Lecture 1: Talent in a Globalizing World

This lecture intends to establish the context required

to appreciate the nature of people development and
its contemporary importance in organizational and
national settings.
Note; People Development is also known as HRD in some texts.

People development or HRD involves procedures

and processes that purposely seek to provide
learning activities to enhance the skills, knowledge
and capabilities of people, teams and the
organization so that there is a change in action to
achieve the desired outcomes (see Bratton & Gold, Ch.10)
Context
The world of work and organizations is constantly
evolving and as a consequence the ways in
which organizations develop their people are also
changing.

 This evolution has occurred as organizations

have changed in size, purpose, structure,
philosophy, work design, technology and
relationships.
At the macro-level, people development has to
be considered in the context of the broad
paradigm shift to post-fordism, informational
economy, enterprise culture & competitiveness,
organizational restructuring, deregulation, labour
market flexibility etc (read Price, Ch.2 for the wider
context)

Furthermore, people development has been

examined in the context of learning and here the
practice and purpose of training and developing
people have grown in importance and scope.
The change in strategic pressures (briefly
discussed later) for organizations have led to
developments in training and learning technology,
role of external consultants, new perspectives on
knowledge and learning & an emphasis on
individual responsibility for learning.

 There have been two major shifts in the way

learning and people development is managed &
delivered;
- from training to learning moving away
from instructor based activity to selflearning as a process
- from HRM to SHRM making the strategic
link between people development and
achievement of organizational goals
The availability of more efficient and effective
alternatives (e-learning, distance learning,
individualized learning, coaching & mentoring,
workplace learning) means organizations can
plan for competitive advantage.
It should be noted that learning & development
also involves creating an educated and skilled
workforce for the effective functioning of the
economy, the competitiveness and wealth of the
nation.

 It is predicted that the future will see a world of

work based on skills (or talent) than
organizations.
One key related area which has underpinned the
shift to learning is the growing role of
stakeholders in the process.
Stakeholders have varying degrees of power and
influence, hold varying roles & values, use
different approaches, have different aims and
learning experiences.
The position of stakeholders has to be examined
in a contextual and cultural sense where not only
practices differ but also expectations.
Stakeholders are varied and they adopt or
represent contesting viewpoints. Stakeholders
can be employers, unions, employees,
customers, institutions (local & international), the
State, consultants, HR specialists, professional
organizations, investors etc

 The professional organizations (in HR CIPD)

are especially influential as they establish new
parameters and approaches (see Beardwell &
Clayton, P. 308-309)

In the past decade, investors have come to value

an organizations ability to attract and retain top
talent in that sector or industry.
What is Changing?

Changing concepts of work and talent

Global movements of talent and labour
Changing concepts of space and time
Commonality of problems and issues
Convergence of business systems, marketing,
advertising and use of symbols, tourism, lifestyles
Emergence of corporate business cultures
Global social movements
Dominance of MNCs and governance institutions
Rise of the flexible firm and atypical labour

The Search for Talent in a Globalizing World:

Environmental Influences
- increasing competitiveness (hypercompetition)
- globalisation of production & markets & power
shift to the customer
- the diffusion of the informational or knowledge
economy
- sustained advantage through talent(competitive
advantage)
It could be argued there is a shift for conceptual,
higher level concerns such as human capital and
corporate culture.
In this sense, treating employees as valued or
intellectual assets and coupling this with
appropriate reward systems are used to
maximise utilization of resources.
There is a focus then on the attitudes, beliefs and
commitment of employees to achieve
behavioural consistency.

 In this context, HRD becomes strategic and

proactive as recognizing & developing skills and
knowledge is imperative to sustaining competitive
advantage.
Guest (1987) advocates the following principles;
- integration of relevant employment into strategies
and goals of firm
- high employee commitment to practices & goals
- high quality staff & internal practices to achieve
high quality products & services
- flexibility in structure, employee functions & job
content so as to be responsive to change
Other attempts to make the link between HR and
business strategy usually emphasise the qualities
required for advantage to be sustained;
- internal resources must add value to the firms
activities
- they must be rare and preferably unique

- competitors should have difficulty in copying

them
- they must be unable to be replaced by
technology
The above criteria arise from human resources in
the form of skills, experience and expertise
(Storey, 1995 see Price, P.158)

The concern for HRD does not arise from an

altruistic concern for staff welfare but from a
realistic appreciation of the long-term contribution
toward business.
This aspect of soft HRM is linked with learning
and development as an investment in human
capital.
General Structural Issues in Delivery of PD Strategies
Commitment is lacking and uneven

 Aggregate expenditures by business on training

are inadequate (leading firms invest more
GE(4.6% of payroll)
Poaching is a disincentive for investment in
training
Accounting rules which treat it as an expense
and not investment
However, in recent years, ideas & practices
related to PD have moved beyond a narrow
conception of training.
There is an emphasis on a holistic view
integration of work and learning (viewed by
leading firms as the only strategy to cope with
change
Strategy and People Development

 In most formulations of HRM employee

development & learning form pivotal
components.
The investment in the skills of employees serves
as a litmus test for meaning change (Ashton &
Felstead in Bratton & Gold, P.318)
Of the bundle of HR practices required for a high
performance strategy, PD has a pivotal role in the
integration of practices to create an internal
labour market with links to structure & strategy
The emphasis on teams in business strategy in
turn warrants emphasis on learning (next
lecture)
With integration with business strategy in mind,
there is a focus on recruiting staff for the longterm and the involvement of line managers in PD.
At another level, McGoldrick & Stewart (in Bratton
& Gold P.319), identify leadership as a key variable

in linking strategy, culture & commitment of

employees.
The ILO model of high-performance working
also supports the leadership view which would
provide vision & sense of momentum and
direction.
However, the results are mixed in practice & PD
takes lower priority to marketing & financial
matters (Bratton & Gold, P.321)

Forming PD Strategies
Identifying the relationship between PD and
business strategy is simpler in theory than it is in
practice. Frequently, PD is a matter of rhetoric.
Torrington & Hall (in Price, P.161) categorise firms
into five groups on their approach to PD;

1. no focus on PD in terms of strategy mainly

small firms
2. firms in which there is growing awareness of
role of PD & its purpose is to match firm
strategy so as to have a fit in terms of
employee numbers, skills etc
3. firms in which relationship becomes two way
some ideas are initiated by HR managers
& there is some debate about the
implications of PD strategies
4. firms where the PD strategy is accepted &
people are seen as vital for competitive
advantage. Strategies are coherent &
comprehensive
5. firms where human capital becomes the
driving force in the development of strategy
great emphasis on skills and competences

 Where firms are genuine in their concern for their

people, PD focuses on certain strategic subgoals or second-order strategies (in Purcells
terminology see Price.P.162);
- resourcing for suitable people
- planning the redeployment of staff (or dismissal
depending on national context. The EU will be
different from the US)
- determining the cultural characteristics relevant to
a firms business objectives
- implementation would require planning for
socialization,
performance
assessment,
development & change programs to realise that
culture
- developing key skills for new products or
equipment includes consideration for externalinternal resourcing, training, formal education &
job rotation.

 As discussed earlier (see P.4) Guest (in

Price.P.162), advocates a circular relationship
between high levels of commitment with high
quality output to flexibility to strategic integration.
It could be argued that PD strategies are derived
from overall business objectives in the same
manner as investment or marketing strategies.
But the difference lies in the notion of
commitment.
Conventional management views advocate that
employees accept and believe in a firms goals.
And this is operationalised by the mission
statement which communicates the goals.
To minimize the risk of such a statement being
banal, conventional logic dictates that it is linked
with some performance measures (performance
management is a topic by itself)
The mission statement is also linked with first
order strategies (long-term focus, range of

activities,markets,
products)
which
has
implications for PD job security, career
expectations, industrial relations etc
In this respect, Japanese firms have traditionally
been successful in linking PD with business
strategies with an emphasis on people
principles ranging from selection to flexibility to
teamwork to single status (first class citizens)
Evaluating Strategy and Action
The last part of this lecture briefly looks at the
complications of translating strategy into action.It is
sufficient for our purpose to summarise the key areas;
- the surface neatness of strategy hides complex
organizational realities related to conflict, power,
resources etc.
- in practice there are unintended elements
surfacing emergent strategies (Mintzberg)

- difficulty in integrating business strategy with PD

owing to the diversity of processes, levels &
styles e.g., providing corporate HR strategies
which can be reconciled with different needs of
individual SBUs.
- Not all societies emphasise the rational school
of strategy formulation. There is also more
diffuse, emergent or evolutionary methods in
business planning.
- In some contexts, there is an absence of written
business strategies esp. in smaller firms
- The qualitative nature of HR & PD issues which
contrasts with the quantitative nature of business
plans.
References
1. Price, A (2001) Human Resource Management in a Business Context, Thompson
Learning
2. Bratton, J & Gold, J (2003), Human Resource Management: Theory and Practice,
3rd Edition, Palgrave
3. Beardwell, J & Claydon, T (2007) Human Resource Management: A
Contemporary Approach, 5th Edition, FT Prentice Hall.

Baldev S. Sidhu 2008