1

MANAGEMENT COLLEGE OF SOUTHERN AFRICA

(MANCOSA)
ASSIGNMENT COVER SHEET
SURNAME LOUW

FIRST NAME/S CLINTON BRIAN

STUDENT NUMBER 117226

MODULE NAME HUMAN RESOURCE MANAGEMENT

ASSIGNMENT NUMBER 1

TUTOR'S NAME Lailah Imandin

EXAMINATION VENUE CAPE TOWN TO BE CONFIRMED

DATE SUBMITTED 04-Apr-11

SUBMISSION () 1ST SUBMISSION  RE-SUBMISSION

6 EASTFORD STREET

POSTAL ADDRESS KNYSNA

6570

E-MAIL [email protected]

WORK: 044 3850310

CONTACT NUMBERS HOME: 044 3851366

MOBILE: 0823754303

COURSE/ INTAKE MBA YEAR 1 - JANUARY 2011

DECLARATION
I hereby declare that the assignment submitted is an original piece of work
produced by myself.

DATE: 04 April 2011

SIGNATURE:

TABLE OF CONTENTS
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Question 1…………………………………………………….3

1.1 Introduction………………………………..…3

1.2 Content……………………………………….3

1.3 Conclusion…………………………….…….6

Question 2…………………………………………………….7

2.1 Introduction…………………………………7

2.2 Content……………………………………..7

2.3 Conclusion…………………………..…….10

Question 3…………………………………………………….12

3.1 Introduction…………………………………12

3.2 Content……………………………………..12

3.3 Conclusion…………………………………14

Question 4…………………………………………………….15

4.1 Introduction…………………………....…15

4.2 Content…………………………………….15

4.3 Conclusion…………………………………18

Bibliography………………………………………………....19

QUESTION 1: NOKIA
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Nokia applies specific HRM practices that focus on attracting and retaining good
employees. Discuss the significance of this strategic approach to talent management that is
adopted by Nokia making them a leader in the mobile phone and telecommunications
industry.

1.1 INTRODUCTION

In order to understand Nokia’s success in the mobile phone and telecommunication industry,
it is important to understand the history behind Nokia’s meteoric rise in this highly
competitive industry.

1.2 CONTENT

According to Lewis (2005, p178), there is no single key to Nokia’s success. The factors are
numerous and varied and can be grouped into three categories, namely, external factors,
internal management and the ‘Home Turf’ factor.

Firstly, external factors include the connection between Finland and Russia. For many years
Finland’s economy was boosted by massive exports to Russia. Russia was highly dependent
on the Finnish government to provide them with material for their war effort.

Secondly, Nokia’s internal management system is based on a horizontal or flat organizational

structure that is based on employee involvement through a decentralized decision-making
process.

Thirdly, the ‘Home Turf” factor refers to their education system, state encouragement and
cultural factors. Nokia’s education system is ranked number 1 in Europe which means that
Nokia has a well-balanced workforce on its doorstep that are able to meet its recruitment
needs locally for the critical research and development.

State encouragement is in the form of funds made available by the Finnish Government for
industrial research and design. The Finnish state can afford it because they don’t spend a lot
of money on military research and design.

What really set Nokia apart from its competitors are their cultural characteristics. They
operate confidently and quickly and most of all, humbly.

The strategic approach to talent management by Nokia is the skill or art of recruiting and
attracting the best possible person for a specific job, integrating them into the company’s
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culture and developing and retaining current workers in order to fulfil current and future
organizational goals.

Nokia’s main focus is to recruit and attract workers who are key to the success of the
business or function because they

• Lead the company or unit

• Possess core knowledge or skills

• Take on business-critical roles

Nokia uses the following HRM practices to achieve the objectives of the company:

SELECTIVE RECRUITMENT AND SELECTION

New workers are not merely recruited and selected on the basis of their knowledge and skill
of a specific job, but whether they will fit in the overall culture of the Nokia Corporation.

This does not, however, mean that they will only employ workers from Finland. They soon
realised that in order to continue operating in a highly competitive global environment they
will have to attract employees from other countries.

Nokia’s recruitment policy basically consists of person-organization fit (optimum fit between
the organisation’s culture and the recruit) as well as diversity (promote creativity in the
workplace).

TRAINING AND DEVELOPMENT

Noe et al (2010, p273) defines training as a planned effort to facilitate the learning of job-
related knowledge, skills, and behaviour by employees. The main focus of training is to
ensure the improvement of the performance of the employee and that the task is done
properly and efficiently.

Nel et al (2010, p 446) states that training must be result-oriented, it must focus on enhancing
those specific skill and abilities to perform the job, it must be measurable, and it must make a
real contribution to improving both goal achievement and the internal efficiency of the
organisation.
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The use of eLearning opportunities and personal coaching as training delivery methods
suggests that Nokia uses both the traditional (coaching) and contemporary delivery
approaches (Internet and intranet-based training). These methods are able to produce better
outcomes for the same price or the same results at a cost saving. It also has the following
advantages, namely self-pacing, flexible timing, reduced time to train, no travel time or costs
and greater retention

On top of these, there are some extra benefits to be obtained by delivering training and
development over an intranet with the intranet available on the desktop; the training can be
delivered just-in-time; the training materials can be easily updated centrally and lastly the
training can be fitted around normal work tasks

EMPLOYEE INVOLVEMENT

Job autonomy, which reflects the extent to which a job allows the freedom, independence,
and discretion to schedule work, make decisions, and select the methods used to perform
tasks (Hackman & Oldham, 1975). Increased autonomy will allow individuals greater
flexibility in how they define their role because they will have greater discretion in deciding
how to perform the work (Fried, Hollenbeck, Slowik, Tiegs, & Ben-David, 1999; Troyer,
Mueller, & Osinsky, 2000).

Job autonomy, self-responsibility for personal development, general participation in decision-

making, etc., is part and parcel of what is known as ‘The Nokia Way’, meaning that it all will
lead to a healthy work environment that will definitely have benefits in terms of its
efficiency. Employees are more committed and satisfied because they feel they are valued as
key internal stakeholders and are empowered in the decision-making process.

COMPENSATION

The incentive compensation system of Nokia is designed to get the best out of its employees.
It is based on the following two aspects: financial compensation (high salaries, bonuses and
stock options) and compensation in terms of a variety of possibilities (flexible working hours,
teleworking, mobile working, and sabbaticals, just to name a few)
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Nokia try not to have a one dimensional approach to its compensation philosophy, meaning
that you can’t motivate employees by giving them high salaries only. It is highly unlikely that
you will find an employee that will be satisfied with his or her salary. The best way to
motivate your staff is by creating an environment where the employee feels appreciated. If
employees feel appreciated they tend to be more productive and loyal to the company. If your
employees are happy, engaged, and know that you feel they are doing a great job, they’re
going to stay.

1.3 CONCLUSION

More and more companies realise that in order to gain and maintain their competitive
advantage, they have to create a culture, value system, operating philosophies, leadership
style and management philosophy that cannot be recreated by your competitors. I believe that
is just what Nokia has done by the way that they have incorporated their HRM practices their
strategic approach to talent management.

QUESTION 2

‘Selective recruitment and selection, training and development, employee involvement and
compensation are the key HR practices applied to achieve the organisational goals.’
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Provide a discussion on the importance of how a strategic fit between HR practices and its
context (HRM) and the overall strategy of the organisation, as in the case at Nokia, leads
to a more successful organisation

2.1 INTRODUCTION

Due to the ever changing nature of the global business environment, more and more
companies realises that human resources can be a unique asset that can provide sustained
competitive advantage. People are viewed among the most important resources to firms and
human resource strategy would be central in achieving competitive advantages.

2.2 CONTENT

The management of the human resources should be in perfect fit with the management of the

ADMINISTRATIVE ONE-WAY TWO-WAY

organization
as a whole and itsINTEGRATIVEstrategic plans.
LINKAGE LINKAGE LINKAGE
LINKAGE

STRATE STRATE
STRATE GIC GIC
GIC PLANNI PLANNI STRATEG
PLANNI IC
NG NG
PLANNIN
NG
G

HRM HRM HRM HRM

function function function function

Figure 1: SOURCE Golden and Ramanujam (cited in Noe et al,

2010)

Four levels of integration (Figure 1) exists between the Human Resource Management
function and the strategic management function, namely

• Administrative Linkage – The lowest level of integration. The human resource

function is detached form the strategic management process.
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• One-Way Linkage – The human resource function is only informed of the strategic
plan by the strategic management function.

• Two-Way Linkage – The consideration of Human Resource issues during the strategy
formulation process.

• Integrative Linkage – It is dynamic and multifaceted, based on continuing rather than

sequential interaction

Nokia’s leadership in the mobile communication industry is a based on the successful use of
the integrative linkage approach. In order to understand Nokia’s success, the diagram below
illustrates how to align or ‘fit’ HR strategy with organizational strategy and human
capabilities.

The conceptual model (figure 2) describes the orientation of the relationships between four
HR strategies and HR capabilities based on strategic value and uniqueness as strategic
capability of employees.

Figure 2: SOURCE: Iranian Journal of

Management Studies (IJMS) Vol 2. No.2. June 2009

HUMAN RESOURCE CAPABILITIES

Strategic value: The significance of human capital is reliant on their potential to contribute
to the competitive advantage or core competence of the firm.

Uniqueness: Refers to the degree that skills cannot be duplicated and imitated by current or
potential competitors.
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1 Firm-specific core employees. They are essential to the firm. They can make a significant
contribution to the firm’s strategic objectives. Human capital is both valuable and unique; it
embodies the knowledge base around which firms are most likely to build their strategies.

2 Generic key employees: Human capital that has strategic value but limited uniqueness.
The value of these employees provides an enticement to employ these workers internally.

3-Idiosyncratic allied employees: Firms would rely on alliances or partnerships for human
capital that is unique but has insufficient strategic value to employ internally.

4 Generic ancillary employees: These employees do not have unique or sufficient strategic
value. Employees in this category are prime candidates for outsourcing.

ORGANISATIONAL STRATEGY

Miles et al (1978: p38) classifies companies according to their "adaptive patterns of

decision", ranging from the most aggressive organisations, the prospective companies, to the
least pro-active, the reactor companies.

Prospector: This is the most competitive of the four strategies. It involves active programs to
expand into new markets and stimulate new opportunities.

Analyser: The analyser is in between the defender and prospector. They take less risk and
make fewer mistakes than a prospector, but are less committed to stability than defenders.
Most firms are analysers. They are seldom a first mover in an industry but are often second or
third place entrants.

Defender: A defender strategy necessitates finding, and maintaining a secure and relatively
stable market. Rather than being on the cutting edge of technological innovation, product
development, and market dynamics, a defender tries to insulate themselves from changes
wherever possible.

Reactor: It is obvious that a reactor has no proactive strategy .Their responses are forced by
macro environmental pressures. This is the least effective of the four strategies.

HUMAN RESOURCE STRATEGIES

Different HR strategies are required for different types of employees.

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Commitment HR strategy: It is for employees who have both high strategic value and
uniqueness.

Productivity HR strategy: The focuses is on the acquisition of human capital and the
deployment of skills for immediate contribution for Generic key employees, who have high
strategic value, yet low firm specificity.

Compliance HR strategy: Generic ancillary employees, with low value and uniqueness are
contracted externally for decreasing their administrative expenses and retaining a significant
degree of employment flexibility by outsourcing nonessential functions, using temporary
employees, developing employee leasing arrangements,

Collaborative HR strategy: Idiosyncratic alliance employees, who have high firm-

specificity, yet low strategic value, are served as a possible source of differentiation.

2.3 CONCLUSION

Nokia has shown that it has found the ‘right’ alignment between the Human resource
strategy, organizational strategy and human capabilities. However, it may be too one-
dimensional to postulate that a single optimal set of Human Resource strategies is ideal, or
can be utilized in all situations.

QUESTION 3

Discuss how reorganizations and massive layoffs, (for example, Nokia, in the spring of
2003), affect employees in terms of their attitudes and morale and discuss how HRM can
contribute to organisational performance and general employee well-being in times of
organisational change (reorganization, downsizing).
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3.1 INTRODUCTION

Nokia plans to close the Jyväskylä site and concentrate mobile devices R&D in Finland at
Tampere, Oulu, Salo and the Helsinki metropolitan area. The planned closure of the
Jyväskylä site is an unfortunate, yet unavoidable measure. We must adjust our resources to
reflect reduced market demand in order to maintain our competitiveness also in the future,"
says Peter Røpke, Senior Vice President, Devices R&D, Nokia.

(Published February 11, 2009 on http://press.nokia.com)

Reorganizations and layoffs are part and parcel of the highly competitive nature of giant
corporations such as Nokia. The reasons for this might be to reorganize their capital structure
when they have accumulated losses and, in the case of Nokia, to maintain their competitive
advantage.

3.2 CONTENT

EFFECTS OF REORGANIZATIONS AND MASSIVE LAYOFFS ON EMPLOYEES

Change or reorganizations is happening faster than ever. Some of the effects are as follows:

• The most common and initial response is resistance, because workers feel change is
beyond their control. This in turn leads to higher levels of stress.

• Fear of the unknown, for example will we lose our jobs.

• If they don’t lose their jobs, will they be asked to do more with fewer resources?

• Employees become rattled, distracted and start to worry about their future at the
company.

• Will they have to be retrained or acquire new skills?

• Workers lose their sense of purpose and creativity.

It is totally natural for workers to react in ways mentioned above. It is therefore the
responsibility of the total management structure of the company, including the Human
Resource Management team, to try and allay the fears of their employees. The attitudes and
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morale of the employees are a determining factor in the overall productivity and
organizational performance of the company.

HUMAN RESOURCE MANAGEMENT’S ROLE TO IMPROVE

ORGANIZATIONAL PERFORMANCE

Management plays a vital role in the process of reorganization and downsizing. The
following steps can be taken to lead the staff along to a healthier work environment
regardless of the changes.

1) Clarify the Purpose of the reorganization and downsizing

A memo from Nokia CEO Stephen Elop to the staff stated very clearly that Nokia faces
troubled times. If they want to regain their market leadership, reorganization and downsizing
is inevitable. According to Stephen Elop, the way things have been was inadequate.

Therefore, it is important for management to show them why the change at hand will enhance
work productivity as well as benefit them personally. Until the staff is convinced that the
change is even necessary they will have a hard time to make the changeover.

2) Clarify the Vision Through the Change

Unfortunately, Stephen Elop did not clarify the vision he envisaged in the memo. This caused
a lot of uncertainty and insecurity amongst staff. It’s imperative to give specifics on what the
company will look like through this transition period. The clearer the strategy and plan, the
more supportive and at ease workers will be.

3) Facilitate the reorganization

If management allow the workers to share their ideas and opinions it will be easier for the
workers to buy in to the whole idea of reorganization. The first thought that goes through the
mind of a worker when change comes is, how will this impact me or my department
personally? They also want to know how they will benefit from this process.

HOW TO IMPROVE EMPLOYEE MORALE DURING TOUGH TIMES

As already stated, there is a direct link between employee morale and productivity, because
the happier and satisfied employees are, the higher their productivity. It is more important
than ever to keep the morale of employees high when companies face tough economic times.
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The task of the Human Resource management team would be to find ways to make
significant contributions to organisational performance and the overall employee well-being
during the process off reorganization and downsizing.

Managers can try to minimize the effect of reorganization and downsizing by lessening the
anxiety and stress that is associated with the possibility of a job loss.

Simple strategies that can help employees refocus their commitment to their organization:

• EMPLOYEE RECOGNITION AND AWARDS

• Recognizing an employee's personal successes by giving awards is common practice

in most workplaces. Employees feel that they are valued; this gesture encourages
employees to demonstrate their loyalty to a company.

• PROFESSIONAL TRAINING AND DEVELOPMENT

• Professional training and development is an important strategy for building employee

morale, and is essential to keeping up with the constant technological transformations
that occur in the workplace.

• DEVELOP PERSONAL RELATIONSHIPS

• Managers should get to know their workers by taking a personal interest in their lives.
Simple strategies like remembering birthdays, asking about employees about their
hobbies or interests, and learning about their family life are effective approaches for
building personal relationships with workers.

• HOST OFFICE PARTIES

• This is an effective way for employees to get to know their co-workers in a less
formal setting.

• EMPLOYEE SURVEYS
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• A useful strategy for managers to learn how workers feel about their job and the
company is to conduct employee surveys.

• COMMUNITY SERVICE PROJECTS

• This will allow employees a chance to interact with their co-workers and the broader
community.

3.3 CONCLUSION

Job losses and reorganizations will always be distressing. The least that management can do
is to make the process just and fair.

QUESTION 4

An organisation needs to create an employer brand where the labour market will
perceive the organisation as an employer of choice.

Examine how Nokia, through their various HRM practices endeavours to create this
unique value proposition.

4.1 INTRODUCTION
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Employer brand is defined by Minchington (2005) as the image of an organisation as a

‘great place to work’ in the mind of current employees and key stakeholders in the external
market (active and passive candidates, clients, customers and other key stakeholders).

4.2 CONTENT

Employer branding is therefore concerned with attracting, engaging and retaining initiatives
targeted at enhancing a company's employer brand. An employer brand proposition
(otherwise referred to as an employer value proposition, employee value proposition or EVP)
is just as important as a company’s a customer brand proposition.

The human resources and talent management group also employs marketing principles to
attract, engage and retain talented candidates and employees, in the same way that marketing
employs to attract and retain clients, customers and consumers.

Employer branding is extremely important to a company such as Nokia in order for them to
maintain their competitive advantage. It is important to attract and retain the right talent to
your company.

Employee value proposition or EVP aids to define what the company would most like to be
associated with as an employer; highlight the qualities that distinguishes the company from
its competitors; and clarify the ‘give and get’ of the employment agreement.

The following model shows elements that can be part of an effective EVP.SOURCE:
http://bridgecnslt.com/buzz/2011/02/01/employer-brand/
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The Nokia Employee Value Proposition consists of four fundamental elements to motivate,
involve, and maintain employee satisfaction and well-being at work. These four elements are:

• The Nokia way and values

• Rewards

• Professional and personal growth

• Work-life balance

Nokia utilizes the following HRM practices to create their unique value proposition:

SELECTIVE RECRUITMENT AND SELECTION

Employees are recruited from over 120 countries. Nokia is committed to an inclusive and
diverse working environment. It leads to creativity and innovation.

Nokia have a Graduate Program that offers exciting opportunities to graduates and Nokia.
The purpose of the program is to develop their talent pipeline for the future by bringing in
new talent and innovative thinking.

Top graduates from recognized universities and MBA schools are targeted to join the
program to:

• acquire skills and capabilities needed by the business

• engage, develop and retain high-potential talent for future leadership roles

TRAINING AND DEVELOPMENT

Training and development programs are designed so that employees will be able to develop,
both personally and professionally at Nokia. They offer an integrated package of classroom
training, on-the-job learning, individual coaching, and mentoring. Employees are encouraged
to learn through active participation by trying new roles at Nokia. In 2007 Nokia spend
almost EUR 70 million on employee training for Nokia employees.

EMPLOYEE INVOLVEMENT
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Employees lead or participate in projects that have a global impact. A flat organizational
structure allows for inclusive decision-making at all levels. It characterizes the Nokia Way.

Nokia encourages open discussion and debate. The annual globally conducted "Listening to
You" employee survey is a powerful way of getting feedback from their employees on a
range of important issues.

The "Ask HR" feedback channel on their human resources Intranet allows every employee to
comment or ask questions about Nokia’s people practices and processes, even anonymously,
and they will receive a prompt and openly published response.

COMPENSATION

It is characterized not only by high salaries, but also in terms of a variety of possibilities to
create a personal work-life balance reflecting special attention to a flexible working
understanding in line with the interests and preferences of the employee, such as mobile
working and teleworking, flexi time, time off and health-care services

The bonus system is designed so that employees have the opportunity to share in the success
of Nokia. Short-term incentive programs allow Nokia to offer immediate rewards for
employee and team achievements. Long-term rewards include the stock option plan that may
allow employees to share in sustained company success.

4.3 CONCLUSION

Employer branding is a must for today’s businesses. Nokia uses its brand to help attract
talent as a magnet attracts metal, the most interesting thing is that you won’t have to
consciously engage yourself in those ‘recruiting’ stuff; Your brand will do the initial hard
work for you.
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BIBLIOGRAPHY

Armstrong, M, (1999) A Handbook of Human Resource Management Practice, Kogan Page

Limited.

Boselie, P (2010) Strategic Human Resource Management : A Balanced Approach, Utrecht

University and Tilburg University.

Elop, S. (2011), ‘Burning Platform’ Memo

http://blogs.wsj.com/tech-europe/2011/02/09/full-text-nokia-ceo-stephen-elops-burning-
platform-memo/

Gay, C. (2011), Creating a compelling employer brand to attract, retain and engage top talent

http://bridgecnslt.com/buzz/2011/02/01/employer-brand/
 19

Miles, R. and Snow, C. C. (1978) Organizational strategy, structure and process , New
York, McGraw-Hill.

Minchington, B (2006) Your Employer Brand – attract, engage, retain, Collective Learning
Australia.

Nazir, N. Employer Branding: The Series.

http://hubpages.com/hub/N-EBS

Nel, P.S., Werner, A., Haasbroek, G.D., Poisat, P., Sono, T. and Schultz, H.B. (2008)
Human Resource Management 7th Edition. Cape Town: Oxford University Press Southern
Africa.

Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2010) Human Resource
Management: Gaining a Competitive Advantage 7th Ed. McGraw-Hill.

Nokia as an employer

http://www.nokia.com/careers/nokia-as-an-employer/nokia-as-an-employer-subpage

Seyedjavadin, S.R, Zadeh, M.H. (2009) ‘HR strategy and its aligning with organizational
strategy and human capabilities’ Iranian Journal of Management Studies (IJMS) Vol2 No.2.