Chapter 9 | Development

Introduction

• Recap of the Previous Chapter:

  • Emphasized the importance of training for both employees and organizations.

  • Highlighted the need to stay agile in a VUCA (Volatile, Uncertain, Complex, Ambiguous) environment.

• Purpose of Training:

  • Ensures employees have the necessary competencies to perform their jobs.

  • Focuses on short- to medium-term skill development.

• Limitations of Training:

  • Training alone may not be sufficient for long-term organizational needs.

• The Role of Development:

  • Development is crucial for preparing employees for future challenges.

  • It focuses on sustained growth and long-term capabilities.

• Strategic Perspective on Employee Development:

  • Organizations must adopt a strategic approach to employee growth.

  • Identify the organization's future direction and align development efforts accordingly.

  • Ensure employees acquire competencies that support long-term organizational goals.

What Is Development?

• Purpose of Training and Development:

  • Both are HR and organizational processes aimed at improving employee competencies.

  • Focused on employee growth to enhance individual and organizational performance.

• Definition of Development:

  • Involves interventions and processes that support long-term growth.

  • Enhances the capabilities of employees, teams, and the organization over time.

• Difference Between Training and Development:

  • Training: Improves knowledge and skills required for the current job.

  • Development: Prepares employees for future challenges and long-term success.

• Nature of Training vs. Development:

  • Training: Tactical – addresses immediate job-related needs.

  • Development: Strategic – anticipates future organizational demands.

• Time Frame Comparison:

  • Training: Achieves objectives in the short to mid-term.

  • Development: Focuses on a long-term perspective.

• Interdependence of Training and Development:

  • Both are complementary and necessary for lasting, in-depth organizational change.

  • Successful organizations integrate both for sustained growth and adaptability.

Approaches to Development

• There are several approaches to development. These can span from existing HR processes to customized interventions. Some are stand-alone interventions while some are done in conjunction with other approaches to developing employees.

1. Performance Management (Bullet Points)

• Objective of Performance Management:

  • Aims to improve the organization's capabilities and overall performance.

  • Inherently developmental – supports employee growth through clear goals and continuous feedback.

• Key Elements for Employee Growth:

  • Clarity on job objectives – knowing what is expected.

  • Tracking progress – monitoring achievements and identifying areas for improvement.

  • Regular feedback – providing insights to help employees enhance their skills.

• Types of Goals in Performance Management:

  1. Performance Goals – Focus on achieving immediate job targets.

  2. Developmental Goals – Focus on long-term skill-building and future readiness.

• Common Issue in Organizations:

  • Many organizations prioritize performance goals while neglecting developmental goals.

  • Ignoring skill development can lead to performance gaps and inadequate job performance.

• Importance of Linking Performance Management to Development:

  • Managers and employees must connect performance and development to ensure lasting growth.

  • This connection is powerful because it enhances both current performance and future capabilities.

• Trend in Modern Organizations:

  • Performance management is becoming an integral part of the employee life cycle in many organizations.

2. Individual Development Plans (Bullet Points)

• Purpose of Individual Development Plans (IDPs):

  • An output of performance discussions aimed at improving employee performance.

  • Serves as a training and development needs analysis tool.

• Role of Performance Feedback in IDPs:

  • Identifies specific development activities required for performance improvement.

  • Outlines key actions an employee must take to enhance their skills and capabilities.

• Time Frame of IDPs:

  • Can cover one fiscal year or extend beyond for long-term development.

  • Includes both training (short-term skills) and development (long-term growth) needs.

• Developmental Process of IDPs:

  • Identify training and development needs.

  • Focus on achieving these goals through structured activities.

  • Track progress to ensure continuous improvement and growth.

• Strategic Importance of IDPs:

  • Aligns employee growth with organizational goals.

  • Provides a clear roadmap for personal and professional development.

3. Career Management

• Purpose of Career Management:

  • Aligns employee development with the strategic goals of the organization.

  • Ensures the organization has the right people in key roles where they are needed.

• Collaborative Process:

  • Involves both the organization and the individual working together.

  • Balances organizational needs with individual career goals.

• Scope of Career Management vs. Other Processes:

  • Performance Management & Individual Development Plans (IDPs): Focus on the current role and short-term improvements.

  • Career Management: Takes a broader view of the employee’s entire career within the organization.

• Time Frame of Career Management:

  • Long-term focus—looks ahead two to three years to plan and prepare for future roles.

  • May extend IDPs (typically one year) into an eight-quarter plan (a two-year program).

• Significance of Career Management Programs:

  • Helps identify and develop future leaders and critical talent.

  • Provides a structured pathway for employees to achieve their career aspirations while meeting organizational needs.

4. Assessment Center

• Definition:

  • Process, not a physical location, used to evaluate and select candidates for top-level positions (for both hiring and promotion).

  • It focuses on observing overt behaviors of applicants on dimensions critical to job performance (Thornton & Gibbons, 2009).

• Process:

  • Candidates for promotion or expanded roles participate in assessment centers.

  • The process lasts from a few days to a week.

  • Applicants undergo tests, assessments, and simulations—either individually or in groups.

  • Exercises are tailored to evaluate specific behaviors required for the target position.

• Effectiveness:

  • Meta-analytic studies confirm a strong correlation between assessment center ratings and job performance (Gaugler et al., 1987; Hermelin, Lievens, & Robertson, 2007).

  • Predictive validity improves with:

    • Involvement of psychologists and managers in assessments.

    • Peer evaluations as part of the process.

    • Multiple exercises to assess a range of behaviors (Gaugler et al., 1987).

• Advantages:

  • Provides an objective and standardized method for evaluating high-potential employees.

  • Offers robust and reliable insights for identifying future leaders and promoting talent.

• Usage:

  • Commonly used by organizations to evaluate, select, and develop individuals for leadership and senior roles.

5. 360-Degree Feedback

• Definition and Purpose:

  • Also known as multi-source or multi-rater feedback.

  • Collects feedback from various stakeholders (e.g., direct reports, managers, customers, clients, and peers).

  • Provides a holistic view of an employee’s performance, especially from those who may not usually give feedback.

• Feedback Process:

  • Feedback is typically anonymous to encourage honest responses.

  • Follow-through support is essential—this may include:

    • Mentoring programs.

    • Development plans to improve weaknesses or enhance strengths.

• Primary Use:

  • Developmental rather than administrative purposes.

  • Not typically used for promotions or salary increases (Mount et al., 1998; Beehr et al., 2001).

• Employee Readiness and Buy-In:

  • Ensure the employee is informed and prepared for the process.

  • Employees are more open when they understand the following:

    • Objectives (e.g., assessing competencies and how they are measured).

    • Use of Data (how feedback will be applied).

    • Process (how the feedback will be collected and shared).

• Ensuring Confidentiality and Sensitivity:

  • Maintain anonymity to protect respondents and encourage honest input.

  • Present feedback carefully—poor delivery can be discouraging instead of motivating.

• Impact of 360-Degree Feedback:

  • Provides valuable insights that may not be revealed through traditional evaluations.

  • Supports transformation by identifying areas for growth and fostering continuous improvement.

6. Job Rotation (Bullet Points)

• Definition:

  • Job rotation involves assigning employees to different roles at regular intervals or when a skill is learned.

  • It usually involves lateral transfers without a change in compensation (Campion, Cheraskin, and Stevens, 1994).

• Examples of Job Rotation:

  • Management Trainee Programs:

    • High-potential hires rotate through various functions in the organization.

    • After 1.5 to 2 years, they may be promoted to managerial roles based on performance.

  • Existing Employees:

    • Used to develop and fast-track employees for senior roles by providing a broader perspective of the business.

• Benefits of Job Rotation:

  • Skill Development:

    • Employees acquire new skills or enhance existing ones through on-the-job learning.

  • Increased Productivity:

    • Aligned with human capital theory (Becker, 1975), which suggests productivity increases when workers’ skills are enhanced.

  • Firm-Specific Skill Development:

    • Especially useful for tacit, company-specific skills that are best learned by doing (Sonnenfeld and Peiperl, 1988).

• Strategic Purpose:

  • Prepares employees for higher responsibilities by exposing them to different areas of the business.

  • Encourages organizational knowledge sharing and cross-functional collaboration.

7. Coaching

• Definition:

  • Coaching is the process of inspiring employees to maximize their potential and improve their view of work and life (International Coach Federation [ICF] n.d.).

  • It encourages self-realization, goal-setting, and accountability through facilitated learning conversations.

• Key Principles of Coaching:

  • Employee Expertise:

    • Assumes the employee is the expert in their field.

    • The coach helps clarify objectives, encourage reflection, and develop strategies for achieving goals.

  • Non-Directive Approach:

    • Unlike sports coaching, organizational coaches do not direct but instead facilitate through active listening and thought-provoking questions.

• Types of Coaching:

  • Internal Coaching:

    • Some organizations train managers to coach their subordinates, especially for performance coaching.

    • Challenge: Power dynamics may limit open and honest communication (Ellinger, Watkins, and Barnas, 1999).

  • External Coaching:

    • Professional external coaches are often used for executive coaching due to their objectivity and expertise.

    • Coaches with a psychology background are often viewed as more credible and effective (Bozer, Sarros, and Santora, 2014).

• When to Use Executive Coaching:

  • During organizational changes requiring new skills.

  • When promoting an executive to a new role.

  • To address performance issues (Peltier, 2001).

• Core Processes of Executive Coaching (Kampa-Kokesch and Anderson, 2001):

  1. Establishing trust

  2. Evaluating the employee and work environment

  3. Providing feedback

  4. Developing a plan

  5. Implementing the development plan

  6. Evaluating progress

• Complementary Role of Coaching:

  • Coaching can be a stand-alone intervention or used to enhance other developmental methods (e.g., assessment centers, 360-degree feedback).

8. Mentoring

• Definition:

  • Mentoring involves a senior person (mentor) providing guidance, advice, and expertise to a junior employee (mentee) (Ragins and Kram, 2007).

  • The primary objective is to support the mentee’s career development.

• Differences Between Mentoring and Coaching:

  • Mentor:

    • Provides expertise in the subject matter.

    • Offers advice, counsel, and direction.

    • Focuses on career growth and organizational navigation.

  • Coach:

    • Does not need to be a subject-matter expert.

    • Focuses on facilitating learning and self-discovery.

    • Guides through questioning rather than giving answers.

• Roles and Benefits of a Mentor:

  • Source of Expertise: Shares knowledge and insights.

  • Advisor & Counselor: Provides career advice and emotional support.

  • Champion/Sponsor:

    • Advocates for the mentee during talent reviews and discussions.

    • Helps improve the mentee’s visibility and career progression.

• Types of Mentoring Relationships:

  • Formal Mentoring:

    • Organization-driven with structured matching and guidelines.

  • Informal Mentoring:

    • Spontaneous or intentional relationships formed naturally.

• Key to Successful Mentoring:

  • Chemistry between the mentor and mentee is crucial for a productive relationship.

  • Both parties must engage openly and respond well to each other.

9. Special Projects

• Purpose of Special Projects:

  • Designed to stretch and develop an employee's skills.

  • Focuses on improving technical, functional, or leadership capabilities.

  • May serve as preparation for a bigger role within the organization.

• Characteristics of Special Projects:

  • May or may not be part of the employee’s current tasks or objectives.

  • Provides a low-risk environment for skill practice and experimentation.

  • Acts as a diagnostic tool to identify key skill gaps for future growth.

• Developmental Benefits:

  • Encourages skill enhancement in a safe and controlled setting.

  • Offers an opportunity to demonstrate potential and capability.

• Role of Mentors and Coaches:

  • Mentors or coaches should be assigned to provide:

    • Feedback on performance.

    • Support, counsel, and advice as needed.

  • Enhances the effectiveness of special projects as a developmental intervention.

10. Developmental Assignment – Local or International

• Purpose of Developmental Assignments:

  • Reserved for high-potential employees and star performers.

  • Provides mobility when internal opportunities are limited.

  • Offers experiential learning in new environments (local, regional, or international).

• Types of Developmental Assignments:

  • Same role in a different setting (e.g., local to regional).

  • Bigger role with increased responsibilities.

• Key Learning Opportunities:

  • Function-related experiential learning.

  • Exposure to management of diversity and cultural differences.

  • Understanding different markets, countries, and environments.

• Support Mechanisms:

  • May be part of a broader developmental intervention.

  • Often supplemented by coaching and mentoring for guidance.

• Importance of Learning Ability:

  • Adaptability to new environments is critical for success.

  • Strong learning capabilities enhance performance and adjustment (Terrell & Rosenbusch, 2013).

11. Education

• Purpose of Educational Opportunities:

  • Enhance employee knowledge through formal education.

  • Provide access to cutting-edge research and new insights.

  • Offer opportunities to expand professional networks.

• Types of Educational Programs:

  • Executive MBAs and leadership programs.

  • Function-specific programs (e.g., finance, marketing, technology) at universities.

• Benefits of Educational Programs:

  • Refreshes and updates employee knowledge.

  • Encourages professional growth and career advancement.

  • Strengthens the organization by developing subject matter experts.

• Knowledge Sharing:

  • Employees can share insights with direct reports and peers.

  • Act as a resource person or trainer in in-house programs.

  • Promote a learning culture within the organization.

• Strategic Impact:

  • Aligns with organizational goals for talent development.

  • Fosters a knowledge-sharing environment and continuous learning.

12. Teaching (Bullet Points)

• Purpose of Teaching Opportunities:

  • Develop employees by allowing them to serve as trainers or subject matter experts in in-house training programs.

  • Provide a platform for knowledge transfer and skill enhancement.

• Trainer Preparation:

  • Even experts in their fields require basic training to become effective trainers.

  • Ensure trainers are equipped with communication and instructional skills.

• Benefits for Senior Employees:

  • Offers senior employees with limited upward mobility a chance to contribute.

  • Provides an opportunity to leave a legacy by sharing experience and expertise.

• Organizational Impact:

  • Fosters a learning culture and knowledge-sharing environment.

  • Enhances employee engagement and retention by recognizing expertise.

Case Analysis: Management Development at Nestlé

1. Introduction

• Nestlé’s approach to management development is a comprehensive, multi-tiered system that integrates learning with corporate culture.

• The company emphasizes continuous training and professional growth across all levels through internal programs like on-the-job training and external programs through partnerships with prestigious educational institutions.

• This strategy ensures the development of managers who are aligned with Nestlé’s values while equipping them with global best practices.

2. Key Themes and Strategies

A. Integration of Learning in Corporate Culture

• Nestlé promotes a learning-oriented environment where all employees are encouraged to develop their skills.

• Managers play a dual role as both learners and trainers, ensuring the transfer of knowledge throughout the organization.

• Continuous learning is not just a policy but a core aspect of Nestlé’s human resource management.

B. Rive-Reine International Training Center

• Purpose: The center serves as a hub for management training, fostering knowledge-sharing among global managers. It ensures managers align with the “Nestlé way” of handling global challenges.

• Courses Offered:

  • Management Course: For managers with 4-5 years of experience. Focuses on internal operations and Nestlé’s corporate culture.

  • Executive Course: For senior managers with 5-10 years of experience. Emphasizes external collaboration and prepares executives for global business interactions.

• Balanced Approach: Both courses equally focus on:

  • Theoretical frameworks

  • Internal best practices

  • External global practices

C. On-the-Job Training and Apprenticeship

• Nestlé emphasizes practical, hands-on learning through:

  • Coaching by managers

  • Apprenticeship programs (a long-standing method since 1867)

  • Technological skill development through modern equipment training

• Distance learning programs offer flexibility for employees to upgrade their skills.

D. External Executive Development Programs

• Nestlé collaborates with prestigious institutions such as:

  • International Institute for Management Development (IMD)

  • INSEAD, Harvard, Wharton

• This external training broadens perspectives and allows managers to benchmark against global best practices.

3. Strengths of Nestlé’s Management Development Approach

• Holistic Development: Blending internal training with external exposure ensures managers are well-rounded and globally competitive.

• Cultural Consistency: Rive-Reine’s focus on the “Nestlé way” preserves corporate identity across all subsidiaries.

• Continuous Learning: Programs for various career stages encourage long-term professional growth.

• Managerial Responsibility: Managers are both learners and trainers, fostering a collaborative learning culture.

4. Challenges and Areas for Improvement

• Localization Challenges: While the core training approach is standardized, differences in local needs (e.g., Japan’s three-day model vs. Pakistan’s 12-month model) may create inconsistencies in skill development.

• Balancing Theory and Practice: Ensuring equal focus on theory and practical applications across all subsidiaries requires careful monitoring.

• Scalability: With the global scale of Nestlé’s operations, maintaining consistent training quality across diverse regions may pose logistical challenges.

5. Interpretation and Implications

• Sustained Competitive Advantage: Nestlé’s robust training structure helps develop future leaders who are aligned with the company’s values while remaining adaptable to external business environments.

• Strategic Human Resource Management: Nestlé views its people as a strategic asset, investing heavily in their development to sustain innovation and operational excellence.

• Global-Local Balance: While training emphasizes global corporate culture, adapting methods to local contexts allows for greater relevance and employee engagement.

• Future Preparedness: By exposing managers to external best practices and continuous upskilling, Nestlé prepares its workforce for future technological and market challenges.

6. Conclusion

Nestlé’s management development strategy is a comprehensive, multi-level system that integrates internal cultural values with global business practices. By combining hands-on learning, international training programs, and partnerships with leading business schools, Nestlé ensures that its leaders are both culturally aligned and globally competitive. This investment in human capital development reinforces Nestlé’s position as a world leader in the food and beverage industry.