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Theory and Conceptual Article

The Cultural Evolution of Talent Management: A Memetic Analysis

Stephen Swailes1

Abstract Using the concept of memes as cultural transmitters and replicators, this article explores the origins of a talent meme and the subsequent evolution of talent management (TM). The sociogenesis of TM is traced through historic developments in management thinking. The rise of individualism in the late 20th century created the conditions for the birth of TM, and the proliferation of the meme since birth is analyzed. The meme reproduces through its psychological appeal and the logic of itself, and the article uses an established approach to reveal cultural rather than rational explanations for TM. Five reasons for the attractiveness, survival, and replication of the talent meme in business organizations are identified. They are salience with business conditions, lack of a competing meme, ambiguity, complexity reduction, and enhanced control over a powerful group. Understanding more about the psychological attractors attached to the talent meme forms part of an expanded research agenda.

Keywords talent management, memetics, innovation diffusion, organizational change

Introduction

As a distinctive approach to human resource management, the phrase “talent manage- ment” (TM) first appeared in the 1990s (Casse, 1994; Istvan, 1991) and now attracts a strong practitioner and research following (Lawler, 2008; Silzer & Dowell, 2010; Sparrow, Scullion, & Tarique, 2014). Although it can take many forms, it typically

1University of Huddersfield, UK

Corresponding Author: Stephen Swailes, The Business School, University of Huddersfield, Queensgate, Huddersfield HD1 3DH, UK. Email: [email protected]

664812HRDXXX10.1177/1534484316664812Human Resource Development ReviewSwailes research-article2016

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concerns the identification, development, and deployment of employees deemed to have above average potential to contribute to an organization. The primary variation involves a broadly elitist approach toward identifying high-performing and high- potential employees and providing them with a differentiated management experience to that enjoyed by the majority workforce. This may be complemented by a robust approach to managing employees whose performance falls below expectations which is necessary, in a “hard” TM mind-set, to liberate the talents of employees that poorly performing managers are suppressing (Michaels, Handfield-Jones, & Alexrod, 2001).

The idea of memes was introduced by Richard Dawkins (1976) as an analogy to genes and the ways that genes replicate and survive through time, and this article applies meme theory to explain contemporary interest in TM. Memes can be thought of as social cultural phenomena such as ideas or fashions that, like genes, adapt, repli- cate, and survive throughout time and which help to explain cultural transmission (Blackmore, 1999). Some memes are short-lived, others survive over long periods. They pass from brain to brain often with some level of variation occurring each time transmission occurs. The receiving brain becomes host to the meme and helps to prop- agate it. Religions, arguably, are memes that have adapted over a long time and which derive their survivability because they provide answers to some difficult questions about human existence.

There is considerable potential for the application of meme theory in organization development. Specific applications include advertising (Williams, 2000), mergers and acquisitions (Vos & Kelleher, 2001), marketing (Pech, 2003), the cultural evolution of the firm (Weeks & Gelunic, 2003), innovation (Voelpel, Leibold, & Streb, 2005), and busi- ness process reengineering (O’Mahoney, 2007). Defined originally as “a unit of cultural transmission” (Dawkins, 1976, p. 192), memes are elements of culture that transmit ideas and are passed on especially by imitation (Blackmore, 1999, p. 43). The replication of these cultural units helps to explain cultural evolution (Aunger, 2007); in this case, why some organizational cultures adapt to work with a talent mind-set. Management innova- tions that are successful, in the sense that they are widely adopted, are memes that “infect” organizations and are transmitted by and through, among other things, networks of execu- tives, consultants, gurus, and conferences (O’Mahoney, 2007). There seems little doubt now about the usefulness of the idea of memes to understanding cultural transmission because they contribute to the distinctive culture of organizations that is itself created by the enactment of combinations of memes (Weeks & Gelunic, 2003).

The theoretical treatment applied in this article builds on previous studies which have focused on coming to terms with the meaning of talent (Collings & Mellahi, 2009; Gallardo-Gallardo, Dries, & Gonzalez-Cruz, 2013; Nijs, Gallardo-Gallardo, Dries, & Sels, 2014; Tansley, 2011); understanding TM practices and their effects (Gallardo-Gallardo & Thunnissen, 2016; Thunnissen, Boselie, & Fruytier, 2013); and mapping the dominant theoretical frameworks (Gallardo-Gallardo, Nijs, Dries, & Gallo, 2015). An underlying assumption of the talent literature is that talent (typically defined as high-potential current or future employees) is scarce but when found, devel- oped, and deployed in pivotal positions makes a disproportionately high contribution to organizations.

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A feature of the literature, however, is an ongoing debate about the meaning of tal- ent and TM. For the most part, talent is assumed to be a relative quality of individuals such as ability or mastery (Gallardo-Gallardo et al., 2013) and is judged in relation to context. Talent is usually equated to a scarce combination of performance and poten- tial (Gallardo-Gallardo & Thunnissen, 2016) although inclusive approaches to TM see talent as something that all employees possess to some extent (Swailes, Downs, & Orr, 2014). However, debates about the etymology of “talent” (Adamsen, 2016; Tansley, 2011) or contemporary definitions of talent (Nijs et al., 2014) do not matter much for the present article because of its interest in explaining the spread of a meme for which ambiguity among its hosts is a key characteristic. What matters here is the cultural attraction to “talent” as a concept in business discourse rather than its various mean- ings to scholarly or practitioner communities because TM is essentially the manifesta- tion of the ways in which the talent meme plays out in the host organization. Related literatures on strategic TM (Sparrow et al., 2014) and global TM (Schuler, Jackson, & Tarique, 2011; Scullion & Collings, 2011) can be seen as mutations of the original meme.

Thunnissen et al. (2013) noted the top-down nature of TM and called for new per- spectives to widen its theoretical framework. Gallardo-Gallardo et al. (2015) identi- fied the resource-based view, international human resource management including global talent management, ways of assessing talent, and institutionalism as the domi- nant frameworks used to-date, and their treatment of TM as a phenomenon is pertinent here in emphasizing that practice is running ahead of theory (see also, Cascio & Boudreau, 2016). Although scholars have attempted to map the TM field, the literature contains little consideration of TM as anything but a rational choice. In a notable exception, Iles, Preece, and Chuai (2010) considered whether TM displays features of management fashions but do not explain its appeal and call for research into the factors behind its adoption. Cappelli (2009, 2010) shows how firms have used management development, and by implication historic approaches to TM, in response to changing market conditions but does not consider TM directly. The point of departure for the present article, therefore, is to trace the evolution of the specific notion of talent not the broader concept of management development and also to provide a fresh perspective on innovation transmission.

Of course, TM attracts a range of theoretical perspectives to explain why it occurs (e.g., organizational institutionalism), why it should work (e.g., resource-based view and workforce differentiation), and its effects on participants (e.g., organizational jus- tice), but the present article shows that they do not fully account for its popularity and to do so requires a consideration of TM over and above rational adoption. Memetics provides a unit of analysis that helps to understand the cultural transmission of ideas and thus the cultural evolution of organizations (Weeks & Gelunic, 2003). A memetic appreciation offers a complementary angle to the existing theoretical frameworks sur- rounding TM; in particular, providing a deeper understanding of why it is adopted.

Although the aim of the article is to show how and why TM spreads for non-ratio- nal reasons, this does not mean that it is irrational. The article seeks to understand why it has flourished and to explain why, in common with other human resource

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management practices (Lawler, 2007), it is popular ahead of a strong evidence base. The contribution of the article is to show how TM evolved and proliferated not simply because managers thought it had demonstrable connections to business performance, although many might have done so, but because of the attributes and internal charac- teristics of the meme itself. These are salience to competitive conditions, a lack of competing ideas, ambiguity in the meaning of talent and the ways it can be operation- alized, complexity reduction for executives, and providing a means of control and power over potentially threatening groups.

Methodological Approach

TM carries some characteristics of management fads and fashions (Iles et al., 2010), and it is important to understand why some ideas spread quickly and widely and why others do not. This means looking beyond the apparent costs and benefits of innova- tions that often do not completely explain why diffusion occurs (Newell, Robertson, & Swan, 2001; Scarborough, Robertson, & Swan, 2015). Explaining this seemingly con- tradictory aspect of innovation diffusion requires stepping beyond rational interpreta- tions of innovations and looking at alternative yet complementary theoretical explanations (Sturdy, 2004).

Of particular interest in meme theory is that explanations of innovation diffusion have traditionally focused on external, rational actors selecting innovations that would be the most successful for their situations (Abrahamson, 1996). However, rational approaches do not fully explain the choices made by organizations and attention turned to other factors that might influence management decision making. One of these fac- tors is the ability of an innovation to replicate, adapt, and spread. The emphasis thus shifted beyond external actors being responsible for diffusion and toward the innova- tion itself to better understand its ability to attract attention (O’Mahoney, 2007).

Epistemologically, the article assumes that the present has no distinct boundary with the past. The past has influenced the present, and any historical interpretation is shaped by the present (Jenkins, 1995). The basic approach to understand the sociogen- esis of TM is to start at the present and to go backward. The historical material used here is not exhaustive but, proportionate to the researcher’s reflexivity, represents the important building blocks in a complex pattern of management thinking.

Meme mapping is a new concept and to understand how TM evolved in manage- ment thought, Paull’s (2009) meme mapping approach is used to explore gestation events, the meme “birth point,” and subsequent meme development events. Events in the gestation period are precursors to the birth event, and some events in this period may be more influential than others. The historical development of the talent meme is traced through a series of database searches looking for the occurrence of “talent” in the source title. JSTOR was searched because of its historic coverage together with Scopus and Business Source Complete to assess the rate of diffusion of the meme in more recent business sources. The search focus was confined to “talent” because the term captures the specific notion of interest and because “talent” predates the use of “talent management” by centuries. The article next summarizes the gestation (sociogenesis) of

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TM. The particular birth point of TM is considered, and explanations for the prolifera- tion of the meme following the birth point are developed.

The Sociogenesis of TM

Memetic analyses require an understanding of events occurring prior to the creation of the meme itself (gestation events) to properly appreciate the social conditions from which a particular meme emerged. The idea that some people are more talented than others at art, sport, music, and science is a recurring feature of human society (Wolfle, 1971). As industrialization progressed in the 19th century, social transformations occurred that gave greater focus to individual achievements over birth status and group membership. As demographic and economic backgrounds began to offer a diminish- ing role in explanations for individual success, attention turned to understanding dif- ferences in mental characteristics (Jansz, 2004). John Stuart Mill in The Subjection of Women (1869), for instance, saw talent as a social resource and was concerned about the loss of talent caused by the ways that women were treated.

Durkheim gave talent central stage in his ideas on social justice. Individuals, he said, possess their talents by chance and should have equal rights to deploy their tal- ents to the extent that they possess them. Durkheim argued that because of their tal- ents, individuals would have different opportunities to realize themselves such that there will be inequalities in the ways that resources are allocated to individuals but that any such inequalities are unavoidable and may be just (Green, 1989) implying that people must be allowed to occupy positions that suit their talents if industrial systems are to function properly. Some inequality based on merit was unavoidable but was preferable to inequality based on social circumstances such as those that might accrue from fortunate parentage.

The Davis–Moore theory of functional stratification (Davis & Moore, 1945) fol- lows Durkheim’s thinking in assuming that some roles in society and business organi- zations require more talent to discharge than others. Societies and organizations place the more skilled and talented people into these roles, and the stratification that results from these processes is presumed to benefit society. Functional stratification draws attention to two things in particular: why some positions are deemed by society as more prestigious (more rewardable) than others and how it is that certain people come to occupy those positions. TM is more concerned with the second question, which is revisited later in the article.

By the start of the 20th century, definitions of talent and genius had attracted close scientific scrutiny (Fischer, 1904). Studies of individual differences showed how men- tal capacities vary naturally and how they connect to differential ability (Hollingworth, 1923). Social factors and their impact on talent development began to be recognized in the hope, perhaps, that replicating certain social conditions would allow greater talents to flourish in society (Faris, 1936).

More complete theories of talent followed that attempted to combine psychological dimensions, heredity, and general intelligence. Bray (1954), for instance, examined talent in business administration and clearly linked talent to success at the expense of a

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more balanced treatment of factors that might boost success or suppress talent. Treatises followed on the need for education and training systems to provide the men (talent was generally equated with being male) who would lead further cultural and economic progress (Brown & Harbison, 1957). The U.S. Committee on the Identification of Talent was created in 1951 and recognized the importance of power and individual adjustment to impersonal power systems in relation to talent recognition (McClelland, Baldwin, Bronfenbrenner, & Strodtbeck, 1958). The mobility of talent, popularized as the Brain Drain, and its links to social change, attracted attention in the 1960s (Adams, 1968; Ramsoy, 1965) as did the influence of talent on career achievement (Ginzberg & Herman, 1964).

By the 1960s, articles on the deployment of talent in business were appearing. The term “talent pool” was used in relation to concerns that talented people were choosing careers outside business (Twedt, 1967), and Patton (1967) warned of looming shortages of executive talent in the United States (see also McDonald, 2013b). The U.S. Civil Service Commission oversaw the “strategic deployment” of top executives into key roles (Bolster, 1967), and the strategic significance of aligning scientific talent with company profit objectives was recognized (Blood, 1963). The special treatment of talented employ- ees was recognized in the long term, manpower forecasting and planning strategies at the time, at least in the United States (Hinrichs, 1966; Vetter, 1967) where concerted efforts to isolate the qualities of managerial talent were underway (Ghiselli, 1971). Longitudinal studies of individual differences and their association with career success and on the dis- tribution of rewards appeared (Abrahamson, 1973; Husen, 1972). Concerns were also surfacing about shortages of managerial talent fuelled by the 1960s counterculture and changes to university education that were seen to be questioning authority in ways that discouraged young people from choosing managerial careers (Miner, 1974).

Another ingredient in the social conditions that created the talent meme occurred in the late 20th century when the concept of HRM embodied a re-evaluation of the con- tributions that employees make to organizations. Concurrent with the rise of HRM was a much stronger interest in fostering and creating high organizational commitment; the basic idea being that committed employees require less supervision and control to perform well (Walton, 1985). Efforts to raise employee commitment were underpinned by a range of HRM practices including contingent-based pay, team building, coaching, and leadership development to engender self-worth and self-efficacy. From the 1980s onward, collectivism and collective agreements declined as a way of managing. Individualism, individual contracts, and greater focus on individual performance gained fresh impetus (van Drunen, van Strien, & Hass, 2004). A psychological shift took place giving the self a more prominent place in organizational thinking.

An important function of labor markets is to allocate people of differing abilities to different sectors of the economy (Grossman, 2004) and, 200 years after Adam Smith realized the role of education and skills in wealth creation (Wolfle, 1971), economists began looking for explanations for the growth of income inequality and used talent heterogeneity as an explanatory variable (Bok, 1993). Rosen (1981) showed how art- ists with slightly greater talent earn much more than people with slightly less talent partly on the basis that “lesser talent is a poor substitute for greater talent” (Adler, 1985, p. 208). Adler (1985) extended this argument by showing that large differences

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in earnings (in the arts) can exist when there are no differences in talent, that is, stars can exist among people of equal talent, a phenomenon returned to below.

Giftedness and talent continued to attract attention (Heller, Monks, & Passow, 1993; Heller, Monks, Subotnik, & Sternberg, 2000) and with the contribution of talent in society well established in the collective consciousness by the late 20th Century, the conditions for the sociogenesis of a meme that would manifest as TM had been created. Interest in understanding the characteristics of high performers continued (O’Connell, 1996; Spreitzer, McCall, & Mahoney, 1997), and the conditions for meme creation, in an evolutionary sense, were created by a coalescence of economic liberalization in times of uncertainty, diminishing lifetime employment arrangements, increased exter- nal hiring in new organizational structures (Cappelli, 2008, 2009), free movement of labor and capital, efforts to inject private-sector practices into public management, privatization, and deregulation (see also, Adamsen, 2016). The confluence of economic forces and the pointing-up of competitive conditions on such a scale in a relatively short time brought organizational survivability into sharp relief such that concerted and explicit ways of managing talent, in contrast to management development, were a logi- cal way forward, particularly for large, private-sector organizations.

The Birth Point

In common with other innovations, TM arose from what came before; in this case, at least 100 years of thinking about the interrelationships between talent and society. To some extent, it is an aggregate of some older ideas around structured selection meth- ods, performance management, and career development (Cappelli, 2009). However, the critical adaptation was that TM emerged from these related but separate memes to embed itself as part of a complex set of memes that sustain and replicate it (a meme- plex). In essence, TM is the outcome of three things: a strong tendency in Western societies to stratify, natural and socially constructed differences in human ability, and distinctive economic conditions. The basis of stratification in this particular case derives from the abilities that signal a person’s economic characteristics and potential. The extent to which TM occurs in organizations is moderated by organizational tradi- tions and overlaying competitive and political systems.

TM is in effect an artifact that people experience (as participants or as part of a team designing and managing talent programs) and which is interpreted to give a particular functionality. Human minds construct representations of the artifact to fit a particular context (Aunger, 2007) which explains why talent programs differ in their philosophy and operationalization. Although talent programs require sets of interlocking human resource management practices, they are shaped and driven by a particular philosophy and mind-set. The practices are not the meme, the manifestation of the meme is the mind-set that shapes the practices.

The birth of TM in a business context, and as a distinctive aspect of management development, occurred sometime in the late 20th century. Commentators often attribute McKinsey’s 1997 “war for talent” report as a birth point for the sharp growth of interest in what has become known as TM (Chambers, Foulon, Handfield-Jones, Hankin &

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Michaels, 1998). The book of the report, The War for Talent (Michaels et al., 2001) is also widely cited as a seminal moment. The idea that organizations were fighting a “war” for executive talent caught on and propelled the talent meme across boardrooms. The rhetoric used by McKinsey was both assertive and moralizing; the “exultation” of strong leader- ship and high-potential employees, the immorality of the poor performer, and survival of the fittest analogies were all used to make the case (O’Mahoney & Sturdy, 2015). Michaels and colleagues claimed to have interviewed nearly 13,000 managers, produced 27 case studies, and held discussions with hundreds of other companies to derive five imperatives including developing a talent mind-set, rebuilding recruitment and development strate- gies, and differentiating among employees with “candid” performance reviews. They insisted that companies at the top of their talent “index” outperformed others by some distance and considered this to be “compelling” evidence that TM impacted positively on business performance. A causal relationship was in no doubt.

With so much data behind their claims, how could they be wrong? Recognizing the talent imperative was described as a strategic inflexion point; a turning point that compa- nies had to pursue or risk falling behind. It would take a very brave executive in corporate America to ignore it. The actual birth point, however, seems more likely to have been a few years before the influential McKinsey report since it is clear that some companies and large government offices were running variations of TM programs in the preceding years. McKinsey did not birth the meme, rather it was the fruit of a build-up of corporate think- ing, in the United States at least, that talent was the competitive weapon that organizations had been overlooking. However, McKinsey’s role in the sociogenesis of TM should not be underestimated given its long-standing influence over corporate America and how it thinks and behaves (McDonald, 2013a). It was a great example of the consultant’s trump card; a problem identified and a solution provided.

Meme Development

To track the popularity of TM and its progress into the consciousness of management scholars, the Scopus database was searched for “talent” in article titles. Limiting searches to social sciences only, in the 1970s and 1980s no more than five articles per year were indexed. Twenty two were indexed in 1995, 21 in 2000, after which the annual output increased steadily to 76 in 2005, 208 in 2010, and 202 in 2015. The peak year was 2013 with 252 articles. Scopus shows the increasing spread of the talent meme from 1996 to 1997 when the “war for talent” narratives were formulated up to 2010 after which the number of citations in the academic literature has leveled off. Repeating the same search for the annual number of hits in Business Source Complete, which indexes a wider range of scholarly and practitioner sources, showed a similar pattern. Twelve articles were indexed in 1990 after which the annual total grew steadily peaking at 717 in 2008 and was 679 in 2015. Both databases show that interest in TM as evidenced by citations has reached a steady-state.

TM derives its survivability in the pool of management memes from its own logic and psychological appeal in relation to uncertain business environments. It provides solace to executives since, if they deploy it, it looks as if they are doing their best to

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get the best out of their employees in difficult times. There is as yet little robust evi- dence that TM does actually improve survival rates (Collings, 2015; Silzer, 2010), but on the surface, it makes sense as a way of improving the chances of organizational survival even if considerable faith is also required. Each organization that pursues TM interprets it in its own ways and adapts it to suit its culture, traditions, and survival strategies. The talent meme can be thought of as the essential basis of the idea that the different organizations deploying TM albeit in different ways hold in common.

The progress of the talent meme is evidenced by a sharp rise in the amount of aca- demic and practitioner publications that has peaked in recent years, and the appeal of TM has continued unabated even in the face of some harsh criticism. Shortly after the birth point, Pfeffer (2001) argued that a talent mind-set could backfire by disaffecting the bulk of a workforce through the glorifying of an elite, undermining teamwork, and using TM to paper over some fundamental cracks in organizational systems and prac- tices. Gladwell (2002), drawing heavily on the Enron folly, criticized the talent myth that had become “the new orthodoxy of American management” pointing to failures in promoting on potential rather than proven performance and the narcissistic behavior of many who do achieve promotions.

But the logic of managing talent outmaneuvered its doubters and the meme spread. In addition to the meme’s seductive logic, the meme’s progress was boosted and sus- tained by the actions of some high-profile consulting firms and the ways that they communicate with corporate clients. In 2013, consultants AM Azure published an analysis of what became of the companies glorified in the original War for Talent. Of the 106 companies that were identifiable, one third had disappeared and one third had “done OK” or better. The others were somewhere in between. Of the 27 case studies in War for Talent, about a quarter had continued to deliver good profitability but nearly half had either disappeared or posted disappointing results. Companies, of course, founder for many reasons and will not live or die by their talent strategies alone so some attrition in the original sample is to be expected. Tantalizingly, how- ever, after trying hard to demolish the original war for talent narrative, AM Azure invites readers to contact them to find out more about “their distinctive approach to TM”; an invitation that suggests they too clung to the faith and the promise of salva- tion. Likewise, KPMG (2014) reporting a “recent global survey of Human Resources professionals” conceded that “there is little evidence that typical ‘war for talent’ prac- tices that focus on high performers actually contribute to improved business perfor- mance” (p. 1). However, even this conclusion was not used to turn away from TM but to justify new directions and more holistic strategies. This is a sign of the meme adapting to survive, to widen its appeal by recognizing and embracing inclusive as well as elitist strategies and thus appeal to more types of organizations and cultures.

Meme Appeal

So, why has this particular management meme prospered? Applying meme theory to look “inside” the meme reveals five features that give it a high degree of “stickiness” (Barrett, 2015). First, memes spread if they are salient and relevant to existing

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activities (Balkin, 1998). The meme benefited by attaching itself to other memes such as leadership and performance management. The talent meme resonated with execu- tives already hardwired for growth, innovation, self-reliance, and change. The meme is easily assimilated; it is simple and sticks in the memory. It produces a behavioral outcome that people experience and transmit as they move between organizations. The structures of social networks affect the extent to which innovations diffuse (Abrahamson & Rosenkopf, 1997) because they transmit information to potential adopters. Human resource directors transmit the meme as they move around, and ambitious employees who have experienced or who are looking for TM will assist the meme’s progress as they circulate.

Second, meme propagation was, and continues to be, assisted because it has no competitor save for a “stay as we are” strategy. This attitude has limited mileage in the for-profit sector when conditions toughen although it is a steady defense in not-for- profit sectors where memes for collectivism and non-differentiation provide some immunity. Memes carrying messages of danger tend to spread quickly (Barrett, 2015), and the talent meme taps into the dangers of inaction, of doing nothing while competi- tors move forward. People are “wired” to pay attention to memes involving danger (Brodie, 2009), and the meme appeals to the conscious fear that there are dangers “out there” that put organizational survival at risk. Had McKinsey “emblazoned” its 20,000 surveys to senior managers (Michaels et al., 2001, p. x) with the “War for Skills” or “The Battle for Recruitment” instead of War for Talent then the outcome might have been very different, at least until an equally effective meme evolved.

Third, in the context of business organizations, the concepts of both talent and TM are aided by their ambiguity; a feature that catalyses their diffusion (Adamsen, 2016; Iles et al., 2010). Unlike sport, for example, in most business contexts innate talent is very difficult to identify (Cappelli & Keller, 2014) and quantify. Talent may be, and often is, described in competence frameworks and similar visions, but that does not amount to quantification in the ways that talent in sport can be quantified through goals scored or track times (Franck & Nuesch, 2011). The attributes of pop stars could be described through their voice, appearance, and behavior, for example, but most people displaying the same characteristics would not make it as a pop star. In social settings, it is very difficult to separate real differences in a person’s ability and poten- tial from luck, popularity, and effort.

TM has principles that can be interpreted to suit a wide range of organizational situ- ations. It has good “interpretative viability” (Benders & van Veen, 2001) such that it can, and does, mean different things to different organizations and can be defined and implemented in a variety of ways. Memetics helps to understand why the ambiguity around the specificity of talent and TM have not been of more concern to practitio- ners—it is this very ambiguity that actually helps the meme to spread. “Talent” is a seductive and easily assimilated word that captures a wide range of attitudes, charac- teristics and skills that many people would think they possess and which organizations might look for. Most people would think they have some sort of talent and the meme attracts attention by reassuring executives that they must, after all, be talented to have got where they are. Consumers of talent can select those bits of the meme’s core idea

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that appeal to them and use them opportunistically for their own purposes. Executives can extract the meanings that they seek from the idea, line managers can use TM sys- tems to leverage control over employees, and employees can play the systems to their advantage, if they have the talent.

Fourth, meme development ties in with van Krieken’s (2012) analysis of contem- porary celebrity society, and in particular, his observation that in a celebrity society, information is in oversupply whereas attention is in short supply. The talent meme easily attaches to a host that accepts the underlying philosophy of workforce differen- tiation by shortcutting through the complexity of managing large organizations. Its message offering the prospect of simple solutions to complex problems appeals to executives in times of attention deficits. However, attention deficits seem likely to cre- ate the conditions in which talent recognition is independent of talent and may not be efficient. Extending Adler’s (1985, 2006) ideas about the relationships between star- dom and talent to business organizations, employees could find themselves in talent pools not because of differences in talent but because of the need for executives to “consume” the same experiences of talent as others are consuming.

Suppose that many employees have talent quality but that executive attention can- not be distributed across all of them. Executives acquire knowledge of those who would be talented by discussing them with others, and when a talented person is popu- lar, then it is easy to find someone to discuss. Hence, executives start to consume the talent that others are consuming. When individuals are discussed by others, they raise their consumption capital (Adler, 1985) such that an employee who does not normally come into contact with the consumers of talent (people influential in talent decisions) and who is not discussed by those consumers will have zero consumption capital. Where a person has high consumption capital, then it is easier for consumers to find other “fans,” and thus, individuals benefit from externalities of popularity which explains, in part, why interest settles on a few “stars.” Executives, as consumers, con- centrate their attention on a specific field of interest (those deemed to have greater talent) at the expense of acquainting themselves with knowledge of the capabilities of a greater number of others. It is more efficient for executives as consumers of talent to patronize a smaller number of individual employees and to save the search costs of discovering information about all others.

Because popularity is relative, everyone cannot be popular at the same time, and so the non-talented suffer the consequences of executive judgments of their relative fail- ure. Thus, “the hierarchy of success manufactures a hierarchy of psuedo-talent in its own image, tending to reinforce the spurious perception of talent differential” (Adler, 2006, p. 898). In this way, stars emerge from groups who are equally talented. Being spotted, and named, as a talented employee arises from chance events that raise popu- larity and which attract attention. Because executives will prefer popular performers, other executives will switch their attention to them. An initial advantage for an employee, however obtained, can thus snowball into stardom. However, employees do not simply rely on luck as they can engineer their popularity via ingratiation, impres- sion management, and upward influence (Bolino, 1999; Chen & Fang, 2008; Thacker & Wayne, 1995). Employees will invest in such methods to engineer their popularity

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to the extent that they think those investments could be recouped by the fruits of talent status in a particular organization.

If employees are overlooked because they are truly less talented than those who are deemed to be more talented, then the processes of talent recognition and reward are efficient (following Rosen, 1981). However, if the reason for talent recognition is actu- ally due to popularity, then the loss of psychic income to the excluded must be bal- anced against the benefits that executives receive from a narrower concentration on a “talented” minority. In this situation, the just-as-talented employees may stop trying to be recognized further diminishing their psychic income with negative consequences for organizations.

Fifth, the meme is spread by relatively successful and powerful people and elevates the status of people linked to elite programs. Even though TM is hard to link to busi- ness success, the idea spreads because those who are involved in running talent pro- grams increase their power over the people in talent pools (van den Brink, Fruytier, & Thunnissen, 2013) and their power to reveal and unmask who is “talented.” The same effect occurs in mergers and acquisitions that are often unsuccessful but which raise the power of executives in the predatory firm (Vos & Kelleher, 2001).

Power and status also accrue to those who are selected for elite talent programs. Winning a talent contest produces gains over and above the actual prize that put addi- tional resources at the winner’s disposal (Nippa, 2011). Being identified as talented confers higher status that itself confers advantages as status influences the structure of interactions with others and, even if there is no objectified status difference, individu- als may draw some subjective evaluation of their recognition and take psychic income from it. Higher status accentuates the perceived value of a person’s resources and improves the chances of sharing the resources of others (Thye, 2000), raises the chances of favorable outcomes independently of actual performance (Washington & Zajac, 2005), and lessens the likelihood of receiving negative or aggressive behavior from others (Lamertz & Aquino, 2004). It is clear, therefore, why status is an attractive motivator in itself (Huberman, Loch, & Onculer, 2004) and how it can be used as a means to an end. The outcomes of status in social networks are clear reasons for want- ing to be associated with talent programs and help attract attention to the meme.

There is a striking parallel between elite talent programs and the analysis of court society (Elias, 1983) that has influenced thinking about how organizations work (van Iterson, Mastenbroek, Newton, & Smith, 2002). Elias drew attention to social pro- cesses and how they are used to maintain order, and elite TM can be viewed as an organizational strategy that uses hierarchical classifications to create and maintain dif- ferences and distinctions between employees, talent pool members, line managers, and senior managers. In the same way that royal courts were used to provide a forum in which courtiers disciplined themselves, or face serious consequences, then competi- tive relationships between the “talented” in talent pools impose a controlling order on participants that mitigates threats that they may pose to senior managers. Talent pools act as outlets for the creativity and individual strategies of ambitious employees, but members must regulate their behavior to comply with prevailing organizational rules and etiquette. Louis XIV of France ruled for 72 years and introduced ballet to his

352 Human Resource Development Review 15(3)

courts. The nobility and courtiers were kept busy practicing their dance, competing against each other for the attentions of the king (Bintley, 2015). At the same time, dis- sent and plotting were suppressed by the diversions of the dance.

Conclusion

This article contributes to a wider social understanding of TM, casts TM as a reflection of contemporary society, and provides new insights into the reasons behind the diffu- sion of TM. In the long tradition of management development, it is clear that large organizations have engaged with practices that, with hindsight, we might now label as TM. However, the widespread use of “talent” in management thinking is recent and had a long gestation time. Set against the rise of individualism that accelerated in the late 20th century, TM is a logical evolutionary device that derives its legitimacy from the logic of itself and is implemented because it is seen in many large profit-seeking organizations as a necessary survival mechanism. However, TM cannot be explained simply through rational adoption, yet it is much more than “smoke and mirror” fash- ion. Memetics help to understand the phenomenon and act as a metaphorical framing device with strong explanatory power. There is plenty of scope for the meme to fit into prevailing organization cultures and to be subject to whatever systems of inefficiency, bias, and favoritism exist. Furthermore, the meme prospers even though perceived dif- ferences in talent and the consequential TM processes may not be based on actual talent differentials.

Indeed, there is little evidence that TM always works to organizational advantage, and this is explainable because, analogous to viruses and bacteria, benefitting a host is not a necessary condition for the spread of a meme. The point is that memes are repli- cators and they do what they are good at; replicating (Dennett, 1995). Furthermore, in common with other management innovations, the more the talent meme spreads, the more it becomes subject to local interpretation (Jones & Thwaites, 2000), and thus, the number of variations of the ways that the meme plays out in practice increases. The more variations of the original idea there are, the more a definitive theory of TM retreats into the distance.

For practitioners, this article locates TM in a particular managerial rhetoric that will continue evolving. These “rhetorical waves” (Barley & Kunda, 1992) shift their ideo- logical stance across time to play to the ways that society sees the core problems of managing large organizations. The dominant rhetoric of the 1980s and 1990s was of culture, commitment, and quality, and the present rhetoric, arguably, speaks more about leadership, performance, and governance. TM focuses on how an internal resource is used, and talent becomes a firm-specific asset that is impossible to replicate exactly. But talent is not immutable, and the processes and routines used in organiza- tions create resources of a particular kind and value. Where it is introduced, TM seems likely to alter the nature of relations among groups of people by providing opportuni- ties for new interactions among them, and it alters the meaning that particular groups of employees have to top management. The extent to which TM benefits organizations is still unclear, and this article identifies five non-rational (but not irrational) reasons

Swailes 353

why it is adopted. As for the future of the meme, if it follows the pattern of other memes such as total quality management and business process reengineering, then the principles will become widely accepted and adopted, and people start to think around the concept but not necessarily use the same label (TM) that carried the original meme.

Memetic analysis suggests an important addition to the research agenda around TM. To understand why TM has affected (infected) so many organizations, more attention needs to be given to what is on the inside of the meme. Understanding more about why and how the talent meme has proved to be a strong psychological attractor is as important as pursuing conventional research agendas. Further research is needed to understand what organizations get out of talent pools that create and maintain a space between top management and ambitious others and which enable their members to play against each other. There is much scope to research TM from a power perspec- tive, and the effects of talent pools on organizational structures and processes offer a fruitful research avenue. This avenue would be complemented by an understanding of the social networks that lie behind the diffusion of TM in a range of organizations to assess how influential they were in adoption or non-adoption and investigation into the influence on non-talent factors in the recognition of talent and executive careers, par- ticularly in the early stages, to reveal the factors that brought particular individuals to attention.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

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Author Biography

Stephen Swailes is professor of Human Resource Management in The Business School, University of Huddersfield. His current research interests focus on reaching a more critical appreciation and understanding of talent management and the reactions of employees to talent programmes.

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Journal of General Management Vol. 26 No.2 Winter 2000

A Reappraisal ofHRM Models in Britain by Pawan s. Budhwar

Human Resource Management is still struggling to find a strategic role.

For a better understanding ofthe subj ect, both management practitioners and scholars need to study human resource management (HRM) in context [1]. The dynamics of both the local/regional and international/ global business context in which the firm operates should be given a serious consideration. Similarly, there is a need to use multiple levels of analysis when studying HRM: the external social, political, cultural, and economic environment; and the industry. Examining HRM out-of-context could be misleading and fail to advance understanding. A key question is how to examine HRM in context? One way is by examining the main models of HRM in different settings. However, there is no existing framework that can enable such an evaluation to take place. An attempt has been made in this paper to provide such a framework and empirically examine it in the British context.

This paper is divided into three parts. Initially, it summarises the main developments in the field of HRM. Then, it highlights the key emphasis of five models of HRM (namely, the 'Matching model'; the 'Harvard model'; the 'Contextual model'; the '5-P model'; and the 'European model' ofHRM). Lastly, we will address the operationalisation of the key issues and emphases of the aforementioned models by examining their applicability in six industries ofthe British manufacturing sector. The evaluation highlights the context specific nature of British HRM.

This introduction looks at the need to identify the core emphasis of the main HRM models that could be used to examine their applicability in different national contexts. Developments in the field of HRM are now well documented in the literature [2, 3]. The debate relating to the nature ofHRM continues today, although the focus of the debate has changed over a period of time. At present, the contribution ofHRM in improving

Pawan S. Budhwar is Lecturer in Organizational Behaviour and HRM at CardiffBusiness School, UK.

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the firm's performance and the overall success of any organization (alongside other factors) is being highlighted in the literature [4, 5].

Alongside these debates, a number of important theoretical developments have taken place in the field of HRM. For example, a number ofmodels ofHRM have been developed over the last 15 years or so. Some of the main models are: the 'Matching model'; the 'Harvard model'; the 'Contextual model'; the '5-P model'; and the 'European model' ofHRM [6, 7]. All these models have been developed in the US and the UK. These models ofHRM are proj ected to be useful for analysis both between and within nations. However, the developers of these models do not provide clear guidelines regarding their operationalisation in different contexts. Moreover, it is interesting to note that, although a large number of scholars refer to these models, very few have tested their practical applicability (exceptions being Benkhoff [8]; Monks [9]; Truss et al. [10]). For the development of relevant management practices there is then a clear need not only to highlight the main emphasis of the HRM models but also to show their operationalisation. Such an analysis will help to examine the applicability of these models in other parts of the world. With the increasing levels ofglobalisation ofbusiness such investigations have become an imperative.

Moreover, although the present literature shows an emphasis on themes such as 'strategic HRM' (SHRM), the majority of researchers persist in examining only the traditional 'hard' and' soft' models ofHRM [11]. For the growth and development of SHRM, there is a strong need to examine the applicability of those models ofHRM which can help to assess the extent to which it has really become strategic in different parts of the world, and the main factors and variables which determine HRM in different settings. This will not only test the applicability of HRM approaches in different regions, but will also help to highlight the context specific nature of HRM practices.

The aims of this paper are twofold. First, to identify the core emphasis offive main models ofHRM which can be used to examine their applicability in different national contexts. Second, to test empirically the applicability of these models of HRM in the British context. Before answering why this investigation is being conducted in the UK, the main models of HRM are briefly analysed.

Models of HRM

Five models ofHRM, which are widely documented in the literature are chosen for analysis. They are: the 'Matching model'; the 'Harvard model'; the 'Contextual model'; the '5-P model'; and the 'European model' ofHRM [12,13, 14]. The reason for the selection and analysis of thesemodelsis two-fold.First, it will help to highlight their main contribution

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to the development of SHRM as a distinct discipline. Second, it will help to identify the main research questions suitable for examining these models in different national settings. The analysis begins with one of the traditional models ofHRM.

The strategic fit of HRM

The main contributors to the 'Matching model' ofHRM come from the Michigan and New York schools. Fombrun et al. 's [15] model highlights the 'resource' aspect ofHRM and emphasises the efficient utilisation of human resources (like otherresources) to meet organizational objectives. The matching model is mainly based on Chandler's [16] argument that an organization's structure is an outcome of its strategy. Fombrun et al. expanded this premise and developed the matching model of strategic RRM, which emphasises a 'tight fit' between organizational strategy, organizational structure and HRM system, where both structure and HRM are dependent on the organization strategy. The main aim of the matching model is therefore to develop an appropriate 'Human Resource System' that will characterise those HRM strategies that contribute to the most efficient implementation ofbusiness strategies. The Schuler group made further developments to the matching model and its core theme of 'strategic fit' in the late 19?Os [17]. The core issues emerging from the matching models are:

1. Do organizations show a 'tight fit' between their HRM and organization strategy where the former is dependent on the latter? Do personnellHR managers believe they should develop HRM systems only for the effective implementation of their organization strategies?

.2. Do organizations consider their HRs as a cost and use them sparingly? Or, do they devote resources to the training of their HRs to make the best use of them?

3. Do HRM strategies vary across different levels of employees?

The soft variant of HRM

Beer et al. [18] articulated the 'Harvard Model' of HRM. It is also denoted as the 'Soft' variant ofHRM [19], mainly because it stresses the 'human' aspect of HRM and is more concerned with the employer- employee relationship. The model highlights the interests of different stakeholders in the organization (such as shareholders, management, employee groups, government, community and unions) and how their interests are related to the objectives of management. It also recognises the influence ofsituational factors (such as the market situation) on HRM policy choices. According to this model, the actual content of HRM is described in relation to four policy areas i.e. human resource flows,

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reward systems, employees' influence and work systems. Each of the four policy areas is characterised by a series of tasks to which managers must attend. The outcomes that these four HR policies need to achieve are commitment, competence, congruence, and cost effectiveness. The model allows for analysis of these outcomes at both organizational and societal levels. As this model acknowledges the role ofsocietal outcomes, it can provide a useful basis for comparative analysis of HRM [20]. The key issues emerging from this model which can be used for examining its applicability in different contexts are:

1. What is the influence ofdifferent stakeholders and situational and contingent variables on HRM policies?

2. To what extent is communication with employees used as a means to maximise commitment?

3. What level of emphasis is given to employee development through involvement, empowerment and devolution?

The contextual model of HRM

Researchers at the Centre for Corporate Strategy and Change at the Warwick Business School developed this model. They examined strategy making in complex organizations and related this to the ability to transform HRM practices [21,22]. Hendry and associates argue that HRM should not be labelled as a single form of activity. Organizations may follow a number of different pathways in order to achieve the same results. This is mainly due to the existence of a number of linkages between the outer environmental context (socio-economic, technological, political-legal and competitive)and inner organizationalcontext (culture, structure, leadership, task-technology and business output). These linkages directly contribute to forming the content of an organization's HRM. The core issues emerging from this model are:

1. What is the influence of economic (competitive conditions, ownership and control, organization size and structure, organizational growth path or stage in the life cycle and the structure of the industry), technological (type of production systems) and socio-political (national education and training set-up) factors on HRM strategies?

2. What are the linkages between organizational contingencies (such as size, nature, positioning ofHR, and HR strategies) and HRM strategies?

Strategic integration of HRM

The existing literature reveals a trend in which HRM is becoming an integral part of business strategy – hence, the emergence of the term SHRM. It is largely concerned with 'integration' and 'adaptation'. The purpose of SHRM is to ensure that [23]:

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1. HRM is fully integrated with the strategy and strategic needs of the firm;

2. HR policies are coherent both across policy areas and across hierarchies; and

3. HR practices are adjusted, accepted, and used by line managers and employees as part of their every day work.

Based on such premises, Schuler [24] developed a 5-P model of SHRM that melds five HR activities (philosophies, policies, programs, practices and processes) with strategic needs. This model, to a great extent, explains the significance ofthese five SHRM activities in achieving the organization's strategic needs, and shows the inter-relatedness of activities that are often treated separately in the literature. This is helpful in understanding the complex interaction between organizational strategy and SHRM activities.

The model raises two important issues (also suggested by many other authors in the field) for SHRM comparisons. These are:

1. What is the level of integration of HRM into the business strategy?

2. What is the level ofresponsibility for HRM devolved to line managers?

European model of HRM

Based on the growing importance of HRM and its contribution towards economic success and the drive towards Europeanisation, Brewster [25] proposes a 'European model ofHRM'. His model is based on the premise that European organizations operate with restricted autonomy. They are constrained at both the international (European Union) and national levels by national culture and legislation, at the organization level by patterns of ownership, and at the HRM level by trade union involvement and consultative arrangements [26, p. 3]. Brewster suggests the need to accommodate such constraints when forming a model ofHRM. He also talks about 'outer' (legalistic framework, vocational training programs, social security provisions and the ownership patterns) and 'internal' (such as union influence and employee involvement in decision making) constraints on HRM. Based on such constraints, Brewster's model highlights the influence of factors such as national culture, ownership structures, the role of the state and trade unions on HRM, in different national settings.

The European model shows an interaction between HR strategies, business strategy and HR practice and their interaction with an external environment constituting national culture, power systems, legislation, education, employee representation and the constraints previously mentioned. It places HR strategies in close interaction with the relevant

Journal of General Management Vol. 26 No.2 Winter 2000

organizational strategy and external environment. One important aim of this model is to show factors external to the organization as a part of the HRM model, rather than as a set of external influences upon it.

From the above analyses, it can be seen that there is an element of both the contextual and 5-P models of HRM present in Brewster's European model. Apart from the emphasis on 'strategic HRM', one main issue important for cross-national HRM comparisons emerges from Brewster's model. This is:

• What is the influence of international institutions, national factors (such as culture, legal set up, economic environment and ownership patterns), and national institutions (such as the educational and vocational set-up, labour markets and trade unions) on HRM strategies and HRM practices?

Recently, Budhwar and associates [27, 28,29,30] have proposed a framework for examining cross-national HRM. They have identified three levels of factors and variables that are known to influence HRM policies and practices and which are worth considering for cross-national HRM examinations. These are national factors (such as national culture, national institutions, business sectors and dynamic of the business environment), contingent variables (such as the age, size, nature, ownership, and life cycle stage of the organization, the presence of trade unions and HR strategies, and the interests of different stakeholders) and organizational strategies and policies (related to primary HR functions, internal labour markets, levels ofintegration and devolvement, and nature ofwork). This framework is used to examine the applicability ofthe issues arising from the five HRM models in British organizations. But why conduct this form of investigation, and in the British context?

As mentioned already, there is a scarcity of this type of research. So far, only Truss et al. [31] have examined the applicability of some of the models of HRM in a few UK case companies. Apart from their research, there is scarcely any study that conducts the type ofinvestigation described here. There are, then, two main reasons for conducting this investigation in British companies. First, a UK sample possesses the characteristics suitable to test the operationalisation ofthe main emphases and critical issues ofthe five models ofHRM. Second, the HRM function in the UK is under intense pressure due to competitive conditions, and the restructuring and rightsizing programmes going on in British organizations, as well as the pressure on British firms from EU and other international players to stay competitive and meet the EU regulation regarding the management ofhuman resources. In such dynamic business conditions it is worth examining the HRM function in context. Moreover, since the five models have been developed among Anglo-Saxon nations, it is sensible to test them initially in these countries before recommending their testing in others parts of the world.

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The Research Methodology

Sample and data collection

A mixed methodology, using a questionnaire survey and in-depth interviews, was adopted. During the first phase of the research, a questionnaire survey was conducted between August 1994 and December 1994 in British firms having 200 or more employees in six industries in the manufacturing sector (food processing, plastics, steel, textiles, pharmaceuticals and footwear). The respondents were the top personnel specialist (one each) from each firm. The response rate ofthe questionnaire survey was approximately 19 per cent (93 out of 500 questionnaires). The items for the questionnaire were constructed from existing sources, such as those developed by Cranfield researchers in their study ofcomparative European HRM [32] and other studies (see for example [33, 34]). The questionnaire consisted of 13 sections. These were: HR department structure, role of the HR function in corporate strategy, recruitment and selection, pay and benefits, training and development, performance appraisal, employee relations, HRM strategy, influence ofnational culture, national institutions, competitive pressures and business sector on HRM, organizational details. Public limited companies represented approximately one-third of the sample, with the remainder from the private sector. The industry-wide distribution of respondents is shown in Table 1.

Table 1: Sample Industry Distribution

Indtitry Percentage . Food Processing 17.2 Plastics 17.2 Steel 16.1 Textiles 17.2 Pharmaceuticals 21.5 Footwear 10.8

Analysis of the demographic features of the sample suggests that the sample was representative ofthe total population. Sixty-two per cent of sample organizations were medium-sized and employed 200-499 employees, 14 per cent employed 500-999 employees, 15 per cent 1000- 4999 employees, and 8 per cent employed 5000 or more employees.

In the second phase of the research, 24 in-depth interviews were conducted with personnel specialists representative of those firms which participated in the first phase of the research. The interviews examined six themes, viz. the nature of the personnel function, integration ofHRM into the corporate strategy, devolvement ofHRM to line managers, and the influences of national culture, national institutions and business environment dynamic on HRM.

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Measures

Multiple regression analysis and descriptive statistics are used to analyse questionnaire data. Table 1 in the Appendix shows the main dependent and independent variables used for multiple regression analysis. Table 2 in the Appendix presents the mean scores of respondents regarding the influence of different aspects of national factors (culture, institutions, business environment dynamic and business sector) and HR strategies on HRM policies and practices. The qualitative data is content analysed. In the discussion, survey results are complemented by key messages coming from the qualitative interviews.

Findings of the Study

The matching models suggest a strong dependence ofHRM on organization strategy, i.e, HRM is mainly developed for the effective implementation of organization strategies. The results show that in 34.6 per cent of the organizations under study personnel is involved from the outset in the formation of corporate strategy, and 42 per cent of organizations actively involve HRM during the implementation stage of their organizational strategies. Such a trend of 'active' personnel management is further evident from 55 per cent of sample organizations having personnel representation at board level. Moreover, 81.1 per cent ofthe respondents believe that their HRM has become proactive over the last five years (i.e. more involved in decision making).

Such results reflect the growing strategic and proactive nature of the British personnel function. There is support for such findings in the existing literature [35, 36].

The second reason to examine the matching models in a cross- national context is to assess whether human resources are considered as a cost ('use them sparingly') or as an asset (spend on training to 'make their best use '). The results suggest that British organizations claim to be spending variable though reasonable proportions oftheir annual salaries on human resource development (HRD) related activities (see Table 2).

Table 2: Proportion of Annual Salaries and Wages Currently Spent on Training and Development

Value(%) Percentage of Sample Nil –

0.1- 2.00 41.3 2.01-4.00 7.6 4.01- 6.00 3.3

6.01 or more 1.1 Don't know 46.7

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A similar pattern characterizes the number ofdays training provided to different levels ofemployees (see Table 3). The substantial majority of British firms have increased (rather than maintained or reduced) their training spend across all categories of staff over the last five years (see Table 4). There is evidence that this investment has been directed particularly in the areas of performance appraisal, communication, delegation, motivation and team building.

Table 3: Average Number of Days Training and Development Given to Staff Categories Per Year

Different Cat~ories of Staff Number ofDays Mana}!erial(%) Prof,/Technical(%) Clerical(%) Manual(%)

Nil 1.2 1.1 2.3 1.2 0.1-3.00 24.4 22.8 35.6 24.7 3.01-5.00 20.9 21.7 13.8 11.7

5.01-10.00 7.0 14.7 4.6 11.8 10.1 and above 5.8 4.6 3.5 9.4

Don't know 40.7 40.9 40.2 41.2

These developments in the British HRD scene appear to be consistent with the increased realisation by both business and government that the development of human resources has been neglected for too long [37].

Table 4: Nature of Change in Amount of Money Spent on Training Per Employee

Different Categories of Staff Nature ofChange Mana}!erial("/o) Prof,/Technical("/o) Clerical(%) Manual(%) Increased 59.8 63.0 53.3 60.9 Same 21.7 18.5 28.3 20.7 Decreased 7.6 8.7 7.6 7.6 Don't know 10.9 9.8 10.9 10.9

Another key emphasis of the matching model suggests a variation in HRM strategies across different levels of employees. This is clearly evident from the results as the nature and type of approach to the management of different levels of employees vary significantly (see for example, Tables 3 and 4). This aspect is further highlighted later in this paper. Based on the above evidence, it seems that the British personnel function still plays an implementationist role rather than being actively involved in strategy formulation. On the other hand, there is a strong emphasis on training and development.

Important Situational Determinants

One of the basic assumptions of the Harvard model of HRM is the influence of a number of situational factors (such as work force

Journal of General Management Vol. 26 No.2 Winter 2000

characteristics, unions, labour legislation and business strategy) and different stakeholders (such as unions, government and community) on HRM policies. The impact of a few of the situational factors and stakeholders (proposed by Beer et al. [38D was examined during the multiple regressions, analysis of means scores and the analysis of interview results.

Taking the number of employees as a characteristic of the work force [39, 40], the regression results show that small British organizations (those having less than 499 employees) are likely to recruit their managerial staff by advertising externally. Medium size organizations (those having 500 to 999 employees) are likely to recruittheirclerical staffas apprentices. Large organizations (those having 1000 to 4999 employees) are more likely to use assessment centres to train their human resources. Lastly, very large firms (having over 5000 employees) are less likely to recruit their managerial staff by advertising internally and their manual staff through the use of word of mouth method. These firms are likely, however, to recruit their professional staff with the help of consultants. Moreover, large UK firms are more likely to adopt formal career plans, succession plans and planned job rotation to develop their human resources (for details see Table 1 in Appendix).

Support for these findings can be found in the literature (see for example, [41D. The size ofan organization has a positive relation with the formalism of their HRM policies [42]. Therefore, as the size of the firm becomes large, logically, the degree offormalism ofits personnel function increases and the organization obtains the help ofrecruitment agencies to recruit its professional employees.

The results show a strong impact of labour laws, educational and vocational training set up (highlighting government policy) and unions on British HRM policies (see Table 2 in Appendix). Unions in the UK are now playing a more supportive role [43]. The implementation of labour legislation is also having significant influence on UK HRM policies. Various pressures groups also contribute in this regard (for example, against age discrimination). Over the last decade or so, the education and vocational set-up in the UK has initiated a number of programmes and qualifications such as the national vocational qualifications (NVQs), investors in people (IIP) and' opportunity 2000' . These are now significantly influencing HRM in British organizations [44].

The results also show a number of significant regressions regarding the impact of HR strategies on British HRM. Results in Table 1 in the Appendix show that organizations pursuing a cost reduction strategy are more likely to recruit their clerical and manual staffas apprentices. These organizations are likely to adopt an effective resource allocation HR strategy. Organizations pursuing a talent improvement HR strategy are

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less likely to recruit their manual staff by word of mouth method. However, sample firms pursuing a talent acquisition HR strategy are likely to use consultants to recruit their managerial staff and recruitment agencies for manual staff. These organizations are also likely to adopt assessment centres to train their staff.

Most of the above results seem to be logical. For example, by recruiting employees as apprentices organizations not only pay them less but also train and prepare them for working in the long run in their organizations. Hence, it helps to reduce the costs. Similarly, by recruiting employees externally, organizations increase the opportunity to improve their talent base.

The second key emphasis of the Harvard model of HRM suggests extensive use of communication with employees as a mechanism to maximise commitment [45, p. 63]. Ninety-one per cent of British organizations share information related to both strategy and financial performance with their managerial staff. However, this percentage is significantly lower for other categories of employees (see Table 5).

Table 5: Employees Formally Briefed about Strategy or Financial Performance

Different Categmes of Staff Tvoe ofInformation Managerial(%) Prof/Technical(%) Clerical(%) Manual(%) Strategy – 8.0 8.6 6.4 Financial Performance 6.5 14.8 39.5 38.5 Both 91.3 65.7 42.0 23.6 Neither 2.2 11.6 9.9 31.5

There can be a number of explanations for the difference in the sharing of strategic and financial information with different levels of employees in British organizations. Whilst noting that top personnel specialists are now more and more involved in strategy making, it seems that top management continue to be reluctant to devolve responsibility to line managers for the dissemination offinancial and strategic information. These issues are further examined when discussing the 5-P model.

The above discussion suggests applicability of the Harvard model ofHRM in British organizations. The results showed an impact oflabour laws, education vocational set-up, unions, work force characteristics and HR strategies on HRM policy choices. There are encouraging results on the communication of information with different levels of employees regarding sharing strategic and financial performance and on employee development through their involvement and training.

Contextual Factors

The main issue against which the relevance of the contextual model can be evaluated is the impact on HRM policies and practices of economic

Journal of General Management Vol. 26 No.2 Winter 2000

(characterized by competitive pressures, ownership and life cycle stage), technological (type ofproduction system)and socio-political (characterised by national education and training set-up) factors and organizational contingencies (such as size, age and nature of organization).

The results show a strong influence of competitive pressures on British HRM policies and practices (see Table 2 in Appendix). To achieve a competitive edge in such situations, they are focusing particularly on total customer satisfaction and the restructuring oftheir organizations. As competitive pressures are also forcing British organizations to enter into new business arrangements (such as alliances), so these are having direct influence on HRM policies and practices.

The results also show the impact of increasingly sophisticated informationand communications technology on HRM policies and practices (see Table 2 in the Appendix). Further evidence indicates that the majority of respondents suggest these technologies mainly influence training, appraisal and transfer functions. Why? Because with the change in technology, employees need to be trained to handle it. To see if they have achieved the required competence they are appraised and if required, transferred to suitable positions.

Finally, we summarise the relevance of the contextual model of HRM in terms ofthe impact of organizational contingencies. Contingent variables such as size of the organization, presence of HR strategy and presence of unions were examined above, as were the impacts of ownership and organizational life cycle stage. These variables do not seem significantly to impact HRM in British organizations.

Nevertheless, there is significant evidence overall regarding the applicability of the contextual model ofHRM in British organizations.

Strategic Integration and Devolvement of HRM in Britain

Our discussion now focuses on the relevance of the '5 P' model ofHRM in British organizations. To achieve this, results regarding the integration of HRM into corporate strategy and the devolution of responsibility for HRM to line managers are examined. The detailed results are presented elsewhere [46], but are summarized below.

In brief, the level of integration is measured on the basis of the following four scales:

a) representation of Personnel on the board; b) presence of a written Personnel strategy; c) consultation ofPersonnel (from the outset) in the development

of corporate strategy; and d) translation ofPersonnel/HR strategy into a clear set of work

programmes.

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The level of devolvement is measured on the basis of the following three scales:

a) primary responsibility with line managers for HRM decision making (regarding pay and benefits, recruitment and selection, training and development, industrial relations, health and safety, and workforce expansion and reduction);

b) change in the responsibility of line managers for HRM (regarding pay and benefits, recruitment and selection, training and development, industrial relations, health and safety, and workforce expansion and reduction); and

c) percentage ofline managers trained in performance appraisal, communication, delegation, motivation, team building and foreign language.

High integration is the result of personnel representation at board level, the personnel function being consulted about corporate strategy from the outset, the presence of a written personnel strategy, and the translation of such a strategy into a clear set of work programmes. As mentioned earlier, the personnel function is represented at board level in the majority (55 per cent of organizations). For our sample companies, 87.4 per cent have corporate strategies. Of these, 34.6 per cent consult the personnel function at the outset, 42 per cent involve personnel in early consultation, and only 13.6 per cent involve personnel during the implementation stage. Over a quarter (26.4 per cent) of sample organizations did not have a personnel strategy, 29.9 per cent had an unwritten strategy and 43.7 per cent had a written personnel strategy. A clear majority (57.4 per cent) of organizations felt that their personnel strategy was translated into clear work programmes.

High devolvement is the result of: primary responsibility for pay, recruitment, training, industrial relations, health and safety and expansion/ reduction decisions lying with the line (see Table 6); line responsibility for these six areas on an increasing trend (see Table 7); and, evidence of devolved competency with at least 33 per cent of the workforce being trained in appraisals, communications,delegation, motivation, team building and foreign languages.

Budhwar's [47] analysis shows that when the four measures of integration are summated and divided into a single scale of high and low type, 50.5 per cent of the sample organizations would be categorised as having high integration and 49.5 per cent fall into the low integration category. The average score of the summated integration scale for a1193 organizations is .50. These results show a moderate level of integration being practised in the sample industries. On the other hand, the summated scales demonstrate a low level of devolvement. Sixty-one per cent of the sample practise low levels of devolvement of HRM to line managers.

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Table 6: Primary Responsibility for Major Decisions on Personnel Issues

Personnel Issues Line Line Mgt in IIR Dilpt. inHRDept. Consultation COllSuJtationRelated to: Mgt. wi!il1lB.l)llUt. withLineMat. Pay andBenefits 48.3 14.3 11.0 26.4 Recruitment and Selection 17.2 12.9 34.4 35.5 Training andDevelopment 15.1 18.3 22.5 44.1 Performance Aonraisal 17.5 6.9 30.4 45.2 Industrial Relations 36.3 13.2 25.3 25.2 Health and Safety 18.5 32.6 19.6 29.3 Workforce

19.4 19.4 44.1 17.1Expansion/Reduction WorkSystem/Job Design 7.6 33.7 40.2 18.5 Figures in the above cells represent valid percentage, calculated after excluding the missing values.

Table 7: Change in Responsibility of Line Management for Different Personnel Issues

PellSonnelIssues Increased (%) Same(%) Decreased (%) Pay andBenefits 27.2 65.2 7.6 Recruitment and Selection 43.5 48.9 7.6 Training and Development 69.6 23.9 6.5 Performance Appraisal 60.0 37.8 2.2 Industrial Relations 28.9 63.3 7.8 Healthand Safety 61.5 35.2 3.3 Workforce

38.9 54.4 6.7Expansion/Reduction WorkSystem/Job Design 43.3 53.3 3.3

The results confirm the relevance of the 5-P model of HRM in British organizations. They also help to examine the main emphasis of Brewster's [48] European model of HRM, i.e, the linkages between corporate strategy and HRM strategy.

Conclusion

Overall, the results show a mixed picture, i.e. from strong to moderate applicability of the mentioned HRM models in Britain. The study aimed to examine HRM in context, and the findings should be useful for relevant policy makers. In particular, it seems that the sample firms are practising a relatively low level of devolvement in comparison to the integration function. Ifthe HRM function is to become more strategic, then the level of practice of both these concepts has to increase. Such demands are likely to increase in future as more and more firms restructure and become lean in order to respond to competitive and other pressures [49].

The study has two main limitations. First, it is restricted to six industries ofthe UK manufacturing sector. Second, the views of only top

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Journal of General Management Vol. 26 No. 2 Winter 2000

personnel specialists were examined. In order, therefore, to obtain a more comprehensive picture, research needs to be extended to other business sectors and to the views of other key actors (such as line managers). Future research could also build upon this study by investigating other models ofHRM and their applicability in different national contexts.

Appendix

Table 1: Factors Determining HRM Practices in British Organizations

Independent. lJependentVariables If BiJta . t·valueVarin/J/es Training and development

0.2102 0.2984* 2.3790 Introductory through planned iob rotation lifecycle stage Communication through

0.1629 -0.2663* -2.0720 immediate superior

Turnaround Recruiting managerial staff by 0.3695 -0.3038* -2.6170

lifecycle stage advertising externally Recruiting managerial staff by

0.3695 0.3658** 3.0590 Less than 499 advertising externally employees Recruiting clerical staff from 0.1014 -0.3184* -2.4220

recruitment agencies Between 500- Recruiting clerical staff as

0.3337 0.2891* 2.4600 599 employees apprentices Between 1000- Training and development 4999 through assessment centres 0.2607 0.3547** 2.8530 employees

Recruiting managerial staff by 0.1563 -0.2835* -2.1800

advertising internally Recruiting professionals/technical staff by

0.1039 0.3223* 2.4550 use of search/selection

More than consultants

5000 Recruiting manual staffby

0.3698 -0.4529** -3.9340 employees

word of mouth Training and development through formal career plans

0.1406 0.375** 2.9170

Training and development 0.1685 0.4105** 3.2460

through succession plans Training and development

0.2102 0.3873** 3.0880 though planned job rotation

Public Limited Recruiting managerial staff by 0.3695 0.4436** 3.8050Company advertising externally

Recruiting managerial staff 0.0830 -0.2881* -2.1700

from current employees State-owned Recruiting clerical staff from

0.2842 -0.2583* -2.0650 organization current emnlovees

Recruiting manual staff by 0.3698 -0.3342** -2.9100

word of mouth Organizations incorporated Commnnication through trade

0.7445 -0.216** -3.0370 between 1869- unions or work councils 1899 Organizations incorporated Recruiting manual staff from

0.1557 0.2609* 2.0240 between 1900- current employees 1947

Continued …

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Table 1 Continued:

Independent lJepen4ent Variables .Jf Beta tvalueVariable Recruitingclericalstaffby 0.2465 -0.3931** -3.2110advertising externally Recruitingmanualstaffby 0.1974 -0.2767* -2.1550advertising externally

Organizations Trainingand development 0.2607 0.4364** 3.3780incorporated throughassessment centres between 1948- Communication through 0.1629 -0.3255* -2.53201980 immediatesuperior

No formal communication 0.3517 0.3265** 2.7370methods Communication through 0.0858 0.2929* 2.2090suggestion box(es) Recruitingclericalstaff from 0.2842 -0.3019* -2.4240current employees

Cost reduction Recruitingclericalstaff as 0.3337 0.4182** 2.9450HRstrategy apprentices Recruiting manualstaff as 0.1330 0.3646** 2.8240apprentices

Talent Recruitingmanualstaff by 0.3698 -0.3655** -3.2440improvement word of mouthHRstrategy Recruiting managerial staffby

0.0777 0.2787* 2.0930use of search/selection Talent consultants acquisition HR Recruitingmanualstaff from 0.0914 0.3024* 2.2880strategy recruitmentagencies

Trainingand development 0.2607 0.2857* 2.2090throughassessment centres Effective Recruitingclericalstaff as

0.3337 0.2882* 2.0300resourceHR apprenticesstrategy Recruitingmanagerial staff by 0.3695 0.3593** 2.9750advertising externally Recruitingmanualstaff by 0.1226 0.3502** 2.6960Unionised advertising internally

firms Communication through 0.3517 -0.255* -2.1820attitude survey Communication throughtrade 0.7445 0.5656** 6.4000unions or work councils

* Significance at .05 level; **Significance at .01 level

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Table 2: Influence of Different Aspects of National Factors on HRM

Aspectsoff"lational (;ultttre No. of Cases Mean 1 Way in which managers are socialised 84 18.07 2 Common values, norms of behaviour and customs 81 20.28 3 The influence of pressure groups 58 10.47

4 Assumptions that shape the way managers perceive and

84 25.98 think: about the organization

5 The match to the organization's culture and 'the way we

86 35.58 do things around here'

N(ltif.}1Inl T- o '011.6 1 National Labour Laws 82 40.91 2 Trade Unions 61 21.72 3 Professional Bodies 56 15.11 4 Educational and Vocational training set-up 84 27.62 5 International Institutions 54 20.07

A~l1ects QflIusinessEnvironment 1

Increased national/international competition – 72 27.56

Globalisation of corporate business structure Growth of new business arrangements, e.g. business

2 alliances, joint ventures and foreign direct investment 66 19.01 through mergers and acquisitions

3 More sophisticated information/communication

70 19.62 technology or increased reliance on automation

4 Changing composition of the workforce with respect to

48 12.39 gender, age, ethnicity and changing employee values

5 Downsizing of the workforce and business re-

69 23.13 engineering

6 Heightened focus on total management or customer

78 26.92 satisfaction

Aspects qfBusinessSector 1

Common strategies, business logic and goals being 71 22.95

pursued by firms across the sector

2 Regulations and standards (e.g. payments, training,

79 20.35 health and safety) specific to your industrial sector Specific requirement/needs of customers or suppliers

3 that characterise your sector (i.e. supply chain 82 28.96 management)

4 The need for sector-specific knowledge in order to 56 15.35 provide similar goods/services in the sector

5 Informal or formal benchmarking across competitors in

61 16.39the sector (e.g, best practices of market leaders) Cross-sector co-operative arrangements, e.g, common

6 technological innovations followed by all firms in the 37 10.54 sector

7 Common developments in business operations and work

49 14.40 practices dictated by the nature of the business

8 A labour market or skill requirement that tends to be

39 13.10used by your business sector only

Respondentswere asked to allocate a totalof100points to the different aspects ofthe above nationalfactors.

Journal of General Management Vol. 26 No.2 Winter 2000

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..

[21]

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[28]

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Hendry, C and Pettigrew, A.M., 'Patterns of Strategic Change in the Development of Human Resource Management', British Journal ofManagement, Vol. 3, 1992, pp. 137-156. Hendry, C., Pettigrew, A. M. and Sparrow, P. R., 'Changing Patterns of Human Resource Management,' Personnel Management, Vol. 20, No. 11, 1988, pp. 37-47. Schuler, R. S., 'Linking the People with the Strategic Needs of the Business', Organizational Dynamics, Summer, 1992, pp. 18-32. Ibid. Brewster, C., 1995, op. cit. Ibid. Budhwar, P., 'Taking Human Resource Management Research To The Next Millennium: Need For An Integrated Framework', Annual Academy of Management Conference, Chicago, 1999. Budhwar, P. and Debrah, Y., 'Rethinking Comparative and Cross National Human Resource Management Research,' The International Journal of Human Resource Management, 2001 (forthcoming).

[29] Budhwar, P. and Sparrow, P., 'An Integrative Framework For Determining Cross National Human Resource Management Practices', Human Resource Management Review, 2001 (forthcoming) .

[30] Budhwar, P. and Sparrow, P., 'National Factors Determining Indian and British HRM Practices: An Empirical Study', Management International Review, Vol. 38, Special Issue 2, 1998, pp. 105-121.

[31] Truss, C., Gratton, L., Hailey, H., McGovern, P. and Stiles, P., 1997, op. cit.

[32] Brewster, C. and Hegewisch, A., (eds.) Policy and Practice in European Human Resource Management, London and New York: Routledge, 1994.

[33] Baird, L. and Meshoulam, r., 'Managing Two Fits of Strategic Human Resource Management', Academy of Management Review, Vol. 13, No.1, 1988, pp. 116-128.

[34] Jackson, S. E., Schuler, R. S. and Rivero, J. C., 'Organizational Characteristics as Predictors of Personnel Practice', Personnel Psychology, Vol. 42, No.4, 1989, pp. 727-786.

[35] Legge, K., 1995, op. cit. [36] Hendry, C., Human Resource Management: A Strategic

Approach to Employment, Bath: Butterworth-Heinemann, 1998. [37] Townley, B. 'Communicating with Employees' , in Sisson, K. (ed.),

Personnel Management: A Comprehensive Guide to Theory and Practice in Britain, Blackball Business: London, 1996, pp.595- 633.

[38] Beer, M., Spector, B., Lawrence, P. R., Quinn Mills, D. and Walton, R. E., 1984, op. cit.

[39] Jackson, S. E. and Schuler, R. E., 1995, op. cit. [40] Tayeb, M., Organizations and National Culture, London: Sage,

1988.

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[41] Sisson, K. and Storey, J., 2000, op. cit. [42] Brewster, C. and Hegewisch, A., 1994, op. cit. [43] Heery, E., 'Annual Review Article 1996'. British Journal of

Industrial Relations, Vol. 35, 1997, pp. 87-109. [44] Collin, A. and Holden, L., 'The National Framework for Vocational

Education and Training', in. Beardwell, 1. and Holden, L., (eds.), Human Resource Management. London: Pitman Publishing, 1997, pp.345-377.

[45] Truss, C., Gratton, L., Hailey, H., McGovern, P. and Stiles, P., 1997,op. cit.

[46] Budhwar, P., 'Strategic Integration and Devolvement of Human Resource Management in the British Manufacturing Sector' , British Journal of Management, Vol. 11, No.4, 2000, (in Press).

[47] Ibid. [48] Brewster, C., 1995, op. cit. [49] Terry, M. and Purcell, J., 'Return to Slender' , People Management,

23 October, 1997,46-51.

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Advances in Developing Human Resources

14(4) 566 –585 © 2012 SAGE Publications

Reprints and permission: sagepub.com/journalsPermissions.nav

DOI: 10.1177/1523422312455610 http://adhr.sagepub.com

455610ADHR14410.1177/1523422312455610Adva nces in Developing Human ResourcesKim and McLean

1Texas A&M University, College Station, TX, USA 2McLean Global Consulting, Inc., USA

Corresponding Author: Sehoon Kim, Educational Administration and Human Resource Development, Texas A&M University, 4226 TAMU College Station, TX 77843, USA Email: [email protected]

Global Talent Management: Necessity, Challenges, and the Roles of HRD

Sehoon Kim1 and Gary N. McLean2

Abstract

The Problem. Despite increasing attention in business, talent management in global contexts has not been explored adequately in HRD. Most studies related to global talent management explain only part of it and do not provide an integrative understanding of what is going on globally in talent management in an HRD perspective. The Solution. This article proposed an integrative conceptual framework for global talent management that involves the necessity, challenges, and roles of HRD. Considering cross-cultural viewpoints and multinational enterprise issues in HRD, the study analyzed why talent management is necessary and the challenges of developing talent. Finally, proposals were made for developing global talent and roles for HRD researchers and practitioners. The Stakeholders. The results of this study will provide insights or guides for researchers interested in talent management/development and HR practitioners involved in a multinational enterprise.

Keywords

talent management, globalization, talent development, high potential, HRD challenges, HRD roles

Kim and McLean 567

Since The War for Talent (Michaels, Handfield-Jones, & Axelrod, 2001), business practitioners have enthusiastically embraced talent management (TM; Iles, Preece, & Chuai, 2010; Lewis & Heckman, 2006). Despite the recent shrinking employment caused by the economic recession, interest in talent in business has extensively increased with the unprecedented global competition (Athey, 2008; Scullion, Collings, & Caligiuri, 2010) because such talent is regarded as generating great ben- efits and value for the organization (Tarique & Schuler, 2010). The business para- digm has shifted from marketing and finance to “talentship” (Boudreau & Ramstad, 2005, p. 21).

As the world economy continues to globalize, organizations continue to increase their international profits and intensify their overseas investments (Guthridge & Komm, 2008). As this occurs, the importance of global talent in organizations has also been increasing. Managing and developing necessary global talent are regarded as among a company’s priorities for sustainable growth (Collings, McDonnell, & Scullion, 2009; Guthridge & Komm, 2008). According to an Ernst & Young survey that included more than 150 global executives among Fortune 1000 companies, 65% of respondents answered that how to deal with global TM would highly impact their organization (Leisy & Pyron, 2009). For this reason, many organizations are making great efforts to acquire, develop, and retain talent worldwide (Boudreau & Ramstad, 2005; Lewis & Heckman, 2006).

In spite of the recent enthusiastic attention to this theme in business, academic activities on managing global talent have not yet fully recognized its importance (Burbach & Royle, 2010). The concept and features of TM have not been clearly and sufficiently explored (Collings et al., 2009; Lewis & Heckman, 2006), and many stud- ies still debate its identity, definition, and scope (Collings & Mellahi, 2009; Farndale, Scullion, & Sparrow, 2010; Iles et al., 2010; Lewis & Heckman, 2006; McLean, 2010; Tarique & Schuler, 2010). Although there is a view in which TM may be a business fad or “old wine in new bottles” (Iles et al., 2010, p. 126), how to deal with talent is critical for organizations to develop in a sustainable way, no matter what we call TM (McLean, 2010). Most studies on TM were found in human resource management (HRM), although development, as focused in HRD, is one of the key elements in the TM pro- cess, and its importance is being increasingly emphasized (Collings & Mellahi, 2009; Tarique & Schuler, 2010). When it comes to a global context, only a few studies on global TM were found. However, these studies, which focused on concepts or cases, explained only part of the global TM approaches and did not provide an integrative understanding of what is going on globally in TM in an HRD perspective.

The purpose of this article is to identify the necessity and challenges of TM in a global context and suggest roles for HRD. First, studies on TM not only in HRD but also in related disciplines were investigated. Then, consideration was given to cross- cultural and multinational enterprise (MNE) issues in HRD, specifically exploring why TM is necessary and the challenges of managing and developing talent in a global setting. Finally, proposals were made for developing global talent and roles for both HRD researchers and practitioners. In this study, we supported the perception of

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McLean (2010) and Collings and Mellahi (2009) that TM is not a very new concept but should be reemphasized by HR professionals to identify key positions and develop a talent pool, a critical step for successful TM. In addition, findings in this study focused on global TM, which is different from TM in a domestic context.

The results of this study will contribute to further academic and practical studies on global talent by providing guidelines for strategic approaches to managing and devel- oping talent in a global environment.

Talent Management As TM is a relatively new topic in HR, first introduced as a unified concept in the 1990s, there is still ambiguity and a lack of agreement in terms of its definition, nature, and features (Collings & Mellahi, 2009; Garrow & Hirsh, 2008; Iles et al., 2010; Lewis & Heckman, 2006). However, recently, several studies on TM have helped define its attributes, scope, and aspects in both empirical and conceptual ways.

There are three perspectives on TM prevalent in organizations (Lewis & Heckman, 2006). The first looks at TM as typical HR roles and activities. In this perspective, HR provides the same approaches to talent, however that gets defined, through recruiting, development, and retention as is done with employees not defined as talent. The second view emphasizes how to secure and develop internal talent by building talent pools. This is generally related to organizational staffing and career planning. In the third perspective, talent in the organization is identified not for certain jobs or through specific succession plans but through recognizing outstanding individual performance. In this view, organizations evaluate employees according to their performance and try to retain the talent of the A grades and eject the C and D grades. In addition to these three perspectives, there are talent pipeline approaches, such as succession planning and leadership development, that are regarded as TM (Iles et al., 2010).

By borrowing the concept from a supply chain perspective, Cappelli (2008) pro- posed four principles for operating TM more effectively. The four principles are hiring or developing talent according to the business strategy as an investment; reflecting the uncertain future; improving the cost-efficiency of employee development; and balanc- ing individual and the organizational interests in development investment.

Integrating recent definitions and perceptions on TM, Collings and Mellahi (2009) proposed a definition for TM emphasizing its strategic aspects:

Activities and processes that involve the systematic identification of key posi- tions which differentially contribute to the organization’s sustainable competi- tive advantage, the development of a talent pool of high potential and high performing incumbents to fill these roles, and the development of a differenti- ated human resource architecture to facilitate filling these positions with com- petent incumbents and to ensure their continued commitment to the organization. (p. 304)

Kim and McLean 569

In the same vein, Collings and Mellahi (2009) also developed a theoretical model of strategic TM. In their model, the firm’s performance results from a dif- ferentiated HR architecture. To develop and utilize internal talent, an organization should recognize which positions are critically related to its performance. Once a talent pool of high potentials and high performers is formed by developing or recruiting talent, the pivotal positions should be filled from the pool. These organi- zational efforts in HR architecture are intended to enable talent to retain work moti- vation, organizational commitment, and extra-role behavior, which results in sustainable performance in the organization. Organizations that deal with human resources in more than one country, however, need different strategies and action plans for talent from domestic organizations. That is, global TM should involve an integrated strategy of TM activities at a global level in order for the business suc- cess of global organizations that goes beyond general HR assignments (Collings et al., 2009). Thus, global TM is defined as an organization’s efforts to acquire, develop, and retain talent to meet organizational strategies on a global scale, given not only the differences between organizations but also their global and cultural contexts (Scullion et al., 2010; Tarique & Schuler, 2010). Based on the interna- tional human resource management context, Tarique and Schuler identified chal- lenges that influence global TM activities, dividing the challenges into “exogenous” and “endogenous” drivers (p. 126). External challenges include globalization, workforce demographic changes, and shortages of talent, and internal ones incor- porate regional specification, retaining talent, and competencies.

HRD in a Global Context The more globalization, the more studies and practices in international HRD are needed (Wang & McLean, 2007). To support organizational work successfully in this broad and complicated business environment, HRD professionals need a global per- spective and understand differences in cultures among countries (McLean, 2006). However, the majority of the studies on cross-cultural training have looked at culture not as the context but as the content of the training and focused on how to prepare expatriates (Osman-Gani & Zidan, 2001).

Global HRD can promote the global success of the organization because the perti- nent development of human capital produces an invaluable organizational resource (Marquardt, Berger, & Loan, 2004). When organizations become globalized, roles and activities of HRD will also be influenced by different cultures, ways of doing business, physical locations, environments, and languages. If HRD relies on the same approaches in a global situation as used in a domestic setting, this may result in inappropriate behaviors and decisions by employees. This can then lead to lower performance or even business failure. Therefore, HRD professionals should know how to deal with different cultures and utilize global HRD interventions needed for organizations involved in international or global activities (Marquardt et al., 2004; McLean, 2006). These global interventions include virtual or cross-cultural team building, cultural

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self-awareness, cross-cultural training, sharing stories, joint ventures, global job assignments, and blending of diverse cultures (McLean, 2006).

DeSimone, Werner, and Harris (2002) listed the four major elements included in most cross-cultural training programs: (a) raising the awareness of cultural differ- ences, (b) focusing on ways attitudes are shaped, (c) providing factual information about each culture, and (d) building skills in the areas of language, nonverbal com- munication, cultural stress management, and adjustment adaptation skills (p. 639). Cross-cultural training needs to develop knowledge, skills, and attitudes for interac- tions with people from different cultures (Osman-Gani & Zidan, 2001).

Method To conduct a comprehensive review of literature, we identified keywords and related terms for a database search: talent management, talent development, global talent management, global talent development, global human resources, international human resources, and cultural training. The search was conducted at the end of 2010. The identified literature was screened by types of publication (scholarly article, research report, and book) and published time (only after 1990), with an initial abstract review. Relevant literature (n = 82) was identified through Google Scholar and several academic databases, such as Academic Search Complete, Business Source Complete, Eric, Human Resource Abstracts, and ABI/INFORM Global, and by refer- ences found in the resulting articles.

In spite of the few studies on TM or global TM in HRD, we found a number of relevant literature related to TM in HRM and industrial psychology. The identified studies were analyzed to identify how academic studies and practical activities related to global TM have been conducted and how to maximize developing global talent in the organization.

Why Is Global TM Necessary? Global TM includes organizational activities to acquire, develop, and retain talent for organizational strategies on a global scale, taking account of cultural contexts (Scullion et al., 2010). Despite the recent global economic recession that has resulted in massive downsizing and restructuring in business, the majority of firms still recog- nize TM as one of the top organizational priorities (Tarique & Schuler, 2010). The reasons global TM is necessary can be identified as expansion of a market to the world, deficiency of talent, and competition for talent.

Expansion to the World As companies step into a global environment, they face competition for talent, one of the most valuable assets in the organization (Bartlett & Ghoshal, 1998). A Hewitt survey of more than 500 companies in the United States revealed that 45% of the

Kim and McLean 571

organizations were currently doing or within 3 years would do business in other countries (Gandossy & Kao, 2004). The success of the organization in a global set- ting depends on how the resources are used and how talent is supported to commit to the work and organization (Marquardt et al., 2004). Marquardt et al. (2004) clas- sified organization types according to global status: domestic, international, multina- tional, and global. They found that each stage had different strategies, products, competitors, markets, structures, and cultural sensitivity. Because of these different corporate activities, globalized organizations need talent who can make a profit in a wide scope of environments (Farndale et al., 2010). Moreover, infrastructure around TM in other regions may be different from the headquarters country of the organiza- tion (Leisy & Pyron, 2009; Odell & Spielman, 2009).

According to a McKinsey Global Survey, most global companies expect that emerging global markets will provide not only more production but also talent and innovation and plan to look for talent in local markets (44%) or from developed mar- kets and deploy them to emerging markets (35%; Dye & Stephenson, 2010). To iden- tify, acquire, develop, and retain global talent, global organizations need new types of competencies, recruitment strategies, development approaches, career paths, and reward systems that are different from the domestic environment (Marquardt et al., 2004). Global TM is not merely about managing physical bodies of smart people but also about dealing with human capital and the intangible resources of individual knowledge and skills (Odell & Spielman, 2009).

Deficiency of Talent The U.S. labor force will decline as Baby Boomers retire and the birth rate decline (Athey, 2008). As in the United States, several reports and studies warned that work- ing populations in most developed countries were rapidly decreasing, and this phe- nomenon would spread over the world in a few years (Gandossy & Kao, 2004; Hayutin, 2010; Leisy & Pyron, 2009; Orr & McVerry, 2007; Strack, Baier, & Fahlander, 2008; Tucker, Kao, & Verma, 2005). According to Hayutin, for the past 20 years, the working-age population grew rapidly in Africa, the Middle East, and Asia, but, for the coming 20 years, the increase would slow in most countries. Most devel- oped countries are projected to face a workforce shrinkage, and the European working population will decline by 50 million (Hayutin, 2010).

The shortages of labor will result in a serious deficiency of talent (Strack et al., 2008) that can cause low productivity in organizations (Dye & Stephenson, 2010). This deficiency will affect the state of talent pools in organizations. Relying only on traditional HR activities may be an ineffective way to retain enough talent because of the limited resources in the labor market. For a sustainable talent supply, organizations need to emphasize not only acquiring and retaining high performers but also develop- ing internal employees who have potential and encouraging them to increase their abilities (Athey, 2008; Strack et al., 2008). In addition, the development activities should not be ad hoc or haphazard but strategically planned to align organizational goals and vision (McDonnell, Lamare, Gunnigle, & Lavelle, 2010).

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Competition for Talent

The lack of labor may be one of the major reasons why more intense competition to acquire and retain talent happens (Strack et al., 2008). However, a lack of critical skills that employees have is also regarded as one of the key factors that increase the need for talent globally (Odell & Spielman, 2009; Zheng, 2009) because skill defi- ciency is related to a high rate of turnover (Zheng, 2009). As global competition for talent heats up, organizations that do not prepare ways to acquire, develop, utilize, and retain talent may fall behind in a race for global business. Therefore, organizations need to consider carefully the actions they take for a sustainable talent supply (Bhatnagar. 2008).

Challenges of Developing Global Talent Given the geographic and cultural scope in which global organizations work, we found three primary challenges that may occur while developing global talent: ethno- centric strategy, worries about global mobility, and barriers between headquarters and subsidiaries countries.

Ethnocentric Strategy One of the critical challenges global organizations can encounter when they deal with talent development is ethnocentrism, defined as a belief that other groups are inferior to one’s own (Barger, 2008). Many organizations are not aware that what they have carried out may not be applicable to other regions, cultures, or countries and believe that standardization through an ethnocentric approach is more efficient than consider- ing difference. Indeed, many HR practitioners struggle with a balance between global formalization or standardization and local flexibility or customization (Begley & Boyd, 2003). With global standardization (formalization), organizations may expect efficiency and fairness in HR policies and activities (Begley & Boyd, 2003). However, regional strategies for talent—hiring regional talent and developing them taking into account local contexts—can result in better performance with lower costs than central strategies because each region or country may have a different perception and condi- tion of talent (Tarique & Schuler, 2010).

For instance, Boussebaa and Morgan (2008) discovered that one of the challenges of a multinational company in France, with headquarters in the United Kingdom, was the difference in understanding of talent in headquarters. According to their study, talent has a meaning of someone who has potential among the U.K. companies, whereas talent in France means someone who has already developed and proven their abilities. Failure to take into account the different understanding of concepts of talent brought about a failure of the talent development system projects led by the British company in France.

Moreover, ethnocentric perceptions of global organizations can result in less prep- aration for global assignments of their talent, which is associated with expatriate

Kim and McLean 573

failure (Choi, 2002; Shen & Lang, 2009; Yeaton & Hall, 2008). According to Osman- Gani (2000), U.S. expatriates generally deemed that a 3-day predeparture training is most appropriate, whereas the majority of German, Japanese, and Korean expatriates considered at least a 1-week-long training as a minimum. In fact, 16% to 40% of U.S. expatriates fail their assignment and return prematurely (Wagner & Hollenbeck, 1995), which is an apparent contrast to a 5% to 10% global assignment failure of non- U.S. expatriates (Dowling, Welch, & Schuler, 1999).

Worries About Global Mobility Through the McKinsey Global Survey, Dye and Stephenson (2010) found that 35% of global companies considered deploying talent employed in the host country to other countries. This means a substantial number of people will work for years in an environment where the culture, language, law, business style, and weather may be different from their home country. Although the experience of global assignments can be invaluable for learning and development, many employees assigned to work in another country may be demotivated not only because of the new environment they will face but also because of worries about career disadvantages after repatriation to their home country (Guthridge & Komm, 2008).

Marquardt et al. (2004) reported that 20% of the repatriates left their organization within 1 year after they came back and 50% quit the job within 1 to 3 years. Mismanagement of expatriates can cause tremendous damage to organizations. The reasons why expatriates fear global mobility are that they think they lose promotion opportunities, there may be limited positions for them when they come back, the overseas assignment may be a result of a demotion, few colleagues welcome them back (Allen & Alvarez, 1998), and they hear about negative repatriate experiences from their colleagues (Farndale et al., 2010). In addition to the situations that may happen in the organization, reverse culture shock of the expatriates themselves, as well as their families, can result in maladjustment (Marquardt et al., 2004).

De Cieri, Sheehan, Costa, Fenwick, and Cooper (2009) found that national identity with their country of birth and quality of life in the home country are also factors that can influence global mobility of employees, either in a positive or negative way. A strong sense of national identity is likely to strengthen the desire for repatriation. In terms of quality of life in the home country, they contended that people tend to desire to relocate and stay in another country if the life in the host country is better than in the home country.

Barriers Between Headquarters and Subsidiaries When the goals of the global organization’s headquarters are not in alignment with the subsidiaries, the regional or local strategies and activities may not be in accord with the overall organization’s purposes (Bjorkman, Barner-Rasmussen, & Li, 2004). If the relationship between headquarters and subsidiaries is distant, local branches

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will be interested in developing talent only for their performance, not for the overall success of the organization. In this regard, subsidiary managers may recruit, assess, and develop talent with a standard according to their own strategies and competen- cies rather than that of the headquarters (Mellahi & Collings, 2010). Sometimes the best employee in the organization can be a victim of abandonment when he or she is positioned between the headquarters and subsidiary (Gandossy & Kao, 2004). Furthermore, this defensive behavior can bring about a reduction in effectiveness of global TM strategies (Farndale et al., 2010).

When barriers between headquarters and subsidiaries are strong, a lack of appropri- ate information on talent in the subsidiaries can cause a failure of the global TM sys- tem, which may result in limited opportunities for talent at subsidiaries to work in the upper management team at headquarters (Mellahi & Collings, 2010).

Mellahi and Collings (2010) also found that a reason for a lack of communication between headquarters and subsidiaries is culture. In regions that have a strong power distance culture, such as China, Japan, and South Korea, people tend to regard saving face for someone who is in a higher position as very valuable. Therefore, employees cannot easily report their opinions to headquarters even though mismanagement of talent may happen in the subsidiary.

HRD Roles for Success in Global TM Wooldridge (2006) warned that relying heavily on a particular approach to talent can no longer be beneficial for the organization and can even adversely affect the future of the organization. Too much emphasis on attracting and retaining talent, and ignor- ing or neglecting development or deployment, may cause significant harm to the organization (Athey, 2008; Pfeffer, 2001). For this reason, many global organizations have changed their talent supply strategies from hiring outsiders to developing insid- ers (Boussebaa & Morgan, 2008; Osman-Gani & Chan, 2009), although this does not mean that external transfusion of talent has been ignored. The roles of HRD are critical for global organizations, not only to support talent in order to generate better performance but also to develop employees who have global potential that will lead to a sustainable talent supply for the organization. For successful global TM, we sug- gest roles for HRD in the areas of balancing centralized and decentralized strategies, developing global competencies, creating structured global talent development, and conducting global team building.

Balancing Centralized and Decentralized Strategies Although global organizations may have headquarters that have central power and roles, their global subsidiaries are normally led by managers from diverse areas (Marquardt et al. 2004). That is, on the one hand, globally unified strategies, struc- tures, and corporate cultures are emphasized; on the other hand, locally specified and customized approaches cannot be ignored. Thus, when a global organization makes

Kim and McLean 575

a decision, the uniqueness of each local environment should be taken into account throughout the vision and strategies of the global organization (Harvey, Fisher, McPhail, & Moeller, 2009).

To enhance the organization’s homogeneous culture and strategies, many compa- nies send managers from headquarters to sites around the world to communicate cen- tral values and cultures (Marquardt et al., 2004). HR managers from headquarters can help incorporate and utilize global TM systems at the subsidiaries, taking into account the local context. Beechler and Woodward (2009) mentioned the Coca Cola Company as an example of an effective strategy of bringing local talent to headquarters and developing their leadership ability. After one or one and a half years, they go back to the subsidiaries as a manager and spread the company’s core values and culture to the local firms. The shared global TM system and its strategies will make it possible for global organizations to have a balanced supply, structured deployment, and develop- ment in terms of talent (Mellahi & Collings, 2010).

Using the same values, systems, and even HR resources tends to provide organiza- tional efficiency, such as flexibility for deploying talent, active communication and cooperation between organizations, and cost saving. However, talent developed for the specific market and culture can result in better performance. A decentralized approach that develops and delivers localized or acculturated interventions (Marquardt et al., 2004) can be effective for local organizations and employees. For example, from a study with Japanese MNCs, Arreglel, Beamish, and Hébert (2009) found that the regional-level effects provided positive influences, such as expanded localized knowl- edge, strong social relationships, and transfer of knowledge and practices due to geo- graphic proximity. Talent hired and developed through localized strategies may be more productive at the local businesses than at headquarters or in another region. When local HR practitioners adopt a TM system and interventions created by head- quarters, the success of the system and interventions will depend on how well the system is localized, taking account of the local culture and business context (Boussebaa & Morgan, 2008).

Developing Global Competencies Global competencies are indicators that global organizations utilize to manage global talent (Farndale et al., 2010). The competencies need to be used to align and integrate activities and processes with regard to TM in each subsidiary and region in order to maximize the synergy of organizational functions, as well as performance excellence of talent (Heinen & O’Neill, 2004). The role of HRD here is to identify the competen- cies and provide effective interventions to develop the abilities of global talent.

Marquardt et al. (2004) introduced six global competencies as special abilities for global employees: cultural self-awareness, global perspectives, language, tolerance for ambiguity and differences, cultural flexibility, and strong communication skills. Among these competencies, the need for cognitive abilities is related to a global mind- set. A global mindset, which is the ability to develop individual criteria that can be

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applied to different regions, nations, and cultures and properly utilize those criteria in a different context, is the most critical for the sustainable success of global organiza- tions (Begley & Boyd, 2003). Tarique and Schuler (2010) found three types of required global talent competencies through several related studies. First, general business competencies, which can apply to most companies, are needed for global talent. The second is cross-cultural competencies divided into the competencies we can easily learn, such as knowledge about the culture, and ones that take a long time to obtain, such as characteristics or attitudes common within the culture. The last type is compe- tencies for creating and managing knowledge required for business performance. Global competencies can be utilized not only for training and development but also for global recruitment, assessment, career paths, staffing, and reward and recognition (Marquardt et al., 2004).

Creating Structured Global Talent Development Global organizations need a structured development system to grow their employees’ abilities for business competitiveness (Marquardt et al., 2004). The structured devel- opment system should be connected to business strategies and goals, reflect needs for global talent development strategies, identify action steps, and analyze inner and outer factors and resources.

Global leadership development, succession plans, and expatriate training can be included in a global development system (Odell & Spielman, 2009). Although these interventions are different from each other, the key activities used may be similar. Systematic cross-cultural training and encouraging global assignments may be exem- plary activities.

Global talent who work with people from different cultures and backgrounds need cross-cultural training because the training helps employees not only obtain knowl- edge, skills, and attitudes needed for challenging assignments (Osman-Gani & Zidan, 2001) but also adapt to a culturally different region or country, which is essential for a successful international task (DeSimone et al., 2002). Despite much research on cross-cultural training, McLean (2006) pointed out that many training programs deal- ing with cross-cultures are still “atheoretical” (p. 211) and emphasize mainly what to do or not to do. Relying only on cognitive information and linguistic skills can be less effective for people who are preparing for global tasks (Guthridge & Komm, 2008; McLean, 2006). To make a cross-cultural training program effective, trainees should have learning experiences in terms of acculturation and be encouraged to have a “cul- tural milieu” (Marquardt et al., 2004, p. 44) in the program (Stanek, 2000).

Work experience in a challenging assignment is one of the most effective ways of developing employees (Meyers, Paunonen, Gellatly, Goffin, & Jackson, 1989). This effective approach is also applied to development in a global setting, providing thor- ough support for completing global assignments (McLean, 2004). These assignments can be coordination, computational, or creative tasks so that global talent can develop interpersonal skills, problem-solving abilities, mediating abilities, business insights,

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and specific subject knowledge and techniques (Harvey et al., 2009). Experiences in different cultures and countries also enable global talent to develop cultural awareness and tolerance (Guthridge & Komm, 2008). In spite of its merit, a global assignment is the least extensively used intervention among global organizations because it takes time to produce desirable results, and employers may be afraid of providing continual opportunities that may fail and damage their business (McDonnell et al., 2010). However, HRD needs to create opportunities for challenging global assignments and establish a supportive environment for talent so that they can improve their capacities and commit to their job and organization (Hiltrop, 1999).

These development interventions provided for talent should be strategically con- nected to the global TM system. McDonnell et al. (2010) discovered that a number of global organizations did not allocate learning resources to their talent, although they had formalized global development programs. HRD practitioners should recognize what interventions they have and how they can help talent to develop their organiza- tional performance.

Conducting Global Team Building A global team, a group of employees from different cultures or countries who work together to do a particular job (McLean, 2006), is regarded as an integrated, strategic, and generative approach to managing global talent (Beechler & Woodward, 2009). As telecommunicating technologies are developed, global teams can be organized as not only face to face but also virtual teams in which group members can work in different places at the same time using a web-chat or web-cam (McLean, 2006). Regardless of type, a global team is expected to provide organizations with capa- bilities to respond to global challenges, solving complex global problems quickly (Marquardt et al., 2004).

According to Marquardt et al. (2004), a global team influences global TM in sev- eral positive ways. First, a global team can encourage an atmosphere of managing talent from all over the world. If employees in an organization are culturally and nationally diverse, the employees can help stop or reduce the effects of making a biased decision when recruiting, deploying, promoting, and developing people. Second, organizations have an opportunity to find and develop their high potentials scattered over the world. Through a global team, talent located in a subsidiary can have a chance to show their capability and to be provided with equal support for development from the organization. Third, while dealing with challenging global tasks, talent can enlarge perspectives, increase global capacities, and gain global managerial skills.

However, a global team does not always guarantee successful results. Several studies have pointed out the ineffectiveness of a globally heterogeneous team because of communication problems, behavioral conflicts, and discriminations (Chatman, Polzer, Barsade, & Neale, 1998; Ely & Thomas, 2001; Thomas, 1999). In this regard, Thomas (1999) found that the difference in effectiveness between a culturally

578 Advances in Developing Human Resources 14(4)

homogeneous and heterogeneous team is dependent on the nature of the tasks. He contended that homogeneous teams perform better with highly structured or overall assessment tasks, whereas diverse teams show more confidence and proficiency with tasks involving creative solutions and idea generation. In addition to the nature of the tasks, he argued that individual cultural characteristics also influence the result of the effectiveness of diverse teams. That is, the more individuals with collectivistic char- acteristics a team has, the more effective the performance of the team is because a collectivistic person tends to be more receptive and regards group harmony as impor- tant. However, those from a collectivistic culture may be less creative because it is more subject to groupthink.

To enhance the effectiveness of a global team, global organizations need to pro- vide organizational activities, as well as develop their systems and cultures, so that the organizations can be open to diversity without any unhealthy interpersonal con- flict and difficulty (Beechler & Woodward, 2009). Diversity training, coaching, and mentoring programs can help develop both knowledge and attitudes for working with diverse colleagues (McGuire, 2011). Cultural facilitation and mediation by HRD professionals may reduce the incidences of prejudice and misbehavior in the first meeting (McLean, 2006). When individuals are willing to learn about and accept differences, a diverse team can generate a synergic effect and provide better performance (Ely & Thomas, 2001). Interpersonal problems can also be addressed by clarifying team goals, roles and responsibilities, or procedures and processes (Burke, 2011). Efforts for global team building should be a long-term approach in a systemic way so that organizations sustain the interventions and develop their cul- tures (McGuire, 2011).

Conceptual Framework for Global TM On the basis of the findings explored, we created a conceptual framework for the necessity, challenges, and roles of HRD in terms of global TM (Figure 1). First, global TM plays a critical role for global organizations because of the globalized business environment, shortage of talent, and competition for talent. Second, ethnocentric per- spectives in terms of talent development, concerns of talent about global mobility, and gaps between headquarters and subsidiaries can be challenges in developing global talent. Third, for success in global TM, HRD needs to balance strategies between centralized and decentralized, develop global competencies, create a structured devel- opment system, and support global team building.

Discussion Despite the limited literature directly relevant to global TM, we found sufficient information to present the necessity, challenges, and HRD roles through reviewing literature related to HRD, HRM, and industrial psychology and synthesizing their contents. Our findings support our initial research assumption that TM is not a

Kim and McLean 579

concept newly created but is reinterpreted HRM/HRD activities focusing on high potentials or high performers (Collings & Mellahi, 2009; Iles et al., 2010; McLean, 2010). Challenges and HRD practitioners’ roles regarding global TM may not be very different from those of general international HRD. However, we believe how to manage or develop global talent is critical for success in global business and HR scholars and practitioners should keep paying attention to matters of global talent.

What we discovered in this article makes several contributions to HRD. First, we disclose a topic that has not received much attention among HRD professionals but inevitably needs their involvement and interest. What HRD can consider and do for talent development in a global context was also identified. In addition, we provided strategic and systematic approaches to developing global talent for HRD professionals extending beyond relying solely on cross-cultural training, the most frequently occur- ring activity in both the field and academy.

This study has limitations. First, only studies written in English were reviewed because of our language and search limitations. Although it appears that the majority of research on global TM has been conducted in the United States, Europe, and coun- tries using English, such as Australia and Singapore, there may be studies or cases in non–English-speaking countries. Second, focusing only on content related to global talent and global HRD limited viewpoints beyond HRD and HRM, although we agree that TM should not be confined to HR. As global talent is emphasized in global busi- ness, identifying, developing, deploying, and retaining talent are no longer only HR’s job but the responsibility of all management from line manager to top executive (McCauley & Wakefield, 2006; Odell & Spielman, 2009). Third, our research focus is limited to for-profit organizations and do not include nonprofit global organizations. Thus, there may be difficulty in applying our findings to different types of global organizations.

Figure 1. Conceptual framework of the necessity, challenge, and HRD roles for global talent management (TM)

580 Advances in Developing Human Resources 14(4)

Recommendations for HRD Researchers

There are four recommendations we suggest for HRD researchers. First, HRD researchers need to pay more attention to global TM. Although the

number of articles on TM have rapidly increased since the concept of TM was intro- duced (Iles et al., 2010), more theoretical and practical studies are necessary for estab- lishing TM as a solid academic area within HRD. How to manage global talent has been one of the hot issues among organizations involved in international business or interested in global human resources. However, academic development of TM is still so minimal that what scholars have accomplished for TM does not meet the field’s needs. This leads many organizations to rely mainly on business consultants who may use tools or models not theoretically grounded. For the academic development of global TM, more cases need to be investigated and, based on those case studies, more empirical studies should be conducted. And then, HRD researchers can perform theory-building studies on global TM and examine those theories.

Second, HRD researchers need to be careful when they prescribe roles for HRD in TM. In an actual business situation, dividing HRD from HRM is likely to be mean- ingless because both have the same goal, contributing to organizational performance and have many overlapping tasks under the same umbrella, HR. Thus, it is hard to say that HRD oversees only training functions in TM or that identifying and deploying talent are only HRM’s functions. Rather, to supply the talent the organization needs, HRD must be involved in all processes of TM. For example, when individuals with high potentials need to be developed as leaders, HRD can draw a career map, identify necessary competencies, provide interventions, and evaluate not only TM activities but also the talent themselves.

Third, TM in nonprofit organizations should also be explored. Most studies on global TM are focused on corporations, not other types of organizations, such as non- governmental organizations. Because these organizations have different purposes, structures, and activities, they may need a different definition of talent and a unique process for managing talent.

Fourth, HRD researchers can broaden their perspective on TM to the national level. Most studies on TM in HR deal with the corporate level. Like the discipline of HRD involving community and nation, however, TM at the national level should also be explored by HRD scholars, recognizing a country as an organization. Therefore, a national policy on acquiring, developing, retaining, and utilizing talent, talent flow in a country, and national brain drain versus gain can be exemplary subjects for further studies on national TM. We expect that these studies will show reasons why phenom- ena that corporations cannot control occur, such as a deficiency of talent or incompe- tent employees, and provide appropriate directions for fundamental remedies.

Recommendations for HRD Practitioners Global TM can be a new term and area among HRD practitioners, especially those involved in a global organization. A great deal of attention is necessary when HRD

Kim and McLean 581

practitioners deal with global TM because efforts for managing talent are likely to fail without consideration of the necessities and possible challenges mentioned ear- lier. We recommend the following for HRD practitioners who are preparing to man- age global talent.

First, the meaning of talent should be defined, taking into account the organiza- tion’s business contexts and strategies. Even though organizations do business glob- ally in the same industry, they may have different types of business operations, such as company-owned, joint venture, and outsourced, and the TM approach should be adapted to the business type (Gandossy & Kao, 2004). Misunderstandings can occur when leaders are seen as equal to talent or leadership development is considered the same as talent development. However, a leader can be talent depending on whether the position is critical for the organization’s profit and sustainable development.

Second, TM is a long-term approach. If HRD practitioners expect immediate effects from global TM, the results may be disappointing. Hasty changes in the management plan and system because of expectations for short-term results can cause not only a waste of time and money but also a loss of trust in HR by the organization. Thus, HRD practitioners may need to be cautious with TM, making sure every step of TM works properly and persuade clients who desire instant outcomes of their investment on TM if necessary.

Third, successful global TM needs fairness in the whole process. Once employees question the criteria for selection of talent, the appropriateness of development oppor- tunities, and the timing of deployment or promotion, complaints about the TM system will arise and cause the organization to suspect its effectiveness. Constant communica- tions and clear statements on the policies and processes will help minimize employees’ confusion or misunderstanding about the organizational approach to TM.

Fourth, HRD practitioners should be aware that the process of TM can result in unexpected problems in cultures different from the host culture. For example, while managing the talent pool, designating talent may cause an unpleasant relationship among colleagues in collectivistic cultures. Because people regard group harmony as most desirable in those cultures, both the selected individuals and their colleagues may feel uncomfortable with a public announcement about the results of the selection. Sometimes, employees in the culture refuse to be identified as a talent because of their relationship with their colleagues.

Fifth, best practices or illustrative case studies can be produced and shared in orga- nizational and interorganizational levels in order to be used as a benchmark, develop more appropriate methods and processes related to TM, and enhance abilities of HRD practitioners. When these techniques are used, however, what is common and different from the applying organization should be taken into account.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

582 Advances in Developing Human Resources 14(4)

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

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Bios

Sehoon Kim is a PhD student in the Department of Educational Administration and Human Resource Development at Texas A&M University. He previously worked in the HR field in Korea. His research interests include work hours, talent management, cross-cultural issues, and brain drain.

Dr. Gary N. McLean (Ed.D., Ph.D. hon.) is president of McLean Global Consulting, Inc., a family business. As an OD practitioner, he works extensively globally. He also teaches regu- larly at universities in Thailand, Mexico, and France. He was formerly a senior professor and executive director of international human resource development programs at Texas A&M University and is professor emeritus at the University of Minnesota. He has served as President of the Academy of Human Resource Development and the International Management Development Association. His research interests are broad, focusing primarily on organization development and national and international HRD.

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Article

Does Leadership Style Make a Difference? Linking HRM, Job Satisfaction, and Organizational Performance

Brenda Vermeeren1, Ben Kuipers1, and Bram Steijn1

Abstract With the rise of New Public Management, public organizations are confronted with a growing need to demonstrate efficiency and cost-effectiveness. In this study, we examine the relationship between public organizational performance and human resource management (HRM). Specifically, we focus on job satisfaction as a possible mediating variable between organizational performance and HRM, and on the influence of a supervisor’s leadership style on the implementation of Human Resource (HR) practices. Drawing on a secondary analysis of data from a national survey incorporating the views of 6,253 employees of Dutch municipalities, we tested our hypotheses using structural equation modeling. The findings indicate that (a) job satisfaction acts as a mediating variable in the relationship between HRM and organizational performance and (b) a stimulating leadership style has a positive effect on the amount of HR practices used, whereas (c) a correcting leadership style has no effect on the amount of HR practices used.

Keywords HRM, leadership style, job satisfaction, organizational performance, public sector, Dutch municipalities

Introduction

During the last three decades, public sector performance has become an increasingly important issue. With the rise of New Public Management, targets, performance, and

1Erasmus University Rotterdam, The Netherlands

Corresponding Author: Brenda Vermeeren, Erasmus University Rotterdam, Room M7-13, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands. Email: [email protected]

510853ROP34210.1177/0734371X13510853Review of Public Personnel AdministrationVermeeren et al. research-article2013

Vermeeren et al. 175

a more business-oriented management approach have come to play central roles within the public sector (Boyne, Meier, O’Toole, & Walker, 2006; Osborne & Gaebler, 1992; Pollitt & Bouckaert, 2004). Several innovations in the field promised to increase the quality of public service while reducing its costs. However, research into human resource management’s (HRM) contributions to these developments in the public sec- tor has been scarce (Boyne, Poole, & Jenkins, 1999; Gould-Williams, 2003). This neglect persists despite the fact that employees (those who deliver public services) are crucial to achieving superior public performance. High-quality services require highly qualified and motivated personnel (Batt, 2002).

Based on numerous studies in the private sector, we can conclude that human resource (HR) practices and organizational performance are at least weakly related (Boselie, Dietz, & Boon, 2005; Guest, 2011; Paauwe, 2009). However, research com- paring HRM in the public and private sectors suggests that the HR policies and prac- tices in these sectors differ in many important areas (Boyne et al., 1999). In particular, public organizations are more likely than private organizations to engage in activities associated with the role of model employer. Such activities imply commitment to staff training, trade union, and workforce participation in decision making, promotion of equal opportunities, and a concern for the welfare of employees to meet their personal and family needs. Given these empirical findings, we cannot simply assume that the relationship between HRM and performance will be the same in the public sector.

In private sector–based research on HRM and performance, the assumption is that an underlying causal link that runs through employee outcomes (in the form of employee attitudes and behavior) connects HR practices with organizational perfor- mance (Boselie et al., 2005; Guest, 2002; Paauwe & Richardson, 1997). In other words, HR practices are implemented to influence employees, with the ultimate aim to positively influence the organization’s performance. Job satisfaction is conceptualized as one of the key indicators of employee outcomes in HRM and performance research (Guest, 2002; Purcell & Hutchinson, 2007). Previous research has demonstrated a positive relationship between HRM and job satisfaction (e.g., Guest, 2002; Steijn, 2004) and between job satisfaction and performance (e.g., Hackman & Oldham, 1975; Judge, Thoresen, Bono, & Patton, 2001; Taris & Schreurs, 2009). These findings sup- port the idea that job satisfaction acts as a mediating variable in the relationship between HRM and performance. At this time, only a few studies have examined that mediating relationship (e.g., Ahmad & Schroeder, 2003; Gelade & Ivery, 2003), but more research is needed to understand how HRM and organizational performance are related. Such research is even more important in the context of the public sector, as previous research showed differences in job satisfaction between public and private sector employees (DeSantis & Durst, 1996).

In general, in the HRM literature is stated that the HR practices perceived or expe- rienced by employees will be those enacted by their supervisors (Bowen & Ostroff, 2004; Paauwe, 2009; Purcell & Hutchinson, 2007; Wright, Gardner, Moynihan, & Allen, 2005). To influence employee outcomes positively, supervisors require well- designed HR practices for use in their management activities. Den Hartog, Boselie, and Paauwe (2004) stressed the important role that supervisors play in implementing

176 Review of Public Personnel Administration 34(2)

an intended HRM policy, as differences in implementation at this level may be attrib- utable to supervisors’ different leadership styles. Such differences in implementation and communication may lead to variation in employees’ HR perceptions. However, scholars have uncovered little empirical evidence that bears on the role of supervisors’ leadership styles in HRM implementation. Focusing on leadership style can provide additional insight into how supervisors influence the implementation of HR practices.

This study adds to prior research in three ways. First, we focus specifically on the relationship between HRM and organizational performance in the public sector. Second, we test whether job satisfaction acts within a public context as a mediator between HRM and organizational performance. Third, we focus on the influence of a supervisor’s leadership style on the implementation of HR practices. Thus, our main research question is as follows:

Research Question: To what extent is the relationship between HRM and the per- formance of public organizations mediated by job satisfaction and what is the influ- ence of a supervisor’s leadership style on the implementation of HR practices?

After a theoretical exploration of the literature on HRM, job satisfaction, organiza- tional performance, and leadership, we will formulate several hypotheses and test them using survey data from 6,253 employees of Dutch municipalities. We perform these tests using structural equation modeling (SEM). We will then discuss our find- ings. Finally, we conclude by describing suggestions for future research and implica- tions for theory and practice.

Literature Review

The increased focus on performance in the public sector has encouraged a large amount of research (Boyne et al., 2006; Halachmi & Bouckaert, 1996). In particular, the impact of management on performance in public organizations has been frequently studied (Meier, O’Toole, Boyne, & Walker, 2007; Nicholson-Crotty & O’Toole, 2004). The O’Toole and Meier (1999) model of management is well known and has often been used to test the impact managers may have on the performance of public organi- zations. In one of their articles, O’Toole and Meier (2008) focused on the internal side of management and, in particular, on the contribution of “the human side” of public organizations to organizational performance in public education. Their results indicate that the power of HRM in attracting and developing an organization’s human capital is important to organizational performance. Gould-Williams (2003), in turn, examined the relationship between HRM and performance in local government in the United Kingdom. He found, the more HR practices are used within an organization, the greater the impact on organizational performance. In both articles, the authors stated that more research is needed to explore the relationship between HRM and organiza- tional performance in the public sector.

Vermeeren et al. 177

As the existing literature has paid little attention to the relationship between HRM and performance in a public context, we must turn to the general HRM literature to get more insight. However, that literature contains a very diverse array of theoretical per- spectives, definitions, measurements, methodologies, and research fields (Boselie et al., 2005). Nevertheless, following Paauwe (2009), we can conclude that there is at least a weak relationship between HR practices and organizational performance. Yet, despite the fact that several studies indicate a link between HRM and performance, significant challenges to a full understanding of this relationship still exist (Boselie et al., 2005; Bowen & Ostroff, 2004; Guest, 2011; Paauwe, 2009).

In this study, we adopt a micro approach to HRM. This approach reflects a more operational view of HRM by focusing specifically on the effect of multiple HR prac- tices on individuals (Wright & Boswell, 2002). By using this micro approach, we attempt to acquire more insight into the impact of multiple HR practices on individuals (measured through job satisfaction) and, subsequently, on organizational performance. By focusing on job satisfaction as a mediating factor, our aim is to generate a better understanding of what takes place between HRM and performance. Furthermore, scholars frequently identify the leadership style of supervisors (who are increasingly charged with implementing HR practices) as a variable essential to a better under- standing of the relationship between HRM and performance (Bowen & Ostroff, 2004; Paauwe, 2009; Purcell & Hutchinson, 2007; Wright et al., 2005). In this respect, Purcell and Hutchinson (2007) used the term “people management” to mark the dis- tinction between a supervisor’s leadership style and the application of HR practices. This distinction is based on the assumption that supervisors require well-designed HR practices to use in their people management activities and that their leadership style will influence the way they enact these practices.

The Mediating Role of Job Satisfaction

Guest stated in 1999 that, given the growing interest in research on the relationship between HRM and performance, a focus on workers’ viewpoints has become increas- ingly important. An analysis of 104 articles by Boselie et al. (2005) confirms Guest’s impression that the linking mechanisms between HRM and performance have largely been disregarded. To understand how HR practices influence employees and improve worker performance in ways that are beneficial to the organization, research is required that concentrates on employee perceptions of HR practices and establishes relation- ships between their job satisfaction and organizational performance, to take one exam- ple (Purcell & Hutchinson, 2007). One model that takes this focus is the Paauwe and Richardson (1997) model on HRM, HRM outcomes and organizational performance. In this model, the first element consists of HR practices such as recruitment, rewards, and employee participation. This element influences the so-called HRM outcomes, such as job satisfaction and motivation. Both of these elements affect the third ele- ment, organizational performance, which involves performance indicators related to the effectiveness, quality, and efficiency of the organization.

178 Review of Public Personnel Administration 34(2)

A variety of studies have examined separate parts of this model. Focusing specifi- cally on the public sector, a number of studies have explored the relationship between HRM (Element 1) and HRM outcomes (Element 2; for example, Gould-Williams, 2004; Steijn, 2004) and between HRM outcomes (Element 2) and organizational per- formance (Element 3; for example, Kim, 2005; Ostroff, 1992). The model by Paauwe and Richardson (1997) adds to this research through its explicit focus on the mediating effect of HRM outcomes on the relationship between HRM and organizational perfor- mance. Moreover, the Paauwe and Richardson model adds to existing public sector research by promoting an explicit concentration on the concept of HRM itself. This concentration marks an important difference with the aforementioned management model by O’Toole and Meier (2008). Therefore, we use the Paauwe and Richardson model as the starting point for our research. However, while that model offers an exhaustive range of options to consider for each element, we limit ourselves to job satisfaction as the only included HRM outcome.

The introduction of job satisfaction enables us to refine the relationship between HRM and organizational performance. To a large extent, positive employee outcomes depend on employees’ perceptions of how much the organization cares about their well-being and values their contributions (Gould-Williams, 2007; Vermeeren, Kuipers, & Steijn, 2011). In this respect, the degree of job satisfaction will depend on the fulfill- ment of employee’s needs and values (Hackman & Oldham, 1975). To increase orga- nizational performance, it is likely important that the organization must not only meet the needs of customers, but also meet those of employees (Schneider & Bowen, 1993). This assertion is based on the assumption that if organizations care for their employ- ees, these employees will care for the organization (and their customers). In other words, this argument is based on the assumption that a happy worker is a productive worker (Taris & Schreurs, 2009). In this respect, the degree to which HR practices are introduced can be conceptualized as a marker of the extent to which an organization values and cares for employees. As noted above, previous research has demonstrated a positive relationship between HRM and job satisfaction (e.g., Guest, 2002; Steijn, 2004) and between job satisfaction and performance (Hackman & Oldham, 1975; Judge et al., 2001; Taris & Schreurs, 2009).1 These findings support the idea that job satisfaction acts as a mediating variable in the relationship between HRM and perfor- mance. However, this relationship is mostly studied in separate parts and seldom examined within one design. We will therefore study the relationships among HRM, job satisfaction, and organizational performance in one model. Following this plan, our first hypothesis is as follows:

Hypothesis 1: Job satisfaction acts as a mediating variable in the relationship between HRM and organizational performance.

The Role of Leadership Style

For many years, HRM and leadership were separate research areas. Gradually, interest in combining these two areas has grown. The connection between these areas is based

Vermeeren et al. 179

on the proposition that employees are likely to be influenced by the HR practices they experience and their supervisor’s leadership style (Purcell & Hutchinson, 2007). Supervisors need HR practices to support their management activities, and the way supervisors enact these practices is influenced by their leadership style. However, pre- vious research on the relationship between HRM and performance paid little attention to supervisors’ leadership styles. One of the few studies that did attend to leadership style demonstrated that leadership and employee satisfaction with HR practices have a strong and independent impact on such employee attitudes as job satisfaction and commitment (Purcell & Hutchinson, 2007).

However, this demonstration does not allow us to say much about the influence of different leadership styles on the use of HR practices within an organization. It is appropriate to assume a relationship exists between different leadership styles and HRM, because the choice of which HR practices to use appears to be linked to leader- ship style. For example, Zhu, Chew, and Spangler (2005) have shown that transforma- tional leaders influence organizational outcomes by their use of “human-capital-enhancing HRM.” Human-capital-enhancing HRM is defined as an approach to managing people that achieves competitive advantage through the strategic development of a highly committed and capable workforce (Zhu et al., 2005). Their assumption is that transfor- mational leaders possess a clear vision of what the organization will be, and what it will do, in the future. HRM plays a critical role in the communication process between leaders and employees, because without such HRM activities as staffing and training the leader’s vision will not be transmitted effectively.

Today, scholars in the field of leadership research use many and varied conceptual- izations of leadership. Despite differences among these conceptualizations, we can detect a certain commonality. This commonality is not of jargon, but of the ideas that underpin the language used. Many conceptualizations are based on a distinction between an internally and intrinsically directed, people-oriented, and stimulating lead- ership style versus an externally and extrinsically directed, task-oriented and correct- ing leadership style (Howell & Avolio, 1993). For example, this distinction underpins the differentiation made between transformational versus transactional leadership (Bass & Avolio, 1994) and participative versus authoritive leadership (Likert, 1961). With respect to the relationship between leadership style and HRM, Guest (1987) has argued that a more correcting leadership style could be linked to hard HRM and that a more stimulating leadership style could be linked to soft HRM. In his research, he refers to the classic distinction in McGregor (1960) between theory X and theory Y. The “hard” version of HRM is widely acknowledged to place little emphasis on work- ers’ concerns. In contrast, “soft” HRM would be more likely to pay attention to work- ers’ outcomes (Guest, 1987).

We will also use McGregor’s distinction between theory X and theory Y. This dis- tinction, despite frequent criticism (Bobic & Davis, 2003), still remains useful for distinguishing between the different leadership styles a supervisor can adopt. Theory X assumes that employees are not self-motivated and will avoid work if possible. Employees, therefore, must be closely supervised and corrected when necessary. Employees are seen as factors in the production process. Theory Y, in contrast, assumes

180 Review of Public Personnel Administration 34(2)

that employees are ambitious and self-motivated and can play a crucial role within the organization. Supervisors must ensure that their employees are properly stimulated by paying attention to their values and needs. It is in this context that Guest (1999) stated that if more HR practices are used, the impact on workers will be larger. Based on the idea that an HRM system should be designed to meet employees’ needs for skills and motivation and provide them with the opportunity to profile themselves to improve their performance (Appelbaum, Bailey, Berg, & Kalleberg, 2000), we would expect that a stimulating leadership style (theory Y) would be accompanied by the use of a greater number of HR practices tailored to invest in employees and meet their needs than would be the case for a correcting leadership style (theory X), in which employ- ees are seen as factors in the production process. This leads us to our second hypoth- esis, which consists of two separate parts:

Hypothesis 2a: A stimulating leadership style has a positive effect on the amount of HR practices used within an organization.

Hypothesis 2b: A correcting leadership style has a negative effect on the amount of HR practices used within an organization.

Figure 1 shows the overall theoretical model representing the hypotheses thus developed above. In the following sections, we present the methodology for testing this model and our empirical results.

Research Methods

A quantitative study was carried out to address our research question. This section describes the data and the measurement procedure, including the results of a confirma- tory factor analysis using AMOS version 16.

Stimulating Leadership

HRM Job

Satisfaction1

Organizational Performance1

Correcting Leadership

2B

2A 1

Figure 1. Conceptual model.

Vermeeren et al. 181

Data

To test our hypotheses about the direct and indirect relationships between the variables we apply a quantitative research design. For our analysis, we used data from a Dutch national survey on well-being among municipal employees. In 2005, a public sector organization representing municipalities approached 29,626 employees of Dutch municipalities in all functional areas (e.g., administrative, sociocultural, legal and information and communication technology functions), asking them to fill out a ques- tionnaire about employee well-being via Internet or mail. Of these employees, 7,918 respondents participated in the research. The respondents with missing data for the analyzed variables were removed from the sample, which resulted in a file with 6,253 respondents. The data for the resulting sample are as follows: 58% are male, the pre- dominant age is 45 to 54 years (37.5%), and the predominant educational level is secondary (vocational) education (43.1%). When compared with general population data (A+O fonds Gemeenten, 2005), the sample’s deviation from the general popula- tion is small (2%-6%). Despite the response rate of 26.7%, the respondents are gener- ally representative of the population with respect to gender, age, and educational level. The respondents also worked in different municipalities spread across the Netherlands and in organizations of various sizes.

Measures

HRM. HRM and performance research exhibits little consistency in the selection of HR practices by which to measure HRM. Boselie et al. (2005) analyzed 104 important HRM and performance studies and identified as many as 26 different HR practices that are used in different studies. No single agreed, or fixed, list of HR practices or systems of practices exists by which to measure HRM (Guest, 2011; Paauwe, 2009). Nevertheless, a certain consensus regarding the measurement of HRM has emerged in the scientific literature on HRM and performance during the past decade. More than half of the articles published after 2000 made use of Ability, Motivation, and Oppor- tunity (AMO) theory (Paauwe, 2009). AMO theory proposes that an HRM system should be designed to meet employees’ needs for skills and motivation and, after meeting those needs, provide them with opportunities to use their abilities in various roles (Appelbaum et al., 2000). The underlying idea is that employees will perform well if they have the requisite abilities, when they are motivated and when they obtain the opportunity to profile themselves (Appelbaum et al., 2000).

In our study, an existing data set is used for secondary data analysis. Although this data set can be employed to search for the presence of HR practices within organiza- tions, it was not developed for this specific purpose. The survey only measures 10 different HR practices used to a limited extent, and it is not able to measure all the aspects of HRM proposed by AMO theory. In particular, the survey does not allow us to determine whether an HR system provides employees with opportunities to use their abilities in various job roles. Despite this limitation, we use this list of practices as an indicator of the extent to which HR practices were used in public organizations.

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Researchers often advocate the study of an HRM system instead of individual HR practices (Wright & Boswell, 2002). Organizations rarely use HR practices in isolation; they more typically use them in combination. This system approach adheres to the prin- ciple “the whole is more than the sum of its parts” and examines a bundle of HR prac- tices. In this study, we have followed the system approach. In the survey, employees were asked about the use of 10 different HR practices within their organization (job evaluation conversations, assessment interviews, personal development plans, training plans, career plans, competency management, population aging HRM policy, mobility management, job rotation, and individual coaching). This particular list has been used in previous research (Steijn, 2004). In accordance with Guest’s suggestion, we counted how many of these practices were present in the organization according to its employ- ees. Cronbach’s alpha is widely used to demonstrate consistency among a set of items and, based on the score, it might be argued that a bundle of HR practices can be observed (Guest, Conway, & Dewe, 2004). The Cronbach’s alpha of the HR bundle is .70. This is within the range for acceptable internal consistency. The assumption is that the use of more HR practices suggests the existence of a better developed HRM policy within an organization. In making this assumption, we can only say something about the surplus value of HRM in general terms. However, we do not know whether some individual practices have stronger effects than others, how each of the individual practices affects performance and whether complementarities or synergistic interdependent relation- ships among such practices can further enhance organizational performance (Delaney & Huselid, 1996; Guest et al., 2004; Sels et al., 2006).

Job satisfaction. Job satisfaction is measured using one item: “All things considered, how satisfied are you with your job?” The answers were given using a 5-point Likert- type scale ranging from very dissatisfied (1) to very satisfied (5). Although there is some disagreement regarding how to measure job satisfaction, previous research shows that job satisfaction can reliably be measured using only one item (Nagy, 2002; Wanous, Reichers, & Hudy, 1997).

Organizational performance. To measure organizational performance, perceptions of performance and objective performance indicators can be studied (Delaney & Huselid, 1996; Kim, 2005). In this article, the focus is on employee perceptions of organiza- tional performance because objective performance data are not available in the data- base. When objective performance data are not available, subjective (perceptual) performance measures may be a reasonable alternative (Delaney & Huselid, 1996; Kim, 2005). There is evidence of a strong correlation between perceptual and objec- tive measures at the organizational level, although there is always some doubt regard- ing perceptual measures of performance (Kim, 2005). In this study, we used one item to measure performance, “the perception that the organization is doing good work,” utilizing a 5-point Likert-type scale, ranging from totally disagree (1) to totally agree (5). The use of only one indicator is clearly an important limitation, but at least we are able to characterize how employees assess their organization’s performance.

Vermeeren et al. 183

Leadership style. To measure the influence of leadership style, we used two latent vari- ables that correspond to the distinction between stimulating and correcting leadership (cf. Bass & Avolio, 1994; Likert, 1961; McGregor, 1960). The specific items can be found in the appendix. All answers were given on a 5-point Likert-type scale ranging from totally disagree (1) to totally agree (5).

Descriptive and reliability statistics were computed for the individual items and the two scales (see Table 1). To show the strength of the associations between the items, Table 1 displays the correlations matrix. The correlations are all significant at the 1% level.

To test whether the distinction between the two leadership styles is supported by the data, we performed confirmatory factor analysis using AMOS version 16. Unlike exploratory factor analysis, in which only the number of factors and observed vari- ables are specified, confirmatory factor analysis permits specification and testing of a more complete measurement model (Byrne, 2001). The simultaneous estimation of the measurement models allows us to examine the relationships between the items and their latent constructs as well as the relationships among the constructs themselves. Furthermore, one also receives information on whether the items load only on their target variable, or whether they load on the other dimension as well (unidimensionality of factors). Based on the results of the confirmatory factor analysis, the measurement model was modified where necessary. The modifications made to enhance the model included the introduction of error correlations.2 Reasons for error correlation include respondents’ inability to answer questions, a lack of effort on the part of the respon- dents to provide the correct answers or other psychological factors, or inadequately worded questions on the survey questionnaire (Byrne, 2001).

For evaluating the convergent validity of the measurement model, Anderson and Gerbing (1988) suggested examining the construct loading and determining whether each estimator’s coefficient is significant. For this model, the regression weights range from .69 to .89 and all are significant (see Table 1). These coefficients may be inter- preted as indicators of the validity of the observed variables, that is, how well they measure the latent dimension or factor. For this model, convergent validity has been achieved. With regard to discriminant validity, we note that the items related to the same construct are always more closely correlated with one another than with the items for the other construct. In addition, Bagozzi and Philips (1982) suggested that discriminant validity in SEM is achieved if the unconstrained model has a signifi- cantly lower chi-square value than the constrained model. In this study, the chi-square value for the unconstrained model (CMIN 1711.061/df 62) appears to be significantly lower than that for the constrained model (CMIN 2722.621/df 63). Thus, for this model, discriminant validity has been achieved. Finally, the R2 in Table 1 is a measure of reliability, which indicates how consistently the observed variable measures the latent dimension. The explained variance corresponding to the observed variables indicates that the respective factor explains an adequate portion of the variance (between 47% and 78%; Perry, 1996).

The overall fit of the measurement model was tested using absolute and relative fit indices, which indicated a good fit. In general, a chi-square test is used to assess the

184

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Vermeeren et al. 185

sample data in relation to the implied population data. However, there are concerns about using the chi-square test because its probability is sensitive to sample size (Jöreskog, 1993). In larger samples (as in this research), the chi-square test almost always leads to the rejection of the model because the difference between the sample covariances and implied population covariances will lead to a higher chi-square value if the sample size increases.3 As a result, a number of alternative fit measures have been developed (Hu & Bentler, 1999), including the goodness-of-fit index (GFI), the adjusted goodness-of-fit index (AGFI), the normed fit index (NFI), and the compara- tive fit index (CFI). The values for this model were .959 (GFI), .940 (AGFI), .972 (NFI), and .973 (CFI). In the social sciences, a cutoff value of .95 is the prescribed norm (Hu & Bentler, 1999). Based on these fit indices, one can conclude that the model is a good fit. In addition, the root mean square error of approximation (RMSEA) value of .065 indicates that the model is a reasonable fit (Byrne, 2001).

Finally, a traditional measure of scale reliability is Cronbach’s alpha, which mea- sures internal consistency among items on a scale. The Cronbach’s alpha for the stimu- lating leadership scale is .95 and for the correcting leadership scale is .78. Based on these results, one may conclude that the reliability coefficients provide independent corroboration for the results obtained from the use of confirmatory factor analysis. The results show that the distinction between the two leadership styles is supported by the data.

Control variables. Of course, several other variables can affect HRM, job satisfaction, and organizational performance. Therefore, Guest (1999) emphasized that several controls must be in place to take account of individual and organizational factors. Fol- lowing Guest, our control variables are divided into two groups. In the first group, we controlled for individual characteristics (gender, age, and educational level). These controls are based on the assumption that different groups within organizations may be managed differently with the result that their perceptions will be different. Then, we controlled for one important organizational characteristic: organizational size. This control is based on the assumption that large organizations pursuing improved perfor- mance have more resources with which to provide their employees a large HRM policy.

We coded gender as a dummy variable (1 = female). The category of age was sub- divided into five categories (1 = 15-24 years; 2 = 25-34 years; 3 = 35-44 years; 4 = 45-54 years; and 5 = 55 years and older). Educational level was also subdivided into five categories (1 = primary education; 2 = lower vocational education; 3 = higher general secondary education, preparatory academic education; 4 = higher vocational education, candidate exam; and 5 = scientific education). Finally, the category of orga- nizational size was subdivided into seven categories (1 = fewer than 100 employees; 2 = 101-500 employees; 3 = 501-1,000 employees; 4 = 1,001-5,000 employees; 5 = 5,001-10,000 employees; 6 = 10,001-20,000 employees; 7 = more than 20,000 employees). Because we used secondary data analysis, we were restricted to these categories in measuring the control variables.

186 Review of Public Personnel Administration 34(2)

Results

The hypothesized relationships among the variables were analyzed using SEM. This statistical methodology allows us to test the full conceptual model in a simultaneous analysis. In addition, SEM enables us to analyze simultaneously the direct and indirect relationships among the dependent and independent variables. Finally, SEM also enables us to compare different models (Byrne, 2001). We built our SEM model using AMOS version 16. To examine whether the data were normally distributed, the index of multivariate kurtosis was considered. Bentler (2005) has suggested that, in practice, values above 5.00 are indicative of nonnormality. Our data have a score of 4.94, which indicates that it is normally distributed.

In Table 2, the means, standard deviations, and correlations of the study variables are presented.The results show that, of the 10 HR practices, employees observed, on average, the use of 4 HR practices within their organizations. The most frequently observed HR practice was job evaluation conversations, and the least frequently observed practice was job rotation. Employees were generally satisfied with their jobs. The average score for this variable on a 5-point scale was 3.78. Moreover, employees perceive the organization to be doing good work, with the average score on a 5-point scale being 3.48. Finally, the average score for the stimulating leadership style was 3.46 on a 5-point scale; the average score for the correcting leadership style was 3.47.

To test the proposed relationships, a causal structure was posited that resulted in a structural equation model. First, we tested the hypothesis that job satisfaction acts as a mediating variable in the relationship between HRM and organizational performance. A distinction can be made between fully mediated and partially mediated models (Wood, Goodman, Beckman, & Cook, 2008). Therefore, in SEM, two different mod- els must be created. In the first model, the direct relationship between HRM and orga- nizational performance was fixed at zero. In the second model, the direct relationship and indirect relationship between HRM and organizational performance were esti- mated. By using the chi-square difference test and other global-fit measures, one can test the models against each other. In Table 3, the fit indices are presented. The chi- square difference test implies that the relationship between HRM and organizational

Table 2. Means, Standard Deviations, and Correlations (N = 6,253).

M SD 1 2 3 4 5 6 7 8 9

(1) Gender .42 .493 — (2) Age 3.57 .958 −.223** — (3) Educational level 3.18 1.169 .071** −.116** — (4) Organizational size 2.76 1.269 −.009 .007 .159** — (5) HRM 3.73 2.04 .004 .045** .093** ,175** — (6) Job satisfaction 3.78 .933 .037** −.014 .008 −.016 .150** — (7) Organizational performance 3.48 .956 −.011 .005 .040** .043** .206** .319** — (8) Stimulating leadership 3.46 .914 .008 −.002 −.008 .000 .251** .416** .443** — (9) Correcting leadership 3.47 .854 −.007 .014 −.045** .016 .188** .240** .325** .649** —

Note. HRM = human resource management. **p < .01.

Vermeeren et al. 187

performance is partially mediated by job satisfaction. Furthermore, the partially medi- ated model shows a better model fit than the fully mediated model.In Figure 2, the partially mediated model is shown. Only the statistically significant relationships are described (with a significance level of .01). The numerical scores on all lines indicate standardized regression coefficients (β), and the scores in brackets are the explained variances.

Second, we analyzed the effect of leadership style on HRM. We assumed that the amount of HR practices perceived by employees would be influenced by their supervi- sors’ leadership styles. We distinguished between stimulating and correcting leader- ship to test our hypotheses that (a) a stimulating leadership style has a positive effect on the amount of HR practices used within an organization and (b) a correcting leader- ship style has a negative effect on the amount of HR practices used within an organiza- tion. The overall model fit was tested using several fit indices. The model fit values were .999 (GFI), .997 (AGFI), .996 (NFI), and .998 (CFI), implying that the model was a very good fit. In addition, the RMSEA, with a value of .015, also indicated that the model is a good fit.The model in Figure 3 is the result. Only the statistically signifi- cant relationships are shown (with a significance level of .01). The numerical scores on all lines indicate standardized regression coefficients (β), and the scores in brackets are the explained variances. The results show that a stimulating leadership style has a significantly positive effect on the implementation of HR practices, supporting Hypothesis 2a, whereas a correcting leadership style appears to have no effect on the amount of HR practices used, rejecting Hypothesis 2b.

Table 3. Fit Indices for the Fully and Partially Mediated Models.

Model χ2 df GFI AGFI NFI CFI RMSEA

Fully mediated model 189.389 7 .990 .970 .874 .877 .065 Partially mediated model 8.670 6 .999 .998 .994 .998 .008

Note. GFI = goodness-of-fit index; AGFI = adjusted goodness-of-fit index; NFI = normed fit index; CFI = comparative fit index; RMSEA = root mean square error of approximation.

Age

Organizational Size

Educational Level

Job Satisfaction (.024)

HRM (.038)

Organizational Performance

(.127)

.053

.074

.163

.158 .294

-.044 .020

.162

-.118

.158

Figure 2. Result of structural equation modeling.

188 Review of Public Personnel Administration 34(2)

When we compare the model in Figure 2 with the model in Figure 3, we see that the first model shows a statistically significant and positive relation between HRM and organizational performance. However, the model in Figure 3 shows that this relation becomes weaker when the variables related to leadership style are included. Therefore, we also examined whether supervisors’ leadership style influences the relationship between HRM and performance (moderating effect). However, these effects do not appear to be significant. These results imply that leadership style has its own, indepen- dent, effect.

Finally, model validity was achieved through cross-model validation. Camilleri (2006) suggested attaining cross-validation in three phases. In the first phase, data are divided into two data sets. One data set consists of a random selection of 20% of the data collected from respondents; the second data set consists of a random selection of 80% of the data collected. In the second phase, SEM by means of a path analysis that calculates the structural fit index (measured by R2) is conducted for both the data sets. The third phase consists of examining the differences between the calculated structural fit indices obtained for each data set. The extent of model validity is determined by the similarity in the variance accounted for by each data set. The results of the cross-model validation are presented in Table 4. Given the fact that the differences in the explained variances are small, the cross-model validation provided satisfactory results.

Age

Organizational Size

Educational Level

Job Satisfaction (.177)

HRM (.102)

Organizational Performance

(.229)

.054

.076

.163

.050 .161

-.025 .029

.086

-.116

.159

Stimulating Leadership

Correcting Leadership

.252 .439

-.054

.310

.069.649

-.045

Figure 3. Result of structural equation modeling.

Table 4. Results of Cross-Model Validation Showing R2 for the Three Samples.

Predicted variable Full sample 20% sample 80% sample Difference in R2 for 20%-80% sample

HRM .102 .109 .100 .009 Job satisfaction .177 .197 .173 .024 Organizational performance .229 .240 .231 .009

Note. HRM = human resource management.

Vermeeren et al. 189

Discussion

Looking at the main independent and dependent variables, we expected that a supervi- sors’ leadership style has an influence on the implementation of HR practices. Our research provides empirical evidence that a supervisor’s leadership style, and specifi- cally a stimulating leadership style, is important to the HRM–performance relation- ship within an organization. When we compare Figure 2 with Figure 3, we see that adding “leadership” importantly increases explained variance. As such, the results of this study emphasize the important role of supervisors in the HRM and performance model, as was previously suggested by Wright et al. (2005) and Paauwe (2009), among others. When we look at the results in greater detail, we find evidence of the positive relationship between a supervisor’s leadership style and the HR practices conducted within the organization, as previously shown by Purcell and Hutchinson (2007) and Zhu et al. (2005). More specifically, a stimulating leadership style is demonstrated to have an important effect on the implementation of HR practices. In contrast, a correct- ing leadership style appears to have no effect on the amount of HR practices used. Thus, our hypothesis that a stimulating leadership style has a positive effect on the amount of HR practices used within an organization is confirmed, whereas our hypoth- esis that a correcting leadership style has a negative effect on the amount of HR prac- tices used within an organization must be rejected. Nevertheless, the results are in line with the research discussed by Guest (1987), which argued that a stimulating leader- ship style (theory Y) could be linked to soft HRM (HRM focusing on the development, motivation, and commitment of employees). Furthermore, it would be interesting in future research to test Guest’s (1987) idea that theory X (with a correcting role for the supervisor) is linked to hard HRM (a focus on rewards and determinations of whether employees do what the organization requires). To study this relationship, data must include such elements of HRM as performance-related pay. An additional interesting result is that a stimulating leadership style appears to be very important to employees’ degree of satisfaction, while the correcting leadership style has a negative influence on job satisfaction. Finally, a stimulating leadership style and a correcting leadership style have a positive effect on organizational performance, although the effect of the stimu- lating leadership style is much larger.

Our research also provides empirical evidence for the mediating relationship between HRM and organizational performance. The results indicate a direct effect and an indirect effect of HR practices on organizational performance, as is already assumed in the Paauwe and Richardson (1997) model. Our analysis shows that when employees perceive a more elaborate use of HR practices, organizations do achieve a better score for their performance. Moreover, when more HR practices are used, employees expe- rience greater satisfaction, which positively influences organizational performance. This study adds to previous research by confirming the hypothesis that job satisfaction acts as a mediating variable in the relationship between HRM and organizational per- formance. This important finding provides more insight into employees’ reactions to HRM and its effect on organization performance. These reactions have been largely disregarded in previous research (Boselie et al., 2005).

190 Review of Public Personnel Administration 34(2)

Looking at the results in greater detail, we see that older employees and employees with higher education levels perceive a greater use of HR practices. This suggests that different groups within organizations (e.g., younger and older employees) are man- aged differently. In addition, organizational size has a relatively large effect on HRM, as can be concluded from its high beta weight. In line with Guest’s (1999) assumption, this finding indicates that the HRM policy of organizations is influenced by such con- textual variables as the size of the organization.

Finally, our study supports the idea that a focus on HRM as a method of increasing organizational performance is also relevant in the public sector. Based on this study, conclusions regarding the relationship between HR practices and organizational per- formance in private organizations (cf. Paauwe, 2009) also appear applicable to public sector organizations. In line with the results of previous research (e.g., Gould-Williams, 2003; Kim, 2005; O’Toole & Meier, 2008), public organizations appear to be more successful if they value their employees and if they utilize a more extended set of HR practices. In addition, this study illustrates the important role supervisors play in this relationship in the public sector.

Conclusion

In the introduction, we stated that public sector performance has become an increas- ingly important issue over the past three decades. Several innovations in the field have promised to increase the quality of public service while reducing its costs. However, research into the contributions of HRM to these developments has been scarce. Our main research question, therefore, was “To what extent is the relationship between HRM and the performance of public organizations mediated by job satisfaction, and what is the influence of a supervisor’s leadership style on the implementation of HR practices?” Based on the data and arguments presented in this study, one can conclude that a positive relationship exists between HRM and organizational performance in the public sector. Specifically, by studying the relationships among HRM, job satisfaction, and organizational performance in a single model, this research showed that job satis- faction partly mediates the relationship between HRM and organizational perfor- mance. Moreover, this study showed that the choice to use HR practices is influenced by a supervisor’s leadership style.

Despite these findings, the limits of this article suggest lines of further research. This study used a cross-sectional data set restricted to Dutch municipalities. Its find- ings, therefore, have limitations with respect to internal and external validity. A longi- tudinal data set would increase internal validity, as such data enable researchers to make stronger causal claims. HRM–performance research is dominated by cross- sectional research, which generates considerable discussion of questions regarding “what came first?” (Guest, 2011). Are public organizations more successful if they value their employees, or do public organizations value their employees if they are more successful? Or are both propositions true? A similar problem can be observed with respect to the relationship between job satisfaction and performance (Judge et al., 2001; Taris & Schreurs, 2009). For this reason, a longitudinal research design would

Vermeeren et al. 191

be preferable in further research. With respect to external validity, we have examined the HRM and performance relationship in the public sector by focusing on Dutch municipalities. More research is needed to determine whether the HRM–performance relationship holds for different kinds of public sector organizations and different coun- tries. Finally, the selection of the data source (survey) may have influenced some of the results. The use of only one survey instrument may create distortions in the data, in particular regarding common method bias (Podsakoff & Organ, 1986). This is spe- cifically a question with respect to the connection between job satisfaction and organi- zational performance. The strong relationship between these two variables may be attributable to the fact that employees were asked to rate their job satisfaction and their perceptions of organizational performance. This potential problem highlights the importance of replicating our research, ideally by using objective performance indicators.

This study not only generates recommendations to further enhance HRM and per- formance research in the public sector. Based on its observations, this study also pro- vides possible starting points for improving the performance of public organizations through their employees. To increase organizational performance, it appears important that organizations invest in employees’ needs by implementing HR practices. Moreover, this study suggests that the stimulating leadership style is very important to employee satisfaction, while the correcting leadership style negatively influences job satisfaction. This suggestion further implies that when a public sector organization wishes to acquire an involved and motivated staff, its supervisors must assume a stim- ulating role. Based on our findings, attention to a supervisor’s leadership style appears to be a prerequisite for successfully implementing HRM within an organization. More specifically, this study indicates that there is an important role for supervisors to play in implementing HRM, developing a satisfied workforce, and enhancing organiza- tional performance.

Appendix

Correcting Leadership

•• X1: My supervisor keeps an eye on my work to check if I do my work well. •• X2: My supervisor tells me when I do not do my work well. •• X3: My supervisor controls whether work is finished on time.

Stimulating Leadership

•• Y1: My supervisor is aware of employees’ welfare. •• Y2: I get enough support from my supervisor. •• Y3: My supervisor allows people to cooperate well. •• Y4: My supervisor lets me know if she or he is satisfied with my work. •• Y5: My supervisor consults his staff about issues that are important to them. •• Y6: My supervisor provides support as needed. •• Y7: My supervisor creates a work climate in which I can develop new ideas

about my work.

192 Review of Public Personnel Administration 34(2)

•• Y8: My supervisor is accessible. •• Y9: My supervisor lets us participate in conversations that are relevant to me

and my colleagues. •• Y10: My supervisor protects me from high work pressure.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

1. Although there is some disagreement about the precise relationship between job satisfac- tion and performance, the literature generally assumes that greater job satisfaction is asso- ciated with better individual and organizational performance (Judge, Thoresen, Bono, & Patton, 2001; Taris & Schreurs, 2009).

2. Error correlation between X1 and X2 is .137 and between Y10 and Y11 is .326. 3. Chi-square value = N × difference between sample covariances and implied population

covariances.

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Author Biographies

Brenda Vermeeren is a PhD student at the Department of Public Administration at Erasmus University Rotterdam. Her research is focused on the relationship between human resource management (HRM) and Performance of Public Organizations.

Ben Kuipers is an assistant professor at the Department of Public Administration at Erasmus University Rotterdam and director and consultant at Performability. His research and consulting work focus on strategic human resource management, change management, and team perfor- mance in private and public organizations.

Bram Steijn is a full professor of HRM in the public sector at the Department of Public Administration at Erasmus University Rotterdam. His current research is focused on public service motivation, job satisfaction, and HRM and performance in the public sector.