Question: Career Development at Electronic Applications

Electronic Applications Corporation is a major producer of silicon chips for the computer industry. It is located southeast of San Francisco in an area of high technology firms. Since its founding in 1972, the company has grown rapidly in terms of sales and profits, thus enhancing its stock price many times over.

However, human resource policies have tended to lag behind company growth. Emphasis has been on reactive policies to meet the requirements of external organizations such as the federal government. Human resources have not been a high priority.

Recently, Harold Sweeney has been hired as Director of Human Resources for the company. Sweeney had previously served as an Assistant Personnel Director for a large "blue-chip" corporation in southern California. He took his present position not only because of an increase in pay and responsibility, but also because of what he termed "the challenge of bringing this company from a 1950s human resource mentality to one more compatible with the realities of 1990s."

Sweeney has been on the job for four months and has been assessing the situation to determine the more significant human resource problems. One significant problem seems to be high turnover among electrical engineers who work in Research and Development. This is the core of the research function and turnover rates have averaged about 30 percent per year over the past three years.

In assessing the cause of the problem, Sweeney checked area wage surveys and found Electronic Applications paid five to eight percent above the market for various categories of electrical engineers. Since the company did not have a formal exit interview system, he could not check out other possible explanations through that mechanism. However, through informal conversations with a large number of individuals, including the engineers themselves, he learned that many of the engineers felt "dead-ended" in the technical aspects of engineering.

In particular, the Research and Development Department had lost some of the younger engineers who had been considered to be on the "fast track." Most had gone to competitors in the local area.

One particular Research and Development employee who impressed Sweeney was Helen Morgan. Helen was 29 years old, had a B.S. degree in Electrical Engineering from California Institute of Technology, and was studying for her M.B.A. at the University of Santa Clara at night. Helen had been employed for seven years, three in an entry-level engineering position and four as a section chief. The latter promotion was the highest position in Research and Development other than the position of Director of Research and Development.

Helen claimed that "the company doesn't really care about its good people." In her view, the present director, Harry James, doesn't want to allow his better people to move up in the organization. He is more interested in keeping them in his own department so he can meet his own goals without having them to orient and train new people. Helen also claimed she was told she "has a bright future with the company" by both James and the former Personnel Director. Her performance appraisals have been uniformly excellent.

She went on to criticize the company for using an appraisal form with no section dealing with future potential or future goals, no rewards for supervisors who develop their subordinates, no human resource planning to identify future job openings, no centralized job information or job positioning system, no career paths and/or career ladders, and attitudinal barriers against women in management positions.

Sweeney checked out the information Morgan had provided him and fount it to be accurate. Moreover, he heard through the "grapevine" that she is in line for the excellent position with a nearby competitor. Clearly, he has an even greater challenge that he had anticipated. He realizes he has an immediate problem concerning high turnover of certain key employees. In addition, he also has a series of interconnected problems associated with career development. However, he is not quite sure what to do and in what order.

1. Describe the nature and causes of the problem faced by Mr. Sweeney.

2. What additional questions should Sweeney ask or what additional information is needed before proceeding toward a solution to this problem? Why?

3. What are the individual and organization benefits of a formalized career development system?

4. If Sweeney decides to develop a formalized career development system of Electronic Applications, what components or types of service should be offered? Why?

5. Should the career development activities be integrated with other human resource management activities? If yes, which one? Why?

6. What criteria should Sweeney consider to evaluate good candidates for promotion? What criteria could be used to evaluate the performance of supervisors in development of their subordinates?