Case Study: HR is Not Just a Back-Office Function

Barry Melnkovic became Amtraks first-ever chief human capital officer in 2016. His challenge was to energize and reshape an HR function that was broken. Human resources at Amtrak was primarily transactional, was reactive rather than proactive, lacked incentives to attract top talent, and had very costly employee benefits. Multiple audits had found major deficiencies in HR structure, programs, and processes.

Melnkovic didnt just come up with his own solutions and try to implement them. He spent hours and days traveling on trains discussing with employees and customers their experiences with Amtrak, asking for ideas about how Amtrak could improve, and familiarizing himself with the numerous jobs necessary for trains to run on time and safely (by doing some of them himself). His vision was to implement a Human Capital Strategic Plan. To do so he traveled to host meetings with Amtrak board members, managers, and employees to describe and educate others about his plan and get their input. His ideas included making sure human resources was involved in strategy development and execution, creating a more results-driven culture, and redoing Amtraks rewards structure.

Many observers were skeptical that Melnkovic could bring about much-needed changes. Within the HR function, he made the tough decision to replace HR team members with others who were more bottom-line focused and were motivated to make a difference. He created a new role to focus specifically on human capital issues such as performance management and succession planning. He created a teamincluding himself, the CEO, and leaders from operations, information technology, marketing, and salesto apply lean and Six Sigma techniques to spark continuous improvement in the company. This resulted in reducing the time to fill vacant positions and speeding up processes through which employees file for family and medical leave. Also, the HR function became the only department at Amtrak to receive ISO certification. Melnkovic also created a learning council with company leaders that helped design a customer experience training program designed to improve Amtraks customers experience. Finally, he worked with his HR team to change compensation and benefits. He introduced incentives for nonunion employees based on their performance as well as yearly awards to recognize individual and team achievements. Previously, company and individual performance were not considered in annual wage increases. He changed pension and retiree health plans that will save Amtrak more than $1.4 billion over 20 years. These changes were not popular with employees, but to help alleviate concerns, Melnkovic visited numerous Amtrak locations to explain the changes, listen to employees, and answer questions. He followed up his visits with webinars, notes to employees, and other corporate communications.

DISCUSSION QUESTIONS

1. What competencies and behaviors shown in Figure 1.3 were most important for Melnkovics success in rebuilding human resources and providing value to Amtraks business?

2. How did he build credibility and demonstrate integrity? Explain your answer.

Figure 1.3