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Secrets of Human Resources April 4, 2007

Posted by Stephanie in Decline and Death, Employees, Organizational Culture.

In Management 101 Human Resources is often overlooked. In GE, HR is not viewed as a support function and certainly not overlooked. After 40 years with GE, Bill Conaty is retiring from head of HR. His work at the company has been exceptional and in some ways untraditional.

Through HR Conaty has helped in developing a performance driven company culture. In a recent article from Business Week (I used a magazine and can’t find the link to the online article), Conaty stresses continuous leadership development and believes “employees must be constantly judged, ranked, and rewarded or punished for their performance.”

In Management 101 teaches the Porter-Lawler Model of Motivation, Performance and Satisfaction, which in part explains intrinsic and extrinsic rewards. At first I was surprised to read how openly Conaty uses a rewards and punishment system. I would think that the employees would want to do well for the company and be proud of their work. Then, again thinking about MGMT 101, I recognized that at some point most people need extrinsic rewards for motivation. Sometimes extrinsic rewards seem unnecessary and it is seen in negative light for someone to need them, but in the end I know that every so often I need something more than just self-motivation.

Last year in the April 17, 2006, Conaty was quoted in another Business Week article saying the primary motivation for the GE staff remains “challenging jobs and a career path for personal growth.”

What motivates you to work hard? Would you want to work in a performance-driven company culture?

In further research I found that in 2004 Conaty was named HR Executive Of The Year. It seems he must be doing something right. Although not much was explained as the criteria for this award, Conaty seems to be appreciated and valued by all levels of employees. This makes sense, as he purposefully does not socialize or become too close with top executives, even the CEO, as he feels this will jeopardize the trust of other relationships with other employees.

Do you think this is a wise move? Should it be a policy for HR workers to distance themselves from executives like the CEO to remain neutral?

The last thing I found particularly significant was Conaty’s reason for executives failing. He says that most often the reason is when they stop learning and growing. As industries, clients, skills and the entire world changes, workers, in particular the leaders need to adapt to change. This continuous learning process is necessary for business to succeed, those who do not acclimate sooner or later will decline and dissolve.

We have talked in class about how detrimental it is for a business not to adapt. Do you think that professors adapt to change? There is a phrase that teachers are students as well. How receptive to change have you found professor to be?


Everyone loves GE April 2, 2007

Posted by Brian Mulligan in Consumers, Decline and Death, Growth.

I remember us talking in class about GE and the numerous business sectors that they’re involved in, so i decided to do a little research about the company. It just intrigued me that the company could still function in some many different industries. I came across this article from CNN Money. It’s named “What makes GE great?” and it explains why GE has been the most admired company for the sixth time in the past decade.

GE has been not a specialist in each sector, but has been the best at creating the best management and strongest organization in the world. Since it’s inception over a 100 years ago, it hasn’t focused on a certain product such as insurance or light bulbs, but fosters strong managerial talent. As time passed the company was at the forefront of corporate policy making, this can been seen with the first corporate R&D lab established and groundbreaking work with labor relations. They battled the creation of labor unions by creating pension plans and profit based bonuses.

They also made the famous “blue books”, which contain detailed guidelines for managers at GE. As the company neared the end of the 20th century they focused on leadership development and strategic planning. It almost makes sense to development strong management when you’re involved in so many different fields of business.

Also, the company is ever-changing and always seems to be one step ahead of its competitors. As we read in class, the addition of the emerging product lines and find what is going to be new hot product has become integral part of the business strategy for GE. Additionally, if something doesn’t work, then GE phases it out immediately and business focus changes with each CEO that comes to company.

“Most people inside GE learn from the past but have a healthy disrespect for history,” says CEO Jeff Immelt. “They have an ability to live in the moment and not be burdened by the past, which is extremely important.”

Trying to stay current learning from their mistakes has made a very dynamic company that is ever-changing. Lastly, GE handles their employees very differently from other companies. They develop them, evaluate them and then act on the results and this has created a very demanding environment. GE give the pink-slip to over 10% of the bottom rung employees each year. You may see this a blunt and heartless, but other companies are jealous of GE’s ability to recognize trouble employees and get rid of them.

I think GE has a very strong coporate structure with perfect management and business ethics. They seem to have it right and do what is necessary to keep this behemoth of a company running smoothly, but it does raise some interesting questions.

Does it make sense to invest money in training and developing of employees and then 10% of your work force? What happens when a CEO pursues a dead end business? Can it potentially destroy the company?