We're seeing three distinct types of company emerging: those that view human capital as disposable (Type 1), those that view it as Mission Critical (Type 2) and those who are trying to build a system that views HC as mission critical but are not there yet (Type 3). 

The Type 1 Company views Recruiting and Personnel development as market interfaces for purchasing purposes. It has a mechanistic view of people and their 'interchangeability'

The Type 2 Company views 'talent' as its central asset and has policies and procedures designed to manage the asset to produce optimal returns. CEOs of these companies are often heard saying, "At closing time, I watch my entire business leave the parking lot. I lose sleep hoping that they'll return in the morning so that I can still have a business." These firms usually have an executive at the top level whose entire responsibility involves the acquisition, development and maintenance of human assets.

The third type of company usually has a strong team of recruiters and trainers but little in the way of top level support. Their problem is how to bring about internal change.

Very interestingly, the Stanford Project On Emerging Companies (SPEC) tried to grapple with similar categorizations. Home to a way of thinking called Organizational Ecology, the SPEC project produced a paper that categorized HR models in emerging companies. They found that the company's founder shaped the view of HR for much of the life of the company (explaining why some HR departments feel like our Type 3). Their models (from the paper) are:

·         The bureaucracy model involves attachment based on challenging work and/or opportunities for development, selecting individuals based on their qualifications for a particular role, and formalized control.  

·         The autocracy model refers to employment premised on purely monetary motivations, control and coordination through close personal oversight, and selection of employees to perform pre-specified tasks

·         The engineering model involves attachment through challenging work, peer group control, and selection based on specific task abilities.  

·         The star model refers to attachment based on challenging work, reliance on autonomy and professional control, and selecting elite personnel based on long-term potential.   

·         The commitment model entails reliance on emotional-familial attachments of employees to the organization, selection based on cultural fit, and peer group control.

The foundations for these models are summarized below:

The study found that a change in the basic model always produced turnover but from different segments in the workforce. Take a moment to read it.

 -John Sumser

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