Tài liệu Corporate Reputations, Branding and People Management 22 ppt

Social capital is based on a the strength of interpersonal networks among employ-ees in and outside of an organization, b levels of trust and knowledge sharing between them and c the kin

We have already discussed, in Chapter 4, some of the issues

of data collection and analysis that were part of the problem we were faced with in tackling the case More importantly, how-ever, the case also raises the ‘so what?’ question: what do we do with the data to improve matters? To help us address this ques-tion, we examine some developments in segmentation theory and practice that proved useful in thinking about the real-life problems of the case

Developments in segmentation

approaches

As discussed in Chapter 5, the evidence for the architectural approach is quite convincing, though just because firms man-age different groups in the same company differently does not always point to an intended, coherent and effective design strat-egy Indeed, according to a wide-ranging review of research on the links between HR and performance, the evidence points in the opposite direction (Marchington and Zagelmeyer, 2005) Moreover, in some cases, it leads to invidious comparisons and endemic employee relations problems because ‘losers’ in the war for talent resent the success of ‘winners’ However, among many practitioners, there are consistent calls for organizations

to manage their human resource strategy according to ‘archi-tectural’ principles There have been at least three recent impor-tant contributions in that direction, all of which are relevant to the Banco case in Box 6.1:

1 Modifications to the original architectural framework

by Lepak and Snell, to consider knowledge flows as

well as knowledge stocks (Morris et al., 2005).

motivation, performance and in ‘living the brand’ Unless data were made available to HR, senior managers and line managers on these issues, there is no way of knowing if this was the case, nor of tackling what had come to be regarded as an employee segmenta-tion problem

2 Understanding different employees’ lifestyles, wants and expectations to create segments

3 Workforce segmentation and talent management

(Huselid et al., 2005).

Developments in HR architecture

Turning to developments in HR architecture, how human capital and knowledge are combined and managed across an organiza-tion over time is an extremely important source of reputaorganiza-tional capital and branding For example, the Swiss–Swedish multina-tional company ABB, which was the darling of the business press for much of the 1990s and a model for so-called transnational firms, achieved its reputation on the basis of being able to trans-fer knowledge between diftrans-ferent parts of its global empire more rapidly than its competitors through management and leader-ship development, so creating future sources of value (Martin

and Beaumont, 1998; Belanger et al., 1999) Indeed, this ability to

transfer and leverage knowledge flows is probably one of the main sources of reputation and value of innovative companies, whether large or small

The basis on which such firms operate is so-called social capital, which is dependent on high levels of organizational

identity and individual identification Social capital is based

on (a) the strength of interpersonal networks among employ-ees in and outside of an organization, (b) levels of trust and knowledge sharing between them and (c) the kinds of shared mental models and mindsets of employees, including their sense of organizational identity, which allow them to commu-nicate with each other more or less economically and effec-tively We shall meet this concept again when discussing CSR in Chapter 9

High levels of social capital are necessary to help bring all four groups of employees described in the previous chapter together – core knowledge workers, alliance partners, contract workers and traditional employees – to assist knowledge flows

in any organization that employs such a model However, knowledge flows can be put to two rather different uses, which

will have an important influence on HR strategy and

organiza-tional design These are exploratory learning (developing some-thing new) and exploitative learning (refining and recombining

existing knowledge) Combining them we create two HR

archetypes – the entrepreneurial and cooperative modes (Morris

et al., 2005) You may have noticed that we have already met these

two archetypes in this book under various guises They include:

initiative vs cooperation (Roberts, 2004); the idea that

reputa-tions are about competing on differentiation, while the CSR agenda focuses on meeting (high) standards of socially legit-imate and responsible behaviour (Boxall and Purcell, 2003; Deephouse and Carter, 2005), and increasing variance in an organization as opposed to driving out variance (Sutton, 2001) These ideas are all variations on the well-established

balan-cing act in organizational studies between a firm’s need to dif-ferentiate and to integrate The key point here is the metaphor of

a balancing act; no organization can do without some degree

of integration for control purposes or without differentiation for its very existence (why would it exist if it provided exactly the same goods or services as any other in the same place, time, price points, etc.?)

Irrespective of how you label the two types – the use of knowledge flows and different type of learning seems to be as good as any – they are associated with rather different bundles

of HR practices, which help us develop the conversation on segmentation quite well (see Table 6.1) You may wish to reflect

on how these different bundles of practices might apply to the problems in the introductory case

Understanding employees’ lifestyles and

psychological contracts

Many surveys of the links between strategic HR and perform-ance focus on what HR professionals intend should happen and the practices they put into place However, they rarely examine

how employees actually experience HR in practice (Kinnie et al.,

2005) Understanding employee’s lifestyles and their percep-tions of psychological contracts is essential not only to making

the connections between HR strategies and reputations, but also to refining such strategies to meet differing expectations and wants

One writer who has popularized the idea of understand-ing employee lifestyles and how employees experience HR is

Table 6.1

Appropriate HR practices encouraging knowledge flows and reputations for

consistency vs encouraging ‘disruptive’ innovation.

Bundles of HR practices Cooperative/exploitative/ Cooperative/exploratory/ social legitimate behaviours differentiation behaviours for for knowledge flows and disruptive innovation

reputations for consistency

Work design ■ Team-based, to enhance ■ Flexible work design to help create

interaction, cohesion diversity and facilitate temporary, and trust sometimes creatively abrasive

■ Job rotation to strengthen ties project teams and knowledge transfer ■ Cross-functional teams to help

learn-■ Bringing in partners from ing transfer, new ideas/mindsets outside to enhance trust ■ Keeping knowledge in-house with

no outsourcing of core business Rewards and ■ Group-based incentives for ■ Individual incentives to encourage motivation fostering organizational initiative

identification ■ Paid on basis of unique and

■ Selection based on fit with valuable knowledge (high levels of values economic rent for knowledge)

■ Multi-rater feedback/appraisal ■ Pay for creative abrasion/friction

■ Communities of practice to and ideas, rather than social foster working together cohesion

Human ■ Long-term, relational ■ Boundaryless careers inside

resource psychological contracts to organization (and outside) to development foster identification and develop new ideas

internal networks ■ Contributions to organizational

■ Extensive internal branding memory through knowledge banks activities/values and sharing of such knowledge

■ Career development and ■ External development to bring in mentoring for building new ideas

identification ■ Encouragement of professional

identities and networks to learn

Source: Adapted from Morris et al., 2005, p 70; Davenport, 2005; Hagel and Seely-Brown, 2005

Lynda Gratton (2004) She has called for the need to build

individual autonomy, organizational variety and shared purpose as

the necessary conditions for building a democratic enterprise Since these characteristics form the goals of most companies concerned with their long-term reputations and brands, her interests mirror our own in reflecting on the relationships between individual identification, organizational identities and performance The central propositions of her book are that democratic enterprises will perform better than others for five reasons:

1 They are more likely to engage employees

2 They create win–win solutions, by balancing individ-ual and organizational needs

3 They enjoy a reputation for fairness and justice, which helps attract and retain talent, as well as being an end

in its own right

4 They are more flexible and agile because they help people make choices, innovate and create diversity,

so essential for the kinds of incremental changes that can turn into longer-term transformational change

5 They are more able to integrate different parts of an organization to create a shared sense of identity

Reflecting on our discussion of individual–organizational linkages in Chapter 4, Gratton points to a number of cases in which companies have taken steps beyond the typical engage-ment survey to learn about employees An excellent example is Tesco, one of the world’s largest and most successful retailers (see Box 6.2)

Tesco is the second largest retailer in the world and is growing fast It is also one of the UK’s most admired companies The CEO challenged the organization to learn as much about its employees as it did about its customers Tesco has a reputation for being able to have an individual relationship with customers based on the mass of data it collects and

analyses through its Customer Insight Unit (CIU), established in 1995 However, it became obvious to the CEO, Sir Terry Leahy, when he was appointed in 1997, that the company did not know nearly as much about its employees He immediately set about a programme to establish a set

of employee values, which was launched in the same year Feedback, however, in the form of ‘Viewpoint’, a survey designed to tap into employee identification with the values, showed that only around 40%

of staff felt they were valued by the company and their direct manager, with roughly the same, low number reporting that their opinions were listened to Given these poor results, an appointment was made of a Values Manager, and the values programme was re-addressed through the development of an employer brand proposition (see Chapter 7) Leahy and his Resources Director, David Fairhurst, challenged HR and the values team to work with the CIU and use their marketing expert-ise internally to learn more about employees

What emerged was a People Insight Unit (PIU) in 2001 This group built on a range of qualitative and quantitative research techniques to gain insight into their employees They used focus groups to develop a survey, entitled ‘Your Life … Your Future’, to understand more about psychological contracts in the company These survey data were fleshed out with insights from annual and bi-annual engagement survey data from the previous seven years From this exercise they developed a

‘Steering Wheel’, balanced scorecard, an important component of which were four key drivers of employee commitment – supportive management, the opportunity to get on, interesting jobs and trust and respect among colleagues

What also emerged from the data analysis were five segments, each with distinctive expectations, values and perceptions of what had been delivered:

■ Work–life balancers: mainly older women, with or without chil-dren, who most of all wanted flexible hours or part-time employ-ment They were not particularly interested in challenging work or responsibility

■ Want it all: typically aged 25–34, degree holders, working in Head Office, who wanted challenge, careers and high pay, but were pre-pared to internalize the company values and work for the com-pany’s success They were the most mobile and were most likely to leave if the deal was not delivered

■ Pleasure seekers: many of these were part-time students, single, male but with service of five years They worked long hours but lacked commitment; their ambitions lay in overseas travel and enjoying themselves outside of work This group was the most mobile and likely to leave if competitors paid higher Interestingly, the CIU predict that this group will form a much higher propor-tion of the working populapropor-tion in the future

■ Live to work: typically young married men or older full-time man-agers with 10 years’ service and working in head office or in distri-bution The most ambitious and committed, working long hours and seeking challenging jobs and promotion For them work was not a social place, and they were willing to sacrifice their home life for the company

■ Work to live: mainly women over 35, with or without children, with long service of around 10 years or more They were not interested

in long hours or challenge, and were willing to do repetitive tasks Their main desire was to be able to work close to home Forecasts for this group show a decline in the future

Forecasts of these different groupings showed different rates of expec-ted commitment and retention

The second stage of the project has been to design customized employment propositions for each of these groups, e.g., by offering cheap flights as part of the package to pleasure seekers Their aim is to provide different groups with what they value in terms of employment, and not to waste effort, time and money in providing people with what they do not value It is not aimed at becoming an employer of choice

by providing every kind of benefit to all, but by being selective The results have been impressive In 2004, Tesco recorded the lowest staff turnover rates in the grocery retailing industry, of 18% for store staff, 17% for distribution staff and 8% for head office staff, which are much lower than average in an industry notorious for its poor reten-tion rates

Coupled with these HR initiatives, Tesco has recorded some of the most impressive growth and profitability figures in British industry, mak-ing the national news on more than one occasion in 2005

Source: Based on Gratton, 2004; Barrow and Mosley, 2005;

http://www.tescocorporate.com/insidetesco.htm

Tesco is not alone Another example of this approach is the Royal Bank of Scotland (RBS) Like Tesco, it has grown rapidly, showing one of the fastest recorded growth rates in the global financial services sector to become the world’s fifth largest bank and the UK’s seventh largest company RBS has used its technologically advanced human capital system to create up-to-the-minute data on its 137 000 employees in 27 countries Using a range of databases and survey tools, including its glo-bal people data, joiner survey, leaver survey, regular pulse sur-veys and employee opinion survey, it can build dynamic pictures

of its workforce based on different responses to questions on work–life balance, performance and development, leadership, recognition, relationships, the nature of the work itself, reward packages and what employees think of its products, brands and reputation The output from these data collection exercises is used to create business metrics to support line managers and a range of human resource initiatives, including tailored employee propositions

It is also worth noting the work of market researchers Taylor Nelson Sofres (TNS), who have carried out major cluster exer-cises on employee commitment data from 2002 and 2004

They use measures along two axes: commitment to the organiza-tion and commitment to career (see www.tnsofres.com) Combining

these two axes to create a two by two matrix produces four clus-ters of employees These aggregate-level data produced by TNS can be used as basic benchmarks for organizations wishing to understand how they compare against the working population

as a whole in the UK The emerging clusters are Ambassadors

(41% of the sample), who are committed to their organization

and their career; Career-orientated (20%), whose

commit-ment is more to their profession and career than the company

(see cosmopolitans in Chapter 4); Company-orientated (8%),

whose commitment to the organization is greater than to their

work or career (see locals in Chapter 4); and Ambivalents

(31%), who show low commitment to either the company or career

The Global Employee Commitment Report carried out by TNS surveyed 20 000 employees in 33 countries Its main finding was that more than a third of the world’s companies were fail-ing to get the most out of their employees Accordfail-ing to one

commentator, these findings confirmed that Britain’s employers have a significant problem on their hands if they want to win the respect and trust of their employees Though only about half of

UK workers feel any loyalty at all to the company they work for (being classified as either Ambivalents or Career-oriented), the picture was even bleaker in Japan, Korea and Bulgaria Fifty-nine per cent of employees in Japan, 58% in Bulgaria and 55% in Korea were uncommitted to both the work they do and the com-pany they work for Contrast these findings with the picture in Israel and Norway and you may understand something of the international variation of these segments Fifty-nine per cent

of Israeli and 57% of Norwegian employees fell into the Ambassador category, significantly above the levels found in the other countries

Some older readers may be thinking, a little like us, that none of this kind of work is entirely new Indeed, there is a long history of sociological studies on orientations to work that produced similar clusters and segments Gouldner’s work on cosmopolitans and locals, discussed in Chapter 4 was one of the first, followed by the landmark ‘Affluent Worker’ studies in the UK during the 1960s, and the repeat performances by Michael Mann on the ‘Working Class in the Labour Market’ These studies informed later American work on segmenting

labour markets and the highly influential ideas of the flexible firm proposed by John Atkinson and his colleagues in the

1980s Similarly, career development studies in organizations have also provided equivalent insights into what employees wanted from work, especially in terms of career orientations and anchors

Much of the data collected and the types of analysis used in these academic studies were the same as the Tesco and RBS studies The surprising element to us in all of this activity is that many organizations have been so slow in systematically collect-ing and uscollect-ing such data, though in one sense we should not be surprised since understanding employees has always been treated as an expense (usually an unnecessary one) rather than

as an investment – unlike spending on market research Barrow and Mosley (2005) pointed out how only a tiny proportion of expenditure in market research is allocated to understanding

labour markets and employees What is different, however, and may explain the recent upsurge in employee data collection, is the relative ease and speed with which such data can be col-lected and analysed, using online surveys to achieve high response rates This drastically reduces the expense element, and coupled with innovative insights into what can be done with these data to achieve significant business results, employee surveys have now begun to address the ‘hot buttons’ of many businesses Our examples of designing individualized employ-ment propositions and reducing turnover help provide evidence for this business case; so do the examples of Tesco and RBS These examples also serve as a good introduction to the last of our segmentation approaches

Workforce segmentation and talent

management

There has been a noticeable change in the recommendations

in the strategic management literature from the ‘global to local’ This change represents a move away from a rather simple world of monolithic organizations pursuing generic strategies, such as low cost, focus and differentiation, to an altogether more complicated scenario, made up of increasingly differen-tiated multinational companies and new-style, networked forms

of organizations turning towards strategies that are, or have to

be, more localized, and relevant to tightly defined geographi-cal markets or product/service segments (Hagel and Seely-Brown, 2005; Paauwe and Boselie, 2005) (see Chapter 7) What works in one set of usually localized and mostly short-lived competitive conditions, will not often work in others for any length of time (Greenwald and Kahn, 2005a) This is because the three main sources of competitive advantage, customer captivity, proprietary forms of technology and knowledge, and economies of scale, are either temporary or must be combined with one or both of the others to have any lasting advantage in globalized markets Competition usually ensures that customers