Chapter 6 - Answers to review questions in textbook, page 144
1. Discuss the changing dynamics of the workplace in the 21 st century
facilitating an increased emphasis on talent management.
Answer: (Introduction)
In the first decade of the 21 st century there is a growing recognition of the
changing nature of the employment relationship. The production base of
advanced economies is evolving from an industrial to a service and
knowledge focus. This has contributed to a shift in the nature of work, with
the individual employee increasingly recognised as the primary source of
competitiveness as discussed in chapter 2 of the prescribed book. As a
result of this focus on the employee, the human resources (HR) function
has the potential to assume an increasingly critical and dynamic role in
generating a sustainable competitive advantage through people by
focusing on the development of diverse policies, practices and systems to
attract, retain and develop these key resources.
The recognition of the role of HR has come at a time of major change in
the nature of the labour market. Increasing skill shortages in many
advanced economies, combined with a generation of workers that are
focused on employability rather than employment, has been the catalyst
for a shift away from the traditional employer-employee relationship, and
created a major change in the balance of power in this relationship. In
addition, declining birth rates in most countries over the last two decades
has, and will exacerbate a growing labour and skill shortage which is only
now starting to become apparent. Although as Cappelli and Critchley
argue, this may be more to do with contemporary employment and
retirement trends than demographic issues associated with growing labour
and/or skill shortages. Despite the differing perspective, it is clear that in
this emerging world of work, if organisations are to remain competitive, the
management of talented employees will be a key focus and fundamentally
different to the latter half of the 20 th century. Many recruitment
advertisements ask for talented people, yet if organisations are lucky
enough to recruit a talented individual, they often experience difficulty in
engaging or retaining them. A new HR management trends namely talent
management has emerged. This is linked to the required new perspective
associated with building and retaining human resources to build a
sustained competitive advantage.
2. How has the psychological contract between employees and
employers been affected by the new era of human resource
management? Discuss.
Answer: (Sec 6.2)
1
, The employment relationship has changed, employees will look for
employability not employment and will want to change jobs often. Critchley
argues that psychological contracts and engagement profiles will be
substantially different for older workers. These trends indicate that
organisations that are prepared to focus on attracting and developing
talent, will be in a stronger position to retain key human resources as the
so-called 'war for talent' intensifies. It is also clear that the way
organisations seek to retain these highly skilled resources will have to
change. This places human resources at the centre of policy and systems
development to achieve outcomes that promote the organisation as an
'employer of choice' for increasingly discerning (potential) employees. The
structural changes driving the 'war for talent' are widespread across many
advanced market economies. This creates what Michaels et al describe as
a "new" business reality in which management skills and ability to
embrace a new mindset are critical - see Tables below.
Table 1 The Old and new business reality
The Old Reality The New Reality
People need companies Companies need people
Machines, capital and geography are Talented people are the competitive
the competitive advantage advantage
Better talent makes some difference Better talent makes a huge difference
Jobs are scarce Talented people are scarce
Employees are loyal and jobs are People are mobile and their
secure commitment is short term
People accept the standard package People demand much more
they are offered
Source: Michaels, E., Handfield-Jones, H. & Axelrod, E. 2001. The War for Talent. Boston,
Massachusetts, Harvard Business School Press, p. 6. Used with permission.
2
1. Discuss the changing dynamics of the workplace in the 21 st century
facilitating an increased emphasis on talent management.
Answer: (Introduction)
In the first decade of the 21 st century there is a growing recognition of the
changing nature of the employment relationship. The production base of
advanced economies is evolving from an industrial to a service and
knowledge focus. This has contributed to a shift in the nature of work, with
the individual employee increasingly recognised as the primary source of
competitiveness as discussed in chapter 2 of the prescribed book. As a
result of this focus on the employee, the human resources (HR) function
has the potential to assume an increasingly critical and dynamic role in
generating a sustainable competitive advantage through people by
focusing on the development of diverse policies, practices and systems to
attract, retain and develop these key resources.
The recognition of the role of HR has come at a time of major change in
the nature of the labour market. Increasing skill shortages in many
advanced economies, combined with a generation of workers that are
focused on employability rather than employment, has been the catalyst
for a shift away from the traditional employer-employee relationship, and
created a major change in the balance of power in this relationship. In
addition, declining birth rates in most countries over the last two decades
has, and will exacerbate a growing labour and skill shortage which is only
now starting to become apparent. Although as Cappelli and Critchley
argue, this may be more to do with contemporary employment and
retirement trends than demographic issues associated with growing labour
and/or skill shortages. Despite the differing perspective, it is clear that in
this emerging world of work, if organisations are to remain competitive, the
management of talented employees will be a key focus and fundamentally
different to the latter half of the 20 th century. Many recruitment
advertisements ask for talented people, yet if organisations are lucky
enough to recruit a talented individual, they often experience difficulty in
engaging or retaining them. A new HR management trends namely talent
management has emerged. This is linked to the required new perspective
associated with building and retaining human resources to build a
sustained competitive advantage.
2. How has the psychological contract between employees and
employers been affected by the new era of human resource
management? Discuss.
Answer: (Sec 6.2)
1
, The employment relationship has changed, employees will look for
employability not employment and will want to change jobs often. Critchley
argues that psychological contracts and engagement profiles will be
substantially different for older workers. These trends indicate that
organisations that are prepared to focus on attracting and developing
talent, will be in a stronger position to retain key human resources as the
so-called 'war for talent' intensifies. It is also clear that the way
organisations seek to retain these highly skilled resources will have to
change. This places human resources at the centre of policy and systems
development to achieve outcomes that promote the organisation as an
'employer of choice' for increasingly discerning (potential) employees. The
structural changes driving the 'war for talent' are widespread across many
advanced market economies. This creates what Michaels et al describe as
a "new" business reality in which management skills and ability to
embrace a new mindset are critical - see Tables below.
Table 1 The Old and new business reality
The Old Reality The New Reality
People need companies Companies need people
Machines, capital and geography are Talented people are the competitive
the competitive advantage advantage
Better talent makes some difference Better talent makes a huge difference
Jobs are scarce Talented people are scarce
Employees are loyal and jobs are People are mobile and their
secure commitment is short term
People accept the standard package People demand much more
they are offered
Source: Michaels, E., Handfield-Jones, H. & Axelrod, E. 2001. The War for Talent. Boston,
Massachusetts, Harvard Business School Press, p. 6. Used with permission.
2
