Cisco Systems Analysis - Essay Example

Cisco ‘Ready, willing and able’ is a slogan used to describe the American workforce. It reflects the desire of most Americans to be gainfully employed in the production of goods and services. (Sauser, 2000). Cisco Systems is among the few companies that is recording any kind of positive growth even in these turbulent times. Currently, it has over 66,000 employees. Its annual revenue in the year 2008 is said to be around $39 billion. Based in San Jose, California, they are involved in the designing and sale of networking and communication technology and service equipment. ). The figures above are used not to merely denote the size of the company and the amount of working capital it has, but represents an organization that means business, spells business and does it efficiently. They have been in the forefront of creating ‘The Human Network Effect’ which is the main theme all their advertisements are based on. One of the most interesting features of the company lies in its strategy to acquire other companies to add to its existing talent pool of software engineers. ‘Cisco is intentionally influencing knowledge flows through its management of IT.’ (Managing knowledge for sustained competitive advantage, Jackson. Susan, p 70). Being a company that reported a growth in sales over 50% annually in a timeframe of five consecutive years, this is truly a power to be reckoned with. This resultant growth is only due to its employees. It is because of the employees, hired in the best interests of the company who drove the sale’s machinery and gave it immense profits that multiplied over the years. But, things have changed since the last few years. The global recession has not only dashed the hopes and wealth of large business enterprises, but also created a sense of intense fear and insecurity in the minds of good workers and employees. In this scenario, the training imparted to employees becomes all the more important because it defines their future roles and shapes their goals when they join the company. Though, currently, this kind of emotional distress seems to be an ongoing problem with most of the business establishments, Cisco needs to be treated differently because of the quality of the workforce it needs to maintain. This is main the reason why Cisco cannot avoid not having a training budget. Training employees is important to make them productive and contribute towards efficient and profitable performance in the long run. It can also act as a retention strategy and ensure that the best and more productive employees stick around longer. For a large company like Cisco, good training is all the more imperative considering its traditionally high turnover because only the best employees can yield maximum profits always. ‘Cisco has relationships that enable fulfillment to provide a much deeper sense of satisfaction, not just tossing out a product, but building a customer relationship that in and of itself creates a form of wealth.’ (Human Resource Management in Virtual Organizations, Innis. Pauline p 107). It is of utmost importance to familiarize employees with the company’s work culture, its policies, its product-line, the business practices and even its competition. To top it all, New Employee Orientation (NEO) and training costs less than $1500 a year according to a survey conducted by the Ontario (Canada) Skills Development Office. When the employees are aware of the costs the company incurs on a regular basis to train them, the mutual feeling of the immense importance of their job for the company’s sustenance and their value in the company shows a steep increase. ‘Brainpower and superior talent drives Cisco’s business, so Cisco needs to train its employees to ensure they are eager and able address their organization’s key competitive challenges.’ (Managing human resources through strategic partnerships, Ren Li Zi, p 5). Besides training in the professional and technical areas of expertise, many other steps need to be taken to help Cisco maintain its position. ‘Cisco has already moved in the right direction by trying and “building” employees rather than “buying” them,’ as stated by John Chambers, the Chief Financial Officer (CEO) of Cisco. What Cisco needs in addition to the robust and effective internal job search tool or software application called ‘Pathfinder’ is to keep the employees informed of changing trends in the market. Understanding the business environment around them will propel these employees to strive harder. Clearly defining the company’s goals and their annual projection would ascertain the professional goals of the employees in turn. Cisco should also ensure that all its employees have sound verbal and written communication skills and an analytical bent of mind. They must be in a position to comprehend and decipher any situation the company is in and have an inclination to serve Cisco’s clients well and to the best of their ability, utilizing their latent potential to the fullest and in a highly fulfilling manner. Cisco must also ensure that its employees are constantly acquiring new skills. The employees must be rewarded with good payouts, bonuses and promotions for the work put in. It is these steps that actually help the large costs spent on training bear fruitful results. A good compensation policy will also help better the situation. However, at the same time, the employees must not have very high expectations of the financial incentives the company might reward them with in the future. Setting the necessary level of expectations must also be clearly decided by the company as this helps eliminate many harsh decisions and discussions over a long span. A company of this size has to adopt a methodology wherein it can weed out the redundant workers and get only the cream in and retain them for a lifetime. Cisco, in order to retain its competitive edge and hold on the market, needs to educate its employees on the important aspects of a sustainable competitive advantage, which are ‘cost advantage’ and ‘differentiation advantage.’ The product can only be as good as the designer and the competitive benefits that Cisco’s products promise customers over other related products in the market alone will see the company through in the years to come. Cisco needs to manage its human resources very effectively to ensure that all the above tasks are carried out in an-employee friendly and precise manner. There is no space or scope for mistakes to be made right now. Therefore, in times like these, experimentation on effective execution of employee strategy and further discussion on adopting other methodologies of human resource management is really not possible for Cisco. It is the need of the hour to have a sound and stream lined human resource section to create an environment that is fair and non-territorial. The seven steps human resource managers typically employ to ensure an able work force are: 1. Job analysis. 2. Recruitment. 3. Selection. 4. Placement. 5. Training 6. Coaching. 7. Development (Sauser, 2000). First, talking about the old work force- the employees who are retained must be clearly told why they services are needed and must feel appreciated and needed by the company. Pathfinder may address most queries like internal job opportunities and selection criteria. The human resource managers must understand the staffing needs and make sure they create a newsletter circulated among all the permanent employees of the company explaining to them the proficiency level required to be a part of another internal team. Second, regarding the new workforce waiting to be a part of the company- the biggest challenges Cisco faces right now is picking a set of people to lead their human resources team who can quickly assess and critically analyze the skill sets that are needed by the company on a permanent basis. Effective human resource management also involves selecting and bookmarking good employees from a pool of potential recruits. A solution to this possible impediment and challenge described above would be to ask suitable managers to try and create a relationship-oriented atmosphere, so people are encouraged to refer their friends to the company. This ‘friends program’ must be a sound and transparent system where the essential skill sets for every job is posted clearly on the internal employee web site or job portal. It may also completely eliminate the need of looking for people who have absolutely no idea of what to expect from the company and have no clue of the existing work culture there. ‘Due diligence must be maintained in preparing job descriptions to emphasize candidate motivation and organizational structure.’ (Long, 1998). Programs intended to deliver balanced information, that is delivering the pros and cons of the job, or ‘realistic job previews’ (RJPs) need to be planned well. Another area that needs to be made crystal clear by this department is the ‘vertical’ and ‘horizontal’ growth the employees can expect with the changes in the company’s workforce. Lateral growth in an organization, which has a flat hierarchical structure, is of no consequence to any employee. The chances of growth and promotions must be weighed keeping multiple performance metrics in mind. Yet another challenge the human resource department faces is designing a fool proof and sensible appraisal procedure where the employees are scored keeping certain performance standards in mind. Each section of the company has different work groups of people with varied skill sets, so a critical decision-making process to design a central hub housing different rating systems, keeping the diversity of the employees in mind is the need of the hour. ‘If your company builds its reputation as a great place to work, the best people will find you’ (Cook, 1997). Cisco already has a feather in its cap in this realm with it being rated sixth in ‘the top 10 best companies to work for’ since many years. To sum up, no glaring difficulties and problems, but opportunities and scope for further improvement to better the lives of the employees and sustain the growth rate of the company is what Cisco has in store for itself. Cisco and fiasco have never and will never go together. References: Human Resource Strategies for the High Growth Entrepreneurial Firm By Heneman, Tansky Published by Iap Read More