1992 Service Optimas Award ProfileBRTexas Instruments
Great idea, you say to yourself. You’ve just developed a program that will help your company to create opportunities for its workforce.to help employees to develop and reach their full potential and achieve their professional and personal goals. You know the idea will work—and it will be inexpensive to implement.
Suddenly your bright, golden bubble bursts, as you realize that this wonderful program you’ve created has no chance of becoming a reality unless you can sell it to the operating managers, who feel that their real job is to control quality, quantity, cost reductions, and so on, and who consider HR issues to be discretionary. It isn’t enough to create a wonderful program—you have to market it as well. This is when you wish you’d taken another course in marketing, instead of that exciting HRIS class.
The HR function at Dallas-based Texas Instruments recognized this problem and found a solution. By bringing the operations management into the decision-making process, HR has given operations ownership of the program. To do this, however, required a restructuring—one that eventually netted the company the PERSONNEL JOURNAL 1992 Optimas Award for Service, a category created to honor departments that have developed programs or policies to support another constituency within the organization.
“We were in a perpetual situation in which HR was trying to sell things to the organization,” says Chuck Nielson, vice president of HR and driving force behind Texas Instruments’ Human Resources Policy Committee (HRPC). “There was a we/they mindset, that HR policies somehow weren’t a mainstream item. The fact is, the only thing that differentiates us from our competition is our people. The equipment, the building—they’re all the same. It’s the people who make the difference. Effective management of HR becomes an issue for everyone.” Because of their new role in developing the programs, operating people now realize that HR management is a gut issue, that to be successful in the ’90s you must be able to manage people, he says.
Texas Instruments comprises two sectors: 1) Systems and Equipment; and 2) Components. These two sectors constitute the five distinct business divisions: Semiconductor, Materials and Controls, Defense Electronics, Information Technology and Consumer Products. All of these businesses operate internationally. As a result of this diversification, programs that work well for one division might be wrong for another.
The company has taken a number of approaches to dealing with its complexity. Management action teams were established in the late ’70s. The teams were evaluated quarterly, using the following sources of input: an attitude survey, HR assessment, fair employment model results, communication and turnover. The teams were effective, but often tended to be reactive. They identified problem areas in human resources and offered possible solutions.
Results of the management action teams were mixed. “What we really needed was to get the operating people involved in driving the human resources vision—to get them into a decision-making role,” Nielson says.
In the late ’80s, the company went through a process called TI2000, says Dave Martin, who is vice president of Texas Instruments and shares responsibility for the Component sector with two other managers. Martin is responsible for Materials and Controls, Consumer Products, and all international operations. “We looked at our mission statement and our values. We realized that if ownership weren’t in the hands of the operating managers, we’d have a hard time living up to those values,” he says.
For instance, for years Texas Instruments relegated quality to the quality department and hadn’t maintained it in operating management. Now the process has developed so operating management can take ownership of quality. “We realized that the same thing was needed with the human element. The HRPC resulted from that realization,” Martin says.
According to Martin, HR decisions used to be made during weekly or biweekly meetings of the Corporate Policy Committee, which included the president, executive vice presidents, counsel and others, including heads of key HR functions. HR issues were presented by HR in the form of straw man proposals. Human resources people then would go out to each operating group, and describe and discuss the proposal, getting feedback, then come back to the human resources function and make required modifications. Finally, the proposal would go before the Corporate Policy Committee for a decision. This process didn’t allow for any business-to-business interaction. All input was filtered through HR. This left operations with very little ownership of the process.
Nielson says operating managers had Channel A and Channel B duties. Channel A duties were related to running the business: schedule, cost, delivery and price. Channel B duties concerned people and their needs: training, rewards, performance appraisal and overall supervision. Managers were inclined to spend most of their time in Channel A and move into Channel B only to resolve a crisis. Nielson knew that, to get HR into Channel A, a restructuring was required. Operating managers must take part in human resources planning, so they can accept ownership of the programs.
Beginning in December 1990, the new structure was set in place, involving two teams of management. One team was made up of human resources representatives (the HR Operating Committee) and the other of operating managers (the HRPC). Members of this committee include group presidents, executive and senior vice presidents, both domestic and international. Nielson serves on both teams.
The HR Operating Committee meets a week or two before the HRPC and develops policies in proposal or draft form. The HRPC has the final responsibility for policy in human resources. The HRPC meets formally each quarter in Dallas to finalize decisions on proposals made by the HR Operating Committee. Its objectives are to be:
- A steering committee for HR
- A final decision-making body for HR policies
- A labor relations committee for the corporation.
“Although HR managers have been working in these areas for many years, the operating managers felt little responsibility for managing the process,” Nielson explains. The HRPC either resolves issues during the meeting or empowers a subcommittee to resolve them. Members consider such policy issues as Job Opportunity System (the process by which jobs are filled internally), pay and benefits, and establishment of training policy. It also makes decisions on budgeting and processes. Workforce reductions also are taken up by this committee.
The result is a set of human resources policies and programs that all divisions can buy into. The HR department then implements these policies and programs.
In its role as the steering committee for the HR vision, the HRPC has identified three areas to address:
- Individual excellence
- Organizational excellence.
Ron Shelly, executive vice president of the Information Technology Group in Austin, is involved in the individual excellence programs of the HRPC and finds that operating managers deal with the HR asset with a more dedicated effort than before. “We’ve developed a list of high-priority, macro issues,” he says. These macro issues are:
- Training and development
- Assessment and selection
- Measurement, recognition and rewards
For the first time, an HR committee has asked which behaviors will be needed. This has resulted in the rudiments of a roadmap for the HRPC, which now is following through on that vision. “We deal with the most important issues up front,” Shelly says. This effort involves senior operating managers, such as Shelly, and the resulting ownership of the output of activities is much higher than earlier.
Texas Instruments has seen some improvements in the way operations and HR have worked together to accomplish their corporate mission. One such improvement came about as a result of the committee’s desire to make the company culture performance-based. The committee changed Job Opportunity System.
“In the past, seniority was a key factor in deciding who would get the job,” Nielson says. The committee developed a policy change that moved the selection criteria from senior most-qualified to most qualified. This one change has a major impact on the corporation. “Response to Job Opportunity has been very positive. We feel that we’ve been able to fill positions with better-qualified people—and we’ve had a good response from attitude surveys. Employees view it as a fairer process. Decisions are based on actual qualifications, not just how long the person has been with the company,” Nielson explains.
Martin points out that the seniority factor played a role in benefits, promotions, workforce reductions, policy and so on. “Many of our businesses no longer can compete globally without greater emphasis on performance,” he says. Seniority still serves as a tie-breaker, after such characteristics as performance, critical skills, breadth of training, flexibility and ability to perform multiple jobs.
Training and development were staff-driven before the reorganization of Texas Instruments’ steering team. Now line management is involved in the curriculum and reports to the HRPC.
In the area of assessment and selection, the company continues to pilot new techniques. “As an outgrowth of the HR visioning and the HRPC, we’re trying a more scientific approach,” Shelly says.
In addition, the company is dealing with the concept of empowerment. “That’s probably an overused descriptor today,” Shelly says, “but we’ve put our arms around the concept and have begun to improve the environment in a way that empowers the people in the organization.” One example is the implementation of self- directed work teams.
“We drive a flatter organization now, resting ownership in operating groups—an ownership that didn’t exist before. Managers are moving to a more facilitative management style,” Shelly says. Managers try to enhance individual initiative and recognize it in a positive way. “We have a long way to go, but now we have a good roadmap, having dealt with it from a vision standpoint,” he says.
Shelly also points out that additional benefits continue to flow out of this process. “We have an environment in which mutual trust is an absolute—a situation in which we’re viewed as being fair, as having high expectations. We’re leveraging our diversity and we have a we-attitude toward everything we do,” he says. That’s what Texas Instruments’ statement of values is all about.
The glue that holds this new process together is communication, according to Shelly. “We have to be good transmitters, but also good receivers. We must be clear on our overall objectives. Our communication must be open, candid and continuous, not sporadic,” he says.
A number of issues dealt with by the HRPC are in process. Now the committee is taking up overtime pay policy, the problem of differing legal and competitive requirements throughout the world, and such major issues as health care, both for retirees and the current workforce. “We’re wrestling now with compensation, too. How do we bring greater differentiation and recognition for performance? Do we change the compensation process from an annual review process to something more variably defined with respect to performance?” Shelly asks.
The HRPC has representation from other cultures on the committee. Currently there are members of the committee who come to Dallas from the regional offices in Europe and Asia. “I’d like to see a greater international involvement,” Martin says. “Europe isn’t monolithic. There are differences from one area to another,” he says. Representatives from these areas are aware of what the differences are and how to respond to them.
Martin also would like to see a clone of this process on a regional basis, perhaps with a different focus. “Human resources and operations people should get together and focus on their needs and on development issues,” he says.
Companies are involved in many activities that, on the surface, seem to have little or no impact on the bottom line. Texas Instruments is no exception. For instance, one of its principles is to be a good corporate citizen. The company is attempting to live up to this ideal by becoming a leader in each community in which it has a facility.
“We participate in a number of activities from a volunteer and financial standpoint in the area of education. We’re a leader in United Way, Junior Achievement and Chamber of Commerce activities,” says Shelly, who adds that, although a direct bottom-line effect isn’t evident, it can impact the company’s ultimate competitiveness.
If community involvement is important to the success of an organization, how much more so is the firm’s ability to manage its workforce. Although people are a company’s most important asset, operating managers haven’t always treated them as such. “There’s an obvious cause-and-effect relationship in HR policy,” Shelly says, “but we haven’t recognized it—until now.”
Nielson adds, “From other resource categories, such as machines, money, materials, we’ve wrung out all we can—but we still can do a lot with people. Our managers realize this now: Managing people is the key to our survival.”
PERSONNEL JOURNAL’s Optimas for Service recognizes Texas Instruments for the HRPC—a program that makes the organization more competitive and HR policy accessible to line management. This program, which provides a service to line management, has provided a service to the HR function as well.
Texas Instruments’ Chuck Nielson doesn’t have to sell his great ideas to the operating people. They’re right there at every stage of the process, from inspiration to implementation—and, as a result, these policies actually meet the company’s needs.
Personnel Journal, April 1992, Vol. 71, No. 4, pp. 64 – 68.