GE and Employee Training - Essay Example

GE and Employee Training Introduction 2 GE and Human Resources 4 Internalised Training 5 The Business Case for Training 7 Visible Improvements 9 Conclusion: A Competitive Advantage 10 Works Cited 11 Many traditional paper based services are moving to an information technology/digital infrastructure, therefore, they need to ensure they have people with the right skills. Critically evaluate how an actual (not theoretical) organization has implemented a training and development system that supports the changes in their business. Discuss how this has affected their business. Use relevant theory and practice to support your arguments. Introduction We live in a time when the most advanced technology available to man is often cheap compared to the business benefits a company can gain from it. Nearly every company can have access to the same development and organisational tools as their competition and in such cases the value of human resources becomes extremely important. Theoretically, two companies can have the same computers, the same quality of raw materials, even the same machinery used for production but if one of the companies has better human resources, then that company will come across as having a clear advantage over the other. Unlike the other factors involved in production, labour and human resources have the advantage that they can grow with the company. Moreover, with effective training they can improve their skill set to play larger roles for the organisation and take on more responsibility. Training might often be a requirement for the company when the business changes to a certain level or when the company is looking to enter new markets where the existing skill set of the employees may not be sufficient. While this is recognised by many HR related professionals, there is a significant investment involved in training and developing human resources which may not turn out to be as loyal to the company as expected by the managers. A company can lay out significant amounts of money on training and teaching individuals in order to make them capable enough to be mangers. Yet the same individuals can leave the company soon after their training is complete to take up positions elsewhere. Effectively, what the company has done is to provide trained professionals to the competition which may not be in the best interest of the company. Additionally, any time which the human resources spend in training is time which is taken away from their other functions. These other functions have a direct impact on the bottom line but training is something which will only present results after a certain amount of delay. These issues and many others are just a representative of why training and HR development needs to be mainstreamed into the functions of an organisation rather than to keep them externalised as outside activities. To show the importance of internalising the training function and some of the ways to include it as a part of management, the example of GE is used since GE is one of the most admired companies in the world in terms of its management systems. These management systems include the concept of employee training and the development of human resources as a central part of the equation because GE uses training for a lot more than simply improving the HR. GE and Human Resources The selection of GE as a focused company for this paper is important because GE has been used as an example of how a company should operate by many different analysts. Both Colvin (2006) and Demos (2006) show that it is one of the most admired companies in the world and it owes a lot of its admiration to the way it treats its employees. Jack Welch, the long time CEO of the company has stated clearly in his book titled Winning that training, “Motivates people by showing them a way to grow, that the company cares, and that they have a future (Welch, 2006, Pg. 109)”. Clearly, these ideas agree with the theoretical concepts outlined by Wilson (1999) who suggests that training is a fundamental part of human resource development and mentions it at the top of the list amongst other functions of the human resource management department at any given company. By making training the primary function of HR, both Wilson (1999) and Welch (2005) show how the agreement between theory and practice helps a company become stronger than the competition. Wilson (1999) also adds to the comments given by Welch by saying that training can become a part of the strategic objectives of a firm if the training is internalised and added to the process by which promotions are made within the company and when the time comes to earmark those individuals who are likely to be the future stars of the organisation. As a part of business strategy, a company like GE can train a number of individuals in various fields which the company expects to enter into. For example, as reported by Welch (2005) training for market entry into China was provided to GE employees before the company started operations in China. At the same time, Welch (2005) suggests that along with monetary rewards, training can be also be used to reward those individuals who show improved performance. Therefore, training for new businesses or for upcoming changes in business patterns allows a company to create individuals who can take up responsible positions and become leaders of the new divisions once the business is established. Training can be conducted by professionals coming from the outside but both Welch (2005) and Wilson (1999) agree that a company should have internal training facilities if they can be afforded as an investment. Internalised Training Theoretically, there are hundreds of skills a person working for a company like GE could need training for. Ranging from the simplest communications skills training to advance training in financial analysis. On a global level, GE could find applications for different training classes for the thousands of individuals who work for the company. However, in the case of internalised training GE may not serve as the best example to begin with. This is because GE can afford to outlay a huge amount of money on recruiting, training, developing, rewarding, and retaining their best performers. They already have a competitive advantage by being one of the bigger names in the business and they are known for being one of the best companies to work for (Morris & Colvin, 2006). These things position GE to gather the best human resources from around the world which permits GE to maintain its position simply through the laws of momentum. However, with the vast resources available to them, GE has created a training center which is dedicated to train and improve the HR within the company (Welch, 2005). Of course many smaller companies and other organisations simply would not have the resources which GE can summon to establish their own training centres. In such cases, external training programs and consultants can be brought in to train the company personnel. GE themselves used the same process in some cases. For example, when they needed to train some of their senior management personnel in the field of computer technology, they used fresh graduates working in the same departments and the same location to help in the training (Welch, 2005). This was an interesting situation since these young guns in the business were called in to teach directors and other senior managers in how to use the basic functions of computer technology. While the fresh graduates had been using emails as a means of communication for a significant period of time, the older more experienced business managers simply could not figure out the basic operations of using Microsoft Office. By using individuals working within the company GE was able to make sure that the directors would understand the business application of computer technology as it related to their individual departments (Welch, 2005). An internal training centre would only be useful when a company knows that it will continually need the resources provided by the centre to train and educate its workers. Most of the time, a company can discover that professional trainers can effectively learn the proper procedures of a company and quickly teach incoming recruits or current employees various skills which the management thinks are important for them to know. At the same time, current employees can also be effectively used as training mangers for the rest of the company. The Business Case for Training Training can be seen as an unnecessary cost by those who do not believe that individuals should be trained by a company but in fact should have the skills and abilities which allow them to function as productive members of an organisation from day one (Smith & Hayton, 1999). At the same time, the benefits of training can not be denied since it intrinsically increases the level of productivity which improves the overall benefit of training and personnel development for the company as a whole. GE recognizes this as a fact that a worker who is able to produce more and give better quality output after a few training sessions is certainly more valuable to a company than someone who simply knows how to get by with their present skills (Smith & Hayton, 1999). Additionally, a worker who has received sufficient training in various aspect of the business is more likely to be considered for promotions and higher positions within the company when the time comes to make a selection for the top slots. Admittedly, investing in people is a risk which comes with providing training to individuals but the basic point of all business is to take calculated risks. As far as mandatory training is concerned, several writers including ONeill and Kramar (1999) as well as Budhwar (2004) have suggested that the government is not doing enough to ensure that a certain number of hours per year should be dedicated by law to training various individuals working for any company. The situation is particularly troubling in developed countries around the Pacific Rim e.g. Australia since Budhwar (2004) writes that, “International comparisons of training expenditure generally place Australia below the levels of similar countries (Budhwar, 2004, Pg. 245).” In more global terms, O’Neill and Kramar (1999) suggest that any benefits which have been gathered by various companies have come from their own initiatives rather than regulatory or government help. While this situation may demand that the governments of the world should take a serious look into how the productivity of their workers can be improved, it certainly shows that at a general level, businesses are very aware of how training functions as a part of the further development of human resources at their disposal. If companies like GE and others in the same league continue to train and develop their human resource capital, there is no reason why smaller companies would not apply the same lessons (Schmitt, 2001). Visible Improvements Smith and Hayton (1999) suggest that the business case for providing training and managing training as a function of investment in HR is certainly there because by providing sufficient training to various individuals within the company it is entirely possible that the need for certain office positions can be eliminated altogether. Consider the example of an office worker trained for maintaining the office computer network. Since computer networks can run efficiently most of the time without human intervention the company can save on the position of a network administrator if one or more office workers can manage the network if it ever needs corrections or maintenance. Welch (2005) reports that individuals who have many talents make good leaders and as GE seeks to groom leaders for the company they also train those individuals who they know can take up leadership positions. While this example does not mean that every person within the company can wear several hats at the same time or that every person working for the company will one day be the CEO, it does suggest that investment in training can save a company a lot of money in the long run. Of course this investment also means that the people trained for different functions within the company are to be retained within the company but that is also is a part of the duties which the HR department must perform. Since there is a definite advantage which comes from providing training as a part of the rewards given to performing individuals, there is no reason why training can not give immediately visible benefits for the company (Welch, 2005). Conclusion: A Competitive Advantage In conclusion, it is clear to me that the correct application of the training function is an essential part of managing any changes in business or technology for a company which wants to gain and maintain a competitive advantage. While there are clear costs as well as risks associated with the process of training people, the advantages are simply too numerous and broad based to ignore and the most important advantage remains gaining an edge over the competition. The positive reports coming from GE show without a shadow of doubt that the company is certainly on the right track when it comes to developing their people. At the same time, there could be many other companies around the country who do not have the resources or the understanding of how to develop their HR for optimal performance and it becomes one of the duties of future managers to guide these companies on this important HR function which can give a great competitive advantage. Word Count: 2,360 Works Cited Budhwar, P. 2004, Managing Human Resources, Routledge. Colvin, G. 2006, ‘What Makes GE Great?’, Fortune, vol. 153, no. 4, pp. 90-96. Demos, T. 2006, ‘The World’s Most Admired Companies’ Fortune, vol. 153, no. 4, pp. 72. Morris, B. and Colvin, G. 2006, The GE Mystique. Fortune. vol. 153, no. 4, pp. 98-104. ONeill, G. and Kramar, R. 1999, Human Resources Management, Allen & Unwin. Schmitt, J. 2001. Welch has a lesson, even for small shops. Contractor Magazine. 48(10): 16. Smith, A. and Hayton, G. 1999, ‘What drives enterprise training?, International Journal of Human Resource Management, vol. 10, no. 2, pp. 251-272. Welch, J. 2005. Winning. Harper-Collins. Wilson, J. 1999, Human Resource Development: Training for Individuals & Organizations. Kogan Page. Read More