Tài liệu Corporate Reputations, Branding and People Management 23 ppt

Reflecting the trajectory of thinking in the strategic man-agement literature, they make an initial distinction between organizations that use generic best practices to drive strategy e

have plenty of options in the long run, since technology and knowledge becomes obsolete or widely available, and even economies of scale only hold good for restricted markets (many fixed costs are tied to a specific product-market or geographi-cal area) We will look at an example of Wal-Mart’s entry into Germany later in this chapter to illustrate the problems of global strategies, and follow up this global–local problem in the next chapter

As a result, dynamic localism and decentralization of strat-egy compete with the benefits of a more corporatist agenda in the new strategic HR literature One of the best examples of this is the strategic workforce segmentation approach developed

by Mark Huselid, Brian Becker and Richard Beatty (2005)

They have chosen the terms, ‘differentiating the workforce strategy’

to ‘drive effective strategy execution’ as their strap line for new

approaches to HR segmentation In a similar fashion to our discussion of the four lens framework on which this chapter is based, they argue that just as strategy can be analysed in terms

of content (the goals to which it is put) and execution (the process of implementing strategy), so can its workforce strat-egy This they define as the systems used to select, develop and reward the workforce

Reflecting the trajectory of thinking in the strategic man-agement literature, they make an initial distinction between

organizations that use generic best practices to drive strategy

exe-cution (which are low on workforce differentiation and low on

strategic impact) and core workforce differentiation (which is akin

to some of the internal fit approaches we have considered, such

as the HR drivers of generic innovation, cost and focus strategies

in Table 5.1 in the previous chapter) This trend to core work-force differentiation is regarded as a move in the right direction

but not one that goes far enough in identifying the elements of

those generic strategies that drive strategy execution Thus the second, and arguably more important, trend they identify is

towards strategic customization (see Figure 6.1), the elements of

which are likely to vary across an organization on the parts of

a generic strategy for which individual managers have direct

responsibility Borrowing from Michael Porter, Huselid et al noted these elements provide the key strategy activity systems, which are operationalized by strategic performance drivers.

There is a lot of complicated business-speak here, so let’s use

an example of what it could mean in practice In any organiza-tion there is likely to be more than one generic strategy in oper-ation For example, in our Banco example, the core strategy seems to be one of differentiation by providing the complete range of financial services offered by an international bank but tailored to a local (South) regional market to reflect its distinctive wants and needs Such a strategy is, rather inelegantly, known in ‘the trade’ as ‘glocalization’ This is likely to require

high levels of (i) local customer intimacy solutions to capture and retain customers and (ii) global operational excellence to achieve

economies of scale Customer intimacy depends on behaviours that demonstrate flexible responses to local customer problems and high levels of cross-selling of products and services, such as financial advice, insurance and mortgages (which usually form the main sources of revenue generation in retail banking) They also require HR systems to support these behaviours, e.g those aimed at generating high levels of flexible responses and knowledge sharing across different parts of the business

Degree of differentiation

Strategic

impact

Low High

High

Best Practice HRM

Selection Development Rewards etc.

Differentiating The core

Innovation Cost leadership Focus

Strategic Customization

Hitting the key performance drivers for the different strategy activity systems

Figure 6.1

Customization of workforce strategy (based on Huselid et al., 2005,

p 35)

However, certain ‘back office’ departments, such as accounting and IT, and even HR, may have strategic goals that emphasize operational excellence, which is based more on continuous improvement, waste reduction, risk averse behaviour and a high concern for process accuracy rather than on external customer focus

Consequently, the retail branch managers will have quite dif-ferent strategic performance drivers for selling products and services and providing customer solutions from back office managers who control information flows across the bank Even within the retail branch banking network itself, there may well

be substantial variations in types and levels of customer intim-acy among those regions based in large cities and those in rural

or semi-rural areas, and thus rather different performance driv-ers for individual managdriv-ers In one sense, this is just another way of saying that all strategy is local, as we have suggested, because there is rarely such an entity as a global consumer or global employee Local differences matter! – though this is not

a truism that some companies recognize (see the Wal-Mart case

at the end of the chapter)

One of the most important points made by Huselid et al is

that, although competitors (in this case, competitor banks) may have a similar generic strategy, the source of their competitive advantage will lie in either:

■ addressing different strategic activities (e.g organizing and managing the product/service mix of the bank)

in different ways, or

■ addressing the same strategic activities (e.g the same product/service mix provided by bank branches to others) in different ways

Devising and executing HR strategies that assist in either source of advantage is one of the best ways of ensuring that these strategy activities are performed in a manner that is not easily imitated by competitors

So, the lessons for our case study of Banco (South) are to:

■ Set out the key strategic activities that will lead to successful strategy execution This process will help define the key performance drivers (see Table 6.2 for an

example of strategic activities and performance drivers for retail managers)

■ Identify the unique human capital demands (know-ledge, skills and attitudes) of each performance driver, and

■ Develop differentiated workforce strategies to meet the human capital demands of each strategic activity

Table 6.2

Examples of strategic activities and performance drivers for retail bank managers

Maximize reliable service to customer Grow and retain the number Manage attrition rates of existing customers of high value customers and Develop effective marketing programmes for high potential customers new/existing customers

Continue developing products and service range

Cross-selling of banks’ branded products and services Increase revenue per

Grow revenue from non-branded products and services customer

Increase fees to customers and balances in accounts

Transfer customers to online banking Reduce cost per customer Increase customer use of online banking to the bank

Reduce transaction costs per customer

HR’s role in developing differentiated workforce strategies depends on two features of strategy

■ Content:How well they are able to use innovative bun-dles of HR practices to impact directly on the human capital demands of each performance driver This addresses the content aspects of strategy in much the same way as our earlier examples of innovation, cost and focus, but this time, developing HR strategies that support innovation where it is needed in the business (e.g growing high value customers through creative marketing and product design), cost leadership (e.g reducing transaction costs per customer), or focus (addressing the specific needs of high value or ‘wealthy’ customers)

■ Execution: How well they implement workforce strat-egy through effective talent management as the focus

for their activities Huselid et al argue that too much

current activity of HR is spent on dealing with employee performance problems – especially low performers – and not enough time is spent on helping line man-agers address high performance problems, especially recruiting, motivating and retaining high performers

to perform high value jobs, which is the core of the so-called talent management problem

Since this notion of talent management is so important

to modern HR practice and workforce segmentation – the CIPD in the UK identified it as one of their three major research objectives for 2005/6 – we need to spend a little time discussing it and how it applies to reputation management and branding

Managing talent

The term ‘talent management’ has become popular as a result

of a major study by North-American-based McKinsey consult-ants Ed Michaels, Helen Handfield-Jones and Beth Axelrod, who undertook their original work in 1997 on the impact of how companies managed their leadership talent on corporate performance, and have subsequently followed this study up

with further research (Michaels et al., 2001) Prior to the

burst-ing of the dot.com bubble in the USA in early 2000, the recruit-ment of talented people was seen to be the biggest single issue facing US business Based on some in-depth research among business leaders, these writers concluded that the ‘war for talent’ was, and would continue to be, one of the most import-ant problems facing industry and commerce in developed countries The changed labour market circumstances follow-ing the downturn in economic prosperity in the USA associ-ated with the dot.com collapse did nothing to diminish their beliefs; subsequent research by them has provided strong

support for their thesis in a number of industrial sectors and countries Their work showed that only a small proportion of senior managers believed their organizations: (a) recruited tal-ented people (their A-class high performers); (b) did all they could to identify and retain these talented performers, and to develop performers with potential (the B class); or (c) under-took to remove or replace low performers (whom they called C-class performers)

Key definition: Defining talent

Talent is seen in individual terms comprising ‘a sharp strategic mind, leadership ability, emotional maturity, communications skills, the abil-ity to attract and inspire other talented people, entrepreneurial instincts,

functional skills and the ability to deliver results’ (Michaels et al.,

2001, p x)

Talent management, they argued, required a new talent mind-set among business leaders because it was so ‘mission-critical’, and therefore could not be left to HR departments Instead,

it required the direct support of the organization’s board of directors and needed to be made a core element of the work of business leaders (see Table 6.3)

These authors proposed that organizations that sought to become top performers should implement three elements of a talent management approach There should be:

■ disciplined talent management, through rigorous and continuous assessment, development of managers and matching them with jobs

■ creative recruitment and retention through refined and meaningful employee value propositions (EVPs), which we shall discuss more fully in Chapter 8 on com-munications and employer branding; and

■ thoughtful executive development, using coaching, mentoring and on-the-job experiences at key points in managers’ development

Table 6.3

The new talent mindset

The vague leadership and HR rhetoric of A deeply held conviction that talented

‘people being our most important asset’ people produce better organizational

performance The responsibility for people management The responsibility for managers to do all lies with HR they can to strengthen the talent pool Small-scale and infrequent programmes for Talent management as a central compo-succession planning and training managers nent of the business and part of the

in acquiring and nurturing people ongoing role of senior leaders

Managers have to work with the people Managers constantly taking active and bold they inherit steps to attract and develop their talent

pool and actively manage low performers

Source: Adapted from Handfield-Jones et al., 2001

Table 6.4

Elements of a talent management approach

Danger signs Signs of progress Signs of achievement

Disciplined talent management

A focus only on obvious Some discussion of Clear identification of A, B and successors in succession incumbents performance C performers in each talent

Lists of high potential Consultation of list when Written action plans for each people, but little action vacancies occur high potential’s development

and retention Belief that there are no Admit that there are likely Act decisively on poor

poor performers to be some, but avoid performers by improving or

doing much about it replacing them Hold no one accountable Evaluate managers on Hold leaders directly

for talent management, how well they manage accountable for developing except for HR their staff their talent pool

Handfield-Jones has turned this approach into a useful con-sulting tool, summarized in Table 6.4

Danger signs Signs of progress Signs of achievement

Creative recruitment and retention

Empty rhetoric about Think about the EVPs for Understand the strengths and being a good employer each type of talent weaknesses of the EVPs for

to work for each type of talent and plan to

strengthen them Hire only at entry levels Occasionally bring in Recruit a steady flow of talent and grow only from senior or specialist at all levels

internal hires people from outside

Go to the same sources Experiment with new Creatively tap new pools of for recruiting talent sources, but look for talent, looking for essential

similar backgrounds capabilities Have high and consistent Analyse attrition data by Know the attrition rates of A, attrition rates among department and type B and C performers and

leaving, performing or underperforming

Thoughtful executive development

Leave the job assignments Suggest some candidates Involve leadership teams on

of managers to the from the high potential every assignment decision, manager who hires them list or job posting system seeking to optimize these

across the company Recruit most qualified Stretch people, but not Thoughtfully consider the candidate with no in the context of any development needs of each discussion of development development plan assignment and the

development needs of each candidate

Assume that the best way Provide formal feedback Embed candidate feedback and

to develop people is by through appraisal once coaching into the routines of throwing them in at the a year the organization and the jobs

Invest in training driven by Offer regular but basic Offer integrated management/ top-down assessments of programmes for manage- leadership learning

pro-candidates and then only ment development and grammes for each transition

in response to immediate leadership, usually point of managerial careers needs, threats or crisis off-the-job

Source: Adapted from Handfield-Jones, www.handfieldjones.com/diagnose/index.html

(28 February 2006)

Another, similar approach to talent management is found in the four categories of employees that make up a ‘talent value chain’ (Rosen and Wilson, 2005; Zingheim, 2005):

■ The Superkeepers: the 3–5% of employees who

con-sistently demonstrate the ‘what and how’ of superior performance in ways that reflect the core organiza-tional values, and help others to do so

■ The Keepers: the 25–30% of the organization who

make a continual difference; they have demonstrated leadership capabilities and exceed normal expect-ations for job performance and skills

■ The Solid citizens: the 65% or so of people who meet

normal expectations for job performance and skills, and may be able to exercise leadership in some situations

■ The Misfits: the 3–5% of people who continuously fall

below normal expectations for job performance and skills, are unable to exercise leadership in some situ-ations, and do not fit with the organizations’ core values

This kind of differentiation mirrors the language of psycho-logical contracting by recognizing the individual nature of psychological contracts and the different types of contracts Moreover, there are various ways in which marketing ideas have been incorporated First, internal marketing is implied in orga-nizational price segmentation through rewards strategy Second, given that talent, by definition, is in short supply, its price has risen markedly over the past few decades in many countries So organizations, it is argued, will have to become used to ‘paying for the person’, rather than having fixed rates and bands for staff Differentials between high performers and average per-formers will gradually increase to reflect market values,

provid-ing people with high levels of economic rent, the additional levels

of rewards beyond those necessary to keep people working when they are in short supply, e.g star football players, who most probably would continue to play for much lower wages than are paid for playing in the English Premier League or the top male and tennis players who earn enormous rewards on the international tennis circuit

Zingheim poses six questions she claims organizations need

to address (which could also form the mantra for successful Premier League football clubs):

1 What are the absolutely necessary skills and capabil-ities needed to be successful?

2 Who possesses these Superkeeper skills in the company?

3 Can you identify and find potential Superkeepers out-side the company?

4 What total rewards package (career development, com-pelling vision, workplace environment, and total pay) are Superkeepers looking for?

5 What changes do you need to make to your total rewards package to put your company in the market for top talent?

6 Is your company ready to embrace such a talent man-agement philosophy, and adapt its rewards packages? There is certainly evidence of this last question having been answered in the affirmative since the 1980s, with ratios of salaries between the top-paid managers and the average salaries of employees increasing significantly in most countries (Wolf, 2002) For example, CEO salaries rose by an average of 8.3% per year during the period 1993–2003 in the USA, whereas the pay of the average employee barely rose at all during the same period (Sparrow and Cooper, 2003; Conyon, 2006)

The third use of marketing is in the strategies for dealing with different ‘portfolios’ of performers The traditional Boston Con-sulting approach to the growth-share matrix uses language like investing in potential ‘stars’ (the As or Superkeepers) and ‘put-ting down the dogs’ (the Cs or Misfits) Such language and app-roaches to individualizing talent, however, have not captured the imagination of all commentators and practitioners The case of Enron points to problems that can arise when individual talent management is over-emphasized, especially at the expense

of other members of the organization The Banco Group, like many other organizations which have embraced a talent man-agement approach, is aware of the problems, but may be driven

to follow the industry recipe of the Financial Service sector of paying excessively for performance (see Chapter 9)