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Unformatted text preview: Future of Business and Finance Armin Trost Human Resources Strategies Balancing Stability and Agility in Times of Digitization Future of Business and Finance The Future of Business and Finance book series features professional works aimed at defining, describing and charting the future trends in these fields. The focus is mainly on strategic directions, technological advances, and challenges and solutions which will affect the way we do business tomorrow. We also encourage books which focus on the future of sustainability and governance. Mainly written by practitioners, consultants and academic thinkers, the books are intended to spark and inform further discussions and developments. More information about this series at Armin Trost Human Resources Strategies Balancing Stability and Agility in Times of Digitization Armin Trost Furtwangen University Villingen-Schwenningen, Germany ISSN 2662-2467 ISSN 2662-2475 (electronic) Future of Business and Finance ISBN 978-3-030-30591-8 ISBN 978-3-030-30592-5 (eBook) Original German edition published by Springer-Verlag GmbH Deutschland, Wiesbaden, Germany, 2018 # Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland To my dear parents Edith and Ernst Trost Preface When I started studying psychology about 30 years ago, my goal was to become a family therapist. At that time I had already 2 years behind me in which I had learned to work intensively with people in a small psychiatric clinic. That was a wonderful, instructive time. At some point during my studies, I turned to industrial and organizational psychology and ended up where many of my fellow students ended up: in the training and development department of a large corporation. My career as a HR professional took its course. I implemented performance appraisal systems without ever having to ask myself what performance, on the part of the people concerned, actually means in concrete terms. I conducted employee surveys without having to take a personal interest in an employee’s experience. I introduced applicant tracking systems without meeting an applicant personally. In contrast to my work in a psychiatric environment, it became clear to me at some point that HR in large corporations means above all setting up processes, instruments, systems, and programs and keeping them running. All this has very little to do with working with people. Basically, that is fine. One quickly learns and accepts that one should not be an HR professional or HR manager if one likes working with people. However, over the years my inner dislike, which somehow became silently apparent from the beginning, became ever clearer. It is not the systems themselves that turned out to be more and more unbearable for me, but the attitude with which these systems were developed and kept alive. You will find descriptions of these systems in most common textbooks about human resources management—the annual performance appraisal, change management, competence management, talent management, etc. And I have to admit that during my studies I hated books on personnel management. There is nothing creepier than a classic textbook on human resources management. To this day, hardly anything has changed, neither in my reaction, nor in the books themselves. What is described in all these books, and mostly lived in practice, has something patronizing, not infrequently even something contemptuous of people. The employee, the human resource, is not treated as a subject here but as an object. It is measured, judged, developed (“upskilled”), promoted, transferred, terminated, rewarded, retained, etc. You do something with the human resource. “You” is the superordinate, corporate system, represented by the human resources department as the executive body. All this is done under the premise of putting the employee at vii viii Preface the centre. What an illusion. The operator of a laying battery also puts his 10,000 chickens at the centre. Then I, of all people, became a professor of human resources management. Looking back, this was the ideal time. Companies slowly woke up and began to rethink. In the beginning, there was a shortage of skilled workers, and suddenly we had to learn to value applicants and candidates, to be interested in their preferences, and to apply to them and not vice versa. My first book appeared: Employer Branding. How can we convince as an employer? Then followed the book Talent Relationship Management. After writing other books, I started to work on a particularly incapacitating HR instrument, namely the annual performance appraisal. The book The End of Performance Appraisal appeared and nothing pleased me more than the great irritation, coupled with broad, positive resonance, that it brought. I’ve been really lucky over the past few years because a gradual awakening in the HR community has become more and more visible. New generations of HR people took the helm, supported by new generations of executives. Throughout the years I found it a wonderful task to throw coals into the blazing fire again and again, critically, provocatively but always constructively, and close to practice. It seemed as if my attitude and the zeitgeist had met, and I was allowed to play an active role in this development. How very much I now welcome the growing debate on the subject of agility. For me, agility is much more than just a buzzword. It symbolizes a long overdue development towards a changing attitude: the employee as a mature human being. My great role model, Douglas McGregor, is being turned to again, and rarely was his juxtaposition of the Theory X—humans are lazy by nature and have to be kept on a short leash—and the humanistic opposite, of Theory Y, more important and alive than now. In the course of this development, it was my great dream to finally write a comprehensive book that would deal with HR from the point of view of Theory X versus Theory Y. What does HR look like in a traditional, hierarchical, and stable enterprise, and how are things presented in a more agile context? What an exciting question! Writing this book was a matter of real concern to me. Here we are talking about much more than just the image of a mature human being. It is ultimately a question of the competitiveness of many proud companies. I share the view that agility is a prerequisite for the majority of companies to survive in current and future markets. And human resources management plays a key role in this. When I started this book in 2017, I had great respect for this task. I was filled with ideas, an attitude, and a blurry picture of what I would write. In the end, writing this book was a long journey into something uncertain. First you start writing a book. But then the book writes you. The fact that such a book has a static character, i.e. one is forced to fix thoughts in black and white and with finality, is difficult for me to bear. Because the journey continues, and everything I write in this book is just a snapshot. Agility also means never really arriving at a final destination. This journey did not take place in a quiet room, but in a constant exchange with numerous forward-thinking, open-minded people and companies who were willing to contribute constructively to the uncertainty. At this point, we usually thank all those who contributed to the success of this book. I can not even name them all. Preface ix They are the many HR managers, HR professionals, executives, and also students with whom I have spent hours, even days, discussing and struggling for solutions. They are the many impulses in the infinite number of books, articles, blogs, and TED talks that have continuously irritated me. But it is also my family who had to endure a father and husband for 1 year, who was mentally absent at times. In particular I’d like to thank Iliana Haro, who supported me so wonderfully with this English version of this book. Thank you, thank you, thank you. I look forward to the long journey that lies ahead of us. Tübingen, Germany July 31, 2019 Armin Trost Contents 1 HR in the Context of Digitization . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5 2 Agility and Stability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 From Attitude to Management Systems . . . . . . . . . . . . . . . . . The Founder and His or Her Personal Attitude . . . . . . . . . . . . A Corporate Culture Emerges and Remains . . . . . . . . . . . . . . Rules and Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Management Systems . . . . . . . . . . . . . . . . . . . . . . . Hierarchical and Agile Development . . . . . . . . . . . . . . . . . . . The Hierarchical Hemisphere . . . . . . . . . . . . . . . . . . . . . . . . . The Agile Hemisphere . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Connected Markets Require Connected Organizations . . . . . . . 2.2 Types of HR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hire & Pay and Darwinism . . . . . . . . . . . . . . . . . . . . . . . . . . Institutionalization and the HR Amplitude . . . . . . . . . . . . . . . Central Planning and Control . . . . . . . . . . . . . . . . . . . . . . . . . People-Centered Enablement . . . . . . . . . . . . . . . . . . . . . . . . . Painful Transformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Digital Dehumanization of Human Resources Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7 8 8 8 9 10 10 13 14 15 16 16 17 20 21 . . 23 24 Building an HR Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 HR Strategy: An Overview . . . . . . . . . . . . . . . . . . . . . . . . . . HR Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building Blocks of an HR Strategy . . . . . . . . . . . . . . . . . . . . All Relevant Questions at a Glance . . . . . . . . . . . . . . . . . . . . 3.2 Corporate Strategy as the Basis . . . . . . . . . . . . . . . . . . . . . . . The Ultimate Business Purpose . . . . . . . . . . . . . . . . . . . . . . . The Positioning of the Company in the Market . . . . . . . . . . . . Strategic Challenges and Opportunities . . . . . . . . . . . . . . . . . . A Different Understanding of Leadership and Organization . . . . . . . . . . . . . 25 25 26 26 28 28 29 31 32 33 3 xi xii 4 Contents 3.3 Critical Functions and Roles . . . . . . . . . . . . . . . . . . . . . . . . . . Roles and Functions with High Strategic Relevance . . . . . . . . . Hard to Fill Functions and Roles . . . . . . . . . . . . . . . . . . . . . . . The Volume of Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key and Bottleneck Functions . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 HR-Relevant Strategic Challenges . . . . . . . . . . . . . . . . . . . . . . Why Are You Doing This? . . . . . . . . . . . . . . . . . . . . . . . . . . . Stakeholders, Dynamics and Limited Resources . . . . . . . . . . . . Three Times “Why?” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Pragmatic Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Possible HR-Related Challenges . . . . . . . . . . . . . . . . . . . . . . . 3.5 Key HR Topics and Their Strategic Alignment . . . . . . . . . . . . . From Challenge to Key HR Topics . . . . . . . . . . . . . . . . . . . . . Possible Key HR Topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Third Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strong Strategic Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Statements in HR . . . . . . . . . . . . . . . . . . . . . . . . . . . The Relevance of Stability Versus Agility . . . . . . . . . . . . . . . . . Outlook on the Following Chapters . . . . . . . . . . . . . . . . . . . . . 3.6 International HR Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . Ethnocentric World View in an International Setting . . . . . . . . . Local Differentiation in a Multinational Setting . . . . . . . . . . . . . Global Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Clarify How the Company Operates . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 34 36 37 37 38 39 40 41 42 42 43 43 44 45 46 46 47 47 48 49 49 50 50 51 The Structural and Cultural Context . . . . . . . . . . . . . . . . . . . . . . . 4.1 The Context and Its Relevance for HR . . . . . . . . . . . . . . . . . . . Structural and Cultural Framework Conditions . . . . . . . . . . . . . Stability in a Traditional, Hierarchical World . . . . . . . . . . . . . . Agility and the Connected World . . . . . . . . . . . . . . . . . . . . . . . 4.2 The Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Individuality, Diversity and Work-Life Balance . . . . . . . . . . . . The Focus Is on the Employee: Really? . . . . . . . . . . . . . . . . . . The Idea of Man: X or Y? . . . . . . . . . . . . . . . . . . . . . . . . . . . . Who Dependents on Whom? . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 The Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . David Against Goliath . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certainty of Process and Outcome . . . . . . . . . . . . . . . . . . . . . . Short Cycles, Long Cycles . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 The Dominant Understanding of Leadership . . . . . . . . . . . . . . . General Knowledge, Expert Knowledge . . . . . . . . . . . . . . . . . . Boss, Coach, Partner or Enabler . . . . . . . . . . . . . . . . . . . . . . . . Autonomy and Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 53 54 55 56 57 57 59 60 61 63 64 66 68 69 69 71 73 Contents 4.5 Organization, Dynamics and Commitment . . . . . . . . . . . . . . . Division of Labour and Task Dynamics . . . . . . . . . . . . . . . . . Consequences and Commitment . . . . . . . . . . . . . . . . . . . . . . . 4.6 Current and Future Status . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 xiii . . . . . 75 75 76 78 80 Talent Acquisition and Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Employer Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Focus on Candidate or on Requirements . . . . . . . . . . . . . . . . . . The Employee Value Proposition as the Core of any Employer Brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Degree of Differentiation . . . . . . . . . . . . . . . . . . . . . . . . . The Right Amplitude . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pure Advertising? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employer Branding from the Inside . . . . . . . . . . . . . . . . . . . . . The Role of Social Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employer Branding Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Sourcing, Approaching and Retaining Candidates . . . . . . . . . . . The Passive, Vacancy-Focused Scenario . . . . . . . . . . . . . . . . . . The Active, Candidate Focused Scenario . . . . . . . . . . . . . . . . . Fun or Networking? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current and Possible Sourcing Strategies . . . . . . . . . . . . . . . . . The Right Strategy Depending on the Target Function . . . . . . . . Simple (Operational) Hiring . . . . . . . . . . . . . . . . . . . . . . . . . . . Difficult Mass Hiring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Specialist Hiring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategic Search . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Talent Acquisition Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Selection and Fit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Short-Term and Long-Term Fit . . . . . . . . . . . . . . . . . . . . . . . . Potential for Future Development or Current Suitability? . . . . . . Efficiency Versus Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . Who Is Supposed to Benefit from Aptitude Testing? . . . . . . . . . The Positive Candidate Experience . . . . . . . . . . . . . . . . . . . . . . Who Is Supposed to Convince Whom? . . . . . . . . . . . . . . . . . . . Artificially Intelligent Selection Procedures . . . . . . . . . . . . . . . . Bear the Consequences of the Selection Decision . . . . . . . . . . . Long-Term Candidate and Team Orientation . . . . . . . . . . . . . . . 5.4 Onboarding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Two Opposing Testimonials . . . . . . . . . . . . . . . . . . . . . . . . . . When Does Onboarding Start? . . . . . . . . . . . . . . . . . . . . . . . . . The Hard and Soft Side of Onboarding . . . . . . . . . . . . . . . . . . . 81 81 82 83 83 85 86 87 88 88 90 90 91 93 94 95 96 97 98 99 99 100 101 102 103 104 105 106 108 109 110 111 111 111 113 114 xiv Contents Babysitting or Cold Water . . . . . . . . . . . . . . . . . . . . . . . . . . . Responsibility for Onboarding . . . . . . . . . . . . . . . . . . . . . . . . Compatibility and Implementation . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7 . . . . 115 115 117 118 Goals, Assessment and Feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 Objective Settings and Performance Expectations . . . . . . . . . . . The Classic, Strategic Alignment . . . . . . . . . . . . . . . . . . . . . . . The General Problem with “Smart” Objectives . . . . . . . . . . . . . Toxic Effects of Individual Goals in Connected Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What Do You Do for Whom and Why? . . . . . . . . . . . . . . . . . . Goal Agreement Versus Goal Setting . . . . . . . . . . . . . . . . . . . . Personal Responsibility and Openne...
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