Tài liệu Corporate Reputations, Branding and People Management 19 ppt

(see Figure 5.2)? Or, to take another example, is our current strategy and organization aimed at exploiting old ways of work- ing by driving out variance among the workforce and generating high levels of cooperation around a core theme of making money now; or is it/should it be about exploring new ways/ideas by enhancing variance and initiative around a core theme of achieving results in the long term – the ‘innovate or die’ argu- ment (Sutton, 2001; Roberts, 2004)? We will return to this ques- tion later in this chapter. The second question is concerned with how strategy is, or should be, devised and implemented: is strat- egy best devised and implemented in a top-down, big bang fash- ion, exemplified by the headline-grabbing, CEO-envisioned and driven, programme of change; or are we better to follow a more middle-emergent and incremental approach that involves as many people as possible and addresses the politics of change all of the way through the process (see Figure 5.2)? 164 Corporate Reputations, Branding and People Management Planned strategy Profit maximizing Emergent strategy Multiple goals Figure 5.2 Answers to Whittington’s Two Questions on the nature of strategy (based on Whittington, 2001). Though we acknowledge that there is a ‘both – and’ answer to these questions, we will use them in their simple form to provide a framework for our analysis of HR strategy, reputations and brands. This approach may be less clear-cut than accepting the dominant views of the best practice or best fit schools, and we will be treading on some big toes in the process, but part of our role is to evaluate received wisdom, even that which appears on the pages of the Harvard Business School Press and is frequently ‘endorsed’ by the UK-based CIPD and the Society of Human Resource Management (SHRM) in the USA. So, the rest of this chapter will address the following two questions on HR strategy: ■ To what uses should HR strategy be put? ■ How should HR strategies be developed in practice? HR strategy: why does it matter? HR strategy and best practice Let’s look at a case that helps illustrate many of the points we wish to address in this chapter and the importance of the two questions. Chapter 5 Four lenses on HR strategy and the employment relationship 165 Box 5.1 HRM at Paragon Many of the cases in this book have been based on a best practice approach in which high performance HR strategies have been aligned with the strategic vision of an organization to produce strong organ- izational identities, reputations and brands. One of the problems, how- ever, with using evidence from headline cases of best practice in high performing companies is that you don’t always know if best practices were the causes of high performance if you don’t test them out in other situations – most importantly, the use of the self-same practices in com- panies that were low performers ( Joyce et al., 2003). This was one of the criticisms of the ‘In Search of Excellence’ companies, so influential in the 1980s, nearly half of whom were no longer excellent five years after Peters and Waterman reported that excellent companies were excellent because of seven practices. The best practice literature, which is so easily digested, is widely available on airport book shelves; and the 166 Corporate Reputations, Branding and People Management pressures to ‘follow the pack’ are so strong that it is very likely that many firms that continue to perform poorly use the same high per- formance practices. Even worse, what’s the betting on best practice leading to total failure? Here is a case of one company that exemplifies the best practice approach. The rise of the Paragon company is the stuff of legends among the business press. It was attributed with inventing radically new business concepts in the 1980s, with re-inventing itself many times during the 1990s and described in one of the major business publications as one of the ‘Most Innovative Companies’ five years in a row, was 24th on Fortune’s Best Companies to Work For, number 2 on Reputation of Employee Talent, and number 1 on the Reputation of Quality of Management. So, on any test of reputation management, this company was up there with the best. How had it achieved such adulation? Paragon’s credo of innovation and high performance Paragon was attributed with re-defining the rules of the previously highly regulated industry in which it became a dominant player by (1) embra- cing a free market philosophy; (2) repeatedly developing new business models to earn superior revenues in a rapidly changing industry and market environment; and (3) re-defining its mission and strategy – it had been a well-known producer of specialist products and services with large amounts of capital assets but during the 1990s became a trading company only, not only in these products and services but in related ones. In doing so, it reflected the general trends in industry to focus on its specialist competence in transforming itself into a new-economy, knowledge-based company trading on its intellectual capital. As its CEO repeatedly said, ‘assets were bad, intellectual capital was good’. Paragon’s people management strategy: supporting reputations and the brand through talent management and high performance HRM 1 Talent management and rewards: The CEO and HR director rec- ognized that in creating a trading company they had to compete with the best in the financial world and elsewhere. They decided to recruit the best MBA graduates they could hire, at the rate of 250 a year. As one senior manager commented, ‘We had these things called Super Saturday. I’d interview some of these guys who were fresh out of Harvard, and these kids could blow me out of the water. They Chapter 5 Four lenses on HR strategy and the employment relationship 167 knew things I’d never heard of.’ The main attraction for these new recruits was the reputation Paragon had created for itself as ‘hip, dynamic, new-economy company’. Bright young graduates in astro- physics and science were turned into trading specialists who could do fast and creative deals in the performance-oriented culture. These ‘A’ players were placed in these ‘A’ jobs of making deals, and were rewarded appropriately by being paid as entrepreneurs, with a salary package that embodied four elements: base salary, high per- formance bonuses, additional perks and stock options. The main cri- teria for bonuses were how they contributed to shareholder value. Top performers were rewarded inordinately and promoted with- out regard for seniority or experience. As the CEO said, ‘The only thing that differentiates [this company] from our competitors is our people, our talent … We hire very smart people and we pay them more than they think they are worth.’ 2 Human resource development: The company lived out the CEO’s credo of building on smart people rather than assets, with HR given a large budget for career development and to create an open market for internal transfers. This was aimed at creating knowledge transfer and flexibility among the many operating units and allowing free movement across previously sacrosanct divisions. The rewards policy supported such free movements by allowing people to retain titles, even though they may be doing rather different jobs (and thus not entitled to the previous title). The stock options were also designed to give people the focus on the business, rather than identification with their own units. Performance management was carried out on the basis of segmenting jobs and people into A, B and C categories, with A referring to the most important jobs and best performers, B to supporting jobs and promising people, and C to marginal jobs and marginal or poor performers. Each year, every unit was required to put people into a forced distribution ranking and identify the bot- tom 15% performers who were usually ‘named, shamed and fired’. 3 Design of work: The way in which work and jobs were designed reflected the needs for innovation, entrepreneurship and high per- formance. Work teams were provided with ‘phantom equity’ to pro- vide them with a sense of responsibility and involvement for running autonomous projects. This equity could be swapped for real stock once the teams had realized a profit from their ventures. This way Many readers will have picked up important messages regard- ing linking strategy to good HR practice from this case, which could well have come straight from the pages of many US texts that follow an essentially prescriptive approach to HRM, strat- egy and performance. But even companies that have adopted a ‘classical’, design approach to HR, beginning with the business strategy and implementing a set of state-of-the-art HR practices, can fail. Even worse, HR can, as Spector (2003) insightfully argued, be the ‘un-indicted co-conspirator’ in helping a com- pany ‘crash and burn’. For, as some readers will have guessed, not only did Paragon fail spectacularly, but its HR talent man- agement and reward practices helped it on its way – Paragon, of course, being a pseudonym for Enron. Consequently, the Paragon/Enron case should serve as a warn- ing to HR practitioners. How they answer the first question con- cerning the outcomes to which strategy, especially HR strategy, should be put can cause immense damage to companies. It also serves as a warning to those advocating a design approach to strat- egy: many of the problems of Enron seem to be attributable to its CEO, Jeffrey Skilling, who drove a top-down, talent management and reward strategy that helped Enron make bad strategic deci- sions, become a victim of ‘irrational exuberance’ and develop a leadership of ‘bad apples’, three of the usual explanations for the failure of Enron (Spector, 2003). So, if leadership can be 168 Corporate Reputations, Branding and People Management of encouraging innovation provided Paragon with a steady stream of business ideas, one of which was an award-winning e-business development, which reduced transaction times by huge amounts. The company benefited from many such developments. 4 Values: Paragon, in line with its name, promoted a value system of communication, respect, integrity and excellence, which the CEO used all avenues to promote. The communications and public rela- tions function in the company, along with the CEO, used many avenues to have people live the values in their day-to-day inter- actions. However, this aspect of HR was probably the least successful, since employees tended to live the unwritten value of finding new ways to make money. From a shareholder value perspective, how- ever, was this emphasis on revenue generation such a bad thing? a source of failure as well as success, we should be asking our- selves: how should HR strategies be developed in practice? So much for a best practice approach to HR strategy, you might say? We think not. Though our book is also written with a view to helping HR practitioners make a more relevant contribution to their organizations, hopefully our more discursive, analytical approach does not fall into the trap of emphasizing a one-best way, or giving HR the centre-stage in management decision- making. Clearly, as the formidable US HR academic George Strauss (2001) has pointed out, British writers often misunder- stand the US approach to HRM by elevating it to a level of importance that it rarely achieves among US firms or in the US university business school community. HR practitioners, because of their ‘trained incapacity’ to think from the perspective of their specialism, tend to look first inside the company for HR strategy by focusing on people and people-related outcomes rather than business and environmental issues (Wright et al., 2003). Strategy surely matters in the general sense of what is import- ant to organizations and so, we believe, does HR strategy; though both have to be viewed from different perspectives about what aspects of strategy matter. You can often look at HR strategy through different lenses to get a more complex ‘reading’. In this chapter, we have chosen to look at it through four different lenses, all of which shed light (and, unfortunately, some heat) on what it is and whether it matters. For, as Gareth Morgan (1997) has pointed out, what you see depends on where (and when) you stand; managers, including HR specialists, need to be able to work with a number of different and even competing ideas simul- taneously to be able to understand and manage the complicated situations often found in managing people and organizations. Chapter 5 Four lenses on HR strategy and the employment relationship 169 Four lenses on strategy and HRM explained Whittington organized the two dimensions in Figure 5.2 to produce four explanations of strategy. We have adapted these to show how HR strategy can be seen through four different lenses, each one of which help us understand HR and evaluate its links with reputations and brands (see Figure 5.3). All four views are characterized by different assumptions and offer unique answers to the questions of ‘what is strategic HRM and does it matter?’. Note, however, the boxes and callouts have purposely not been drawn the same size because some of these lenses are more important than others in HR, at least in terms of their impact on practice. 170 Corporate Reputations, Branding and People Management Multiple goals Profit maximizing The design school Markets and evolution Embedded systems Processes and change Rational planning Action- emergent Figure 5.3 Four lenses on HR strategy (based on Whittington, 2001). These four lenses or perspectives on HR strategy are: the design perspective, classic in the sense that it is the most import- ant and dominant one; the increasingly important process and change perspective, which is the basis for casting HR specialists as change agents (Ulrich and Brockbank, 2005); a market or evolutionary view, which reduces the role of HR strategy to cost reduction, managing downsizing and flexibility; and the embed- ded systems approach, which focuses on how HR strategy and practices are rooted in particular contexts or business systems, making their transfer to other organizations, industries and national cultures much more difficult than is usually imagined. Let’s explain just how these four views have been arrived at before we examine them in more detail in this and the next chapter. There is a long tradition in the literature on HR and employee relations (Fox, 1974) that addresses the first question concerning the outcomes of HR strategy – whether practice or thinking emphasizes unitary, profit maximizing outcomes such as shareholder value or pluralist, multiple outcomes such as satisfy- ing diverse stakeholder interests. Answers to the second ques- tion have tended to divide according to those people favouring rational choice and planning as a way of making strategy and those favouring the emergent, political and action-oriented nature of strategies (Mintzberg et al., 1998). Karl Weick (2001), a well-known US scholar, rather provocatively set out this second question in the form: do we think our way into action or do we act our way into thinking? He argues for the latter, that strategy- making is more like improvisation than design, with managers using whatever materials/knowledge they have at hand to fashion or craft strategy, the first step of which is to examine these materi- als/knowledge to see what they have previously been used for and what has been achieved with them. So, having an intimate under- standing of what human capital and resources you have and recombining them in novel ways is what makes good HR strategy from an improvisation perspective. Sutton (2001) has talked about such an approach as ‘seeing old things in new ways’, for which he adopts the term ‘vuja de’. This is equivalent to inventing new combinations of existing ideas. Therefore, according to Whittington, the design school and what we have called the embedded systems lens share one key assumption – that planning and rational choices are important. They differ, however, because the design school increasing share- holder value is seen as the only legitimate claim on their activities, while the embedded systems approach takes into account multi- ple demands and pulls in formulating and implementing strate- gies, such as the CSR agenda, which we shall discuss more fully in Chapter 9. This is very similar to the competing interest problems facing leadership we discussed in Chapter 3. For example, the design school has focused on profit maximization and business drivers whilst embedded systems stress the entrenched nature of managerial actions in organizational, industrial and national cultures, including the social backgrounds, education and pro- fessional orientations of managers. This focus may still result in rational choices, but this time, rational choice is exercised as a balancing act, satisficing or optimizing between competing claims rather than maximizing outcomes. Chapter 5 Four lenses on HR strategy and the employment relationship 171 A good example of this balancing act would be how strategic HR decisions are often taken in Sino-foreign joint ventures where market forces and the profit motive have to be understood in the context of overt political influence (Zhang and Martin, 2003). Another example from our research concerns the inter- national recruitment consultants, Hudson International, who were in the process of implementing an employer branding pro- ject across their subsidiaries in a number of European countries. Implementing the new values framework and reviews of HR prac- tices is being achieved through a major consultation exercise with employees in the various companies. In Europe, with its overlay of national cultures and institutions, this has meant taking into account not only language differences but also the contestable notion of values. As the European HR Director explained: certain words we use mean very little in Germany, with no equivalent translation. And even the notion of values itself has different meanings in the different countries. For example, speaking to the Italians, and telling them you have these values that you would like to implement causes them real problems. They look at you and say, well what were you before? Didn’t you have values before? We never had to do that with TMP (the American-owned previous parent company) – these were the words and that was what you would have to use. So each country will look at the notion of values and make them meaningful in their context. In contrast, the evolutionary and market-based assumptions asso- ciated with so-called popular ecology views on organizations rest on the relentless and unpredictable nature of the market envi- ronment for managers, and predict their helplessness and inability to make much of a difference to their organization’s chances of success. In effect, this economics-dominated per- spective sees the hidden hand of markets selecting out those firms that will survive in the increasingly competitive global economy and has little time for human agency and managerial choice. As Whittington suggested, there is a cruel paradox at work since only those firms that are fit for such competition will survive but managers have very little ability to help shape their 172 Corporate Reputations, Branding and People Management firms for survival other than make them cost-effective and fast and flexible enough to respond to market signals of what is required to compete. From a very different perspective, the assumptions of those holding a process and change perspective on HR strategy are at odds with the dominance and rationalism of markets and the processes of natural selection. Instead they point to the many imperfections in market forces, the power of large firms to cre- ate virtual monopolies through global branding and the import- ance of human agency in new, highly creative firms that are able to become major players in existing and new industries by learning faster and better. Furthermore, reflecting the idea of Weick (2001) and ideas drawn from complexity and chaos the- ory (Stacey, 2001), some writers have argued that managerial attempts at long-term planning had little effect on organizational outcomes because strategic change was a much messier, emer- gent and politically influenced process than rational planners assume to be true. These change writers have given much greater emphasis to building organizational coalitions, bargaining and learning as a way of producing incremental strategic change. The cumulative effect of small increments in strategic change, as Morgan (1993) has pointed out, can result in quantum or radical change over a longer time period. Chapter 5 Four lenses on HR strategy and the employment relationship 173 The classical approach to strategic HRM, the focus on planning, best practice and strategic fit As we have already explained this school assumes that unitary goals such as profitability or maximizing shareholder value are the natural state of affairs or, at least, should be – to paraphrase the US president, Calvin Coolidge, the ‘business of business is business’ argument in which social responsibility and ethical behaviour are not objectives that business can, or should be, concerned with. Its adherents also hold strong beliefs that the rational planning and design of strategy, structure and human resource systems are the best means to achieve such unitary . shape their 172 Corporate Reputations, Branding and People Management firms for survival other than make them cost-effective and fast and flexible enough. good’. Paragon’s people management strategy: supporting reputations and the brand through talent management and high performance HRM 1 Talent management and rewards: