TRW - SHRM
Chitra
CASE BACKGROUND
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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!!
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Cost Cutting measures initiated
Layoffs Occurred
Upper Level managers Shifted
Company pushed to survival Mode
1993- The Turning Point
SHRM IMPLEMENTATION
Align Business Objectives and Individual Goals- Bring Synergy
Implementation Through Two Iterations
Performance 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
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
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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
Initially considered Cost Center
Launch Of SHRM changed the
scenario
HR Dept is a Profit center
Human Resources liable for wealth
maximization
Aligning 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
Linking Pay to Performance
Sales Man = Two Options
Small basic Salary + High Variable
Pay
Higher basic salary + Small variable
Pay
Employees Chose First Option
Return on Investment High
 Brings 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
Co’s Promise Better
Quality of Life
Employees have to
Support to Fulfill promise
CONCLUSION
 SHRM is a new dimension which affects the firms
performance
TRW’s Will Sproule implementation of SHRM spurs firm’s
profits
Goal Congruency Improves employees Performance and
increases the profits