Application Case: Siemens Builds a Strategy-Oriented HR System

Application Case

Siemens Builds a Strategy-Oriented HR System

Siemens is a 150-year-old German company, but it's not the company it was even a few years ago. Until recently, Siemens focused on producing electrical products. Today the firm has diversified into software, engi¬neering, and services. It is also global, with more than 400,000 employ¬ees working in 190 countries. In other words, Siemens became a world leader by pursuing a corporate strategy that emphasized diversifying into high-tech products and services, and doing so on a global basis.

With a corporate strategy like that, human resource management plays a big role at Siemens. Sophisticated engineering and services re¬quire more focus on employee selection, training, and compensation than in the average firm, and globalization requires delivering these services globally. Siemens sums up the basic themes of its HR strategy in several points. These include:

1.              A living company is a learning company. The high-tech nature of Siemens' business means that employees must be able to learn on a continuing basis. Siemens uses its system of combined classroom and hands-on apprenticeship train¬ing around the world to help facilitate this. It also offers employees extensive continuing education and management development.

2.                  Global teamwork is the key to developing and using all the potential of the firm's human resources. Because it is so important for employees throughout Siemens to feel free to work together and interact, employees have to understand the whole process, not just bits and pieces. To support this, Siemens provides extensive training and devel¬opment. It also ensures that all employees feel they're part of a strong, unifying corporate identity. For example, HR uses cross-border, cross-cultural experiences as prerequisites for career advances.

3.                  A climate of mutual respect is the basis of all relationships— within the company and with society. Siemens contends that the wealth of nationalities, cultures, languages, and out¬looks represented by its employees is one of its most valuable assets. It therefore engages in numerous HR activities aimed at building openness, transparency, and fairness, and support¬ing diversity.

Questions

3-18. Based on the information in this case, provide examples for Siemens of at least four strategically required organizational outcomes, and four required workforce competencies and behaviors.

3-19. Identify at least four strategically relevant HR policies and activities that Siemens has instituted in order to help human resource management contribute to achieving Siemens' strategic goals.

3-20. Provide a brief illustrative outline of a strategy map for Siemens.

Application Case: Jack Nelson's Problem

Application Case

Jack Nelson's Problem

As a new member of the board of directors for a local bank, Jack Nelson was being introduced to all the employees in the home office. When he was introduced to Ruth Johnson, he was curious about her work and asked her what the machine she was using did. Johnson replied that she really did not know what the machine was called or what it did. She explained that she had only been working there for 2 months. However, she did know precisely how to operate the machine. According to her supervisor, she was an excellent employee.

At one of the branch offices, the supervisor in charge spoke to Nelson confidentially, telling him that "something was wrong," but she didn't know what. For one thing, she explained, employee turnover was too high, and no sooner had one employee been put on the job than another one resigned. With customers to see and loans to be made, she continued, she had little time to work with the new employees as they came and went.

All branch supervisors hired their own employees without communication with the home office or other branches. When an opening developed, the supervisor tried to find a suitable employee to replace the worker who had quit.

After touring the 22 branches and finding similar problems in many of them, Nelson wondered what the home office should do or what action he should take. The banking firm generally was regarded as being a well-run institution that had grown from 27 to 191 employees during the past 8 years. The more he thought about the matter, the more puzzled Nelson became. He couldn't quite put his finger on the problem, and he didn't know whether to report his findings to the president.

Questions

1-20. What do you think is causing some of the problems in the bank's home office and branches?

1-21. Do you think setting up an HR unit in the main office would help?

1-22. What specific functions should an HR unit carry out? What HR functions would then be carried out by supervisors and other line managers? What role should the Internet play in the new HR organization?

Source: GEORGE, SUPERVISION IN ACTION: ART MANAGING OTHERS, 4th, (c) 1985. Printed and Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey.

The New Human Resource Manager: Focus on Improving Performance

They Focus on Improving Performance
Employers expect their human resource managers to help lead their companies' performance -improvement efforts. Human resource managers recognize this. Surveys of HR professionals list competition for market share, price competition/price control, governmental regulations, need for sales growth, and need to increase productivity as top challenges HR managers face.

Today's human resource manager is in a powerful position to improve the firm's performance and profitability, and uses three main levers to do so. The first is the HR department lever. He or she ensures that the human resource management function is delivering its services efficiently. For example, this might include outsourcing certain HR activities such as benefits management to more cost-effective outside vendors, controlling HR function headcount, and using technology such as portals and automated online employee prescreening to deliver its services more cost-effectively.

The second is the employee costs lever. For example, the human resource manager takes a prominent role in advising top management about the company's staffing levels, and in setting and controlling the firm's compensation, incentives, and benefits policies.

The third is the strategic results lever. Here the HR manager puts in place the policies and practices that produce the employee competencies and skills the company needs to achieve its strategic goals. For example, Yahoo's new employment policies helped to improve its innovation and competitiveness, and the bank's new software helped its customer service reps improve their performance, thanks to new human resource training and compensation practices.

The New Human Resource Manager

"Personnel" managers used to focus mostly on administrative activities. They took over hiring and firing from supervisors, ran the payroll department, and administered benefits plans. As expertise in testing emerged, the personnel department played a bigger role in employee selection and training.47 New union laws in the 1930s added "Helping the employer deal with unions" to the list of duties. With new equal employment laws in the 1960s, employers relied on HR for avoiding discrimination claims.

Today, employers face new challenges, such as squeezing more profits from operations. They expect their human resource managers to have what it takes to address these new challenges. Let's look how today's HR managers deal with these challenges.

They Focus More on Strategic, Big-Picture Issues
First, human resource managers are more involved in helping their companies address longer- term, strategic "big-picture" issues. Chapter 3 (Human Resource Management Strategy and Analysis) explains how they do this. In brief, we will see there that strategic human resource management means formulating and executing human resource policies and practices that pro¬duce the employee competencies and behaviors the company needs to achieve its strategic aims. The basic idea behind strategic human resource management is this: In formulating human re¬source management policies and practices, the manager's aim should be to produce the employee skills and behaviors that the company needs to achieve its strategic aims. So, for example, when Yahoo's new CEO recently wanted to improve her company's innovation and productivity, she turned to her new HR manager (a former investment banker). Yahoo then instituted many new HR policies. It eliminated telecommuting to bring workers back to the office, where they could continuously interact, and adopted new benefits (such as 16 weeks' paid maternity leave) to lure new engineers and to make Yahoo a more attractive place in which to work.

The model follows this three-step sequence: 

1. Set the firm's strategic aims 
2. Pinpoint the employee behaviors and skills we need to achieve these strategic aims
3. Decide what HR policies and practices will enable us to produce these necessary employee behaviors and skills.