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Training can directly contribute to an organization's business goals and strategy by emphasizing innovation, creativity and continuous learning. In addition, training can prepare employees to work successfully in diverse teams (Noe, Hollenbeck, Gerhart, & Wright, 2010, p. 88).
American Express values leadership skills greatly and works hard to attract and train potential leaders across the organization. The company provides training programs to leverage the potential of their employees so that they can improve their project management skills, motivate colleagues and call customers to action as well as supporting American Express' values which are: customer commitment, integrity, teamwork, winning mentality, respect for people and personal responsibility (American Express, 2011).
The company's priority is taking care of their people while understanding very well that keeping them happy will eventually translate into pleased and loyal customers. Therefore, the organization provides opportunities for employees to learn new skills and develop existing ones by investing time and resources to attract, develop and hold the most talented employees in the company. American Express provides training opportunities such as classroom activities or self-thought courses. The array of classes available is very wide including: leadership, diversity, management as well as others focused on expanding employees' minds and skills. As a result of these initiatives, teamwork and collaboration are fostered which, ultimately, contributes to the company's success (American Express, 2011).
Research shows that in order for training initiatives to be successful, they need to be supported by top management (Noe, Hollenbeck, Gerhart, & Wright, 2010, p. 292).
American Express also offers a flexible development plan to all employees who can define their careers and advance at the same time. In order to achieve this goal, employees are partnered with a team leader who meets with them on a regular basis while serving as a coach, motivator and useful provider of feedback (American Express, 2011).
Being faithful to the notion of the company's belief that effective leadership translates into an improvement in business performance, American Express is not only training employees within the organization; but, it is also partnering with other organizations such as the Center for Creative Leadership to help advance the upcoming generation of leaders in the nonprofit field. As a result, the company has created the American Express Leadership Academy, which is an international training program where future leaders have the opportunity to interact with some of American Express' senior executives, including CEO, Mr. Kenneth I. Chenault (Anonymus, 2011).
Performance management is essential to gaining competitive advantage in the market and it is used to guarantee employees' actions and outcomes are aligned with the goals of the organization. It involves stating which activities will contribute to the company's successful implementation of its strategic business plan. Some companies use subjective manager performance evaluations while others use quantitative performance measures (Noe, Hollenbeck, Gerhart, & Wright, 2010, p. 351).
American Express developed a strong set of values -customer oriented strategy, talented people, teamwork and reliability- which were placed in writing in 1990 and has served as a vital asset for the organization. During the following ten years, the company went through significant changes in order to enhance its performance. Some of these changes included cost reduction strategies, globalization of certain business lines as well as gaining new business partnerships (Fairbairn, 2005). American Express CEO believed that employees' and other stakeholders' expectations needed to be taken into consideration before implementing any changes. As a result, American Express applied the Appreciative Inquiry (AI) approach for performance improvement which required a shift in the way people reacted to change. This approach is focused on discovering people's strengths as opposed to focusing on problems that need to be solved. The company followed the four phases of the AI approach - discovery, dream, design and destiny-. (Fairbairn, 2005).
The first stage, discovery, identified the best qualities, behaviors and business processes in the organization. In order to accomplish this goal, American Express conducted 30 focus groups with employees from different levels and business units across the world. The results displayed the company's strong core values; and, they also showed that employees were proud of the company's brand by highlighting aspects such as teamwork, development and growth opportunities within the organization (Fairbairn, 2005).
In the second phase, dream, employees pictured the future or the company. They anticipated certain employee benefits such as development opportunities and pay for performance incentives; and, at the same time, they forecasted the company's competitive advantage in the global economy. In order to accomplish these goals, employees believed that offering superior customer value as well as being accountable when delivering business outcomes would be essential to achieve the company's growth.
The third stage, design, included the reinvention of the company's principles to better monitor business decisions as well as their implementation. For example, the principle of "treating employees with respect" was redesigned as "we value our people, encourage their development, and reward their performance". The implementation of the redesigned values also included a change in the management strategy style and a communication plan aimed to help Human Resources implement the change among all employees promoting at the same time interaction and feedback. After the implementation, human resources professionals designed several processes and tools in order to preserve the behavior changes which included a focus on performance management in order to guarantee that employees were appraised and rewarded based on the new established competencies (Fairbairn, 2005).
Finally, the destiny stage, focused on how to maintain the organization's strengths throughout time. As a result of this initiative, American Express was able to renew its core values which has helped the company retain talented employees and improve its business performance (Fairbairn, 2005).
American Express also applied this change practice to launch its own Six Sigma initiative in order to improve the quality of its processes; and, ultimately, its overall performance (Young, 2001). Six Sigma is a methodology consisting of a five step approach -define the process, measure it to obtain a performance baseline, analyze the data, improve the process and control- to eliminate variation in business processes (Johnson & Weinstein, 2004, pg 77). In order for the implementation of Six Sigma to be successful, American Express paid special attention to the following aspects: purpose, public role and private role, resources, monitoring, consequence management, organizational infrastructure and people management. First of all, it was very important for management to explain the purpose of Six Sigma and how the technique was relevant to achieve business goals. As a result, Six Sigma was included in all business meetings, including one-on-one meetings in order to explain the benefits of its application. In addition, the process was monitored in order to discuss learning potential obstacles. Lastly, Six Sigma goals were incorporated in all levels of the organization; and, as a result, human resources followed suit and incorporated Six Sigma skills in the process of identifying, paying and achieving employee retention (Young, 2001, pg 19-22).
By managing Six Sigma, American Express has enabled to approach the challenging human aspect in any change initiative. As a result, American Express uses Sig Sigma as a powerful decision tool to achieve high performance outcomes. The business units that have implemented Six Sigma have obtained higher performance levels and project savings for the company, which translated into higher levels of customer satisfaction (Young, 2001)
The type of relationship between a company and its employees can alter the organization's ability to compete effectively in the market. In addition, certain strategic decisions such as hiring and defining recruitment policies as well as choosing the appropriate type of training and performance management strategy can determine the successful accomplishment of business goals. (Noe, Hollenbeck, Gerhart, & Wright, 2010, pg 89).
At American Express, top management believes employees are an important asset that enables the company to differentiate itself from its competitors. This principle is the pillar of its human resources strategy; and, at the same time, it becomes its major challenge due to the fact that the company has four main businesses which all together comprise 100,000 employees from 100 different countries. Embracing such diversity among the workforce forces human resources to follow a decentralized model which adds a significant degree of diffciulty in managing successful employee relations that follow American Express's common goals and respect at the same time the different cultures present in the various business units (Halcrow, 1989, pg 42).
Being flexible and providing support are main drivers for the human resources department. As an example, the company has created family care programs for working mothers. Therefore, the human resources department has become a change facilitator so that any drawback that affects people can be solved in order to help the employee to achieve the organization's business goals (Halcrow, 1989, pg 43).
Another human resource principle is to embrace diveristy. American Express believes diveristy adds value to the organization. Human Resources professionals encourage management to embrace diversity in their teams and to create a confortable environment for women, ethnic and racial minorities (Halcrow, 1989, pg 44).
In addition, teamwork is also fostered at the company. Employees are encouraged to work in teams to solve problems together and to participate in the design and improvement of business processes by highlighting opportunities and potential drawbacks. As a result, employees feel the company trully cares about them and feel more engaged in the business (Zeithaml, Berry, & Parasuraman, 1988, pg 40).
Finally, American Express has achieved a significant progress in workforce diversity management by offering more flexible benefits and scheduling. The company is open when it comes to customizing shedules to accommodate the needs of its employees. For example, it offers confortable shifts for parents who work and need to pick up their children at school and it also provides professional opportunities for retirees who work part time (Halcrow, 1989, pg 44).
Regarding performance management, Amercian Express has incorporated the concept of emotional intelligence in their employee's training to guarantee business goals are met successfully (Hays, 1999, pg 72). During the 90's American Express did a research to find out why only 28% of their customers who received advice had bought life insurance. The research showed that the real reason was the lack of emotional intelligence of the financial advisors. As a result, Amercian Express started offering employees's soft skills training in order to improve job performance and increase profitability. The results of the training programs have shown an increase in sales revenue; and, emotional intelligence has turn out to be a forecaster for success (Hays, 1999, pg 74).