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June 30, 2009
Jack Welch Says HR Managers Have the Most Important Job in America

Patricia M. Trainor, J.D.
Legal Editor

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Jack Welch, former CEO of General Electric, believes that HR managers have the most important job in America and that CEOs should value their HR managers as much as their chief financial officers. Welch was the opening session keynote speaker at the Society for Human Resource Management's (SHRM) 61 st Annual Conference and Exposition in New Orleans.

In a twist on the traditional keynote speech, Welch took questions from moderator Claire Shipman, author and national correspondent for ABC News' “Good Morning America,” as well as questions from SHRM members sent via video and Twitter. Not surprisingly, the discussion focused on Welch's views on how HR managers can succeed during the current economic downturn.

Trust. First, Welch told attendees that HR managers must earn the trust of employees. They need to take care of those who do a good job, and “tell it straight” to those who are not performing well.

He believes strongly in rigorous evaluations, noting that no employee should wonder where he or she stands in the company. Weak performers should be “traded out of the team.” Welch explained that this does not necessarily mean they should be fired. Often a weak performer will be a better fit in a different position in the organization.

HR also needs to create an atmosphere of growth and excitement, to make the organization “vibrate so people feel the excitement of tomorrow instead of the pain of today.” Welch urged HR professionals to make their companies more informal, less bureaucratic. In Welch's view, this will help organizations retain their best performers when the economy recovers.

Don't be a victim. Welch advised attendees to stop being victims. To enthusiastic applause, Welch exhorted attendees to make it know to upper management that HR makes a difference and to get out of the “picnic, birthday, and insurance form business.”

When asked how HR professionals can make their CEOs recognize their value to the company, Welch responded with two words: by overdelivering. Welch explained that HR professionals have to make their bosses smarter by giving them more than what they ask for. HR also has to insist on having a voice within upper management.

Communicate. Welch finally stated that HR has to engage in reality-based communication. Recognize the uncertainties in the economy, and let employees know what is going on. He believes that HR can gain the trust of employees and of upper management through honest, consistent communication and by sending the same message to employees, upper management and the media.

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