numbers through the application of information and communications technology (ICT). Low level call cen- tre staff are one example; mid- to low-skilled HR spe- cialists are another, given the advances of ICT in e-HR. To help make sense of some of the material on the import- ance of context in HRM, let’s finish off this chapter by looking at a case of diversity management, one of the shibboleths of politically correct, best practice HRM. 184 Corporate Reputations, Branding and People Management Box 5.3 The Glass Ceiling: diversity management, best practice and best fit An Economist article in July 2005 reported an interesting conundrum. Despite years of effort by companies to develop diversity policies, based on best HR practice, little had changed in terms of numbers of women in top management jobs in Fortune 500 companies (8%), with only Employment mode Low High Low High Human capital value Externalized Relational Transactional Core knowledge/ creative workers Traditional employees Human capital uniqueness Alliance partner Contract workers Employment relationship Internalized Figure 5.4 The basic architectural model. Chapter 5 Four lenses on HR strategy and the employment relationship 185 0.7% of CEOs being female. This is despite nearly half of jobs in the US economy being held down by women and women being as well edu- cated as their male counterparts (as measured by Masters-level degrees) (The Economist, 2005b). The problem is well known and quite well under- stood, following the Wall Street Journal’s coining of the term the ‘Glass Ceiling’ in 1985 and a US government commission on this topic in 1995. However, it seems the success numbers are low and not getting any bigger over time. Yet, as the report pointed out, companies are doing more and more to address the issue with companies that were once the bastions of male-domination, e.g. IBM, GE and BP, now making a ‘busi- ness case’ for diversity; i.e. that diversity pays because the market is diverse in terms of tastes, with women and racial minorities becoming increasingly important consumers. Such increased differentiation on the outside, so the argument goes, has to be matched by equivalent dif- ferentiation on the inside. Moreover, given the ‘war for talent’, organi- zations need to increase the potential pool by including as many diverse groups as possible. There is evidence that some North American company programmes are beginning to work, with IBM reporting 14% of its senior executives being women, and the Canadian company, Alcan, reporting that three out of its four main businesses are managed by women at the top. Part of what has been behind this has been to change the ‘tone at the top’ from long hours to more of a work–life balance culture. Yet, despite these well publicized cases and the application of best HR practices, the more things change, the more they remain the same in the USA and the large European economies. This picture, however, is not quite the same the world over. Look at this table, which shows the proportion of female directors in different countries in 2004. Country Female directors as a percentage of total (approx.) Norway 21.0 Sweden 17.0 USA 12.0 Australia 9.5 UK 7.0 (continued ) Conclusions In this chapter we have introduced the notion of HR strategy and four lenses on strategic HRM, all of which contribute to our understanding of how HRM can influence reputation manage- ment and corporate branding. We also discussed the merits of best practice versus best fit strategic HRM. We concluded that, since context matters a great deal in strategy, a contingency approach to HRM is more likely to be appropriate in guiding managers in the design of HR strategies. One of the most useful of these contingency approaches is the architectural metaphor developed by researchers at Cornell in the USA, which we reworked a little to show its relevance to reputation management and branding. The key implication of this architectural approach and of other recent developments in HR segmentation is that there is little sense in treating all employees the same because they differ in their potential to add value, reputation advantage, or risk to an organization’s key strategic drivers; they also differ in their abilities. Different bundles of HR practices are required for each segment, especially for those employees whose jobs help build reputations for innovation, differentiation and entrepre- neurship (reinforcing the initiative agenda) and those who help exploit existing knowledge and/or maintain social legitimacy (the cooperative agenda). 186 Corporate Reputations, Branding and People Management Country Female directors as a percentage of total (approx.) Germany 6.0 France 5.5 Singapore 5.0 Hong Kong 4.5 Spain 3.5 Italy 2.5 Japan 0.3 What does this table tell you about the importance of context, in this case national context, to the application of best practices? As the Enron case has shown, some so-called best practices can lead to disastrous results, when pushed to the limits. Consequently, the idea of external fit with the organization’s environment and internal fit with each other – bundles of prac- tices – is important in shaping employment relationships and, therefore, reputations and brands. 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Chapter 5 Four lenses on HR strategy and the employment relationship 189 This page intentionally left blank CHAPTER New developments in HR strategy and the employment relationship 6 Introduction In this chapter, we follow up our discussion on segmentation to examine a range of interesting developments that should help HR practitioners create better external and internal repu- tations, and brands. As part of this discussion, we also introduce the ideas underlying talent management, one of the growth areas in strategic HR because it is one of the major problems facing businesses and public sector organizations, especially in the knowledge sectors and creative industries. We also evaluate these ideas using the lenses introduced in Chapter 5 to reveal their strengths and weaknesses. Finally, we discuss some of the international issues of reputation management, branding and HR, concluding with a case of Wal-Mart in Germany. For those readers involved in multinational companies, we develop these international issues in Chapter 7. To give readers an insight into the problems certain organ- izations are facing in this field, we will use a consulting case we were asked to work on. Confidentiality is important here so we have changed the name and location of the company to protect its identity. 192 Corporate Reputations, Branding and People Management Box 6.1 Business and HR issues at Banco (South) The strategic drivers Banco (South) (the Company), part of the Banco Group, has under- gone a great deal of change over the past decade, including a recent strategic re-positioning and re-branding exercise that has attempted to differentiate the bank from competitors as a ‘local’, regional bank but with access to all of the advantages and resources of a major, ‘global’ financial institution. This positioning and re-branding exercise has been accompanied by the development of a group-wide internal values and behaviours framework, drawing on ideas, research and material from head office. Banco (South) takes part in a group-wide engage- ment survey carried out by a major survey consulting organization. This survey provides a temperature check in the form of quarterly results on employee identification (including internalization of group values, feedback on management style and career development) and engagement with the Group values, as demonstrated by engagement behaviours. The results of this survey are used to provide feedback to senior managers on how people management is supporting the key business drivers, including sales performance and revenue generation, and is used to calculate the performance bonuses of managers in the region. The Company benchmarks itself against Group norms on all per- formance indicators, and against performance norms for the financial services industry as a whole. As part of this exercise, it uses consulting data to benchmark against engagement norms for the industry, shown it to be in the top quartile for all companies in the relevant group. However, the Company norms on certain key indicators, particularly engagement, are lower than the Group mean norms, even though the South region performs well overall in revenue generation. A further issue raised during discussions with HR staff was the South region’s needs to put into place a fresh initiative for IIP re-accreditation (Investors in People 1 ), due in 2006. 1 Investors in People (IIP) accreditation is a quality standards exercise for HR that many UK companies seek to use as a means of guaranteeing the quality of their HR provision. Gaining and retaining accreditation is an exacting process used in setting performance objectives for HR departments and as part of an employer of choice policy. Chapter 6 HR strategy and the employment relationship 193 Initial diagnosis In discussions with senior HR staff, the following problems were iden- tified as potential causes or factors underlying the Company’s per- formance problems: 1 There was perceived to be no clear line of sight between employees’ understanding of the values and behaviours framework and the external image and positioning of the organization. It was felt that this might be a consequence of using a ‘global’ values framework cre- ated by Head Office, which might have had less resonance with the ‘local’ situation of employees of the Company in the South region. 2 Although there were various sophisticated HR initiatives in place, there was a perception of lack of coherence among them and that they might not be addressing the key strategic drivers of the new strategy and brand. It was felt that there was a morale problem among substantial elements of the Company workforce who were either actively disengaged or apathetic. Without fully understand- ing the reasons for this, there was a suspicion that leadership and management style, and the basis of rewarding managers for short- term sales performance may be part of the problem. Though lead- ership style and the basis for rewarding managers may have been linked, this was not always clear and could vary over the regional network; in any event, changing rewards policy was a Group func- tion and not something that could be altered locally by Company HR staff. 3 Whilst the new survey dealt with general levels of engagement and employees’ understanding of the values, it was not sensitive enough to provide the information to allow Company HR staff to develop ‘locally sensitive’ HR policies that would help drive the positioning and branding strategy and improve the benchmarking perform- ance. This applied to Banco (South) and its 10 districts, which form the South region retail banking network. It also applied to its whole- sale banking, private banking and regional head office services (including HR, marketing, finance and IT). 4 Senior HR staff also believed that delivery on psychological con- tracts by the Company of what employees want, value and expect may be part of the problem: they may be over-delivering in key areas on the needs of certain groups of employees and under-delivering to others, with the knock-on consequences for attraction, retention, . changed the name and location of the company to protect its identity. 192 Corporate Reputations, Branding and People Management Box 6.1 Business and HR issues. 207–220. 188 Corporate Reputations, Branding and People Management Stacey, R. (2001) Complex responsive processes in organization, learning and knowledge