Page 160 - DMGT548_GLOBAL_HRM

Unit 8: International Compensation

Lucent developed what is called a ‘policy deployment’ plan for its bonus programme in Notes
Network Systems, the largest unit before reorganisation. Managerial bonuses are based
on three components: financial (60%), customer (20%), and people (20%). The people
dimension of the plan was based on Management by Objective (MBO) thresholds involving
the high-performance cultural initiative, diversity goals, and had 100% of the employees
with development plans. If the company did not meet its earnings per share goals, there
would be no bonus irrespective of performance on the Other Dimensions.
Challenges Facing HR in Lucent
Many of the Lucent’s most pressing HR challenges revolve around supporting the need
for organisational renewals and new competencies at a time when global markets demand
very short cycle times. Business units are often required to start a new ‘business’ from
scratch over very short timeframes in order to respond to customer demands. The ability
to ‘ramp up’ this type of recruiting and hiring effort in a company that, until recently, had
focused largely on downsizing is a significant challenge. More broadly, HR needs to
support a larger renewal effort in all of the business units with focus on significant hiring
of ‘new blood’ with the drive and future-oriented skill sets that Lucent’s new strategy
demands. But again, the key challenge is to get these competencies in a timely fashion so
that human capital issues do not impede the successful implementation of the firm’s
strategy.
A related theme involving organisational renewal is the relationship between the firm’s
performance management and development process. Lucent needs to develop new
competencies among the existing workforce and had developed a clear strategy for
achieving this goal. Senior managers are adopting a vision of leadership that focuses on
bringing the most out of people, while at the basic supervisory level, managers need to do
a much better job of coaching for development and changes. Lucent also continues to work
on appropriate development policies. It is investing very significant resources in employee
training, but is in the process of identifying the returns from this investment in quantifiable
terms. Finally, Lucent’s leadership understands they have some skill gaps, but see it as one
of their challenges. The need is to create competencies, to understand the development
implications of this gap, on the part of both the HR and the line managers.

HR Competencies
As far as Lucent’s HR function in developing its new strategic role is concerned, there was
recognition that the HR community also requires additional ‘reinvention’. It was observed
that HR was good at cost control and transaction business, but not as competent in adding
strategic value. This will require HR, which has traditionally been relatively isolated
from the major business strategic decisions, to break with its past behaviour if it is to fulfil
its role as a business partner. In fact, as the concept of service excellence becomes critical
throughout the firm, many more people will be engaged in HR work, so the relationship
between HR and its staff role will need to be transparent. Lucent needs to ask: What kind
of competencies will be advisory role required to facilitate this transaction?
HR at Bell Labs
Bell Labs has a unique group of employees involved in some unique HR challenges.
Firstly, HR cannot “get in the way” or fulfil the role of the gatekeeper or ‘policy police’; it
simply will not be tolerated in this environment. In addition, talent acquisition takes the
form of ‘one of a kind’ hires, rather than 100 engineers at a time. At the same time, HR has
to develop broader business acumen and managerial skills among a group of managers
that think typically that technology is all that matters. Finally, Bell Labs currently employs
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