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The Analytic paper (APRP). Harvard Business School (GE's Two Decades Transformation: Jack Welch's Leadership) - Case Study Example

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Jack Welch’s leadership and pay structure in GE Jack Welch, former Chairman and CEO of General Electric, is still regarded as one of the greatest business leaders of all time because of the optimal changes, he brought in GE. He took over GE's reigns and positively changed various management processes and organizational culture…
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The Analytic paper (APRP). Harvard Business School Case (GEs Two Decades Transformation: Jack Welchs Leadership)
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Download file to see previous pages So, in that direction this part of the paper will discuss about the various applications/processes/interventions, related to pay structure, which can be implemented and which will bolster Welch’s strategies further and move the company to where Welch wants it to go. What As pointed above, Welch carried out various optimal changes throughout the organization, and that includes the pay structure of the employees. Welch was a strong believer in reward and incentive systems, and so in that direction radically overhauled GE's compensation package or pay structure. Apart from carrying on with the traditional system of narrow increases in base salary, further supplemented by bonuses based on GE's as well as individual performance, Welch also included an allocation of stock options. He maximally expanded the number of stock options recipients from 300 to 30,000, and also began making much more aggressive bonus awards. (Bartlett, 2005). Inclusion of Stock options as part of the pay structure is an interesting and motivating strategy. Although, allocation of stock options as incentives is welcomed by employees from all sectors, there is some skepticism regarding its benefits in the post-credit crunch times. When faced with organizational decline due to economic recessions, employees’ mind will be filled with various doubts regarding how the organization can provide stock options, which will be competitive. (Latham and Braun, 2009). The other important aspect of pay structure particularly the traditional options of bonuses or financial rewards has to be focused and checked, regarding whether they are given through a foolproof system, without any biases to undeserving employees. Why In any organization in any sector, the employees will accomplish their set tasks for a wide range of personal motivations, apart from the organizational goals. Personal motivations in the sense, they will do their duties mainly with the intention to have good profession or career, enticed by the culture or the working environment and importantly to earn money or salary. Only salary, as an important facet of overall job satisfaction, comes close to meeting expectations of the employees, leading to heightened motivation. (Wanous, 1976). This being the case, employees at GE had to be optimally paid and rewarded. With Welch doing a complete overhaul of the organization including retaining of only performing employees, it has become important on the part of the HR to retain as well as further motivate those high performing employees by carrying out appraisal process and aptly rewarding them. These actions can surely motivate the employees to give better productivity, as increased productivity or results will directly or in-directly lead to better pay packages. When To further optimize GE’s pay structure and thereby accentuate the employees’ motivational levels, as discussed above, both stock options and unbiased rewards has to be given aptly. Both these two forms of compensation can be given appropriately if an apt performance appraisal process is implemented. “Performance appraisal is one of the most important processes in human resource management, because it has a great effect on both the financial and program components of any organization” (Jafari, Bourouni and Amiri, 2009). The company implemented a performance appra ...Download file to see next pages Read More
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