General Electric is an American multi-national corporation that is well-known for its succession management system in which leaders are developed from within. The system involves year-around learning whereby leaders from the various branches of the company share best practices with one another while coming up with ideas for new practices. In every two to three years, General Electrics top leaders are transferred from job to job. Every promotion is a well-orchestrated process that equips the leaders with knowledge and experience about various elements of the business.
The approach that General Electric takes in succession management can work in other organizations. Hiring an insider to replace an outgoing leader has some positive results, one of them being in the form of the message it sends to the organization. It conveys a message that there are ways in which lower ranked employees can move up within the company. If an employee works hard, he or she can get promoted, and a number two leader has a chance of becoming number one. In many companies, a promotion to become the CEO is the top prize in the employment game. It triggers a competition that acts as an enticement for executives to do an excellent job. Hiring from inside is a way of continuing that nature of competition so that executives are aware that working hard has something good in store for them. Going for outsiders demoralizes those executives as they get disillusioned about what they are competing for and what is the prize.
Moving employees to new jobs every two to three years like the way General Electrics does comes with some demerits. One disadvantage is that a lot of time and effort is wasted in convincing employees to take new jobs. Team members cannot be expected to work with willingly counterparts from other sections whom they are barely acquitted with. Superiors have to sit down with each employee in person and explain the benefits of this strategy, and then motivate him or her to agree to it. Another disadvantage is that moving employees results in anxiety and stress amongst them. Workers are often reluctant to get out of their comfort zone and rarely contribute in other departments. To them, the process is just another formality or inconvenience imposed on them, and all they have to do is follow what their superiors have asked them to do. Such employees often take some time to open up in front of new colleagues and express their thoughts and ideas within a new team; something that often makes them turn negative.
General Electrics succession management approach has achieved a lot of success because it lays down clear development objectives for succession. For one, the company identifies the employees that have the potential to be entrusted with greater responsibility within the organization. Once this is done, such individuals are provided with crucial development experiences. Also, the leadership of the company at various levels is engaged in offering support to the high-potential individuals. Whats more, GE has a database that is utilized in making more effective hiring decisions for top positions. The company is fortunate to have a leader who understood succession planning and development process. This is Jack Welch, who began working for the company in 1960 and who is among the most successful business executives of all time. One of Welchs most notable skills was the ability to groom subordinates in a way that there was always an individual to replace him whenever he was given a promotion.
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