Read attached Six Principles of Effective Global Talent Management and answer the following questions
please answer the following questions (one-paragraph answer to each question):
a. With regard to the information in this cultural profile, what confirmed what you already know about this culture?
b. With regard to the information in this cultural profile, what surprised you?
c. Based on this cultural profile, what recruiting strategies will be especially important when attracting high-quality talents from this country (based on the reading and lectures of this week)?
Length: In total, about 3 paragraphs (single-spaced, 12 fonts, about one-page long).
Read attached Six Principles of Effective Global Talent Management and answer the following questions please answer the following questions (one-paragraph answer to each question): a. With regard to
Six Principles of Effective Global Talent Management WINTER 2012 VOL.53 NO.2 REPRINT NUMBER 53212 Günter K. Stahl, Ingmar Björkman, Elaine Farndale, Shad S. Morris, Jaap Paauwe, Philip Stiles, Jonathan Trevor and Patrick Wright Please note that gray areas reflect artwork that has been intentionally removed. The substantive content of the ar- ticle appears as originally published. COURTESY OF SIEMENS ONE OF THE BIGGEST CHALLENGES facing companies all over the world is building and sustaining a strong talent pipeline. Not only do businesses need to adjust to shifting demographics and work force preferences, but they must also build new capabilities and revitalize their organiza- tions all while investing in new technologies, globalizing their operations and contending with new competitors. What do companies operating in numerous markets need to do to attract and de- velop the very best employees so they can be competitive globally? To learn how leading multinational companies are facing up to the talent test, we examined both qualitative and quantitative data at lead- ing companies from a wide range of industries all over the world. (See About the Research, p. 26.) The range of talent management issues facing multinational companies today is extremely broad. Companies must recruit and select talented people, develop them, manage their perfor- mance, compensate and reward them and try to retain the strongest performers. Although every organization must pay attention to each of these areas, our research convinced us that competitive advantage in talent management doesnt just come from identifying key activi- ties (for example, recruiting and training) and then implementing best practices. Rather, we found that successful companies adhere to six key principles: (1) alignment with strategy, (2) internal consistency, (3) cultural embedded- ness, (4) management involvement, (5) a balance of global and local needs and (6) em- ployer branding through differentiation. How Companies Define Talent We use the term talent management broadly, recognizing that there is considerable debate within companies about what constitutes tal- THE LEADING QUESTION What steps can global companies take to ensure that they recruit, de- velop and deploy the right people? FINDINGS Dont just mimic the practices of other top-performing companies. Align talent man- agement practices with your strategy and values. Make sure your tal- ent management practices are consis- tent with one another. Internal consistency in talent management practices in other words, the way a company’s talent management practices fit with each other is key, as companies such as Siemens recognize. Following talent management best practices can only take you so far. Top-performing companies subscribe to a set of principles that are consistent with their strategy and culture. BY GÜNTER K. STAHL, INGMAR BJÖRKMAN, ELAINE FARNDALE, SHAD S. MORRIS, JAAP PAAUWE, PHILIP STILES, JONATHAN TREVOR AND PATRICK WRIGHT Six Principles of Effective Global Talent Management LEVERAGING YOUR TALENT: TALENT MANAGEMENT WINTER 2012 MIT SLOAN MANAGEMENT REVIEW 25 26 MIT SLOAN MANAGEMENT REVIEW WINTER 2012SLOANREVIEW.MIT.EDU LEVERAGING YOUR TALENT: TALENT MANAGEMENT ent and how it should be managed. 1 (See The Talent Management Wheel.) Since the 1998 publication of McKinseys War for Talent study, 2 many managers have considered talent management synonymous with human capi- tal management. Among the companies we studied, there were two distinct views on how best to evalu- ate and manage talent. One group assumed that some employees had more value or potential than others, and that, as a result, companies should focus the lions share of corporate attention and re- sources on them; the second group had a more inclusive view, believing that too much emphasis on the top players could damage morale and hurt opportunities to achieve broader gains. The differentiated approach. Although the practice of sorting employees based on their performance and potential has generated criticism, 3 many companies in our study placed heavy emphasis on high-potential employees. Companies favoring this approach fo- cused most of the rewards, incentives and attention on their top talent (A players); gave less recog nition, financial rewards and development attention to the bulk of the other employ ees (B players); and worked aggressively to weed out employees who didnt meet performance expectations and were deemed to have little potential (C players). 4 This approach has been popularized by General Electrics vitality curve, which differentiates between the top 20%, the middle 70% and the bottom 10%. The actual definition of high potential tends to vary from company to company, but many factor in the em- ployees cultural fit and values. Novartis, the Swiss pharmaceutical company, for example, looks at whether someone displays the key values and behav- iors the company wants in its future leaders. The percentage of employees included in the high-potential group also differs across companies. For example, Unilever, the Anglo-Dutch consumer products company, puts 15% of employees from each management level in its high-potential cate- gory each year, expecting that they will move to the next management level within five years. Other companies are more selective. Infosys, a global technology services company headquartered in Bangalore, India, limits the high-potential pool to less than 3% of the total work force in an effort to manage expectations and limit potential frustra- tion, productivity loss and harmful attrition. The inclusive approach. Some companies prefer a more inclusive approach and attempt to address the needs of employees at all levels of the organi- zation. 5 For example, when asked how Shell defined talent, Shells new head of talent management re- plied, I dont have a definition yet. However, I can assure you that my definition will make it possible for any individual employed by Shell at any level to have the potential to be considered talent. Under an inclusive approach, talent management tactics used for different groups are based on an assess- ment of how best to leverage the value that each group of employees can bring to the company. 6 The two philosophies of talent management are not mutually exclusive many of the companies we studied use a combination of both. Depending on the specific talent pool (such as senior executive, technical expert and early career high-potential), there will usually be different career paths and de- velopment strategies. A hybrid approach allows for differentiation, and it skirts the controversial issue of whether some employee groups are intrinsically more valuable than others. What We Found As we looked at the array of talent management practices in the 18 companies we studied, we asked interviewees why they thought their companys in- dividual practices were effective and valuable. Their responses helped us to formulate six core princi- ples. We recognize that adopting a set of principles rather than best practices challenges current think- ing. But best practices are only best in the context for which they were designed. The principles, on the other hand, have broad application. Principle 1: Alignment With Strategy Corporate strategy is the natural starting point for thinking about talent management. Given the com- panys strategy, what kind of talent do we need? For example, GEs growth strategy is based on five pillars: technological leadership, services acceleration, en- during customer relationships, resource allocation and globalization. But GEs top management under- stands that implementing these initiatives may have ABOUT THE RESEARCH This paper is based on a multiyear collaborative re- search project on global talent management prac- tices and principles by an international team of re- searchers from INSEAD, Cornell, Cambridge and Tilburg universities. The research looked at 33 multinational corporations, headquartered in 11 coun- tries, and examined 18 companies in depth. We selected the case compa- nies based on their superior business performance and reputations as employers, as defined through Fortune listings and equivalent rankings (e.g., the Best Companies for Leadership by the Hay Group and Chief Executive magazine). The case study inter- views were semi-structured, covering questions about the business context, talent management practices and HR function. We interviewed HR professionals and man- agers and also a sample of executives and line manag- ers in an effort to understand the ways companies source, attract, select, develop, promote and move high- potential employees through the organization. A second stage of research consisted of a Web-based survey of 20 companies. The survey contained items on six key talent management practice areas (staffing, training and development, appraisal, rewards, employee rela- tions, and leadership and succession) and the HR delivery mechanisms (including the use and ef- fectiveness of outsourcing, shared services, Web-based HR, off-shoring and on- shoring). Ultimately, we received a total of 263 complete surveys from the Americas, Asia-Pacific, Europe, the Middle East and Africa. SLOANREVIEW.MIT.EDUWINTER 2012 MIT SLOAN MANAGEMENT REVIEW 27 less to do with strategic planning than with attract- ing, recruiting, developing and deploying the right people to drive the effort. According to CEO Jeffrey Immelt, the companys talent management system is its most powerful implementation tool. 7 For instance, to support a renewed focus on technological leader- ship and innovation, GE began targeting technology skills as a key development requirement during its annual organizational and individual review process, which GE calls Session C. In all business segments, a full block of time was allocated to a review of the businesss engineering pipeline, the organizational structure of its engineering function and an evalua- tion of the potential of engineering talent. In response to Immelts concern that technology-oriented man- agers were underrepresented in GEs senior management ranks, the Session C reviews moved more engineers into GEs senior executive band. Tal- ent management practices also helped to drive and implement GEs other strategic priorities (for exam- ple, establishing a more diverse and internationally experienced management cadre). In a similar vein, a recent survey of chief human resource officers of large multinationals highlighted another approach to aligning talent management with the business strategy. One HR director wrote: We have integrated our talent management pro- cesses with the business planning process. As each major business area discusses and sets their three-year business goals, they will also be setting their three-year human capital goals and em- bedding those human capital goals within their business plan. Achievement of these goals will be tracked through our management processes. 8 Strategic flexibility is important, and organiza- tions must be able to adapt to changing business conditions and revamp their talent approach when necessary. For example, Oracle, the hardware and software systems company, found that its objective goal-setting and performance appraisal process was no longer adequate. Management wanted to add some nonfinancial and behavior-based measures to encourage people to focus on team targets, lead- ership goals and governance. This necessitated a significant overhaul of Oracles existing perfor- mance management systems, investment in line management capability and overall changes to the mind-set of line managers and employees. Principle 2: Internal Consistency Implementing practices in isolation may not work and can actually be counter productive. The principle of internal consistency refers to the way the compa- nys talent management practices fit with each other. Our study shows that consistency is crucial. For ex- ample, if an organization invests significantly in developing and training high-potential individuals, it should emphasize employee retention, competi- tive compensation and career management. It also should empower employees to contribute to the or- ganization and reward them for initiative. Such combinations of practices will lead to a whole that is more than the sum of its parts. There should also be continuity over time. As one manager at Siemens remarked, What gives Siemens the edge is the monitoring of consistency between systems: the processes and the metrics must make sense to- gether. For example, one Siemens division has tied everything related to talent management together in such a way that internal consistency among the vari- ous HR elements is virtually guaranteed. The division recruits 10 to 12 graduates per year, assigns the new hires to a learning campus (a network for THE TALENT MANAGEMENT WHEEL The Talent Management Wheel divides the important elements of talent management into two: talent management practices (shown in the outer ring) and guiding principles (the inner ring). The six guiding principles apply equally to each of the individual talent management practices. Compensation and Rewards Talent Definition Development and TrainingPerformance Management Retention Recruitment and Selection Talent Review Internal ConsistencyManagement Involvement Employer Branding Through Differentiation Balancing Global and Local Needs Cultural Embeddedness Alignment With Strategy Talent Management Practices Guiding Principles SLOANREVIEW.MIT.EDU 28 MIT SLOAN MANAGEMENT REVIEW WINTER 2012 LEVERAGING YOUR TALENT: TALENT MANAGEMENT top new graduates within the division) and assesses them at the development center. Later, the desig- nated employees go through a leadership quality analysis and review procedure, including feedback and performance appraisal, and become part of the mentoring program led by top managers. The whole process is continuously monitored through reviews and linked to the companys reward systems. BAE Systems, the defense and security company, places a similar emphasis on consistency. From the time prospective managers arrive at the company, or upon their designation as a member of the leadership cadre, they are continuously tracked for development purposes. Drawing upon data from 360-degree ap- praisals, behavioral performance feedback and executive evaluations of their input to the business planning process, managers participate in leadership development programs that target the specific needs revealed by the leadership assessments. The emphasis on consistency is also paramount at IBM, which works hard to assure that its people management systems are consistent across its sub- sidiaries. To achieve this alignment, IBM combines qualitative and quantitative data collected quarterly to ensure that its practices are consistently intro- duced and implemented. The company also conducts an HR customer satisfaction survey twice a year to learn how employees are responding to the programs and to detect areas of employee dissatisfaction. Principle 3: Cultural Embeddedness Many successful companies consider their corporate culture as a source of sustainable competitive advan- tage. They make deliberate efforts to integrate their stated core values and business principles into talent management processes such as hiring methods, leader- ship development activities, performance management systems, and compensation and benefits programs. 9 For example, whereas companies have traditionally fo- cused on job-related skills and experience to select people, some multinationals we studied have expanded their selection criteria to include cultural fit. These companies assess applicants personalities and values to determine whether they will be compatible with the corporate culture; the assumption is that formal quali- fications are not always the best predictors of performance and retention, and that skills are easier to develop than personality traits, attitudes and values. 10 IKEA, the Sweden-based furniture retailer, for ex- ample, selects applicants using tools that focus on values and cultural fit. Its standard questionnaire downplays skills, experience or academic credentials and instead explores the job applicants values and beliefs, which become the basis for screening, inter- viewing, and training and development. Later, when employees apply internally for leadership positions, the main focus is once again on values in an effort to ensure consistency. IBM likewise subscribes to a strong values-based approach to HR. Not only does IBM hire and promote based on values; it regularly engages employees to ensure that employee values are consistent throughout the company. It does this through ValuesJam 11 sessions and regular em- ployee health index surveys. The jam sessions provide time to debate and consider the fundamentals of the values in an effort to make sure that they are not per- ceived as being imposed from the top. We found that a strong emphasis on cultural fit and values was common among successful global companies. In evaluating entry-level job applica- tions, Infosys is willing to trade off some immediate skill requirements for a specific job in favor of good cultural fit, the right attitude and what it refers to as learnability. In addition to evaluating the appli- cants college record, Infosys puts applicants through an analytical and aptitude test, followed by an exten- sive interview to assess cultural fit and compatibility with the companys values. Rather than selecting employees for attitude and cultural fit, a more common approach to promoting the organizations core values and behavioral stan- dards is through secondary socialization and training. Standardized induction programs, often accompa- nied by individualized coaching or mentoring activities, were widely used among the companies that we studied. We found that leading companies used training and development not only to improve em- ployee skills and knowledge but also to manage and reinforce culture. For example, Samsung, the Korea- based semiconductor and mobile phone maker, has specifically geared its training program to provide its employees worldwide with background on the com- panys philosophy, values, management principles and employee ethics, regardless of where the employ- ees are located. Managements goal is not to freeze the existing culture but to have an effective means of sup- The furniture retailer IKEA selects applicants using tools that focus on values and cultural fit. SLOANREVIEW.MIT.EDUWINTER 2012 MIT SLOAN MANAGEMENT REVIEW 29 porting change. Several years ago, Samsungs top management came to realize that in order to become a design-driven company, it needed to let go of its tradi- tional, hierarchical culture and embrace a culture that promotes creativity, empowerment and open com- munication. By encouraging young designers and managers to challenge their superiors and share their ideas more freely, it hopes to make the transition. In addition to inculcating core values into young leaders, successful companies often make focused ef- forts to adapt their talent management practices to the needs of a changing work force. 12 Consider the grow- ing interest in healthy work-life balance. As the number of employees seeking balance between their personal and professional lives has increased, more companies have begun to offer flexible working ar- rangements in an effort to attract the best talent and retain high-potential employees. For example, Accen- ture, the consulting and technology services firm, has a work-life balance program that was initially aimed at the career challenges faced by women, but it has since made it available to men as well; among other things, the program features flextime, job sharing, telecommuting and flybacks for people working away from their home location. 13 The program has al- lowed Accenture to significantly reduce its turnover rate among women while also increasing its number of female partners. Internal surveys show that team productivity, job satisfaction and personal motivation among women have improved substantially. Although the number of companies offering such programs is still relatively small, the ranks are growing. Consistent with an increased emphasis on val- ues, some companies have introduced what might be called values-based performance management systems: They assess high-potential employees not only according to what they achieve but also on how they reflect or exemplify shared values. BT, the British telecommunications giant, has imple- mented a performance management system that looks at employees on two dimensions: the extent to which they achieve their individual performance objectives, and the values and behaviors they dis- played to deliver the results. The combined ratings influence a managers variable pay. Other compa- nies, too, are realizing the importance of balancing financial success with goals such as sustainability, compliance or social responsibility. Principle 4: Management Involvement Successful companies know that the talent manage- ment process needs to have broad ownership not just by HR, but by managers at all levels, including the CEO. Senior leaders need to be actively involved in the talent management process and make recruit- ment, succession planning, leadership development and retention of key employees their top priorities. They must be willing to devote a significant amount of their time to these activities. A.G. Lafley, former CEO of Procter & Gamble, claims he used to spend one-third to one-half of his time developing talent. He was convinced that [n]othing I do will have a more enduring impact on P&Gs long-term success than helping to develop other leaders. 14 However, that level of executive commitment is rare. In a recent survey of chief human resource offi- cers at U.S. Fortune 200 companies, one respondent lamented that the most difficult aspect of the role was creating a true sense of ownership among the se- nior leaders regarding their roles as chief talent officer; recognizing that having the right people in critical leadership roles is not an HR thing or responsibility, but rather, it is a business impera- tive and must be truly owned by the leaders of the respective businesses/functions . Creating this type of mindset around leadership and tal- ent is the biggest challenge I face. 15 One of the most potent tools companies can use to develop leaders is to involve line managers. It means getting them to play a key role in the recruit- ment of talent and then making them accountable for developing the skills and knowledge of their em- ployees. Unilever, for example, believes in recruiting only the very best people. To make this happen, top- level managers must make time for interviews, even in the face of all their other responsibilities. Line managers can contribute by acting as coaches or mentors, providing job-shadowing opportunities and encouraging talented employees to move around within the organization for career development. The responsibility for talent development extends beyond managers. Employees need to play an active part themselves by seeking out challenging assign- ments, cross-functional projects and new positions. 30 MIT SLOAN MANAGEMENT REVIEW WINTER 2012 LEVERAGING YOUR TALENT: TALENT MANAGEMENT SLOANREVIEW.MIT.EDU However, our survey finds that job rotations across functions or business units are not very common. Al- though HR managers in our survey saw value in job rotations and new assignments for career develop- ment, many companies lack the ability to implement them. A possible explanation is the tendency of man- agers to focus on the interests of their own units rather than the whole organization; 16 this narrowness may hinder talent mobility and undermine the effec- tiveness of job rotation as a career development tool. A McKinsey study found that more than 50% of CEOs, business unit leaders and HR executives inter- viewed believed that insular thinking and a lack of collaboration prevented their talent management programs from delivering business value. 17 Principle 5: Balance of Global and Local Needs For organizations operating in multiple countries, cul- tures and institutional environments, talent management is complicated. Companies need to figure out how to respond to local demands while maintain- ing a coherent HR strategy and management approach. 18 Among the companies we studied, there was no single strategy. For example, Oracle emphasized global integration, with a high degree of centralization and little local discretion. Matsushita, meanwhile, fo- cused on responsiveness to local conditions and allowed local operations to be highly autonomous. A companys decision about how much local con- trol to allow depends partly on the industry; for instance, consumer products need to be more attuned to the local market than pharmaceuticals or soft- ware. 19 Furthermore, rather than being static, a companys position may evolve over time in response to internal and external pressures. Our study suggests that many companies are moving toward greater inte- gration and global standards while simultaneously continuing to experience pressure to adapt and make decisions at local levels. For example, Rolls Royce has global standards for process excellence, suppor ted by a global set of shared values and a global talent pool approach for senior executives and high potentials. At the same time, it has to comply with local institutional demands and build local talent pools. Clearly, the challenge for most companies is to be both global and local at the same time. Companies need a global tem- plate for talent management to ensure consistency but need to allow local subsidiaries to adapt that template to their specific circumstances. 20 Most companies in our sample have introduced global performance standards, supported by global leadership competency profiles and standardized performance appraisal tools and processes. Activities that are seen as less directly linked with the overall strategy of the corporation and/or where local insti- tutional and cultural considerations are viewed as crucial (for example, training and compensation of local staff ) continue to be more at the discretion of local management. At IBM, for example, foreign subsidiaries have no choice about whether to use the performance management system; it is used world- wide with only minor adaptations. But subsidiaries may develop other policies and practices to address local conditions and cultural norms. While locally adapted approaches create oppor- tunities for diverse talent pools, they limit a companys ability to build on its global learning in hiring, assessing, developing and retaining top global talent. This requires more integration across business units. One company in our study didnt coordinate hiring and development efforts across its different divisions, so even though it had diverse talent pools, it wasnt able to take advantage of cross-learning opportunities. Shell, on the other hand, has come to embrace HR policy replication across divisions over innovation. Companies that find a balance between global standardization and integration and local implementation have the best of both worlds. They can align their talent manage- ment practices with both local and global needs, resulting in a deep, diverse talent pool. Principle 6: Employer Branding Through Differentiation Attracting talent means marketing the corporation to people who will fulfill its talent requirements. In order to attract employees with the right skills and attitudes, companies need to find ways to differenti- ate themselves from their competitors. 21 P&G, for example, was in one year able to attract about 600,000 applicants worldwide of whom it hired about 2,700 by emphasizing opportunities for long-term careers and promotion from within. The companies in our study differed considerably in how they resolve the tension between maintaining WINTER 2012 MIT SLOAN MANAGEMENT REVIEW 31 COURTESY OF SHELL a consistent brand identity across business units and regions and responding to local demands. Shell, for example, uses one global brand for HR ex- cellence and several global practices or processes for all its businesses. The brand highlights talent as Shells top priority; each business is then able to take that global brand and apply it locally. This means that rather than having all branding efforts coming from corporate headquarters, each subsid- iary receives its own resources to build the brand in accordance with the local market demands and the need for differentiation. Intel takes a different approach. It positions many of its top-level recruiters outside the United States to ensure that the Intel brand is promoted worldwide. For instance, Intel has recently set up a large produc- tion facility in Vietnam. To staff the operation, the company sent a top-level HR manager from its Cali- fornia corporate office to build local awareness of Intel as an employer. Hiring top talent, no matter where we are, is top priority for Intel, the manager explained. To accomplish this, Intel has become in- volved with local governments and universities to advance education and computer literacy. Such in- vestments may not pay off immediately, but they put roots in the ground in countries that see hundreds of foreign companies come and go each year. Infosys has also taken significant steps to in- crease its name recognition, improve its brand attraction and fill its talent pipeline by combining global branding activities with efforts in local com- munities. For example, the company initiated a Catch Them Young program in India that trains students for a month; the students are then invited to work for Infosys on a two-month project. In rural areas, Infosys offers computer awareness pro- grams in local languages to help schoolchildren become more comfortable with high-tech equip- ment. Although not initially directed at recruitment and branding, the program has been an effective strategy for enlarging the pool of IT-literate and Infosys-devoted students in India, which may even- tually make it easier to find talented software engineers. Infosyss global internship program, called InStep, however, is central to the companys employee branding effort: It invites students from top universities around the world to spend three months at the Infosys Bangalore campus. It is part of an ongoing effort to make the company more at- tractive to potential candidates outside of India and to tap into the worldwide talent pool. One way companies are trying to get an edge on competitors in attracting talent is by stressing their corporate social responsibility activities. Glaxo- SmithKline, the pharmaceutical giant, offers an excellent case in point. The company capitalizes on its employment brand and reputation through reg- ular news releases and media events at key recruitment locations. Former CEO Jean-Pierre Garnier stressed the importance of GSKs philan- thropic activities in increasing the attractiveness of the company among potential recruits and provid- ing an inspiring mission to the employees: GSK is big in philanthropic undertakings; we spend a lot of money with a very specific goal in mind, such as eradicating a disease. [O]ur scientists, who are often very idealistic, follow this like an adventure. It can make the difference when they have to choose companies they might pick us because of the effort we make to provide drugs to the greatest number of people regardle