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 The pressures on organisations to add value, achieve sustained competitive advantage, and respond and adapt quickly and flexibly to new challenges and opportunities are relentless. The responses to these pressures have taken many forms, including new types of organisation, lean, delayered, flexible, process- or project-based, increasing reliance on information technology, and an emphasis on continuous improvement in terms of performance, quality and customer service. 


 Clearly some organisations can survive on fairly traditional hierarchical structures to deliver standardised ranges of products and service, but increasingly customer orientation, product differentiation and service support require new forms of organisation. This is requiring no more than ‘horses for courses’ but it does draw attention to the fact that there is no guarantee that today’s organisations will exist indefinitely in their present form, or indeed exist at all. Therefore, there is a case for organisational strategists to recognise drivers for change and for managers to diagnose and be able to act upon the implications of these drivers, because organisational survival may depend on it. This impacts on approaches to managing people and the demands made on people managers, whether they are line managers or HR professionals. It is the context within which people are managed that is changing and HR managers have had to reposition themselves ‘in the ever-changing environment of global competition, new technology, and new methods of working and organising work’ (Armstrong, 2000). Private sector mantras are sustainable competitive advantage, added value, core competencies and strategic capability, while in the public sector the driving force has been ‘best value’ and from 2010 cuts in public spending.

 Organisational transience, employability and the transactional psychological contract

  It has also impacted upon the mutuality of obligation between employer and employee with regard to traditional career patterns. The end of the job for life may have been subject to hyperbole, but career patterns are different and twenty-first-century workers may need to engage in continuous development and the refurbishing of skills in order to maintain employability. This tends to promote a loyalty to self rather than intensifying loyalty to the organisation. Worker loyalty may therefore have to be purchased by the employer through the currency of self-development opportunities. Promoting self-development is not just about offering training courses but encompasses lateral career moves, development appraisal and employer responsiveness to worker employability needs. These ideas have links to the concept of the ‘war for talent’ where employers compete with each other to recruit and retain valuable employees. This competition involves offering not only appropriate financial rewards but also non-financial rewards.

 This refocusing of the employeremployee relationship can create the transactional psychological contract, replacing a relational psychological contract, whereby both parties sustain the employment relationship all the time there is ‘something in it for them’; it is self-centred rather than familial.

 Customer aspirations and power

 Although phrases like ‘the customer is king’ and ‘delighting our customers’ can be accused of being trite, there is little doubt that, among other things, organisations have had to become more customer-focused in order to survive and prosper in competitive environments. Excellence in customer service has always been a differentiating factor, but perhaps what is different now is that customers have had their expectations fuelled and are encouraged to feel empowered to demand quality products and good service. Customers are also more inclined to exercise their power through either the withdrawal of custom or the pursuit of compensation or restitution. Philpott (2001) sums up this customer power: ‘intense competition in global and domestic markets forces businesses to keep labour costs in check and/or raise their game in terms of product quality, because empowered consumers want ever-better goods at ever-lower prices.’ This rise in customer aspirations is not only a private sector phenomenon, because citizen consumers of public services have also been encouraged, principally through public policy, to perceive themselves as fully fledged customers. It is not for this section to debate the legitimacy of the customer-driven organisation, nor to say how it should be achieved, but merely to draw attention to an issue which has implications for the world of work. Customer aspirations and power are influencing the way organisations are structured and managed and have significant implications for workers who have to contend with the increased emphasis on satisfying customer needs through being more responsive and more flexible, and providing emotional labour ‘the management of emotions and provision of behavioural displays associated with feelings in interactions with customers/clients’ (Legge, 2005).



 The war for talent and the new paternalism

 Where shortage labour markets exist they confer power to workers, as sellers of their labour, and enable a greater degree of choice to be exercised over whom to work for and on what terms. This is one element of the war for talent employers having to compete with each other to secure their human resource needs. The war for talent goes beyond this, as the name suggests, and it is argued that in order to survive in competitive product and service markets employers need to attract and retain the most talented workers, even in difficult macroeconomic conditions. It is through securing the expertise, creativity and innovation of talented people that the organisation will prosper. In service-based and knowledge economies employees are not only the major operating cost but also the source of competitive advantage. Studies by Goleman in the USA, reported by Brown (2001), found that in low-skill work the highest-performing workers contributed twice to three times as much as average workers, while in professional jobs top performers were capable of adding ten times as much value as their co-workers. Kets de Vries, in summing up the competition for talent (Williams, 2000), created an interesting metaphor: ‘Today’s high performers are like frogs in a wheelbarrow, they can jump out at any time.’ The implication is that organisations need to prevent talented employees from escaping. To extend the metaphor, this does not mean putting a lid on the wheelbarrow, it means making the wheelbarrow a sufficiently attractive place to stay. This attractiveness cannot be defined in any generic way because this rather depends on what the frogs want. Williams argues that the answer resides in talent management processes which go beyond ensuring that financial rewards are market competitive and encompasses the whole range of non-financial and environmental rewards. The work environment, depending on the type of work, might include opportunities to exercise discretion, to engage in innovative work, to have opportunities for self-development, to work with interesting people and to be able to share in success in the broadest sense. These features would be in addition to what might be considered more traditional non-financial rewards such as recognition, responsibility and being treated with respect. The role of managers in talent management is to exercise empowering leadership and deploy competencies related to coaching, mentoring and feedback.





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