Assignment on human resource

management
Fannie Mae’s Human Resource
Management Policies

Submitted by: Submitted To:

Name Enroll. No
Kamna Mathur
Gurpreet Singh 10BSP356
Rohit Balhara 10BSP1400
Puneet Khaneja 10BSP1314
Mandeep Sharma

Section: D

Date: Oct. 22, 2010

About Fannie Mae

Late 1930s the Federal Government’s decision to help American own homes, and the unwilling
of private lenders to ensure a reliable supply of mortgage credit across the nation led to creation
of Finnie Mae.

It was established in February 1938 to facilitate the constant flow of mortgage money by
creating a secondary market for the same. Initially the company was only authorized to buy
mortgages that were insured by the FHA. Later in 1994 it was allowed to buy loan guaranteed
by Veteran’s Administration. Fannie Mae was listed in New York stock exchange in 1970.

In 1981 David O Maxwell Became CEO and company entered many new business segments of
The Mortgage Market. In early 2003 Fannie Mae was the largest source of House Mortgage
Financing in US. By 2003 out of every 5 families in America lived in a house that Fannie Mae
had helped finance.

Issues/ Problems

1) After mid 1980s the financial service industry, especially the home mortgage market,
had to deal with intensified competition.
2) Around the same time, changing trends in American society and demographics required
employees to pay more attention to their family lives.

Solution/ Company’s HR Policies to solve the problem

To survive in highly competitive market, company had to focus on efficiency and growth. The
development of a talented workforce was one of the ways in which companies could drive
competitive advantage in such a market. Change and revamped the HR Policies to meet the
changing needs of the employees.

Finnie Mae understood the value and necessity of creating a workplace environment that
enable employees to balance work and family lives. Working on the premise the work-life
programs would increase the recruitment power, productivity and retention rate and would have
a positive impact on organizational culture, the company refines its HR policies since late 1980s

Its HR Policies focused mainly on employee benefits, diversity and career development.

Employee benefits at Fannie Mae are:

FINANCIAL BENEFITS:

The Co. offered its employees: Employee Stock Ownership Plan (ESOP), Employee Stock
Purchase Plan (ESPP), Employee Retirement Plan and 401 (k) Retirement Saving Plan.
It also offered financial benefits such as Employer Assisted Housing (EAH) Program and Life,
Accident and Disability Insurance.

The EAH Program was aimed at helping all Fannie Mae employees own a house, as it granted
forgivable loans for their housing needs. Fannie Mae offered life insurance options for
employees and their dependents. Fannie Mae offered its employees long-term disability
insurance under the ‘Choice Dollar’ plan. Apart from these benefits, Fannie Mae provided home
care, adult day care and nursing home care coverage for employees and their families to help
them cope with financial difficulties.

HEALTH BENEFITS:

Fannie Mae offered a wide array of health benefits and programs to ensure that its employees
maintained healthy lifestyles. These health benefits also covered the spouses/domestic partners
and dependents of the employees.

The company ran a health insurance program ‘Partnership for Healthy Living Program (PHLP),
which included many health promotion and behavior modification activities. The Health
Assessment Screening Program, an initiative under PHLP, provided free annual health
assessment screenings to employees.

A group counseling session was also conducted for employees to help them improve their
wellness ratings in relevant areas.

Employees were given a ‘Healthy Living Day Off’ so that they could complete the health
assessment and attend group counseling on their wellness results.

Health promotion initiatives also included exercise, walking and massage programs, weight loss
programs, healthy lunch seminars and fitness centre discounts.

Fannie Mae offered its employees a health and dental care insurance plans. Employees could
choose the insurance plan which suited their needs.

The company covered its employees for an eye examination and a pair of lenses once a year,
and a set of frames, biannually.

FAMILY & LIFESTYLE BENEFITS:

Fannie Mae offered its employees a range of benefits to enhance their quality of lives and to
improve their job performance. Employees were entitled to an annual vacation leave, which was
based on the number of years they had worked for the company.

The company developed a volunteer leave program to encourage its employees to contribute to
one of the company’s core commitments like, making a positive impact on the community. The
company offered services to various communities through the 10 ‘We Are Volunteer Employees’
(WAVE) committees.
 Fannie Mae provided its employees with child birth/adoption leave, dependent sick leave,
Emergency child care services and child care vouchers. It established an Emergency Child
Care Centre in Washington D.C. which offered on-site childcare in times of emergency.

The employees were given access to a full-time on-site Eldercare consultant and Elder Kit (a
complete guide to elder care), under the Eldercare Program.

One of the major lifestyle benefits offered by Fannie Mae was The Flexible Work Options
Program, under which, a range of flexible work options were provided to eligible employees to
help them fulfill their personal obligations unrelated to their jobs. They are tale-working,
compressed work schedule program, flextime, part-time work and job sharing.

Career Development

Career development at Fannie Mae was aimed at retaining and expanding its talented
workforce. Fannie Mae provided its employees a wide range of opportunities to enhance their
capabilities, Assistance to Collegiate Education (ACE) Program was one such major career
development initiative. AAs part of ACE, company provides full financial aid to employees so
that they improve their education qualifications. Company also provided career development
tools to help employees enhance their skills and interests. The Corporate Mentor Program was
another major tool offered by Fannie Mae, which aimed at helping employees improve their
relationship-building abilities, and help employees set and achieve career development goals.
As part of initiative the company allowed their employees to choose their mentors and
encouraged mentor to exchange ideas and help each other in development and growth. The
CMP program consists of three components: Mentor Speaker Series, Peer Mentor Program and
Mentor Protégés Program.

The job rotation program was another key career development tool at Fannie Mae. As a part of
program, Fannie Mae offered the Project Staffing Program (PSP). In this program, employees
were offered the opportunity to participate in three-to-six month projects in various business
units. PSP helped employees understand and learn new jobs. Lunch and Learn Sessions (LLS),
a career development initiative which helped employees identify their career goals, learn
personal development plans, and identify learning objectives.

Results:

By the turn of the 20th century, Finnie Mae had been reaping the reward of its innovative HR
policies for many years. In 2003, the company had one of the lowest turnover rates (3%) in the
industry. The company had 5 minority members on its 17 members management board and11
out of 50 highest paid employees were from minority communities.

About 44% employees were minorities and around 44% in top management were women. By
mid-2003 Finnie Mae had won many awards for its innovative work policies and diversity
initiatives. Company earned itself a place in ‘Best Companies for Minorities’, ‘100 Best
Corporate Citizens’, ‘American Most Admired Companies’, ‘Top 25 Companies for Executive
Women’, ‘Top 5 Companies for Black Employees’, ‘Top 50 Companies for Diversity’ etc.

In 2003 the company was one of the top 3 list along with IBM and American Express

In late 2003, Fannie Mae continued to improve its work policies to meet the changing
requirements of its employees and the work environment. Due to its sustained focus on
developing HR policies that were the ‘need of the day’, the company was able to recruit and
retain a workforce committed and dedicated to the achievement of its goals and objectives. In
light of the above, analysis felt that it would not be surprising if the company continued to
register increasing growth in profits and revenues and achieved its target of pledging $2 trillion
in housing finance much before 2010.