By Group 3

International Business Machines: Strategies and People Issues

06 Amit Papneja 09 Sravya Arekatla

12 Chhavi Aggarwal 13 Chhavi Gupta

50 Swetha Sri M. 59 Vidhi Verma

Question 1: Compare and contrast the HR strategies of the

three CEOs of IBM John Akers, Lou Gerstner and Sam Palmisano on hard-soft dimensions of HR Strategy.

John Ackers HR strategies

Hard Model
View of Employees
A tight fit between HR and Business strategy Expected to wear familiar dark suits and white shirts

Are Employees a resource?

Yes Change their jobs as and when required

Focus
Human resource policies Sophisticated Human resource planning Recruitment and Training Performance Objective system Extensive training on people management

HR Mgmt. Emphasis
Calculative Pay better than rate of competitors Life time employment Audit of staff function held every two yearss

Reflects
Crude Unitarism

Combines
Scientific Management

Type
Prescriptive model Decision making and people management delegated to line managers at lowest possible level

Shows
Rational Strategy Social contract between employee and employer

Style
Paternalistic and Hierarchical

Lou Gerstners HR strategies

Hard Model
View of Employees
A tight fit between HR and Business strategy High focus on reviving the business Improving customer relations and decentralization Diversity Management

Are Employees a resource?

Yes Major staff reductions

Focus
Knowledge Management Information sharing as one of the parameters in PMS to determine compensation

HR Mgmt. Emphasis
Calculative Cost reduction through reduction in global workforce Raising cash by selling assets

Reflects
Alignment of Business

Combines
Scientific management and rational strategic management

Type
Prescriptive model Individual accountability Sense of urgency

Shows
Strategic alignment of all the processes

Style
Measuring results

Sam Palmisanos HR strategies

Soft Model
View of Employees
Focus on people and their relations with management Emphasis on employee development

Are Employees a resource?

Yes Resourceful humans

Focus
Empowerment Trust, collaboration

HR Mgmt. Emphasis
Different organization structure

Reflects
Neo pluralism

Combines
Human relations Japanese Management

Type
Collaboration

Shows
Emergent Strategy New Technology and process management

Style
Global Integration

Question 2: Discuss fully the italicized statement of Czarnecki,

the HR Manager brought in by Lou Gerstner: IBM did deliberately foster paternalism, with a social contract between employee and employer. But economic realities forced us to rethink the relationship. Now were no longer asking people for total commitment to us. Theyre eager to stay, but prepared to leave.

KEY CHANGES TO HR BY GERSTNERS TEAM

Look to the marketplace Fewer, faster jobs in a flatter organization Reward for performance

Single salary structure changed to different salary structures with merit budgets for different job families. Allowed IBM to pay employees in different job families according to market-oriented rates.

Traditional salary grades scrapped in the USA Number of separate job titles cut from 5000 to less than 1200

New compensation system: managers given budget and told to differentiate between stars and acceptable performers on the grounds that otherwise the stars would not stay too long.

Reference: Price, Alan; Human Resource Management in a Business Context (Third Edition), (2007), Thomson Learning

EVOLUTION IN SOCIAL CONTRACTS

1961: Progress report to Employees, Thomas J. Watson, Jr. "I feel strongly that there are some priceless ingredients in this business which we will never changethings such as our concern for the individual, our sense of fair play and our belief in services. For our fine reputation as a company is based on nothing more and nothing less than respect for the individual, integrity and personal values of our people. You are, in fact, the IBM company."

2007: NY Times Report by Steve Lohr IBM reinvented social contracts with its workers Whether a person stays with the company for a long career or just for a few years, IBM is a place where people can enhance their skills and be more competitive in a labor market buffeted by globalization and rapid technological change.
http://www.marketingprofs.com/articles http://www.taipeitimes.com/News/editorials/archives/2007/07/29/2003371794

Question 3:

10

Question 4:

11

12

Question 5:

13

14

THANK YOU

15