“Employers have to give up on the idea that employees will stay forever”--

“Employers have to give up on the idea that employees will stay forever”(2)

2007-06-05 15:30:16 [ Big Normal Small ] Xing Zong 　Comment

Xing Zong: Chinese firms always talk about the mechanism to retain the employee inside the company. Income compensation and possible chances for promotion are two effective ways. For income compensation, many companies use the policy of rewarding stocks, options. What do you think in terms of effective monetary compensation?

Peter Cappelli: Money works in the sense that people stay until they get it - until the options vest, etc. For something more long-term, however, it is important to use things like opportunity for advancement. And, of course, employers have to give up on the idea that employees will stay forever.

Xing Zong: In term of promotion, companies’ typical strategy is to promote insiders. For example, P&G is a good example because most of its management team members start from novices in P&G. But many people argue the negative side of it will be lack of different perspectives. What’s your comment on that?

Peter Cappelli: It is not an “either/or” question. Companies should be doing some of both. But if they don’t do some promotion from within, they don’t have a real organization - no one will stay.

Xing Zong: What else can a company do to retain the employees who have exhibited good performance? Recently Forbes magazine ranked Google to be No.1 place for employees. Indeed, Google is famous for providing gourmet food, luxury gym… for their employees. Prof. Cappelli, in your opinion, what can Chinese companies learn from Google?

Peter Cappelli: I am not exactly sure what you can learn from Google. The dot.com companies used to do all these things as well. Most high flyers leave because of better opportunities elsewhere, not because of lifestyle issues inside the company. So finding them better opportunities inside is the best bet.

Xing Zong: Talk about campus recruiting. Still take P&G as an example, the former CEO in P&G once said, I can’t see anything more important than campus recruiting. His argument is that, those fresh minted graduates are much easier to identify the corporate culture therefore be loyal to the company. Do you agree?

Peter Cappelli: It is certainly easier to mold new hires. Companies need to have the infrastructure in place to develop them, however, because new hires don’t know anything yet and can’t contribute much.

Xing Zong: The traditional Asian culture teaches people to be obedient. Therefore Chinese employees typically don’t like to say No to their supervisors. In your opinion, how can a company construct the kind of culture that encourages employee to say No when they don’t agree?

Peter Cappelli: Begin by having them express their opinions in teams of peers. But the big issue will be how the supervisors respond. If they don’t encourage employees to offer their views, it will die quickly.

Xing Zong: CEO succession is a classical HR problem. In your opinion, what are the key issues to find the right successor?

Peter Cappelli: Think first about what the organization needs going forward. Does it need a new perspective, or is continuation of its path the right thing to do? Then look to see if you have someone inside who could take over. But having someone inside is not an accident, it requires developing them along the way.

Xing Zong: One very common phenomenon in Chinese company is that; some employees have wonderful performance at their positions, when being promoted to the manager, he doesn’t really know how to motivate and manage a team. In a word, he is a good soldier but not a good captain. But you still need to promote him because of his performance. In facing such a dilemma, Prof. Cappelli, what is your suggestion?

Peter Cappelli: Well, are you promoting people into positions they cannot do? If that’s the case, it’s probably better to find other ways to reward people as individual contributors rather than promote them into roles they are not capable of performing.

Xing Zong: Internet is changing the old way of doing business, therefore affect HR. Prof. Cappelli, what should HR department do to take advantage of opportunity that internet has offered?

Peter Cappelli: It’s crucial in hiring, finding good candidates. It’s also crucial because increasingly employees learn things about their own company on line, especially things the company does not want to them to know, like business plans. So I think it encourages employers to be transparent with their employees.

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