Page 159 - DMGT548_GLOBAL_HRM

Global HRM

Notes benchmarking sources and emphasise five areas that answer the question, ‘What are the
knowledge, skills, commitments that will enable the business partners to their customer’s
(internal client’s) expectations?’ These competencies are then to be integrated into an HR
system of learning and developing, staffing and selection, career development and
performance management. The initial integration is through individual assessment tools
that form the basis of a customised career development plan. The business partner
competency model will, over time, serve as a foundation for such models in other HR
roles at Lucent.
Talent Acquisition

Talent acquisition is a high-impact HR area for Lucent because the firm is looking to grow
rapidly in selected markets, often representing competencies outside their traditional
strengths. While this remains a continuing challenge, Lucent’s HR function is making
progress, as a business partner, in being able to anticipate and respond quickly to the
work force planning implications of the client’s business strategies. HR personnel have
been able to incorporate work force planning models at the strategy development stage in
a way that allows them to get the right person in the right place and at the right time. For
example, the HR has developed a simple staffing model based upon benchmarked work
force productivity numbers (revenue per employee), given revenue projection at the
business level. Using the revenue/employee estimates, HR can estimate reasonable
headcount project and skill mixes. This also allows them to avoid overstaffing and the
subsequent downsizing required. The key challenge here is for the HR leader to develop
the personal competencies to coordinate not only the technical analysis, but perhaps more
importantly, to play the genuine leadership role necessary where HR and business problems
interface.
Creating a High Performance Culture
The challenges of overcoming an ‘entitlement’ culture remain significant. For example, in
certain business units, such as Bell Labs, concrete actions have been taken to modify the
traditional culture of being very egalitarian, (where executives got very similar stock
option grants in the past). After the changes in HR, for the first time out of 25 executives in
one unit, 5 got no options and another 12 received 180% of the ‘average’ distribution.
Similarly, Lucent (and predecessors) had tolerated poor performers for significant periods
of time. Now, under the new performance improvement process, the lowest performing
managers are required to improve or they are moved out of Bell Labs (to less demanding
R&D work in Lucent) or even terminated.
Compensation

Lucent’s compensation system continues to evolve with the new demands on the company.
The share of variable pay among lower-level employees has been increased. Lucent has
changed its pay system, which has historically been driven by job evaluation based on the
Hay system. For middle managers, variable pay represents about 16% of the total
compensation.
80% is based on Lucent’s corporate performance and other 8% is based on unit performance
and individual performance. For individual rewards, the pool is determined by unit
performance. Manager’s reward is based on individual rewards working under them.
Earlier there were 350 types of grants, from which employees could choose up to the
extent based on management’s evaluation of their performance. The company also provided
every employee on a worldwide basis 100 options as ‘founder’s grants’ when Lucent went
public.
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