Case Study: Intel Corporation Europe

Running head: HUMAN RESOURCE MANAGEMENT
Human Resource Management
Name of the Student
Name of the University
Author Note

1HUMAN RESOURCE MANAGEMENT
Case study – Intel Corporation Europe
When it comes to putting reward right at the heart of the employment relationship, the
computing giant Intel are firm believers in their managers exemplifying principles of
reciprocal trust and open communication – and this approach has seen spectacular results.
Intel Corporation’s operation in Europe extends from Ireland in the west to Kazakhstan in the
east and Israel in the south, employing approximately 17,000 workers in sales and marketing,
manufacturing and design. Intel’s mission – ‘This decade, we will create and extend
computing technology to connect and enrich the lives of every person on earth’ – reflects
both their ambition and their values. That such a mission would drive bold corporate
objectives might be expected, but it is in the translation of these high-level objectives into
meaningful working practices that has been key to delivering results. Gary Boyle, HR
Business Partner for Europe, believes that this has been achieved through a combination of a
strong reward philosophy; open, clear communications; and line managers who are
passionate about Intel and engaged with the company’s vision and values. Intel’s reward
philosophy is based on matching or exceeding the market for fixed elements of the total
reward package (base pay, benefits and employee share schemes) and rewarding exceptional
performance with variable pay practices which allow repeat high-performers to earn at the
very top of the market. An annual bonus is based on individual targets with a multiplier based
on overall company performance, while a six-monthly bonus is awarded on size of revenue,
operating margin and feedback from customers. What may be surprising in a diverse
employee population of 17,000 is that the bonuses are open to all, regardless of role, business
group or location. The message to employees is unambiguous: performance drives earnings
potential and performance is dependent on everyone – everyone will have a role to play, and
a share, in company success. Boyle is equally clear about the critical role of line managers in
the performance equation and believes strongly that this is where HR should facilitate, not

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direct. For reward to be meaningful from an employee perspective, Boyle says, ‘you don’t
need someone from HR coming in and telling you about the pay philosophy, you need your
manager understanding it and being able to relate it to you as an individual.’ In Boyle’s view,
the relationship between direct reports and managers and the trust people have in their
managers has the potential to be more important than pay in motivating and retaining high-
performers. According to Boyle, a healthy management relationship and the principle of
‘matching what you say with what you do’ have been responsible for some extraordinary
results at Intel. In 2010 the company faced a product recall. Its factories around the world,
already working to near capacity, were challenged with doubling production to meet
customer demands. Intel approached the situation as a potential win–win; they knew that
getting this right would improve financial results and they committed to sharing any gains
50/50 with employees. A huge communications campaign promoted the challenge and kept
employees informed of performance against target on a daily basis. Employees rose to the
challenge spectacularly and achieved the equivalent of 14 weeks’ production in just 8 weeks,
each earning a $1,000 bonus in the process. In an economic environment of zero or very low
base pay increases, it is clear from Intel’s example that greater employee financial
involvement underpinned by a positive employment relationship could be a very powerful
tool indeed.
Please narrate the case using the related HRM terminology. Which compensation
methods does the company use?
The case portrays the freedom of association terminology of the human resource
management. The human resource manager of the concerned organization is able to comment
on the role of the line mangers and the respective lower authorities which are taking care of
the employees. It is evident from the case that the management of the needs of the employees
can be effectively conducted with the improvement in the open communications and the