CHAPTER II

HUMAN RESOURCES DEVELOPMENT

1
(HRD)
HRD is a profession today. It has a body of knowledge and this knowledge is
transferred to younger generations through management institutes in India. By now
HRD is a well-recognized function in organizations. HRD has professional bodies
supporting its knowledge generation, knowledge dissemination and capacity building
in organizations. HRD has also generated consulting firms which proide e!clusie
HRD serices for organizations in need. "hus HRD is a well-recognized profession
in India today.
"he subse#uent topics of this chapter take the readers through arious aspects of this
profession.
$. %H$" I& HRD'
HRD is based on the two assumptions( HRD makes sense only when it contributes
towards business improement and business e!cellence. HRD also strongly beliee
that good people and good culture make good organizations.
HRD means building(
)ompetency in people
)ommitment in people
)ulture in the organization
HRD means building competencies. "he most important HRD function is to build
competencies in each and eery indiidual working in an organization. )ompetencies
are to be built and multiplied in roles and indiiduals.
HRD means building commitment in people. )ompetencies will not make sense
without commitment. "hink of an organization where all the employees are
competent but not willing to put into use their competencies. Hence, competencies
without commitment will not contribute towards effectieness.
HRD is all about building a deelopment culture in an organization. HRD ensures
that culture-building practices are adopted from time to time to create a learning
enironment in the organization. It builds such a culture that the built-in culture in
turn will build competencies and commitment in the people who work with the
organization.
HRD can be defined as the branch of human resources management function that
endeavors to build competencies, commitment and a learning culture in
*
+, -omon ./0012. HRD in Real "ime
organizations with the purpose of bringing in competitive advantages to achieve
business excellence in all its operations.
B. HRD &3&"4+&
HRD functions are carried out through its systems and sub systems. HRD has fie
ma5or systems and each of the systems has sub systems as elaborated below( the first
three systems iz., )areer system, %ork system and Deelopment system, are
indiidual and team oriented while the fourth and the fifth systems iz. &elf renewal
system and )ulture &ystems are organization based.
1. Career system( $s an HRD system, career system ensures attraction and retention
of human resources through the following sub-systems.
+anpower planning
Recruitment
)areer planning
&uccession planning
Retention
2. Wor system! %ork-planning system ensures that the attracted and retained human
resources are utilized in the best possible way to obtain organizational ob5ecties.
6ollowing are the sub systems of the work planning system.
Role analysis
Role efficacy
7erformance plan
7erformance feedback and guidance
7erformance appraisal
7romotion
-ob rotation
Reward

". De#e$o%me&t system! "he enironmental situation and the business scenario is fast
changing. "he human resources within the organization hae to raise upto the
occasion and change accordingly if the organization wants to be in business. "he
deelopment system ensures that the retained .career system2 and utilized .work
system2 human resources are also continuously deeloped so that they are in a
position to meet the emerging needs of the hour. 6ollowing are some of the
deelopmental sub - systems of HRD that make sure that human resources in the
organization are continuously deeloped.
Induction
"raining
-ob enrichment
&elf-learning mechanisms
7otential appraisal
&uccession Deelopment
)ounselling
+entor system
'. Se$()re&e*a$ system! It is not enough to deelop indiiduals and teams in the
organizations but occasionally there is a need to renew and re-5uenate the
organization itself. 6ollowing are some of the sub systems that can be utilized to
renew the organization.
&urey
$ction research
8rganizational Deelopment interentions
8rganizational Retreats
+. C,$t,re system! Building a desired culture is of paramount importance in today9s
changed business scenario. It is the culture that will gie a sense of direction, purpose,
togetherness, and teamwork. It is to be noted that whether an organization wants it or
not along with the time common ways of doing things .culture2 will emerge. If not
planned carefully and built systematically such common traits may not help the
business but may become a stumbling block. Hence it is ery important to hae
cultural practices that facilitate business. &ome of the culture building subsystems are
gien below(
:ision, +ission and ,oal
:alues
)ommunication
,et-togethers and celebrations
"ask forces
&mall ,roups
). HRD 7R8)4&&4&
HRD is a process-oriented function. HRD functions in many organizations fail
because the processes inoling the systems are not ade#uately addressed. "he
concept of process essentially concerns the #uestion of ;how< and to a great e!tent the
#uestion of ;why ;. It emphasises the behaioural and interactional dimensions. $ll
the HRD processes are centred around four constituents of an organization iz, the
employee, role, teams and the organization itself. 4ach of the unit has its own
behaioural patterns and framework, which, if not addressed ade#uately may not
bring in the desired outcomes. It is through these processes that the HRD systems are
effectiely implemented. Implementations of the HRD systems are, in turn indented
to bring in right processes in organizations. Hence HRD systems and HRD processes
are closely linked. "heir relationships are well e!plained by Rao .*==02.
1.I&-.#.-,a$( Indiidual is the basic constituent of an organization. $ll the
behaioural pattern and dynamisms emerge from indiiduals. Hence indiidual based
HRD process e!plained below are ital for HRD function and for implementation of
the HRD systems.
4fficacy
4ffectieness
&tyles
>eadership

2.Ro$e( Role is a dynamic entity which inoles the e!pectations of significant others
and self from the position of the role holder. $ large number of behaioural patterns
and dynamism in organizations are centred around the roles. "he role occupier and all
others who hae some linkage or relationship to that role form a constituent.
6ollowing are some of the role related, HRD processes in organizations.
)ompetencies for 5ob performance
)ommitment
+otiation
6rustration,
&tress ? Burnout

".Teams! %ork in organizations are performed through teams or groups. %hen
indiiduals begin to work in team, behaioural patterns and dynamisms emerge.
6ollowing HRD processes are to be addressed if team work should bring in the
desired results.
)ommunication
6eedback
)onflict resolution
)ollaboration
'.Or/a&.0at.o&! $ large number of HRD processes are organization related. @nless
and until these processes are in place, HRD cannot take off. Howeer, in a number of
organizations as a result of implementation of HRD systems, these processes were set
right. HRD systems can contribute towards the deelopment and maturity of these
processes.
8rganizational )limate
)ommunication
>earning 8rganization
8rganizational )hange
8rganizational Deelopment
D. )8A)>@&I8A
In this chapter we hae seen the definition of HRD, arious systems and
subsystems, the HRD processes and the sub processes. "he sub systems and sub
processes are not discussed in detail since the ery purpose of this work is to
proide a #uick and brief understanding of HRD rather than discuss them
e!haustiely. It is to be noted that body of knowledge relating to the sub themes
mentioned aboe are already aailable in some form or the other. "he HRD
sources and the Bibliography gien towards the end of this book may be used for
further reading and elaboration.
Problems & Issues of Human Resource Planning
Mismatch Between Applicants and Skills
An organization may find it difficult to fill the positions called for by HR
planners. This might be because there is more demand in the organization than
there is in available talent in the job market. Another reason is that the
organization's recruiting strategies aren't attracting the right talent. Not being
able to fill positions that are critical to achieving operational goals leaves the
organization in a eak business position. That's hy forecasting human resources
needs should be folloed up ith effective recruitment! replacement and
retention of employees.
Environmental Issues
"nvironmental issues can occur inside an organization. #emographic
changes affect the internal ork climate. #ifferences in ork values beteen
generations! such as $aby $oomers and %enerations & and '! mean that
employees ant different things to be satisfied ith their ork. (rograms must
address these different needs in one culture. Also! technological changes re)uire
orkers to continuously add ne technical skills. *f employees' current skills
aren't needed! they may become redundant. HR planning involves planning for
organizational learning! or developing staff skills! to keep pace ith changes in
the business market.
Recruitment and Selection
+rganizations get better staffing results hen they can count on HR
departments and line managers to do their on jobs effectively. ,or e-ample! HR
personnel depend on line managers to use eb.based tools to perform recruiting
and selection /or hiring0 functions ith limited assistance. The HR department
posts the steps in the hiring process! policies and procedures! and documents on
the company intranet. Although HR personnel may consult about )uestions! line
managers must be able to follo guidelines for recruitment and hiring ithout
e-posing the organization to liability.
Training and Development
1ine managers must do more than recruitment and hiring. They must
perform other jobs that used to be associated ith personnel departments. They
must address their on employees' training and development needs. 1ine
managers must find all of the resources inside and outside the organization to
ensure employees develop the re)uired skills. This takes place in the conte-t of
keeping employees motivated to perform. "ffective communication beteen line
managers and HR personnel planners can result in effective identification of
training and development needs e-ceeding current resources.
STRATEGIES USED BY THE SOFTWARE COMPANIES:-
The scarcity of )ualified managers has become a major constraint on the speed ith hich multinational
companies can e-pand their international sales. The groth of the knoledge.based society! along ith
the pressures of opening up emerging markets! has led cutting.edge global companies to recognize no
more than ever that human resources and intellectual capital are as significant as financial assets in
building sustainable competitive advantage. To follo their lead! chief e-ecutives in other multinational
companies ill have to bridge the yaning chasm beteen their companies' human resources rhetoric
and reality. H.R. must no be given a prominent seat in the boardroom.
%ood H.R. management in a multinational company comes don to getting the right people in
the right jobs in the right places at the right times and at the right cost. These international
managers must then be meshed into a cohesive netork in hich they )uickly identify and
leverage good ideas orldide.
2uch an integrated netork depends on e-ecutive continuity.
This in turn re)uires career management to insure that
internal )ualified e-ecutives are readily available hen
vacancies occur around the orld and that good managers do
not jump ship because they have not been recognized.
3ery fe companies come close to achieving this. 4ost
multinational companies do not have the leadership capital
they need to perform effectively in all their markets around
the orld. +ne reason is the lack of managerial mobility. Neither companies nor individuals
have come to terms ith the role that managerial mobility no has to play in marrying business
strategy ith H.R. strategy and in insuring that careers are developed for both profitability and
employability.
"thnocentricity is another reason. *n most multinationals! H.R. development policies have
tended to concentrate on nationals of the head)uarters country. +nly the brightest local stars
ere given the career management skills and overseas assignments necessary to develop an
international mindset.
The chief e-ecutives of many 5nited 2tates.based multinational companies lack confidence in the ability
of their H.R. functions to screen! revie and develop candidates for the most important posts across the
globe. This is not surprising6 H.R. directors rarely have e-tensive overseas e-perience and their
managers often lack business knoledge. Also! most H.R. directors do not have ade)uate information
about the brightest candidates coming through the ranks of the overseas subsidiaries. 7H.R. managers
also fre)uently lack a true commitment to the value of the multinational company e-perience!7 notes
$rian $rooks! group director of human resources for the global advertising company 8(( %roup (lc.
The conse)uent lack of orld.ise multicultural managerial talent is no biting into companies' bottom
lines through high staff turnover! high training costs! stagnant market shares! failed joint ventures and
mergers and the high opportunity costs that inevitably follo bad management selections around the
globe.
9ompanies ne to the global scene )uickly discover that finding savvy! trustorthy managers for their
overseas markets is one of their biggest challenges. This holds true for companies across the technology
spectrum! from softare manufacturers to te-tile companies that have to manage a global supply chain.
The pressure is on these nely globalizing companies to cut the trial.and.error time in building a cadre
of global managers in order to shorten the leads of their larger! established competitors! but they are
stymied as to ho to do it.
The solution for multinationals is to find a ay to emulate companies that have decades of e-perience in
recruiting! training and retaining good employees across the globe. 4any of these multinational
companies are "uropean! but not all. $oth 5nilever and the *nternational $usiness 4achines
9orporation! for e-ample! leverage their orldide H.R. function as a source of competitive advantage.
Anglo.#utch 5nilever has long set a high priority on human resources. H.R. has a seat on the board's
e-ecutive committee and an organization that focuses on developing in.house talent and hot.housing
future leaders in all markets. The result is that :; percent of 5nilever's top <== managers are fully
homegron. *nternationalization is bred into its managers through job content as ell as overseas
assignments. 2ince >:?:! 5nilever has redefined @; percent of its managerial posts as 7international7
and doubled its number of managers assigned abroad! its e-patriates! or 7e-pats.7
*.$.4.! ith ?= years' e-perience in overseas markets! reversed its H.R. policy in >::; to deal ith the
ne global gestalt and a ne business strategy. *nstead of cutting jobs abroad to reduce costs! *.$.4. is
no focusing on its customers' needs and increasing overseas assignments. 78e are a groing service
business .. our people are hat our customers are buying from us!7 e-plained "ileen 4ajor! director of
international mobility at *.$.4.
8hen managers sign on ith these companies! they kno from the start that overseas assignments are
part of the deal if they ish to climb high on the corporate ladder. These multinational companies
manage their H.R. talent through international databases that! ithin hours! can provide a choice of
%rade.A in.house candidates for any assignment. "ven alloing for company size! fe 5nited 2tates.
based multinationals come close to matching the bench strength of a 5nilever or NestlA. The Bapanese
multinationals are even farther behind.
This article outlines a global H.R. action agenda based on the approaches used by leading multinational
companies. The goal is to build sustainable competitive advantage by attracting and developing the best
managerial talent in each of your company's markets.
The strategy demands global H.R. leadership ith standard systems but local adaptation. The key
underlying ideas are to satisfy your company's global human resources needs via feeder mechanisms at
regional! national and local levels! and to leverage your current assets to the fullest e-tent by actively
engaging people in developing their on careers.
*mplementing these ideas can be broken don into >= steps. $y taking these steps! a company should be
able to put into place an effective global human resources program ithin three to four years.
1. Break all the "local national" glass ceilings
The first! and perhaps most fundamental! step toard building a global H.R. program is to end all
favoritism toard managers ho are nationals of the country in hich the company is based. 9ompanies
tend to consider nationals of their head)uarters country as potential e-patriates and to regard everyone
else as 7local nationals.7 $ut in today's global markets! such 7us.versus.them7 distinctions can put
companies at a clear disadvantage! and there are strong reasons to discard them6
"thnocentric companies tend to be -enophobic .. they put the most confidence in nationals of
their head)uarters country. This is hy more nationals get the juicy assignments! climb the
ranks and ind up sitting on the board .. and hy the company ends up ith a skeed
perception of the orld. Relatively fe multinational companies have more than token
representation on their boards. A.$.$. is one company that recognizes the danger and no
considers it a priority to move more e-ecutives from emerging countries in eastern "urope and
Asia into the higher levels of the company.
$ig distinctions can be found beteen e-patriate and local national pay! benefits and bonuses!
and these differences send loud signals to the brightest local nationals to learn as much as they
can and move on.
1ess effort is put into recruiting top.notch young people in overseas markets than in the
head)uarters country. This leaves fast.groing developing markets ith shallo bench
strength.
*nsufficient attention and budget are devoted to assessing! training and developing the careers
of valuable local nationals already on the company payroll.
9onventional isdom has defined a lot of the pros and cons of using e-patriates versus local nationals.
/2ee "-hibits * and **0. $ut in an increasingly global environment! cultural sensitivity and cumulative
skills are hat count. And these come ith an individual! not a nationality.
After all! hat e-actly is a 7local national7C 2omeone ho as born in the countryC Has a parent or a
spouse born thereC 8as educated thereC 2peaks the language/s0C 8orked there for a hileC All
employees are local nationals of at least one country! but often they can claim a connection ith several.
4ore fre)uent international travel! population mobility and cross.border university education are
increasing the pool of available hybrid local nationals. "very country.connection a person has is a
potential advantage for the individual and the company. 2o it is in a multinational company's interests to
e-pand the definition of the term 7local national7 rather than restrict it.
2. Trace your lifeline
$ased on your company's business strategy! identify the activities that are essential to achieving success
around the orld and specify the positions that hold responsibility for performing them. These positions
represent the 7lifeline7 of your company. Typically! they account for about >= percent of management.
Then define the technical! functional and soft skills needed for success in each 7lifeline7 role. As 4s.
4ajor of *.$.4. notes! 7*t is important to understand hat people need to develop as e-ecutives. They
can be savvy functionally and internationally! but they also have to be savvy inside the organization.7
This second step re)uires integrated teams of business and H.R.
specialists orking ith line managers. +ver time! they should e-tend
the skills descriptions to cover all of the company's e-ecutive posts. *t
took >? months for *.$.4. to roll out its orldide skills management
process to more than >==!=== people in manufacturing and
development.
A good starting point is ith posts carrying the same title around the globe! but local circumstances need
to be taken into account. 9hief financial officers in 1atin American and eastern "uropean subsidiaries!
for e-ample! should kno ho to deal ith volatile e-change rates and high infiation. 5nilever circulates
skills profiles for most of its posts! but e-pects managers to adapt them to meet local needs.
9ompiling these descriptions is a major undertaking! and they ill not be perfect because job
descriptions are subject to continuous change in today's markets and because perfect matches of
candidates ith job descriptions are unlikely to be found. $ut they are an essential building block to a
global H.R. policy because they establish common standards.
The lifeline and role descriptions should be revisited at least annually to ensure they e-press the
business strategy. 4any companies recognize the need to revie the impact of strategy and marketplace
changes on high.technology and RD# roles but overlook the fact that managerial jobs are also redran
by market pressures. The roles involved in running an emerging market operation! for e-ample! e-pand
as the company builds its investment and sales base. At *.$.4.! skills teams update their role
descriptions every si- months to keep pace ith the markets and to inform senior managers hich skills
are 7hot7 and hich the company has in good supply.
3. Build a global database to know who and where your talent is
The main tool of a global H.R. policy has to be a global database simply because multinational
companies no have many more strategic posts scattered around the globe and must monitor the career
development of many more managers. Although some multinational companies have been compiling
orldide H.R. databases over the past decade! these still tend to concentrate on posts at the top of the
organization! neglecting the middle managers in the country markets and potential stars coming
through the ranks.
*.$.4. has compiled a database of senior managers for E= years! into hich it feeds names of promising
middle managers! tracking them all ith annual revies. $ut it made the base orldide only >= years
ago. No the company is building another global database that ill cover F=!=== competencies and
include all employees orldide ho can deliver those skills or be groomed to do so. *.$.4. plans to link
the to databases by E===.
5nilever has practiced a broader seep for the past F= years. *t has five talent 7pools7 stretching from
individual companies /e.g.! %ood Humor $reyers *ce 9ream in the 5nited 2tates and 8alls *ce 9ream in
$ritain0 to foreign subsidiaries /e.g.! 5nilever 5nited 2tates *nc. and 5nilever 5.G. Holdings 1td.0 to
global corporate head)uarters. ,rom day one! ne e-ecutive trainees are given targets for personal
development. Those ho sho the potential to move up significantly are )uickly earmarked for the
7#evelopment7 list! here their progress through the pools .. company! national! business group andHor
region! global! e-ecutive committee .. is guided not only by their direct bosses but by managers up to
three levels above. 78e ant bigger yardsticks to be applied to these people and e don't ant their
direct bosses to hang on to them!7 e-plains Herig Gressler! 5nilever's head of remuneration and
industrial relations. To make sure the company is groing the general management talent it ill need!
the global H.R. director's strategic arm reaches into the career moves of the third pool .. those serving in
a group or region .. to engineer appointments across divisions and regions.
To build this type of global H.R. database! you should begin ith the 2tep E role descriptions and a series
of personal.profile templates that ask )uestions that go beyond each manager's curriculum vitae to
determine cultural ties! language skills! countries visited! hobbies and interests. ,or overseas
assignments! H.R. directors correctly consider such soft skills and cultural adaptability to be as
important as functional skills. The fact that overseas appointments are often made based largely on
functional skills is one reason so many of them fail.
>
4. Construct a mobility pyramid
"valuate your managers in terms of their illingness to move to ne locations as ell as their ability and
e-perience. 4ost H.R. departments look at mobility in black.or.hite terms6 7movable7 or 7not
movable.7 $ut in today's global markets this concept should be vieed as a graduated scale and
constantly reassessed because of changing circumstances in managers' lives and company opportunities.
This ill encourage many more managers to opt for overseas assignments and open the thinking of line
and H.R. managers to different ays to use available in.house talent.
2ome multinational companies! for e-ample! have been developing a ne type of manager hom e
term 7glopats76 e-ecutives ho are used as business.builders and troubleshooters in short or medium.
length assignments in different markets. +ther multinational companies are e-ploring the geographical
elasticity of their local nationals.
9onsider the five.level mobility pyramid in "-hibit ***. To encourage managerial mobility! each personal
profile in your database should have a field here managers and functional e-perts assess here and for
hat purposes they ould move. 8hen jobs or projects open! the company can )uickly determine ho is
able and illing to take them.
4anagers can move up and don a mobility pyramid at various stages of their career! often depending
on their family and other commitments. 'oung single people or divorced managers! for e-ample! may be
able and eager to sign up for the glopat role but ant to drop to a loer level of the pyramid if they ish
to start or restart a family life. +r seasoned senior managers may feel ready to rise above the regional
level only hen their children enter college.
*.$.4. uses its global H.R. database increasingly for international projects. *n preparing a proposal for a
%erman car manufacturer! for instance! it pulled together a team of e-perts ith automotive e-perience
in the client's major and ne markets. To reduce costs for its overseas assignments! *.$.4. has
introduced geographic 7filters76 a line manager signals the need for outside skills to one of *.$.4.'s F==
resource coordinators! ho aims to respond in @E hoursI the coordinator then searches the global skills
database for a match! filtering the re)uest through a series of ever.idening geographic circles.
(reference is often given to the suitable candidate ho is geographically closest to the assignment. The
line manager then negotiates ith that employee's boss or team for the employee's availability.
The shape of a company's mobility pyramid ill depend on its businesses! markets and development
stage and ill evolve as the company gros. A mature multinational food.processing company ith
decentralized operations! for e-ample! might find a fiat pyramid ade)uate! hereas a multinational
company in a fast.moving! high.technology business might need a steeper pyramid ith proportionately
more glopats.
>
Gevin $arham and 4arion #evine! 7The Juest for the *nternational 4anager6 A 2urvey of %lobal
Human Resource 2trategies7 /"conomist *ntelligence 5nit! >::>0.
. !dentify your leadership capital
$uild a database of your company's mi- of managerial skills
by persuading people to describe the information in their
c.v.'s! their management talents and their potential on
standard personal.profile templates. Bump.start the process
by having your senior managers and those in the lifeline posts
complete the forms first. Add others orldide ith the
potential to move up. *nclude functional specialists ho sho
general management potential.
Re)uire over time that every e-ecutive join the global H.R. system. This makes it harder for uncut
diamonds to be hidden by their local bosses. Recognizing that people's situations and career preferences
shift over time! hold all managers and technical e-perts responsible for updating their c.v.'s and
revieing their personal profiles at least once a year.
9ompanies should make it clear that individual inputs to the system are voluntary but that H.R. and line
managers nevertheless ill be using the data to plan promotions and international assignments and to
assess training needs. $e mindful of the personal privacy provisions in the "uropean 5nion's ne #ata
(rotection directive and similar regulations forthcoming in Bapan that basically re)uire employee
consent to gather or circulate any personal information.
". #ssess your bench strength and skills gap
Ask each e-ecutive to compare his or her skills and characteristics ith the ideal re)uirements defined
for the e-ecutive's current post and preferred ne-t post. *nvite each to propose ays to close any
personal skills gaps .. for e-ample! through in.house training! mentoring! outside courses or
participation in cross.border task forces.
9ompare the skills detailed in the personal assessments ith those re)uired by your business strategy.
This information should form the basis for your management development and training programs and
sho hether you have time to prepare internal candidates for ne job descriptions.
5nilever uses a nine.point competency frameork for its senior managers. *t then holds the information
in private databases that serve as feeder information for its five talent pools. The company thoroughly
revies the five pools every to years and skims them in beteen! alays using a three. to five.year
perspective. *n >::=! for e-ample! its ice cream division had a strategic plan to move into <= ne
countries ithin seven years. 5nilever began hiring in its current markets ith that in mind and set up a
mobile 7ice cream academy7 to communicate the necessary technical skills.
*.$.4. applies its competency frameork to a much broader personnel base and conducts its skills gap
analyses every si- months. $usiness strategists in every strategic business unit define a plan for each
market and! orking ith H.R. specialists! determine the skills re)uired to succeed in it. 9ompetencies
are graded against five proficiency levels.
4anagers and functional e-perts are responsible for checking into the database to compare their
capabilities against the relevant skills profiles and to determine hether they need additional training.
Their assessments are revieed! discussed and validated by each e-ecutive's boss! and then put into the
database. 7Through the database! e get a business vie of hat e need versus hat e have!7 e-plains
Rick 8eiss! director of skills at *.$.4. 7+nce the gaps are identified! the )uestion for H.R. is hether
there is time to develop the necessary people or hether they have to be headhunted from the outside.7
$. %ecruit regularly
2earch for ne recruits in every important local market as regularly as you do in the head)uarters
country. #evelop a reputation as 7the company to join7 among graduates of the best universities! as
9itibank has in *ndia! for e-ample.
The best ay to attract stellar local national recruits is to demonstrate ho far up the organization they
can climb. Although many ,ortune ;== companies in the 5nited 2tates derive ;= percent or more of
their revenues from non.domestic sales! only >; percent of their senior posts are held by non.Americans.
There may be nothing to stop a local national from reaching the top! but the e-ecutive suite inevitably
refiects here a company as recruiting <= years earlier. "ven today! many multinational companies
recruit disproportionately more people in their largest .. often their longest.established .. markets!
thereby perpetuating the status )uo.
To counter such imbalances! a multinational company must stress recruitment in emerging markets
and! hen possible! hire local nationals from these markets for the middle as ell as the loer rungs of
its career ladder. (hilips "lectronics N.3.! for e-ample! gives each country subsidiary a target number of
people to bring through the ranks for international e-perience. 2ome go on to lengthy international
careersI others return to home base! here they then command more respect! both in the business and
ith government officials! as a result of their international assignments.
&. #d'ertise your posts internally
Run your on global labor market. *n a large company! it is hard to keep track of the best candidates.
,or this reason! *.$.4. no advertises many of its posts on its orldide *ntranet. 5nilever usually
advertises only posts in the loer to pools! but this policy varies by country and by business unit.
Routine internal advertising has many advantages in that it6
Allos a competitive internal job market to function across nationalities! genders and other
categories.
2hos ambitious people they can make their future in the company.
4akes it harder for bosses to hide their leading lights.
Attracts high.fiyers ho may be ready to jump ship.
Helps to break don business.unit and divisional baronies.
Reduces inbreeding by transferring managers across businesses and divisions.
%ives the rest of the company first pick of talent made redundant in another part of the orld.
2olidifies company culture.
*s consistent ith giving employees responsibility to manage their on careers.
There are also certain disadvantages to this practice6 1ine managers have to fill the shoes of those ho
moveI a central arbiter may need to settle disputes beteen departments and divisions! and applicants
not chosen might decide to leave. To prevent that! disappointed applicants should automatically be
routed through the career development office to discuss ho their skills and performance mesh ith
their ambitions.
*.$.4. used to hire only from the inside! but five years ago it began to recruit outsiders .. including those
from other industries .. to broaden thinking and add objectivity. 5nilever is large enough that it can
garner a short list of three to five internal candidates for any post. 'et it still fills >; percent to E= percent
of managerial jobs from outside because of the need for specialist skills and because of the decreasing
ability to plan here future groth opportunities ill occur.
(. !nstitute succession planning
"very manager in a lifeline job should be re)uired to
nominate up to three candidates ho could take over that
post in the ne-t eek! in three months or ithin a year! and
their bosses should sign off on the nominations. This should
go a long ay toard solving succession )uestions! but it ill
not resolve them completely.
The problem in large multinational companies is that many of
today's successors may leave the company tomorro. *n
addition! managers name only those people they kno as
successors. Third! the chief e-ecutives of many multinational
companies keep their succession plans .. if they have any ..
only in their heads. This seems to overlook the harsh realities of life and death. A better approach is that
of one "uropean shipping magnate ho alays carries a ritten list ith the name of a successor for the
captain of every boat in his fieet.
1). Challenge and retain your talent
%lobal netorks that transfer knoledge and good practices run on people.to.people contact and
continuity. "-ecutive continuity also cuts don on turnover! recruitment and opportunity costs. As
international competition for talent intensifies! therefore! it becomes increasingly important for
companies to retain their good managers. 4onetary incentives are not sufficient6 the package must
include challenge! personal groth and job satisfaction.
A policy should be adopted that invites employees to gro ith the company! in every market. *n
addition! a career plan should be dran up for every e-ecutive ithin his or her first >== days in the
organization. And plans should be revieed regularly to be sure they stay aligned ith the business
strategy and the individual's need for job satisfaction and employability.
+verseas assignments and cross.border task forces are e-cellent ays to challenge! develop and retain
good managers. They can also be aarded as horizontal 7promotions.7 This is particularly useful since
the fiat organizations currently in fashion do not have enough levels for hierarchical promotions alone to
provide sufficient motivation.
5nilever has long had a policy of retentive development and manages to hold on to ;= percent of its
high.fiyers. As an integral part of its global H.R. policy! it develops the 7good7 as ell as the 7best.7
5nilever reasons realistically that it needs to back up its high.fiyers at every stage and location ith a
strong bench of crisis.proof! e-perienced supporters ho also understand ho to move ith the
markets.
5nilever bases these policies on three principles6
>. $e very open ith people about the company's assessment of their potential and future.
E. (ay people ell .. and pay those ith high potential really ell! even though it may look like a
distortion to others.
<. #on't hesitate too long to promote people ho have shon ability.
2ometimes this policy involves taking risks ith people. $ut the point of a good system is to enable a
company to place bets on the right people.
*#+!,- !T ./%+
The >=.step global H.R. frameork has the potential to affect every e-ecutive in every location. This
scale of culture change has to be led by a company's chief e-ecutive! ith full commitment from the top
management team. A task force of H.R. and business strategists ill be needed to facilitate and
implement the program! but its success in the end ill depend on line managers. As Re- Adams! former
orldide director of human resources at 4obil +il! has commented! 7The development of jobs and the
people ho fill them has to be the prime responsibility of line managers! supported by H.R. as
diagnosticians and strategists.7
1ine managers ill have to be on over to the business case for a multicultural mi-! trained seriously for
their career.development roles and offered strong incentives to implement orld.class H.R. practices.
*#,#-!,- /01%21#2 3/2T!,-2
+verseas assignments are an essential part of the >=.step program. 'et the track record at most 5nited
2tates.based multinational companies is poor. +ne study found that up to E; percent of 5nited 2tates
e-pats 7black out7 in their assignments and have to be recalled or let go. $eteen <= percent and ;=
percent of the remainder are considered 7bron.outs76 they stay in their posts but underperform. The
failure rates for "uropean and Bapanese companies ere half those of American multinational
companies.
E
,inding e-citing challenges for returning e-pats is another problem. About E= percent of 5nited 2tates
e-patriates )uit their companies ithin one year of repatriation! often because their nely ac)uired
overseas e-perience is disregarded.
<
A >::E study revealed that only >> percent of Americans! >= percent
of Bapanese and E; percent of ,inns received promotions after completing global assignments! hile @@
percent of the Americans! F< percent of the Bapanese and ;F percent of the ,inns sa themselves as
demoted after returning home.
F
Although the average annual cost of maintaining a 5nited 2tates employee abroad is about K<==!===!
and the average overseas assignment lasts about four years! 5nited 2tates multinational companies have
been accepting a one.in.four chance of gaining no long.term return on this K>.E million
investment.
;
The ay around this problem is to manage an e-pat's e-it and re.entry as you ould any
other major appointment by adopting these strategies6
Accord overseas postings the same high priority as other important business assignments.
4atch the candidates' hard skills! soft skills! cultural background and interests ith the
demands of the post and location. An American manager ho studies tai chi and Asian
philosophy! for e-ample! is more likely to succeed in 9hina than one ho coaches 1ittle 1eague.
%ive internal applicants the edge! ith personal and company training if needed.
2pend on some insurance against blackouts and bronouts! especially ith medium. to long.
term assignments in the company's 7lifeline.7 2end the final candidates to visit the country
here the post is based! preferably ith their spouses! and give the local managers ith hom
they ill ork input into the final selection.
%ive the appointee and his or her family cultural and language.immersion training.
Assign a mentor from head)uarters ho ill stay in touch ith the manager throughout the
posting. *deally! the mentor ill have similar overseas e-perience and can alert the appointee to
possible pitfalls and opportunities.
2et clear objectives for the appointee's integration into the local business environment. *.$.4.!
for e-ample! traditionally e-pects a country general manager to join and head the local
American 9hamber of 9ommerce and to entertain a government minister at home once a
)uarter.
9ontinue developing the manager hile he or she is overseas. #o not make it an 7out of sight!
out of mind7 assignment.
#iscuss 7ne-t steps7 before departure and again during the assignment.
5nilever used to have big problems ith e-pat appointments and ould lose E= percent to E; percent on
their return. The problems occurred partly because e-ecutives ho could not make it in the most
important markets ere sent on overseas assignments. According to 4r. Gressler of 5nilever6 78hen
they ere ready to come back! nobody anted them. *t took to years to get the message out that e
ould not post anyone ho ouldn't have a fair chance of getting a job in.house on their return. No!
our rate of loss is ell under >= LpercentM.7
5nilever's overseas postings no have to e)ually important objectives6 to provide the local unit ith
needed skills! technical e-pertise or training and to develop general management talent. 5nilever prefers
to have its foreign operations run by local nationals! supported by a multinational mi- of senior
managers! so most e-pats report to local nationals. +nly >= percent are sent to head a unit .. either hen
no local national is available or hen the assignment is important to a manager's career development.
A manager ho is sent on overseas assignment remains linked to a company unit that retains a career
responsibility for him or her. The unit must include the manager in its annual performance revies and
career.planning system. Responsibility is given to the unit rather than to an individual manager to
provide continuity and is included in the performance assessment of the unit and its director.
9areer development is a factor in managerial bonuses in emerging markets! here 5nilever is trying to
train and develop local people! and in established markets! hich help supply young e-patriate
managers to emerging markets.
4/. 5/,- !2 1,/6-47
The duration of any overseas appointment has to make sense for the individual! the company and the
country. Three.year assignments are typical for the regional and global levels on the mobility pyramid!
but they are not alays enough. The cultural gap beteen a 8estern country and Bapan! for e-ample! is
especially large! so a 8esterner appointed as country manager ill probably need to stay si- years to
make a significant impact.
"ven hen the culture gap is narroer! three.year assignments may be too short! e-cept for the skilled
glopat. 5sually the first year is spent unpacking! the third year is spent packing up and anticipating the
ne-t move! leaving only the second year for full attention to the job. 4ost 5nilever e-pat assignments
last three to four years! although 4r. Gressler believes four to five years ould be preferable in many
cases.
5nilever no gives managers international e-posure through training courses and career development
at younger ages than in the past. 78e do this because younger people today have a far greater
international orientation .. command of languages! e-perience of travel .. than their peers of previous
generations. 8e ant these people in 5nilever and they ant to ork for an organization that can offer
international assignments early on.7
*#TC4!,- C/*351*1,T#%8 2+!552
+ne caveat .. overemphasizing individual development planning can lead to trying to turn every
e-ecutive into a superman or superoman. *n fact! organizational effectiveness depends mainly on
leveraging complementary skills of team members. The mobility pyramid can be a great advantage here.
5sing a variety of information technology groupare and mobile assignments! companies can partner
managers from domestic and international markets in complementary and mutually supportive
assignments to transfer ideas! skills and technology.
This is done particularly in high.technology industries! here it often takes time and training to bring
nely hired local nationals up to speed on highly technical product lines. *n such cases! an e-perienced
manager can be sent to the market on a short.term assignment both to build initial sales and to train the
local nationals hile learning about the local market from them. *.$.4.! for e-ample! uses this approach
to build a more integrated netork of local nationals.
%iven the shortage of true glopats! many multinational companies find it useful to pair a head)uarters.
oriented e-ecutive from outside the market ith an e-ecutive familiar ith the local market as the to
most senior managers in an operating subsidiary. These to often have complementary skills! and their
pairing permits a 7good cop! bad cop7 approach to certain customers. The e-pat knos the product line
and company ell! and his or her lack of detailed knoledge about the local culture can actually help
provoke a fresh and open approach to local obstacles. The insider then provides the ell of country
knoledge and connections for the e-pat to dra upon.
+nce a beachhead is established! further penetration of the local market favors the e-ecutive ith local
knoledge. The outsider can then mentor from behind the scenes! staying in touch ith head)uarters to
guarantee the transfer of good ideas. 4otorola has used this approach very successfully in Russia.
N
*n the event of a financial crisis! the home office often elects to tighten controls and appoint a financially
savvy general manager ith strong ties to head)uarters. A major strategy change or ac)uisition may also
re)uire such leadership to implement it. +nce the situation is under control! hoever! leadership may
revert to a manager ith deep local knoledge.