Global Talent Management at Novartis - Case Study Example

Global Talent Management at Novartis: Case Analysis [Name] [Professor Name] [Course] [Date] Table of Contents Table of Contents 1 Abstract: 3 Universal way MNCs motivate and account for employees 3 Potential effectiveness of Novartis's performance measurement system 5 Goal Model 6 System model 6 Strategic-constituencies models 7 Ineffectiveness model 7 Novartis’s strategy for dealing with talent management challenges in China 8 Employee turnover (reflective perspective) 9 References 11 Abstract: This report discusses the various issues of talent management at Norvatis. Issues discussed include whether there is one universal way for a multinational company to motivate its employees around the world exert maximum effort and be accountable for their results. Second, the potential effectiveness of Novartis's standardized system for performance measurement around the world is evaluated. Also examined include Novartis's strategy for dealing with talent management challenges in China and changes that can deal with the turnover problem. Universal way MNCs motivate and account for employees Cross-cultural management can be an effective way that can be used universally by a multinational to motivate its employees across the globe as well as be accountable for their results. Generally, cross-cultural management involves processes and activities aimed at managing traditional organizational behavioural issues such as leadership, motivation, group dynamics and decision-making. Cross-cultural management is indeed integral to the effective management of companies with productive activities in more than one country. Given their diverse nature, performance of employees can be a major concern based on the high potential for conflicts due to cultural differences. However, the role of human behaviour is an integral factor of performance given its fast response towards change, particularly in cross-cultural environments. In any case, there has to be some level of motivation in order for the employees to perform effectively and productively (Trifunovska and Trifunovska 2010; Hofstede 1980). Indeed, motivation and engagement of employees are crucial areas that can enable a multinational to be effective. Towards this end, it is arguable that a multinational universal can motivate its workers as well as be accountable for their results through cross-cultural management techniques such as talent management, or investment in human capital (Oluyinka and Zohreh 2012). Consistent with these perspectives, several studies have suggested that since it is not possible for management and motivational theories and concepts to be accepted universally (or to be ‘universally valid’), effective use of human capital is a primary determinant of organizational performance, as a result, motivation of local employees is a fundamental issue for foreign management (Hofstede 1980). Indeed, cross-cultural management through leadership and talent management can be an effective method of universally enabling a multinational to control the behaviour of its workers across the globe towards corporate objectives (Kim and Kamalababhan 2011). Due to the increased globalisation, more and more multinational corporations are evolving their global strategies for optimal human resource utilization, in order to operate efficiently as well as attain high performance (Terzioglu and Watty 1999). For instance, in the Norvatis case scenario, Vassella introduced a globally standardized talent management system used by major multinational corporations. He introduced a system for rating employee performance and for appraising human potential. Basically, the global talent management system was aimed at developing individual employees’ talents for leadership potentials. It was effective in motivating the employees. At the same time, through regular assessments of human potential, Norvatis could be accountable for their results. With reference to the case study, one of the leading barriers to effective organizational management that faced Norvatis was the diverse culture in its global operations, such as in China where it faced high turnover rates. This implied a need for talent management, which reduced turnover rates to 17.6 percent in 2007 from 20.1 percent in 2006. Since culture reflects what is regarded as significant or insignificant by the people, and that such significance varies from one country to the other, the effectiveness of an incentive system cannot be effectively applied universally across all nations (Kim and Kamalababhan 2011). The basis for successful management of companies with global operation lies in understanding individual cultures and assumptions, as well as expectations about how individuals should think or act, and in return, understand others. A number of theories used in cross-cultural management can helps provide an understanding of ways in which employees can be motivated and their behaviours directed towards achieving corporate objectives (Henri 2003). The culture-based theory of work motivation provides a framework for assessing the motivation potential of various motivational techniques across different cultures. Work motivation theories such as content theory attempts to establish what motivates people at work. Process theories such as goal-setting theory and equity theory attempt to explain work motivation based on how employee behaviour can be initiated, stopped or redirected (Kim and Kamalababhan 2011). Potential effectiveness of Novartis's performance measurement system Several models can be used to capture the effectiveness of Norvatis’s standardised system for performance measurement across the globe. Their diversity can be explained by the type of effectiveness construct and a range of conceptualizations of the company that generate different models of effectiveness. Goal Model This model uses the organization’s vision as a rational set of systems focused on achieving goals (Henri 2003). The effectiveness Norvatis’s standardized system for performance measurement across the globe is therefore measured in terms of the outcomes. The focus is mainly on achievement of corporate objectives, targets and goals. Norvatis’s standardized system for performance measurement across the globe can offer a periodic surveillance of the employees and their productivity to ensure that the corporate objectives are being fulfilled. The system has the potential of improving the efficiency and performance of the employees. This has a direct effect on their output and the overall improved performance of the organization. This is because the system enables managers to periodically review the performance of their employees and provide incentive based on performance. The managers then use the information for their own assessment and assign a performance rating. Almost every Norvatis employee across the globe receives a performance rating. System model The system model underscore the means needed for achieving certain ends with regard to processes, inputs and resource acquisition (Henri 2003). The system has the potential to ensure that the Norvatis administrative system does not encourage mediocrity or that encourages a system for workers to do jobs merely on year-on-year basis. This ensures that the management structures are kept under surveillance since it is easy to determine their effectiveness based on the overall performance of the employees. Strategic-constituencies models This model serves to extend the scope of system model and goal model by adding the expectations of several interest groups in an organization (Henri 2003). This model is viewed as comprising a set of external or internal constituencies that negotiate a complex of organizational goals or constraints. Based on this model, the effectiveness of Norvatis’s standardised system for performance measurement across the globe by evaluating how it is aligned to the interests of various individual and groups such as employees, shareholders, customers and the government. For instance, Norvatis’s performance measurement system can effectively ensure that the organization matches the employee remuneration to performance. Most jobs at Norvatis are assigned a base salary in addition to a target incentive. When an employee receives his rating, he meets with his respective manager to discuss what should be done to improve the performance of the department and the employee. The discussion may end with how performance rating would impact the employee salary and incentive payout. In any case, improved performance of the organization has the potential to build the company’s repute and sales output. Through these, the system ensures that the interest of the employee, the organization, the customers and the general stakeholders are kept into consideration. Ineffectiveness model This model focuses on the factors that restrain the successful organizational performance, by evincing different perspectives that envisage the organization as comprising a set of problems (Henri 2003). Therefore, Norvatis’s the effectiveness of performance measurement system can be judged based on the absence of effectiveness factors. In the case of Norvatis, the major ineffectiveness factors identifiable in the company due to its multinational operation include cultural diversity. Hence, the effectiveness of Norvatis's performance measurement to reduce cultural differences relies on its potential to reduce cultural differences affecting the company. However, Walsh and other Norvatis managers observed that there was a significant challenge in implementing Norvatis performance measurement in collectivist cultures that have a strong representation of the union. Additionally, in Confucian-influence Asian societies, managers also noted that full implementation of the system was hampered by resistance from employees. From this perspective, the performance measurement system is not likely to be effective in collectivist cultures. Novartis’s strategy for dealing with talent management challenges in China In China, Norvatis's talent management system faced the challenges of cost control and employee retention. This was compounded by the looming talent shortage and high competition for scarce talents. Norvatis initiated a set of human resource development (HRD) programs, such as training and development of workers to tackle the issues. In the case scenario, Janice Gwyn, head of talent management, notes that searching for talents in China often proved futile as applicants were often young and had little experience with multinationals. Hence, when they joined the company, they entered a learning curve. Additionally, China’s local salaries were rapidly rising at an annual rate of over 10 percent. Norvitas faced major challenges in talent management in China. According to Vasella, it was immensely difficult to change a company from the position of the middle or upper-middle management, since dramatic change originated from the bottom or the apex of the organization. In dealing with the talent management challenges in China, Norvatis strategy was focused on learning. The effective development of employee talents was based on the learning processes at its research labs. For instance, the company initiated a program that sent 48 Chinese employees to part time programs at Beijing University's business school. The program was funded by Norvatis through its human resource department. Further, the company structured one companywide salary band for returnees. The company also invested some $100 million in the expansion of its research operation in Shanghai, so that the company's Chinese operations would examine an extensive range of scientific responses. Basically, the strategy involved recruiting, training and retention of workers. Overall, retention seemed to be the final struggle of the company’s strategy, and therefore aimed to take measures to influence the employees to remain in the organization for maximum period of time. The strategy of human resource development through training was effective as it served to reinforce the sense of value of the returnees and new hires. Indeed, as seen in the case scenario, the overall turnover in China decreased to 17.6 percent in 2007 from 20.1 percent in 2006. Employee turnover (reflective perspective) The overall turnover in China decreased to 17.6 percent in 2007 from 20.1 percent in 2006 as a result of Norvatis’s human resource development strategy. In my opinion, if I was in charge of China operations, there are some changes I would have made. First, I would have initiated a mentoring program that is integrated with objective-oriented feedback system to provide a framework for establishing strong relationships within the organization. The program would have involved pairing experienced employees with less experienced workers with the objective of developing certain competencies, providing feedback and designing a personalized career development plan (Yazinski 2009). Next, I would have encouraged referral and recruitment from within. By having the current employees offer referrals to new employees, it could have helped minimize confusions signified by job expectations. This is since current employees can realistically explain the expectations of a position as well as an environment to the interested individual. Additionally, by hiring from within, it would have minimized the effects of high turnover rates as employees are already aware of the expectations of a job and the environment. In addition, by fostering trust and confidence in the middle- and upper-level management, strong relationship with employees is established from the outset. The new employees in China have to be made to believe that the management is competent and the organization will be successful in the long run. I would have strove to inspire this confidence as well as made decisions that reinforce it. For instance, by being consistent or walking the talk, the employees can be made to have confidence in the management of the company. Further, I would also have engaged and inspired employees by pushing for policies that show that the company has faith in their contribution (Chai 2009). Additionally, I would ensure that the organization provides growth opportunities to the new employees in China. By providing the employees with sufficient work challenges that expand their knowledge in the field, they are motivated to retain their positions at workplace. Providing workshops, taking the employees to cinemas and organizing trips to foreign Norvatis operations, can enable the employees to understand themselves as well as what they should expect from their careers (Yazinski 2009). In conclusion, cross-cultural management can be an effective way that can be used universally by a multinational to motivate its employees across the globe as well as be accountable for their results. In addition, Norvatis’s standardized system for performance measurement across the globe can offer a periodic surveillance of the employees and their productivity to ensure that the corporate objectives are being fulfilled. Lastly, Norvatis’s strategy for reducing turnover included human resource development (HRD) programs, such as training and incentives. References Chai, W 2009, Talent retention and development within multinational company in China, viewed 3 Sep 2013, http://www.diva-portal.org/smash/get/diva2:220648/FULLTEXT02 Henri, J 2003, Performance Measurement and Organizational Effectiveness: Bridging The Gap, Université Laval: Québec City Hofstede, G 1980, Motivation, Leadership and Organization: Do American Theories Apply Abroad, viewed 3 Sept 2013 http://alangutterman.typepad.com/files/motivation-ldrshp-and-orgn-do-american-theories.pdf Holton, H, Dent. F & Rabbets, J 2009, Motivation and Employee Engagement in the 21st Century: A Survey of Management Views, Ashridge Business School, viewed 3 Sept 2013, http://www.ashridge.com/Website/IC.nsf/wFARATT/Motivation%20and%20Employee%20Engagement%20in%20the%2021st%20Century:%20A%20Survey%20of%20management%20Views/$file/Ashridge_Report_Motivation-and-Employee-Engagement-October2009.pdf Kim, HD & Kamalababhan, T 2011, Developing a theoretical framework for a cross-cultural employee motivation study, Indian Institute of Technology: Chennai Oluyinka, S & Zohreh B 2012, "Employee Motivation and Organizational Performance in Multinational Companies: A Study of Cadbury Nigeria Plc," International Journal of Research in Management & Technology ,Vol. 2, No. 3,pp2249-9563 Terzioglu, B & Watty, K 1999, Performance Measures Employed by Australian Subsidiaries of US Services Multinational Companies: An Empirical Survey, viewed 3 Sept 2013, http://mams.rmit.edu.au/9dvu6urpwy8.pdf Trifunovska, K & Trifunovska, R 2010, Human Resource Management- Motivation among employees in multinational corporations, Kristianstad University: Kristianstad, viewed 3 Sept 2013 http://hkr.diva-portal.org/smash/get/diva2:400003/FULLTEXT01.pdf Yazinski, S 2009, Strategies for Retaining Employees and Minimizing Turnover, viewed 3 Sept 2013, http://hr.blr.com/whitepapers/Staffing-Training/Employee-Turnover/Strategies-for-Retaining-Employees-and-Minimizing- Read More