THEORETICAL FRAMEWORK AND CONCEPTUAL DEVELOPMENT
3.2 Theories Related to Talent Management
TM is a concept that has not yet manifested in grounded theory studies and the search for any theories that emerged as a result of any investigations or findings has been futile. Collings and Mellahi (2009) are of the view that there are a number of theoretical approaches that could inform the development of an enquiry into TM.
Obviously, theories such as the human capital theory (HCT), RBV, SET, AMO theory, and ST are important in TM research. For instance, previous research (Collings and Mellahi, 2009; McDonnell, 2009; Tarique and Schuler, 2010) has suggested that HCT and RBV offer significant potential for TM research. The above studies added that HCT and RBV provide credibility for TM as a distinct and useful
management system through differentiating the field of TM as a significant strategic approach to the management of the firm’s key talented individuals.
However, HCT and RBV are more related to TM research at the organisational level. The unit of analysis of this study was at the individual level and therefore required theories that describe individual behaviour appropriately. Björkman et al. (2013) in their study used SET as the appropriate theory for TM at the individual level. Similarly, Festing and Schafer (2014) in their framework of TM used SET as a theoretical background. At the individual level the AMO theory has often been deployed for analysis (Boselie, Dietz and Boon, 2005; Boxall and Purcell, 2008). ST also offers a great potential for TM research (Gelens et al., 2015).
This study will be positioned within the SET, AMO theory and ST theory. The reason for the adoption of more theories is based on the fact that a single theory is insufficient to capture the complexities involved in TM. Beech, Cairns, Livingstone, Lockyer and Tsoukas (2005: 17) have argued cogently that the adoption of a single theoretical perspective for TM research implies that the situation has a singular nature and can be viewed from a single position. However, the concept of TM is obviously not singular in nature but is complex.
This study draws on SET because it is basically a work motivation theory and is adopted for understanding the dynamics and effective nature of TM practices as a means of fostering employee commitment, satisfaction and motivation. SET has the ability to illustrate how people’s needs influence and drive their behaviour at work as well as decision making, attitude formation, and the motivation of employees (Beech et al., 2005). SET provides a framework for understanding the cognitive, psychological, and behavioural processes that motivate and make talents committed to the TM process.
The AMO theory claims that employees’ performance is a function of their ability, motivation, and opportunity. From the AMO perspective, it is only when talents are motivated and placed in the right position that they are able to perform.
Thus, TM practices act as psychological forces on talents to produce changes in behaviour in terms of performance and intention to stay. In the view of the signalling theory, TM practices communicate messages constantly and in intended ways that are understood by talented employees to improve their performance (Gelens et al., 2015).
Details of these theories and how they relate to TM are described below.
3.2.1 Social Exchange Theory
Social exchange theory (Blau, 1964) predicts that given certain conditions, people seek to react positively to those that bring benefit to them (Bateman and Organ, 1983). POS represents an essential part of the social exchange relationship between employees and the employer because it implies what the organisation has done for them, at least according to the employee’s belief. Applying this to the workplace, an organisation that acts in a positive way towards employees generates reciprocity so that employees generally respond in positive ways that are beneficial to the organisation (Eder, 2008), thus establishing an exchange relationship (Setton, Bennett and Liden, 1996).
SET advocates that when organisations invest in their employee, they are likely to reciprocate these organisational investment in positive ways (Cropanzano and Mitchell, 2005), providing a helpful lens through which to understand the mechanisms involved in how talents interpret and react to TM practices. TM is seen as an investment in the identification, attraction, and subsequent training and development of talented employees. This will be seen by talented employees as valuable and support on the part of the organisation. Therefore, SET implies that employees that perceive high levels of support from the organisation are prone to pay back the organisation.
One essential way to reciprocate the organisation’s favourable treatment is through continued participation, exerting more effort, leading to performance and avoidance of negative work attitudes (Allen, Shore and Griffeth, 2003). Building on SET, this study suggests that TM, which explicitly assumes differential treatment of selected employees, is likely to be viewed by talent pool members as an indication of their employer’s commitment towards them (Meyer and Allen, 1991) and as discretionary future organisational support (Eisenberger, Cummings, Armeli and Lynch, 1997). This in turn is likely to lead to an internalised normative obligation to act in ways that meet organisational goals and interests (Allen and Meyer, 1990) in terms of performance, avoidance of negative behaviours, and intention to stay.
3.2.2 Ability, Motivation, and Opportunity Theory
The AMO theory states that an individual’s performance is a function of his or her ability, motivation, and opportunity to participate (Appelbaum et al., 2000; Bailey
at al., 2001). The AMO theory theorised how HRM practices can increase the employee’s performance by (a) enhancing his/her knowledge, skills, and abilities (KSAs), (b) creating opportunities for employees to act, and (c) encouraging and motivating employees to perform well for their organisation.
In a TM system, being identified as having high potential is already a confirmation of the fact that one possesses the desired abilities and receives the opportunity to act (Collings and Mellahi, 2009). Hence, the aspect of motivation to perform in particular is important in linking TM practices with employee outcomes.
Organisations generate competitive advantage through improving employees’ ability, and motivation and providing them with opportunities to participate in value creation, which then results in higher productivity and better organisational performance (Appelbaum et al., 2000; Bailey et al., 2001).
AMO theory attempts to conceptualise performance by considering an individual’s performance as a function of his/her abilities, motivations, and the opportunities, which are needed for individuals to succeed in performing within their work environment (Boxall and Purcell, 2003). This is usually shown as P= f (A, M, O). Applying this to TM, ability is predetermined where talented employees are selected based on their potential or performance, hence with a relatively high level of ability. Additionally, because talented employees are put in strategic and key positions, they have opportunity (Gallardo-Gallardo et al., 2013). As a result, it is expected that motivation, which is both internal and external to the talented employee, emerges here as a mediating variable in the TM employee performance relationship (Collings and Mellahi, 2009).
Thus, AMO theory is based on improving performance through HR systems that pay attention to employees’ interest such as skill requirements, motivation, and the quality of their jobs (Boselie et al., 2005). Since the fundamental principle of TM is recruiting high potential and performing employees, developing them in pivotal positions and supporting them with a differentiated HRM architecture, the AMO model suggests that higher levels of individual performance should be apparent (Collings and Mellahi, 2009; Gallardo-Gallardo et al., 2013). It has been found that motivation mediates the relationship between HRM practices and firm performance (Huselid, 1995; MacDuffie, 1995; Becker and Gerhart, 1996). This idea is built on the
fact that employee motivation is a mediating variable between TM and employee performance as well as the intention to quit. Thus, the perception of a motivated TM program has important consequences for employee performance. Mowday, Porter, and Steers (1982: 27) claimed that “committed employees are willing to give something of themselves in order to contribute to the organisation’s well-being.”
This reflects the view that work performance is a product of ability and motivation, which can be enhanced through TM (Chugh and Bhatnagar, 2006). Tobias (2007) urged firms to hire, develop, and retain motivated and capable people that have the “can do” (ability or capability) and the “will do” (motivation) factors relevant to the job. This study is positioned in the AMO theory view that implementation of TM practices will give employees opportunity and will motivate them to perform. The perception of a motivated TM system is therefore seen as a mediating variable in the relationship between TM and employee performance as well as intention to quit.
3.2.3 Signalling Theory
Signalling theory (Spence, 1973; Ross, 1977) is an important theory when describing and conducting research on the relationship between two parties. Even though the theory came out of finance and economics literature, it has been used in the HRM literature where a number of studies have examined the signalling that occurs during recruitment (Suazo, Martinez and Sandoval, 2009) and implementation of HRM practices. Signalling theory involves a dyad, the signallers and receivers, communicating one signal. In the management literature, the signalers and receivers generally represent person or persons such as recruiters, managers or employees (Connelly, Certo, Ireland and Reutzel, 2011). Signally theory suggests that the implementation or introduction of certain practices sends a signal to receivers who then act accordingly. The implementation of a TM system sends a signal to talents that they are valued and expected to reciprocate with improved performance.
TM practices can be seen as performing a symbolic or signalling function by sending messages that talents are performers and define the psychological meaning of their work situation. Thus, TM practices communicate messages continuously and in intended ways, and these messages are understood by talents to perform. Investment in TM and human capital may send a signal (Spence, 1973) as long as a high
investment in these types of capital is the favourite choice of talented people. This will also signal POS by talents who will then seek to create or continue a social exchange relationship with their organisation.
The perception that one’s organisation offers these practices (TM) should thus be positively related to POS (Shore and Shore, 1995) and subsequently performance.
This only occurs when the action is both discretionary and directed at the individual worker (talents) because benefits available to all employees regardless of performance would not be associated with POS because they do not signal to the worker that he/she is particularly valued (Shore and Shore, 1995). Table 3.1 summarises the theories that relates to TM used in this study.
Table 3.1 Summary of the Theoretical Approaches Examined in this Study Theory Theoretical Suggestions Link to Performance Outcomes Social
Exchange Theory
The SET implies that
employees that perceive high levels of support from the organisation are inclined to repay the organisation. This is based on the principle of reciprocity (Blau, 1964;
Bateman and Organ, 1983).
When the organisation invests in the employment relationship by
identifying the employee as having high potential, train and motivate that employee, they will feel obligated to reciprocate with beneficial attitudes and behaviours (Kuvaas and Dysvik, 2010).
AMO Theory
Performance is a function of employees’ ability, motivation and opportunity to participate (Appelbaum et al., 2000; Bailey et al., 2001).
Recruiting, developing, deploying high-performing employees in pivotal positions and supporting them with a differentiated HR architecture leads to performance (Chugh and Bhatnagar, 2006;
Collings and Mellahi, 2009).
Signalling Theory
Implementation of TM practices sends a signal of support and talents reciprocate with performance and intention to stay.
Employees are signalled through the adoption and implementing HR systems (TM) which are especially important for talents. A
differentiated HR architecture is appropriate