Employee Branding and Equality - Assignment Example

Employee Branding and Equality Examine the extent to which the concept of employee branding conflicts with the notion of equality. You may wish to draw on organisational examples as illustrations. Introduction The concept of employee branding is certainly not a new concept since differentiation between employees and the way some employees are treated compared to others has been a part of our culture for many years. The concept of employee branding can be said to be in conflict with the idea of equality but it can also be shown that all employees are not equal and branding employees according to their performance and output is the fair thing to do. No company in the world across any industry in any location is as well respected and appreciated as GE (Demos, 2006). Throughout its existence, and more recently in current years, analysts from the fields of management, administration, human resources and organisational behaviour have all given their highest respect to GE (Fisher, 2006). A large part of this respect comes from the way GE handles its organisational aspects of Power and Control which becomes a part of how GE differentiates between employees for the purposes of branding. Examples of such branding have been given by those who have been a part of GE as well as those who have observed it from afar. Theoretically speaking, the company appears to be working with the Functionalist Paradigm in mind which suggests in brief that human beings can largely be expected to act in ways which are rational. Under this paradigm organizational behaviour can be understood through experimental observation and hypothesis evaluations (Burrell, 1979). It seems that this paradigm is certainly useful because GE acts in a manner which is very rational for the most part and the methods used for branding employees, establishing power and keeping GE running as well as profitable are founded in rational thought. For GE, the overall purpose of employee branding is to set the performance bar for not only the employees but also the company’s objectives and actual accomplishments. It is interesting to note that even a successful conglomerate such as General Electric (GE) with more than 300,000 employees engaged in 11 technology, services and financial businesses across 160 countries has been focusing and improving on the basic management functions of controlling the efficiency and productivity for all of their employees for more 130 years and continues till date (GE, 2006). However, it is their success and their employee management systems as well as the leadership which have brought them the success and appreciation which is seen today (Colvin, 2006). It can be shown without a doubt that this success is in no small part due to the employee branding systems used at GE. GE’s Employee Branding Between individuals as well as groups, differentiation, employee branding and power relations can be established in many different ways as discussed by Burrell (1979) and Armstrong (1999) but with respect to the business environment, power is established when one person has the ability to influence the behaviour of the other. Since individuals are assumed to behave rationally, power is given more or less voluntarily. Of course any discussion of power also assumes that the individual exercising power has the legal and ethical authority to exercise that power. With those definitions, it can be shown that power at GE is maintained with the use of other normal tools which any other organisation uses e.g. salaries, employee perks, medial insurance, health insurance etc. but the way rewards such as bonuses, awards and stock options become a part of the culture at GE is how GE brands its employees (Kerr, 1996). Additionally, things like the power exercised by the line managers and eventual group heads of the company is also as significant as the power exercised by the friends and co-workers at GE since they can brand their co-workers with special significance (Grote, 2002). On the other hand, GE also brands employees with a negative label since 10% of the employees at GE are removed on a regular basis since they are at the bottom of the table in terms of performance. This takes places because rewards alone may not be enough to motivate all individuals and some might need to be shown the negative side of not performing (Schmitt, 2001). Employees are politely asked to leave the company since they could not be a useful fit in terms of skills and commitments (Grote, 2002). However, before a discussion of branding employees with punishment, it would be more appropriate to discuss rewards since they are far more commonly given and received at GE than punishments or termination letters. Differentiation Though the field of management and the applicable rules can change on a day to day basis as discoveries are made in the field (Beardwell &Holden, 1997), as early as the 1930s, GE was focused on cooperative labour relations and employee branding instead of merely being satisfied with a traditional power structure. By the 40s, GE had created profit based employee bonuses as well as pension plans for those who had an extensive career with the company (Colvin, 2006). This shows that the company has had a long history and a good track record of creating employee brands and differentiation with rewards. Rewards are an intrinsic part of the branding process at GE and the rewards for individuals who gave outstanding performance are significant and public (Kerr, 1996). Welch (2005) reports that, “We publicly rewarded people who drove the mission and let go of people who couldn’t deal with it for whatever reason (Welch, 2005, Pg. 16)”. This simply stated idea of employee branding means that only the best individuals are retained by GE therefore a person who remains at GE is essentially a good performer. The idea of publicly rewarding top performers rationally ensures that those who see it happen know why those individuals are being rewarded. Good employees are given higher rewards and publicly appreciated to become part of the stars of the company. On a simple management level, the individuals who were rewarded would have a harder time in leaving the company and their power relationship with the management would only be strengthened. The creation of employee branding and the power relations between the individual and the company begin at the recruitment stage as suggested by Shelly Lazarus who has been a long standing member of the board of directors for GE (Colvin, 2006). This relationship is taken further as the power relationship turns itself into a partnership with continual rewards and promotions coming to the individual who performs for GE (Grote, 2002). Depending on which position the individual is recruited for and the nature of work performed by the individual, the communication patterns between the employee and the company can be expected to differ significantly. The Use of Rewards for Employee Branding The functionalist paradigm depends on organisational relationships and good managers who know how to use co-workers to motivate other individuals in a company. At GE, any bonuses, stock options, increments or gifts given by the company to individuals working for the company are made public knowledge to the members of the department and as suggested by Morris & Colvin (2006), that helps to motivate other employees to emulate the success of winners. Employees who are seen to be rewarded are immediately recognized as being better than others in terms of performance but at the same time, managers are careful not to let demoralisation set in. The QuickThanks Program as discussed by Kerr (1996) and explained further in this paper, also supports the idea that employees can reward their peers for a job well done. The review and evaluation process for the purposes of employee branding ensures that no person is rewarded for average performance and every high performer is adequately rewarded (Welch, 2005). This public nature of rewards and bonuses disclosure means that friends and worker groups are included in the power relationship since they have a collective connection to the company. Therefore, as recommended by Boxall and Purcell (2003) GE is using rewards and bonuses as tools for strategic management as well as motivation that keep the power relationship alive. The Process of Branding Establishing employee brands requires a significant investment in the form of time spent on managing people. When GE ranks employees into various categories, it splits them in 3 levels which include the top 20%, the middle 70% and the bottom 10% (Welch, 2005). Common wisdom would suggest that the most time should be spent with the top 20% to earmark those individuals who can get top positions within the company. On the other hand, extra time can also be given to the bottom 10% so their performance can be improved and even with a relatively low time investment a company could see significant returns. However, the process of establishing brand priorities is slightly different at GE. According to Welch (2005), the managers at GE are told to give their most time to the middle 70% since this is the largest group created out of the employee branding process. Additionally, 50% of a department’s overall rewards and bonuses are handed out to this group since they form the backbone of the company and are responsible for doing the most work (Welch, 2005). Of course in certain situations no amount of control or motivation can help an individual in which case they are best removed from the company. The termination process is not instantaneous nor is the decision taken in haste because the person is given enough warnings and time to correct their behaviour if they can (Grote, 2002). The branding process separates employees into three categories as described by Welch (2005) and shown in the table below: Action Taken A B C Employees are Evaluated and placed Top 20% of the company Middle 70% of the employees Bottom 10% of employees Short term strategy Rewarded and awarded Motivated and trained to come to higher standards Warned and motivated Long term strategy Considered for and given leadership positions Moved within the company or within departments to find best fit Removed from service To balance the rewards side for branding employees, a threat of termination would be a good tool to use as per the functionalist paradigm. Fear can be used as a motivating factor so while behaving like a family and a closely knit group; GE functions plainly as a meritocracy in which there is no room for poor performance. Yearly, the bottom 10% of the company is removed from service, which allows fresh blood to take replace outgoing individuals at a rapid pace. At the same time, it keeps all those on their toes who missed the axe or were told to shape up or even seek different departments within the same company or different groups within the same department (Welch, 2005). It must be noted that the final threat involved here is not the threat of termination, but rather replacement on merit. Jack Welch has summarized the differentiation and branding process that rewarding performers and punishing underperformers by saying: “When all is said and done, differ­entiation is just resource allocation, which is what good leaders do and, in fact, is one of the chief jobs they are paid to do. A company has only so much money and managerial time. Winning leaders invest where the payback is the highest. They cut their losses everywhere else (Welch, 2005, Pg. 38) It seems that this is the correct way to manage employees within a company that wishes to keep the best human resource given to it and remove those who have been recruited as a mistake. While there is no legal requirement for using or not using the differentiation process for rewarding employees, the other side of differentiation which asks for the bottom 10% of the employees to be removed from service means that there is a possibility of a wrongful termination lawsuit for the company. A disgruntled employee may consider their notice to be a summary termination but the system at GE works in such a pattern that the notice does not come as a surprise to anyone involved in the process (Welch, 2005). Moreover, termination may not be a necessary option if the person can be moved to a different department more suited to their abilities (Grote, 2002). Furthermore, employees can establish performance based brands amongst themselves as well and these brands are created much faster than company mandated reviews. Performance can only be controlled sufficiently if the rewards or punishments associated with the performance of some act come quickly. Kerr (1996) uses the example of rewarding mice in a cage for pushing a button and suggests that if a sugar cube comes a year or more after the lever was pulled, there would be little to connect the two actions. To control employee behaviour in a more improved fashion, the amount of reward and the speed of rewarding good work must be high enough to make a difference. The QuickThanks program at GE lets peers rewards others with instant gift coupons worth with 25$s for something which they think should be appreciated. The appreciation from the peers is not easy to get since peer evaluations at GE are often harder to ace than evaluations coming from the bosses and managers (Kerr, 1996). This concept is perfectly inline with rational behaviour and motivation as suggested by the functionalist paradigm and the process of allowing employees to create performance related brands. Other Examples of the Same Branding Process GE’s ranking system for branding employees into various groups was greatly appreciated by Grote (2002) who said that companies which do not rank employees are wasting time if they give the workers any performance appraisals. In fact, even in situations where two employees are performing at more or less equal levels, Grote recommends going deeper into the situation to exactly find out who is performing more and who is performing less. To give rewards and bonuses, a ‘forced ranking’ system is used at GE through which it is impossible to say that two employees are working at the same level. One is always better than the other and the best can improve to raise the bar for everyone. It is to GE’s credit that their system for employee branding has been respected, tested and accepted by some of the biggest names in the world. This ranking system is used by Microsoft, Cisco, HP, Sun, Capital One, PepsiCo and Intel amongst many others. Sun exactly mirrors GE’s system to discriminate between employees by saying that 20% are superior, 70% are “Sun Standard” and 10% are underperforming. On average, a quarter of all the companies in the Fortune 500 list have established this practice of division as a reward management standard (Grote, 2002). Welch insists that the removal of the bottom ten percent is a critical part of the overall rewards process and in his final letter to the company’s stock holders he wrote that: "A company that bets its future on its people… …must remove that lower 10 percent, and keep removing it every year--always raising the bar of performance and increasing the quality of its leadership (Grote, 2002, Pg. 41-41).” In conclusion, the branding and performance based rewards system is intrinsically linked to the philosophy of a company to improve itself using differentiation and if that means making some tough decisions, they have to be made quickly and efficiently. The concept of equality for employees is not defeated by this concept since all employees are not equal. The bottom of the barrel needs to be cajoled into becoming performers while the top performers and the stars of a company will always have a higher reason to be justifiably branded as such. Works Cited Burrell, G. 1979, Sociological Paradigms and Organisational Analysis, Heinemann Educational Books. Boxall P. and Purcell J. 2003, Strategy and Human Resource Management, Palgrave & Macmillan. Beardwell I. and Holden L. 1997, Human Resource Management: A contemporary Perspective, 2nd Ed., Pitman. Colvin, G. 2006, ‘What Makes GE Great?’, Fortune, vol. 153, no. 4, pp. 90-96. Armstrong, M. 1999, A Handbook of Human Resource Management Practice, Kogan Page. Demos, T. 2006, ‘The World’s Most Admired Companies’, Fortune, vol. 153, no. 4, pp. 72-73. Fisher, A. 2006, ‘America’s most admired companies’, Fortune, vol. 153, no. 4, pp. 65-76. GE. 2006, ‘General Electric’. GE.com, Available at: http://www.ge.com Grote, D. 2002, ‘Forced Ranking: Behind the Scenes’, Across the Board, vol. 39, no. 6, pp, 40-46. Kerr, S. 1996, ‘Risky business: The new pay game’, Fortune, vol. 134, no. 2, pp. 94-97. Morris, B. and Colvin, G. 2006, ‘The GE Mystique’, Fortune, vol. 153, no. 4, pp. 98-104. Schmitt, J. 2001, ‘Welch has a lesson, even for small shops’, Contractor Magazine, vol. 48, no. 10, pp. 16-17. Welch, J. 2005, Winning, HarperCollins. Read More