Sunday, December 16, 2007

Jack Welch: HR head as crucial as CFO

Business News - Monday December 17, 2007

Bangkok Post

Jack Welch : HR head as crucial as CFO

This week is the third and final part of our look at Winning by Jack Welch, the former head of GE and one of the most admired corporate leaders of the past generation. Today we'll look at Chapter 7, People Management, where the author identifies six practices :

1. Elevate human resources (HR) to a position of power and primacy in an organisation, and make sure HR staff have the special qualities to help managers build leaders and careers. In fact, the best HR types are a combination of pastor and parent. Mr Welch suggests that the HR director should be as important as the CFO. He also observes some reasons why HR staff are not well respected:

FHR managers deal with soft issues that people cannot measure. Most people misconstrue that they are ''people persons'' and don't need any help.

FHR encompasses administrative functions like benefits, insurance, vacation scheduling and so on.

FIn the 1960s, GE's HR system ran on gossip, whispers and tattling. It held the power to promote anyone based on personal feelings instead of merit.

2. Use a rigorous, non-bureaucratic evaluation system that monitors for integrity, with these characteristics:

FIt should be clear and simple, washed clean of time-consuming bureaucratic gobbledygook. If your evaluation system involves more than two pages of paperwork per person, something is wrong. Mr Welch evaluated his 20 direct staff with frequent handwritten notes that included two pieces of information: what he thought the person did well, and how he thought they could improve.

FIt should measure people on relevant criteria on which everyone can agree and which relate directly to an individual's performance.

F It should ensure that managers evaluate people at least once a year, and preferably twice, in formal, face-to-face sessions. Informal appraisals should happen all the time.

FA good evaluation system should include a professional development component.

3. Create effective mechanisms _ money, recognition and training _ to motivate and retain staff. Mr Welch gives an example of when a key talent left the organisation because nobody told her how she was performing. A winning company does not let good people walk out the door for lack of recognition, financial or otherwise. Don't underestimate training and development even for the top talent.

4. Directly focus on the challenging relationships with unions, stars, sliders and disrupters:

FUnions: Always build relationships with unions, instead of starting the relationship at the negotiation table after something has gone wrong.

FStars: Stars could become monsters if you let them. That's why someone has to be on the lookout, namely the star's boss, with the support from HR. The minute a star seems to be getting arrogant or out of control, someone has to call the person in to have a candid conversation about values and behaviours. Stars who go wrong should be replaced within eight hours to demonstrate that no one is indispensable.

FSliders: These are employees who were once good performers but have hit a wall for some reason or another, ranging from a mid-life crisis to a job-related disappointment. Sliders need to be re-energised, either with new jobs or training. Otherwise, they grow bitter.

FDisrupters: A company that manages people well takes disrupters head-on. First they give them very tough evaluations, naming their bad behaviour and demanding that it change. Usually, it won't. Disrupters are a personality type. If that's the case, get them out of the way of people trying to do their jobs. They're poison.

5. Fight gravity: Instead of taking the middle 70% for granted, treat them like the heart and soul of the organisation. Mr Welch divides his employees into three groups: top 20%, 70% middle and 10% bottom. Usually, the bottom will be ''managed out''.

Most work in the organisation gets done by the people in the middle 70% _ those solid performers who don't quite shine but work hard and well, and perhaps could shine with enough care and attention. Managers must spend at least 50% of their people time on their biggest constituency.

6. Create a flat organisation. Hierarchy creates layers that add more time to the process and also distort information. Managers should have 10 direct reports at a minimum and 30-50% more if they are experienced.

Kriengsak Niratpattanasai provides executive coaching in leadership and diversity management under the brand TheCoach. He can be reached at coachkriengsak.

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