Human Resource Planning Recruiting and Selection
Abstract
This paper discusses the impacts of the organization’s competitive advantage, external and internal environments to the human resource planning, recruiting and selection. This paper analyzes the internal and external factors that create competitive advantages for General Electric, a multinational company operating in more than 100 countries. At the heart of human resource planning, recruiting and selection is enhancing an organization’s competitive readiness and renewal capabilities, motivating factors to a developmental organization. Human resource planning, recruiting, and selection determines the quantity and quality of human resources needed to foster organizational renewal and enhance competitive readiness.
General Electric
GE is a services, technology and manufacturing company operating in more than 100 countries and employs 313,000 people worldwide. The company traces its beginnings to Thomas A. Edison, who established Edison Electric Light Company in 1878. In 1882, a merger of Edison General Electric Company and Thomson-Houston Electric Company created General Electric Company. GE is the only company listed in the Dow Jones Industrial Index today that was also included in the original index in 1896. GE ranks as the 5th largest U. S. company in the Fortune 500 and is ranked as the 8th largest in the world, as of 2000 ().
GE is one of the largest and most diversified industrial corporations in the world. GE has engaged in developing, manufacturing, and marketing a wide variety of products for the generation, transmission, distribution, control, and utilization of electricity since its incorporation in 1892. Over the years, GE has developed or acquired new technologies and services that have broadened considerably the scope of its activities. GE’s products include major appliances; lighting products; industrial automation products; medical diagnostic imaging equipment; motors; electrical distribution and control equipment; locomotives; power generation and delivery products; nuclear power support services and fuel assemblies; commercial and military aircraft jet engines; and engineered materials, such as plastics, silicones, and super-abrasive industrial diamonds.
GE’s services include product services; electrical product supply houses; electrical apparatus installation, engineering, repair and rebuilding services; and computer-related information services. Through its affiliate, the National Broadcasting Company, Inc., GE delivers network television services, operations television stations, and provides cable, Internet and multimedia programming and distribution services. Through another affiliate, General Electric Capital Services, Inc., GE offers broad array of financial and other services including consumer financing, commercial and industrial financing, real estate financing, asset management and leasing, mortgage services, consumer savings and insurance services, specialty insurance and reinsurance, and satellite communications ( 2002).
Competitive Advantage: Internal Environment
Competitive advantage, according to (2002), can be defined as any factor that allows an organization to differentiate its product and service for those of its competitors to increase market share.
Human Resources
The traditional views on competitive advantage have emphasized such barriers to entry as economies of scale, patent protection, access to capital, and regulated competition. Views that are more recent have highlighted a different source of competitive advantage, a firm’s human resources and human capital. New demands facing organizations as a result of heightened competition, globalization and technological advances have put a premium on creativity and innovation, speed and flexibility, as well as efficiency (2004).
General Electric established a learning culture called “learning from your employees.” GE usually encourages its employees to do things in a different way, requiring all employees to attend a “Six Sigma” training course and use the principles and methods to improve the quality of their daily work. Six-Sigma requires everyone to innovate in his or her own way to achieve progress. To monitor the achievements, employees hand in a report very year. GE has a performance evaluation system, which determines rewards and training.
An organization must develop various methods for listening to and getting information form stakeholders – employees, customers, suppliers, rivals, and other industries, relevant national and international organizations, and so on. It needs to adopt various analytical tools for further data analysis and then discover the emerging changes, problems, challenges and opportunities in its internal and external environment. GE’s human resource management department uses an employee survey system annually. An employee survey system is a major way to get information on potential internal problems, employees’ satisfaction, and their suggestions or ideas (2005).
Management Concepts
Work out is a way to get ideas and suggestions from everyone in GE. Jack Welch believes that people who work in the frontline know the job best, and empowerment and delegation should be the major way GE motivates its people. Managers just give direction, provide resources and support, and each employee has full responsibility for his or her job. Work-out started in 1989, and its essence is to involve everyone. This initiative builds up the confidence of employees and encourages them to solve problems in their own ways. It also creates a culture of speed and simplicity. Even now, Work-out is one of the key management tools for GE. Jack Welch says “the distilled essence of competitiveness is the reservoir of talent and creativity and energy that can be found in each of our people. The essence is liberated when we make people believe that what they think and do is important–and then get out of their way while they do it” ( 2005).
Six Sigma
Six Sigma is a management framework that has evolved from a focus on process improvement using statistical tools to a comprehensive framework for managing a business. Six Sigma speaks the language of management. It institutionalizes a rigorous, disciplined, fact-based way to deliver more money to the bottom line through process improvement and process design projects – selected by the top leadership and led by high potentials trained as Black Belts or Master Black Belts in Six Sigma – that aim to create near-perfect processes, products, and services all aligned to delivering what the customer wants (2003). The term Six Sigma is used to describe a process improvement strategy to meet or exceed customer needs and return money to corporate bottom line. It is structured, disciplined, data-driven process for improving business performance. At the same time, it is also a measure of process capability that enables us to establish how capable a process is of meeting customer requirements and to determine how far a given process strays from perfection (2003 ).
Six Sigma at GE has not only delivered outstanding financial results, but has established a standard improvement methodology ( 2003). General Electric’s dedication to Six Sigma has resulted in significant improvements. Jack Welch credits the Six Sigma initiative with raising the company’s operating profit margins. Success stories abound within GE. GE Medical Systems introduced a .25 million diagnostic scanner, a product designed from start to finish using Six Sigma design principles. At GE Plastics, a Six Sigma team improved a process to increase production of plastic by 1.1 billion pounds. GE has attributed a host of other benefits to Six Sigma. Six Sigma is assisting General Electric improve their standing as the most successful corporation in history ( 2001).
Competitive Advantage: External Environment
GE was a good example of acquiring knowledge from other companies. GE is known for its Six Sigma quality program, but GE first learned it for Allied Signal and Motorola, and then implemented it very well. In the 1980s, GE funded research by a group of leading international business schools to look at examples of change and understand why the change was successful or not. From this research, GE and the business schools obtained what they called “The principles of successful change.” GE created the change acceleration process model and related tools. These tools can help people in the company to pay attention to the factors that are important for achieving successful change (2005).
Infrastructure Technology
GE is planning to invest trillion in global infrastructure by 2015. GE has the broadest array of infrastructure products, services and financing in the world. From Energy to Aviation to Transportation to Water to Oil and Gas, GE is solving customers’ infrastructure challenges around the world (2006).
Emerging Markets
Emerging markets include China, India, Eastern Europe, Russia, Middle East, Africa, Latin America and Southeast Asia. These markets are growing at 3 times the global GDR rate based on population and high oil prices. GE had billion of emerging markets revenues in 2000. Today, GE has billion, and it could have billion by 2010 (2006).
Environmental Solutions: Ecomagination
The challenges of global warming, water scarcity and conservation fill every part of the world. While government policies may differ, there is a growing consensus among GE’s customers that they value technology that can preserve the environment and achieve productivity at the same time. GE’s ecomagination initiative is designed to drive growth by creating innovative solutions to environmental challenges. GE has technical breadth and credibility and is building partnerships and capability that should secure decades of accelerated growth ( 2006).
Digital Connections
GE’s customers are increasingly using the Internet. Digitization facilitates rapid distribution and knowledge transfer to a fragmented customer base. GE is positioned to capitalize on digitization. GE has thousands of engines, turbines, locomotives and scanners in its installed base. These have been digitized, so that GE can provide its customers with interactive decision support to boost productivity ( 2006).
Demographics
Aging populations in the developed world and exploding growth in the developing world are important. Healthcare and GE Money are examples of some of GE’s businesses that have benefited form these dynamics. GE has invested to build a substantial Healthcare business, which could double in size over the next five years. GE is a leader in diagnostics with the capability to improve access to care, find disease earlier and treat them more efficiently. GE has invested in its consumer finance business, which can increase every year by marketing innovative financial products globally (2006).
Strategic Principles
Being a reliable company also requires consistent execution on strategic principles that drive performance every quarter and every year. GE has consistently executed on four strategic principles.
- Build Leadership Businesses
- Focus on reliable execution and financial discipline
- Drive growth as a process
- Spread ideas across great people and teams that share common values.
GE’s strategies create strengths and capabilities, which, in turn, drive competitive advantage. The consistent execution of the same strategic principles year after year, provides the foundation to invest and deliver (2006).
Human Resource Planning, Recruiting and Selection
The HRM planning process involves forecasting HRM needs and developing programs to ensure that the right numbers and types on individuals are available at the right time and place. Such information enables an organization to plan its recruitment, selection and training strategies (2002).
Recruitment is the process by which organizations discover, develop, seek, and attract individuals to fill actual or anticipated job vacancies. It brings together those with jobs to fill and those seeking jobs ( 2002). Selection is the process of obtaining and using information about job applicants in order to determine who should be hired for short-or long-term positions (2002).
At the heart of human resource planning, recruiting and selection is enhancing an organization’s competitive readiness and renewal capabilities, motivating factors to a developmental organization. Human resource planning, recruiting, and selection determines the quantity and quality of human resources needed to foster organizational renewal and enhance competitive readiness (2000).
Benchmark Recruiting
General Electric devotes a team of resources to benchmark best practices with other equally; if not more, successful organizations. Benchmark recruiting takes basic benchmarking a step further by utilizing it as a recruiting tool to find target candidates. Benchmark recruiting refers to the process of identifying individuals who developed and implemented the best practices in their organizations. These individuals demonstrate not only their superior knowledge, but also their ability to get good ideas implemented. Displaying characteristics of a “high performer” have made them invariably ideal targets to recruit (2004). Benchmark recruiting can allow GE to gather best practices information, identify target candidates, as well as build relationships with these target candidates all at the same time.
Person-Organization Fit
General Electric has a distinct cultural environment that sets it apart for its competitors. GE promotes a culture that promote learning. Jack Welch, GE’s former Chief Executive officer, introduced different innovations to General Electric. Welch believed that the best way to carry out a dramatic revolution at GE was to delegate authority to the employees and to let them control their own destiny. The employees at GE take personal responsibility and control at what they can in the workplace and in their personal life. Shared value and employee empowerment are the guiding principles of the GE organization. GE also promotes a boundaryless environment. A bounderless company removes barriers between company functions, removes barriers between organizational levels, removes barriers between company locations, and reaches out to important suppliers and makes them part of a single process. In addition, the company also has a work-out concept. Work-out’s central objective is growing a culture where everyone’s ideas have value. Everyone at GE plays a part. Work-out is the process of mining the creativity and productivity that resides in the workforce (1998). It is clear that GE has a unique and innovative culture. It is therefore important to recruit and select employees that will share the company’s vision and values. The employees vision, personality and values should match the culture and values of the organization.
Person-organization fit is the congruence of an individual’s personality, beliefs and values with the culture and values of an organization. A cultural mismatch between new hires and the organization has been demonstrated to be a significant contributor to potential job dissatisfaction and reduced work group cohesion, thus leading to poor job performance and high attrition rates. New hires who can identify with the culture of the organization are more likely to value incentives offered by the organization. As incentives are likely to improve in work attitudes and to remain in the organization.
Competency Based Selection
Competency-based assessment and selection is used to identify the characteristics of those applicants with the skills to implement the company’s growth strategy and at the same time succeed in their unique corporate culture; and to accurately identify and select applicants that posses these capabilities.
- Competency-based selection improves performance and reduces attrition. High job performance predicts high retention because good performers need not be fired; and satisfied employees are less likely to quit.
- There may be an organizational need to identify new hires with the potential to become future managers or leaders.
- Competency-based selection can cut new hires’ learning curve period by 33 to 50 percent. New hires with the relevant set of competencies to do a job become fully productive earlier.
- A gap between the competencies needed and what skills the new hires posses indicates the training that new hires will need.
Credit:ivythesis.typepad.com
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