I’m reading Michael Malone’s book ”Bill & Dave", subtitled How Hewlett and Packard Built the World’s Greatest Company (see blog ”Technology changes, people stay the same" June 22).
In 1959 the company launched what is thought to be the first ever employee stock purchase plan. It enabled staff to put a portion of their wages to the purchase of HP stock at a discounted price.
However, the founders had made one mistake. To their surprise employees at all levels, including senior management, were all too often selling the stock at market price and pocketing the difference. The stock purchase programme rules were quickly altered to include a vesting period and HP employees became among the largest shareholders in the company.
Another innovative development was flex-time - allowing employees to individually adjust their work schedules (start and finish times) to suit themselves. The company assumed staff loyalty without demanding it, trusting them to get the work-life balance right.
[Down here, when the concept arrived it was called ‘glide-time’. I found it extremely useful (and who hasn’t) in my first job as a junior draughtsman in the Lands and Survey Department.]
The company started 1960 with 3000 employees and 10 years later had revenues of $325 million and 16,000 employees. Its founders, in 1970, were now 57, Hewlett, and 58, Packard and recognised as brilliantly successful entrepreneurs and enlightened businessmen.
The 1970s were somewhat more turbulent for the company as recession hit Silicon Valley with the first of the boom-bust cycles that still plagues IT to this day. For most companies this meant lay-offs. Dave Packard had accepted the position of US Secretary of Defense in Washington in 1969, where he would remain for three years, and Bill Hewlett was running the company.
His solution to avoid layoffs was to introduce the Nine-Day Fortnight, asking every HP employee, from himself to the janitors, to take every second Friday off work. It cut overheads, preserved the company’s intellectual capital, maintained morale, positioned the company for the turnaround and was an ongoing recruitment tool as Bill Hewlett demonstrated his loyalty to HP’s staff.
As well, this memo from Hewlett on July 16, 1970 is worth repeating in full. It says volumes about the company, its founder and ‘the HP way’.
SUBJECT: Evaluations & Terminations
An increasing number of cases are coming to my attention in which employees are being terminated with little or no warning that their performance has been unsatisfactory. In some cases, evaluations have been glowing up to the time that an individual is released.
There is just no excuse for this. It is not humane. It is not HP-like. It is not justified. I would like you to be guided by the four points.
(1) The individual affected has had advance warning through written evaluations and has been advised constructively on how he/she should improve.
(2) Wherever practical, assure the employer is given the opportunity for other placement where he/she might make a greater contribution. Employee placement is a function of supervisors and Personnel and not a function of the employee to be turned loose to find his own job someplace in HP.
(3) If termination is the only alternative, Personnel must be fully advised and believe the case is satisfactorily documented, and the decision has the approval of the general manager concerned.
(4) Before any adverse action is taken, it should be well thought out. We must recognize that each of our people represents an individual with problems, families etc.
