Leadership Development at Goldman Sachs - Case Study Example

Leadership development at Goldman sachs Leadership development at Goldman Sachs Table of contents………………………………………………………………………………..3 Executive summary………………………………………………………………………………..3 Introduction………………………………………………………………………………………4 Literature review…………………………………………………………………………………..5 Importance of leadership development programme………………………………………………6 Structure of leadership development programme…………………………………………………7 Methods of leadership development programme………………………………………………….8 Benefits and limitations…………………………………………………………………………8 HR Policies………………………………………………………………………………………9 Conclusion……………………………………………………………………………………….10 Bibliography……………………………………………………………………………………13 Executive summary This paper is meant to analyze the case study of the leadership development, which is visible in Goldman Sachs. The company was in dire need of trying to attract and retain employees in 1990s. to deal with this arising situation, the organization’s management and top official made a decision to create several slots for managing directors posts in different geographical regions and the functions each of the MD specialized in. the reason is that there is a demand for new competencies and skills brought about by a change in the global market. That is why organizations need to have well-motivated and competent employees for them to have a competitive advantage in the market. As a result, there is a rising demand for learning organizations. It is recommended for organizations to have the required capacity to facilitate their employees to learn continuously during their working tenure in the organization. This is what is described as the learning organization. Such organizations need to have high level of professionalism and expertise to facilitate learning in their organizations. Moreover, there is a dynamic change in the expectation of customers due to the changing levels of technology. That is why it is important for such employees to constantly learn to adapt to the changing preferences of the customers and advancing levels of technology. This in turn is capable of increasing employees’ motivation thus increasing their customers’ satisfaction. As a result, the organization continues to amass more profits. Goldman Sachs has realized this that is why they are determined to create a program to enhance the development of leadership in their MDs. This program should foresee all aspects of training, development of its employees, the outcomes of employee and the required organizational performance. The organization should ensure that the program undertakes all the affairs of the organization to ensure that the organization realizes profits by ensuring that its employees are well suited and motivated for their job. Introduction Goldman Sachs is an investment bank situated in America though it is also a multinational. It went through various challenges between the years1980 to 2000 due to various reasons: Globalization Growth in their IPO market Expansion of their business among other things In 1990, the situation that the organization faced raised various important issues in addition to undertaking investment banking. Due to increased globalization in the area, various organizations were competing for new expertise. Therefore, the organization aimed at retaining its employees and providing them with the learning that they desired for them to remain competitive. Since the organization had expanded its business territory, most of its employees worked in other global countries. As a result, they created more managing director positions that were created their function where they will be located. This issue made it necessary for MDs to be trained to work in diverse cultures. Moreover, training the MDs is enables them to develop the required skills and expertise and retain the professionalism in the company. as a result, the company required ample training and development since the organization’s growth was high thus the need to come up with a corporate culture and retain it. The company is famous for its corporate culture but they needed to up their game for them to maintain a competitive advantage. The company had new talent in its employees who had worked for less than two years thus the probability of them not knowing the organizational corporate culture was high. that was one of the main importances of the leadership program to ensure that it created awareness of its corporate culture among all its employees. This analysis will draw on three areas. The first one will draw on the various academic literature used and show the link between training and development, outcomes of the employees and organizational performance. Moreover, it discusses the importance of a leadership and development program for GS considering the market, company’s culture, and their employees. The second part presents and justifies the important aspects of GS leadership program. The third part discusses how the leadership program collaborates with other practices and policies of HR. at the end, the paper will have a conclusion and the reference list. Literature review Development in this context is the process by which organizations acquire the required knowledge and skills among its employees (Wilson 2009). Often such expertise is used in future and not necessatrily the present. Training and development is important in organizations to be in a position to develop important skills for the organization to maintain a competitive advantage (Kozlowski & Salas 2009). Due to globalisation, it is imporetant for organizations to ensure that they attract and retain as much potential as possible or risk facing shortage of expertise(Gratton and Truss 2003). Moreover, the preferences of customers are drastically changing due to the advanced technology (Sims 2008). That is why it is important for organizations to engage in training and developing its employees to keep up with the changing technology and customer’s preferences. According to Jackson, Schuler, & Werner (2012) and Harder & Council (2007), the level of training that organizations offer to their customers is capable of increasing the employees outcomes including retention and satisfaction. The reason is that most organizations aims at pleasing the customer to amass profits(Prokopenko & ILO 2009). The employee who pushes for these customer satisfaction is often recognized and rewarded by the organization in many forms. Such employees become well-motivated and thus maximize on their potential. As a result, such employees are retained in the organization to continue enhancing the success of the organization (Sims 2009). Nickson (2007), Jones (2011), Ford (2014), Rosenbaum & Williams (2011) and Tobin (2010) all agree that training and development of employees affects the perfomance of the organization. when employees are well motivated and satisfied, they in turn offer excellent customer’s services thus enhancing customer’s satisfaction (Graupp, Jakobsen, & Vellema 2014). Once the customers are well satisfied with quality of the products and services of the organization, they keep coming for more (Evans 2009). They also recommend the organization to other individuals enabling the organization to attract and retain more customers. as a result, the profit margin of the organization is increased (Petouhoff & Development 2011). It is important for these organizations to ensure that they come up with professionals to train their employees and ensure that they come up with better strategies often to ensure that they maintain a competitive advantage (Vaiman & Vance 2008). Highly trained employees contribute to the organization’s profit making venture (Russell et al. 2011) and(Becker et al. 1997). Since it is visible from the literature review that there is a relationship between training and development, the outcome of the employees and the organization’s performance, it is important for GS to undertake the leadership program since it will affect all this. In the event that the organization adopts this strategy, it would enable it to maximize on its profits through improving their employees’ satisfaction and job performance. Importance of the leadership development programme The organization is experiencing a global market with a high level of advanced technology. Thus, it continuously requires highly trained workers to be in a position to cope in the highly competitive environment. Since this is a requirement of the organization, they should aim at hiring and training employees to be competent to be their main strategy of enhancing their business’ profitability. Considering that the organization is highly expanding and changing, and their IPO is also growing, the organization requires fresh talent and professionalism. Moreover, the growth and expansion of the organization means that the organization is developing business in diverse cultures and other countries. Thus, it is important that their employees are trained on the diversity of these cultures and also increase their confidence in their abilities. Goldman Sachs has employees who aim at achieving the best results. To retain this trend, training and development is important. Thus, the leadership development programme of the organization is important. The structure of the leadership development programme Each employee is different in terms of his or her mental capacity and what he or she can handle. That is why before training, it is important for the organization to conduct an analysis to determine the needs of each employee. This is achieved by measuring the skills that an employee has and makes a comparison with the organizational requirement. The organization can interview these candidates, offer questionnaires or use the observational method of their employees in the event of their daily chores. As a result, the organization gets to know what each employee needs to learn in order to achieve the organizational set goals and objectives. The organization should ensure that it offer training to their employees at all their global locations. That is why it is important for the organization to develop their own school where employees from all the branches converge, learn and share ideas. As a result, they come up with creative skills and expertise. Moreover, such corporate schools will come in handy in offering training to the MDs. They should ensure that the employees and MDs are assessed frequently to find out their commitment and what they have learned. This will improve their leadership skills and expertise in the organization. Methods of leadership programme Offering their MDs and employees the required expertise enables them to change and develop drastically. It does not have to be a physical one but these employees can attend classes through the internet. The main aim of such institutions should be to offer quality training to the employees according to their needs. They should offer different packages to the managing directors to suit the geographical locations that they are situated in. The organizations should ensure that even if the MDs do not meet on a face to face often during their training, they schedule particular days for such meetings. In such meetings, they should inculcate the spirit of teamwork and real life situations where MDs can share the experiences and get an opportunity to learn from one another. It is important for the existing leadership programme in the organization to be conducted under the existing human resource function. The reason is that the programme necessitates the need for hiring new employees in the organization. It is also important for mentorship programmes in the organization. Thus, the organization should have both the external and internal mentors to ensure that their employees receive the support that they require. In fact, new employees require more mentorship compared to the other employees. This will go a long way in preventing them from becoming overwhelmed in their initial working days in the organization. Moreover, the training offered should be concerned with the market and business culture of the given geographical location in question. The MDs and other employees in the organization also need to learn the core values of the organization. This will be important in ensuring that the goals and objectives of the organization are met altogether. Benefits and limitations A leadership development programme has both advantages and disadvantages. One of the benefits is that adequate training conducted in the program enables the MD to posse’s creative ideas to handle any situation in the future. This training will also increase the rate of retention of the employees in the organization to improve on their productivity. This will ensure that the organization attracts and retain employees and MDs with the required expertise, which improves the productivity of the organization. The disadvantages include expense and time consuming. Training employees and MDs in the organization is likely to cause huge amounts of money for the organization and time consuming. Moreover, it equips the employees with the expertise that many other employers yearn for. As a result, there may be other employers who might offer these employees better deals thus making them leave the company. It is important that the evaluators involved are professionals though they may offer subjective judgement. HR Policies Human resource policies are important in an organization. The reason is that these policies determine the kind of employees who join an organization’s workforce. It is important for such policies to be aligned to enhance an effective and smooth operation in the organization. Goldman Sachs need to integrate their leadership development programs with the HR policies to ensure that their set goals are comfortably met. Most employers are often afraid of employing workers with no experience and training them since other organizations out there find such trained employees attractive. Since the organization is often involved in training its employees, it can lead to creation of a large pool of expertise and professionals since employees would be attracted to organizations that train its employees. To prevent the situation where employees might move to other organizations after receiving training from Gold Sach, it is important for the organization to offer equal and fair opportunities for all its employees. This means that their pay should be considerable in addition to job rotations and promotions. It is therefore important for the HR department to seek potential MD candidates internally first. The employees are likely to be motivated and maximize on their potential if they know that they are likely to receive promotion based on their job performance. Hiring internally is also less costly and less time consuming compared to looking for candidates outside the company. Moreover, due to globalization, the organization can also decide to hire externally since they require MDs and employees from diverse cultural backgrounds. Performance appraisal is important in the evaluation of the leadership development programme. The HR department can decide how well the MDs build relationships with their colleagues. Considering that the corporate culture of the organization is based on this, it is important for the MDs to be on the frontline in developing good relations with others and building teamwork. It is also important for other employees to be assessed to assist in the realization of the organizational goals and objectives. Conclusion It is important for organizations to enhance their training and development to improve their job satisfaction and improve on the performance of the organization. Considering the diversity of the cultures where the organization has branches, training and development is important to ensure that employees understand these cultures to improve customers’ satisfaction. It is important for the management of the organization to ensure that they give their employees a reason to work with them. They should also ensure that they are well rewarded and compensated to avoid brain drain. The development programme adopted has considerations for the organization’s market, culture and its workers. To maintain their corporate structure, it is important that the organization create an institution where all its MDs and other employees in the organizations can converge and receive training. Moreover, it is also required that these MDs receive the level of mentorship that they require to ensure that they have the level of support that they need. The human resource should ensure that they look for internal candidates for MDs position. This is capable of reducing their costs and reducing the amount of time taken. However, it is also important for the HR to look for external candidates due to the diversity of the cultures based on globalization of the organization. The leadership development programme has its downs and lows. One of the main advantages as indicated is the equipping the MDs and other employees with the required expertise to enhance the profitability of the organization. The lows include time wastage and high amounts of costs used in the process. Therefore, it is important for the Goldman Sachs to conduct and continue with the leadership development programme since it will be beneficial to the organization in improving the performance of the organization. Moreover, the organization should reward these employees considerably to ensure that they do not leave the organizations for other competitors. 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