FACULTY OF COMMERCE

DEPARTMENT OF BUSINESS MANAGEMENT

DEGREE PROGRAMME: HUMAN RESOURCES MANAGEMENT

COURSE: STRATEGIC HUMAN RESOURCE MANAGEMENT

CBU 4213

LECTURER: MR NYATHI

QUESTION 4

What five imperatives, according to Michaels et al (2001), should companies act on if they are
going to win the war for managerial talent? [20 Marks]

Today’s highly competitive and uncertain business environment coupled with the requirements
of the knowledge society, the development of information technologies and changes in the
structure of labour force is a reality which poses new challenges for organizations and their
management. It is obvious that the quality of the human capital and the practical
implementation of the human resources development are the key factors of organizations
success and competitiveness. Organizations can hardly compete without highly skilled workers
and without the continual investment in the human capital. To have the right people in the right
places and in the right time is critical for any organization to achieve the competitive advantage.
Furthermore, the success of any organization depends strongly on having talented individuals.
Therefore, the ability to deal with talent and talent management (TM) effectively has been and
will be one of the biggest challenges facing organizations today. Organizations are beginning
to realize that talent is a core competitive asset and a key factor of organizations´ success. It
has become obvious that talent management is one of the key challenges to the organizations,
today and in the future.

It is better to regard talent management as a more comprehensive and integrated bundle of

activities, the aim of which is to secure the flow of talent in an organization, bearing in mind
that talent is a major corporate resource. But to understand the process of talent management it
is necessary to be clear about what is meant by ‘talent’ Thorn and Pelant (2006) define talent
as “someone who has the ability above others and does not try hard to use it. These people
excel with easiness and grace. A talented person has a certain aura in his/her ability that others
wish to emulate and from which lesser mortals draw inspiration”. Michaels et al. (2001, p. 3)
define talent as “the sum of a person’s abilities, his or her intrinsic gifts, skills, knowledge,
experience, intelligence, judgment, attitude, character, and drive. It also includes his or her
ability to learn and to grow potential for further development. To summarize the above
definitions the talent is mostly regarded as an innate disposition and ability to do something
well in a particular field.

McKinsey et al (1997), coined the phrase ‘the war for talent.’ Michaels et al (2001) identified
five imperatives that companies need to act on if they are going to win the war for managerial
talent. These are:

Creating a winning employee value proposition that will make your company uniquely
attractive to talent.

Organizations cannot continue to discuss or attempt to address “talent issues” in a vacuum.

Organizational culture plays a particularly important role in unleashing or constraining the
talents of individuals, and the fit between individuals, organizational strategy, tasks, structure
and processes, as well as the culture, are all critical in “winning” the global war for talent and
sustaining organizational competitiveness (Stahl et al., 2007). In an age of extreme diversity,
where many people no longer work where their employers can watch them or in jobs with
easily measurable output, organizations must use creative ways to bind their workforces
together (Cairncross, 2002). However, we argue that organizations' responses to these new
trends has been slow due to organizational inertia; existing business and mental models
developed in a different age; resistance to change; cognitive biases in decision making; and the
knowing–doing gap.

An employee value proposition (EVP) is the inimitable set of reimbursements which an

employee gets in return for the abilities, skills, competences and experience they bring to an
organisation. The emphasis is on what the company can offer to either existing or prospective
employees they accrue value from and that the package or offer would help to persuade them
to join or remain with the business. Employee value proposition is about bringing a definition
to what the company stands for and how it derives its uniqueness from its employees. It
comprehends the reasons why employees are motivated to work at certain organisation, such
as the inspiring vision or distinctive culture. When combined with other aspects of a business,
a strong employee value proposition will help to retain internal best performers and attract the
best external talent.

To create a compelling employee value proposition, one should understand existing

perceptions so as to develop a strong, realistic EVP, the organisation must first understand what
perceptions existing staff and potential employees have about the company brand and culture.
Determine key selling points, establish a cross-functional team to review the research results
and determine the aspects of your business that people value the most. Organisations can test
their EVP with existing employees and a sample group from the external market to see if it
adequately articulates why an individual would want to work for their company. Communicate
the message, once the organisations’ EVP has been defined, its best they find creative and
relevant ways to communicate it to the people they are trying to attract. Starting by conveying
it through all hiring channels such as company websites, advertising and the interview process,
so that prospective talent can determine if they would make a good fit for the business.
Consistently communicating a compelling EVP through branding, public relations and
marketing will also help the passive labour market form a positive perception of the value of
working for the company. Ensure alignment, existing employees are the organisations most
powerful source of advertising and play a key role in helping to attract talent with the right
cultural fit. To cultivate brand ambassadors, employees must see consistency in the image the
business sell externally and in the day-to-day reality of working for the company. Incorporate
the EVP into the company’s induction plans, reward and recognition schemes, internal
communications, policies and business plans, so that it is reflected in the way the company
conducts its daily operations. Review EVP annually to ensure that it continues to reflect the
changing employee experience. With an effective EVP, the organisation will have candidates
fighting to work for them. The hardest part will be choosing the best fit.

Company employee value proposition include HubSpot, “We’re building a company people
love. A company that will stand the test of time, so we invest in our people and optimize for
your long-term happiness.” At Nike, their employee value proposition is “We lead. We invent.
We deliver. We use the power of sport to move the world.” At Google they say, “Do cool things
that matter.”

Moving beyond recruiting hype to build a long-term recruiting strategy

Finding the right talent, at the right time, in the right place, remains an ongoing challenge for
organizations, particularly during the current global economic recession. Even when economic
growth returns, developments in technology alone will profoundly influence the level of
complexity in organizations and specific jobs. Work is also becoming relational, rather than
transactional, and an individual's abilities to build and sustain relationships, as well as the
organization's ability to build systems and processes to maximize those relationships for
business performance will be critical to competitive success. Employers and educational
institutions will need to restructure their organizations, jobs and revamp policies and
procedures to attract, develop and effectively manage and engage employees for complex and
relationship-driven work. In a talent crunch, it’s easy for recruiters and hiring managers to
focus on filling open slots. But that approach can give them tunnel vision when it comes to the
candidates who could be a good fit for other roles. Organisations need to move away from a
requisition-style talent strategy and build candidate-centric recruiting models (Kurt, 2015).

Using job experience, coaching and mentoring to cultivate the potential in managers

Managers cannot just sit back and wait and expect for new innovative employees with
leadership etiquettes to come to their organisation fully developed. They must actively identify
employees with leadership potential and then find ways to nurture and develop that potential.
Leaving talent development to chance isn’t a good option for any organisation, but it’s critically
important for business owners who are future oriented. Talent development requires a serious
commitment of both time and resources. As workers begin to retire or exit, the business loses
critical knowledge, and most businesses need to fill vacancies quickly rather than hobble along
during a lengthy outside search to find new leaders.

In order to improve and develop talent, managers can:

Professional Training

Formal employee training may be required to ensure competency and even excellence. The
company should create a knowledge-base of critical information and best practices to pass on
to new hires as they grow their team. This will be time-consuming at first, but it will pay off in
the long run. For many roles above entry-level, training manuals are as obsolete as time-clocks.
When the business hires experienced candidates, they will put their existing skills and
knowledge to work. At first, they will mainly have to teach them the particulars of their offering
and acclimate them to their company culture. If the business culture is healthy and other
employees believe in the product or service, this will happen almost organically through
conversations and regular interactions. As time goes on, the business can augment their
knowledge and abilities with business books, seminars, and access to e-learning on topics from
project management to demand generation. By simply reading one or two online articles per
week, employees can stay up-to-date with marketplace trends and new practices, strategies,
and tactics that others have found successful.

Coaching and Mentoring

Managers today are overburdened and no longer pass-on knowledge, skills, and insights
through coaching and mentoring. Organisations need to support and incentivize managers to
perform this work. Coaching may seem intimidating at first, especially for managers that have
little to no experience. But today’s employees demand more than just telling them what to do.
When company leaders are intentional about having the right conversations regularly take
place, employees can self-reflect on their accomplishments, and managers can support them in
achieving their true potential.

Strengthening your talent pool by investing in A players, developing B players and acting
decisively on C players.

According to DeLong (2017), only 10–20% of employees are A players, organizations cannot
afford to ignore their B players. Companies' long-term performance even survival depends far
more on the unsung commitment and contributions of their B players these capable, steady
performers are the best supporting actors of the business world (DeLong 2017). B players are
not necessarily less intelligent than A players, but may be less ambitious or want work-life
balance, and provide stability and counterbalance the ambitions of the high-performing
visionary A players (Vijayaraghavan, 2017). Acting on C performers is only part of managing
a talent pool effectively, companies need to be just as deliberate in managing A and B
performers. The A performers create significant value for their companies directly and through
their leadership of others. The objectives with A performers are to accelerate their development
and to do everything you can to retain them. The B performers are the solidly contributing
majority of a company’s managerial force. Collectively, they are critical to the success of the
business. They should be developed and affirmed so they realise more of their potential and
feel valued for their unique contributions.

In due course, A and B performers require the same types of developmental actions, including
to accelerate their professional development through a steady stream of challenging job
assignments, encourage their involvement in tasks outside their jobs so they are connected to a
broader network and build a stronger sense of belonging, assign mentors to nurture their
development and to help retain them, offer candid feedback about their weaknesses, and praise
them for their distinctive strengths and recognise and reward their contributions. One challenge
for executives is determining how to allocate a company’s scarce resources among the A and
B performers. High-quality coaching, seasoned mentors, generous compensation, promotions,
and highly visible roles are often in short supply, so they need to be invested in those people
with the highest performance and potential.

Having a pervasive mindset, which is central to this approach – a deep conviction shared
by leaders throughout the company that competitive advantage comes from having better
talent at all levels.

Forces within and across national borders will continue to present organizations with an
increasingly diverse workforce and challenges to traditional employment and employee
management models. This more complex environment will require new leadership capabilities
and companies will need to find and develop a whole new generation of leaders. In addition,
many organizations have not adapted their structures and processes to respond to the differing
nature of the employee–employer relationship. Peter Cappelli (2003), notes that employers may
face difficult challenges in recruiting and hiring people in the future but that those challenges
will stem not from a shortfall in the number of workers caused by demographic shifts but from
fundamental changes in the nature of the employer–employee relationship that contribute to
the difficulty of retaining employees. He suggests that employers work to improve their
inadequate human-resource capabilities rather than worry about a non-existent shortage of
workers. This empowers the HR people to create an impact on the organisational strategy and
also provides a link between talent management and strategy. Talent management specially
needs to be projected as a differentiating strategic capability that can offer real and substantial
competitive advantage. For HR to prove that talent management can be of strategic importance
to organisations, the critical relationship between the two must be proven. Talent management
specially needs to be projected as a differentiating strategic capability that can offer real and
substantial competitive advantage. The creation of differentiating strategic capabilities
signifies the relationship between business strategy and human resources. Human resources are
the primary sources of strategic advantage basing on Resource based view (RBV) of an
organisation. This view has gained significant ground among HR practitioners as basis of
models for formation and structure of resources.

Unlike other non-contingent capabilities that can be developed easily and cannot contribute to
a large extent towards the development of a sustainable competitive advantage, differentiating
strategic capability such as strategic HR through talent management can. However, for human
resources to qualify as potential sources of competitive advantage they should prove their
worthiness basing on the VRIO framework. The employee as a resource should have, value -
the resource has to contribute substantially and add value in his/her area of expertise, the talent
has to be rare - unique in terms of skills, knowledge and abilities in order to qualify as rare,
the talent has to be appropriable - the extent to which the resource is owned by the firm, the
resource should be inimitable - such that the resource cannot be replaced even after the
competitors having spotted the same and cannot be substituted - this means that the resource
cannot be substituted by the rival firms and that there is no match for the talent. There are not
many things in the business environment that can fulfil all the above criteria and offer unique
competitive advantage except human resources and that is under the jurisdiction of talent
management. There is also a need to understand the strategic intent of the organisation before
defining strategic capabilities.

However, Jeffrey Pfeffer (2001) has doubts about the war for talent concept, which he thinks
is the wrong metaphor for organizational success. He believes that, fighting the war for talent
itself can cause problems. Companies that adopt a talent war mind-set often wind up adoring
outsiders and downplaying the talent already in the company. They frequently set up
competitive zero-sum dynamics that make internal learning and knowledge transfer difficult,
activate the self-fulfilling prophecy in the wrong direction (those labelled as less able become
less able), and create an attitude of arrogance instead of an attitude of wisdom. For all these
reasons, fighting the war for talent may be hazardous to an organization’s health and
detrimental to doing the things that will make it successful.

According to its authors, “the war for talent” rests on three critical assumptions: individual
ability is largely fixed and invariant there are better and worse people; people can be reliably
sorted on their abilities and competence; and organizational performance is, in many instances,
the simple aggregation of individual performances. What matters is what individuals do, not
the context or the system in which they do it (Pfeffer and Sutton, 2006)

Taken together, all of the factors discussed above form a rapidly changing, incredibly complex
and diverse global environment for companies to attempt to attract, develop, motivate and
retain talent. Assessing these trends, executives and consultants see a global war for talent
persisting into the foreseeable future. However, recent research shows that the nearly single-
minded focus on individuals that is endemic to companies' strategies for fighting the talent war
often backfires and reduces, rather than enhances individuals, teams, and organizations. The
best evidence indicates that natural talent is overrated, especially for sustaining organizational
performance (Pfeffer and Sutton, 2006). In analyzing McKinsey's research (Chambers et al,
1998; Axelrod et al, 2001), Pfeffer and Sutton (2006) identified deep flaws in that the claimed
cause of performance (managing talent) was measured after its effect. They also assert that
despite claims in The War for Talent, Top grading, and numerous other books on hiring the
best people, the talent mind-set is rooted in a set of assumptions and empirical evidence that is
incomplete, misleading and downright wrong” (Pfeffer and Sutton, 2006: 90).

In conclusion, despite today's global financial circumstances, the capacity of organizations to

attract, develop, motivate and retain talent will remain a critical strategic issue for the 21st
century's knowledge economies. From unrelenting global demographic and economic forces to
the increasing mobility of people and organizations, the business environment is more
demanding and complex. There are knowledge-driven industry transformations as well as
cultural changes within businesses and in individuals' views on career life cycles. These require
higher cognitive capabilities; extensive relationship management and leadership skills; and
new human resource, development and career processes. There is a much wider diversity in
culture, gender, working generations and modes of employment than ever before. These can
be sources of advantage to be leveraged or conflict to be managed.

REFERENCES

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