HR Is Easier Said Than Done, Says Jack Welch

By Leon Rubis May 5, 2009

Practicing the profession of human resources effectively is a lot harder than it looks, says Jack Welch, the legendary retired CEO of General Electric (GE).

CEOs might think: “I’m the HR person; I know how to do this; this is easy,” Welch said in a recent interview. “They don’t understand the job isn’t as easy as knowing Harry or Mary—it’s developing them, it’s being sure they’re treated fairly, both with candor and reality. It’s a much bigger deal than many people perceive.”

Welch spoke with HR Magazine in advance of his June 28 appearance at the Society for Human Resource Management’s61st Annual Conference & Exposition in New Orleans. The complete interview will appear in the June issue of the magazine.

Welch was a longtime champion of the HR function during his career, culminating in one of the most successful runs of a CEO during 1981 to 2001 at GE. He has expounded on the importance of effective performance appraisals, leadership development and other HR functions in many of his BusinessWeek columns and in books, the latest of which is Winning: The Answers (2006, HarperCollins).

HR’s job is “to be sure that a great leadership team is built, and you’re responsible in many ways for ensuring that managers are candidly appraising people,” Welch said. “The performance management system should be treated with the same seriousness as Sarbanes-Oxley.”

On other topics in the interview, Welch said:

The U.S. recession might not weaken significantly until the middle or end of 2010, but at least it’s “generally flattening” and businesses’ “visibility” is improving. “In January, you didn’t know whether February was going to be down 20 percent, 30 percent, whatever. You were in a free-fall, so there’s a little more stability” now. When the economy does improve, “I think we’ll end up coming back pretty fast. The productivity will be enormous in the beginning because you’ll have all those people gone. And with inventories low, the first signs of orders will start to reflect right to the economy.”

The health care reform issue is “the toughest, most intractable [problem] I’ve ever looked at. I’ve never seen one as complicated—inefficient health care system, uninsured people going to emergency rooms—all these different elements that have to be dealt with while it becomes more and more part of our gross domestic product. I honestly don’t have a solution for health care—I don’t know who does.”

The number of H-1B and other visas for foreign workers should be increased “so the best and the brightest are retained here. … Why do we want to educate all these people, make them great, productive members of society and then say ‘go do it somewhere else’?” Welch noted that he received a lot of “vitriolic e-mail” on the subject after writing a recent BusinessWeek column. “I just hope we can come to a reasonable settlement.”

Leon Rubis is editorial director of SHRM.


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