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Bill Hewlett and Dave Packard graduated in electrical engineering from Stanford University in 1935. The company established by Hewlett and Packard in Packard’s garage with an initial capital investment of US$538 during a fellowship in 1939. Hewlett Packard Company commonly referred as ‘HP’. HP product lines include personal computing devices, enterprise servers, related storage devices and diverse range of printers and imaging products. HP Company has been described as one of the most successful companies of the 20th Century. The reason why this company was so successful over such a long period of time may well lie in the management of its corporate culture ‘The HP Way’. The HP Way reflects the personal core values of Bill Hewlett and David Packard, and the translation of those values into a comprehensive set of operating practices, cultural norms, and business strategies (Collins, 2005). However, since the late 1990s, the company has been experiencing a new and different culture is emerging, ‘The New HP Way’. Today, many companies take the tenets of the HP way almost for granted but when first formulated, they were visionary. This report would briefly outline ‘The HP Way’ and ‘The New HP Way’ organisations which is a balance between profits for the owners and shareholders of the company and the rights, job security and working conditions of its employees.
• Organisational Behaviour
Effective communication & Leadership Behaviour
The HP’s way of communicating was unusual and unique. A two-way communication was opened to everyone and allowed employees to share their thoughts each other including the President oh HP. This called the ‘open door’. In effective communication, the sender’s message is fully understood by the receiver. In order to gather rational feedbacks accurately, the senders and receiver should be able to communicate freely without noise (Wiley & Australia 2010). HP practiced effective two-way communication, openness and respect for the individuals. The senior managers of the company were not distanced from their employees in organisation. This has allowed the employees to the organisation’s objectives and encouraged to accomplish goals and share company’s success.
The leaders use their power to get someone else to do to make things happen the way they want. The leaders exercise to inspire their employees to achieve their goals. Reward power uses the incentives; coercive power uses punishment and referent power which uses special expertise and identification. The original HP way of convincing their employees was close to use referent power because the original Hp wanted to maintain good relationship between the managers and the organisation as they admire the company. However, the new way HP leadership was mainly through rewards. Often the new HP used incentives such as pay rises or promotions to inspire the employees. As a result, ‘reward power’ was very effective and fairly simple to exercise but the problems with ‘reward power’ was that there are always risks that employees would change their minds if they got offered higher rewards from outside the HP Company.
• Human Resource Management
Performance Appraisal Methods
Basically, performance appraisal was practised to reward the employees for good performances or punish them for poor performances to make the best used of human resources. The HP Company used system of management by objectives (MBO) and performance ranking method. This gives the person as much freedom as possible in working towards that objective. Under MBO system, managers set a list of objectives and make assessment on performance on a regular basis. The performance appraisal of ranking is used to assess performance from highest to lowest levels. The performance was reviewed every quarter and employees who are on the ranked would get increase or decrease salary depending on their HP ranks. HP Company introduced the ‘open door’ principle, managers could attempt to communicate with their employees and give them advise about the performances what they have done. However, this may limit the chances to get feedbacks from superiors to subordinates. Adopting 360°feedback would be a good idea to assess employee’s performances. It includes where superiors, subordinates, peers, and even internal and external customers are involved in the appraisal of a job holder’s performance (Wiley & Australia 2010). Therefore, the performance evaluation would be objectivity