Ge & Jeff Immelt

Topics: Management, Human resource management, Strategic management Pages: 6 (1804 words) Published: May 2, 2011

Ge Making Of Ceo

Management of Organizations Case Write-up 1 – GE’s Talent Machine: The Making of a CEO

1.What philosophy, policies, and practices have made GE a “CEO factory” as Fortune called it? General Electric (GE) has traditionally had a hands-on approach to talent management. There is a high degree of involvement of the top management in its people policies. There is a top-down approach to human resource policy. Also, GE recognized the need to be a strategy focused organization early on. The people policy of GE and its HR systems show a high degree of alignment to its strategy implementation. The emphasis on management talent development by four successive CEOs has lead to GE having the most sophisticated of HR processes. Though the operational details of the visions of each of its CEOs since Edison have differed, their philosophies have always concurred on the cornerstones of a good HR strategy, namely an emphasis on nurturing talent, a good performance monitoring and evaluation system and commensurate performance oriented rewards and returns schemes. The philosophy of GE was also to look beyond traditional operational measures for performance measurement to more strategic ones. GE’s policies and processes are uniquely suited to make it a CEO factory. GE has been very successful in achieving a high level of correlation or fit between HR and overall strategy of the firm in two key areas as illustrated in Table 1. Table 1: GE's HR System - Internal and External Alignment Fit Components/Objectives Internal fit – aligning HR components HR planning, recruiting and selection, training and development, performance management and appraisal, compensation and benefits, work organization, communication systems, HR performance measurement External fit – aligning HR system with Strategic objectives, HR deliverables, Culture, Structure GE has within its HR processes, managed to link HR deliverables to elements influencing human performance namely, employee skills, motivation and strategic focus. Table 2 connects the initiatives taken over the years by successive GE leaders to these key drivers of strategic human performance. GE always promoted its top leaders from its own ranks. executive development practices were rooted in the cultural values put in place by Charles Coffin, the CEO who succeeded Edison in 1892. a thorough decentralization of the responsibility and authority for making business decisions first corporate university, known within the company as Crotonville In 1956, GE spent $40 million annually to support management education, almost 10% of its $424 million pre-tax earnings strong commitment to upgrade GE’s on-the-job management development processes. A new corporate system, known as Session C, was designed to support an ongoing dialog about managers’ career interests and development needs. Individual Career Forecast, rating each subordinate on a six-point scale from “high potential” to “unsatisfactory.” They also prepared an Organization and Staffing Plan, identifying three replacements for his or her own position and for each subordinate. plans for promoting “high-potential” employees, remedying “unsatisfactory” ratings…/10993 1/4


Ge Making Of Ceo

To fuel this growth, Borsch needed to overcome department managers’ natural tendency to hoard talent. To help him manage GE’s executives as a corporate resource, he created a corporate Executive Manpower Staff (EMS) reporting directly to himself as CEO. In contrast to the existing human relations staff working on plant level industrial relations issues, EMS focused only on jobs classified as PLs 13 to 27, a group representing the top 2% of GE’s 300,000 worldwide employees. Believing that decades of diversification and delegation had fragmented businesses and led to a preoccupation with operational efficiency, Jones introduced a more formal and structured...
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