Master Thesis
In Order to Achieve the Academic Degree
“Master of Science in International Business & Management”
The Meaning and Nature of Talent Management in
Particular Organizational Contexts: Talent Management
within a Multinational Corporation
-
The Case of Volkswagen AG, Germany
Submitted to:
Prof. Dr. Florian A. A. Becker-Ritterspach Prof. Dr. Christoph Dörrenbächer
Submitted by: Carmen Finke Anna Blamansingel 59
1102 SR Amsterdam, The Netherlands Phone: 0031/616/577 817 E-mail: carmi05@gmx.de
Student ID: s1748351
TABLE OF CONTENTS
LIST OF FIGURES ...II LIST OF ABBREVIATIONS ... III
1 INTRODUCTION... 1
2 LITERATURE REVIEW ... 4
2.1 Problems on a Macro-Level Leading to the Necessity of TM ... 4
2.2 Problems on a Micro-Level regarding the Execution of TM ... 8
2.3 Talent Recognition and Recruiting ... 9
2.4 Training and Development... 11
2.4.1 Management Development ... 14
2.5 Talent Retention ... 15
3 METHODOLOGY ... 18
3.1 Units of Analysis: The Case Company ... 18
3.2 Research Design ... 19
3.3 Data Selection ... 20
4 FINDINGS AND ANALYSIS ... 23
4.1 General HR Structure of the VW Group ... 23
4.2 Principles of Talent Management in VW... 25
4.3 Talent Recognition and Recruiting ... 27
4.4 Training and Development... 29
LIST OF FIGURES
Figure 1: Declining Supply of Future Executives ... 5
Figure 2: Old and New Realities With Regard to HRM ... 7
Figure 3: What Motivates Talent?... 16
Figure 4: Various Roles of Corporate HR... 24
Figure 5: Criteria for an Elite Team ... 26
LIST OF ABBREVIATIONS
AC = Assessment Center CV = Curriculum Vitae
EVP = Employee Value Proposition GE = General Electric
HQ = Headquarters
HR = Human Resources
HRM = Human Resource Management IA = International Assignment
IHRM = International Human Resource Management MD = Management Development
MNC = Multinational Corporation
SME = Small and Medium Sized Business STB = Student Talent Bank
StiP = Study in Practice
TM = Talent Management
USA = United States of America
VW = Volkswagen
1
INTRODUCTION
“The only thing that now makes capital dance is talent.” (Ridderstrale & Nordstroem 2002: 230).
The transition to a post-industrial service economy intensified at the end of the 20th century (Evans et al. 2002) and has kicked off a shift from an investment in tangible assets such as land, buildings, and production facilities to such intangible assets as human capital. Hence, companies started to focus more on their investments in people. Besides the usual debates about cost control, efficiency, productivity, shareholder value etc., the competitiveness of a MNC focuses now on the quality of HR, i.e. the knowledge as well as managerial and leadership skills of MNCs employees.
“Getting the right people with the right knowledge into the right job is essential for business success.” (Brown & Hesketh 2004: 15). This statement might sound straightforward and somewhat simplistic, but it reflects the enduring debate about the demand for skills and the upcoming problem of how the best jobs are to be allocated (Brown & Hesketh 2004). Thus, amongst the traditional aspects important for the increase of shareholder value mentioned above, Talent Management has become an important factor to add shareholder value. This is proven by an update of the 1998 Mc Kinsey Report (Chambers et al. 1998) in 2001 (Axelrod et al. 2001). The update found that the MNCs best in managing talent deliver far better results for their shareholders. Companies scoring in the top-quintile of TM outperform their industry’s mean return to shareholders by 22% (Axelrod et al. 2001). These numbers prove that companies can gain a competitive advantage through better TM (Axelrod et al. 2001). Ridderstrale & Nordstroem (2002) even theorize that how a company attracts, retains and motivates their employees is more important than technology. Thus, identifying, attracting, developing, and retaining the best talent and leadership has become a priority for many MNCs (Conner 2000).
Recent literature in the field of HRM is mainly focused on expatriate management, the influence of strategy on HRM, and how to create and manage a truly global workforce. The specific subject of TM, however, remains understudied or in its infancy as only very few authors focus exclusively on this topic. Frequently only a chapter or paragraph is devoted entirely to TM.
existent in that area, especially concerning empirical works which explore the meaning and nature of TM in particular organizational contexts. Therefore, this thesis is based on one intensive single case study of a German automobile MNC, the Volkswagen Group. A HQ perspective is adopted that examines the TM conducted by the VW HQ in Wolfsburg, Germany.
As the area of TM is still evolving (Porter et al. 2008), there is plenty of room for approaching the topic and for different kinds of analysis and interpretation. Thus, it is important for the structure of this thesis to set certain criteria and to define some terms. In general, talent is defined as abilities that “add immediate or future value to any prescribed activity, discipline or enterprise.” (People Management, 2003: 59 in Sparrow et al. 2004). In order to narrow down this broad description, when discussing talent in the following pages, knowledge will be referred to as a type of talent, i.e. talented people working as software engineers, business managers, IT specialists etc. The author is aware of the fact that there is another sort of talent existent as well, i.e. in terms of manual work conducted by industrial workers as mechanics, welders, and technicians. However, this group of employees is not considered in this thesis as the available literature in this area focuses almost exclusively on knowledge/management talents.
In summary, the foremost aim of this thesis is to increase the understanding of the practice of global TM in MNCs, and to broaden the theoretical findings with empirical evidence. By doing this, arguments are found which either support the theoretical findings made by previous authors active in the field of TM, or challenge the common research stream in case the VW Group has a different approach of managing their talents than predominantly described by literature.
Research Question
In order to operationalize a more specific research task, the following research question was formulated to be answered in the course of this thesis:
How does a large German-headquartered MNC active in the automobile industry manage their talent regarding Recognition and Recruiting, Training and Development, and Retention,
and is there consistency with the existing academic literature about TM or does VW’s approach differ from theoretical assumptions?
opinions will be discussed. In a second step, the case will be introduced and the TM of the VW Group will be analyzed. This takes place by introducing their approach of TM with regard to Recognition and Recruiting, Training and Development, and Retention. By doing this, it will be continuously linked to the statements made in literature, so that a comparison between the theoretical arguments made by literature and the actual processes made by VW can be made. The overall aim is to find out similarities as well as differences between theory and praxis, and based on that, to enhance the literature and theories in the area of TM with empirical evidence.
In the following pages, the important literature in the field of global TM will be linked to the research question mentioned above to obtain a deeper insight into the topic and to base the case investigation on a theoretical background. This approach aims at being able to compare the theoretical assumptions with the findings of the case study later on.
Following the literature review, the methodology section of the thesis will give an overview of the characteristics of the case company and describes research design and data selection methods.
Finally, in the findings and analysis section, the results of the investigation will be presented, analyzed and interpreted in order to answer the aforementioned research question. This part is again divided into the different parts of TM mentioned above to maintain clearness and consistency.
2
LITERATURE REVIEW
“As in ancient times, talent has become the coin of the realm. Companies that multiply their human talents will prosper. Companies that don’t will struggle.” (Michaels et al. 2001: 65).
In the first part of this literature review, the main problems on themacro-level which lead to the necessity of TM in MNCs will be discussed. After that, problems occurring within the MNC (micro-level) with regard to conducting TM are addressed. The second part of the literature review is separated into the different parts TM can consist of and therewith also refers back to the research question: Talent Recognition and Recruiting, Training and Development, and Retention. This distinction is used as these are the most important aspects addressed in the literature as well as in the VW Group. The aspects discussed in the literature review were carefully chosen with regard to the research question and with the aim to identify and elaborate on the research gap mentioned in the early part of the introduction. The review contains normative as well as empirical literature, however the normative literature plays a more important role as its assumptions will be primarily compared with the findings in VW. The empirical literature serves to highlight former investigations and to connect theoretical assumptions to practical findings already in this first part of the thesis.
2.1 Problems on a Macro-Level Leading to the Necessity of TM
According to Sparrow et al. (2004), TM as an increasingly important part of HRM is a very recent topic and can be traced back to Chambers’ et al.’s (1998) extensive research investigating the talent problem. The authors studied 77 US-based MNCs from a variety of industries, interviewing more than 6,000 people as CEOs, top-executives, HR executives and academics. The main finding of this study is that big US companies are finding it difficult to attract and retain good people and that business executives and academic experts point to a severe shortage of the people needed to manage critical functions within MNCs. These companies engage in a war for executive talent, yet they are ill-prepared to fighting this war (Chambers et al. 1998). Actually, this study can be seen as the starting point of a newly emerging debate: the War for Talent.
most capable employees with context-specific knowledge of how to do business (Scullion & Collings 2006), and try to recruit them for their own organization instead of losing them to competitors.
As one can see in the figure below, the number of 35-to 44-year-olds in the USA reached its peak in the year 2000. However, the supply of possible future executives is decreasing from that year onwards: Chambers et al. (1998) forecast a 15% decline of the 35-to 44-year-old Americans between 2000 and 2015, i.e. as of today, the year 2008, the USA is in the middle of this decline and will reach its trough in 2015. Even though the data is limited to US population, it is already demonstrated that this development does also happen in other developed countries (Axelrod et al. 2001), especially throughout Europe.
Figure 1: Declining Supply of Future Executives
Chambers et al. (1998: 47).
On the other hand, with regard to the observable decline of 35-to 44-year-old people, the number of people being in the second third of their life is increasing. Conner’s (2000) research results exemplify this development: the current pool of managers in her case MNC were aging and many were close to retirement age. This resulted in a situation in which vacancies existed that could not be filled with suitable successors.
international assignments to less developed countries. Third, the needed skills and knowledge are changing. For instance in the volatile business environment, new technologies emerge with a fast pace and intense competition. Hence, many employees simply do not have the required skills and experience necessary (Conner 2000). Evans et al. (2002) also point out that the lack of firm-specific talent is a major constraint on the economic growth of a company. Shell, for instance, estimates that only 5% of students at university have the potential to enter their graduate program and to become a top graduate talent, which is why they consider their efforts to attract those people as part of a WfT.
Chambers et al. (1998) distinguish three qualitative challenges MNCs have to face concerning TM today and in future. The first, also pointed out by Conner (2000), is to attract talent having a global mindset, technological competence, entrepreneurial skills, and an ability to manage complex business processes – as the increasingly complex economy demands such a skill set. Second, an even a more severe problem facing MNCs is the fact that start-ups and SMEs increasingly target the same people sought by MNCs, turning into a serious competitor for talents as they can often offer career opportunities large MNCs cannot offer (e.g. faster career steps, better salary, flexibility, excitement etc.). In 2000, already 30% of MBAs in the USA chose working for a start-up company or SME (The Universum 2000), with the percentage of computer science and electrical-engineering graduates choosing this possibility even higher (37%) (Axelrod et al. 2001). Third, MNCs have to face increasing job mobility among their employees, meaning that potential talents are willing to switch companies more often. As the authors discovered, the average executive today will work in five companies, whereas it was only one or two companies ten years ago.
inhospitable. Thus a new kind of employee, who is more adaptive to the changing environment, more willing to relocate, and to change companies more often, is taking his place - the “mobile worker” (Vance & Paik: 350).
Another alarming trend concerning the change of career profiles has emerged in Europe and the USA. People are leaving their companies because their talents are either being ignored, misused or not rewarded enough in terms of money and/or recognition, and start to open up their own business like ‘Me Inc.’ or ‘Ich AG’, doing the same tasks as before, using the knowledge acquired in their former companies and re-selling it (Ridderstrale & Nordstroem 2002).
According to Brown & Hesketh (2004), the WfT makes it necessary for survival that MNCs seek to identify outstanding talent and do whatever it takes to attract, develop and retain such individuals. Hence, as Michaels et al. (2001) state in their book, excellent TM has become a crucial source of competitive advantage and will boost the companies’ performance dramatically. An excellent TM can be achieved through adhering to the ‘new realities’ set up by Michaels et al. (2001).
Figure 2: Old and New Realities With Regard to HRM
Furthermore, the authors develop an interesting argument, i.e. that the WfT reflects a major paradox: in the knowledge-driven economy, recruitment depends far less on the knowledge of candidates because many more people applying for professional jobs have met the knowledge requirements associated with a university degree and thus the war for talent is not the result of poor quality of education. There is, however, a limited pool of people capable of transferring their education into the work arena (Brown & Hesketh 2004). Furthermore, in the authors opinion, there actually is a wealth of talent being produced on the global market, and therefore the real WfT is simply how to make better use of it.
The Old Reality The New Reality
People need companies Companies need people
Machines, capital, and geography are the competitive advantage
Talented people are the competitive advantage
Better talent makes some difference Better talent makes a huge difference
Jobs are scarce Talented people are scarce
Employees are loyal and jobs are secure People are mobile and their commitment is short term
People accept the standard package they are
offered People demand much more
To avoid or at least mitigate the aforementioned developments and problems resulting in the WfT (Scullion & Collings 2006), it is even more crucial and essential for the survival and business success of a MNC to conduct an appropriate, well-organized, dynamic and future-oriented management of company talents. Initiatives include the areas of Recognition/Attraction/Recruitment as well as Training & Development and Retention and will be discussed in detail in the course of this thesis.
2.2 Problems on a Micro-Level regarding the Execution of TM
“It is essential to better understand how to successfully design and implement practices to recruit, develop, deploy and retain the best and the brightest for key positions around the world.” (Scullion & Collings 2008: 128). Due to the above mentioned issues, TM has become a major aspect of HR practices in MNCs. But what is the supposed outcome of successful TM? Sparrow et al. (2004) list some aspects that should be created by TM programs:
• Sustainable competitiveness through the alignment of employee competence, behaviors and skills with business activity
• Higher level of innovation
• Improved staff engagement, commitment and motivation
• Lower loss rates of knowledge and experience (lower brain drain) • Lower external resourcing costs through internal employee development
Furthermore, Sparrow et al. (2004) argue that the coordination of a MNCs talent pipeline on a global basis is necessary as talent has become more mobile and the competition between employees has become more generic and has shifted from the country, to the regional, to the global level. Economies of scale play an important role and global networks, for instance, can transfer best-practices across several countries. Such a best-practice approach indicates that there is a standard set of universal HRM practices and systems in place which lead to superior organizational performance (Sparrow et al. 2004). However, according to Sparrow et al. (2004), the applicability in all contexts is questionable as the success of HR practices will to some extent depend on both, the economic and cultural conditions in which they are applied.
implementation issues of TM is becoming increasingly problematic for many MNCs. In 2002, Evans et al. prove this by stating that many companies are unaware of where their best talent is located, as HR specialists often get lost in the myriad of different tools and techniques, failing to see the wood for the tree and missing a systematic global approach to talent management (Evans et al. 2002). As Evans et al. (2002) put it, the “cream” of employees is too often left to rise to the top by natural or political processes, or attention to talent development is focused on the mother company alone.
More specifically, MNCs are facing severe difficulties in recruiting and even more important, retaining the talents necessary to operate worldwide (Scullion & Collings 2006), i.e. they fail to deploy their internal talent effectively once recruited (Bryan et al. 2006). Only 3% of respondents of the extensive WfT survey (Chambers et al. 1998, Axelrod et al. 2001) agreed that their companies develop talent quickly and effectively.
Thus, creativity in finding a sufficient pool of talented, qualified managers who can effectively manage MNCs becomes the primary challenge for international HRM/global TM and requires a far more proactive strategy than ad hoc promotion of “promising” employees (Harvey et al. 2001).
In the following section, the three most important areas of TM are introduced and discussed. This was already done with regard to the findings retrieved through the investigation at VW. Thus, it will be possible to compare theoretical aspects given by literature with insights given by VW.
2.3 Talent Recognition and Recruiting
“Once you know what you are looking for, there are a number of routes you can take (…) but most companies don’t really know what they want.” (Chamber et al. 1998: 53).
Michaels et al. (2001) found out that only 19% of the investigated senior managers agreed that their companies brought in highly talented people. Even worse, Chambers et al. (1998) found out that only 16% of the studied MNCs think their companies know who their high performers or talents respectively are. According to the authors, this is a common problem MNCs are facing, and that this has to be solved, i.e. companies must find out what kind of talents they want as soon as possible to ensure the effectiveness of their recruiting programs. Thus, it will be necessary to rebuild MNCs recruitment strategies if they want to cope with the aforementioned WfT problems (Axelrod et al. 2001).
recruit “ahead of the curve” (Sparrow et al. 2004: 122; Chambers et al. 1998) instead of the more traditional vacancy-based recruitment. This means that companies must be continually looking and recruiting great talent, rather than only when vacancies have to be filled (Chambers et al. 1998). Furthermore, Doman et al. (2000) found out that organic growth can be best achieved when recruiting and training takes place in anticipation of a necessary growth in staff, rather than in response to it.
Another precondition to tackle the challenge of recognizing, selecting and finally recruiting the highly talented people a MNC needs is to communicate awareness that the company has attractive jobs to offer (Sparrow et al. 2004). This might happen through internal procedures as the creation of an internal talent pool, intranet announcements, internet job boards (Sparrow et al. 2004) or international graduate programs (Scullion & Collings 2006). On the other hand, external activities should supplement the internal efforts, as for instance a presence in universities and on career fairs or through WebPages or recruitment companies.
The use of external help such as recruiting firms is an observable trend in today’s HR practices as a means of finding highly talented people. This is shown for instance by the fact that in the USA as of 1998, revenues of such agencies have grown twice as fast as GDP over the past five years (Chamber et al. 1998). Today, 10 years later, the revenues have probably skyrocketed even more. Sparrow et al. (2004) see this source as an alternative to consider. In their research, however, the quality of different recruitment companies varied enormously. In general, no company should rely exclusively on only one recruitment strategy. Instead, investing in secondary sourcing strategies as different channels helps achieve balance and diversity (Chambers et al. 1998).
2.4 Training and Development
“The distinction between learning, working and living is gone – it is one and the same thing.” (Ridderstrale & Nordstroem 2002: 229).
The Potential Development part of Evans et al.’s (2002) model for leadership consists of functional ladders or careers the talents will train and develop in. This means that multi-functional mobility of leaders or talents respectively is strongly limited or even non-existent, and a more expertise-based development, with a focus on specific functions takes place. That German MNCs tend to follow the functional approach of Management Development was also proven by Harzing (2001), where horizontal job rotation is a key issue of the Germanic Model to MD.
Concerning development of talents in general, there is a conflict between theoretical literature and empirical evidence. On the one hand, a Conference Board study (1998) identified developing talents/leaders as the most important HR goal for global business success (Csoka & Hackett 1998). On the other hand, as for instance Michaels et al. investigated in their 2001 study, only 3% of studied US-MNCs stated that their companies develop people quickly and effectively. As a consequence of this conflict, academic literature suggests different elements and steps successful TM should include. Chambers et al. (1998) for instance suggest specific steps MNCs should take to develop their talents, which are described briefly in the following:
• Put people in jobs before they are ready: Chambers et al.’s research confirms that the key to development is a challenging position that the employee has not expected to get. This could happen through cross-functional moves, assignments to leadership roles etc. The authors argue that people learn best by being put into situations that require skills they do not yet have. This is, however, not yet a common strategy within HR departments of MNCs which rather reach staffing decisions according to the principle “who can do this job best right now” (Chambers et al. 1998: 55).
giving proper feedback as in 2001, only 39% of the respondents of Axelrod’s et al.’s research said that they have received effective feedback provided by their companies. • Understand the scope of your retention problem: MNCs must become aware of the
fact that the best investment in the future of the company lies not with the top 200 executives, but rather with the early and middle ranks of managers, who are some years out of college and between 25 and 34 years old. It is this group that is able to shape the companies’ future and success, but it is also this group that will become scarce in future, as those people become more mobile and demanding and the number of 25-to 34-year-olds is declining.
• Move on the poor performers now: Chambers’ et al.’s research suggests that taking action to deal with poor performing employees is the most difficult, least-exploited talent-building level for every MNC. Thus, ineffective people often stay in their positions for years. This, however, should not happen at all as the costs of keeping people with low productivity are high. Furthermore, they might drag down the performance of all they work with as well, as these people might get discouraged. Therefore, it is important to take action, in the form of removing the person from their job or moving them to another job. Regardless, “however you do it, do it” (Chambers et al. 1998: 57).
Evans et al. (2002) also offer theoretical suggestions to develop employees effectively. They set up three basic elements they think should be part of talent development:
• Challenging assignments: According to Evans et al. (2002), too often all the structured approaches such as coaching, feedback, assessments etc. risk of “[becoming] ends in themselves” (351), They argue that it is simply a challenge talents should be given, as they develop best through challenges, i.e. a challenging assignments which require skills or capacities the employee does not yet have or contains components that have never been done before.
decisions.
• Hardship experience: Hardship experience is necessary so that the risk management mentioned before does not tend to minimize any risk of failure so that employees never learn “to stand on their own feet and face up to tough situations.” (Evans et al. 2002). Hence, according to the authors, it is also important to learn how to deal with such hardship experiences, to learn how to bounce back from making mistakes and how to cope with the consequences of such mistakes.
Conner (2000) develops a good overview about practical actions HR managers can take when developing their talents or leaders respectively. This table can be found in Appendix 1.
According to the article of Stroh & Caligiuri (1998), many US MNCs have even started to create a job position called Chief Learning Officer (CLO), whose responsibility it is to organize and guide the development of human talents of the company on a world-wide scale.
Company Universities
“The workplace has become a campus.” ( Ridderstrale & Nordstroem 2002: 227).
2.4.1 Management Development
“Superior talent will be tomorrow’s prime source of competitive advantage. Any company seeking to exploit it must install a talent mindset throughout the organization, starting at the top.” (Chambers et al. 1998).
Following the predominant route in literature, MD is seen as one part of general TM and often set up as separate block with special characteristics. MD primarily focuses on the development of soft-skills, judgment, creativity and thinking (Porter 2008) and is aimed to develop employees towards high management positions.
Porter et al. (2008) argue in their recently published book that managers are neither born nor made, but will grow themselves within an organization – if this organization provides the right climate and the right incentives. The authors define MD as “(…) a tool to improve the performance and potential of individual managers, to identify learning gaps and help to prepare them for future responsibilities.”(303). This is a more micro level view which puts emphasis on the learning and development of individual managers. On a macro-level view, MD can also act as an organizational renewal (Varney 1977) or to build a consistent management style and culture within the MNC (Porter et al. 2008). This differentiation, however, is not elaborated upon since the focus of this thesis lies on the micro-level development.
A MD program existent in reality will probably consist of both formal (secondments, projects etc.) and informal (experiential learning, learning by doing, trial and error) procedures, including on- and off-job activities as well as skills and behavioral development. The crucial aspect is, of course, to find the most appropriate balancing point between both processes (Porter et al. 2008).
Furthermore, MNCs spend billions every year on corporate training, but only a few ever evaluate their training and development measures in terms of business impact (Porter et al. 2008), for instance through setting up key figures and return on investment ratios to establish a link between learning and performance and to validate the MD program (Porter et al. 2008). However, evaluating MD is often problematic as it consists of various forces and it is extremely difficult to differentiate the developmental aspects (Porter 2008). Furthermore, MD might have direct and indirect effects, so how can the indirect effects (e.g. on financial performance) be measured? Hence, companies need to choose suitable evaluation methods and procedures as well as systematic processes to assess the impacts of their MD to make it as efficient as possible and to justify the investment of resources in these programs (Porter et al. 2008).
2.5 Talent Retention
“The Most Wanted employer of yesterday may not longer be so today” (Sparrow et al. 2004: 124).
Chambers et al. (1998) found out that only 10% of the surveyed US-MNCs agree that they retain almost all their high performers. Thus, they conclude that talent, especially executive talent, has been the most undermanaged corporate asset for the past two decades. Michaels et al.’s (2001) more recent research revealed even more alarming numbers, which show that only 8% of HR managers in MNCs believed that they retained almost all of their high performers. So, what is the secret behind it? How can a MNC retain their most valuable, talented employees?
Figure 3: What Motivates Talent?
Chambers et al. (1998)
Employer Branding
Employer branding as a means of retaining talent becomes increasingly important for MNCs and is actually an extension of brand management into the field of HR (Sparrow et al. 2004). It consists of building and defending a corporate brand and sophisticated reputation to offer constant reasons to potential talents available on the internal and external labor markets why they should work or stay with the company respectively (Sparrow et al. 2004). Schuler & Tarique (2007) also mention the importance of becoming an employer of global choice as a means of employer branding, which is necessary to ensure a sufficient supply of appropriate talent.
An essential part of employer branding is the creation of an Employee Value Proposition to win the WfT, i.e. to attract and retain the people needed. Such an EVP gives the answer to the question why a potential talent would want to work for your company rather than for your competitor (Chambers et al. 1998): “(…) it differs from one organization to another, has to be as distinctive as a fingerprint, and is tailored to the specific type of people the organization is trying to attract and retain.” (Sparrow & Cooper, 2003: 160).”
the best ones will leave. Hence, to retain good people, Ridderstrale and Nordstroem (2002) plead for treating them as individuals, with “…each and every little system needs to be personalized.” (Ridderstrale & Nordstroem 2002: 231).
Succession Planning
“…the need for qualified talent across all levels of skills in the organizational hierarchy (…) will persist for the foreseeable future.” (Harvey et al. 2001: 910).
3
METHODOLOGY
The empirical evidence presented in the later part of this thesis is build upon a qualitative case study research (Gill & Johnson 2002). This method was chosen as an explorative approach which allows flexibility in identifying relevant contextuality (Becker-Ritterspach 2005). This is suitable in this instance as the TM issue is not extensively researched yet on an empirical basis and thus, makes exploration necessary.
In section 3.1 it will be explained why the VW Group was chosen to empirically investigate the TM topic and how the exploration of VW’s TM can serve to answer the research question of this thesis. Furthermore, the VW Group itself will be introduced and some company facts important to know in the course of this thesis are mentioned.
Section 3.2 explains why a certain research design - the single case study - was selected as a method to explore the realization of TM and to compare the theoretical assumptions with the practical implementation.
Finally, the data selection part describes in more detail which data sources were used and why these were chosen in order to answer the research question.
3.1 Units of Analysis: The Case Company
This thesis is limited to one company and therefore to one sector and one country to retain a clear research focus as well as due to limited willingness of MNCs to participate in such a project, where it might happen that confidential strategic concepts are published. The choice of the Volkswagen Group as the case company is grounded on the fact that it is a huge, famous MNC, offering many opportunities to tackle the topic, since small companies might not have a TM approach at all. Thus, due to the reason mentioned before, the case of VW is likely to be replicable or to extend the available theory (Eisenhardt 1989)
execution of TM.
Finally, VW offered the best research access due to previous contacts with the HQ and a common nationality and language.
The VW Group, headquartered in Wolfsburg, in the northern part of Germany, is one of the world’s leading automobile producers and the largest car manufacturer in Europe. In 2007, the VW Group increased the number of vehicles delivered to customers slightly up to 6.189 million (2006: 5.734 million), which is an increase of 7.9% compared to 2006. Correspondingly, its share of the world passenger car market increased to 9.8%. The overall group sales rose to 108.9 billion Euros in 2007 (2006: 104.9 billion) (volkswagenag.com).
The VW Group consists of eight brands from six European countries: Volkswagen, Audi, Bentley, Bugatti, Lamborghini, SEAT, Skoda and Volkswagen Commercial Vehicles as car brands as well as the Volkswagen Financial Services AG offering services such as leasing and insurances to complement the automobile business. Each brand operates as an independent entity on the market. Thus, every brand also has its own HR functions and department, however always in line with the HQ’s worldwide guidelines. The product range of the eight car brands extends from low-consumption small cars over commercial vehicles (pick ups, busses, heavy trucks) to luxury class vehicles and all of these are sold in more than 150 countries. The Group operates 48 production facilities in thirteen European countries and six countries in the Americas (Mexico, Brazil, and Argentina), Asia (India, China) and Africa (South Africa). Around 329,000 employees (148,562 in Germany) produce around 25,400 vehicles per day or are involved in vehicle-related services (volkswagenag.com). In the first half year of 2008, VW delivered 3.27 million vehicles worldwide, which is a plus of 5.8% and the highest figure ever for the first six month of a year.
3.2 Research Design
Furthermore, as it could not yet be elaborately investigated if and how large MNCs effectively manage the skills of their employees, i.e. their talents (Scullion & Collings 2006), the research approach of a case study is especially appropriate as it addresses a new topic area and thus, can analyze the dynamics present within the setting of a single MNC (Eisenhardt 1989). A case study is especially used when the boundaries between the phenomenon and the context are not clear or visible, and the goal of the research is to cover contextual conditions (Yin 1994), i.e. in this case to observe and explain the meaning and nature of TM in the particular organizational real-life context of the VW Group.
Furthermore, case studies are the preferred strategies when “how” and “why” questions are being asked, and when the investigator has little or no control over events (Yin 1994). As the research question in the beginning indicates, this thesis investigates the “how” and “why”, and as the data selection methods were primarily interviews, control is low and subjectivity plays a role, too. Following Eisenhardt’s (1989) advice, the research question avoids directing the case investigation into specific relationships between variables and theories, but was rather formulated to be able to offer enough scope to analyze and interpret the different information retrieved through the case study.
Finally, this study does not have any propositions since, as Yin (1994) notes, there is a legitimate reason for some case studies not to have some, i.e. in which the topic is the subject of exploration. As this thesis is based on a qualitative, highly explorative research method (Gill & Johnson 2002) where further exploration of the topic is needed as available literature does not provide conceptual frameworks or tested hypotheses, and hence, the existing knowledge base still spoor, Yin’s (1994) argumentation not to have propositions is applied here.
With regard to answer the research question, Eisenhardt’s (1989) suggestion to successfully conduct case study research is considered: the evidence found during the analysis of the case will be compared with conflicting as well as similar literature to build internal validity, raise new theoretical assumptions, and sharpens or improve generalizability (Eisenhardt 1989).
3.3 Data Selection
1994) and authors advise researchers to use them to strengthen the grounding of possible new theoretical developments (Eisenhardt 1989), a major goal that is to be achieved with this thesis as well.
The main sources of evidence for this thesis were personal interviews. The strength of conducting interviews is that one can set up questions which are directly targeted-focused on the case study topic (Yin 1994). Three open-ended, semi-structured interviews were conducted with three HR Managers located in the HQ of VW in Wolfsburg, Germany. Open-ended questions were chosen as one can ask about facts as well as for the respondents’ opinions about procedures or events, or to propose their own insights into certain occurrences, so that the interviewee appears to be an informant rather than a respondent (Yin 1994).
Furthermore, the interviews conducted were focused, which means the respondent is interviewed for a short period of time (Yin 1994). In this case, interviews still remained open-ended and had a conversational manner, but were more likely to following a certain set of questions (Yin 1994). Furthermore, additional field notes were taken to combine observations and analysis already during the interviews. This means for instance not only writing down the answers of the interviewee, but also impressions that occur to the interviewer, further questions that might come up etc. (see also Eisenhardt 1989).
The information for this case study was retrieved from three such interviews, lasting 2.5 hours and 1 hour twice respectively. This elaborateness of the interviews, especially the one which lasted about 2.5 hours, immensely reinforces the reliability and validity of our research and gave detailed insights into the TM conducted by VW.
To determine the questions most significant and valuable for this topic, to gain more precision in formulating these questions, and to develop concrete and insightful questions, a comprehensive literature review on the topic was conducted as well as a thorough investigation into the company through their website and newspaper articles. In the following, an interview guideline was developed. As Yin (1994) notes: “Budding investigators think that the purpose of a literature review is to determine the answers about what is known on a topic; in contrast, experienced investigators review previous research to develop sharper and more insightful questions about the topic.” (the interview guideline consisting of the questions asked to the three interviewees can be provided upon request). Due to the fact that the interview guideline was set up in German language as the VW HQ is based in Germany and the interviewees were Germans, a careful translation of the answers useful for the thesis into English was conducted.
4
FINDINGS AND ANALYSIS
“The most critical resource wears shoes and walks out the door around five o’clock every day.” (Ridderstrale & Nordstroem 2002: 47). In this chapter, the thesis’ main findings concerning the major research questions will be summarized and analyzed along the existent literature and theories described in part 2. A comparison between the empirical findings and the available theoretical argumentations is made. In the evaluation, special attention was paid to triangulating the multiple sources of data as these are the interviews, internet-sources and some company documents. Also, an effort was made to triangulate the different perspectives given by literature with the case evidence to obtain a broad and reliable result of how TM is conducted in the organizational context of the VW Group.
4.1 General HR Structure of the VW Group
VW follows a global product division structure as explained in Vance & Paik (2006), where benefits from global integration are significant and local differences are minor. All functional activities tend to be controlled by a product group. Local autonomy is limited as product managers from the HQs make product decisions for the global market. Vance & Paik (2006) argue that there is an organizational fit among organizational structure and HRM orientation. According to the authors, when a global product division structure – such as the one used at VW – is in place, the HRM orientation is supposed to be ethnocentric. The reason for this is that MNCs with a global strategy, i.e. a global product division’s structure, are usually required to maintain a higher level of control at HQs to ensure coordination and integration among different subsidiaries. To achieve this goal, an ethnocentric orientation is followed by placing the authority and major decision-making issues in the hands of the HQ (Vance & Paik 2006), located in Germany in this case example.
production plant will open in 2009.
The following table outlines a direct link between the structure of the company and the roles of HR. It indicates the differences in the activities of HR departments due to their overall structure. In this respect, Dowling & Welch (2005) also mention the tendency of MNCs to also centralize training and development programs, which is consistent with the findings in VW.
Figure 4: Various Roles of Corporate HR
Centralized HR companies Decentralized HR companies Transition HR companies
Large, well-resourced HR
departments Small HR departments Medium-sized HR departments
Key Role: management of all high-grade management positions worldwide
Key Role: managing elite corporate managers
Key Role: management and career development of senior managers and expatriates
Key Activities: planning international assignments and performance management globally, identifying high-potential staff
Key Activities: influencing operating units to support international assignments, supporting decentralized HR
Key Activities: persuading
divisional managers to release key staff using informal and subtle methods, strategic staffing
according to Dowling & Welch (2005), based on Scullion & Starkey (2000)
Scullion’s and Colling’s (2006) description of centralized HR companies can be applied to VW, which follows this approach. First, the HR department in the HQ in Wolfsburg is very large and exercises a high degree of control over, and coordination and integration of the worldwide TM, i.e. over the careers and mobility of senior management positions and high potential candidates all over the world (Scullion & Collings 2006).
VW’s overall goal is to align their TM with their worldwide growth strategy and to implement sophisticated and uniform standards and programs, for instance for trainees, graduates and young professionals (autogramm 2008). Furthermore, VW has started to introduce more advanced training methods in its subsidiaries around the globe as well (autogramm 2008). On the other hand, VW’s companies like Audi, Skoda and Seat have separated TM programs and are independent from the VW Group in this respect: “Everything which is done under the brand Volkswagen AG is done from our headquarters in Wolfsburg. We alone are responsible for the brand VW AG.” (interview 26.06.08).
undertakes a wide range of activities with special emphasis on a systematic and strategic management of talents on an international basis, as for instance MD, career and succession planning, strategic staffing, top-management remuneration and the management of international assignments/expatriates. Furthermore, the findings are consistent with Scullion’s and Starkey’s results (2000) which empirically support the theoretical argument made by Pucik (1992) that international TM and development is a first priority in HR in a globally oriented company. Scullion & Starkey (2000) reinforce the validity of the results found in VW as they point to an increased influence of corporate HR over the management of talents and expatriates. Both findings, concerning VW and Scullion’s & Starkey’s (2000) paper, are in line with Arkin’s (1999) suggestion that re-centralization will turn out to be a significant new trend.
4.2 Principles of Talent Management in VW
Figure 5: Criteria for an Elite Team
source:
http://www.volkswagenag.com/vwag/vwcorp/content/en/sustainability_and_responsibility/Mitarbeiter.html. 23.07.2008
However, it is not always easy to find talented people to create such an elite team, and that is why the topic TM is gaining increasing importance for VW (interview 26.06.08). Especially as there were some termination agreements made last year, where many vacancies were suddenly available: “Sure, when so many people leave the headquarters, vacancies exist, and where we had to have a look how we can fill those vacancies: what kind of people come into consideration, and where exactly are these vacancies?” (interview 26.06.08).
To realize their TM initiatives, VW is following the best-practice approach, which was mentioned in the literature review. In the case of VW, the best-practice approach is set equal with the home country approach, as the HR strategies developed by the HQ in Wolfsburg are seen as the best practices to implement them in other global subsidiaries as well. A “viewpoint Germany” (interview 26.06.08) is adopted, with the HQ Wolfsburg as the base: “It is a matter of fact, Wolfsburg is the center, the headquarter.” (interview 26.06.08). According to the interviewee, this is done to influence TM on a global basis and to follow the long-term strategic interests of the entire group (interview 26.06.08): “It is often said that if you are a high potential candidate, you should have worked for Wolfsburg at least for a while.” (interview 26.06.08).
4.3 Talent Recognition and Recruiting
Talent Recognition
The single divisions within VW Wolfsburg are in charge of recognizing future talents: as “we are aware of the fact that superiors, who work together with the people every day, can better assess the performance than an external person.” (interview 26.06.08).
There are no binding guidelines in place which state how talents have to be searched for, neither does VW have a general definition of which characteristics and skills a talent should have: “You just look at the job performance: is it an employee who looks beyond one’s own nose? Is it an employee who is able to think for other departments as well or is he/she just doing his/her own tasks without looking further.” (interview 26.06.08). Thus, the heads of every single department in VW are responsible for spotting potential talents and high potentials, where an employees’ commitment in his/her department is important to be recognized as such a talent: “Then you say well, let’s see, is there more potential behind it or not?" (interview 26.06.08). If a superior thinks there is someone in his/her department who has more potential than he needs for the job currently done, he/she contacts the colleagues in the HR department in Wolfsburg: “Well, Ms XY, we have somebody here we would like to develop further, could we conduct a performance discussion or report here?” (interview 26.06.08). Hence, an intensive networking amongst between the different divisions and the central HR department takes place. A simplified chart of how such a process might look like can be found in appendix 2.
VW is a good example for following the Potential Identification part of the Germanic Model (Evans et al. 2002) introduced in part 2.3. Its apprenticeships programs (as of 31/12/2006, 9,199 apprentices and trainees were being trained across the entire VW Group) are regarded as being a first step towards recognizing their future high potentials. This is monitored through apprentices’ performance or final grades (interview 26.06.08). However, to discover real management potential, apprentices are still too young (interview 26.06.08). The final decision to consider someone to be a talent or high potential rather happens during their first years on the job, where they take responsibility for the first time. “After 2-3 years of working you can identify a tendency, if there is more or is it just a person with good professional competence.” (interview 26.06.08). VW’s study and graduate programs (an overview and a brief description of the current programs can be found in appendix 2) and PhD recruitments instead are already more focused on recognizing and selecting employees that have high potential to take over management or executive positions in the future.
First there is the Student Talent Bank (STB). The STB is designed for students who have completed an at least three-month internship at VW and who have demonstrated to be an outstanding talent in both the specialist and social field (interview 26.06.08). To enter this databank, there is a compulsory process that one must go through. First, the student has to be recommended for the STB by their managers. Second, in a one-day assessment center it is decided whether the student will be accepted in STB. If yes, the STB offers their talent exclusive additional opportunities and support for those promising talents by offering seminars, organizing visits to fairs or the participation in other VW events, paying study allowances, offering work possibilities during semester breaks etc. (interview 26.06.08). “When students have entered this database, you can say they have made the first step. They will be developed further faster, with seminars, workshops, more responsibility and more tasks.” (interview 26.06.08).
As a second tool to foster the early recognition of high potentials, VW operates a talent database in form of an Access file, where all the CVs of junior management employees, high potential managers and upward positions are saved in. “The database is used if one wants to see which kind of vacancies currently exist, who could suit this vacancy, do the steps in their CV match with the vacancy, etc.” (interview 26.06.08).
Talent Recruiting
Dowling & Welch (2005) argue that MNCs are endeavoring to exploit and develop an internal labor market, i.e. their existing employees, from which expatriates, international and top-managers can be drawn. This is also the case in VW, with trying to find suitable candidates for talent development or IAs internally has priority: “In such a big company, you always find someone.” (phone conversation 19 May 2008).
Besides that, internet recruiting is playing a crucial role in VW’s strategy to recruit talented employees, as around 80% of all job applications reach VW through their online-portal (autogramm 2008). Thus, a primary goal of the company is to improve the quality and convenience of their online career platform, which is planned for 2008. Recently, the career website of VW (vw-personal.de) was voted to the best amongst 150 German companies by a renowned study of the University of Applied Sciences in Wiesbaden, Germany (autogramm 2008).
4.4 Training and Development
As VW is aware of the fact that the challenges it faces can only be met with the help of its employees, a HR Development System is in place, fostering the development and performance of all employees, from apprentices to top managers, from their recruitment to their retirement (volkswagenag.com) in accordance with its corporate strategy. Development measures include specialist seminars, development programs and more general training in areas such as self-management and communications (volkswagenag.com).
In 2006, approximately 211,600 VW Group employees took part in training measures. This results in around two days training for every Group employee per year (volkswagenag.com). As VW mentioned, this figure is supposed to increase in future. It is the objective of the VW Group to become one of the world’s leading employers with regard to HR Development (volkswagenag.com).
Figure 6: Five Areas of Upward Mobility
At VW, talent development and promotion possibilities are dependent upon five areas of upward mobility/salary levels. The entering of a higher level is bound to certain conditions. Entering the “Tariff Plus” level, for instance, is bound to certain conditions: “Our employees have the chance to develop within the salary level they belong to. If they would like to enter the next salary level, they have to attend an assessment center (…).” (interview 26.06.08). The goal and structure of such ACs will be explained in part 4.4.1.
The step from level two, “Tariff Plus”, to level three, “Management” is considered to be a special one as on level three, the development of managers and executive starts, and not all employees being talented in a way are suitable for management positions: “The difference is that for some, there is more planned than a higher salary level, which is the development towards management positions, for others this is not the case. It might still be ‘a good one’, who shows great performance with their skills and in their specific field, but where you just say, this is not the manager type, we cannot imagine him/her as a manager. Thus, this person will most probably become a specialist.” (interview 26.06.08).
Challenging Assignments
As it was mentioned in the literature review, many authors (e.g. Chambers et al. 1998; Evans et al. 2002; Conner 2000) call for challenging assignments as a means of developing talents within a MNC. This method also plays a role in VW: “(…) then you develop him further (…) with a more significant task, yes, but in a small department or area, a small subsidiary for instance.” (interview 26.06.08). However, this kind of method has its limits - Evans et al. (2002) describe it as “Risk Management”. The risk of letting their employees make mistakes at the expense of business performance is also existent in VW: “You don’t do this with employees where you notice ‘oh, they are borderline candidates, but let’s try with them’ (…). The danger that this won’t work is too big.” (interview 26.06.08). “If it is about important decisions, like budget numbers or something like that, this has to be reassured by the next superior. The employee always has someone else above him, and this guy again has someone else above.” (Interview 26.06.08).
VW’s Company University
As other MNCs mentioned in the literature review, also VW established its own, group-wide university, called “AutoUni”. This educational institution combines scientific, academic teaching from international universities with the practical knowledge VW can offer. The activities of the AutoUni are aimed at the VW’s expert employees and executives (volkswagenag.com). As of today, the AutoUni focuses on the VW-World exclusively. In a second step, it will open up to suppliers and partners and eventually, the opening up to the public is planned. The AutoUni is divided into the School of Economics and Business Administration, the School of Science and Technology and the School of Humanities and Social Sciences. Furthermore, the two additional, process oriented departments Company Culture and Values and Learning Strategy and Technology are existing (vw-personal.de).
4.4.1 Management Development
functional areas.
Furthermore, as an early attempt to loosen the strict functional careers of the Germanic Model, VW has introduced job families. This means that it is put emphasis on working in projects and thinking in terms of processes rather than in terms of structures and functions. VW wants its specialists to make their expertise available across interfaces as well, thus creating job families or also called expert communities which work towards common goals (vw-personal.de). Each job family includes jobs which are related to each other, i.e. show similar tasks or skills, but are independent of hierarchies and structures. Job families are supposed to provide new prospects with regard to an employee’s personal development, as a more focused, tailor-made on-the-job development based on career path is made possible - for technical experts and high-ranking specialists as well as for managers (vw-personal.de).
Milestones
To test the management potential of promising talents, personalized “milestones” will be defined: “Milestones will be defined, which say that, if you do a good job here, we go further, and when you do that one good as well, we develop you further after that assignment as well.” Such milestones are individually set up as, according to one interviewee, “It is necessary to look at every single individual, what does he/she need?” (interview 26.06.08). In this respect, VW complies with Ridderstrale’s & Nordstroem’s (2002) demand of thorough personalization. The most common milestones to develop managers in VW are special ACs and IAs, and will be introduced in the following. Besides that however, there are other tools existent in form of fixed programs as the Junior Management Program (JuMP), the Junior Executive Program, the International Personnel Development Program (IPD) or the International Leadership Program for Senior Management Level (ILEAD). A short summary of these programs can be found in appendix 4.
Assessment Center
he/she has not, or yes, but with a certain restriction.” (interview 26.06.08). In case a potential with restrictions was diagnosed, there are targeted possibilities (e.g. additional seminars, assignments abroad) offered by VW to improve the areas where discrepancies exist and to diminish weaknesses (interview 26.06.08). If the AC is not successfully passed by the employee, he/she cannot be appointed to the management circle (interview 26.06.08).
In such an AC, a competency catalogue established by VW and consisting of pre-determined desired competencies, skills, and performance indicators is tested, as for instance teamwork, logical, strategic, and analytical thinking, the ability of transferring issues and leadership skills (interview 26.06.08): “It is very important to have a tool, to have developed a catalogue of certain skills and competencies which demonstrates, exemplifies the typical VW Manager.” (interview 26.06.08). Hence, such a management AC “(…) is not about asking know-how questions anymore, that does happen in their operating departments, but rather if there is management potential existent, yes or no.” (interview 26.06.08). The AC currently lasts 2.5 days. “When employees get out of this assessment center, they are often totally exhausted, due to the mental stress. You see the strongest man crying there, because it is such a huge pressure and stress for them.” (interview 26.06.08).
International Assignments
“All the more foreign sites are being built or bought, all the more it is important to be truly international and that the management, which has to make the most important decisions, has this international perspective as well.” (interview 26.06.08).
Harzing’s (2001) results in her well-known and often-cited study about the functions of international transfer of managers in MNCs show that MD is most important for German, Swiss and Dutch MNCs to send expatriates to their subsidiaries. A transfer for MD is aimed to enhance the expatriates’ international experience and to develop his skills and personality for future roles in either the HQ in the home-country or in the subsidiary abroad (Harzing 2001). VW is a primary example for such a German MNC as IAs serve as another milestone to develop VW’s talents and high potentials towards the appointment into the management circle. “Of course such an assignment consists basically of costs, no doubt about it, this is real money. With such a foreign assignment, a high investment in our talents takes place.” (interview 26.06.08).
the final step before an appointment into the management circle (interview 26.06.08). “Often you just say, ‘come on, if you are doing a good job during your assignment abroad, we will appoint you to a management function afterwards.” (interview 26.06.08). However, as well as Ford Motor where the rule is in place that they will not promote anyone to the position of CEO unless this person has been on an international assignment (Tung 1998), VW is following a similar practice: “It is an internal spoken rule that every executive working for the VW group has undergone at least one assignment abroad.” (interview 26.06.08).
4.5 Talent Retention
‘There is nothing worse than developing an employee further, investing time, money and effort, when he is eventually leaving the company.” (interview 26.06.08).
As the WfT implies, highly talented employees are increasingly enticed away from their current employer by competitors who lack their own pool of talents (Conner 2000) or by recruiting companies. In VW, the hazard of losing talents to competitors has been recognized: “Sure, headhunter companies are an issue, especially in the internet-era, where you have these pages, where you can upload your personal work profile…if there is something interesting, headhunter are very quick luring those people…that’s a danger, of course.” (interview 26.06.08). “Especially when they have around two to five years of professional experience, they are not yet totally committed to VW, and they think about when they get a good offer from somewhere else. At this point, it is important to be able to retain this know-how.” (interview 26.06.08). Thus, according to our information, to find a way how to keep talents within the VW Group is on of the biggest challenges of its HR today (interview 26.06.08).
To avoid the leaving of valuable employees, VW pursuits different strategies: “That makes it even more important to conduct feedback sessions with employees, to set milestones, and to tell the employee: ‘hey, we would like to develop you’, to try to establish an obligation.” One of the most straightforward ways to retain their people is, as Chambers et al. (1998, see also part 2.5) noted, to let the talents know that they are high potentials and hence, highly valued: “The employee has to be aware of that their potential is recognized, that their performance is valued.” (interview 26.06.08).
especially valued employees (for instance for expatriates or STiP1 participants: they are bound by contract for 3-6 years; interview 26.06.08). Also the STB “(…) is one way to commit them to the group.” (interview 26.06.08). Besides the inclusion of safeguards into contracts, another strategy to retain young talents is giving those who have been out of the day-to-day business due to IAs or studies a reemployment warranty.
Employer Branding
“We are very much keen to commit our talents to our company.” (interview 26.06.08).
Employer branding as a means of retaining talents also becomes increasingly important for VW: “All the strategies around the most attractive employer are strongly changing, there is a lot under way currently to develop and hold our talents. VW wants to become bigger in this area. We want to say ‘Hello, this is VW, we are an attractive employer’.” (interview 26.06.08). “To present VW as an attractive employer is one of the main focuses of our new HR director.” (interview 26.06.08). These statements go in line with Chambers’ et al.’s (1998) asking for implementing a convincing EVP as a major condition for retaining talents.
However, as the VW Group is the largest automobile company in Europe and one of the largest employers in Germany, one might expect that a MNC like VW is not in need of spending resources to an issue as employer branding. According our interviewee, most of VW’s employees have a strong emotional connection with the company as VW is the biggest employer in Northern Germany, and employees are proud to work for VW (interview 26.06.08). “Actually, no one is willing to give up their employment with VW.” (interview 26.06.08). On the other hand, “Especially because of all the bad press in the past (…)” (interview 26.06.08), as for instance news about corruption or private amusements at the expense of the company, let VW realize that a well-known brand name is not enough to attract and retain bright people: “We are not resting on our laurels in this respect.” (interview 26.06.08).
1 In the course of StiP (see also Appendix 3), highly talented students receive a monthly study grant from VW.
