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02/19/2010

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Your vision is accurate and has been pursued by numerous far-sighted enterprises for many decades. The original General Motors Institute was founded in the 1930s as an internal training and development arm of GM's HR department to do those very things. In the 1960s, they were on the cutting edge of such mutually-beneficial career planning and progression schemes and later morphed into a regular accredited university. Called the West Point of Industry, it still graduates more mechanical engineers than any other school.

Without mentioning more employer names, I'll just comment that more than a few long ago embraced that philosophy you outlined. It's so logical that myriad practicioners are bound to come to the same common conclusion, because it is the inevitable path to combine both individual and enterprise self-actualization. The problem is, was and remains one of persistence in the face of organizational and economic change: long-term investments in problematic categories like human talent which have no line-item entry on the balance sheet are difficult to maintain in an enduring, consistent and universally accepted manner in any one enterprise. Why? Because it's a constant in human organizations that short-term-itis will periodically throw out the baby with the bathwater, if you know what I mean.

But, a generation from today, that wholistic approach will be the routine in every surviving entity worth working for. One day, it will be normal for people to receive as much maintenace and get as much investment attention as the other more obvious equipment elements do... and every employee will have a personalized remuneration package customized to their unique self-selected value choices. We have a long way to go, but we already see the destination.

Nothing new here. We went through 2000K paying high prices for IT... now taking hits. We went through a period where Finance was constantly being bumped up and it has moderated. I don't see a replacement of the merit matrix, I see merit being necessarily associated with maintenance of skills and productivity as modernization is continually being ramped up by technology.

Jim:

You're right. We know where we need to go, but we sure have a way of getting distracted on the way there. I can only hope that we are making incremental positive progress. Thanks for the thoughts!

Deb:

You're right - it is nothing new in one sense. It is our eternal struggle to adjust our organizations' pay structures to the leaps and bounds of the external environment and marketplace. What is different, though, is the pace at which those external changes take place. I don't think we have the luxury of the same reaction timeframe that we used to - we now know enormous companies, even entire industries, can fail at a breathtaking pace. Many elements of the game are (and will probably always be) constant, but the pace at which the game is played seems to be accelerating. That's my take, anyway. Thanks for the comment!

Hi Ann. I agree with the pacing issue, but I think it's not even the result of the recent year's activities. Why don't we place a higher priority on active skill and competency building (instead of churning employees)? It seems like good business sense to avoid serious capability lags. We do the same with IT equipment, for pete's sake.

I agree with Jim that there are large companies who do this relatively well, but I also think they are exceptional, and may start doing their own lagging in this economy. I agree with you that it's a great time for this discussion in our part of the business world, especially because we could all benefit if attention to skill and competency development could be accelerated.

Margaret:

It does seem like good business sense, doesn't it? You're right, that our apparent reluctance to invest in this kind of capability building is not a new phenomenon. Thanks for the comment!

Readers:

Here is an interesting case from Investment News (http://ow.ly/19Zvr)

...consider the action of Ahmad Chatila, president and chief executive of MEMC Electronic Materials Inc., a manufacturer of solar and semiconductor wafers based in St. Peters, Mo.

Two weeks ago, he announced plans to use his $500,000 bonus for 2009 to fund training programs for 450 employees who will be laid off through two planned plant closures this year and next, according to a -filing with the Securities and Exchange Commission.

This amount is in addition to the other training, severance, benefits and assistance, including one year of group medical and dental benefits, and supplemental educational expenses already offered to the affected workers, according to the regulatory filing.

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