Putting People First for Organizational Success

Putting people first for organizational success:

This paper discusses that people are the most important asset.

Study - After 5 years of being founded, only 60% of companies were still existing. One major reason for this was the value the firm placed on human Resources —such as whether the company cited employees as a source of competitive advantage— and how the organization rewarded people—such as stock options for all employees and profit sharing— were significantly related to the probability of survival.

Apple story:

In 1991, about 10 percent of the work force was laid off. In 1993, cost cutting by laying off 2,500 people, about 14 percent of the work force. In 1997, another round of layoffs affected almost a third of the remaining people.

More damaging than the layoffs themselves was the way they occurred in waves over time, making people unsure of their futures and tempting the best people to leave.

Whenever a company faces any financial problems, the quick action they take is to reduce employ costs – reduce training, no promotions, part-time or temporary help increases, people are laid off or forced to work reduced hours. This only has negative effects as these lead to reduction in motivation, satisfaction, and loyalty to the company Employees feel.

people work harder because of the increased involvement and commitment that comes from having more control and say in their work; people work smarter because they are encouraged to build skills and competence; and people work more responsibly because more responsibility is placed in hands of employees farther down in the organization.

Seven Practices of Successful Organizations:

1. Employment security
2. Selective hiring
3. Sell-Managed Teams and Decentralization as Basic Elements of Organizational Design

1. the greatest payoffs from team-based organizations is that teams substitute peer-based control for hierarchical control of work.

1. Comparatively High Compensation Contingent on Organizational Performance
2. Extensive Training
3. Reduction of status difference

1. NUMMI: Same uniform
2. Kingston technology: CEO sit in open cubicles not cabins

1. Sharing information

Implementing these ideas in a systematic, consistent fashion remains rare enough to be an important source of competitive advantage for firms in a number of industries.