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Human Resources Management General Electric Case study report 1. Introduction General Electric (GE) was founded 1878 by Thomas Edison. This American company is nowadays very well-known due to its multinationality, to its conglomeration of corporations and also to its excellent performance on the segments in which operates (infrastructure, capital finance and media). However, over the years this firm has also been outstanding when it comes to Human Resources (HR) practices having previously been referred to as a CEO factory.
This report will be performed with the intent of studying the strategic talent management system of GE and what are the implications that it has on the overall performance of the company. 2. Pivotal Talent Positions in GE After defining its strategic objective and vision, a company should identify the key positions that are crucial to meet those objectives. Also, in this way it is easier to perceive where to allocate the key employees or even where to spend more resources.
This is also important because a significant improvement in the performance of these key talents that occupy the pivotal positions can have a dramatic impact on the results of the company. For GE, because they are a company that operates mainly on the technological/scientific area, these positions are the engineers. They are the ones with the potential of creating an impact on the company’s formation of a sustainable competitive advantage.
However, the differentiation between them and other positions, is not done at a personnel level but rather on a professional level; this because all the other workers are also valuable for the company, therefore they cannot be disregard. The main difference is that engineers are the key for GE to outperform its competitors. Over the life of the company, with its different CEOs, GE had a lot of changes at the level of HR practices but all of them, since the beginning of the company, made the development of management talent a high priority, which was reflected in GE having one of the most sophisticated HRM processes in the world.
The CEO Ralph Cordiner started to introduce a system of objective performance evaluation tied to 28 (and later 29) position levels (PLs) that distinguished employees’ levels and was a beginning to start differentiating positions. In 1963 Fred Bosch created the Executive Manpower Staff (EMS) that focused only on jobs well classified (from PLs 13 to 27) – these key levels were occupied by the 2% of the best employees.
In 1972 Reg Jones, another CEO, introduced an additional practice in GE – the sector – that created positions in which to evaluate candidates who could succeed as CEO and in 1981 Jack Welch created an elite group staffed by ex-consultants in transition into management roles and also found that HR professionals were crucial to integrate the management teams. All these action were taken with the objective of creating an elite group, a special cluster of talent where only the best would get in and be followed closer than the less talented employees.
Having the notion that there existed these peculiar groups, the next step would be to choose among all the employees, the A-performers. 3. GE’s A-performers Once an organization has identified the pivotal talent positions, the key for a strategic talent management system is to develop a pool of talent to occupy the pivotal positions. GE always put an emphasis on education, i. e. it always focused on getting the best graduates from a varied pool of universities in order to develop their talents.
Cordiner built the first corporate university, and the Session C that supported dialogue about career interests and development needs and in addition, the employees had to meet with their superiors to understand what they were doing right, what could be improved (the development plan) and which career opportunities they could pursue. The objective of these C Sessions discussions was to promote the development of high-potential employees, remedying unsatisfactory ratings, and implementing succession plans.
Jack Welch had another approach with the objective of developing the pivotal employees: he leveraged the rewards by giving them only to top performers, which would be a driver for employees to make an effort to be A-performers. He also changed the rules about the Crotonville course, which was now a privileged reward and also signal good future perspectives. Many other practices were implemented to promote communication between subordinates and superiors and to promote the development of employees, in order to lead to a better performance of the orkers. One in particular, was the training rotation assignments; during this practice, employees had the opportunity to acquire and share different types of knowledge, going beyond their scope. This off course brought a huge advantage for GE since it would open the employees to new areas that might motivate them more, therefore helping the company not to waste resources. However, it can be argued that the firm made an error by looking for talent only within, i. e. nly internally given that: organizational effectiveness can be enhanced by career movements across organizational boundaries. Nevertheless, this can also be seen as an advantage: by promoting only top leaders from its own ranks, the company is saving costs in introducing the employee to the company’s culture, customs and habits. 4. Different HR architectures within GE GE recognizes the importance of having different HR policies for different departments and also of distinguishing its employees due to their skills, their competence.
Therefore, the company is aware that there is no such thing as a global HR system, since it depends heavily on the uniqueness of the human capital. However, it is important to have someone who’s job in the company is simple to see the company as a whole picture in order to move employees across jobs, in case that they will be better in another department (therefore saving time and costs by avoiding firing and afterwards hiring again to a different department). Here is where GE fails, since the company is more concerned with tracking down and retaining knowledge-based employment.
Sure it is important to focus on the talent-pool and build rewards and development efforts in order to keep the members satisfied and hence retain them for the future; Nevertheless, a company should never disregard its whole base of employees since a worker, will be willing to perform under less than ideal conditions if he finds himself fully committed to the company and also if he feels identified with the goals that were established. Therefore, even do focusing is good, a company should never forget the whole picture. . Conclusion GE’s success can very much be justified due to its excellent application of HR practices. This is a company that understands the importance of fighting against silo thinking, i. e. how crucial it is for the talent to circulate across the whole company, in order to have an outstanding performance and the ability to develop and grow. Nevertheless, in order to continue the profitable performance, Jeff Immelt should keep in mind that it is not enough to establish good HR practices.
The reason for this is because performance is highly dependent on variables like ability, motivation and opportunity which vary greatly across employees. Hence, the key is to keep workers aware that the company’s business strategy is aligned with the talent management strategy, making it easier on them to identify which personnel characteristics should they develop more in order to perform better in the company and to be able to move towards the position of A-performers. ——————————————- [ 1 ]. www. ge. com/company/index. html [ 2 ]. Information withdrawal from the paper: Strategic Talent Management: A review and research agenda [ 3 ]. Concept withdrawn from the paper: “Strategic talent management: A review and research agenda” [ 4 ]. Idem [ 5 ]. Theoretical concept withdrawal from the paper: The people problem in talent management