TRW - SHRM

Chitra
 CASE BACKGROUND

• TRW Information Services Division

• Will Sproule, Director Human Resources
• Knicely created three strategy awards
• OD methods went beyond team building
• HR to have a seat in the management table
•
Company Profile
• Well Diversified Company
• Automotives, Space, Defense and IS
• IS earned mostly by acting as a
credit reporting agency
– Consumer Credit Reports
– Direct marketing Lists
• 1980’s profitable
• Late 80’s profits dwindle
BAIL OUT!!
• Cost Cutting measures initiated
• Layoffs Occurred
• Upper Level managers Shifted
• Company pushed to survival Mode
• 1993- The Turning Point
 SHRM IMPLEMENTATION

üAlign Business Objectives and Individual Goals- Bring Synergy

üImplementation Through Two Iterations
üPerformance Related pay
Iterations
• SHRM was implemented through
two iterations
• In Iteration I four main objectives
identified
• 5 management Priorities Identified
– R&R
– PMS
– Training
– Professional Development System
– WorkForce Diversity
 ITERATION II
• Results of the Iteration I were
positive as sales were improving
• Iteration II included the ITS division
• SHRM is a continuous process
• 3 Preliminary Issues are
– Performance Management
– Alignment of Goals
– The ability to use IT internally
ANALYSIS
• Cost Center vs. Profit Center
• Employee Life Time Value
• Performance based Pay
• Employee as a Stock
• Quality of Life Orientation
COST CENTER VS PROFIT CENTRE

qInitially considered Cost Center

qLaunch Of SHRM changed the
scenario
qHR Dept is a Profit center
qHuman Resources liable for wealth
maximization
qAligning Objectives resulted in
increased revenues
EMPLOYEE LIFETIME VALUE

• Total value during stay = ELV

• Employee Revenues – Employee
Cost
• Training Employees
• PMS
• Achieve Objectives
 PERFORMANCE BASED PAY

qLinking Pay to Performance

qSales Man = Two Options
qSmall basic Salary + High
Variable Pay
qHigher basic salary + Small
variable Pay
qEmployees Chose First Option
qReturn on Investment High
qBrings out 100% of the employees
Employee as a stock

• Employee is a
Long Term
Investment
• Human capital
also liable for
Returns
• Positive Returns
Spurred by
SHRM
Quality of life orientation

SHRM

qCo’s Promise Better

Quality of Life
qEmployees have to
Support to Fulfill promise
 CONCLUSION

qSHRM is a new dimension which affects the firms

performance
qTRW’s Will Sproule implementation of SHRM spurs firm’s
profits
qGoal Congruency Improves employees Performance and
increases the profits
q