Tài liệu Corporate Reputations, Branding and People Management 23 ppt

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.
204 Corporate Reputations, Branding and People Management
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.
Chapter 6 HR strategy and the employment relationship 205

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 managers. 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
206 Corporate Reputations, Branding and People Management
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.
Chapter 6 HR strategy and the employment relationship 207
Table 6.2
Examples of strategic activities and performance drivers for retail bank managers
Performance driver Strategic activity
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
208 Corporate Reputations, Branding and People Management
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).
Chapter 6 HR strategy and the employment relationship 209
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.
210 Corporate Reputations, Branding and People Management
Table 6.3
The new talent mindset
Old HR mindset 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
planning exercises pool
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.
Chapter 6 HR strategy and the employment relationship 211
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
managers understand why they are
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
deep end of leaders
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.
212 Corporate Reputations, Branding and People Management
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).
Chapter 6 HR strategy and the employment relationship 213