More effective management of human resources (HR) increasingly is being seen as positively affecting performance in organizations, both large and small.
A joint venture between General Electric and a Japanese company, GE Fanuc is a manufacturer of factory automation and control products.
Headquartered in Virginia with 1,500 employees, the HR department primarily performed administrative support activities. But when Donald Borwhat, Jr., took over as Senior Vice President of Human Resources, he and his staff began by restructuring and decentralizing the HR entity so that each functional area of the company has an HR manager assigned to it. The HR managers were expected to be key contributors to their areas by becoming knowledgeable about the business issues faced by their business functional units.
Headquartered in Virginia with 1,500 employees, the HR department primarily performed administrative support activities. But when Donald Borwhat, Jr., took over as Senior Vice President of Human Resources, he and his staff began by restructuring and decentralizing the HR entity so that each functional area of the company has an HR manager assigned to it. The HR managers were expected to be key contributors to their areas by becoming knowledgeable about the business issues faced by their business functional units.
Today, HR managers participate in developing business strategies and ensure that human resource dimensions are considered.
For instance, the HR manager for manufacturing has HR responsibilities for 600 employees. In that role she contributes to workflow, production, scheduling, and other manufacturing decisions. It also means that she is more accessible to and has more credibility with manufacturing workers, most of whom are hourly workers. Making the transition in HR management required going from seven to three levels of management, greatly expanding the use of cross functional work teams, and significantly increasing training. To ease employee and managerial lose their jobs. Managers and supervisors affected by the elimination of levels were offered promotions, transfers to other jobs in GE Fanuc, or early retirement buyouts. Additionally, employees were promised profit sharing, which has resulted in up to three weeks additional pay in profit sharing bonuses in some years. The test of the change is in the results. GE Fanuc’s revenue is up almost 18%. Over 40 work teams meet regularly to discuss work goals, track their performance against established measures, and discuss problems and issues. Employee turnover is also extremely low in most areas. Transitions in HR management are also paying off in the Bank of Montreal, based in Montreal, Quebec. Emphasizing human resources has involved 35,000 employees in organizational success. This recognition meant focusing greater attention on the talents of diverse employees working at the bank. Specific efforts were made to expand opportunities for women employees, who composed about three-fourths of the bank’s workers. As a result, several years later about one-fourth of all managers and executives are women. Similar attention also was focused on other diverse groups of employees. So that all employees were given opportunities to grow and learn, the Bank of Montreal’s Institute of Learning was established at a cost exceeding $50 million. The goal of providing five days of training and education to every employee each year has been met for several years. To focus on performance, each department and every employee have performance targets and measures on such factors as customer service, return on equity, and profitability. Yearly, the scores from all measures are computed as indices, and then compiled into one figure to measure overall bank performance. Executives believe that their emphasis on HR activities has contributed significantly to the Bank of Montreal’s achieving period profits for seven years in a row.
For instance, the HR manager for manufacturing has HR responsibilities for 600 employees. In that role she contributes to workflow, production, scheduling, and other manufacturing decisions. It also means that she is more accessible to and has more credibility with manufacturing workers, most of whom are hourly workers. Making the transition in HR management required going from seven to three levels of management, greatly expanding the use of cross functional work teams, and significantly increasing training. To ease employee and managerial lose their jobs. Managers and supervisors affected by the elimination of levels were offered promotions, transfers to other jobs in GE Fanuc, or early retirement buyouts. Additionally, employees were promised profit sharing, which has resulted in up to three weeks additional pay in profit sharing bonuses in some years. The test of the change is in the results. GE Fanuc’s revenue is up almost 18%. Over 40 work teams meet regularly to discuss work goals, track their performance against established measures, and discuss problems and issues. Employee turnover is also extremely low in most areas. Transitions in HR management are also paying off in the Bank of Montreal, based in Montreal, Quebec. Emphasizing human resources has involved 35,000 employees in organizational success. This recognition meant focusing greater attention on the talents of diverse employees working at the bank. Specific efforts were made to expand opportunities for women employees, who composed about three-fourths of the bank’s workers. As a result, several years later about one-fourth of all managers and executives are women. Similar attention also was focused on other diverse groups of employees. So that all employees were given opportunities to grow and learn, the Bank of Montreal’s Institute of Learning was established at a cost exceeding $50 million. The goal of providing five days of training and education to every employee each year has been met for several years. To focus on performance, each department and every employee have performance targets and measures on such factors as customer service, return on equity, and profitability. Yearly, the scores from all measures are computed as indices, and then compiled into one figure to measure overall bank performance. Executives believe that their emphasis on HR activities has contributed significantly to the Bank of Montreal’s achieving period profits for seven years in a row.
In summary, it is evident that the transition of HR management at GE Fanuc and at Bank of Montreal has enhanced organizational competitiveness and success .
As human resources have become viewed as more critical to organizational success, many organizations have realized that it is the people in an organization that can provide a competitive advantage. Throughout the book it will be emphasized that the people as human resources contribute to and affect the competitive success of the organization. Human Resource (HR) management deals with the design of formal systems in an organization to ensure the effective and efficient use of human talent to accomplish organizational goals. In an organization, the management of human resources means that they must be recruited, compensated, trained, and developed.
As human resources have become viewed as more critical to organizational success, many organizations have realized that it is the people in an organization that can provide a competitive advantage. Throughout the book it will be emphasized that the people as human resources contribute to and affect the competitive success of the organization. Human Resource (HR) management deals with the design of formal systems in an organization to ensure the effective and efficient use of human talent to accomplish organizational goals. In an organization, the management of human resources means that they must be recruited, compensated, trained, and developed.
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