Human Resource Development: The Case of General Electric
Introduction
This paper is about the Human Resource Development issues faced by General Electric during its transition period. Organizational change has affected the human resources of the company. Training and development has played important roles in preparing and educating the employees about the new strategies and goals of the company. Organizational change in General Electric required flexibility, adaptability and increased responsibility. HRD helped the employees to adjust and perform their current jobs effectively. It has also helped the employees to prepare for future careers and responsibility.
General Electric
GE is a services, technology and manufacturing company operating in more than 100 countries and employs 313,000 people worldwide. Thomas Edison established Edison Electric Light Company in 1878. Edison’s company later formed a merger with Thomson-Houston Electric Company in 1882, giving birth to General Electric Company. GE is among the largest and most diversified industrial corporations in the world ( and , 2002).
Human Resource Development in General Electric
Development of people within the organization is directed at performance improvement in order that the organization can benefit – greater organizational efficiency, more effective competitive practices, and greater profitability. Human resource development refers to the preparation through learning activities of human resources for current jobs (training) and future work assignments (development) as well as individual enhancement (education). The three focus of human resource development are training, development and education ( and 1998).
Human resource development (HRD) means competence building, commitment building and culture building. HRD outcomes can influence an organization’ business goals of higher productivity, cost reduction, more profit better image, and more satisfied customers and stakeholders (, 1999 cited in and 2004). These outcomes require high-level competencies in the employees (technological, managerial, human relations and conceptual), effective utilization of people through well-developed roles, high work commitment, work motivation, and teamwork. According to and (2004) continuous training, empowerment, and teamwork facilitate employee development.
Issues that affected HRD in General Electric
General Electric, like many successful organizations today has undergone a series of restructuring that has led to downsizing people and stripping off the organizational hierarchy. Changing organizational strategies and objectives, I believe have a significant impact on the training and development of employees. Restructuring and downsizing can be challenging both for the organization and its people. In the succeeding discussion, I will try to analyze the impact of restructuring and downsizing in General Electric to its employees and managers. Organizational change does not end with changing strategies and objectives. Most important is the human resources – the competitive advantage of the organization. Training and development is an important consideration in times of restructuring and downsizing as it prepares employees to fulfill new and future roles and responsibilities.
Restructuring
Restructuring the organization has a big impact on Human Resource Development. Employees need to be trained and educated about the new strategies and goals of the company. Performance and other contributions made by employees need to be aligned with the organizational goals. The best way to make the people prepared to fulfill their new roles and responsibilities and to make their efforts contribute to the new strategies and objectives of the company is to train and develop them.
Let us consider General Electric’s experience, when became the CEO of General Electric, he pursued a major organizational change. New goals and objectives have been introduced. The organizational structure has been changed and some layers of the hierarchy have been removed. Job redesign was the order of the day. Managers and employees were asked to perform new and different tasks. This has caused tremendous difficulties and challenges. The managers and employees were not well prepared for the abrupt changes. Many lost their jobs. Middle managers were removed. Managers and employees find themselves doing jobs that they were not trained to do. The initial stage of the organizational change was truly challenging for every one in the organization. It takes money and time to replace or change then mix of human resource skills and attitudes when the organization is undergoing major change. Productivity drops on a per capita basis when people are learning in contrast to when they are experienced. Thus, additional training and supervision, and operational personnel resources are required to produce the same results that could be provided by an experienced workforce. What I am trying to say is restructuring the organization requires employee training and development. Change will not occur unless the employees are properly trained and developed. In this example, we look at how restructuring has impacted the human resources of General Electric. HRD deals with employee training, development and learning. HRD helps employees to fulfill their current roles and prepares them for future assignments and responsibilities.
Like many organizations today, General Electric operates in a fast changing market. Both internal and external environmental factors affect the organization’s performance, goals, culture and success. According to (1991), the most effective way to incorporate human resource factors within corporate strategic planning is to have a member of the human resource planning group and a human resource executive participate as active members of the corporate strategic planning function. General Electric knows that in order to be successful it needs to align its human resource strategic plans with the corporate strategic plans. Human resource management and development should be considered in the organizational planning process.
Downsizing and Delayering
Restructuring and downsizing means that many employees need to be trained to take on expanded responsibilities as organizations have created internal environments of ‘doing more with less’. HRD must be an out growth of the organization’s overall strategy. Today, training must be tailored to fit the organization’s strategy and structure. When strategy changes, training and development have to change and equip employees with the Knowledge, Skills and Abilities necessary to meet new demands.
When took over GE, he started to abolish most of the bureaucratic structure of the company. He stripped out layer after layer of management and making nearly a quarter of GE’s workforce redundant in a matter of a few years. Welch wanted a much leaner and flexible organization which concentrated on its core strengths and markets and could respond quickly to new events. Welch delayering of the organizational hierarchy has caused tension and unrest among the managers and employees. Delayering has negative effects on employee motivation. Because of delayering many employees and managers lost their jobs.
The initial result was chaotic. The employees were suspicious of Welch’s strategies. Motivation is an important factor in human resource development. Because HRD aims to develop, train and educate employees to fulfill their present jobs and be prepared for future assignments, the lack of motivation affects the success of the training programs.
In this example, I try to look at downsizing as an HR issue. Downsizing affects employees. Downsizing and Delayering leads to job redesign and restructuring of job descriptions and job responsibilities. In times of downsizing and delayering, the HRD department plays an important role in making sure that the employees are equipped with the necessary knowledge, skills and abilities through training and development. Organizations of today are constantly changing. Employment is uncertain. Human Resource Development is not just about traditional training and development. It needs to prepare the employees to be flexible and adaptive of the changing environment.
In order to counter the negative effects of delayering, the top management led by the CEO showed the managers and employees that it is dedicated to employee development and career advancement. Several strategies were implemented to ensure that the employees are properly trained and given opportunities for development and career advancement. According to (2003), GE invested heavily on employee training. By 1998 the training center had trained over 15,000 managers. set up an in-house management training center in New York and personally oversaw its development. He put in personal appearance during almost every programme and spoke to the managers involved. By some estimates, GE spends half a billion dollars a year on training, making it one of the largest investors in management in the USA (). The top management shows dedication to training and development. This has countered the employee insecurity that was produced by delayering. The employees are given opportunities to upgrade their skills and knowledge. Let us look at the various strategies that GE employed to ensure human resource development.
GE’s Solutions to Issues and Problems
1. Employee Empowerment and Teamwork
To mitigate or counter the negative effects of organizational restructuring and downsizing, General Electric promoted employee empowerment. According to (2000), at General Electric, every member of the organization has participated in ‘Work Out’ sessions. These sessions are facilitated by a process expert and are intended to teach skills of consensus, negotiation, and decision making among individuals representing different levels and functions (). GE created a culture where employees are empowered to achieve their greatest potential. GE’s performance meritocracy is demanding but the rewards can be just as great. All are geared toward understanding what is important to employees and providing access to tools, resources and information tom help employees reach their potential. The company allows the employees to take personal responsibility and control what they can in the workplace ( 1998). The organization realized from the beginning that delayering and stripping out pf managerial hierarchy would have to be counterbalanced and that a new center of organizational gravity would be required ( 2003). Employee empowerment can be an effective form of development. Employees are given more responsibility over their jobs. Employee empowerment helps employees to become effective decision-makers. By giving them more control, they develop a sense of ownership over their jobs. Employee empowerment also helps employees to improve. One of the benefits of employee empowerment for employees is it allows them to plan for their training and development. Employees identify their training and development needs. These are aligned by the HRM department to the goals and objectives of the organization.
2. Employee Education and Learning
General Electric begun to realize that continuous learning is important in human resources development. Organizational learning is one of the top most priorities in General Electric. Organizations who value learning have the following characteristics:
- Learning is accomplished by organizational systems as a whole, almost as if the organization were a single brain
- Members of the organization are aware of the significance of organizational learning in the achievement of company objectives and goals
- Continuous learning is parallel to work
- There is a focus on creativity and generative learning
- System thinking is fundamental ( 1996, )
3. Career Planning Workbooks and Workshops
Workbooks are prepared to guide their employees individually through systematic self-assessment of values, interests, abilities, goals and personal development plans. General Electric has developed an extensive set of manuals for its career development program, including workbooks to help employees explore life issues that affect career decisions ( 2002).
GE invested considerable time and money training undergraduate and graduate students for its premier entry-level global Leadership Development programs. Many of GE’s top leaders can trace their career beginnings to these programs. Programs such as this help facilitate a common culture. These programs also help nurture core processes and levels of expertise are developed that flood the company. Challenging assignments, mentoring, and regular exposure to senior management help to identify and develop future high potential leaders. GE’s dynamic culture promotes lifelong learning. GE employees are both expected and encouraged to fulfill training that helps them navigate a more competitive market place, learn domain expertise, develop skills and comply with the company’s integrity and citizenship initiatives ( 2006).
Recommendations
General Electric, today is among America’s most admired company. Its training and development strategies during the organizational phase have been successful. However, there are still factors that are beyond the control of the organization. General Electric operates in a fast-changing environment. Human resources is still its key competitive advantage. Training and developing employees to be able to adapt to changes is still important. The changes in the external environment, especially in technology presents both challenges and opportunities. The organization needs to grab the opportunities given by technological innovations. In this section I try to suggest training and development strategies that can be beneficial for the company.
1. E-Learning
The power of e-learning comes from the opportunity to leverage technology and information to alter the basic tenets of learning by eliminating the one-size fits all approach to instruction and customizing content to meet individual needs and learning styles ( 2002).
The benefits of e-learning rely on the dynamic relationship that links learning, people, and organizational performance. High quality e-learning can improve speed to capability by significantly reducing the amount of time it takes to train workers on new products and processes. E-learning can also reduce the costs of workplace training. E-learning can help create unprecedented opportunity, productivity, and prosperity for individuals and organizations ( 2002). E-learning in a technology-enabled learning designed to increase workers’ knowledge and skills so they can be more productive, find and keep high-quality jobs, advance in their careers, and have a positive impact on the success of their organizations, their families and their communities ( 2001).
E-learning can be a powerful training, development and learning tool for large organizations like General Electric that have operations world-wide. In a diverse organization like General Electric people bring with them different values, attitudes, cultures and learning styles. So traditional one size-fits-all training and development programs are not adequate. E-learning can be an effective HRD tool because it takes employee training and development to personal levels. It fits ach employee’s capabilities and skills to his or her makes training and development. In the case of GE we see how the changing environment affects the human resources of organizations today. Restructuring, Downsizing and Delayering are facts of organizational life. As companies try to be flexible and adaptive, the HRD department must also make sure that the employees are flexible and adaptive to the changing business environment as well.
2. Web/Technology-based Training
Technology-based training includes all training forms that use the computer for delivery. One example is web-based training. According to (2003), the term web-based training refers to the delivery of computer-based training over the internet and intranets. Learning via the internet is being considered as a new potential model for training. Web-based training is the best way to reach geographically dispersed employees quickly and at a low costs. Web-based training according to and (2004) can be synchronous or asynchronous. Synchronous training is instantaneous and allows the instructor and learners to interact via the Web in real time context. In contrast, asynchronous training is not instantaneous; the learner logs on to the course to complete the lesson or post, receives and responds to messages at his or her own pace and at the time that is convenient to him or her ().
Conclusion
Our discussion talks about the human resources development issues that an organization under organizational change encounters. Organizational change is not only a strategic management issue. It affects not only the strategies and goals of the organization. More than anything, it affects the people within the organization. Organizational change can be chaotic and problematic, especially to the employees who find themselves trap in an unsecured situation. Training and development should be a main consideration in organizational change. The organization cannot implement its new strategies and objectives if the employees are not prepared, trained and educated. Human resources development plays an important role in the success of organizational change efforts.
References
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