Case Study: General Electric (GE)

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. Edisons
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.
One major challenge to the HRD process of General Electric surfaced when the company was in a period of
massive downsizing and delayering. Downsizing and Delayering mean 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 organizations overall strategy. Today, training must be tailored to fit the
organizations 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 Jack Welch 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 GEs 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 Welchs 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 order to counter the negative effects of downsizing and 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 Witzel (2003), GE invested heavily on employee training. By
1998 the training center had trained over 15,000 managers. Welch 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 (308). The top management shows dedication to training
and development. This has countered the employee insecurity that was produced by delivering. 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.

Hitech Corporation (Hitech) is a well known IT company based in Hyderabad , India. Hitech provides networking solutions to many Fortune
500 companies. Started in 1990 by two technology experts, Hitech currently has almost $40 million in annual revenue. When the founders
started the company, they established as one basic value that working at Hitech should be enjoyable as well as profitable. That belief has
helped create a company culture today that gives Hitech competitive advantages when recruiting and retaining talented workforce in the
challenging labor market of IT.
Because recruitment of talented employees to handle growth at Hitech is so crucial, , the HR unit has an aggressive employee referral
program which pays employees up to $5,000 for referring new hires who stay with the firm.The HR unit prides itself on prompt feedback to
potential employees. Other "fun" programs include-
Football, pool tables, volleyball courts, assorted video games, pianos, ping pong tables, and gyms that offer yoga and dance
classes.
Grassroots employee groups for all interests, like meditation, gourmet cooking and salsa dancing..
Healthy lunches and dinners for all staff at a variety of caf?
Theme parties organised each month. Last month Hitech had its executives wearing animal costumes as part of a "jungle" party .
These fun initiatives have a more important business purpose-to demonstrate that people are important at Hitech. Is all this fun profitable?
Hitech's answer is an unqualified yes. Over 40% of all Hitech ?s new employees come from the employee referral program. The firm?s cost
to hire each new employee is about $5,000 less than the industry average. Even more important, those hired stay longer as indicated by its
retention rate of 42 months compared to the industry average of 20 months. Also, employee turnover is about 6% annually? significantly
below the industry average. It is obvious that Hitech's approach to HR management is paying off, both in an enjoyable company culture and
in contributing to organizational success.
Case Study Questions
What according to you could be the pros & cons of "fun at work" strategy used by an organisation ?
Employee referral is the best approach to recruitment .What is your view?
Why has "fun at work" been profitable at Hitech?

Case Study in Human Resource Management
Industry : Manufacturing
Industry: Well established, smooth running, multi-crore manufacturing giant, aspiring to be the "No.1" on not only business fronts but political
and management horizons too.
You are about to complete tenth year of service in this business house. You are happy and expecting a second promotion.
Situation: One fine day you board the bus in the morning to notice a very special silence. All the chirping, joking, gossiping has come to a
stand still .You get to know that your company has accepted the VRS recommendations by the central government. Your bus partner
enquires about your age and the number of years of service.
Grapevine: The company may shut down this plant possibly in the next fiscal year due to taxation and infrastructure problems. To begin with
they want to cut down the manpower, beginning with managerial cadre, then the vendors followed by the workers
Facts: Earlier the govt did not allow job termination so easily. The recently elected govt. has a commitment of "job creation" in their electoral
"Magna charta" of promises One brainy idea has come in the form of termination of "old, experienced but sometimes difficult" employees
under the disguise of offering "golden shake hand" or "voluntary retirement" Contrast: On one side the country is facing grave shortage of
skilled, experienced manpower on the other they are promoting schemes like VRS!!
Challenge:
You have family of five to support.
You have to shoulder a housing loan and a car loan.
Having spent ten years in a particular industry it may not be easy to find a new job.
VRS is for the employees above forty years of age and / or have completed ten years of service.
Maximum package of Rs Five lacs is for those having completed 15 years and above.
You can get a max. Of 2.90 Lacs. Only.
Once you accept VRS, getting a new job may not be easy.
If you do not opt for a VRS, possibility of transfer to a remote place or you may be asked to resign , and go without any
compensation being in management cadre.
Case Study Questions
Task : You have to make your choice and justify it in not more than five sentences.