Global Talent Management at Novartis - Assignment Example

Global Talent Management at Novartis Name of Student: Course: Course Instructor: Institution: Date: Global Talent Management at Novartis 1. Is there one universal way for a multinational company to motivate its employees around the world to exert maximum effort and be accountable for their results? According to the case, employees go to work because of believing in what the company does and for wanting to be associated with its success (Cadsby, 2007). However, Brown et al (2003) assert that commitment and success have to be encouraged through other means other than money. Employees around the world working for a multinational company may be motivated in one universal way to exert maximum effort and be accountable for their results (Strack et al, 2008). For instance, in 1996 Novartis came up with a system for management of employee performance where employees were graded and their compensation matched according to business results and adherence to laid down behaviors and values. In 2002, a universal system applicable to all employees around the world was created. The previous two-dimensional system was adopted with a focus on objectives for the business and behaviors and values consistent with the norms of the company. At the beginning of each year, individual employees and managers meet for personal objectives to be set and in July as well as at the end of the year the manager meet again for direct reports progress to discuss the performance of individual employees. Information gathered is being used in assessing and rating performance of employees and this performance is reviewed further and approved. Employee compensation is closely connected to the company performance and individual rating, and pay for performance system of the company has been embraced by employees. According to Brown et al (2003), most employees work hard with the thought of getting paid according to the amount of work done. This form of motivation used by Novartis is similar to several other multinational companies. Assessment of employee performance is a strategy that is used in exerting maximum effort and for accountability for results (Gatsby, 2007). Providing employees with feedback on assessment and counseling them on better ways of performing their duties and responsibilities ensures better performance that is motivational for employees. On the contrary, this is not satisfactory especially in situations where employees work interdependently and are unable to control their performance. Also, this mode of motivating employees has a disadvantage in situations where employees are forced to adhere to contractual terms that limit their creativity in the achievement of high performance at work (Strack et al, 2008). In addition, different countries have different cultures and universal motivational strategies may not be applicable unless changed to fit particular cultures (Wu, 2008). Employees who are unable to cope with these challenges will often decide to look for employment elsewhere. Therefore, addressing these challenges would lead to success of universal ways used by multinational companies in motivating their employees. 2. Evaluate the potential effectiveness of Novartis's standardized system for performance measurement around the world. In applying standardized system for performance around the world, Novartis faced numerous challenges especially in collectivist cultures, environments that are represented by strong unions and countries with high inflation history (Brown et al, 2003). Some managers from the company complained of behaviors and values of the company being too complex and in contradiction with local culture for business as well as internally contradicting itself. The system also faced resistance from poorly performing employees. The case demonstrates that the system was resisted in countries such as Japan with an argument that rating most of the employees as average performers was demotivating for employees who always achieved an average performance. However, the same has been effective in some countries such as China where the performance of a good percentage of employees with the lowest ratings was raised. Further, in Switzerland, manufacturing unions worked with the company in awarding higher performance with higher compensation and vice versa for lower performance (Gatsby, 2007). In Turkey, the company negotiated with unions for installation of pay for performance system and the terms were accepted by the Turkish unions. Management of performance is a recent development by companies that aim at maximizing the current performance of employees with a focus on future potential (Strack et al, 2008). This applies to all company levels; the case demonstrates its implementation is a result of globalization pressures, as well as a need of creating competitive advantage for survival in the global market. It entails setting goals to be achieved by individual employees with the aim of realizing their wider objectives of the company (Allen et al, 2003). In the case of Novartis, the company has adopted the strategy of rewarding employees according to their performance whereby high performance attracts higher pay while low performance means receiving low compensation. Inasmuch as there is an emphasis on setting concrete goals, achieving this in practice is challenging. This is because the company has a standardized system of performance measurement applied to different countries across the world. This does not put into consideration different cultures and what individual countries consider as appropriate behavior for performance evaluation. The diversity of cross culture and cross nation can lead to strategy conflict in the implementation of a standardized system for human resource management (Wu, 2008). Also, specific attributes used in assessing the performance of specific employees have not been established because is done in private by line managers only. In addition, competence level for achievement of objectives satisfactorily has not been established. Individuals in organizations usually work interdependently, and this makes it difficult for individuals to control their performance. General ranking of employees in performance assessment has never been fair, especially in places where women work in companies with high masculinity. Criticism and feedback are rarely provided after assessment of performance, and this is quite unfortunate because this could be used by low performers in achieving high goals. However, the culture of a place is to blame for this. For example, the Chinese culture has reserved patterns for communication, and this makes it difficult for direct feedback or criticism to be provided (Farndale et al, 2010). Providing a solution to this case requires performance management to be effective, strategic and integrated (Chartered Institute of Personnel and Development, 2009). This can be made possible when individuals are aware of their roles and responsibilities, possess the required abilities and skills, develop the capacity of meeting these expectations, are provided with feedback regarding their responsibilities and contribute to the objectives as well as the aims of the company. Furthermore, the success of the Novartis standardized system of performance measurement depends on transparency in making decisions, fairness of the procedure and respect for individual employees. Creation of a clear line between the effort of individuals and the contribution made to the objective of the company creates an effective evaluation for management of performance (Chartered Institute of Personnel and Development, 2009). The systems for performance can be translated to fit individual countries with cultural variance. This will ensure the effectiveness of performance measurement systems. 3. Evaluate Novartis's strategy for dealing with talent management challenges in China. If you were put in a charge of China operations, what changes would you make to deal with the turnover problem? In the talent management, Novartis was expanding its manufacturing and R&D in China because of the local market that was growing. Most R&D personnel were talented and competing in a global market for talent with converging salaries. For Example, En Li, the Head of Research at Novartis Institute for Biomedical Research in Shanghai had a Ph.D. in Biology from MIT with a ten year experience in teaching and research at Massachusetts General Hospital’s Center for Cancer Research. He was offered an attractive package in 2003 by Novartis on condition that he went back to China. Globally competitive salaries were offered to senior research managers as well as scientists recruited to work in Shanghai from around the world. A good number of them were overseas citizens from China receiving competitive salaries (Yao and Wang, 2006). They could accept local healthcare and schooling for their children. On the other hand, employing young talented applicants was a problem because they possessed minimal experience (Allen et al, 2003). The company is therefore, forced to incur costs of training them and this has a negative impact of lowering productivity. This is further compounded by the fact that training the employees leave for other companies because they possess the necessary experience and because they want salary, as well as career progression (Schuler et al, 2012). When this happens, Novartis is forced to start training other employees. In addition, experienced employees in the company keep receiving better offers and the company try its best to retain them. In providing a solution to the case of Novartis, management of talent is essential for the success of a company in a competitive marketplace. It involves implementing integrated strategies to increase productivity in the workplace through the development of processes to attract, develop, retain and utilize people with the required skills in meeting business objectives (Lockwood, 2006). The anticipated shortage of skills in the future, as well as the need of global expertise, is driving management of talent (Allen et al, 2003). However, human resource is required to be strategic for success of talent management because of the role it plays in maintaining employee commitment in a company (Alexander et al, 2011). Also, companies with initiatives for talent management are required to have budgets for formal recruitment. The case demonstrates that several multinational companies have entered the Chinese market using different strategies (Farndale et al, 2010). However, these companies are facing several challenges such as the management of human resource, negotiation problems and cultural differences (Wu, 2008). Therefore, employment is localized to reduce costs and overcome difficulties but recruiting qualified staff in the Chinese market is difficult and different due to many reasons such as talent shortage. China witnesses millions of graduates yearly but they did not return to the market because more students do arts rather than sciences that make them lose competitive advantage (Strack et al, 2008). This is contrary to multinational companies in China that would want to attract specific talent with technical skill and an understanding of international management (Alexander et al, 2011). In addition, variations in the social environment entail differences in the labor market, employment systems and culture between other countries and China, making it difficult for multinational companies to maintain staff in the Chinese market (Wu, 2008). Also, benefits and compensation contribute greatly to the challenges faced by multinational companies. Qualified staffs leave their companies with the intention of finding better paying jobs. These force multinational companies to look for top management expatriates for the establishment of their operations (Schuler et al, 2012). Sometimes expatriates return to their original countries because of a number of reasons such as culture shock and unfamiliar situations in China. This has a negative impact on multinational companies such as Novartis. Expatriates are paid three to ten times more than local Chinese managers, and this exerts financial pressure on companies. According to Chen and Hoskin (2007), turnover has become a common phenomenon in China and in dealing with this problem, multinational companies are working on implementing pay and reward programs to attract and retain qualified Chinese staff. This form of payment is valued more by Chinese employees than fixed salaries. It is for this reason that staff resign from fixed salary employment for casual labor with wages because they have the capability of controlling their earnings. To solve the turnover problem in Novartis, I would make several changes such as to work on programs for implementation of employer brand improvement for candidates’ attraction. This is due to the fact that this has gone to the extent of corporate behavior and employees being linked to company brands. The changes to be used in dealing with the problem are, in addition to increasing the number of positions, placed in rural areas or cities with salaries lower than Shanghai. What is more, I could reduce turnover through the hiring of undervalued talent such as those with temporary jobs and young graduates from the university. Besides, the company is required to keep increasing its offers to match with the outside world to avoid losing employees to other companies. Also, I would initiate a combination of different approaches that include mentoring, coaching and international exposure. Additionally, I would focus on global webinars and e- learning. Moreover, I would create an environment that not only engages with employees, but also values them as expected. I would come up with a management strategy for talents, which would also include a succession plan that would serve as a motivational platform for employees to look forward to promotions. References Alexander, N A et al 2011, ‘The Impact of Employee Perceptions of Training on Organizational Commitment and Turnover Intentions: A Study of Multinationals in the Chinese Service Sector’, The International Journal of Human Resource Management, vol. 22 no. 8, pp. 1765- 1787. DOI:10.1080/09585192.2011.565667. Allen, D G et al 2003, ‘The Role of Perceived Organizational Support and Supportive Human Resource Practices in the Turnover Process’, Journal of Management, vol. 29 no. 1, pp. 99– 118. Brown M P et al 2003, Compensation Policy and Organizational Policy: The Efficiency, Operational, and Financial Implications of Pay Levels and Pay Structure, Academy of Management Journal, vol. 46 no. 6, pp. 752- 762. Doi: 10.2307/30040666 Cadsby, B 2007, Sorting and Incentive Effects of Pay for Performance: An Experimental Investigation, Academy of Management Journal, vol. 50 no. 2, pp. 387- 405. Doi: 10.5465/AMJ.2007.24634448 Chartered Institute of Personnel and Development 2009, Performance Management in Action: Current Trends and Practice, viewed 3 September 2013, Chen, W and Hoskin, J 2007, ‘Multinational Corporations in China: Finding and Keeping Talent’, Society for Human Resource Management (SHRM). Farndale, E et al 2010, ‘The Role of the Corporate HR Function in Global Talent Management’, Journal of World Business, vol. 45, pp. 161- 168 Lockwood, N R 2006, ‘Talent Management: Drivers for Organisational Success’, Society for Human Resource Management (SHRM) Research Quarterly, viewed 9 September 2013, Schuler, R S et al 2012, ‘Global Talent Management and Global Talent Challenges: Strategic Opportunities for IHRM’, Journal of World Business. Siegel, J 2008, ‘Global Talent Management at Novartis’, Harvard Business School, 9- 708- 486, Boston, MA: Harvard Business School Publishing. Strack, R et al 2008, ‘Creating People Advantage: How to Address HR Challenges Worldwide Through 2015’, BCG/World Federation of People Management Associations, Boston. Tariq, M N et al 2013, ‘The Impact of Employee Turnover on the Efficiency of the Organization’, Interdisciplinary Journal of Contemporary Research Business, vol. 4 no. 9, pp. 700- 711 Wu, J 2008, ‘An Analysis of Business Challenges Faced by Foreign Multinationals Operating the Chinese Market’, International Journal of Business and Management, vol. 3 no. 12, pp. 169- 174 Yao, X and Wang, L 2006, ‘The Predictability of Normative Organizational Commitment for Turnover in Chinese Companies: A Cultural Perspective’, International Journal of Human Resource Management, vol. 17 no. 6, pp. 1058- 1075. Read More