Fannie Mae's Human Resource Management Policies

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Case Details:

Case Code : HROB038
Case Length : 16 Pages
Period : 1999 - 2003
Pub Date : 2003
Teaching Note :Not Available
Organization : Federal National Mortgage Association
Industry : Mortgage Financing
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"For Fannie Mae, diversity is not just the right thing to do, it is the smart thing."

- From an article published in www.greaterdiversity.com, in July 2003.¹

Fannie Mae Wins Laurels

Federal National Mortgage Association (known popularly as Fannie Mae), the largest mortgage-financing firm in the US, announced a record $6.4 billion profit for the year 2002 over revenue of $50.8 billion. This was the 16th consecutive year in which the company had registered a double-digit growth in profits.

Since 1990, Fannie Mae's assets had increased sevenfold to over $924 billion by early-2003. It had grown to become the second largest financial institution in the US after CitiGroup. In early 2003, the company ranked 16th in the list of Fortune 500 companies.²

Analysts attributed the company's success to government sponsorship (as Fannie Mae operated under a Federal charter), effective asset management and portfolio management, and a focus on the 'American dream of homeownership by providing affordable house and homeownership opportunities.'Fannie Mae achieved recognition not only for its financial performance but also for its progressive human resource (HR) policies, especially its 'diversity at the workplace' initiatives.

In early 2003, Fannie Mae was ranked 43rd in the list of Fortune's '100 Best Companies to Work For' list (it ranked 79th in the same list in 2002). The company had been included in Fortune's 'Best Companies for Minorities' list every year since 1998. In 2002, Fannie Mae ranked first in the 'Best Companies for Minorities' list and in 2003, it ranked second in the list.

Since the late 1980s, Fannie Mae had given attention to the development of innovative and effective HR policies. These policies were mainly aimed at recognizing and retaining talent, irrespective of class/gender/nationality. The company's HR policies offered a wide variety of financial, health and career benefits to retain its valuable employees.

Some such benefits were 'healthy living' day off, paid child adoption leave, elder care and child care programs, flexible work options, Assistance for Collegiate Education (ACE) Program, Corporate Mentor Program, mandatory diversity training, 10 hours of paid-off each month for volunteer activities, and Employer-Assisted Housing (EAH).

Fannie Mae was also among the first few companies to create the Office of Diversity (1992) to promote diversity at the organization.

In early 2003, Fannie Mae was considered to be one of the most family-friendly companies in the US. The company consciously worked towards helping its employees, strike a balance between their family and work lives. Jamie Gorelick (Gorelick), Vice Chairman, Fannie Mae, commented, "By providing benefits that help employees balance their work and personal lives, we foster a committed workforce that is highly motivated to help us meet our critical housing mission and achieve our stretch business goals."³

Fannie Mae's Human Resource Management Policies - Next Page>>

1] "Diversity Profile: Fannie Mae's Diversity Tool Kit," www.greaterdiversity.com, July 31, 2003.

2] The company also earned the distinction of being one of the 11 companies profiled in 'Good to Great,' a best selling book (published in October 2001) on best-run public companies.

3] Fannie Mae press release published on www.socialfunds.com in January 2001.