Human Resource management| HP Case| WAC Submission| | Submitted By: Syed Ahad GardeziM. Awais IbrahimSyed Ammar HassanZaid Rahman ShamsiMBA II29-Nov-12| Lahore School of Economics Submitted to: Prof. F. A. Fareedy Company Background: HP products were mainly electronic test and measuring instruments for engineers and scientist. Since then HP has added computers, calculators, medical electronic equipment and many more products. HP had 57000 employees worldwide and there were 20 manufacturing locations spread across the United States and 8 others around the world.
Company’s objectives were first put in writing in 1957. Product Strategy: The prevailing importance is on R&D to products that will compete by new technical contribution rather than through marketing or to the competitive devices. The product strategy reflects the external modification, technical contribution and basic design or purposes of the instruments were not altered. HP’s focus was on technical contribution and short run profits rather than improving long term growth. Organization: The fundamental business unit at HP is the product division.
The division is an incorporated self-sustaining organization with a great deal of independence. No product area is a division until it contains the six basic functions of R&D, manufacturing, marketing, quality assurance finance and personnel. At the end of 1980 there were 40 HP divisions. Coordination of divisions’ activities is the responsibility of 10 product groups. Financial Element: The financial reporting system also provides special statements to view each division’s success in worldwide management of its product line. Each ivision is measured along two dimensions: 1) The financial results of the actual manufacturing of products in the divisions. 2) The total worldwide activity in the divisions’ product line’s whenever they are manufactures. Capital allocations are negotiated during the yearly budgeting process although divisions are expected to be self-sustaining over any time period. Human Resource Elements: Hiring is done by normal interviewing processes. Testing is rare and then limited to specialized skills tests mostly pertinent to a position.
The confrontation with the problem growth in 1973 also led to the expansion of training in the values and methods of HP. Executive seminars were increased and a new series of courses started for supervisors on managing at HP. The course is offered for the employees and it was taught by the local personnel staff and by at least by one lone manager. The routine tasks of employees are carried by a comprehensive system of management by objective (MBO). By introducing this system HP thought that each group or division to operate as a completely separate business. So that divisions have freedom of choice in their operations.
The perception of the entire team about the success of HP is the communication at each level of division which is due to trust, team work and openness. HP used a variety of techniques to encourage an ongoing dialogues with its. One way it tries to do this is by an open door policy. Supervisor was there to promote the employees and helped them in to seek any advice. The career was given a specific name at HP that was “career maze”. “This phrase acknowledges the normalcy of cross functional, cross divisional, and lateral moves that often occur over the course of career at HP. The performance appraisal and salary administration process also expose individual employees to many managers around the company. The performance components were predominant in the line with HP and moreover pay positions of the employees closely related to the performance. Problems Loss of Human Capital One issue that HP faces is the loss of human capital. The company is not very good in retaining its most important resource and is facing problems in this regard. The workforce of HP is so competent and all the employees are very proficient when they were hired that they only needed just a little bit of xperience and learning to touch the heights of success. HP spends too much of its resources and time to train these employees in such a way that they could make big decisions and right decisions on their own without any difficulties and hesitation. All this learning and experience make them capable of doing their own business and make them self sufficient. These employees then no longer want to stay in the company but want to grow by starting their own new ventures. Loss of these employees may not affect the company in short run but it will be very costly for HP in the long run. Doubtful Career of Employees
Another rather minor but an important issue in the company is that employees are not aware about when they will be promoted and where they could be working in the company for their next assignment. So there is so much ambiguity about the career of the employees due to which they cannot plan about their career. And when they are not sure about their career and could not plan much for it, they might get de- motivated which is again not a very good sign for the company. De-motivated employees cannot work on their full potential and efficiency and the loss is then beard by the company.
Complex Organization Culture Thirdly the organizational culture of HP is varied and cannot be understood very easily and quickly. One of the reasons is that it is not very well defined by the company. Goals, objectives and strategies are very well communicated to the employees but then they are set free to choose whichever path they want to choose for accomplishing the tasks. Employees can give their input and suggestions to their supervisors about their jobs and also they can have flexible hours.
Participative management style is used by the company but at the same time the case also discusses how new employees get confused when they were communicated the objectives of the company only and then they’ll have to choose themselves how to achieve them by doing what? This is why most of them asked about what are they going to do about these objectives and what exactly was their jobs? Informal Environment The company has formalized procedures but they did not focus too much on following them. In fact, the president himself said that we don’t focus much n the ‘way’ but the only thing in which they are concerned with is the completion of tasks and achievement of deadlines. Despite having the formal procedures the company is using informal procedures and given employees full freedom so that innovation may continuously take place in the company. But on the same time it is a growing company with lots of potential. Currently it has fifty seven thousand employees which are expected to increase so such an informal and flexible culture would never sustain in a growing environment. Recommendations: Hp is a huge organization with about 57000 employees all together.
The company’s culture has been working fine for the employees who get involved in it and with time, they do become a part of it. In its culture, employees were given freedom of how to complete their tasks in a given time along with some set of procedures they had to comply with. This culture has been followed since the company’s long history and has proven to be successful and an edge over the other companies. To keep up with this culture and also to make new comers feel comfortable and see themselves as adjustable to it, we think that here, the role of the senior employees comes into part.
The seniors have to be more compliant, more welcoming and help the new employees feel that now they are a part of it. Another problem we see in the case is a flaw in the Human Resource Department’s plan. As mentioned in the case that employees left the company in an effort to start their own ventures and when they failed with it and wanted to join Hp again, they were welcomed in the company. First of all, there shouldn’t be employees who leave the company. Reasons for this should be identified and taken into notice.
A reason mentioned in the case is that there were no defined career paths for the employees which could be a major reason for employees in leaving Hp. This matter should be resolved by proper succession planning and giving a defined path to the employees so that they get to know what position in the firm they might be aiming for in future. Secondly, the employees who wanted to rejoin Hp must not be welcomed to rejoin. This would create a norm within the employees of leaving and coming back whenever they wish to.
If they have this idea in mind that it is safe to leave their job at any point in time and if they come back they’ll be accepted, they would work half-heartedly for Hp and not perform as they are capable of. So, we recommend that a fair of job security should be there in the employees before they decide to leave the firm. With a proper succession plan, the posts of the employees who leave should be filled instantly and the post would be no longer available for that employee who left. This way, the employees would think twice before leaving the firm and then make their final decision.