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Ciba Creates an HR Strategy for the Next Century

October 1, 1995
Related Topics: HR Services and Administration, Career Development, Employee Career Development, Featured Article
Talk to any chemist at Ciba Additives. They'll tell you that once you mix the right elements together, you've probably got a winning formula. For example, haven't you ever wondered how your red car stays red? One of the ways an automobile's color is preserved is by special antioxidants in the car paint-developed and manufactured by companies such as Ciba Additives, a division of Ciba U.S.A. in Tarrytown, New York. With the right product, a car owner can save his or her vehicle from unnecessary wear and tear.

Ciba Additives also has created a formula for a successful strategic HR plan. By mixing the right chemistry of career development, training, compensation, management development and recruitment, HR helps preserve the company's competitive edge in the windstorm of ever-changing social demographics and technological advances.

As vice president of human resources and communication, I have been pleased to participate in the processes that have helped bring about these changes. Clearly, it takes years to witness the fruits of such changes. However, our employees increasingly are becoming more empowered as we've moved HR functions down the line, better aligned our culture with our business strategy and prepared for the work force of the next century.

Move HR functions down the line.
The role of HR will increasingly become the responsibility of line organizations. The HR professional's role should be one of helping his or her division to achieve its business objectives. Employees should feel empowered, be recognized and rewarded, well-trained and trusted.

It may sound trite, but research indicates that effectively motivated and challenged employees in turn satisfy their customers. HR, therefore, must make greater efforts to partner with all employees, from line operators to senior management, and reduce the misperception that HR's primary role is to patrol the other functions.

Ciba Additives began its culture- change effort in the late '80s. The company wanted to create an empowered work force that would reflect HR's changing role and worker demographics. It was at that time our company became a formal division of Ciba U.S.A., whose parent company is Basel, Switzerland-based Ciba-Geigy Ltd. We subsequently established a management committee composed of the vice presidents of various business and staff functions. Our president was committed to moving away from a top-down, control style of management toward creating a work environment that was horizontal and cross-functional. To help us achieve this, the division management examined the best HR practices of a number of other companies.

After exploring other models, the Additives division had to decide which criteria we wanted to be measured by. Besides technical innovation and services, Ciba Additives wants to be recognized as a caring organization that respects and trusts its employees and helps create a continuous-learning environment. We want our employees to be given the opportunity to recognize their skills, abilities and potential. That means redefining the culture for our 800 employees.

"Our employees are becoming more empowered as we've moved HR functions down the line and prepared for the workforce of the next century."

The culture or environment necessary for our division to achieve its strategic business plan requires several key factors: sharing the same vision; believing in the values we, as a division, represent; committing to continuous improvement; involving employees; believing in oneself to make a difference; and committing to the empowerment of team ideas and solutions. In our industry, we often talk about and value technical synergies. Why not create an environment in which human synergies are highly valued? This goal isn't easy to achieve. Indeed, changing the process from I to we to us takes time. But today's work environment gradually is changing to one in which employees prefer joint rather than individual problem solving.

To enhance this process, Ciba Additives established cross-functional Quality Action Teams and Quality Improvement Teams. Our employees were then able to come together to solve problems about our products, technology, facilities operation, customer service and human resources issues. As a result of this joint problem solving, we are seeing an increase in employee cooperation, trust, mutual respect and personal fulfillment.

Increase employee responsibility for career development.
As HR functions move down the line, employees face the challenge of redefining career advancement from "When is my next promotion?" to "What new elements can I add to my job to make it more enjoyable, professionally rewarding, valued and also increase my base compensation?" Our division has examined ways to group jobs horizontally, not vertically. Several of our departments may benefit from horizontal work teams. We believe that the satisfaction gained by participation will address employee morale, particularly among those who have been employed with us for more than 10 years. Simply stated, to retain our knowledgeable employees, we must sustain their job satisfaction.

First, employees today need to recognize that career development is their responsibility. Second, they must realize that they're viewed by the division as assets. Third, our employees must keep pace with advancing technology. They also must be recognized for ownership of the end product, as well as be acknowledged for the process they follow in performing their jobs. While employees work to enhance their careers, the company must supply the resources, and managers must offer appropriate coaching and counseling. The employee-development process we introduced last year has become an important step in demonstrating our commitment to career development.

In recent years, the technical community has been expected to exceed its specific skills. With the expansion of technical marketing, research and development teams and strategic alliances, these technicians may be required to fulfill some of the more complex jobs surfacing today. However, they also may not be fully trained in decision-making and in communicating directly with our sales organization, outside vendors and customers.

The division's requirement for employees with technical, sales and managerial skills can't be satisfied simply by acquiring new employees. In fact, we'll have to do a more effective job of designing our training programs. Our supervisors are going to have to learn how to effectively manage a more diverse work force. We'll have to prepare them through a combination of in-house programs, external symposia and workshops. In some situations, an employee whose skills are obsolete must be retrained. In this way, we'll acknowledge employee loyalty and dedication. And with the changing demographics and anticipated shortage of technical and professional employees, we must regrow our own.

At the same time, we also want to improve our new-employee orientation. As we add to our staff, the proper orientation and training are needed to provide new employees with our vision, quality process and culture so they can share in its development. HR managers will need to anticipate the changing work force based on these significant demographic trends:

  • By the year 2005, 70% of all new workers will be female, comprising 49% of the total full-time work force
  • Eighty percent of new entrants into the labor force will be minorities
  • Legal immigrants (non-Europeans) will comprise at least one-quarter of the population growth
  • Approximately one-third of positions available will require a college degree. Currently, only 22% do
  • By the year 2000, the number of students graduating from high schools will be at least 10% less than the 1990 total.

Assuming that we successfully recruit from this emerging pool of new workers, Ciba must also pave the foundation for their advancement. Although the number of rungs in our division's vertical managerial ladder may not increase significantly in the next decade, our employees should still be fully developed to assume increased responsibilities when key jobs become available. As mentioned before, technical preparation simply isn't sufficient. What are needed today are leadership skills that develop a general managerial perspective. To accomplish this task, Ciba Additives increasingly will use business teams, and will assign individuals to projects that encompass more than one functional discipline. And regardless of any temporary inconvenience, we plan to utilize job rotations both domestically and internationally. Even if we, as employers, were to decide not to increase our employees' general business awareness, the younger generation-now in the 25 to 45 age group-would demand it. If we aren't responsive, many of them may leave the company.

Compensate employees to further empower your work force.
In addition to supplying workers with much-needed business knowledge, an attractive compensation program is an important element in motivating and retaining our employees. Employees should feel good about the amount and form of their compensation. An individual should feel rewarded for his or her efforts. If we're a financially successful company, our employees want to know that we recognize their part in the equation of achieving and maintaining this success.

Regardless of how much we improve the competitiveness of our compensation programs, we also need to increase our internal communication. If employees can understand the technical aspects of their jobs, why shouldn't we fully communicate our compensation programs? We now provide more presentations for our employees-describing market pricing of jobs and explaining our annual merit fund, for example.

For Ciba Additives to remain competitive, our operating costs must remain at levels that allow us to ride out future economic fluctuations. Compensation systems should keep base salaries at a reasonably competitive level, but permit employees to share in our successes. Our employees currently participate in a gainsharing program that, in the first 18 months, has reduced expenses and costs, and helped improve profitability.

"A startling reality: there are fewer high school and college graduates in the sciences, and a higher proportion of positions will require a college education."

The American Compensation Society estimates that more than 1,000 companies currently have some form of gainsharing. In 10 years, the number will double. Well-conceived plans with top management support and employee involvement can survive more than 30 years. Because our plan is custom-designed, we believe it will be an effective compensation tool for the next five years and beyond.

No longer do we define employee benefits only as medical, dental, pension and life insurance. Increasing socio-demographic changes dictate we must also address: dual-career couples, single parents, an increasing emphasis on the need for leisure time, quality-of-life vs. quality-of-career issues, flextime, extended maternity leaves and child care.

In the next decade, we'll have to consider both an individual's needs and a company's ability to pay for them. The operative approach in the future is flexibility with planning and communication. Our company must open the books and help our employees understand the expense side of the situation we've been facing in the last decade-and likely will continue to face in the years ahead.

Aggressively recruit the next generation of professionals.
To realize our strategic business objectives, Ciba Additives will need to attract new, qualified personnel, such as more laboratory technicians and research fellows. Where and how will we attract them? Some startling realities face us in the 1990s: There are fewer high school and college graduates in the sciences; a higher proportion of positions will require a college education; the ethnic mix of the work force is changing so that by the year 2000, almost one-third of all Americans will be non-white. The largest increases in the work force will be Spanish-surnamed Americans, Asian Americans and African Americans. To date, large numbers of Spanish-surnamed Americans have not been attracted to chemistry and chemical engineering. Women, however, who now represent almost half the total work force, are becoming attracted to engineering, science and business in greater numbers.

With the unemployment rate of chemists currently in the range of less than 4%, we're trying to take significant steps to attract graduating scientists to join our division, especially in Westchester County, New York. We're now working to build bridges with high schools, vocational schools, community colleges and universities by sponsoring more educational projects and high school visits, and by providing research grants and scholarships at a select number of colleges and universities. Becoming more visible helps us compete for the limited supply of talent to satisfy our personnel requirements through the decade.

At Ciba Additives, we believe that employee development and growth is derived from the development and growth of the division, and we're committed to both.

Personnel Journal, October 1995, Vol. 74, No. 10, pp. 109-112.

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