HRM Strategy in General Electric Company - Case Study Example

HRM STRATEGY IN GENERAL ELECTRIC COMPANY TABLE OF CONTENT Executive Summary Error: Reference source not found Company profile Error: Reference source not found Establsihment of General Electric Error: Reference source not found Globalization strategy Error: Reference source not found Entry into India 6 Pestel Analysis 7 General Electric Corporation overview 8 Human resource Function 9 Recruitment and selection 10 The seven-point Roger plan 11 Internal Recruitment 11 External Recruitment 13 Training and development 14 ASK Model 16 Performance management 17 Total Reward Model 18 Reward Systems 19 Performance management and Appraisal 20 Employee involvement 20 Engagement Drive Diagram 21 Employee involvement and relations 23 Conclusion 24 Recommendation 24 References 26 HRM Strategy in General Electric Company 1. Executive Summary The fundamental principle in the operations of firms is the establishment of credible human resource management criteria. Human resource management entails acquiring human labor and developing it towards meeting the needs of a firm or business. Hiring the right employees in terms of skills and expertise is the most crucial thing in the human resource management task. Hiring and training of employees ensures that a company has a guarantee of a smooth flow of management and production operations. This report is based on the globalization strategy and expansion of operations in the Electrical industry. Additionally, the report evaluates the way human resource management practices are conducted in the industry. It goes further to assess the role played by the employees in adding value to the electrical industries. The report makes subtle remarks based on the information gathered regarding the state of the electrical industry. The larger part of this report is dedicated to the evaluation of the basic human resource management elements including recruitment, staffing, skill development, and reward systems. The report also investigates the impacts of the applied reward system in the electrical industry. It also evaluates the nature of market and competition in the vast electrical industry. The report notes that General Electric Company has undergone tremendous transformation to meet the current global demands. The company has revolutionized to adapt to the requirements of the different countries it has already opened up operational sites. The human resource strategy employed by General Electric is streamlined to align with the company’s mission, vision, and objectives. My topic of discussion for this report is, therefore, the General Electric Company. The report makes particular reference to the General Electric’s performance in India as its satellite operational location in Asia. I dedicate my report into evaluating and showing the models used in facilitating human resource management activities for General Electric in India. 2. Company Profile Establishment of General Electric General Electric is an American based multinational company with its headquarters in Fairfield. The company was founded in the year 1892 in New York by Thomas Edison and Charles Coffin. General Electric has ventured in infrastructure and financial services company and operates globally especially in America, Europe, and Asia. Eclectic products from the company include car and aircraft engines, oil production apparatus, medical equipment, and household appliances. The company’s services fall under different classes including aviation, healthcare, transport, lighting, and power and oil. General Electric keeps on revising its operational strategies to keep on with the competition (Ocasio, 2008). Globalization has been a vital boost to General Electric since it has been able to find markets across the world. The company has also been able to generate huge revenues over the years that enables it expand its services. Globalization strategy General Electric has made tremendous steps in venturing into global markets for electrical goods and services. Market rivalry from other electrical companies has forced General Electric to go outside America in search for markets. The biggest external market capture for General Electric has been in Europe and the Western Asia countries. Currently, General Electric operates in 175 countries worldwide. The company has a broad reach for the large number of customers in various parts of the world. With the large number of operational sites, General Electric has been able to capture a wide market for its goods and services. General Electric shifted its operations during this period to utilize the loopholes in the weakness in Europe’s economy. General Electric invested 18.5 billion dollars in setting up operational sites in Europe (Clement, 2002). These periods also enabled General Electric study and strategize on acquiring smaller companies in Europe. The company intended to invest directly in opening up new sites as well as acquire 50 companies in Europe. GE logo and symbol Major expansions and establishment of markets for General Electric were initiated in Western Europe. Billions of dollars were spent in the globalization activities in Western Europe. One of the notable globalization deal conducted by General Electric was with Electrolux Company in Sweden. General Electric had offered 3.3 Billion dollars for the acquisition of production rights for Electrolux Company. General Electric also moved its Healthcare operations to London in 2004. The shift to London was aimed at getting closer to the market for the healthcare services. It also enabled General Electric achieve more in its globalization strategies since London acted as a gateway to Britain. General Electric also ventured into Italy in 2006 by moving its Oil and Gas headquarters to the region (Abetti, 2006). The move was aimed at tapping the potential oil and gas market in Italy and its neighbors. In 2008, General Electric made additional moves by shifting its money headquarters to London. This step enabled General Electric have a better touch in managing its finances in Europe. 3. General Electric’s entry into India General Electric one of the leading companies in the manufacture and supply of electric appliances in India. The venture into India was motivated by the large population and demand for electrical goods and services. The company has over 13000 employees in India thereby having an impact on the country’s economy. General Electric majors in three sectors including transport, healthcare, and energy in the Indian market (Henderson & Evans, 2002). In a bid to meet the growing needs of the Indian customers, General electric has partnered with other Indian electrical companies. General electric has partnered with energy and transport companies including Wipro, SBI, and Triveni. GE identity logo in Mumbai, India GE Headquarters 3.2 PESTEL ANALYSIS Political General Electric is committed to observing and maintaining its operations within the legal space provided by the Indian authorities. The company wishes to meet the laid down regulations in its production and marketing processes. India has strict environmental laws that owners of industries and businesspeople are required to follow. General Electric remains committed to keeping high safety standards and care for the environment as required by the Indian laws. Economic General Electric in India is prone to competition for market due to rivalry from other companies. Price shifts in the market for electrical goods are also a concern to the management team for the company. The primary economic concern is the antagonism in the market capture that arises from the locally established electrical companies. Abnormal market trends in India affects General Electric’s strength by cutting down its revenues. Social-cultural General Electric in India is involved in the production of products that have a direct impact on people’s social life. The company reassures its dedication to the maintenance and promotion of a coherent social structure through its products and services. The company also wishes to add value to people’s lives particularly to the communities living close its premises. Technological Application of modern technology has been a vital pillar in the success of General Electric in its production and marketing activities. General Electric has been able to adopt extensive technology that makes its running efficient and profitable. Legal General Electrci Company observes all legal aspects in its operations. The management team responds and meets the legal demands including tax payment, employment laws, and pricing. Environment The factor refers to the ecological surroundings of a business in terms of economic or social in nature. The company operates in regions with suitable environmental factors like, favorable temperatures, access to water, and areas free from natural calamities. The company has also been able to grow profitably due to accessibility of social amenities like, rail, and road transport facilitated by good ground conditions. General Electric corporation overview Parent Company General Electric Corporation Category Conglomerate Sector Infrastructure and energy Tagline/ Slogan "We bring good things to life." USP Headed by an efficient and instrumental management team STP Segment Mid-Market, Luxury Target Group Real estate, infrastructure developers, and energy firms. Positioning Construction and lighting for a life of comfort SWOT Analysis Strength 1. An Excellent management team that understands the market and economic trends. 2. Technical innovations to improve customer experiences and Constant upgrade of business processes 3. Good employee retention due to use of proper recruitment and training methods 4. Huge revenues that enable the company expand its operations 5. Long period of operation translating into market experience 6. Good reputation in the market that has created brand loyalty. 7. Good strategic location and vast population that offer outlet for products and services Weakness 1. Scarcity of market costly goods due to the low-income status of the customers 2. Unpredictable economic policy changes and government regulations. 3. Change in consumer taste and preference Opportunity 1. Increasing demand arising from the growth of population 2. Customer loyalty and like for particular products 3. Ineligible demand shifts due to limited substitutes in the market 4. Increased growth of the real estate and infrastructure in India that offers a good outlet for the goods and services. Threats 1. Unpredictable behaviors from competitions especially on mode of production, service delivery and advertisement. 2. Stiff competition in terms of sale price from rival companies in India 3. Availability of many brands and substitutes that pose a threat to market and production influence 4. Unpredictable economic shifts that affect market stability. Competition Competitors 1 Hitachi, Ltd., 2 .Mitsubishi Heavy Industries, Ltd.¸ 3. Siemens AG, 4. The 3M Company, 4 Human Resource Function Human resource management plays a vital role in the success of a company. Recruitment and training facilitate the availability of labor that is vital to the operation of a business. The managers are obligated to oversee a successful hiring and training of the employees in their respective departments. Industries rely heavily on skilled labor to produce quality goods and services. Product and service quality depends on the skills employed in the operations of a company. Highly trained workers efficiently and deliver by producing quality goods and services (Borrus & Ernst, 2003). Human resource management is, therefore, a vital pillar in the success of a business. General Electric Company has been at the forefront of the implementation of a sound human resource management plan. The company has a large number of employees and this demands a proper management of the massive labor force. General Electric Company hires employees depending on skills and experience. Section enables the human resource manager match the right employees with their area of expertise (Clement, 2002). In a bid to make the employee selection procedure flexible and efficient, General Electric in India makes use of both internal and external employee recruitment methods. 4.1 Employee recruitment and selection Polycentric approach A polycentric approach is a strategy through which every single office gets treated as a unique entity. The approach dictates that employees and managers should be hired locally and maintained in their respective offices and locations. The major benefit of this approach is that it minimizes commination challenges that may arise in a business. It also reduces the problems associated with foreign workers trying to adapt to the new country or region of work. The best method of hiring high level managers is through quality employees’ selection guided by the individual’s academic qualifications. High level managers should be chosen in regard to their experience and level of their skills. The human resource team should make adequate study and analysis of the managers’ skills in the relevant fields. Employee recruitment and selection is a vital part of the human resource management process. As pointed out in Roger seven-point plan, employ selection should be guided by the needs of the business. The promotions from a temporary to a permanent job entail various stages of assessment and accreditation. India has a large population and this creates a large pool of labor that benefits General Electric in its operations (Henderson & Evans, 2002). Contract employees are also transformed into permanent ones after a series of assessments by the human resource manager. General Electric employs various strategies in the recruitment and selection of its employees. A primary driver towards meeting the goals of a company is the availability of skilled labor (Abetti, 2006). Human resource managers must understand the labor needs of their companies and facilitate the hiring of an adequate number of employees. The Seven-Point Plan (Rodger) 1. Physical make-up health, physique, appearance, bearing & speech 2. Attainments education, qualifications, experience 3. General intelligence fundamental intellectual capacity 4. Special aptitudes mechanical, manual dexterity, Computer literacy. 5. Interests intellectual, practical – constructional, physically active, social, artistic. 6. Disposition acceptability, influence over others, steadiness, dependability, self-reliance 7. Circumstances domestic circumstances, occupations of family 4.1.2 Internal Recruitment Method Internal recruitment is the process of promoting employees to fill upcoming positions in a company. General Electric utilizes this method in its worldwide sites to ensure the availability of labor for all tasks in the company. General Electric in India has utilized this recruitment strategy to fill up certain positions. The method enables the company cope with the challenge of shortage of skilled labor. The need to initiate competitiveness and retaining top performers makes General Electric use this method of recruitment in India (Schnebel, 2003). It also enables the company identify the most efficient workers and allocate them to more demanding tasks. The method is vital in recalling past talents into the company thereby igniting new life in General Electric. Internal recruitment also entails the transformation of temporary employees into permanent ones. The first method of announcements for positions is on the notice boards dedicated to employees in the company. General Electric has established areas that are erected with notice boards dedicated to employees. Notices meant for employees are pinned on these boards. The second form of communication is done through the internet in the General Electric’s official website. The website has different slabs that cater for the managers and department head, employees, and the customers (Abetti, 2006). Notices of job positions are posted on the employee slabs won the company’s website. Advantages of the Internal Recruitment method There are numerous benefits associated with the use of internal recruitment method by General Electric. The method has been in use in General Electric due to its benefits in timely, fats and less demanding in terms of resources. The benefits associated with internal recruitment include; Internal recruitment method is quicker compared to external recruitment. The method is cheap and a credible way of identifying and raising skills in the company. The method consumes less time and also involves few personnel in facilitating the process. The method does not involve extensive interviews thereby making it fast and transparent. It initiates competition among employees as they strive to scoop the highest positions available in the company. External Recruitment External recruitment involves hiring new employees outside the company and this is aimed at inducing new talents into the firm. The employees may have either worked in other companies or graduates from colleges. General Electric employees the external recruitment process in India as a way of getting new skills into its operations. New employees have a better output as they strive to showcase their talents in the new field. External recruitment is, therefore, a boost to General Electric’s strategies of boosting its human resource management activities (Haikonen & Savolainen, 2004). Application for jobs in General Electric happens through various channels that are offered by the company. The company advertises vacant positions mainly through its website and social network. General Electric majors in recruiting both experienced and new people on the job as a way of diversifying skills. General Electric also offers less competitive chances for bright students in campuses. Students who show excellent skills and understanding of electrical studies are given an opportunity to work in the company. (Ocasio, 2008). The company, therefore, faces few challenges in finding new employees for vacant positions. Benefits of external recruitment to General Electric It helps General Electric increase its brand externally. It brings in new talents thereby adding value to the company It induces positive competition among the employees It creates room for a detailed and wise selection of the required skills thereby increasing productivity. 4.2 Training and Development Training and development is the process of retaining and adding value to the employees’’ talents and skills. The human resource managers are required to identify the abilities of each employee in terms of output and efficiency. Training is a significant part of human resource management as it improves the labor force of a company. Training and development are actions aimed at increasing productivity by creating an efficient labor force. It also allows a company to keep track of the employees’ output thereby minimizing inefficiency. Training enables organizations improve their performance thus increasing its competitive advantage. Electrical industry also applies the training and development plan in improving the skills of their workers (Borrus & Ernst, 2003). The human resource manager offers training to its employees in its human resource management operations. Training of employees has been a significant boost to General Electric’s productivity. It improves the performance of the employees enabling he company maintain its lead in the production of quality electrical goods. The company’s global touch can be felt in its high-quality electrical products and services especially in India. General Electric in India has always strived to offer satisfactory services to its customers within and outside India (Eckes, 2002). Quality goods and services produced by the company can be associated with its commitment to the training and development affairs. Additionally, the company has been able to utilize the productivity of its employees to create competitiveness. Training takes place from different angles after being initiated by the human resource manager. Firstly, training can be organized and molded to take the shape of a class event. In such situations, the managers organize and provide trainers who direct the employees on productivity improvement. Part of the working hours is dedicated to training and learning within the company’s premises. The workers take shifts to allow the company’s operations to run smoothly while the training takes place. The other training model is where the experienced employees are encouraged to guide and advise the new staff. General Electric is a diverse company that fetches employees of varied expertise (Henderson & Evans, 2002). Experienced employees particularly those who have worked with the company for long possess adequate skills in their respective departments. The two models of training go far in developing talents and increasing efficiency in General Electric Company. Training and development has, therefore, been a significant supporter to the company’s goal of having a productive labor force. 4.2.1 ASK Model how Joint venture of GE use ASK to develop their employees ASK Model was developed as a guide to the human resource management practices particularly in the training and development. The model gives insights of the best approach the human resource managers should take in facilitating the training of the employees. Training and development of workers entails adding value to their skills for a better performance. It guides the employees in adopting and imitating the skills passed on to them in the training period (Borrus & Ernst, 2003). The model lays a good foundation in nourishing work ethics among the employees. It is a crucial work plan in the training and development of the employees in the human and resource management practices. General Electric in India also stands to benefit from the ASK Model in its human resource management activities. The managers make use of the model in laying out training strategies for their employees. The model has enabled General Electric stand out in possessing the most highly trained employees in the electrical industry. Qualified employees are a benefit to the company since they impact efficiency thus creating a competitive advantage for the company (Clement, 2002). The model has enabled General Electric achieve great heights in the human resource management operations. 4.3 Performance management Performance management is a process dedicated to identifying and evaluating the abilities of individual employees in a company. Reward systems are models used to appreciate those employees who show efficiency in their work. Reward systems vary from one firm to the other depending on the accomplishments made by individual employees. The primary goal of rewarding employees is to initiate competitiveness and increase productivity. Performance is positive only when the output of the employees exceeds the time and capital investment made by the company (Clement, 2002). General Electric in India has a properly laid out performance management and reward system. The model enables the company keep track of the performance of its employees spread out in its numerous sites in the country. The employees are driven towards giving out their best efforts realizing that their performance is being tracked. It is an efficient way of initiating productivity among the workers. The performance management system in General Electric has been a credible way of improving productivity among its employees (Schnebel, 2003). Performance management systems are vital in identifying areas and departments that perform poorly in a company. General Electric in India utilizes these systems to determine the performance of individual employees. The performance analysis done for each department and employee enables the company plan on ways to raise their standards. It is, therefore, a credible way of balancing input and output thereby reducing wastage of resources. Reward systems are established to appreciate the high-performing employees. The workers strive to be recognized for their excellent performance and this brings productivity in the company (Ocasio, 2008). Additionally, the reward systems are also significant paths towards measuring the performance of an individual employee in the company. 4.3.1 Total Reward Model The total reward model is s strategy laid down by human resource managers used to guide them in compensating their employees. The model acknowledges that compensations can be in terms of; bonuses, promotions, salary increment, and incentive pay. The primary goal of compensating employees is to motivate them and encourage positive competition within a company. It fosters good relationships between the employees and the managers or department heads. Total reward model also assists in employee retention (Haikonen & Savolainen, 2004). Motivating employees makes them feel embraced and part of the success of the business. Various forms of rewards for the employees in General Electric Company include; Salary rise- As a form of motivation, high-performing employees receive salary increment based on their achievements. Promotion- The human resource manager recognizes and promotes the high-performing employees. Promotion is done in regard to the performance of the employees. Promotion has been vital way of motivating the employees and initiating internal positive competition among the workers. Bonuses-Bonuses given to the employees will vary depending on the positions held and the achievements made. The human resource managers give bonuses in terms of gifts and monetary prizes. General Electric in India embraces the total reward model in developing a good relationship with its employees. The model has been used to motivate the company’s employees enabling it make huge steps in efficiency and quality production. It is an unbeatable incentive that instills improvement in employee performance. General Electric has also been able to retain its employees since they feel motivated and part of the enviable company. Total reward model has enabled General Electric make tremendous gains by initiating a good relationship with its employees (Schnebel, 2003). 4.3.2 Reward Systems The basic intention of establishing reward systems is to stimulate efficiency within a company. Reward systems are an indirect ways of modeling the employees’ attitude in their work by focusing their efforts towards excellence. Companies develop their unique reward systems depending on the tasks being performed and the number of employees (Abetti, 2006). The reward systems used by General Electric in India are unique helpful to the company’s goal of being the best in the industry. The reward systems of General Electric are aimed at improving production of quality goods and services. The company is committed to appreciating its outstanding employees through rewards and job promotion (Haikonen & Savolainen, 2004). Reward systems have enabled General Electric, India to maintain its lead in the provision of quality electrical goods and services. The company has been able to establish an unbeatable pace in the electrical industry in India. 4.4 Performance management and appraisal Performance management and appraisal entails evaluating the productivity of employees in their respective tasks. It also refers to the method of identifying the performance of an employee and coming up with a reward for their good work. Performance management and appraisal provides a framework through which employees can be rewarded. Human resource managers are obligated to come up with implementable performance appraisal work plans. Businesses that develop a good performance management and appraisal strategies have a better reap from the efficiency of their employees (Eckes, 2002). Performance management and appraisal has been in use in General Electric in India as a part of human resource management practices. The company has a sound performance management plan for its employees. Appraisal strategies employed by the company has had very positive results in the efficient performance of its employees. General Electric evaluates and rewards its employees on the output basis. The standard appraisal methods used by the company include salary increment, job promotion, bonuses, and more leadership roles (Abetti, 2006). Performance appraisal has enabled General Electric improve the productivity of its employees. Improved productivity has brought huge gains in the marketing operations of the company. 4.5 Employee involvement Employee involvement is the process of accommodating the workers in the decision making. It also entails welcoming their views regarding the progress of a company. The management should create room for the employees to express their views and contribute to the decision-making process. Employee involvement can be done directly or indirectly depending on the matter being addressed. Direct involvement is mainly through discussions, meetings, and verbal or written suggestions (Abetti, 2006). Employee involvement creates a sense of belonging to the employees and this motivates them to be part of the success plan. General Electric in India embraces employee involvement in its operations. The company has given the employees freedom to share their views on matters that concern the production and state of work. It gives the employees a chance to participate in the decision-making process for the company (Eckes, 2002). 4.5.1 Engagement Drive Diagram Employee engagement is a vital part of the vast human resource management work. It is also a way of involving the employees in the every single unit of development in the business. The feedback can be of broad issues pertaining their performance and areas that require improvement (Ocasio, 2008). An efficient and transformative model supports employee engagement and development. Such kind of involvement and constant feedback motivates the employees and improves their output. Employee involvement can also be done through their joint groups and trade unions. Such platforms enable the employees have a stronger voice in the financial operations of industries. General Electric in India uses the employee engagement insights to get in touch with its employees on regular basis. The company gives the employees feedback on their performance and changes that occur in the management. In most cases, employees will air their views on matters that affect their productivity. For example, workers complain of poor working conditions and poor pay (Henderson & Evans, 2002). Such complaints are vital build tools that human resource managers can use in rectifying issues in a firm. 4.5.2 Employee involvement and relations Employee involvement is the process of accommodating the workers in the decision-making. It also entails welcoming their views regarding the progress of a company. The management should create room for the employees to express their views and contribute in the decision making process. Employee involvement can be done directly or indirectly depending on the matter being addressed. Direct involvement is mainly through discussions, meetings, and verbal or written suggestions. Giving a chance to the employees to air their views is a suitable way of learning existing problems in an organization (Borrus & Ernst, 2003). Employee involvement can also be done through their joint groups and trade unions. Such platforms enable the employees have a stronger voice in the financial operations of industries. In most access, employees will air their views on matter that affect their productivity. For example, workers complain of poor working conditions and poor pay. Such complaints are vital build tools that human resource managers can use in rectifying issues in a firm. General Electric in India embraces employee involvement in its operations (Clement, 2002). It gives the employees a chance to participate in the decision-making process for the company. 5. Conclusion In conclusion, this report confirms that a proper human resource management strategy is a significant force that drives firms towards success. Human resource managers play a vital role in ensuring that companies acquire the right personnel for production activities. Hiring and recruitment are the first and crucial stages that supplement the entire process of human resource management. General Electric has made notable gains in its global venture as it continues to capture wider markets for its goods and services. General Electric’s venture into India has enabled the company have a widely felt presence in the Asian markets for electrical goods and services. The company enjoys a huge a bank of revenues gathered over the years from its operational bases in different countries. Proper handling of the human resource management has enabled General Electric achieve an unbeatable standard in the world of electronic appliances and services. 6. Recommendations To beat the rivalry from other electrical companies, General Electric in India should venture into product and service diversification. Firstly, the company should aim at strengthening its brand and recognition in the vast Asian Market. General Electric should also try establishing electrical training institutes as a way of nurturing and developing its labor force. The notable presence and loyalty of General Electric in India should be used as an outlet into the entire Asian and Middle East markets. Human resource managers need to have a broad study of the techniques being applied by other firms that pose a threat to General Electric. The company’s objectives should be communicated to the employees to remind them of their obligations. The operations in the company should be guided by its mission and vision to avoid losing focus. General Electric should employ more multinational strategies that add value to its human resource management capabilities. References Abetti, P. (2006). Case study: Jack Welchs creative revolutionary transformation of General Electric and the Thermidorean reaction (1981–2004). Creativity and Innovation Management, 15(1), 74-84. Borrus, M., and Ernst, D. (2003). International Production Networks in Asia: Rivalry or Riches. Routledge. Clement, A. (2002). Wave energy in Europe: current status and perspectives. Renewable and Sustainable Energy Reviews, 6(5), 405-431. Eckes, G. (2002). The Six Sigma Revolution: How General Electric and others Turned Process into Profits. John Wiley & Sons. Haikonen, A., and Savolainen, T. (2004). Exploring Six Sigma and CI capability development: preliminary case study findings on management role. Journal of Manufacturing Technology Management, 15(4), 369-378. Henderson, K., & Evans, J. (2000). Successful implementation of six sigma: benchmarking General Electric Company. Benchmarking: an International Journal, 7(4), 260-282. Ocasio, W. (2008). Rise and fall-or transformation: The evolution of strategic planning at the General Electric Company, 1940–2006. Long Range Planning, 41(3), 248-272. Schnebel, E. (2003). 16. Cultural Differences of Values-Driven Management: the Value-Management Programs of the General Electric Company and Siemens AG. Moral Leadership in Action: Building and Sustaining Moral Competence in European Organizations, 222. Read More