Management Theory From the Article Review
Descriptive Summary
According to Carol Hymowitz of the Wall Street Journal, a fundamental paradigmatic shift is being forced upon in terms of the way they operate during economic slowdowns. Her January 28, 2008 article “They Ponder Layoffs, but Executives Still Face Gaps in Talent” states that companies are experiencing a dearth of talented people to fill vacant positions because aging top managers are retiring in record numbers. To cut costs during economic slowdowns, traditionally companies let go even some promotable employees, and did not look for new or additional workers. But in 2008, despite the fact that recession seems on the horizon, many companies are embarking upon job searches to fill critical management positions because of inadequate training of current employees.
In the past, top managers would plan far ahead to fill a position. Today, every vacancy seems to be treated as unique — and even as a surprise, despite the long-term trend of frequent job changes by employees” (Hymowitz 2008). These external job hunts are thus not reflective of a positive trend. It highlights how companies lack employees in-house with necessary skills, and have frustrated current employees in the past who feel they have been inadequately prepared and mentored to fill top positions they have been eyeing for a long time. These desperate job hunts are symptoms of poor strategic planning.
General Analysis
This current trend indicates a problem with company training and development. It shows that companies have “dropped the ball on talent development. Some 60% of companies have no succession planning of any kind…nearly half of 20,000 employees surveyed at 100 large global companies…said they don’t receive enough feedback from their managers to help them improve their performance [and] employees who lack guidance and opportunities to advance are more likely to quit and look for jobs elsewhere, even during shaky economic times when as the last hired they may be the first fired (Hymowitz 2008). When employees leave, companies must divert valuable revenue to head-hunting and orientation of new hires. Under-training and under-promoting of can actually cost the company more in the long — and short run. This is exactly what companies do not want during a recession, when companies want to focus their finances on remaining economically afloat. Companies want current employees familiar with operations to give advice on how to begin cutting costs in other areas.
Critical/Comparative Analysis
The phenomena described in the article highlights what management theorists have always counseled — that financial compensation alone is not enough to ensure that individuals stay at a company. The company must invest in the employee’s future by taking worker suggestions, and giving future managers exposure to a variety of new educational and training experiences. Employees of today know that they must be constantly sharpening their skills.
Keeping people “excited” and “nimble” through continued training ensures that companies will have an extensive stock of in-house talent to promote during crunch times, and that employees will put in the extra hour at the office to show they are working hard (Hymowitz 2008). Some companies have attempted to foster worker loyalty with flexible scheduling, retirement planning and other financial services, better benefit packages, employee gyms equipped with personal trainers and extensive subsidized cafeterias (Lanzoni 2001:1). However, employees that are truly the managers of tomorrow will not simply want a more ambient workplace, or even more extensive benefits packages — they want to know that the company regards their input as an asset, and they are being groomed for new positions that will open up in the future.
Management Application
Promoting mainly from without is not simply time consuming in terms of training new employees and fostering loyalty in new managers. It also creates a dispirited atmosphere in at the company, as current employees feel they are not being groomed to advance. Also, it does not promote diversity of skills within the workforce. Lateral exposure is one vital aspect of training, in other words, exposing current employees to the skills and work environment of a number of different departments. The article cites one company, which, “until four years ago” was a “holding company with disparate units and little departments and locations,” until finally it recognized, “if we go elsewhere to find talent whenever openings occur, we’re telling our people to be free agents, too, when we need their loyalty” (Hymowitz 2008).
During economic slowdowns, companies need loyal employees more than ever. The article implies that companies must be mini-business schools of training, and develop more effective mentoring systems. Also, maximizing strategy in succession planning is just as critical as strategizing about launching a new product. No company would skimp on strategic planning in today’s competitive economic climate — so why skimp on the training of the individuals who will fill the key management positions designing the strategic plans of the company’s future?
Works Cited
Hymowitz, Carol. (2008, January 28). “They Ponder Layoffs, but Executives Still Face
Gaps in Talent.” Wall Street Journal (Eastern Edition), B.1. Retrieved February 1, 2008, from ABI/INFORM Global database. (Document ID: 1419438441).
Lanzoni, Gene. (2001, November 14). “Despite Soft Economy, MetLife Study Shows that Employee Retention Tops List of Employers’ Benefits Concerns. www.allbusiness.comBusiness Wire. Retrieved February 1, 2008, from ://www.allbusiness.com/labor-employment/human-resources-personnel-management/6146299-1.html
