, then, human resources are considered explicitly in conjunction with
“People always overestimate how complex business is. This isn’t rocket science. We’ve chosen one of the world’s most simple professions.” In Jack Welch’s words, business is simple. A leader needs to supply his employees with the information, the resources, the vision, and the atmosphere to succeed and reward them when they do. Welch does not concern himself with the details of GE’s many business units; he only needs to ma...
4) Tokesky, George C; Kornides, Joanne : ‘Strategic HR Management is vital’( Personal journal, December 1994 v 73 n 12 p 115.