1.

What human resource management-related steps did Siegel take to help get Tyco back on

the right track?

Laurie Siegel is senior Vice President of human resources and internal

communications for Tyco International. She joined Tyco in January 2003. In this role,

she has global responsibility for leading the company’s strategies in the area of leadership

development, organizational effectiveness, compensation and benefits, staffing and

diversity, learning, HR systems and processes, and internal communications. Tyco

International Ltd. is the international company and a global, diversified company

headquartered in Princeton, New Jersey. The company provides products and services in

five business segments which are fire and security, electronics, healthcare, engineered

products and services, and plastics and adhesives. To maintain their performance, Tyco

need to have good human resource management steps. Those responsibilities were lies

under Laurie Siegel as the Senior Vice President of Human Resources.

During the phase that Siegel joining in the Tyco, Tyco was facing the great crisis

and this is clear that Human Resources need to play important role to steering Tyco out of

crisis. The important tools in Human Resources are the fundamentals of leadership,

values, governance, change management, and employee engagement. The new leadership

may bring fresh start to recover the critical situation at that time. Siegel challenge herself

to become part of HR management due to the an extraordinary HR opportunity in which

the strategic decision need to be make in order to bringing Tyco back on the right path.
 Basically, human resources management steps can be perform by all managers

with five basic functions. Therefore planning, organizing, staffing, leading and

controlling. Those five basics function was included in Siegel’s aim to tackle the

numerous problems when she took her seat in that company. Therefore, she need to help

hire new management team, she had to do something about what people outside viewed

her company and lastly she need to think on the company’s top management

compensation plan.

Based on the research, Mr. Breed said that Siegel was outstanding human

resources professional with good experience. She helped the Tyco established processes

for identifying, developing and promoting a talent throughout the organization. In order

to bring back Tyco in the right track, the key process was based on the Human Resources

function. It shows how the company selects and adopts the best practices. During the

tension phase in the company when most of the top management and the director were

fired, Siegel need to find new plan to fill up those position.

Firstly, she builds up the effective recruitment and selection process in order to

attract the best performer in the company. Siegel was able to hire the best possible people

even though getting new members in the top management of the company was

challenging. These recruits intern would be responsible for the future prospects of the

company with an effective recruitment process. Rebuilding the board of directors and

senior management ranks may give enormous challenge that are very risky due to the

company’s uncertain future and also tarnished the reputation. Otherwise, one interesting
twist to the process was that after a time, realizing that leadership may change for second

round and this will be giving more collaborative work styles that later required.

Secondly, Siegel need to emphasis on talent development and effective training.

These talent development and effective training was very important to build up behavior,

working ethics and morale for the employee. The importance of the talent development

and training was well understood by Siegel and it will show to the workers how she

determines about their career progressive in the company. As the worker, appreciation

from the top management was very important to make them willing to perform in the

organization, thus human resource department need to take care of that. Talent

development and training will help the employee to improve their skills by the time they

will be easily to get promoted in the companies division based on their qualifications.

The database about the employee will help the human resource department to keep track

on the employees in Tyco. This will help the management to know all their background,

performance based on their training and development activities.

Thirdly, Human Resources related step that taken by Siegel is increasing and

recruiting more number of independent auditors. Internal auditors job responsible

ensuring the organization is in standards and makes recommendations to the management

on how it can increase it efficiency. In order to recruiting auditors, they also need to pass
 some specialized training.1 Independence is fact in which the auditors is unbiased and is a

person of integrity.2 In fact, Tyco was hired more than 100 internal auditors.

Fourthly, Siegel plan to conduct seminars on ethical policies in the company. In

order to running the seminar, Siegel was draft a strict company code of ethics. During

that time, Tyco has written and circulated, to all 260,000 employees, a multi-page ethics

policy that has now been translated into 12 languages. The outline of the company code

of ethics was published, and then the responsible department will arranged to organize

the seminar. All of Tyco’s employees attended mandatory one-day ethics seminars, and

more detailed programs are in the works for its 25,000 managers. In the past, the practice

was to award huge bonuses to anyone who “somehow drove the numbers up.”

Fifthly, Siegel planned to change the bonus plan and revamping the pay system. A

new compensation system was critical and at the same time, changing the pay system is

also difficult. This plan may require courage and integrity because the pay system was

changed in every way. The management reduced pay levels and shifted the mix to focus

on long term results. She also established performance metrics to reflect the new priority

on cash flow. She advised the compensation committee on how to replace Tyco’s old

salary and bonus policy, which rewarded acquisition-based company growth. The new

system is based on measurable company performance. Bonuses and restricted-stock

grants are linked to objective measurements, including each business unit’s earnings

1
http://www.careersinaudit.com/article/audit-jobs-what-you-need-to-know/
2
Knechel W. R., Salterio S. E., Ballou B., [2007], “Auditing: Assurance and Risk”, 3rd edition, Chapter 4, p 107,Thomson South-
Western Publishing.
before interest and taxes, and Tyco International’s overall performance. Even though the

plan was difficult to implement, but interestingly, the crisis allowed the new HR

management to drive towards a vision of excellence much faster than before.

And lastly, Siegel aim to improving and installing the information and technology

(IT) system in the company due to the lack of companywide computer technology. Siegel

helped staff and install technology that centralized procurement system that centralized

buying and services to contractors, and total compensation (payroll and benefits). The

new system assesses how well managers set and meet goals. As a result, Tyco’s bonus

budget for the fiscal year 2003 was reduced by $90 million. With Tyco’s attention now

on 2004 and 2005, the immediate challenge for management is to improve operating

rigor, further strengthen the balance sheet, solidify governance standards, generate more

cash, and begin to establish a reputation as a world-class operating company.

2. Do you think she took the appropriate steps? Why or Why not? What, if anything, do you

suggest she do now?

Based on the studies, I think Siegel took the appropriate steps. The steps that she

took bring back Tyco to the normal stage. Tyco’s finances, profits, and stock prices were

recovered. Her approaches as the Senior Vice President Human Resource Management

bring Tyco back to the good conditions. Her role are very important because she is the

one who responsible to monitor, influence, shape and strategize around the HR policy

matters in the company. Those HR strategies and score cards that drive the appropriate

employee behaviors in support of the business strategy was seen successfully. What she

was doing is right because as the HR manager, she provides resources for initiatives that

improve reputation, including compensation for employees. During the transitions, HRM

should ensure that employees are treated with respect and every opportunity is taken to

ensure that the maximum number of employees benefit.

Moreover, Siegel also shows to the business world that HR management systems

can enable organizations to pursue and achieve the company vision and goal because

only a few agree on how HR really affects the company’s performance. HR’s span of

control typically includes fundamental areas like identification or recruitment of top

performers; training them to work effectively; monitoring employee progress and

rewarding employees for accomplishing goals. Depending on the company’s economic

model, competitive and strategic goals, HR management often controls a variety of other

functions.
 Usually, many companies may face the hard time and the HR management is key

to shaping corporate strategy and implementing it successfully. “When company leaders

assess the potential payoff of strategic options and view the value of a performance-based

pay program, they should consider the impact employee performance can have on the

company,” says Paauwe. “Instead of assuming that business strategy will drive HR

strategy, successful companies can use HR policies and practices to enable a broad range

of strategic options.”3

In conclusion, Siegel take very appropriate step to make Tyco condition better

than before. This because she do what Human Resources HR responsibilities of staff

managers such as assistance in hiring, training, evaluating, rewarding, counseling,

promoting, and administering various benefits programs.

3
HR Spectrum, Centre for advance Human Resources Studies, School of Industrial and Labor Relations, Cornell
University May-June 200 http://www.ilr.cornell.edu/cahrs/resea
rch/pubs/hrspectrum/upload/HRSpec04-06.pdf
References

Friedman, B. A. (2007). Got Positive Corporate Reputation? Human Resource

Management Role Implications. Association on Employment Practices and Principles,
41.

Siegel, L. (2011). When Crisis Calls. The Chief HR Officer: Defining the New Role of
Human Resource Leaders, 99.

HR Spectrum, Centre for advance Human Resources Studies, School of Industrial and
Labor Relations, Cornell University May-June 200 http://www.ilr.cornell.edu/cahrs/resea
rch/pubs/hrspectrum/upload/HRSpec04-06.pdf