HR

,_,..--------- I 2 Business and Staffing Strategies

Outline

Starbucks's Staffing Strategy A Resource-Based View of the Firm

What Is the Resource-Based View of the Firm? Requirements of a Competitive Advantage

The Firm's Business Strategy Types of Business Strategies Making Changes 10 the Firm's Business Strategy- and Staffing How the Organizational Life Cycle Affects Staffing

The Firm's Talent Philosophy Filling Vacancies or Hiring for Long-Term Careers The Firm's Commitment to Di versity Applicants and Em ployees as Either Assets or In vestors Develop Your Skills: Measuring Your Firm's Climate for Diversity The Firm's Commitment 10 Ethical Behavior

Deriving the Firm's Staffing Strategy The Firm's Strategic Staffing Decisions

Should We Establish a Core or Flexible Work force? Should Our Talent Focus Be Internal or External? Should We Hire People wi th the Skills We Need or Train Them to Develop Those Skills? Should Talent Be Replaced or Reta ined? Which Skills and What Level of Them Should We Seek? Should We Pursue Proactive or Reacti ve Staffing? Which Jobs Should We Focus On? ls Staffing an Investment or a Cost? Should Our Staffi ng Funct.ion Be CenLralized or Decentralized?

Achieving a Competitive Talent Advantage Starbucks's Staffing Strategy Summary

LEARNING OBJECTIVES After studying this chapter, you should be able to:

Explain how different staffi ng sLrategies support different business strategies.

Describe the resource-based view of the fim1 and how staffing can contribute 10 a compan y's sustainable

competitive advantage. Explai n when an organization would use talent-ori ented rather than job-oriented staffing .

.t Describe hu man capital ad vantage and human process advantage and the di ffere nces between the m.

Describe the strategic staffing decisions any organization must make. 21

Starbu,ks's Staffing Strategy uum coir«' romp.in) namcJ Jfic r thr fir')t ma1c 111 licrn,an Mch , ,

SWN<., th< S<Jt~<-b.b<J prrn n 1990 to ow I()() um<> Lhat number today S<>A lit • . ;inJtJ tNm Ju,1 SJ )lore'- i r, h h h .... uUckl'

,,.._.,,, Ohl hl.) e,r n d \. dcpcnd) on 1hc inn inng t c ng t cmploycc-s 1 :it,dit, hJ s:ct h1g.h pm, ·, h)t 11' C\J ~ Rn~;ung its rocus on its rmplO) ccs. Starbucks rd able lo pro, ,J.: tuih--quJ.hL) ru.sh,mc-r ~•n IC'C' c

11 115 hu mln rc~ouri;.-c functton "Partner Resources c~ lo '1l

.. Starbud.s c,cn ca .) I - . c-mplo~«-' :u -p.u111m Ir :u St urbuekS I ) 10 ctc,l·lop cn1hw)1.ci11cal y sauslu:d customers. Mort

\oolh<r ~ ,J,ns pnoop . d th;t e,pcncnrc i, completely dependent on the pan U... '" /Te,:. 5urt,u,.s sells anexpcncn~ around the \\ or ld e,ery day.~ The challenge facings'::~~

J ,,r 30 m,lhon customc _,·r, d --.. ~' an -.cf'\C O . . 1

th ~tciY 15 10 find enough qu.u1 1c and desirable ,......,. e; ts ~" • <loba !!IO" . h A . Pa --.. ,<biq

:,; tl ""."u_ ' urrcnt US ·"oMorce anJ double ,1, " oMorrc tn I c Sta c1fic regi0n by 2017J ,.., incrca)C us c nds on the i;k:Jll.s lltlll pc~onahucs of 1Ls people. 1t 1s a daunting challenge t · s,---,u,c Surbucl.s dq,<11 'and staff us global "oMor<'C. As Jim Donald. Starbucks"s pre, Or I to ronu~uc to success!: ~~~c compcuuon . ahhough I rc~pcct it _ If s hnvrng a robust pipc.b~ ,1J1cs. M) biggesi ~ h

I rrs "ho" ,11 also be able to tai.c their next steps wi th the compan ~

r--oplc: to open and m1r1agc t c s o h d I . . y How can Starbud.s use staffing 10 pursue its grov.t Mratcgy an mrun arn its com petitive adYlr).

l ·c., \\ hat llnd of ~tafling s1r.iteg) v.ould you re,commcnd Starbucks puniue to help it continue to i! lhe nght people? After n:ading this chapter. you should hove ,omc good Ideas to share With ~ compan) -

Wh ) docs one company succeed and another company fa,I? Mosl people believe a company rnust focus on its strategte. financial. and 1cchnolog1cal capab11tucs to com"':tc successfully. We oo,, lnow th3t these ,mp<Jnant eapab,lt tics muSI be supple mented wi th orgamzauonal capabilities 8.,,_ crated by ottraeting. relJlining. mouva1ing. and de, eloping talc~1cd empl?yces. Therefore, slaffiog plai s 3 central role in creating and enhancing any organ1zauon s compc uu vc advantage. As S1t1t Ballmer. the CEO ofM,crosof1. s,ud. ··You may base a technology or a prod uct that gives YOU • edge. but your people dc1cnnine "hethcr you de, clop the next wmning technology or Product. -i

Organwmons that pUISUC c!Jffcrent compcuti, e >tratcgies req uire different staffing s1ratcgies to c.,ccutc them. For example, companies li ke Pruete r & Gamble. wh ich mus1 continually inll'Oduct new and improved product< hkc mul1,bladc razors and 1ooth-wh11cning 1001hpas1e 10 stay compeo. u,e. need 10 fos1ercreativuy and nsk talung among ccnain employees. By contrast, companies that focus on dclivcnng the best qualuy or value to cuslOmcrs need to foc us more on operations and ,mpro,1ng Lhcir \\ Ork processes to red uce costs and improve product quality. These companies-. more ltkcly to need team pl ayers " ho nre trainable and able 10 fo ll ow slandardizcd procedure~

Acquin ng. deve loping. and retaining the right talcnl helps businesses create 1he organiza. uonal capability and intellectual capital driv ing their strategy execution. This potential is 11cll kno11 n by companies such as lime, Inc .. 1he world 's larges, maga£inc publisher. Kerry Bcsiey, limc' s sent or ,ice president of human resources (HR), states, " HR' s missio n is building capabil- uy for lime's business ... . Our executives ,•icw us as management panncrs because we recognuc this business is about lalen1- i1's what drives the quality of products 1ha1 connect to readcn.,. At QVC. business strategics are so closely aligned wi1h s1amng strategy 1ha1 every project i. capital plan has an accompanying talenl plan.7

Tlus chapter first describes the resource-based v,cw of 1hc firm and then explains ho11 lhc busmcss s1ra1cgy and compcuuvc advantage of a !inn affect its s1afli ng needs . We describe -.ha "< mean by an organization's ··1a1en1 philosophy" and discuss how 1alcn1 philosophies in0ucnct human resource strategy and staffi ng s1ra1egy. We al so discuss nine stralcgic staffing decisilllll all !inns musi make. After reading this chapter. you should understand the role slafling plays lll tenns of creaung and sustai · · · d ff ntng a compc t1t1vc advan1acc for the li m1 as ii ancmpls 10 cxccull 1 erent types of business s1ratcg,cs. -

A RESOURCE-BASED VIEW OF THE FIRM

Most organizations recognize that I b tee success. Success

II d a arge udgct and , 1a1c-of-1hc-ar1 facilities do not guW·

resource-based view;;~ y fi cpcnds ~n employees· moti vation,. compe te ncies, and skill s. Th< can hel p u create a sustai: ~rm dcsc~bcs how employees' mott vauon,. compe1cncies, and skills

e compc1t1, vc advantage.

Chaplcr 2 • Bu~1ncss a.nd St3fling StrJtcg1c.~ 23

What Is t he Resource-Based Vi ew of t he f irm7

TltC resource-based ,•icw or lhe firm proposes th at a company's rc,ources and compctcnc,es cnn rroc1ucc a su~tamcd compctll1vc advantage by creating ,alue for custome rs by lov.c n ng , o,LS. pro\ 1dmg ~omc1h1.ng o r unique value. or so me cornbma11o n of the 1,,0.8 To create value, th~ hinn£ progranb. pohc ics. and practtccs of an organ 1ta11on must either lo"cr the costs o f the ort;unuouon' s products or services, enhance the d1ffcrc nt ia11on of the organi tation·s products or ,er, ,ccs in the eye, _of cu,tomcrs. or both. To the c,1cn1 that staffing mnucnces who has ihe opp<>nun,ty anJ de,'.:• to _pursue an employment rclau onsh,p with the orga ni,.ation. stafiing scr\'CS as a "gatc~ecpcr by mnue ncmg 1he le,cl and composi uon of an o rgani,auon' s talent. In shon. the re source-based view of lhe !inn focuses attention on the quality of the skills of a company' s \\~rkforce nt van ous levels, and on the qual ity of the mott vational cli mate created by

m.:in3£C l11COI.

Requirement s of a Compet itive Advant.age

Jay Barney. a professor and bus iness strategy expcn. has identtficd the li,•e cri teri a (shown in Tnblc 2- 1) thnt a resource must meet to provide an organi,.ation with a s ustainable competi- tive odvantagc.10 Research shows that resources such as a firm' s emp loyees meet the cri teria when they add value to the !inn, arc rare, cannot be imitated, and connot easily be substitu ted wilh other things. The company must also be orga nized in a way that enables 1hc resource to be c,pl0t tcd.' ' Com panies cannot necessari ly replicate ono1hcr firm's capabili ties j us1 by 1mi1a1ing the compc1i1or's human resource practices. Thus, good human resource management is valued not only for ils ability to implemem a given compctiu ve strategy but also for its abili ty lo ge11er- att strategic capabilities fo r the lirm. ' 2

THE RESOURCE MUST BE VALUABLE Starling activi ties can create value for a firm in that they can help it to cxplo11 opponuni1ics and/or neutralize threats. The return on staffi ng inve, 1- mcnts and the rete ntion and performance of em ployees can be increased by rigorously evaluat- ing the effective ness of various staffing practices and targeting staffing activi ties 10 1dc n1ify and attract 1hc bcsl lypcs of applicants for the organization's needs. Providi ng applicants with reahsuc infomiation about the job and organization can also help reduce employee turnover, cut o, crall labor costs , and improve lhe lim1's produciivity.13 Hiring people who do a belier JOb for the same pay is also a way 1ha1 s1afling invcsuncnts can create value.

The po1cnttal of strnicgic staffing 10 create value and a sustai nable compc1i1ivc advantage for an orga niza1ion has been recognized by invcsto~ as well. An Ernst & Young study fo und that inslllutional ,n vcstors' decisions 10 buy a company"s stock arc based in par! on the company' s abi lity to attract talent. Because the quality of a company' s s1afling practices can diffcrcnti- a1c i1 10 in,cstors,14 staffing appca~ 10 meet the value requ irement of creating a competitive advantage.

R£SOURCF.-8 AS£0 \//£ IV OF Tl/£

FIR.II pn,pouf 1'1at a comp<m; f rrwur r t\

and '""'fH''"""t '"" product' u rustmntd ,omp,11111 r 1ulwnwsr by ararmg ,oJ,u /nr c111tumt'ff by

"'"' um~ (OSIS, proi 111mg fOtllt'llu,ig of ~mqut' ,alut', or JtJmt' ('(mtbmauon

oftl1t t\\ll

THE RESOURCE MUST BE RARE Value creation alone is not enough to produce a sustamablc compctt1ivc advantage. For a company 10 outperform compclllors, 11s s taffing practices musl also result in a set of workforce a11ribu1cs 1ha1 arc rare. The ability 10 idcnufy and attract rare tale nt varies acro,s organizations. For example, some organi zauons, such as Google and 1hc "archousc club Cosico, arc able 10 hire and retain the best talcnl at a greater rate than their compctllors. S1ra1egic staffing practices arc what allow ftm1s such as these 10 mecl the rarity

-

Requirements a Resource Must M ee t t o Give a Firm a Com petitive Advantag e

1. The resource must be valuable to the firm by explo1t1ng opponun1t1es and/or neutralizing threats 1n an org anization's environment .

2 . The resource must be ra re among the comp any's current and future com pet1t1on 3. The resource must not be e asily imitated by other forms. 4 . The resource must not be easily substituted or replaced w,1 h another resource S. The company must be organized to be able to e>p lo, r the resource

24 Clupu-r 1 • 81.b1n.., , ll'IJ S1lffin~ s rr.uep~ - . m 1111,c ad, anmgc. '5 They have the potential to create or

BUSl.\ 'ESS STRA TEGI'

how a r tJIN/)(Jn) 1111/ rom~lt m 1t1 m11r(r 1p/ace

requ1rern,·n1 for gammg a co ~ n. ,~le than their compe titors, and that exhi bit supc . gan,14. uon, tbJt JI\' more intdhgent an I,, t6 no, lc,c)i

d n.•rformance as " ell. of ,-o.,pcrauo n an r NOT BE EASILY IMITATED If an ~rganizati on ' s strategic Slaffin

TIIE RESOUR~ MUST . bv 3

compcutor, the organ11a11on s resul11ng talent will not be J Pile. uccs can be c.istl) cop1td . But the fact ts that thtS ts not always easy lo do • tsullct f th. 1:u •nt of us compcmors. · " finn• rorn ' ' . art detcrmmcd by the unique. or rare, talent a1tributcs a . 1 , 1:1.11ing competencies ared th. m ~rm:s ab1li1y to identify stafllng practices that conlribu/ ailabJc tn the l:,bor mar~et an e ' t I d . c to lhc

. f tlu . , L Ho" cver the competencies arc a so uc, tn pan. to the comp acqu1smon o , twe n · · , ks ( h ti I · ¾y's

d . 1 1 aonshtps and us recruttmg nc111or sue as 1e re auonshj . decplv mgrame socta re a "d · · h P 11 ~

· rs and the communtly that can pro v, e 11 w11 candidates) as .. , U with 11, employees. cus1ome .

1 . "e '1

us long-sllllldtng relationships with us Ullent sources, such as emp oymcnt age ncies, uni versiucs,

and professional recruiters. . . . . ,que history and resulung repu1a110n and culture can also inn An organ1zauon s un . 11 . . ucncc

. . b i·u·es 10 copy an organization's staffi ng pracuces. Imagmc 1f an establ" •·· compeUtors a t t . . 1

·•- . ts,.., h hi re·pcctcd for its mtegrny and commumly pht anuu opy simply passed out 1. ..

company 1g Y ' W , Hi · 1"' d "d d I ""'1· ness cards at a communuy funcuon 1ha1 read. " c re nng_- ~n prov1 e . an nterne t ad~ for people 10 go IO for funher information. The organw111on 1s ltkcly to ~cce1ve a rnorc favorable response IO such a recruiting imtiau'"e than 11oukl a stan-up comp:1°y w uh illlle visibility and no repuiaaon. In other words, companies that U)' the same staffi ng mniauvc may not experience thc same response. To the extent that many interrelated facto~ contnbutc to the success of an orga. nizauon·s staffing effort, it '"II be d1fficuh for a co_mpe111or lo cop~ all of them exactly. ThllS, staffing meets the inimi1abili1y requirement for providing a compcllt1 vc advantage.

TIIE RESOURCE MUST NOT IE EASILY SUBSTITUTED A staffing practice should have minilllll subsututability. In other words. for it to provide a co mpetitive advantage, there can be no good substilute for it. 18 If one company successfully recruits students via e-mail from a uni vcnny Imo" n for its 1cchnological capabilities but a competitor can effectively reach the same studen~ by handing out rccruiung brochures to them on campus, then neither company will cxpcncnce a staffing advantage relauve 10 the other. Similarly, if a compe titor can find a substitute for the type of talent another organizauon has acquired, neither organi,.ation wi ll realize a compctitiie adv:,n tage. Technology is also un likely to serve as a substi tute for the talents employees contrib- ute. Why? Because no machine can duplicate the intelligence, j udgment , and innovation human beings arc able to bri ng to their jobs. Thus, superior staffing meets the competitive advan1.1ge criteria of nonsubstt1u1J1bili1y as weli. 19

TIIE COMPANY MUST BE ORGANIZED TO EXPLOIT THE RESOURCE For talent lo be a sowtt of a sustai ned competitive advantage, a comp:,ny must be organized 10 take full advantage of the value-creati ng, ran: , and inimitable talent it employs_lO For exa mple, if a fim1' s human rcsourci activities-its rccruiunen~ selection, compensation. and training systems-arc di sorganized ti' inconsistent with one another. the firm won't be ab le 10 fully leverage its talent. To illustrate.sup- pose an organization is able to recrui t and select the top candidates it is pursuing but can offer them only a bel ~w-marke t rate of pay. If this is the case, it is unl ikely the finn will be able to hire or rclllln them de spue the success of its recruiting and selection functions. Likewise, if an orga nization suc- cessfully hues lower-skilled people with the intention of training them in the necessary job skills but the 1m1rung program is poor the O • • , be . . . . ,, , , , rgamzauon won I lully able 10 capualt zc on 11s euecme staffino sys tem This is why a r. • , . rr. · ' 0

• ,,rm s S1411tng pracuccs have 10 be integrated wi th the company s human resource and othe r fu nctions II be . . . .. . as we as cons1s1cn1 with us poltc1cs and pracuces.

THE FIRM'S BUSINESS STRATEGY

A company's business strategy d fi h . 21 strategy should ,cncct what the e i~es . 0~ the firm will compete in its marketplace. The the ftrm can cost-effcctiv I d 1· orgamza11on s customers wan t. what the finn wants, and what

e Y e 11•cr. Busin ess strat · 1·k • I · J bus1· ness units in a divenified c . egies arc 1 ·cly to differ across mu lip c fcrcnt strategic approache s ~rporauon. Procter & Gamble, IB M, and General Electric take dif-

o ensure the success of th · · 111- · elves making different choices abo h" cir various business lines. 1s inv ut w tch products and services to offer, and which strategies 10

Chapter 2 • Business and Staffing Stra1cg1cs

pursue 10 gain a competlli~e advantage. Both, of course. will hinge on a company's capabilities. stre ngths, and weaknesses in relation to tis compcutors. In other words, for a company to execute

25

11s business ;iratcgy. not only ~US! its hum an resource management policies and prac1tccs fit \\Ith 11s strat egy. but_also ns_busmcss strategy must 5,<1uarc with the ftrm 's competiti ve environ- ment and 1he imm~dtate busm_ess _co~dit1 ons II foccs.2-

Bccause ti 1s an organtzauon s people who arc responsible for gaining and keeping a competitive advantage, hiring and retaining the right people arc critical to business strategy execution. Researchers Michael Treacy and Fred Wiersma have identified many sources of compel· ,u,e advantage, including having the best-made or cheapest product, providing the best level of cus- tonicr service, being more conveni~nt to buy from. having shorter product development times, :,nd having a well-known brand narne.23 Warehouse retailer Costco· s strong and loyal custome r base, at'CCSS to a broad range of high-quality products for a low price. and commillcd employees give it a competitive advantage over smaller and lesser-known retailers. Although Costco pays us employees , ubstantially more than its closest competitor, Sam's Club, it has similar financial returns on its labor cost> due to lower turnover and higher le vels of employee productivity.2' This. in tum, results in a bet1cr-qualified workforce and a higher-quality customer experience. According to management °'pert Michael Porter, to have a competitive advantage, a company must ultimately be able to give customers superior ra/11tfor tlteir money (a combination of quality. service, and acceptable pricc)- a belier product that is worth a premium price or a good product at a lower price can both be a source of compcutivc advantagc.25 Table 2-2 lists some possible sources of competitive advantage.

Types of Business Strategies

A company can create val ue based on price, technological leadership, customer service, or some combination of these and other factors. Its business strategy not only involves the issue of how 10 compete but also encompasses the following:

l11e strategics of different functional areas in the firm • How changing industry cond itions, such as deregulation, product market maturi ty. and

changing customer demographi cs, wi ll be addressed • How 1hc finn as a whole will address the range of strategic issues and choices it faces

Business strateg ics arc partially planned and partially reactive to changing circumstances. A large number of possible strategies exist for any organization. and an organization may pursue dilfcre nt strategics in different business units. Companies may also pursue more than one strategy at a panicular time. Porter proposes that a business can compete successfull y by being the chcap- c>t producer, by making unique products valued by consumers, or by applying its expertise in a narrow market segment to meet that segment' s particular product or service needs.26 Companies can also make a strategic choice to grow the business. Next. we di scuss each of these strategics and their implications for what is required of the staffing function.

A COST-LEADERSHIP STRATEGY Finns pursuin g a cost-leadership strategy strive to be the lowest-cost producer in an industry for a panicular level of product quality. These busi nesses arc typically good at desig ning products that can be manufactured efficiently (e.g., designing products with a minimum number of parts needing assembly) and at engineering efficient manu- facturing and distribution processes to keep prod uction costs and customer prices low, Wal mart ts a good example of a lirm pursuing a cost-leadership s1ratcgy.

it\:ijff j Sources of a Competitive Advantage Innovation: develop new products, services, and markets and improving current o nes Cost: be the lowest-cost provider Service: provide the best custome r support before, dunng, or afte r the sale Quality: provide the highest-quality product or service Branding: develop the most positive image Distribution: dom inate d istribution channels to block compet1t1on Spe ed: excel at getting you r product or service to consumers quickly Convenience: be the easiest fo r customers to do business with First to market: introduce products and services before competitors

COST-LE,\/)£RS/IIP STRATEGY

bt l ht IOI\ f j l -COSI producer fur a particular lt\t'l ufproducr q1-Wl11y

26 C"h;ap(cr .. • Bu."1rte", .mJ Suffin~ StrJl(1:1C" ,. - • 3

cosl- l<Jdcr<h1p , 1r:11cgy ,ocus on keeping c B,-cau>< Ofl'On11JUOn, pur..u 1ng npc1iuve ad1an1age based on operational e• <>sts '!Id

h 10 dc1 clop a COi •<cu, onllAT/0\ t L £.\ CUIL\ CE pr1C<', low. 1 C) lry d tify ond fo llow eflic1en1 processes and engage in nrt

Emplo1«:s ,n the« finn, need 10 ', cn

1 n n• and 1tan,pona11on companies frequently .. ~~ba.,_

_,""'°'-'..,,:a.""",•• · . 1.,., ~bnu, ac u o -..pi ••· ..,..,..,.._..,.,.,..,_ ,.,,, ~.,._,., ou, 1mpro1cm,n1 pr.ic 1 > ally look for " ays 10 reduce their cost.s and lo ""' Toe "'3n11auon< conunu , II lier ,1...

P""" .. -...-:, "'"' opproach. .,., "·• 1 roduct thol compc1cs success,u y with compctiiors• "'II

pnccs "h,le offcnng 3 des,ro~ ~ fv Jmart arc cood ex3mples of companies whose co Pltld.

DIFFERE.\TUnO.\' STIUTEGI

d.rrrl1Jf'Ult a prodllCt or J<nlet thal lta.J ~, clwrorttnsna 1al.urd bl

PROot ·cr I\ \Ol~ T/0.\'

t1e, rl11pvtg nr. prudJJcn or lrn 1ctJ

ucts Dell Compu1cr... FedEx. an • - lllJ>cho,-, based opcrouonal « ccllcncc .

achantag< is on i perouonal excellence \\3nl 1roonablc and ne xible cm 1 Mos1 finns ,in, ong or

O I

nn producuon obJcc1hes, avoid was1e, a nd lower it 0>its "ho are able 10 focus on shoner- :11 hmnc emplo)CCS "ho have high salary ex pcc,. ,~ ~

· producuon com As a n:s · - h · ~-ollt pan) s bi° 27 Because organoinu ons pursuing t ts , 1ro1egy operate With ~

no1 neccs7i~n:;~•;:1y ~ion: on work icams. ii is nol as hel_pful lo pay the high price rcqub&Jl margins an The ium on this 1n,es1men1 ,s not high enough, and the resulon lfld to attr3CI top ukn1 I re can hinder thcor effcc uve ieamwork. Instead, lhe s1amng g Ply do<panl) among emp

0>_ccs produc uon workforce arc likely 10 include hiring pcopl g~ for such an organ,zauon score ·11 c ~bo

fr, . ·cn1ed learn onc n1ed. vainabl e, and \II mg to fo llow s1anda,d

are adaptable , c 1c1ency on · • lltd

proccdun:s

A DIFfEIIENTIATION STRATEGY When a_finn pursues a difTerenliallon strategy it auempu

10 de-clop produc1s or services that have unique charac1en s11cs valued by c ustomers-prodlJCb

and scn ,ccs for which ihe firm may be ab le lo charge a prc m,~m pncc. The dimensions aloag

which a frnn can d1ffen:n11a1e include 1he ,mage of lhe firm s produc1s (Roi ex wa1ches.,..

an «ample ). produci durobollly (Caner's childn:ns clo1h1ng), qual 11y (Lexus automobilcsk

safely (the Voh o brand name), and usab1i11y (Apple Computers). As we. ~eniioned ~-

lier. companoes can pursue mon: 1han one Slfalegy al a 11me. Sou th"_cst Airlines is both 1 cost leader and 3 d,ffercni,a1or. In add11ion 10 being a low-cosl, no-fnlls airline, Soulh•·eii

Au-lines diffcrenuaics Ilse If from i1s compcti1ors by crea1ing an unconvc niional atmosphere fct

cus1omcrs. ari,ano a tions pursuing a d1ffcrcn11a1ion s1r:11 egy oflen lfy to develop a compe titive adl'll-

1.lge based on product innol'Otion. Thos requires employees to conl inu all y develop new prod.

uclS and se rvices 10 cn:a1e an organization's advantage on the marke t. These companies Cl?ltt

and maml.lin an environment tha1 encourages employees to bring ne w ideas inio lhe company

These companoes 1hen ils1cn 10 and consider these ideas. however unconventional 1hcy rru,i.

be. For these companies. the fn:q uenl inltoduction of new products is key to slaying compa,.

u,e. Thos S1ta1egy is comm on m technology and pharrnaceu1ical companies. Johnson & JoMS01, Nike. and 3M arc good examples of organiza1ions whose competitive advantage is based on producl innovation.

Produc1 1nnova1ors mus1 pro1ec1 their cn1tcpreneurial corporate c ulture. To that end, thq =ruiL hon:, and tram employees 10 fit the ir mnovauve culture. Thal means thal instead o(

sclec1ing Job candida1c, based only on their rela1ed experience, they also assess whe1hcr 1

cand1da1e can " 'Ork cooperoti"clY in learns and wheiher she or he is ope n-minded and crr-

aii,e.28 An organowuon "1th a producl innovation competi li ve advantage would likely seek a core " orkforcc of research and dc\'elopmcnt employees who have an entrepre neurial miDd- seL longcr-1crm focus, high 1olcrancc for ambigui ty, and a n interes t in learning and diSCO\CI)'.

Employees "ho need stab1l11y and pred,ctab, lily would not lit in as we ll. Individuals able to

so fl lhrough Ja,gc amo unlS of information to iden1ify ideas 1hat lead 10 ne w products or services

"ould also be Yaluablc to innova1ivc compan ies. For example, P&G, which relics on innova-

uon 10 crea1~ new product.s and de,elop new ma,kets, looks for c urious. creati ve people "ho

work "•11 with others and 14 elcomc changc. 19 Forms pu rs uing a differentiation strategy b3Std

on _,nno~auon would likely make greater invcs1mcn1S in 1hci r hu man reso urces and focw 00 hmng highly slollcd workers 'or k h • - . · cos1-leadersh1p s1tatcgy JO

" ey resc3rc poso l1ons compa,ed 10 compa nies pursuing I

Being first 10 ma,le1 with the be I od · · · rod·~ . s new pr ucis 1s usuall y the highest pnonty of p ,., ,nno,a1ors . As a resuh cos1 is les f b . ' key resea h d d · 1 s O a amer 14 hcn II comes 10 acquiring top talent for the finn s

re an eve opmen1 pos( I d . . 1 ions. n 1v1dual contributi ons arc imponant for 1h1s l}JIC

ChJplcr .2 • Busmos and Staffing Strategics

of organ11a1oon Consequcnlly, new hrrcs "ho arc mo11va1cd by pay-for-performance , y,1cm,

and "ho acce pl ihal pay dospan ucs will ~xr,1 among employees depending upon 1heor con1nhu-

27

uons 10 new product de,•elopment an: likely lo be good crnplo)•ees. Innovauvc organization<

3 1,0 n,•cd employees wllh

3 wider range of ap111udes and ab1l111es 1han do organ11a11ons pursuing

lo"-cosl str:1tcg1e.1 m relau vcly s1able markets.JI

,. SPECIALIZATION STRATEGY Busr ncssc, pur,uing a specialization strategy focus on a

narrow markcl scgmenl or niche-a single product. a pan,cular end use, or bu) ers w11h spe-

<1al needs-and pursue either a diffcrenuauon or cos1-Jeadersh,p str31egy wi1hin 1h01 marke1

segment Successful busmesses following a spcc1al,st strategy know the ir marke1 scgmenl very

"ell. and oflen cnJoy a high degree of cus1omer loyally. nus strolcgy can be success ful if ,1

rtsulls in either lower costs thun compe1i1ors serv ing the same niche or an ab1l11y IO offer cus-

iomers something 01hcr compc1i1ors canno1. say, nons1andard producl5 and pans, for example

spons clo1h1ng relaoler Under Armour, cycwcar company Luxou,ca Group, and 1oymakcr LEGO

an: c., amples of companies pursuing a spcc1alr,a11on stra1egy. Organi zations pursuing a specialization stra1egy of1cn try 10 develop a compeuu,e advan-

iagc based on customer intimacy and lry 10 deliver unique and customizable produclS or ser-

vices 10 meet their customers' needs and increase their loyally. This approach involves divoding

ma,kcls into segments or niches and then tailoring the company's offcnngs 10 mecl the demands

of those niches. Creating customer loyally n:qu,res cmplo)ces 10 have opcrouonaJ nexobilrty

as well as detaoled knowledge about "hat their customers want so they can m pond quickly to

mecl thcrr needs, from customi zing products 10 fulfrll1ng special rcquesis. Consulung, retail, and

banking organizations oflen pursue customer intimacy slfalcgics. High-end relllilcr Nordstrom

,s kno"n for the high-qualrty customer service II provides customers. Employees m primary

con1ac1 with cuslomcrs would lrkcly receive pan icular sufling a11cnt1on due 10 therr key role ,n

ob1aimng cuslomer intimacy. Mosl service-quality expens say 1ha1 hin ng is no1 only the first bu1 also the most eriti•

cal slep on burlding a cuslome r-oriented company.32 Hiring ac 1i vc learners with good cus-

1ome r relalions skills and cmo1ional resilience under pressure would complement a firm 's

cus1omcr in1 imacy compe1111ve advantage. h would also help ensun: 1hat the organizauon

conunually enhances Hs ability lo deli ver on promi ses 10 customers_l3 Employee coopcra-

uon and collaborauon arc importanl 10 developing cus1omer inlimacy, so firms pursuing 1his

siratcgy should foc us on idenlifying and a11rac1ing adap1able team players with good people

skill s. Starbuc ks 1s an example of a lim1 1hat pursues thi s s1ro1egy. The co mpany is able 10

command a high price for a c up of coffee because it focuses on its relationship with custom-

ers. But imagi ne if Starbucks replaced its work force with cheaper labor, including people

who don'I enjoy in1crac1ing with customers or people or who have weak communication

, kill <. Soon Starbucks' s competilivc advan1age "ould begin 10 erode, and its brand \\ould

lose 11, luster. Quickly Starbuc ks would h3\'C to reduce the price of iis coffee to keep cuslom-

ers coming bac k. Even1ually, Sta,bucks could find itself pursuing a cos1-lcadership strategy

ra1her 1ha n a speciahzali on strategy because it failed to recruit and hire the righl types of

people.

A GROWTH STRATEGY A growth slralegy involves expanding tl1c company 10 either increase

1hc fi rm \ sales or allow the company 10 achie,c economics of scale. The success of a grow1h

s1talegy depends on 1he firm 's abili1y to find and retain the righ t number and types of employ-

ees 10 su>tain its intended growth. The growth can be orga11 ic, happening as the organization

expands fro m within by opening new faclories or stores. If 11 is, it requires an invcstmen1 in

recru111ng. sclec1ing, and training the right people lo expand the company's operations. This is

what Sta,bucks has had 10 do as ii rcgu la,ly opens new stores. Fi rms can also pursue gro" th stralegies through mergers and acqo,isirions. Mergers and

acqui,i1ions have been a common way for organi,ations 10 achieve £rOwth and expand intcrna-

llonally. In addi1ion 10 expanding 1hc organi zati on's business, mergers and acq uisi11 ons can al<o

be a way for an organization to acquire the qual11y and amount of talent ii needs 10 execute it<

bu>1ncss strategy.

Sl'F.CIALJZA T/0,V STRA TF.GY

Joc 11w1g cm a ,w,rm, nw,lr1 u ~mrnl or mch, and punumg r11f1u a diflru n11a r1on o r m11-ltudrr1l11p

ffmr,gy t\1th111 thm 11uul.L1 ugm,nl

CUST0.11F.R I NTI.IUCY

drl11rn11g umqurund cu1t,m11whlr produeu or srn i<r.r that bnru mu, cwromus ' nttdJ and incrra.u ,w,omu IO)alry

GROIVT/1 STRA TEGI"

"ttratrgy to rrpwtd tht comfHJn> r 1thu organically or, 1a acqunuwnJ

28 ChJrtct c • Bu, 1°'~ !l/W Suffing. StrJIC'~tC"'- . eoniz auon "hose grow1h ,1ra1cgy requ ires II lo hire lho

For « ompk . an or. , 1 0 0

,cchnolo~y consul11ng spcc1alts1s may s ,_ 11.!ands I n.•nenr cd 1n1orm3 , • ee, lo of •dd111on• c, ,. d lo)'S ih,s ial cnl h 1s not unu sua l for or•an· le.

"' ihoi alrco , cmp e izat1on qum, • compa , 1 1

for thei r 1alcnl and sub,eque n1l y J1sco n1inuc lh s I<) acquire Nh<r compan1e< so e l ,n1 11JII) in. Fas1 gro" ,ng iechnology companies Ge b114,,

th, a •qu,reJ company "°' h an.,. ness < ' f I bu) , iart-ups 10 acquire I c ir engineers and fo u ,1• ··,.., FaccbooL ond Z) nea requcnl ) """rs '"' • ·oJ u Emplo)CC> ,n redundant pos111ons or in Jobs not need db ..,. 1hcn Jc1L1>on ihrn pr uCIS. ncd or kl go ond ihc 1arge1cd la lcni is incorporalcde Ylht

cr~ed orclntllUOn :ire rrlbStg into ,1... m • • . k Assuming ihe mgc1ed talen1 sta) s wuh 1he merged O .., ocqu,nng compon, s ran s ff d rgan14 uon which ,s nol ~uaran1ced. 1h1s s1ra1cgy can be e ccu, c in c,pan mg an organi za1100• ,ale ~I ba,c. 11 ,s ,;pl'rtanl 10 co nsider 1he ma1ch bcl\\ Cen_ organ1za11 o nal cu ltures, '•l11e 1 1alc n1 ph,lo<ophy. and human resource pracuccs when using mergers and acquis11ion1 ~ 3

" "Y 10 ,mpl<mcnt a gro \\lh siraieg) . M1sma1chc s bcl\\ccn merged or_ ~cquJTed organ,. ,auon, can rc,u ll ,n lhc loss of 1alcn1cd cmplo)ce, . M~rgers and ac qu1s 111ons o ften fl!] becou,c of people issues rather 1han 1echn1 cal or r:nancial iss ue s. For example, a cuhurt clas h prc,cn1eJ the DaimlcrChrysle{i AOUT1mc \\ arncr. and Sprint/Ncx1el mergers froa, ac h1cv1ng the an11c1pa1ed synergies.

Table 2_3 ,llu>1rates lhc , iaffing ,mpltcauon, of the different sou rces of compctihit

ad, ant:igc

•tli•fJj Staffing Implications of the Different Sources of Competitive Advantage Sourc-e of Comp~• Adv•ntage Description St,ffing Implications

Operaoona/ E.<cell~ce (low Cos:) • FOC1Js IS on the efficient production and • Efficiency focus delivery of ptoduru and/or services

- Product l eadersh ip VMovaoon/

Customer /nomacy /Custom,zaoon)

Growth

• ObJectJve " to lead industry in both pnce and conveni ence

• Provide a continuous stream of new cutt,ng-edge ptoduru and serv,ces

• Objective 1s the fa st commerc1a l1 zat1on of new ideas

• Tailor and shape produru and seNices 10 hi each customers needs

• Adaptable

• Tra inable

• W1ll1ng to follow standard ized procedures

• Top research talent

• Entrepreneurial m ind -set

• Creat1v1ty

• Hig h tolerance fo r ambiguity

• Interested 1n and motivated by learning and discovery

• Adaptab le

• learning oriented

• Objective IS long-term customer loya lty • Networking skills and long-term cuS1omer prof11ab111ty

• Expand the company to either increase th e firm's sales or allow the company to achieve economies of scale

----

• Customer relations skills

• Emotio nal res1l1ence

• Fit vmh company culture

• Future onented

• Flexi ble (w1ll1ng to assume multiple role s)

• Willing to take controlled risks

Ch::iptcr 2 • Uu~iness and Staffing St ratcg1e1,

M,kin9 Changes to the Firm's Business Str;itegy-.and St;iffing

s ir.iicg) 11nplcmcn1a11on and s1ra1cg1c change n,quirc large-scale organ11a1ional changes. one of ,he largeSI of \\h1ch may be lhc na1ure of Lhe competencies. values. and cxpcnc nces required of cmploiccs Depending on lhc nal ure of a straicgic change. some employees arc hkely 10 lac k 1he "'"'"6ne,s or e,cn 1he ability to support lhc new stra1egy. Targeting 1hc s1affing effort 10 hire people "ho " 111 be wi lling and able lo implemenl a new strategy may help 1he stra1egy 10 take holJ and ul11ma1cly innuencc 11s cffecuvencss.

Imagine an organi,.auon currently manufac1unng ,cm,conductor chips The eompeuuve environment I) such thal the organin111on mus1 compe1c on cost. The organ11aLion is focused on opcmuonal efficiencies 10 con1rol expenses. and tries 10 hire lhc bc1t labor II can al Ille lowcs1 " aces possible. lls focus 1s on keeping hiring and training costs con1a,ned, and the organi za1ion p;,nolcs from '"1h1n. _when po~siblc, 10 help achieve these goals. Now consider what would change 1f 1hc organ11a11on 1dcn11fies a bener competi1ive posilion by specinh, ing in designing nc\\' and innovati ve compu1cr chips and outsourcing their production. The orgnnitalion's recrui t- ing focus would now be on idc nu fying and a1trac1ing the bc, t and brigh1es1 research and dcvel• opmcnl 1nlcn1 10 join the organiza1ion. and the cosl of doing so would be less of a fac1or. Ex1emal hires would be more prcvnlenl dcsp11c their higher cosl because 1hc need for 1hc 1op chip design skills would require the firm lo in vest in new, more expensive 1nlcn1. The relum on lhe larger siaffin g invcs lmcnt woul d be much gn,a1cr lhan under lhc old lo w-cost producer stra1egy. ln1cl wc nl 1hrough 1h1s lypc of 1ransfom1au on in the early 1970s when i1 moved from being a producer of semiconduc tor memory chips 10 programmable microprocessor chip,.

Because staffing innue nccs lh e skill s, mo1ivations. and in1e rcsts of lhc organi,ation's employee<. umn1endcd s1rateg1es may emerge in an o rganization as employees c.ercisc lhei r ,n1ercS1s and skills. These emergent strategics can ac1ually crealc new marke1 opportun itie s for ihe firm and ,nnuence fulurc business strategy. Fore,amplc, an orgamzauon in1cnding 10 become a leader in pharmaceutical drug research and deve lopment may alter its course 1oward gcnomics research because 11 finds lhal many of the sc icn1is1s ii has hired 10 do trad itional research have skills and e xperti,c ,n this area as \\ell.

How the Organiational Life Cycle Affects Staffing

The orga,11~atio1wl and product lift cycle can also innuencc a firm 's choice of strategy. As a finn or a panicular producl ages, ii grows, matun:s, declines, and dies. A firm 's strategics oflen change 10 adJUSt 10 lhc diffcrenl stages in the life cycle. Dunng 1he irirrod11ctio11 stage "hen a company is fonning, anracting top technical and professional talent is often a prior- 11y, oflcn requiring 1hc company 10 meet o r c.cccd markcl co111pensa1i on ra1es. Firms 1hat lack 1hc rc,ourccs 1hey need 10 a11rac1 lhc 1alen1 1hcy require to gel off the ground some1imes offer applicant1 ownership in the company (company st0<;k, generally). During the growtlr s1agc, new companies or produc1s musl sci 1hcmsclvcs apart from competilors 10 gain cu, 1omers and market share by pursuing mnova1ion or differentiation strategics. Because the y ore less established and Lhu, higher-mk employers, lhcy oflcn need to invest more money and resources in staffing to a11rac1 the 1alcn1 1hcy need lo grow. They usually lack a large and slrong internal 1alcn1 pool. and 1hcy need to hin, new employees externally as they grow. Because of their rapid growth, cmplo)CC> arc like ly 10 be promoted or transferred 10 01hcr positions fas1er lhan during the 01hcr Slages of an organizntion's life cycle.

During the mawrity stage of the li fe cycle, lhc firm's products and services have fully c, ohcd, and their market share has become established. The company' s f0<;us then shifts 10 ma1 n1ain1ng or o btaining funhcr marke t share via a cos1-lcadcrship strategy. Companies achie ve thi, b)· stn,amli ning opern1ions and focusing on effic iency. Because mature companies have a lar~er poo l of in1cmal talent from which to draw. the 1alcn1 focus becomes more inlernal dur- ing thi s , 1agc, and promotion opportunities can decrease unless the turnover of lower perform - ers is managed carefully. Many companies also rcs1ruc1urc during their ma1urc years, \\hich require, employees 10 be more adap1able and mobile as 1hc company' s needs for workers and , k,11 , change.

Companies in dec/i11e arc facing shri nking markets and weaker business perforn1ancc. A company in decli ne can pursue a cost-leadership strategy and allow 1hc decline to continue un11I lhc business is no longer profi1ablc. Ahema1ivcl y. ii can try 10 make changes to revive ,ts

29

30 Ourt...-r ~ • Bt.Nn1..~ JnJ StJJTlni Stnlc~,~ ha.nee ib proJuct N :scrv,cc. Lhc firm typica)J If hoo,c, 10 If) 10 c • y "<lo...

T _. U..\T PHJWSOPHI

pt'C'dUl'I or ,en ll"\! II C - I !ti - t'\I 3

,n.•;.·ia.litJtJOn l,rdiITcn•no 3uon ,tfll c _,1 ho,\ a fim1· , bu sincs~ strategy shapes It ' · . h,,e J,,cu,s,-u • s st.trr,

Up hJ rn,, point. "1.: . I lool 'i for in II~ new hin:s. A firm s human tea h cliarac1cn~ucs I rcSOo

m:eJs .:inJ inllu1.·nc~·, t c n •nee 3 cornpJny's staffing ~trntcgy as well. We d' ltt. ,trJICg) and IIS 1alcn1 ph1losoph) ,n u, 'SC¾

thJ ' 01.' \I

THE FIRM'S TALENT PHILOSOPHY . .

050 h , ,s a si•sicm of beliefs about how IIS em ployees sh

;J ~ PJ «JMp JixwJ...,.. D (if'f'I l r,q-J.•\T't'J d,.,.JJ bit 11Tll.'ft!

An Of!:aTTuauon > talent philb ,~s }oundcr.,, 11 reflects how an organ12ation thinks •bout OUld be i.n:a1cJ. Typical ly sbapcdme ~r an,zauons view employees as partners and key Slakehoi,,.'_~ em plo} CCS. For e,umple. soh .

1 ~, 11 emploi«s as more expendable and easily rcpi-.:7' the company 11 hcreas 01 ,rs . . . -...,It_

HCIIA.\" IIESO[ RC£ STR.ffCGI"

tk lusbr:.- c,jlk nirur ~ raor,,rr,l1ulnlOl,-.1dtrJtrNJilfl/'ltJ/f\ I

J:.,uuv.D~):..\

STAFFL\"G STRATEGl"

IN cvr.s:I,tlbM ,,f prwnruJ. pc>lu:,n. and brNllDl'J utd io moNUt' th< _foft. ofla/rnI uua rltrouJlr. '11111 ouJ of"" ~mtr nmr

A ,n n,ny 's b~sioc» ,traiegy can al so mfluence how a compfany '"11crac1s wnh IIS employcts,

comr-- d d 10 manage the movcmcnl o peop c 1010, through and 0 "'h1ch th1.·n JffC'C~ hov.• II cc1 es ' IJt ti

the com pany._ e stral""" hnks 1he enun: hum an resource function With ,L A fiml s hwnan resoun: • .., r ....

, . Su.u« ie human resource management a 1gns a company' s values,.,. finn s busmcss strategy. • d · n h b .... •0.1.ls ",1h lhc b<h»'IOO. values, and goals of employees an '" uences I e su Strategics of CICfl ~f the firm .> human resource funcuons. incl uding Its staffing, perfom1_ance manage men~ llalo- '"" and compcnsauon fu ncuons. The alignment of 1hcsc scp_:ira1c funcuon~ creates an intc&ral,d h.;;;.an resource management system supporung the cxec uuon of 1he business strategy, gujd,,J

by the llllenl philosophy of the organllauon. . .. An on:amzauon's oicrall staffing strategy 1s the cons1cllauon of pn ont1es: policies, 111d

behaviors u~ d 10 manage the flow of 1alen1 in 10. through. and oul of an or~amza11on over time An orgamzauoo·s ialcnl strategy thus encom passes 1ts approache s 10 acqumng, deploying, and reiammg its talent, and the choice of Jobs 10 which II de voles greater or lesser resources, A finn's suflin• , traieey ultimately reflects 11s busmc ss sira1cgy. human resource strategy, and lalcat philos,;phy. \Ve nexl look more closely al how a company's talent philosophy shapes its stalling

s1r.11cgy. . If 001 created in1en1ionally, a firm' s 1alen1 phi losophy evolves on Its own as the personaJ

1 aJucs of high-level managers an: expressed m tl1eir hiring and 1alen1 management decisions 111d actions. 01cr ti me. lhcsc value; and perspectives become those of the o;;aniuu ion. Johnsoo 4 Johnson ·s arucula1cs ,ts l.1len1 philosophy as part of the company credo.

The four con: questions 10 ans1<er in dc1cloping a talent philosophy are summariztd In Table 2-1. We II Iii discuss each of the questions nexl.

Filling Vacancies or Hiring for Long-Term Careers

An organi,.ation"s 1alen1 philosophy can focus on a short- or long-lcnn hori,on. Some organit.1- uons fill open positions 1Vith people abk 10 do 1he open job without also considering their likeli- hood of advancement. The only concern is geuing a qualified person in the vacanljob as soon as possible. Other 0111anizauons, mcludmg Nokia, believe in hiring people wi th the ability 10 bod! fill 1hc vacant Job successfully as well as move inlo other positions in th e organi zation over time. Google is famous for hmng lop 1alcn1 c1en when ii docsn·1 have any openi ng as much 10 keep this 1alcn1 from compelilors as 10 build its Ol'.n capabilities.37

ltj:jr;fQ Questions Addressed by an Organization's Talent Philosophy 1 · Do we want people to contrrbute to the company over long-term careers o r do we want

to focus on f.11,ng vacancJes ,n the short term? 2. Do we value the rdeas and co I b • f · . 7 3 Do n n ut,ons o people V10th diverse ,deas and perspectives . we see our employees as asset t be

ch wh s O managed or employees as investors who oose ere to allocate their time and efforts?

4. Vvlia1 are our ethic.ii pnnc,ples when rt com~ ur em ployees?

Ch:ip1cr ::! • Uu~mcss and S1.iffi ng S1n:ueg1es

If a company's talent ph,losoph) 1> 10 h,rc employees for long- tenn careers, 11 shou ld fo.: us on lun ng people w1tl1 both the polenual and 1hc desire 10 e1•entually l>c promoted, TI11s '""·rca,c'!> 1h..: hl cll hood thJt employee(; wi ll he able 10 1al,.c ad vantage o f the tr.un ing and career ;id , 011amcnt opportun111cs the organinu1on make s avai la ble. Such a co mpany should al so in vest more hra, 1ly m the siafling sy~1cm for 11-. entry-level poMltons, as 1h1~ ,s also Lhc source of t.hc conip>n) ·, future leaders. P&G hires less 1han one -half of I percent of 1hc ~00.000 people who

3pply r ach ) Car for us cnLry-lc,cl managem ent po"111on,. placmf! strong cmpha~1s on candi- date,· ,•nluc.s. cmpa1hy, and lcadcnlup and in novauon skills.38 The company's staffing mvcst- lll Cnt ,s wonl\~l as 95 pcrccnl of II-> talen t ,1ans at 1hc entry level and progresses throughout the orcam,at to n.

- If o comp:rny has high turn over, a bcuer strategic choice might be to focus on filling

1 ucanc,cs quickly and hiri ng people who can hil 1hc ground run ning. Why? Because any 1rain- inf costs arc unlikely lo be recovered 1f a new hire leaves quickly. If turnover is low and ihc compan y invests a lol of money and time developing empl oyees. 1hcn Lhc bcucr strategic- choice might be to hue employee s for long-term careers. S11nilarly, if 1hc company·s business ,n,•olves long-1ern1 projects. or higher-level managers need a substantial amoun1 of knowledge , boul how the company works lo be cffecuvc. then hiri ng employees for long-1enn careers makes scn::.c.

The Firm's Commitment to Diversity

Another cornponcnl of an organizat1 on·s talent philosophy 1s its comm1uncnt to diversity. A finn can proactivcly rccruil a diverse mix of people and stri\'c to in corporate diversity into HS 11 orkplace. Ahemauvcly, the company can more passively lei diversity "' happen on its own" 10 1hc ex1cn1 tha1 II occurs. In hgh1 of the many laws and rcgulauons we wi ll cover in Chapter 3. active ly managmg <l iversily through staffing is usually the b<ner strategic choice.

Diversity is important for more lhan legal reasons. Years of research have shown 1ha1 11 cll-managed, heteroge neous groups wi ll generally outperform homogeneous gro ups in prob- lem solving, innovati on, and crea tive solution building. which arc critical to business succe ss 10 today's fast-paced global markclplace.40 Organizat ions also benefit from diversity because 1hcir customers arc diverse. In the United Stales today, African Americans. Hispani cs. Asian Ame ricans, nnd Native Americans have an cs1ima1cd combined spending power of more than S1.3 1nll1on.'1 Dive rse empl oyees may also be bcncr able 10 understand and negotiate with dif• fcrenl suppliers and customers and develop products and services that heller appeal 10 different people.

An organizati on's staffi ng strategy reflects i1s commitment 10 diversity. For examp le. 3M values d1vers11y. innovation. and long-1em1 comrnitmenl on the part of its employees. Conseq ucn1ly, ii focuses on a11racung and hiring inlelligenl and in1ellec1ually curious individu- als. As s1a1cd on its We b site, "Al 3M. our recruiting efforts arc first and foremost dedicated 10 idcnu fying lalenl. With th at goal in mind, we look for individuals from all walks of life that share our commitment to innovo.1ion and cxccllcncc ... ,12

An organi zauon proac1ivcly seeking diversity is likely 10 establish relationships with recruu ing sources of di verse people, and actively create a culture of inclusion. For example. Goldman Sachs diversity recruiti ng programs include hosting women 's leadership camps for undergraduate and MBA students 10 explore career opportunities, Employ Ab ility internships to give s1uden1s wi th di sabilit ies 1he opportunity 10 gain work experience, and a Pndc Summit 10 mlroducc LGBT undergraduates 10 tl1c company.'3

Th is chapter' s Develop Your Skills feature wi ll help you to assess your organiza tion's cl11na1c for diversity.

Applicants and Employees as Either Assets or Inve stors

Another imponant way organizations differ in their 1alcn1 philosophies is in view ing their joh apph can1s and employees as either assets ( i.e .. "human cap ital") or as in vestors. If applicants and employees arc thought of as assers, the staffi ng focus is on managmg costs and controlli ng 1he asse t (as is the case with managing other assets, such as land, equipmen t. or steel). As a r«uh. 1he goal lends 10 focus on the acqu isition and deployment of labor as cheapl y and qu ickly as pos,iblc.

31

DEVELOP YOUR SKILLS . . for Oive r sitV

44

Measunng Your Firm s Climate Pie se indicate the extent to wh,ch you agree or t 10 divf"'IY a I n has the follo\'<1ng charact , . rov ... ,ant to re nforce your f,rm s commnmen ' f I that your organ1za 10 eristJcs \\I

and enhance your appeal to d~e~ Job applicants. tt she ~t:'. the number from 1 to 7 that corre~ponds to your a~r \I\: ~o u~erstdnd your orgarn:at.ton s current d1-..~rsity ~1m~~:rs1ty ~e to the left of each item num er ~lo\\ ng lS a scale you can use to assess the C imate or n your organizat-on

5 6

__ __..!, ____ !_ ___ __.!~---::--:::=-:=::::ii~;;~s;11;igh;-;tliyAAg~r:;,ee;---AAg~r:;ee;---S~tr;~ Strong'Y Disagree Disagree Shghoy Disagree Ne,ther Agree nor Disagree . .,..,

1. A shc1red commitment to organizat.1ona1 goals -- 2. A demonstrated commitment to cont1nuous learning = 3. Organ1za11onal flexib1l1ty, responsiveness. and agility

4. A focus on innovation and creat!Vlty

13. Equal access to opportunity for all employees --14. Shared accountab1hty and responsib1hty --15. A commitment to d1ve rs1ty on the part of the or~ -- zaoon's leaders

16. A demonstrated commitment to diversity = 17, A representauon of different demographic gr00ps, all levels of the organization

5 A collaborawe conflict resolutJOn process = 6: Team. interdependence, or collaborauve 'N'OrK environments

__ 7. Paruopatory work systems and employee involvement __ 8. 360-degree communicanon and 1nformat1on shanng __ 9. Fair treatment for all internal and external stakeholders __ 10. Pa...er shanng __ 11. Equitable systems for recogn111on, acknowledgment,

and r=ard

__ 18. Diversity-focused mission, goals, and slfateg"5 19. Diversny education and tra1n1ng

- 20. A representation of diffe rent demographl( gr -- among internal and external stakeholder grOUps °'II

12. A demonsuated commitment to community relato0nsh1ps

Sconng Md up 1our score< Poss ble scores range from 20 to tCQ Scores abo~e 110 rtfle<t a mofe pc>SJtl\e d versity chmate

By contrast. 1f aprltcants 3nd employees an: thought of as i111·,stors rather than CA~ the focus 1s on establish ing a mutually bcnefiCtal relationship in" h1ch e mpl oyees arc rcccpuu as in,esting their n:soun:es (lime. 1alcn1s, energy, and so forth) in the organization in exchllp for 3 return on that in vestment (a supponive culture. good p3y and bcnclits, professional dtld- opment, opponumtics. and so on). Because talented employees (as in,·cstors) can choose nu• in vest in the company (by not applying for or accepting a Job) or lo discontinue \hei r invutm in the organtZation (by leaving) at any time, an organization with this philosophy docs iu bc1I to he as auractive as possible to potential and current employees. When viewing applicanu al employees as investors. the goal is to ghc them a return on their personal investment in tbt organization.

. An organ1Zation·s staffing strategy rcnects whether it looks at its employees as 15.l(UI in vcstors. V1ew1ng ~mplojees as an asset to be managed generally leads to a low-cost approa to _staffing. A dominant staffing go3J of an organization such as thi s would be 10 acquui • quickly 3nd cheaply as possible emplo)ces \\ho can pcrfonn the dutie s of a job. RCC111lldl soun:es 3nd sclccoon methods requ· h r, . .

. mng I c inn to ln\est a large amount of ti me or mOII! " 1 ouldh behldess hkelyf 10 be uscd. Although an asset-based tale nt philosophy is unlikely to gelll·

a ca 1g egrcc o emplo)ee co •l · .

1 mnrnment, 11 can be an eITcctivc approach for orgamzatllll

pursuing a ow-cost strategy · h' h h' J turno>er an: 001 d '" w_

1 ~ . tgh levels of skill arc not required, and high lc1cb 11

isrupu,e or proh1b111vely expensive By contras,, orga nizauons that rel th · ftlli

that the commitment and efforts r Yon c de velopment of new products arc hkel) to such as Coming Pfi zer " ' h

1 °

1 115

employees arc key dri vers of their success. OrganizatOI , . n tr poo 3nd Ge h f , •• ,.

capped 1f they embrace · n b. nentec , or example ma)• find the mse lves ....... • asset- ased h'I h ' ~

make it h3rder fo r theni 10 • 11 P I osop Y of talent. An asse t-based philosophy•

" ract lop talc I . . .... 1 pcrfonn ance. n · retain good e mployees, and inspire their,..

Chaplcr 2 • Bus iness and Staffing Str.ucgi~

the Firm's Commitment to Ethical Behavior

;\n org:1n11auon's phtlo~ophy toward ethical Ist;ucs includin g fairness. honc~ty, and mtcgnty is ...,nce1cd 1n 11> taknl philosophy and <Jarring s1rn1egy a.< wc\1. A firm wuh a talent plu\osophy ro.-u,cJ on m:unta.inmg h1 ~h clh1cal standards 1s more hkc1 y to explain to applicants 11s hinng proce,s-that 1>. how the ltrm w,11 mal.c 11, hinng dem1on and the reasoning behind the assess- ment method~ 1t U)CS to c, aluatc JOb candidates. Commun,cauons wuh candidates arc hkc\y to he n1ore fr<quent. and delays m1mm1tcd. By contrast. firms "hose staffing ph1\osoph1es an: less focu-..,d on c1htcs w11\ be more prone to cmphasJZing hiri ng expediency and \ow rccruiung and st•fflng costs at the cxpcn,e of building trust "ith its job apphcants and employees. Beve rage and snac k maker PepsiCo 1s a company that applies its core ethical values to us staffing and other HR pracllCC) nnd even explains ilS hiring process and g1,es interview tips on us Careers ftitc.

46

Numerous government agcnc1es. professional organizations. and socicucs have developed guiddines to help org3ntZallons establish good standards for staffing and address many of the etlucal 1>sucs and the grey areas of the law related to it. Some of the best sources for stafling- «\a1cd standards and ethtc31 guidelines include the following:

Tht American Ps)c/10/ogical Assoriarion (A PA ). • Publishes a document that describes test takers' nghts and responsibilities. (Available

online at" ww.apa.org/sc,ence/ttrr.html.) Publishe s the Srandards fo r Ed1<catiorial and Psyc/10/ogical Tt sring ( 1999) along with the Amcncan Educutional Rcsean:h Associauon. Amencan Psychological Association, and the National Council on Measurement in Education. (Available for purchase onlinc at www.apa.org/sc icncclstandards.htm1.) Publishes rcpons to address emerging staffing 1Ssues. such as the APA' s r,sition on good and ethical Internet testing practicc41 3nd test user qualifications.' (M3ny of these reports arc free on the APA's Web site located at www.apa.org/sc1ence/tcs1ing. html.)

• Publishes ethical guidelines to help staffing cxpcns. (Available online at www.3pa.org/ eth1c<lcode2002.htm1.)

Th, Socitry for /11d11srrial and Orga11i:ario11al Psychology. • Pubhshes Tl1 t Prinriplts fo r tht Validarion and Ust of Ptrso1111tl St ltction Proctdur,s

(2003). (Av3ilable online at www .siop.org/_Principles/princ1plesdefault.3spx.) • Publishes a report on record keeping 3nd defining job applicants.49

Tht Unrfo mr G11idtli11ts 011 Employte Stltcrion Proctdurts (1978)-although this pub- lication doesn' t co,•cr Internet-related staffing issues, 1t provides a unifonn set of legal standarus governing the use of employee selection procedures and validation standards generally nccepted by the psychological profession. (Available online al http://www.gpo. gov/fdsys/pkg/CFR-2011-title29-vol4/xmVCFR-20 I 1-titlc29-vol4 -pan 1607 .JUTII.) The Socie ty for f/11111011 Rtso1<rce Ma11agtn1t11 r (Sf/RM) represents over 200,000 human resource practitioners. The organization provides numerous resources and publicntions on its Web site (www.shnn.org). SHRM' s code of ethics for its members is also available online at http://www.shnn.org/about/Pages/cthics.aspx. Academy of Ma11agtmt111-foundcd in 1936, the organization is a leading professional association for scholars dedicated to creating and disseminating know ledge about manage- ment and organizations (www.aom.org). The code of ethics for members can be found at http://aom.org/About-AOM/Code-of-Ethics.aspx.

Table 2-5 offers some examples of how a linn's staffing strategy is innuenccd by its HR strategy and talent philosophy.

DERIVING THE FIRM'S STAFFING STRATEGY

Having an appropriate and high-potential strategy is useless unless it is executed prope rly. This usually poses the biggest stralegic challenge for orgnnintion,. For cxmnplc. when Ron Johnson became CEO of embattled department store chain JC Penney. employees as well as c ustomers resisted the changes he tried 10 implement. Johnson found that his biggest chall enge was not decidin g which direction 10 take the company , but ligurin~ out how to effec tively execute the strategy.50 Staffing is u key ste.p 10wartl strategy executton.

33

H

i I

I I

Ourc,cr: • Bu.Qn~...s J.nJ S1.1Jli~ Slrn.tc~1t·,

I t P h'losophy Affects Its Human Resource

-

H waFirm'sTaen ' St~ategy and Staffing Strategy

Ta lont Philosophy Human Resour<t Str•ttgy Staffing Strategy

\Vants employees to contnbute to the ~rm over IOf"lg•term careers

Values the ideas and contnbuuons of people with dive rse ideas and perspectrves

Views appl•cants and employees as investors of their tJme and effort

Has high ethical standards regarding the treatment of its applicants and employees

Acquires. develops. and reta r,s talent abfe to contnbute to the firm over tuT'!e

Acqu1res and retains a diverse workforce, creates and maintains a cvlture of 1nclus1on and respect to leverage diversity

Develops mutually bonef1c1al relatJonships with ns employees, respects applicants and employees

Treats applicants and employees with fairness, honesty, and integnty

Hinng Recruits and hires talen able to perform now and in fut JObs ~

Deploying Uses succe ssien planning, career planning, and career development to take advantage of empl oyeos• potential over time

Reta ,n,ng. Retains top pe rfo and h1gh-potent1al employ,:'""

H,nng Recruits and hires diverse people

Deploying · Creates mentonng programs

Retain,ng. Rewards and promotts d111ers1ty "champions"'

H,nng: Attracts and hires employees who fit the firm's culture and values; responds qu ickly to applicant 1nqu1ries

Deploying: Puts employees 1n Jobs that match their interests and ab1l1t(es

Retaining: Allows flexible woiic arrangements to meet employ..,- needs

Hinng Expl ains the hmng dec1s1on-mak1ng process and the uses of all assessment methods; hires based on ment; complies with laws

Deploying· Gives honest performa nce feedback

Retain,ng: Promotes based on ment

Ul~ma1ely. a finn 's bu sonc,s s1ra1<gy depends on employees· '"llingncss und abili1y ID exccu1e 1L Leaders " 11h a 1alcn1 m1nd-se1 generally share Allied Signa l CEO Larry Bossidy's con,·icuon th31 "Ao lhe end of lhe day. "c bco on people. nol s1r.11cg1c,.''51 Leaders like Bossody bche,e lhai building lheor oalcm pool lead., 10 a compeUI I\ C ad,an1acc on and of il5clf. Therefore. 11 JS an 1mporuu,t part of their Jobs. •

h An organw,tioo's slaffing s1r:ueg) should be dcml'd fmm and he clearly supponi,e of 1~

uman resource str:Ue•y "hoch a, " h 'd I ks f ·•· • ·. • c a,e sa, , in lhc enure human resource function 10 lhc e.te•

cuuon o uM; org:aru1l1mn s o\crall b S1 no,auon's ·· 'enl ac · • d lboncss >1r:11cgy. • h addresses 1hc qucs1ion. "how will !he <i!•

wi qu1silJon an rctcnuon tra funcuons conlribuie to lhe · inong. compen<a11on. :ind performance managemt01

organ11.auon's compeui ad . • As we ha\C noied th I\C van1agc and help 11 successfully compe1e.

. ere arc many cih I profesSJ onals ha,c 10 coniidcr. We '"II .'ca 1>sues rcla1cd lo s1affing 1hat human rcsourte

conunuc 10 discus, ohem 1hrough ou1 1he book.

Chapter 2 • BusmcM and Siaffing Strategics

For example. RMB Ho/dongs os lhc ho/dong company of some of South Afnca s leading fi nancial , crviccs companies RM B' s human resource s1r.11egy is to "recruio. bui ld and rc1ain lite t,cSI people from Souoh Africa·, dl\ersc popula1ion base. In particular, 11 , ee ks people wllh an cnorcprencunal a1111udc and encourages an owner-manager cuhure. People an: empo"ered, held :,ecoun10blc for !heir ac uons. and arc rrnardcd appropnaicly."11 Likewise. the human resource ,,raoegy for Melso. an organ1Lat1on "hose core businesses arc fi ber and pa per oechnology. rock ;nd mincrnl processing. and au1omauon and con1rol occhnology. " rencc1cd by ohc following.

Toe aim of Mctso's human resource stra1cgy os 10 ensure the avwlab1h1y of skilled and comm111cd personnel needed by Mctso's businesses and 10 develop such human n:sour<c pohcocs that allow utilizing 1hc in1cllcc1ual cop11al in achieving common goals. Toe goals of the human resource straoegy funher involve directing the 1r.U1sforma1ion in Mel>O 1owards a new type of kno\\ ledge envi ronmcno. slllying up-10-dalc w11h the sU1TOUnding world and an11c1pating changes affecting human n:sour<c policies.

The role of lhc human resource function is 10 safeguard lhc devclopmcnl of kno" ledge nnd compe1cncies. as well as lhe dcvelopmcno of leadership required for a mouva1ing working aimosphere and the desired personnel s1ruc1urc. The 1asks of the human resourec function funhcr involve providing suppon 10 networking and csoablish- menl of sus1ainablc ways of opern1ion. Moreover. we ensure for our pan tha1 Me1so 1s an a11mc1ivc and rcspcc1cd employer to bolh existing and fu1urc Melso profcssionals.54

Toe primary s1affing strategics for bolh oflhese organmuions are easily derived from 1he1r bro:Jder human resource s1ra1egies.

As "e have c,plni ncd. if a business wishes 10 pursue a low-cosl slr.llcgy. ii will need to focus on controlling labor costs. reducing expensive 1umovcr. and hiring people willing 10 \\ Ork fo r markc1 or below markc1 wages. lls tr.li ning programs will likely be slreamhned and focus narrowly on currcnlly needed behaviors and skills. And rather 1han rewarding innova1ion. ohc company' s performance management sySlem is hkcly to re"ard performance. This. in 1um. d1rcc1ly affcc1s i1s recru1ung and s1affing functions. As we will cover extensi vely in Chapter 4. cons1s1cn1ly doing a job analysos w1ll 1r.1nsla1c c,•cry posi1ion in the orgnnozauon into a set of employee compe1cncics. s1ylcs, and traits 10 which applican1s can be ma1chcd. The goal is 10 hire people \\ ho ha, e lhc 1alents necessary 10 cxeculc the business slr.ltegy. To do this. manag- ers need 10 de1erm ine: ( I) the in vestmen1 1ha1 needs 10 be made 10 staff each job: (2) v. hc1hcr to r,-crui1 people for only 1he present job opening or fulurc. advnnced openings; and (3) the skol! le ,·els needed by new hire s. Identifying lhcse and other goals establi shes a critical link bc1wccn ohc organi,a1ion' s businc,s s1ru1cgy and its HR (and slllffing) function. Al a minimum. an orga- n11a1ion' s business str:uegy is likely 10 innuencc ( I) ilS talent philosophy. (2) t11c 1ype of people ohe organi,a1ion rccru11s, (3) the type of infonnnuon communicaled during 1hc hiring process. (~) 1hc IYJl<' of rccruilcr used. and (5) the 1ype of recruitmenl media used 10 publicize opcnings.55

Because s1affing ac1ivities are nol 1he only human resource ac1ivitics an organization under- takes, ii i, also 1mponan1 1ha1 the straocgies of each func1ional area of human resources comple- mcnl each mhcr as well as tlie organiza1ion·s higher-level human resource s1r.11egy. For example. a stalling s1rn1cgy of hiring people wilh lhe po1ential 10 fill higher-level positions over time would be unlikely 10 work "i lhou1 well-designed nnd implcmenled !raining and development sys1cms. A broad undm1anding of tlie role of the organization' s hull\lll\ resource sys1cms and funclions that suppon the bu<mess s1r.11cgy guides 1he dcvclopmcn1 of more specific s1r.11cgics for each of the f uncuonal areas.

THE FIRM'S STRATEGIC STAFFING DECISIONS

As " c have explained. a company's talent philosophy re0ccis how it ohinks abou1 its employees and innucnccs its s1nffing s1ratcgy. Organization s have 10 make se,·cral decisions when it comes 10 de, eloping and executing their s1affing s1r.11cgics. The mne decisions th a1 in0uencc a com- pany' s , 1affi ng , 1ra1cgy arc summarized in Table 2-6 and wi ll be discussed in grca1cr dc1ail ncx1.

Should We Establish a Core or Flexible Workforce?

An organization's core workforce consislS of people who are percei ved by the organi,.auon 10 CORE WORKFORCE

35

bi! regular employees who arc central to what the organizati on doc~ or produces. These workers '°"~r,.,,rm. rtRutt,r rmplo~u , arc considered 10 be imponnnl. longer-1cm1 contribu1ors lo 1hc company. Titc rcfore. 1he com- pany lrics 10 rc1ain 1hem for longer periods.

36 C'h.lt"'lcr : • 8 u'1tt........S .mJ S1:1ffin~ StrJ[cgu:-,

FU:J.JIILE II ORK£RS

~ t,JW rart·ruN or rm.."nlo."'f •orl,n t>I' ir.Jr~r'II ,~ n111olm-,d }Ur Jltor.,r ~,-.Wb,fim,._,11.1"1tt'ttJrd

/.ITER.l'AL TAIL\7 FOCLS

o prrfrruut for tkidopml( t"lf'lu)rrs

and pruniorm, /rum 1o uh1.11 r1.1 fill Jvb UJ't nmei

EXT/iR.l'AL TAU\7 FOCl 'S

c1 prt/urnrr for /Wm, fl)bJ 1o11/i ntl4 rmplt1)UJ hurd/r1-m m,mdr rltr flff,:(Jnl:JJI/Un

Enlii·i Nine Elements of the Sta:ng Strategy 1 Do "e want a core or fle.--:,b!e ,,orkforce 2: Do we pr•fer to h,re ,ntemally or externa lly' d d skills? 3. Do we want to hire fo r or train and develof nee e 4. Do we want to replace or retain our talent ? S. What levels of which skills do we ne1 whe re 6. Will we staff proacu ... ely or react1vely 7. Which Jobs shou ld we focus on? , 8. Is staffing ueared as an irwe stment or a cos~ 9. Wi ll staffing be central,~decentral1Zed

Flexible " orkers. or conungenl 11·orlm . hll e less JOb sccuniy than the firm•s core "'Orl fm't'. The,,c: people may be ieinpor.uy. leased, pan-ume, or contrJCI workers. Typical ly, lhcy Jia,; 3

fo""al conlr.lCt II ith the orgomzation ihol specifics 1hc nature ol tl1etr relauonsh1p. When a f111n•s business slo11 s do11n. nex1ble 11 orlers an: usually let go before core 11 orkers. When the finn•s busines> e.pands. ne<1blc 11 oflcrs ore added someurncs 10 the 11orkforce before core workers unul 11·, clear the expansion 111 11 be pe""oncnl. I~ other wonls, a flexible workforce also allo:

3 company 10 ad Just qudly 1o , olaulc chonges m demand for 11S products or services, thereby dccrca.mg tlic lilel,hood ,111 ,II h,ve 10 Jay off 11S core " orkforce \\hen dc~and shifts again latt,.

Companies hkc Kelly Services, Accoun1cmps, and Manpower provide temporary worktri on an os-needcd bos,s 1o help a f,"" odJuSI 11.1 \\ Orkforce 10 115 produc11on needs. Eigh1y JJCrttni of cmplo)crs use some form of non1rad1uonol staffing nrra~gcmem, and many use more llUQ one ~6 3M uses O wide rongc of conungcnl workers 10 meet us vary ing workforce needs and IO create O feeder pool for future h,res.

57 Mail-order compomes and shipping companies like I.JPS and FedEx regularly use 1emporory " orkers 10 ramp up for bu,y holiday periods.

F1«1ble arrangcmcnlS can also be used 10 help meet a company"s workforce needs. Flexible Job arrangements 1h01 al low people 10 work ou tside of the tradlllonal nine-lo-fi ve sched. ule include Job sharing, allowing emplo)ecs 10 11 ork pan- umc or work from home, and lak- ing extended pencxls of ume ofT 10, soy , ollcnd school or raise children. Some Ocxible worun would prefer 10 be core 11orlcrs ond have greater job s1obi l11y-especia lly if their companin offer belier hcol1h, reun:menl, and 1acauon benefilS 10 core 11 orkcrs. Other Oexible workers bke the nrrangemen~ believing II helps them belier balance their work and non work responsibilities, such as school and family hfe In fact, m recent surveys, the rna1on1y of working women lly 1> orlung pan-ume "ould be the ,deal employment arrnngcmcnl for thcm.58 Moreover, some people '-' Ould be unoble 10 work 01 all if their schedules weren't flexible. Thus, having a flcxiblt '-' Orkfon:e con help on orgonmuon lap undcru1ih1.cd, high-quality 1alcn1.

Organ1ta11ons need 10 dcte""inc which Jobs arc best for core and flexible workers. and lhe oppropno1c mix of each. Trad111onall) , firms have been more willing 10 nllow fl exi ble arnngc- menlS for emplo}ees m suppomng func uons than those mjobs more ccnlral 10 the organizall011'1 s1ra1egic execution. Ho"ever, this may be changmg-cspec1ally as employers search for wco1 1<orldw1dc m onlcr 10 become more globally compe11u>e. As one IBM cxccu1ivc said aboul hiJ company's employees. "'ho often "ork from home: "We don '1 care II here and how you gel yoor 11o rk done. We care 1ha1 ) OU ge l )OUr 11 ork done:·59

Should Our Talent Focus Be Internal or External?

One aspect of an organizo1ion's talent philosophy concerns its preference for developing, rc111in- ~ng, and promoung empl~yccs, which 1s an internal talent focus, versus hiring new employees

d or lugds,hcr-levcl Jobs, 11 h,ch is an external talent focus . Which 1s the bcucr choice? The answer epe n on the organuauo • b · • n s usmcss strategy; talcm philo,ophy; the qu:tli1y of its employee

asscssment, lraJmng ond development p d .... laoor market O h ' h . rograrns; an lhe qual11y and cost of 1:tlcn1 availabl e in u~ . n I c one and a l'ldco game prod · 1 ,. , 1 rcp= niauv f ·, uccr m1g 11 hi: con,1an1 ly looki ng for new wen

e o its customers currcn1 tastes n,· f _.., rccru1ung internally Focus h · is type o company would be less focu,w OIi acquire fresh lalcn1 ~uh sl ,~g _onth mng people from outside the compony would help ii continually " uh a customer sen ,cc s1~1: '" c : os1 recent lcchnologics and trends. On the oihcr hand, a finn

gy nng I need 10 rctom long-tern, em ployees who have developed

Chapter 2 • Bu~mcsli and S1J.Oing Slr:llcg1cs

rdJt1on,h1p~ '' 1th CU\ tom('~ :ind undc~tand how the company can best meet 1hc1r needs An cx1cr• nJI 1Jlcnt focus could undcnn,ne such a s1ra1cgy. Forc,amplc, ,f the r,"" al11o}s Jooled cx1crnaJI) 10 fill aJ1anccd JlO>iliOllS, u~ ould hlcly lead 10 high turnover among IIS customer scn1ce rcprc· ~t'013u, .:, anJ hamper l lS a?iluy to crcu tc and maintain quahty rtlat1 onsh1ps wuh its customers

Indeed, some organ 11a11ons focus solely on dc,c:loping 1hcir own 1alen1 via ,ucccssion p1, nn1ng and corccr dc vc lopn,cn l rn1hcr !hon hmng new employees for h1gher-levc l JObs . P&G', build•from•wilhrn 1alcn1 strolcgy focuses on building a strong 1ale n1 pipeline by mvcsung heav• ii) ,n candidate ossc,smen110 make the best htrcs and tl1cn m leadership developmcnl 10 build 11> n<'I gencrauon of business leaders. P&G understands that executing 1h1s s1ro1cgy means control· hn~ a11nuon 1ha1 would disrupt 115 talent p1pehnc.60

• Both approaches can be cffccuvc depending on the organ,.ration·s struleg,cs ond needs. Most companies use a mixed strategy 1h01 includes both mtcrnaJ and external hiring. Many com- panies con>1dcr in tern al cand1da1cs first If they cannot find suitable 1n1cmol cand1do1cs. then they look externally. Allernauvel y. a firm can conduct internal and external searches sunullonc· ously, giving preference 10 mlcmal candidates.

An mtcrnol talent focus requires hinng people "i1h the capabi lity 10 perfom1 "ell m cur• rcndy open pos111ons. who have the capob1b1y 10 perform well ,n the organ1zauon' s tr:unmg and de1elopmcn1 progrnms. and who hove the potenual 10 assume leadership positions in the organiza. iion later. 11 also requires a firm 10 invest m Ir.lining and cmplo}ec development 10 ensure ii has o suffi c1en1 pool of qual ified mlcrnal job candido1cs av:uloblc. An external 1alcn1 focus often n.-quirc, pa) ing a premium 10 acquin: 1alcn1 wi1h 1hc exi;tmg skills and experience 10 perform well m 1hc organu.auon's currently open positions. If the fi"" cannot find appropriate 1alen1 ou1>idc the firm, it will have 10 develop and promote from wi1hin, find o way 10 subs111u1c 1cchnology for the scarce slulls, or do witl1ou1 those skills. Table 2-7 summnrizes rcosons organi,a1ions pur.,uc each focu s.

ltli!f P Internal and External Talent Focuses Why Organizations Prefer to Hire Internally: , Internal h,nng sends employees the m•ssage that loyalty and good performance can be

rewarded with a promotion , thereby e nhancing the ir mot,vat,on and retention levels , One promot,on could generate the opponun,ty for others to be promoted to f,11 the Jobs

left vacant • Greater information 1s known about candidates who already work for the organ1zat1on, so a

more accurate assessment about their fit with the job can be made. • Internal hires are likely to get up to speed 1n their new JObs faster because they are already

familiar with the organization. • Jobs can be filled faster. • The return on the company's Investment 1n terms of tra1nmg lower-le vel employees can be

increased when more of them are ultimately promoted. • The higher tra ining and development expenses associated with internal hiring can be

offse t by lower turnover, recnuting, a nd hmng expenses. • Smaller or lesse r•known organizations some times have a more difficult time attractin g

external talent they desire. • Orgamzat1ons with a strong, positive organizational culture somet1mes find th at internal

hires reinforce and strengthen the tr existing cultures more than external hires do. Why Organizations Prefe r to Hire Externally: • The firm lacks qualified internal candidates. • EKternal hmng can enhance an organ1zat1on's diversity. • Focusing on external hires ca n increase the size and q uahty of the candidate pool • External h1res can mJect new ideas and perspectives into the organ1zat1on • The firm's cost of developing and mamta1nmg interna l train ing and development programs

1s greater than its cost of hmng externally. • Internal promotions can be d isruptive because they lead to othe r open pos1t1ons that must

be f,lled (creat,ng add1t1onal promobon opportunities can also be a desirable outcome as l1S1ed previously) . Too much internal movement can crea te instability and cause delays in the complet,on of

proiects.

37

38 C'lupia , • BJSt""' :inJ S1:1ili"l' Su>I•~"' . • 1

·th the Skills we Need or Train Them Should We Hire Peop e WI to Develop Those Skills?

• te ,e , iaffin~ dc<"tston " "heihcr an organtZallon should prefer hinng people

Anolh<r , 1r.1 _g . dr.,;,.i skills and compc1enc1<s or " hclhcr II should hire JlC0ple w ~~ alrcaJ) Jl<lS«SS

thc h rad McDonald"s fou nder Ray Kroc once said. "If we 1lrC •lhoi,1

iho,c ,kills and ~n I cm;•' IJlcnL And I' m going lo pul my money '" ialcnL '-61 Su 801ng1o b"' an)" here we 1< go1 10 a,< · . PPOn,-

. , 1

Donald" created a "orld,11dc management unrnmg cenler called Ii•,.:•~-..., tlus philosophy. " c > • • , _ ~"

h h •·· n·" o, er 80 000 McDonald , managers since 115 ,ounding in 1.,, Unl\mlly, " ,c ,=II1ll"' · , _ 70 1.

bl 10 ~,y compcuu,e "aces and. dtcrc,orc. nllr:tcl ski lled worke

Companies una e ,- - 1 - b d h rs OUaJ.

lind II n,-ccssru y 10 hire peopi< .. ,11,ng and able 10 lea

rn 11c JO an .tram I cm instead. For . Iha! .,.., unique 10 an 01130,,.11,on. skilled " orkcr, may no1 cxis1,.

which wo uld make it n~

10 htrc people and pul 1hcm through a company-dc,cloped 1r:trnmg program. If a company doci no1 ha, c an oppropno1c lrJ1ning ~udgct or progra~ . ,f there ts no ume lo lr.lJn new hires, or if lb,

JOb need, 10 be filled ,mmedia1cly. the bell« dcm,on " ould be 10 hire pcoplc already able lodo

!he Job "ho can hu 1hc: ground running

Should Talent Be Repl;iced or Retained?

OrgantZauons can choose 10 II)' 1o mintmi,c 1hcir 1Umovcr or acccpl whatever turnover Occun and lure replaccmcnis as opening, occur The advantages of lc1ung turnover occur inclUdt

n.-cc,ving a more frequent in fusion of nc"" ideas and 1alcn1. which can be useful for companies

,n fast-changing indus1ncs. For example. some b101cchnology or computer so ft ware companies

may find that lhetr emplo)ces· wlcn1s arc obsolete " ,Ihm a few years. Un less they are w,nll&

10 in><st ,n retrarn,ng lhetr empl0)CCS, 11 m1gh1 be benefic,al 10 cncouroge them 10 leave af1tra

few years and replace !hem w11h new graduates lratncd 1n 1he lo1cs1 technology. When lhcrt on abundant supply of people w11h 1hc qualificouons a fi rm ,eeks . replac ing emp loyees rrug:

also be less cxpenme than rciaming current employees for ccrl3in jobs. The advan tages of

relllln1ng "orkers include a more loyal and comm111cd " ork forcc wuh a bcuer undemanc1toi

of the company's produm, SCC\tces, and processes. and decreased staffi ng costs. If a posiuOII

,s of parucular 1mporuncc 10 1he running of 1hc company. or If 1hc 1alcn1 needed by a p:utia,.

lar pos,uon 1s d1fficull 10 find. focusing on rc1enuon con help lo ensure tho1 lhc posiuoo u

r:ttcly vacanL

Which Skills ;ind What Level of Them Should We Seek7

One of lhc mos1 cnucal staffing dec1s1ons concerns 1he l)pcs of s~1lls a new hire should posstU

and !he appropno1c lc,cl of lhosc skills. Ahhough hmng managers often request "lop taltnl •

mos1 Jobs do no1 require lop skills in all areas. Objecti vely analy llng lite job 10 delcrmi nc exllCdy

wha1 " rcqwrcd for an 1ncumbcn110 pcrform wcll 1s key 10 making 1l11s de1crmina1ion, TI1is pro-

cess " called job analy s,s and 1s dcscnbcd in more detail ,n Chapter 4.

Some organ1Lat1ons' slllffing gool ,s 10 hire only 1hc h1ghes1-abil11y individuals. To dodtis,

lhe organwiuon mus1 fim be able 10 recruit high-abtl11y ind1v1duals and 1hen be able 10 idenufy

and hire lhe h1ghcs1-ab1l11y appltcan1s. Bc<"ousc !here is a limited number of high-abi lity people, for many organuauons 1h1s 1s an ex1rcmcly d1fficull goal. Allhough 1h1s approach can be •etJ

appropnale for some organuauons. such as lop consulling firms or other busi nesses rclymg 011

knowledge workers 10 create new producl5, for many organiza11ons 11 1s not !he bcsl approach. 11 "often more su-a1cgic lo try lo idenufy a11nbu1cs 11ta1 arc d1fficul1 10 change through

lraJning. and lhai effcctl\cly diffcrcnua1c among oppltcan1s. and 10 hire people who already pol· sc,s !hem. For example technology sc and 1r.un the sk II ,-6J I. d d _"ices company EDS has ;i ,ayi ng 1ha1 !hey "hire !he I/UIU ,oday 'oc

I s. "

1 cc · '" 0 rapidly changing business environment like 1hc one firms face

. " using on app 1can1s· current k II f . quickly adapt 10 h s

1 5 15 0 ten msuffic1en1. Employees need 10 also Jean lhc sam~ for long cpc~:; co~m:ica1e effecuvely, and "Ork " ell w11h others. Some Jobs SU)'

lhmk of as rapidly chan : an ° crs t hangc rapidly. Even clerical jobs, which we often don'! ging, wcn1 through a pc ·00 f · - d 1"""' " hen computers and word . n o rapid change in 1he I 980s an ,.,,_.,,

processing became ma , 110n, h1nng an office a51151301 sk II

d I

ms1rcam. During 1his 1,mc. for many orgam1'-

hmng an office as,is1an1 able lo ~s: ~~ y al manual typing " 0ulJ nm have been as s11111egicll a 1ype 11,n1cr and a co111pu1er.

Ch.:1pccr 2 • Busincsi. and Stalling S1r31cgi~ 39

should We Pursue Proactive or Reactive St affing?

proac1h·c s1nffing 15 done before si luauon, or ISSues come up, rather 1han ,n response 10 1hcm.

35 ., 1hc case with rca~livc _staffing. An organizau on ca n staff us pos,uon, prooc uvcly or

rcacl"cly in ":gard 10 d,vcrsuy as 1<cll as 1alcn1 qual11y. Proacll\e d1 vcrs11y dec1s1ons 1< ould

,ncludc rccru111ng from sources known lo be di verse. tracking 1he d1vcrs11y of hires produced

by eac h rccruiung source. and cons1an1ly mon11oring lhc firm"s progress toward 115 diversity

goals. nus 1s gcner:illy be_ucr ~an mak1n_g reaet,ve staffing dcc,s,ons fo llo wing a specific c ven1.

such as being sued for hmng discnmmauon. Reac11vc organilal1ons 1ake a more .. wo,1-and-sec"

approach 10 staffing. while proactive organit-lllions try 10 1dcn1ify pr:icuces or si1ua1ions 1ha1

could be pro_blcmallc an~ work 10 improve 1hc:m before !hey become problems.

Organ1111uons 1yp1eally recru11 when !hey need 1o fill a specific JOb opening. "hich is

job-oriented staffing. However, when labor markel5 arc 11gh1 and good recruits arc hard 10 find.

organiU11lons muSI pursue talent-oriented staffing and pursue scnn:e 1alcn1 cons1andy-no1 j us1 "hen a vacancy occurs. This allema1ivc philosophy encourages people within (he firm 10 1den-

ufy " here 115 fu ture skill gaps arc going 10 be well in advance of il5 actual needs. Tots way 1hc

firm can iniccl a ~onun~ous s1ream of 1alen1 inlo lhc staffing pipeline 10 ensure !here arc always

quali fied people '" vanous singes of lhe hiri ng process. For example. ,n 1he previous chapter.

Mike. u human resource professional wilh Soles. kepi 1wo job finalists in !he pipeline fo r futu re

openings. SimHarly, _bccausc o_flhc nursing shorugc in many areas of lhc country, some hosp1-

1als arc partnering w11h local high schools 10 encourage sludcnl5 10 go in10 nursi ng.

Some fi rms creole unique. or idiosyncratic. jobs for people w,lh 1alcnts 1he organization

can pul 10 use. ld1osyncra1ic Jobs arc created around a current or new employee's unique expen- cncc, knowledge. skills, in1eres1s, and abilities.6' Rather 1han focusing on whether !here is cur-

rently an opening before evaluating available 1alcn1. the person is hired and 1hen a Job ,s created

10 cxploll 1hc individual's strengths. For example. when someone steps down from a posllion ,n

1hc Wh11e House. 11 is common fo r a consul ting or lobbying firm 10 hire him or her in a ··consu h-

1ng .. role 10 1:ike advantage of their connections. An additional advantage of a talcn1-oricn1ed philosophy 1s Iha! 11 can speed up 1he hiring

process and decrease the amount of time jobs s1ay unfilled. With qual ified job cand1da1cs already

in 1hc advanced stages of1hc hiri ng process. hinng will be faster when a pos11ion opens. Because

more lime is 1aken lo generate qualified job eandida1cs. a deeper pool of cand idates is usually

created as well. This approach 10 filling Jobs can be a belier str:tlegic choice than the 1r:tdi1ional

approach of wailing for a position 10 open. In fac1. al The Container S1orc. store managers arc

required 10 invcsi 1wo 10 three hours per week interviewing job cand idates. The idea is 10 help

the company auain il5 goal of never having to place a job ad anywhere! Prcscrcened job cand1-

d01cs cm1 before 1hc nexl job opening e,en occurs. By mainiaining a rosier of qual ified cand,-

dotc, 10 call on, even when seasonal employees need 10 be hired, the home office's two- person

recru11ing s1aff docs nol need 10 gel involved. 65

Whether an organiz,ition' s 1alcn1 philosophy is talenl oriented or Job oriented innucnccs il5

staffing s1ra1cgy. A 1alcn1-orien1ed philosophy of1en requires orgamza1ions to recruit regionally

or na11onally. and 10 assess how candidates can meaningfully con1ribu1c 10 !he company r:ilher

lhan evaluating candidates against predefi ned job requircmenl5. A job-oriented philosophy has a

bcncr chance of a11rac1ing 1hc active. local job seeker who is considering a job change or is cur-

rently unemployed lhan a11r:tc1ing lop wlent who could really add "aluc 10 !he organilauon bu1

who pc1haps is already employed or would have 10 relocalc. 66

Whc lher a firm's staffing is proactive or re active will also depend on 1hc degree 10 which

staffing is considered an important contributor 10 the company"s business s1r:t1cgy. If !he firm

develops 11> busi ness slr:tlegy wi1hou1 cons1denng 1hc stJtffing 1Ssucs related 10 it, 1hc staffing ,s

ri:ac1ive lf 1hc firm considers il5 staffing issues in conjunction wnh ns business s1ra1egy. 1hen 1he

swffing decisions arc proac1ive and stra1cgie .

Which Jobs Should We Focus On7

Another a.spec! of a successful wlcn1 strategy in volves 1dcn11fying key jobs on which 10 focus

addi11onal a11cn1 ion and re.sources because of their importance 10 1he company' s performance

and c.ccu1,on of j15 business strategy. Nol all Jobs w,tJTllnl equal invcs1men1 in rccruitmcn1

or s1affing activilies A company" s key jobs arc 1ho,e 1ha1 m some way crcalc value for 1hc

l'ROACTI VF. S TAff/,\ 'G

done lxforr utuatuuu or ,uur, o rnr

HF.ACT/VF. STAFFING

dont in r,rpo,u t IQ ntuatwru or 1uut1

JOB-OR/E..VTE.D STAFFING

111nng ,,, fill" Jpt'njir Jvb Opt'fl lfl/:

TA LE.NT-ORIE..VTE.D STA FF/,\ "G

rtrru111n,: and , , rn luring 1111hout a

Jprrific ;ob opfmnx

40

<

Ctu , - li r "' .inJ Sutfins ~ lrJIC'gtC"l • rt~'"f - \l." 1

" ' 1 on M rctcnuon of chcnt~ busrnc,'i or the ._ 10 the ~cncrn I Cltai l'r"\!Jnitauon h\ contm,uting. ... ,at ion \\' hcnc, er there 1s pc rfom1ancc \'fl... 10cl - ' roJ -1 for the or~ani -,ab,1 Lll nt:'-' capab1lluc:!I, or P u1. ~ n there 1, the potential 10 11npro vc that rw,,, tty th< ,amc pu,i llO , .--IIJoii• :inll,n~ JX-Oplc '-' orl.mg in th•· 3, er.ire ~ rfonn ancc le, cl of lhosc C""'pl 1 - , uun b) r.11>1ng • • . "' O)'"-conmbuuvn to th< of)'anlla

11 b tan uall) more of a com pani , product than do ~,

r ,ahn.•oplc ,c , u > f OIi,.,_ forcumpl<. 1 some ' r , __ , that result ,n the h1nng o a greater number oftu-• ...,_ • ma1 be ,dcnlUIL-U gho,

,talTmg tmproi cm, nts · 1

pcrfomung salc,pcoplc __ , I and fc"cr o"cr· .

rcrtonmng ,.,c,peop c f h h ob, and roles arc cnucal to obtaining us com.,. must 1dcnu l " tC J "•,--~~,

Th< company taffin• the ,dcnuficd post11on, should hel p the company ex • ad,anuge Foc u,ing on bell«' • mn.•uui c ad1an1Jge If, fo r example, FedEx ex-~

a.. . 1 "l' and enhance ti> co ,-- ---~,c, ,i,, uu>1n<>S sw.i c. mpact on profitabtllly, a 15 percent 1mproven1ent tn thew arc as led " luch " ould ha, e 3 greot

1 c" their couners they w, 11 1den11 f y the councrs T!us

11 15 nt 1mpro,cmcn m ' · t us. p1l01> or• percc I the cmploiees who a.re paid the most money who cJc.cn tralL'S the fact thot 11 1' not ncccs,on y "ho arc a lei component of I alu~ creation.67 c the most auenuon-ll is the cmplo)CCS

f Dell Computer cu, tomcr sm 1cc reprcscn1a11,·cs responsible 1 Imagine a g:~pqu:suon, about the company's products and solving product JlrObl.:

an," cnng cu,tome be . the people ,n ,1 arc rc, ponsiblc for markcung the eomno. • This ,, a key pos1uon cause f h ,,..,) I roJuc1> and keeping customers sau,ficd "1th thc,r purchase s. So me o t e customer SCrvtc,

P I cf'cctll e 31 communicaung wllh callers to understand their iss"H rc presenuu,·cs art extre me y ,, . ._._ and they provide clear and concct ans1<m and soluu ons. Other cu~tomer_ service rcprescntaul't! arc much less effectiie, taling much longer to undmtand callers qucsuo~s and problems, 111d ,omctimcs pro11d,ng them 1111h inconcct or 1ncffcc111 c an,11ers a_nd solu uons. ~!~rs 10 these l011cr-perfonmng customer se rvice rcprescn1a111cs are unhappy wllh the co~pany s mab1lny to address the,r needs and arc less hlcl) to buy the product again or recommend ti 10 others than.,. callers spcakmg 10 the h1gher-perfonmng represen1a111cs. . . .

Because cmploiees in this pos, uon create 1<calth for Dell by retmmng its customers 111d ,clhng them addmonal products. the staffing pr.ic uccs re lated to the JOb are worth tn vesung ID. If De ll can ,mpro1e 115 staffi ng S)>tcm to recnut and select t.:11er customer service reprcstnta- U\CS " ho y. 11J be more effcc u,·c, the fi nn 1s c, cn more hlely to n:tarn us c ustomers, cxpcncncc belier 1< ord-of-mouth ad1 cnmng. and gene rate add111onal bu,incss. If the a1erage produ~>TI) of the customer sen 1cc rcprcscntau, cs also increase~ beca use o f the new staffing syste m, fev.tt customer sen 1cc rcprcscntau, es may be needed.

Is Stiiffing an lnvHtment or a Cost?

It ,s common for an organ1zauon's a>eragc cost per htre to be mani thou.ands of dollars. One stud) found that organ,,auons w,th 1,000 or more cmpl0)CCS spcnJ an average of 43 days and S4.2&S 10 fi ll an open pos,u on.68 Staffing oc11v111es can be cxpc ns11 c. Ho11e1cr, it's a mistake to view th, c.pense purely as a cost to be minmu,ed TI,e investments made ,n recruiti ng, staffing, and retairun& emploi ecs can lead to financial rctunts ,n tenns of higher pcrfonnance und productivity for the ftrm, stronger fulUrc leaders, lo1<er trnining cost,. and l011er recru iting and staffi ng cxpe nd11ures duc IO fc1< cr 1acancics. Just as effcc111e ,nve,tmcnts in marleung un<l advcnising can lead to a largc:t and more protitJble customer base, imc.stmcnts in sourcing and recruiting cnn generate a greater number of h1gher-qw1hty Job applicants " ho arc 1ntercs1cJ ,n Jo1n1ng and contnbuting to the company.

If there can be meaningful pcrfonnance difference, among II orl ers in the same j ob, swftnj 1s a good in1cstmen1. The best software developer at Apple ,s at lea,1 nine times as producu1c11 the a1erage software engineer at other technology companie, , Nordsuom's best snlcs associatts <ell at least eight limes as much as the a1erage sales assoc,atc at other depanment stores. E1en the best blackJack dealer at_ Caesar's Paloce in Las Vegas keeps player.. play ing a t least fi ve umcs 11 long as the a, erage Stnp dcalcr.69 Jn1esung tn findi ng and hmng abme average talent for tld posn,ons can result in a sizeable re turn on in,estmcnt even if a company needs to pay them at,oll tlhc2 market a1crage Even '" jobs of medium complexity, top performers have been fou nd to be

limes more producu,e than lo" e rf d 8 rf I th

· r pc onncrs, an 5 percent more productive than an a,cragc pc ormer. n c most complexJ'obs-thc b hold. c I JO s insurance <alc,pcoplc and account managers or examp c-a top pcrfonner ,s 127 70.,,,_, arc not pie- in-the- k be percent more producuve thJn an average performer. , ,,._

s y num rs Other rc<earch has h h ge"' crate even larger dollar value d·,ffcre s. own t at h1 ghcr-q uul11y_cmployecs can

nces '" pcrfonn,mce than m our 1ll ustrat1on.)1

C hJptcr 2 • Bll')inei~ and S1:iflins Strategics 41

In nJJ 1uon to 7 t:ooqmg proc.Jucuv11y, Marting ~y,tcm, ah o ha, c the potential 10 enhance

,n,pla) cc rctcnuoo - Thus. any benefits fro m belier staffing last 01 er the longer tenure of the "''' hU'C";' cmploymcnl \\llh 1hc fi nn . funhcr increasing Lhc company' s return on us s taffing

10,ci,.uucnt For most companies, m\c,ung a liulc more money rccru ilmg. hm ng. and retaining t-,cn~r cmplo)CCS I\ hkcl) 10 lead lo a good n:t urn 1f the new ,ystcrn n:~ ults 1n the conwitcnt hir- ing of ,1ar cm plo)'cc,

nus 1s not to ~.1.y that ~ta.fling cos15 arc un1mpon ant. Or1;a n1L.a11ons must ~mkc a b:ilancc bct"ccn ntalmg o long-run m\ c~tment and ach1cv1ng their shon -tcnn crn,t goals Mo, t compa- nies. parucul arly ,mailer ones, cannot pay unhmucd amounts for opumal staffing systems. To ,llw,lratl! the possible return on mvcsuncnt for a staffi ng syMcm, ~ sumc an organu.a t1on has to hire J ,000 salespeople in the next year and that II has a cho,c.c of 11<0 di fferen t >1affi ng systems Bot h S) >tems have s1m1lar. but not 1dcn11cal . capab,hues. One S)·,tem costs 5900,000 whil e another com $1.3 milh on Because hu man resource cxpcnd,turcs arc uea ted typically ns a cost. many managers aod bustncsses .-ould opt for the cheaper system Bu t 1< hich system is the belier !ltr:itcgu: choice? As~umc lhe laucr system generates employees who O.\eragc SI0,000 more in ,ab per emp loyee per year than the cheaper system and 30 percent of those sale, IS profi t. In the ,cry fi rst year, the $400,000 invc:.tmcnt in the more cxpcns,vc staffi ng system would yield $3 nu llion more 1n profit ($1 0,000 x 0.3 x 1,000), before taxes. Thi, simple example 1llus1ra1cs how dcch1ons may J1 ffor when viewi ng staf fi ng as nn investment rather than a, an expcn~e

Technology and a looser labor market can reduce the average hiring cost for an organi,a- uon However. the costs su ll amount to a considerable tn\·c strncnt for most companies. ThJ.t ) a.Id, the coSl of the system is not what is m~ t 1mponant. The most important issue is to deter· mine the return on in vestment. which we JUSI did with our prcv10us calc ufauon.s Unfortunalcly, many compan ies don't take the ume to quanu fy the cost- benefit trade-offs when II comes to their staffi ng demions. Max1miu ng the company's return on that in, cstment requires the staff- ing functio n to pnonu,e tts goal s and ma~e appropnatc trad e-offs among them

Should Our Stiiffing Function Be Centralized or De centralized?

Who , hould manage the staffing process? Th is is a key aspect of a r.rm·s staffi ng philosophy. f\ stafli ng funcuon is rtmrnlil.td when nn organi zation that has multiple business units has one , taffing unit rcspon>tblc for meeting at least some of the needs of all the company's bu,iness um1.s. Each business info nns the centrali zed staffing function when it needs to hire, and the si,ffing unit then sources, recruits, and prescrccns candidates. 1l1e local bu;,ness unit 1s still responsible for ma~,ng a final hiring decision from the group of candidates or finahsb sent to it by the , taffi ng unit.

Centralized stnffi ng is a suuauon in which all of an organizauon's >Laffiog activities arc chJnnclcd through one unit. Some times called :.liartd stn 1irt s ltnj]ing, it allows for greater economic, of scale. Multiple posiuons can be filled from the same candidate pool. and op111nal l11nng pr•ctices can be leveraged across the orgonizution. By centrahzing its staffing, a firm can qu,ek l) reallocate its resources to meet the company' s changing buS1ness priorities. Centrali zed staffing also tends to result in policies and procedures that provide some level of un iformity for the nrgun11 a11011. The fim1 can "brand" its image ns an empl oyer by ensuring consistency in ho11 the organ11u11on presents itself and its job opportun ities.

Dccentrallzed stamng occurs when the d,ffcrc nt business units o f a company eac h house thm 01< n staffing functions. Deecntrahzcd staffi ng gives uni ts more local1Led control over their rccru1 tmg and staffing ai.:uv1ucs. Give n local control. 3. recruite r can improve his or her under· stand ing of what type of person will be most successful in a parti cular un it. The structure also g11c, recruiters greater fleubility to source and recru it in the best way for tlic tr location and l•bor mMl cts. A deccn trali1.cd staffing fu ncuon ts also more responsive to the needs of htring managers because the staffing specialists repon directly to them versus someone at the com- pany'< hcadquancrs. However, with dccentrahzcd staffing, the firm's staffing mctncs arc less hkcly to be tracked or consolidated. This can result in the units duplicati ng the company's staff- ing cffons and result in higher costs. For example, a good appl icant who ultimately isn't hired by one unit might never be considered by another unit of the company despi te bemg a great fit.

Some organi,a11ons use a combinauon o f centralized and decentrali,cd ?pproachcs. Some areas of the staffing fu ncti on arc shared, and others are decenunhzcd and t.11lorcd to meet the

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42 C'h.Jrl:C't': • Hu,in<".., .utJ Suffing Slr.Urgi~s The combined approach (also called the hub llnd

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ne«I< vf each businc" unit or region 1,, Oe\lbilit) as well as standardlle the s••f' l!>at, • ·ach bu1o1nc1,'\ uni ~ nrig opproa,h) can ma"m",' nimi,e redundancies. and le,crnge technology IIIQ.

h I th· comf)3n, , mi b lllld i.._ nc, u....-d throug ou ' · J,n help staffing personnel u1ld a more credible -._ • cd approach can a~ . llld ....

prncuccs A com, ,in finn'> hinng managers by gmng them more hin ng discrch r~ ducn,c rclauon,h1p " 1th the Ott !hi.

d cnt.ra1 11ed ,trueturc they " ould ha,c un « a c I outsourcing different sourcing and recru

iting •u ,__,. ton, arc 1nerca,1ng Y • " 11rt- _,,~anw1 I to be,t ro,•1dc d1ffcrcnt services at a belier cost. This appl1lacb...,.

10 outside ,enJor, :iblc d P hie the organiauon 10 respond to different orchangin Cl! increase sU1rfing Ornbihty an en~ increased use of loca l cxpemse can also help a c! °"'ii in different countncs or rcgion/ \ooal labor markets. For example, in Mexico bus ~ t>cner understand and ~rull ~mrcfa1ionsh1ps Candidates arc often hired by a recruitc;~ • often conducted throl ugChpm;cru11ers must full) understand the business, company Value,bc,i the)• alreadv kno" n ina. · I d' fi d' ..,lld

. . II be ble to handle recru1ung challenges, inc u ing in ing talent in• n~ thcpos111onas"c as a . . . h I I ·••

. bl ""·d local nct\\ orks famtltartty wit cu tura nu ances and c• area Local rccnutcrs csla 1:til\: ' 73 ' <\f)Cn. enc~ with local la"s con make them an invaluable starring rcsourec.

ACHIEVING A COMPETITIVE TALENT ADVANTAGE

An organtzauon·s talent con create a compe1111ve advantage by innucnf1ng the quality or~ on,aruzauon's stock of talent or the supenonty of 1ts work _proccsscs. Resource stock 11d p,;,.css capabtlitics rcOect the differcncc b<tween hum~n cap11al advantage a~d human P<OCtsi ad, anta•e The organiation can generate human capital advantage by hmng and rctauu.111 outstllndtng people, and producing a stock of e<ceptional Lalent. • .

A human proces.s advantage 1s obtained when the finm s \\Ork gets done in a SUpc, nor way. The phenomenon can b< thought of as a funcuon of complex processes that evohl over umc as 3 re<ult of learn ing. coopcrauon, and innovation on the pan of employees. H11m11 process ad-anl3gcs arc \Cf)' d1rricult to 1m1U1tc.

15 For example, a finm mi~t have very Sfflat

and capable mana2crs (h1gh-qualtty talent stock) but f~1l to fully uultze thctr Lalents-~ t..><:ausc the pohtick1ng and 1nfigh11ng b<tween the finm s depanments are cxccsstvc (poor Wu\ processes). Thus, an organ1Zat1on achieves a compc1111vc talent advanLagc if it has a beuernod or employees \\ Orkmg w11h beuer pnxesscs.

Gl\cn that any compc1111ve ad, antage erodes over time. an organization must do '"hat itca to defend 1ts currcnt pos111on by regularly undenaking new strategic initiatives. These initiau1'CI can mclude broadening the company's product hoc or customer suppon (e.g., offering f~ tr low-cost traming to product users). patenung altemauvc technologies, further reducing costs 11111 pnces, and acquiring talen t ahead of the company·s present needs to keep them from being hind by potential competitors. Indeed. gcmng the right people on board before they arc needed ca dereoshcly prevent them from being hired by the compe tition and offensively ensure they~~ be available "hen the organizati on needs them. For example, Praxai r, a world wide provider c( mdustrial gasses, believed that it could not afford to wait for the finm' s future growth to fin1111CCill human resourecs. Knowmg the talent had to be in place before the company could be successful. II made acquinng new talent and dc,cloping emplo)ees a top spending priority.16 An CC00()1lllC downturn is often an excellent time for organi,ations 10 build up their talent reserves bccatll( the looser labor market makes II easicr to hire good people at an affordable cost. When an industry ii 10 an ups" 1ng. the labor pool becomes tighter, and the competllion for talent heats up.

Starbucks's Staffing Strategy

Ho~ can Stacbucks u,c >taffing to pursue Its gro"th and diffe rentiation <trategics and maintain Its coa>- pruu\e ad\~tag~., Starhucks needs 10 offer premium service ir it 1s 1o c~mmand premium prices roriu products Mamtammg a hi•h Jc,cl r . ,_. r .,, o customer >m ice while the company e,pands and opens hun"""' 0 new storcs "a big challenge B ol

its emploiccs. who II calls. ~ "::'""' the qualuy of its customer sm Ice depends on the err?"'

M<sionai, and pan ers. 17S tarbucks Ines to hire people "-hO are adaptable. sclf-motJ"tcd.

r- • crea1nc team players To Leep them comm111ed, Sl.trbucks . . . 1t1ch

helps it 10 retain ils val ed I lreats ll\ panners as 1n\c~1ors by also invc.sung 1n 1hcm. ~

u 13

ent The company's strong mission and values statement cmphaSIZCS

Chap1cr :! • Business and Staffing Str:llcg1~

eaung a rc~pcc1ru1 and po)IIJ\'C "-Orl env1ronmcn1. \lthich also ht'lps keep us panncrs )atisficd EHn ~~gh l\\ <Hhirds of 1~ cmplo)ecs \lt Ork pan-umc.71 Starbud:s's frequent appearance on 1hc~ist or fonw,r's Bc~t Pl..iccs lo Work rrnects ,ts reput.iuon as :in emplo)cr that carc.s about its pcoplt Th1((,.

100, helps 11 conunue _to n-crun good people. Starbocls offcn compct1U\IC "-ages und good hcnrfits. lnclm11ns comprchc.nsi\e hcahh benefits for full- :ind Pffl•Umc emplo)«s. 1u1uon reimbursement. \13C3·

1100, 3 JOt(k) plan. and stocl options The generous bcn<fits rcflce1 11, philosophy of creaung a n:spcct• rut l\nd po~iu,c \l,Ofk e~\lfonmcn1. help kttp IUmO\C'f" low, and ~naate a ready pool or expcrienccJ cmplo)C~ ~ho can ass1s1 m its expansion dfons

In add1tt0n lo ha\ mg a rcpulJUon for Lrcaung emplO)'CCS \ltell . Sta.mucks 1s al.so known for 11.s MX1al rt\p<)0\1b1hty m1ua1hcs. including OUtreJCh programs mto communnics bolh "-'here .stores opcr.uc and \\here 1ts coffee 1.s grown Da\c Pocc. cxccuthe \'lcC prcsic.Jcn1 for partner resources. explains. "We do

11 t,ccJUSC it's the right thmg to c.Jo .. Bui from my pcrspccthe n's mo II tcmlic rccrulung and rcten- iion 1001 ·40 By h\'mg ns values and mission .statement, Suubuck; 1s tl.blc to attract people who share us \ ldUCS

To bnng m ne\l, panners. Starbucks has 1mplemcn1cd 11 slllffing .strategy 1ha1 1s both ccnlralizcd anJ dcccntrJh1cd. AccorJing to Sheri Southern. vice prc.siden1 or panncr resources for Slarbucks North America. Starbucks's staffing strategy is. 1'0 have the right people hiring the right people: · fapcnenccd store managers ofien make initial contact with po1.tnual recruits in the stores and at job fatrs Word-of-mouth and the company's Web si1e also generate leads Hiring managers rccche hiring guiJehncs containing qucsuons that help rcvcnl whelhc-r recruits have the core competencies necessary ror 1hc JOb The company aho encourages rttruits to sclr-sclcct out or the h1nng process by clearly stal • mg m its hiring nd\'crt1Kmcnt~ and on its Web sne 1ha1 it wants people who arc adaptable. depcnd3bk. pJSSionatc team players Starbucks also maintains a d3taba~ or hundreds or thousands or onhne candi• da1es \I.ho ha\C lll'lswcrcd preliminary informalionll and skills-based quesuons This gt\CS the company a held siart on 1hc hinng process. allowmg 11 to Mafr more quiclly 11

Summary

43

A firm's talent ph1lo,ophy and business strategy in fl uence the human resource strategy that guides its staffi ng strategy. Its talent philosophy rcllccts how it thinks about its employees. Its busmcss strategics arc created to leverage the r.rm·s resources and capabilttics in ways that rcsuh in superior value creation compared to thctr competitors. Its competitive advantage depends on its ability to le"cragc the resources and capabihtics that derive from the talent it is able to hire and retain. How 11

positions itself to compete in the marketplace dctcnminc s the compc1i11vc advantage it needs to create and the starring strot• cgies II needs to pursue to acquire and retain the appropriate talent. A company's choice and execution of its slaffing strnt· egy influence the number and types of people it hires. and thus its abili ty to maintain a competitive Lalcnt advan tage as a re sult of its human capital and processes.

Takeaway Points

I . Ir a firm seeks 10 achic\e a com~ith·e advantage. it.s staffing stra1cgy ~hould suppon its business slratcgy Different stra1eg1cs require ~irfcn:nt t)pcs or employee,. A cost-leadership s1r.11egy requires train.ible and ncxiblc cmployccs \lo ho arc able 10 rcx.-us on shorter-term production objccthcs and ll\'oid Y. asle. and who arc concerned about production costs. The gool in this case is to dc,clop a rompc:1itive ad\•antugc based on opcratiorul exceUencc. A d1frmntiation strategy based on innovation requires employ- ees \I.ho fit the lirm's innov:itin~ cuhurc. A company pursuing a \l')('Cial1zaLion nrn1egy based on customer intim3Cy \I.OUld need to hue ndaptable. active lcnmer1 wi1h good people nnd cus1omer rclJ· uon11 !-ik1ll((,, and emotional resilience under prcs((,ure

2. The rc.sourcc -bascJ \'icW or 1hc firm proposes that a l'ompany's resources and competencies can produce a susmined compc11t1 vc

advanl3gc by creaun~ value ror customers by lo\l.enng costs. p~ v1d1ng ,omclhing or unique nluc. or some combination or the t\l. O Becau.sc the talent resources created by suffing can be vn.luabk. rare. immuablc. and nonsubstilulllble. staffing has the potential to create 3 compclllhc :1dvantage for :i firm. Acquiring the right 1'11· ent 1s not enough. ho\\C\Cr. The company mu,t be appropriately organiud 10 take foll ach'antagc. or its talenl resources.

J. An organitauon \I.OUld U)e job-oriented staffing \I.hen it needs 10 fi ll • specific Job opening. It would pur>uc talent-oriented stllffing "hen labor Dllltkets on, tight and good recruits arc hard to find. or to oddrc5s anticipated skill gaps in ad,ana, of ae1ual needs.

4. A lirm can achk~\'C a human capital lldvantngc by hiring a stock or quo.hty 1alcnt and retaining outstanding people. A human process ut.lvnntage occur~ when lhc fi rm's "ork gels clone in a supcnor

i I

Discussion Questions I. \\lul Y(' I.hr~ fflfl:)I 1mpo,unl ('lhial pnoorlo thJl )OU fo:I

lY't'WLllK'llb sJ'K.,ulJ sihat to ,n ttl'Ul.) ('If thctr ,;;uffing ph1low- ~C"' Wh, .,

!. WhJJ. a,,~ dtfT~c N'tv,('(11 trc:1t1ng emplo)tt) as as\ctS :inJ lb IR\CSIOC"" Whrn ,~ II J.pproJ)OJl(' for w, orgamuuoo lo treJI cmplo~t'O 3..\ ln\ NON"" \\ hen IS II uppropnaie for 311 otllfll/JtlOn to trc':ll JQb :lf'rbc:ll\b lnd emplO)r'CS ~ lb~LS ...

.\ SuJ"'P,bt ,ou "'(TC' 1n ch~ of t't'l"'llllllng and staffing lhc ~ft· ,,.~ i=n~OC"CI'\ v.ho ...,oukt ...,ork for Goc,glc Do )OU thml.. lhJt

Exercises

I. Sl/TJ.U'K) fa,rrur h.mn 1 small group of four 10 fi,c Mu<knu.. l.knllf) ~ busm«="') th.u )OU could ~ \\'hat type of bu~mess \IOUIJ )OU prop(Kt'" \\ tu!. busmos ) lrJICg) v. ould )OU follow ., \\lul sufftng wa.1cg.u:s "'ould ~01.1 U}C lnd "'h)'' Ho\l, does the rc,ourtt•b.l..-.aJ '~"' 1nfonn )OUI lhm~mg ..,

1. O/VftJ/IJ \ IJMttr £-rrrrur Wudmg 1nJI\ 1du~I) ur m a smJ.11 group. l'tff'3d the chlptc-r ,'lgl't('ttC on Surbud.s and Jddms the foUov.mf qucsuons. Be prepJTCJ 10 ,hJrt ) OUr w,sv,cn 1.1.11h the cl.1.s.5 3ftcr 20 nunu1r-s a. \\'bal suffing mucs "' ou ld crtJIC lht b1ggCS1 oh)t:1clC'S 10

Surbucks"s abthl) 10 cxennc Its £10"'th and spcoaJ1LJIIOO Str'3:lcp~"'

C\S[STUDY

s~tll\.o rt·pl.K'(' or f('lllR uilcnt. :mJ pur!tue PfOJC'll\e or" ,taffing It ,., ,d~ unron lllt 10 addre\..; "hJt I.:, els or \t. hich ~ ,houlJ bc sou~h• and ~ h1rh Job, ,ho~ld be focused on, ., • ~ "hl'lhi.'r \taffing \ hould be ,1cv.cJ lt'I an ime~tmcni or :t c0:1111 shoulJ be C't'nirahtN or dccentralw:-d -,

1 rcmr.im hl..e Google should hire ~Oll\\an: e ngineers •,tti ,~alb II nccJs or tram them 10 dr, elop those skills? Why? It:

-'· In "hat \i tuauons "Nld pos1uon-onen1C'd staffing be pr,.rcrable1o t.1kn1-oncn1C\J staffing"

5. L1>l lhc cosls and bcner.lS of ha'ln~ on in1<mal Maffing ftq,. Torn h.st lM co\t :ind bcncfits of ha, mg an external Maffing fi \\'tut art lhe u-ade-offs bct"c-rn the 11,1, 0 Jpproaches1 Olli&.

b. Whal ~ould )OU r<eommcnd S1arbuc:b do 10 o'crtomc tae obstacles ) OU 1dcn11ficd?

J. Dti'tlop Your Sk,1/$ fu·trc,st : Thank of an organi.tauon lhal )oa currrnll) ,ux~ for or hJ\e \\Orkcd fo r m lhc pasl as )OU~ pktc the ··~fea.\unng Your Fum's Climate for D1, el'lity" aueu,. mt"RI in the [k\elop Your SL1lls feature How well do you tllat the organuauon' s chm:ite-for-d,,cr\lly score renecu hs tab philosophy?

INTEGRATING MCDONALD'S BUSINESS, HUMAN RESOURCE, AND STAFFING STRATEGIES People are McDonald's mo,t 1mponan1 asset. The com- p.1n} 's success depends on Lhc 5.ltjsfocuon of its cus1omcrs, "h,ch begins "1th " orLm "ho ha;c the atutudes and ab,h- Ue< rcquiml 10 "orL err.c1e ndy and provide good customer >cr\1ce To e.ccute 11> gro,-th strategy, McDonald's has 1denur.ed people a,, one or 11S three global corporate strJle- g,es. McDonald '; claims that as an employer, it wan ls "lo be the b.:st cmplo)cr tn each comm umty around the "orld.'-32 It also mal:es a "people promise" to 11s emplo)CCS thal ""e ,alue )Ou, )Our gro11th. and i our Contnbuuons .. !J llS fi1c "people pnnc,plcs" rcn«1cd by 11s human resource strategy are respect and recogn111on. 1alue, and leadership bcha11ors, compe11u,e pa) and t>c:ner.ts; learmng, de,eiopment. and pe r- >onal p o'-'lh. and cnsunn_g that emplo) ccs h.1,c 1hc resources needed 10 gc1 the Job do nc.5-1

McDonald 's has C:\ccutcd 11.S opcra11onal C!<Cellcncc S11"31- cgy 11e ll by tracJ..,ng Ley tnd1carors or product and sc" ice quail!) , speed. and accuraci . The company has also ,denufied IIS people pracuce1 and approaches 1ha1 , ub<tanualli impact

the finn ·s 1umo1er, producll " llY, cu<tumcr satisfoction , SAie,, and pror.1ab1h1y. nus has allo11cd ii 10 de\'c lop o business model that emphas11es not only financial and operational rac- tors but also people foc tors that improve the company's resulu by improving emplo)ce comm11men1, retent ion, productivity, and customer loyalty.85

Because ilS business slrategy relies on providing custom· ors qual11y, cleanline<s, qu,ck sc" ice, and va lue. McDonald's " orks hard al hmng people "ho 11,1111 10 excel in dtli\'er- 1ng ou1;1andmg service. Many of its restaurant emplo)· ees an: lcenagers, and McDonald\ is their first employer. The company tries 10 rernrn and hire the best people, re1ain them by offenng them ongoing ITJming,86 and then promole from "llhm to fill its manage n ol positions. To ensurt llut I' JS rccru,ung the ngh1 people. the company has idenufied imponant skills and behaviors 1ha1 " looks for in applican~. McDonald 's has fo und that 1hc hc,1 way o f hiring qualllY crew members is to ad\'en1sc inside the restaurant and auroct loc,l people and/or friends or exist in~ employees. McDonald's .Jso

rc,ruit_., al Jocnl JOb ccntc~ anJ career fmN , u1o1ng hirin g m:iic - nJI \\ 11h u di:Jr mc~,ngc l.ir~ctcd at 11;; intended audience \ McDonJld' , CEO Steve Ea,,1crbrook says, "Jr you get the

; oplc part n £hl , the rc,1 .,,11 folio" "87

Questions J. Ho,v 11ould you de<cnhc McDonald 's bustness s1rn1cgy?

What arc the fou ndation~ of ll~ compc:1111,c advan1agc (,\hat arc 1hc ~ourccs of lb success)?

semester-Long Active Learning Project

You should hii,e a hst of jobs and companies lh:u ) OUr 1eam v. 111 hJ\e access h> for the project You now need to decide "'hich JOb and orgamtation 10 use for the semc~ter prOJCCI and begin collC'<'t• ing 1nform:111on on the co mpany. IIS business strategy and compcu • 11,c ad\antage. and how it current ly sources. rC<'rull s, and selects (or the po)11ion you 1dcn11ficd You a lso need to 1dcnUf) ho1,1, the position 1s !ltrateg,c for Lhc company an some way Before the nc,1 c lJi, , you should confi rm that )OU 1,1, 111 ha,c occcss 10 one or 11,1,0 Job C.\pcn s and solid ify the job and organ izauon your team wi ll U!.C for the proJCCI

Specifically. ) OU need to include lhe foJ101,1,1ng m )OUr rcpon 1. A brief ,ummaf) of the organua11on. us business s1ra1cg) . and 11\

cuhurc

Chap1cr 2 • Busmc'l>, :ind Staffing S1 r:Jte&1cs 45

2. Huw has McDonald ' s ahgncd ll> busmess, human resource, and staffin g ~tratcg1cs'.'

J, What arc some possible 1alcn1-n:la1cd th reats that could cat away at McDonald's compct iuvc advant~ge? Would higher turnover or a ught labor marJ..et in which ll 1s d, f. ficult 10 ri nd talented people be a problem? What "'ould you recommend th e com pany do to marntaan its com pcu - u,c ad,an tagc O\Cr the ncxl fi ve ycar!t'!

2. An e,planJuon of "hy the pm1uun you chose 1s )tratcg,c for l~ company (Why should aucnuon be gt\Cn to improving ho" 11 1s stallcJ" Whnt are the 1mphca11on.s of having low ve~us high per- formers in 1hc JOb11 Dcscnbc the strategic context of your future pro- po~ for rccnuung nnd sclccung for thlSJ~" hat multi ru1urc hires be able 10 do to help Lhc com~y c,CCtJtc us business strategy?

3. Responses 10 c::ach of the nine !.lrateg1c ,1::affin{! dec1s1ons pr~n1cd in Table 1-6 and a jusuficauon for each of )Our rccom mcnda11ons. II ,.r a good ulr'a 10 uad ,Ji~ appl,rd rcut al.ug,imrnts fo r 1l1t rrJI of 1hr r/,apr,rs to gu,de ,·our r,uarcl, and ,c/r1111!, how , our JOb apuu n11gl11 pro, ,dr w,fut 1nfonntJt1011 for futurt u n ,o,u of 1hr prOJl'( t

Case Study Assignment: Strategic Staffing at Chern' s Sec 1h<: appcnd1, a1 1hc bad, of lhc bool fo r this C;be :o.1udy ass1~nmcnt

Endnotes

"'Cart"'Cr Center.'' S1arb11rlo.J rnm. w\l.v. .Marbucl..s com/aboutu<j,} Jobccnler .a,p Wetx•r, G , "Prcscning t he Starbucl s' Counter Culture." 1VorJ..forrr Managtm,,u. September 7. 2011. httpJ/1,1,\\v. " orLtorcc com/nniclc/20050201/N1:.,VS02/J02019989 "St3t bucks Doubhng A~ia Pacific Staff," Fastrruual rom, rrbrun1y 19, 2013. http,1/w" w.fa<tca.sual com/an,clc/20$51 51 S1.1Jbuc1'.!i•doubl1ng-As1u-Pacific -s1aff Weber , "Preserving lbc Stnrbucks' Couo1er Cuhurc " Cor-:lnnJ, M, V .. "My Golden Ruic." 8u,111tH 1.0, December I. 2005. http ·//money ,cnn com/maga z1neslbusinch2/ bu,me<>2_archlle/1005112JOl /8364598.'indC\ him. Ccn1cr for Adv31K'C'd lluman Resource S1ud1cs, '"Time, Inc.:· hrSl'ECTRUM (March- April 20!).I): 4. hllp1/www.ilr comcll. <du/cahrs/rcsc:arch/pubslhr>pcclrumiuploaJ/HRS~OI pdf Hanky. D . " Values Arc Priceless a.t QVC." Taltlll Alanagrmrnl Maga:111t, June 2012: 3S-41 Poncr. M. E. Comptt,twe A.d~•ClJltage: Cre,umg mid S1uta11w1g S11J•l'nor Ptrforma11a, New York: Free Press. 1985. TJ) lur, ~1 S . and Colli ns, C J , "Organilation:il Recrui1mcn1 En hJncmg 1hc Intersection of Research aJHJ Prxticc."

In G L Cooper and E. A. Locle (eds ), /11d1urr,a/ and Orgw11:.a11011at Ps)clrotou . \Vl1at Wr Kno w A.bout Tlirof") & l'rarrirt, Oxford. UK. lllackwell Business, 2000. 30+-330

JO Barney, J.. "Firm Resources and Su sto.mcd Compct1u,c Advantage." Jo11rna/ ofMwiag,m,nr. 17 ( 1991 ): 99-120: ll:imey, J . and Wrigh1. P. M . "Oo llccoming a Str.uegic Portner The Role of Hum:in Re-sources in Gaining Compctiuvc Ad,an1ngc ... H 1u11w1 R<'source Ma11agt mem (Spring 1998)· 31-46.

11 Wnght, P .• Mc Ma hJn, G .• and MeW1l1i3ms, A., "ll uman Resources and Sustained Compc:Uthc AJ,:mt.ngc: A Rcsourcc- BMC'd Pe-rspcc1ivc," lnttnrationat Joumal of Human RtJo urrt Ma11ag ,mt<11, 5 (1994)· 301- 326

12 Barney. "Finn Resources and Su~taincd Compcuu,c AJvan1agc"

13 Taylor and Collins. ··organitational Recruitment ··. Phillips, J M. "Effects of Realistic Job Prc,·1e1,1, s on Muluplc OrgamLJUon.al Outcomes. A Meta-Anal) sis," Ar adtnrv of ,l/a11ag,m,nr Jorm,a/, JI ( 1998): 673~90.

14 Grant, L , "Happy Workc~. Uigh Returns,·· fortw1t, January 12. 1998· 81-95

15. Ta) lor and Colhns. "Organitauonal RccrunmcnL ..

46 ~Cf ; • Bu~~ JJ1J ~tJffin~ StrJIC'!!t1."'

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r,orl, fm,. llo,!on . \IA ll;unnl Bu,,nc,,s SchNI Ptc-, 199S.

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Rn<w<, I/"""&'"""'· 36 (1997) c9-J7. D<lo,uc & Touchc. UP. CtnJJVt& SNJrrho/drr Va/u, n.ro.gh P,oplr 1hr H11man Cq,,:al ROI Stud, • ..;.,,. Yori<. D<lomc & Touch<. UP . .:!002. Trc>c) . \L an.I \\ ,avnu. F. --C:U>lom<r lnomxy :ind Other Vllh.r Dtsoph""-. Hanurd B•n,,,..rs Rm,-. 71 (1993) Sl-9.J

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ll'orl.forr,. 81 (~lay :!001) l 6-J1 33 BOIi) and Schne,a . - ~C' .... HR Role:\ to Impact Organ11JllonJI

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35 J!ICObscn. D . "6 Big Mergen Tiu! Were K1llc:d by Cullun: (And How IO Stop 11 From Killing Youn).- Globoforr, . SC'ptc mbcr 2 6 . 2012 . h 11 p ·// \tt ww globoforc e com/ gfblog/20 I Yf>.b!g-magcrHhal-~ cn:-l1 IJ<d-bj <ullurc/

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37 Vander~k) . A .. .. , n.rnk Google\ R,ouning M•eh1ne: C,\ ~ I/on,- . F<brulll) 1J. 2011. hup/11,ch fonunc.rnn c:om/20 I 11JY.Wgooglc-rccrwung/

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JO llut-b.inl. E E . ··o,. m ny LcJdcr,h1p by the \ u lmrlemrnung D1\er-.ny Management Strategies for \ t , Return l'" 1n,C'"1mrnt (ROI) Performance," N"'~~ c,J ,lir J lufr1C11/w ral o,,t lopmt,u CPmu, Ma.y 25

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45 Dyer. 1.. .• and Holder. J., .. A S1ra1<g1e Perspective of H Resourtc Managemcn1:· In I.. Oyer (ed.). Humao R """' Monagrmtlll £, ob ,ng Rolts and H~sp01u,b,l1t1ts. Wastu~ DC. Amcnean Society for Personnel Adm,mstraLlon/Bu~';; N, uonol Affain . 1988. 1- 35

J6 "Hinng.'" Prps,Cocom, 20 13. h11p://www.Jl<psicoo,w Caroffl/Appl 1can1-Help/Our•H1nng-Process.h1m1.

J 7 :»ghcn. J A . Dr.isgo" , F , Schmn. M • Handler. L. Pnli"'1, A . Margolis. A . and VellS(jue,. R ... P, ycholog,ca1 T ..... on lhc Jn1r rnet New Problems. Old Issues," A1Pttria. l's•~hologu1, l9 (200l) 150-162.

-18 Turner. S M . D<~ten. S T . Fo,. H R . and Rct<!, G IL ..APA"s Gu1d<hncs for Tc.st User Quahficauons An e.,_,, Sum11131)'." Amrnran Psycloologw . 56 (2001) 1099-J 113

J 9 Re) nolJs. D , --EEOC and OFCCP Guidance on Dcfioq 1 Job Applicant in the In1cmc1 A~c· SIOP"s Responit, • 11, /ndusma/-Orga111:,,11onal Pn ·rhologut, 42 (2004): 127-llt

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l I Ch:unbcn, E. G , Foulon. M . Handrtcld-Joncs. H .. Haibo. S M . and \fichacls. E G Ill . "111< \Var for TaJ~• lit McK111se)' Q11artrrl), 3 ( 1998): 44-57.

l 2 Uaull. L , and ~kshoulam. I ... Managing Two Fii, of S~ Human Resource Managcmcnl." Acadtmy of Mana1ttttt11 Nmrw. 13 ( 1988) 11 6- 128. Leplk. D. P . Liao. H , Cblllf Y , ru,d Ifard<n. E . .. A Conceptual Re ,•fcw or II- Resource Manage ment S) \ lems rn Strategic Human Rt50lltt Mana1,'tmcn1 Re>carch:· In J. M:,nocchlo (ed.), R,JNCI 111 PnJonntl a11d flwna,1 Hno11ru s M tmagm1tnl, Vol 25, S1amfo1d. CT JAi Press. 2006, Hu.mg. T. C . 'The EITC11S GI Lml3£C Bctv. ccn Bu~me~\ anJ llumJn RC'sou rre ,\ lwgcmcff S1111eg,«." Pmo1111rl Rt"'"'· 30 (1001)· 132-15 1.

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l7 SnrJ111. S. R , .. 3M Lool , 10 a 11~1S 10 Transfonn Its Tcmp."OJ WorHorcc Program," U'oriforrl' M1..111agcmt 111 0 11/mt, MJJ'Ch 1f1R

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59 Sa.11'1.. , 8 . '11\c Future or 1hc Workpl.icc No Offict", llt~UJIIC'" 1n C) bc'r~pJCC.•· A8Cnt 11J r<Nn, AUGUSI 27, 2007. ~lip /lat... n<" s go com/WNl,tO') ' •d=Jl2 I 725&p.,gc= I

60 RcoJ. S . ··Sc1ec11ng Top Talent at Proc1cr & Gambk." DD/ Wmld. 1012. hnp """'\to dd1" orld com/DOIWorldlmrdia/ddi• ,umm11/lOl 2/PG .. Tcch10Sclc:c1Tak n1..DDISumm112011 pelf

61 McDonald's, " Hamburger Um,crsn) McDonald'5 CcnIcr or Tnumni; E,C'C'lknce," hupJl\li\li\tt aboutmcdonJld, romlmcd.' corpora1c_carcers/tta1 nl ng_and _dc .. r lopmcnt/hamburgc-r _ UOl\t.'r)tl)' hlml

62 Ibid 63 Solomon, C. ~I , "Stellar R«n11ting for a Tight Labor M.ul..c1:·

ll'orl.forrr. 77 (Aug\111 1998) 66-71 6-1 ~hoc,. A , "ld1osyncrnt1c Jobs m FonnaJ Orgam,a11ons."

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67 N,\CE. "1009 Rccru,t.ing Benchmarks SUJ'\C')'." Oc1obtr 1(X)I-), http//"'"' \I, nacc...,cb org/Rcscarch1Rttru1tr.~(X)9_ Rrcnuung_Bcnchmarls_Sun c) a_1ip,

6S Dooney, J • "1:.Accuuve BnC'f Wh11 Factoo lnnueocc CO\t•pcr- 11 ,rcT' Soru-ryfor 1/uman R~.Jourre Ma,ragrmrnt. 2011 hllpJI "'"" shrm o rgl rei earch/ bcnchm>rls/documcn1s/coS1•pe r· h1n:%10art,clc_final pelf

69 ~1.mkm;. M . Bini. A , 311d ROOI . J . "Mal.mg Star Team, Out of Star PIJ) ers." llan ·ard 8 1,srntll Rtutw. 9l. I (Janu:11)- Fcbrua') 2013)· 7+-78

70 lluntcr. J E . Schmidt . F L . 311J Jud1csch. M K . .. lnd1\ldu>I D1ffc1"Cnccs in Ou1pu1 Vanabilny as a Funcuon tif Job Complcxll) :· Jm1n111/ of Applird Psycholog_, . 15 ( 1990) 28-4~

71 llooJ n:au. J W .... ULlhty Anol)>IS ror D:m,ons m Human RC'Ollm:Mwia~ment ... lnM D. DunncucWldL \I llough(<ds). lltu11.lboo'-. of l,ultulnlll wul Orgam:JJllonal Psyrlw,log) , Vol 2. PJlo Allo. CA Con<ulting Psychologists Pn:s<. 1991. 601-617

72 l'lulhp,, "Effects of Realisuc Job Prc,1e..., s on Mulupl~ Organ1 t a1ional OulL'omcs"

Ch,1ptcr 1 • Bu~mc)'J and S1aI ling S1r,negics 47

13 Dono, Jn. K M , "llu1IJ a Winning Global Rccruiung Str.ucgy." /altt1I Ma1U1g1mr,11. Jul)' 11, ~0 12. hllplltalc n1mg1 com/ .u11ck ~./\ 1e\li lbui ld-::s•\li mmng-global-rccru1tinS•Mmtcg)IJ

7J Lodo. A A • anJ W1hon, M C . " I lumJn Resource S)•!ilC'nt'- arnJ Sus1Jmcd Compcuthe Ad\'anl age A Compc1enC)· B~ J>enpccU\e," Aradtm) of Managtmm1 Rtu~u . 19 . .1 (199·0

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76 11:im,. II R . Hu,ehd. M A . ond Becker. B E . --s1ra1cg1c Human Rc\Ollrce Management at Pr;u3.1r," l/11mcm RtJourrt

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81 WC'bcr, "Pre.scn ·mg lhc Starbud.s' Counter Cuhurc •· 82 "MeDoruld's People V151on:· \1cDonaJd's Corpor:u,on. \l,"'\I,

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85 ~loore. D , l..anda. A ,:ind Nclson. S . -- 1-0 Ps)chologi,1.,- Roi<> in HR Sys1cms," (ndu.11r1al-Or gam:.a11onal Ps)rhologu ,. Jul y 2001. hllp./lsiop org/uplb,ck,ssucsffipJulOl/17b3mcy asp,

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