A Reflection on HR Effectiveness

When large companies get larger, it sometimes raises unexpected issues. When that growth takes place by acquisition and merger, the consequences can be historic, or historically funny. Let’s say you work for Company X, a Fortune 500 company with sales of $450 million a year and 20,000 employees. In the space of less than a year, through a series of interesting events, your company acquires Company Y ($110 million in sales, 8,000 employees), Company Z ($150 million in sales, 4,000 employees) and Company B ($450 million in sales, 17,000 employees). So now you have a company with $1.16 billion in sales and 49,000 employees. It operates world-wide, in all kinds of product and service markets. All HR functions are run separately, but that is going to change. A new Corporate Vice President of Human Resources has been hired (formerly a consultant to Company B). He has convinced the Board of Directors that the Company should start to create standard corporate approaches to the various HR functions. Like most Boards, the Board here is concerned with spending money, so they decide to move the whole company to one salary structure. Currently, there are 17 distinct compensation systems among the four divisions, supported by what seems to be a million different job analysis programs. Think about how you are going to get that down to one job analysis process to set up one salary structure encompassing all 49,000 employees located everywhere from Miami to Timbuktu.