HP Way
TABLE OF CONTENTS PART I “THE HP WAY” 3 INTRODUCTION 3 STAFFING 5 INTRODUCTION 5 HP HUMAN RESOURCE POLICY 5 HP CULTURE 6 THE HP WAY ADVANTAGE 7 THE HP WAY – PART OF THE CURRICULUM 7 REWARD SYSTEMS 9 INTRODUCTION 9 SALARY COMPENSATION AT HP – THE BASE PAYMENT 9 THE MERIT PAY 10 GAIN SHARING 11 WORK SYSTEMS 12 INTRODUCTION 12 STRUCTURE CHARACTERISTICS 12 ORGANIZATION STRUCTURE 13 DEGREE OF FORMALIZATION 14 HIGH INVOLVEMENT (& COMMITMENT) WORK SYSTEMS 14 CONCLUSION 17 PART II PART II 18 FACING THE FUTURE 18 PERSONNEL CHANGES 18 THE CHALLENGES 19 THE STRATEGY 20 CONCLUSION 21 BIBLIOGRAPHY 22 “THE HP WAY” Introduction “It’s the key to productivity and to leadership and continuing progress and success in our company.” Before we discuss the human resource practices of Hewlett-Packard, it was essential for our group to determine HP’s appropriate business strategy. ... The “It” he was talking about, is the “HP Spirit” or “HP Way”, which we will define further in this introduction. ... One example lies in the Corporate Objectives, where the fifth point focused solely on the people of HP. ... In defining the HP Way, we quote that “The HP Way is difficult to define, both within the company and to those outside. It includes a participative management style that supports and even demands, individual freedom and initiative while emphasizing commonness of purpose and teamwork” Through individual freedom, flexibility and culture, HP is compromised to innovation and the research and development of new products. Using this definition as our base, coupled with Dave Packard stating that the HP Way is the key to success of the company, we will continue further discussion on how the human resource practices of Hewlett-Packard support this business strategy of maintaining the HP Way. STAFFING Introduction As the strength of an army in its soldiers, so is the strength of HP in its people. A major part of HP’s success is due to its hiring and staffing policies. ... This is the basic premise of HP, according to one of the managers. Nobody is hired just to help out with a program for a short-term, as HP have expectations for their people to stay and to grow with the company. This potential to grow is what HP is looking for in the people they hire. Thus strengthens the HP Way. HP Human Resource Policy HP’s policy is to develop its own resources, to promote from within using an ability to grow its own management people, its supervisors and its own technical people. This policy displays loyalty of HP to its people, which result in a high level of loyalty to the company. ... Although an unwritten rule, HP rarely hires someone from the outside into a management position. ... Trust is highly valued within HP when promoting into the management positions which takes at least a year to develop. ... HP is expecting some sort of “conditioning period” from its new employees. ... They get surprised by “the informality and the non-directiveness” they see at HP. It takes new employees some time to realize that HP is truly using the Management By Objectives technique (MBO) in its work. ... This is the HP Way, which results in the efficiency of company operations. HP Culture As mentioned earlier, this semblance of lack of direction and informality are part of the HP Way. ... The spirit of innovation and creation is a very large part of the HP culture. ... The HP Way Advantage In reading about the HP Way, we get a sense of the devotion employees have developed for HP and understanding how HP is able to secure these talented workers is essential. Using an example case of production workers, the set of skills and competencies of a hired person are very similar to those of people employed at other non-HP production facilities. However, due to all the positive feedback potential employees hear about working for HP, they join excited about the opportunity. In a way, the HP Way has helped the company develop its own brand, as people regard working for the company as an added value. The HP Way – Part of the Curriculum In 1973, HP realized that the size and the growth rate of the company made it difficult to transfer the culture of the HP Spirit to new employees simply by using examples and stories. As a result, HP developed a course “Working at HP”, in which the culture is passed on through a series of lectures and discussions. ... The instructors attempt to let employees discover HP, through establishing an on-going dialog between managers and employees. ... The course is organized into modules which cover a variety of topics: the history of HP, the development of the HP Way, personnel policies, performance evaluations, salary administration, and personal development.