Human

Resources at
Hewlett Packard
Aimen
Aimen Batool
Batool
Amna
Amna AliAli
SyedSyed
Aniqa
AniqaEjaz
Ejaz
Maham
MahamRizwan
Rizwan
Mahnoor Khalid
Mahnoor Khalid
 INTRODUCTION
• American multinational information
technology company.

• Headquartered in Palo Alto, California.

• Founded in 1939 by Bill Hewlett and Dave

Packard as a shop in a car garage.

• The company grew from a small electronic

instruments company into one of the
global leaders in information technology
products and services by the end of the
20th century. 2
 INTRODUCTION
• The firm produced and supplied a wide
variety of hardware as well as software
components and related services to
consumers, small and medium sized
businesses and large enterprises

• HP followed a no-nonsense strategy in

which the organization was more focused
on succeeding through technical innovation
than marketing or other means of
competition.

3
 Products of HP
• Audio Oscillator: which was used to
test sound equipment.

• Electronic test and measurement

instruments for engineers and
scientists.

• By 1979, the firm produced

products including electronic
equipment for measurement,
analysis, computation and printing.

4
 Products of HP
• The firm then expanded in to • Current Product lines
production of other products • Printers
Computers, Calculators, Medical
• Desktops
electronic equipment,
Instrumentation for chemical • All-in-one PCs
analysis, and solid state • Laptops
components.
• Gaming products
• Scanner and fax
• Monitors
• Cameras and Camcorders
• Smartwatches
• Mobile devices and many more. 5
 Corporate Objectives

• Profit
• Customers
• Fields of interest
• Growth
• Our People
• Management Citizenship

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HP’s Unique Style of
Doing Business

“The HP way”

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Organizational
Culture Aspect

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 Organizational Culture Aspect
• The key to success was strong organizational culture.

• The organization operated against the industry standards with respect to

management of its human resource.

• Employees were given flexible work hours which was not a norm in the
industry in which the firm was operating.

• HP believed that employees were more likely to suggest an innovative,

effective and efficient solution for the problem so they had been given
freedom of providing suggestions for changes as the upper management who
has no idea how the processes are being performed at the lower levels.
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 Organizational Culture Aspect

• HP had an open door organizational policy in order to promote

communication among the employees at all levels of the organization.

• This fostered a strong bond between employees and helped in the creation
of work family based on trust and freedom which resulted in employee
satisfaction and loyalty.

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 Participative Management Style - Creating
Sustainable Performance
• HP focused on both individual efforts and teamwork.

• HP provided direction to its employees by creating well-defined and

negotiated goals (provision of decision making discretion), by sharing
information and by supporting necessary resources.

• The mistakes of the employees were tolerated and they were given the
chance to learn from them and improve them.
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 Participative Management Style - Creating
Sustainable Performance

• Created a sense of empowerment in the employees and conveyed a message

that their decisions and work impact something bigger i.e. the overall
achievement of organizational goals.

• This provided sense of purpose, closeness and informality within the

organization as the organization is attempting to create thriving workforce.

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 What Vs How – Emphasizing the Process
• HP paid more attention to the ways things were done not only to the what
was achieved.

• The processes within organization were the source of strength along with the
structure that produced results and contributed in the sustainable
competitive advantage of the firm

• As stated by HR program manager

• “if an employee does something that isn’t in the HP style, people will say, that
isn’t the way we do things around here”

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 Integrating the Employees – Developing New
Working Relationships
• Cultural trust environment of the organization was based on
 Subtlety

 openness in relationships
• Quite the opposite of the industry norms.
• The new comers were expected to learn these aspects of the organizational
culture and they were forced to do so through peer pressure.
• Fostered sense of belongingness and achievement.

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 Managing C-performers

• Underperformance of the employees was not tolerated in the culture of HP

• C-performers were managed by transferring them to the jobs where they

could perform better rather than firing them.

• Created the concept of employment security among the employees.

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Financial Aspect

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 Financial Aspect
• New divisions were established to support the growth of the firm and
customer demands.

• Formed when a particular product line became large enough to support its
continued growth out of the profit it generated.

• HP Operates on
• Self-financing approach – Done by management of assets speceifically
inventories and receivables
• Financial reporting system – To evaluate the performance of domestic
divisions as well as international operations
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 Human
Resource
Aspect

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Work Systems
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 Work Systems
• Annual Tactical and Strategic Planning
• Defining job’s objective and its major responsibilities and performance
measures.

Management By Commitment to
Objectives Teamwork

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 Management By Objectives
• Used to guide employee behavior

• Created a sense of responsibility and made the jobs interesting and

challenging

• It Included:
• Establishment of long and short term objectives based on overall
organizational objectives.
• Employee discretion was being provided for the accomplishment of these
goals.
• Provided an opportunity for individual initiative and influence in setting
overall objectives.
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 Commitment to Teamwork

• Promoted through teamwork and participative decision making,

environment of openness, trust and cooperation.

• Team work for multiple product line approach applies not only across
business units, but also includes the ability of all members of a unit to
influence the way the unit’s task is accomplished.

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Communication
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 Communications

Open Door
Policy Management
By Wandering
Around

Division
Reviews
Attitude
Surveys

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 Open Door Policy

• No doors to the individual offices to promote interaction among employees

• Top executives had modest sized offices within large administrative areas,
divided by freestanding low partitions.

• Creation of learning organization

• Less time required to resolve issues

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 Open Door Policy
• Other ways to ensure dialogue:
• common coffee breaks
• frequent plant meetings and a loud speaker used to disseminate the
information within the organization
• periodic beer busts and picnics
• management meetings
• retirement parties and division parties.

• Reinforced a sense of common purpose and belongingness

• Creates sense of responsibility among supervisors and managers

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 Management by Wandering Around (MBWA)
• To build new channels of communication, to analyze how different
employees are performing their tasks and how various processes are working
together through the creation of synergy among various departments

• An outgrowth of MBO

• Adopted to make open door policy truly effective.

• To lower down the communication barriers between them and their

subordinates.
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 Division Reviews
• Covered a full range of business matters revolving around a division
• financial performance of the past year
• outlook for orders
• shipments and facilities for the next three years,
• detailed presentations on product development strategy
• key programs
• a look at people management including training, recruiting, and affirmative
action goals and results.

• Considered an effective forum to build relationships

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 Attitude Surveys
• Periodic surveys – to learn about employee attitudes and concerns

• Personal identification, sense of achievement and belongingness used to be

measured

• Attitude survey of 1972 – the high levels of employee satisfaction, sense of

responsibility and belongingness among employees

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Rewards & Promotions
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 Rewards & Promotions

Career Maze

Pay and
Performance Employee
Selection and
Socialization

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 The Career Maze
• Career Paths

• Cross-functional and cross-divisional promotions and lateral moves based on

performance and potential of the employees.

• Promotions were given haphazardly – against the industry norm

• various communication tools used to identify the employees worthy of

promotion, in which specific area and at which position.

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 Pay and Performance
• Pay levels reflected performance compared to others

• Judged by immediate supervisor

• Adjusted based on ranking process which compared employees across

various departments with similar responsibilities – based on sustained
contribution

• Sense of equity among the employees – distributive and procedural justice

methods of pay and reward system
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 Pay and Performance

• High performers ranked in top quartile were given frequent and larger raises

• C-performers – job counseling and quick improvement, repositioning or

involuntary termination

• Reward system based on equality

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 Employee Selection and Socialization
• Assessing the candidates using right techniques – Hiring
• Key criteria –technical skills, interpersonal skills, adaptability and cultural fit
• Behavioral events interviews
• Candidate’s past reveals the specific competencies that HP was looking for.

• Employee Development
• Hiring to retain – foster employee loyalty and reduction in costs related to
recruitment and selection
• Internal hiring – internal promotions and management of c-performers

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 Employee Selection and Socialization
• It increases the value of human asset of the company
• creates a pool of individuals who understood the company and its culture
and industry and were prepared to assume leadership roles in future
• Weakness – progressive process of adaptation for new employees

• Passing on the Company Lore – Formal Approaches of Skill Training

• Organizational culture, stories, norms and value used to be passed down
during recruitment and orientation activities
• Organizational growth – formal training course in values and practices of
HP
• “Working at HP” and later “Managing at HP” for new managers.
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 Organizational Practices and Maslow’s
Hierarchy of Needs

• Satisfied the belongingness and love needs and esteem needs of employees.

• Belongingness and love needs – various communication tools like open door
policy, management by wandering around, division reviews and attitude
surveys

• Esteem needs – decision making discretion and sharing information, giving

the autonomy to decide the action plan
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 Organizational Practices and Maslow’s
Hierarchy of Needs
• Culture of HP instilled the feeling of accomplishment – tolerance for
mistakes, employee empowerment and involvement in decision making
process

• Sense of responsibility and sense of achievement

• self-actualization needs – skill training, employee development, and

organizational culture

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39
 SWOT Analysis

* Team Work
* Open Door Policy
STRENGTHS

* Organizational Culture
* Participative management style
* Management of C performers
* High employee retention rates
* Employment Security
* Division Reviews
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 SWOT Analysis
*Over emphasis on the processes
* Not flexible processes
* Employees can't do things other than HP ways
Weaknesses

* MBWA is not straight forward - managers show reluctance

* Not hiring outsiders at managerial positions - limited
knowledge, expertise and creative ways
* New employees going through period of adaptation -
considerable frustration can lead to loss of high performing
candidate

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 SWOT Analysis
Opportunities

* Growing through acquisitions - acquisition of

knowledge and expertise for future growth
* Expansion in various other product lines

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 SWOT Analysis
* Strong culture - if this culture is changed then employee morale
will decrease
* Employee commitment will be reduced
* Organization will have to layoff employees in order to grow
further in other product lines
Threats

* Outgrowth of existing practices

* Organization might not be able to sustain its competitive
advantage i.e. human resources
* Organization might not be able to compete in the industry due to
limited knowledge and expertise

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44
 Changes in Management Practices
Rapid innovation
in Information
Technology

Major Industry Shifts

Entry of New
• Decline in its stock prices Outsourcing
Startups

• Decline in Employee Profit

Sharing
Global
Declining Prices
Competition
 HR’s Employment Security Policy

Mid 1980s - the

Reduction in the Tried old 1970’s
electronic Period of
defense strategy of taking
industry faced a retrenchment.
spending Fridays off
major downturn
HR’s Employment Security Policy
2 Policies for
Retrenchment

Downsizing Redeployment

3 paid months to find

Early retirement another job within HP. -
packages if necessary at a new
location or at lower pay

Voluntary severance
incentives
 HP’s Entrance into Computers
• 1972 - HP entered the new market by introducing first hand held
calculator
• Minicomputer in 1974
• Rose overall earnings of the company from $271 million to $285 million
• In 1990s
Computer Computer
System Products
Organization Organization

It operates in high
It involves High
margin businesses
Volume products i.e.
of work stations and
PCs and Printers
minicomputers.
 HP’s Entrance into Computers

• 15.4% increase in sales giving a total sum of

$16 billion Sales.
• International business accounted for 56% of the
revenue
Expansion • Computer products produced 77% of the total
Advantages HP’s income as compared to 54% in 1980s
Because of Expansion and Industrial Forces ..

Change in Change in
Change in Changes in
the the Changes in
Business Business
Company’s Divisional the HP Way
Strategy Policies
Structure Organization
 Change in Business Strategy

Change in Marketing Strategy

• Technical innovation - no longer be the sole source of
competitive advantage. In past marketing was done by
engineers through a practice called “next bench
syndrome” i.e. what their coworkers need.

• Sophisticated understanding of and responsiveness to

more diverse set of customer’s demands were necessary.
 Change in Business Strategy
New Product Development
UNIX
• Open system with non-proprietary operating
system in which customers could mix and match
compatible hardware and software products from
many vendors rather than only one
RISC
• New computer architecture called Reduced
Instruction Set Computing (RISC) for its mid-range
computers and workstations.
• Others in the industry rated it as "HP's RISCy
decision."
• early 1990s RISC became the industry standard.
 Changes in Business Policies

• Acquisitions and Partnerships:

• May 1989, HP made its largest acquisition when it purchased Apollo Computer for
$500 million.
• Contract Work
• HP began to do the contract work, for HP now had a big enough revenue base that
a lost contract would not affect its employees significantly.
• Forward Pricing
• Forward price was practiced as long as the gain in market share would ultimately
add to profit or knowledge
• Consolidation and Outsourcing
• Areas not considered "core competency" were outsourced to other. In order to
remain competitive.
 Change in the Company’s Structure

Integrated Functions:

• Shared functions of divisions

• Computer Systems Organization (CSO), the different systems of the computer
(the terminals, displays, circuit boards, and CPU) had to be integrated.
• to achieve coordination and cost efficiency but maintained a decentralized
product marketing focus

Despite structural changes forced by a new business

environment, HP still valued decentralization.
 Change in the Company’s Structure

Autonomous operations of They no longer shared

Business Organizations: many common services
• HP's business • Have different customers,
organizations structures, technologies,
• Test & Measurement and channels of
• Computer Systems distribution.
• Computer Products
• Measurement Systems
 Changes in the HP Way
No time for
consensus Traditionally decision
based making process at HP
decisions is based on teamwork
mandated consensus
Past : frequent coffee breaks
Change in
communication Shortened coffee talks
Now: people's schedules tightened and
practices deadlines shortened

"coffee talks" were given a few times a

month.
 Changes in the HP Way

Change in
communication Management by To practice through
practices
wandering around such e-mail and
(MBWA) teleconferencing

Change in divisions now had

divisional reviews to be reviewed in
groups
 Core Issues Faced by HP
1. Losing its “Human Touch” after being steered away from the ‘HP Way’ of doing things

2. Coming up with an alternative policy with respect to Employment Security, as a fear had
been instilled in employees due to the perception that the “HP Way” was dead.

3. Application of the ‘HP Way’ in different countries with varied cultures and norms.

4. Issue of increased pressure from HP’s businesses to have autonomy over their strategies,
policies and management practices, due to greater diversity in markets and products.

5. The sustenance of its unusual success, and not falling prey to failure like other high-tech
companies like IBM and Digital Equipment Corporation.
6. Rapid growth and hiring made it difficult to pass on HP’s culture by example and word-of-
mouth. Often, the company’s fundamental values clashed with the culture of the host country
e.g. joint venture with Samsung in Korea

7. Industry forces like rapid innovation in information technology, entry of new start-ups,
declining prices, global competition and outsourcing practices caused HP’s stocks to languish,
profits to decline and employee profit sharing to drop as well.

8. Employee satisfaction decreased steadily as shown by company surveys (Exhibit 4 - 1992

survey vs Exhibit 3 - 1979 survey).

9. Changes in the business environment like venturing into markets of minicomputer and hand-
held calculator.

10. Consolidation had an impact on the structure of company, many divisions no longer had
their own functions and had to share them, thus there were no more feudal baronies like
before.
Industry
Analysis –
PESTLE
Analysis

60
 POLITICAL FACTORS

Changing policies with new Other stakeholders such as Regulatory Practices –

government –there can be a non-government Hewlett Packard has to
transition of government in organizations, protest & manage diverse regulations
near future in most pressure groups, activist in the various markets it is
prominent market. movements play critical role present in.

Taxation policies – Over the Government resource

last two decades HP has allocation and time scale – it
benefitted from lower is difficult to infer that there
taxation policies throughout will be change in resource
the western hemisphere. allocations.
 ECONOMIC FACTORS

Efficiency of financial markets - HP

Economic Cycles – The performance Increasing liberalization of trade
can access vibrant financial markets
of HP is closely correlated to the policy can help Hewlett Packard to
and easy availability of liquidity in
economic performance of the invest further into the regions which
the equity market to expand further
country it is present in. are so far off-limits to the firm.
globally.

Economic Performance of Hewlett

Availability of core infrastructure –
the government has increased the
investment in developing core
infrastructure to facilitate and
improve business environment.
Packard – the economic
performance of the markets grows
above 9-10% because of increasing
government expenditure, increasing
disposable income, and increasing
investment
 SOCIO-CULTURAL FACTORS

Societal norms and hierarchy –

Attitude towards health and Media outlets play a critical role
the society as portrayed in the
safety – With increasing in influencing the public
Human Resources at Hewlett-
liberalization the attitude opinion. Both traditional media
Packard case study is different
towards health and safety are and social media are rapidly
from the home market of
getting lax. growing,
Hewlett Packard

Gender roles – The gender roles

are evolving in the country.
Hewlett Packard can test various
concepts to cater to and
support these evolving gender
roles in the local market.
Demographics – For the
Education level – The education
Organizational Development
level is high in the Hewlett
sector, Hewlett Packard has
Packard existing markets.
demographics on its side.
 TECHNOLOGICAL FACTORS
Lowering cost of production – The
latest technology is fast lowering
production and servicing cost in
the Organizational Development
sector.
5G and its potential – Hewlett
Packard has to keep a close eye
on the development and
enhancement of user experience
with increasing speed and access.
Empowerment of supply chain
partners – Technology has
shortened the product life cycle
and it has enabled suppliers to
quickly develop new products.
Latest technology based
innovations implemented by
competitors of Hewlett Packard
Developments and dissemination
of mobile technology has
transformed customer
expectations in the Organizational
Development sector.
Technological innovation is fast
disrupting the supply chain model
of Hewlett Packard as it is
providing greater access to
information to channel partners,
leading to higher profit sharing.

Business Laws – The
business laws procedure that
government follows.
Environment Laws and
guides – The level of
environmental laws in the
country and what Hewlett
Packard needs to do to meet
those laws and regulations.
LEGAL FACTORS
Time taken for business
cases in court – some
countries even though follow
international norms but the
time for resolution often run
in years
Data protection laws – Over
the last decade data
protection has emerged as
critical part of not only
privacy issues but also
intellectual property rights.
Employment law in the
country and how they are
impacting the business
model of the Organizational
Development sector.
Health and safety norms in
the country and what
Hewlett Packard needs to do
to meet those norms and
what will be the cost of
meeting those norms.
 ENVIRONMENTAL FACTORS
Customer activism – Greater
awareness among customers
have also put environmental
factors at the centre of
Hewlett Packard strategy.
Environmental norms are
also altering the priorities of
product innovation.
Waste management
especially for units close to
the urban cities has taken
increasing importance for
players such as Hewlett
Packard.
Regular scrutiny by
environmental agencies is
also adding to the cost of
operations of the Hewlett
Packard.
Extreme weather is also
adding to the cost of
operations of the Hewlett
Packard as it has to invest in
making its supply chain more
flexible.
Recycling is fast emerging as
a norm rather than a -good
thing to do- in many
economies.
Mistakes
 Mistakes
Losing Human Changes in HPs Downsizing Redeployment
Touch employment This sudden Employees were
HP’s source of security policy downsizing shook also upset about
competitive Due to dramatic the employees redeployment
advantage lied cuts in defense emotionally, HP was because they were
in its spending, a always known for being forced to work
supportive long period of providing job in another
environment, it retrenchment security to its department if they
was critical to was cause, employees. want to stay a part
change which was a of HP.
employee’s huge mistake
perception in at HP’s end.
order to
increase
employee
satisfaction. 68
 Mistakes- Changes in Business Policy
Acquisitions Consolidation and outsourcing
It confused the • The acquisitions, consolidation and outsourcing
employees about their resulted in developing a feeling of loss in the
relationship with employees.
employees of Apollo as
• They believed that HP has lost the sense of family
Plat mentioned “that they
they had before.
couldn’t understand the
relationship with the • Employees were also fearful of that fact that they
acquired organization.” would lose their jobs.

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 Mistakes – Organization Wide
Centralization Combing sales Forward Pricing
In the 1980’s work force HP has grown into a
mistaken efforts were This decision led big revenue base
made to have high to reduction of and, as a result HP
coordination with specialized work sacrificed its
centralizing the force that were tradition. HP opted
departments. needed to sell for forward pricing
different until the market
products. share gain would
lead to profits.

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Challenges

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 Challenges
Despite of HP’s remarkable success financially, there were still a few challenges that
needed to be resolved:
Are we getting too big to practice the HP way?
• Adjusting new employees and supervisors
• Increasing geographical spread of operations outside United States
How can we believe in the HP way when people are loosing there jobs?
• Downsizing of employees without prior notice
• Low Employees Morale
Why don’t practices apply equally across the company anymore?
• Difficulty in following old practices in acquired companies and new hires
Can the HP way survive in today’s intensely competitive environment?
• Challenging to sustain previous strategy due to aggressive growth
• New strategies required to sustain in this competitive environment
73
 Recommendations
• Explicitly state the “HP way” to employees and measure their performance individually
because after the acquisitions 40% of the employees are not aware of the HP way.
• Give skillful and experienced new people an opportunity to enter into HP, it will pave way
towards having a broad set of ideas, way of thinking and imaginary ability.
• Customize management style according to the requirements of the respective country to
overcome geographical and cultural barriers.
• Align use of MBO with the culture of the organization, because it can overemphasize the
setting of goals over the working of the plan and underemphasize the environmental and
external factors.
 ThankYou!
april@www.proseware.com