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Policies for the future
Dr. Jochen Menges, Professor at University of Cambridge tells Aamir Nowshahri about the policies that European countries need to adapt in order to attract the best talent from the world
Issue Date - 01/07/2011
Dr. Jochen Menges is a Lecturer in Human Resources and Organisations at the Judge Business School, University of Cambridge. He has worked as a consultant and executive trainer on leadership and human resources issues. As the scientific project leader of a major employer quality assessment study, he evaluated more than 450 companies in Germany regarding their potential to attract and retain talent. His research interests include leadership, human resource management and emotions in organisations.

Q. What are the challenges that Europe is faced with when it comes to human resource management?
Europe has many specialised small and medium sized companies, and also a number of big players with great products and services. The challenge for all of them is that they are operating in a very tight labour market. The demographics of Europe are such that the workforce is shrinking. At the same time, the demand for people with professional expertise is rising. Given that European companies rely on high innovation rates and are exposed to an ever intensifying global competition, the challenge for HRM is thus to recruit, retain, and motivate those employees that can provide their company with a competitive advantage.

Q. What are the strategies that Europe should employ to meet these challenges?
In other places around the world and in Europe, HRM strategy and the business strategy, of course, need to be aligned. In Europe, specifically, most companies follow a differentiation strategy, seeking to develop the best possible product or service. Thus, what companies in Europe endeavour to do is to set up and maintain a work environment in which the employees can develop the best product or service. What they also need to do is to try to create an environment which attracts those people who can contribute to developing and providing the best product and service. To that end, the HRM must be an important partner in business decisions.

Q. You have done an extensive study on organisation cultures. Share with us some of the findings from that study.
In a large-scale study of German companies, my colleagues and I looked at how companies create an attractive workplace, which HRM practices these companies employ and whether their business was successful. What we found was that those companies that were rated as preferred employers are the ones that maintain what I call a positive emotional climate. In these companies, employees frequently feel inspired, energetic and enthusiastic. HRM is, in many ways, the guardian of this positive emotional climate. And, it turns out, the companies with positive emotional climates are very successful and often manage to develop and deliver the best product or service in their specific area.

Q. How much of an influence does the government have in framing human resource policies?
There is sufficient freedom for companies to shape their HR practices. Governments are rather supportive, and in Europe, most companies operate within relatively similar circumstances.

Q. What have been the major changes in HR practices after the recent economic recession?
The very tight labour market may have eased a bit during the economic downturn, but it is now even tighter than before, especially in Germany. Thus, the main task of HR managers is still to attract the best and most qualified people from around the world. To improve the emotional climate, HR managers can fine tune their selection systems to assess applicants’ character and fit with the organisation, in addition to assessing the applicants’ expertise and school grades. They can also promote and train employees on emotional competencies. Once HR managers achieve that the employees themselves sustain a positive emotional climate, they have created a wonderful workplace that is attractive for others around the world. Then, they can portray their company to others as a superb employer, by means of employer branding.

Q. Do you think there is scope for improvement in the HR sector? What can organisations do to better the present practices?
In order to sustain the type of positive climate that I described, companies can draw on some of the innovative practices that we found through our research. For example, companies can increase employees’ positive emotions by introducing a plaudit system through which they give credit and recognition to successful employees and teams. They can celebrate successes together. They can bring together employees with customers, a practice enormously helpful for motivating and inspiring employees, because employees get to meet those, for whom they work every day, giving them a better understanding of their customers. Companies can also use grievance and complaint systems to absorb negative emotion. And they can get rid of projects that are over-burdening their employees, if these projects are not essential, and thus remove unnecessary stress.

Q. What are the challenges for Europe in the future?
The first is to get the best talent, and second, to develop the best product or service. These are the core challenges for Europe. Price leadership is currently not realistic, because price leadership can be gained wherever labour is cheap and there is no cheap labour in Europe. So, European companies can only succeed if they find the best, rather than the cheapest, solutions to the problems of the future. To get these talented people to work here, they need to provide the most attractive workplaces. An attractive workplace is where employees feel enthusiasm day after day when they go to work, enter the hallways and offices of their company, and meet their colleagues and customers. If that emotion deep inside them is positive, then it shines beyond the borders of their company and begins to attract others to join in as well. And such places, we know from research, are those in which the best ideas emerge. When people are happy, upbeat, enthusiastic and inspired, that is when they come together and think of ways to improve an already great product even further and make it the best in the world. Thus, one of the core tasks for companies and human resource managers these days is to create positive emotions.

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