Knowledge that Transforms

A corporate culture is the combination of the values and characteristics that define an organization. It influences the way employees relate to each other, to customers, to shareholders, and to business partners. It drives behaviors and unites employees around a shared set of values. Companies with strong, formally articulated values that are focused on the needs of their constituencies have an important advantage over those without such values. American Express recently worked to strengthen its culture and renew its corporate values. I will focus on why this initiative was important, how we reviewed company culture and implemented culture change strategy, and what early results showed.

With escalating expectations and opportunities for HR professionals to add greater value comes the mandate for greater knowledge about the fundamental driving forces of business. Business leaders and employees increasingly assume that HR professionals have foundational knowledge of HR concepts and practices. But to create competitive advantage from that knowledge, HR professionals must be fully versant about external business realities that directly or indirectly influence how to apply that knowledge. We examine four of the most central categories of external business knowledge: advancements in technology, the causes and effects of economic and regulatory turbulence, the dynamics of business globalization, and changes in population demographics. With knowledge about these fundamental business drivers and their supporting data, HR professionals will be more able to make credible and accurate strategic contributions to business discussions and to proactively build more centrally relevant HR practices.

Today's employers must use their resources as efficiently as possible. This includes continuous improvement in products, processes, and productivity, as well as sound procedures for compliance, risk management, and accountability. But customer satisfaction depends on employee discretionary behavior. The HR profession has the lead responsibility to design the policies and practices that elicit behavior leading to sustainable success. This article presents what HR has to do to prove it is a sound business partner, as well as the steps it can take to stimulate the essential employee of today.

In an effort to understand how to optimize employee energy at work, we borrow from the sports physiology literature to develop and test several concepts that have now been used in more than 75 large and small organizations (e.g., automobile firms, banks, hospitals, manufacturing, high technology, service businesses, financial services, and more). Our focus on employee energy led us to develop new measures and processes for our research. The resulting studies presented in this article test two hypotheses focusing on the link between employee energy, turnover, job performance, and job satisfaction. Consistent with what we know about athletic performance, we found that energy is an optimization construct and that variation in employee energy at work has detrimental consequences for performance and satisfaction.

A new human resource ROI has been identified: return on intangibles . Intangibles represent the hidden value of a firm and are becoming an increasingly important portion of a firm's total market capitalization. Six actions that HR professionals can take to create sustainable intangible value are presented in great detail. The emerging focus on intangibles opens the way for HR professionals to more readily link their work to shareholder value.

The contributors to this special issue provide unique perspectives and insights about the future of human resource management, and many of their ideas present opportunities for future research. Our intent is to focus on identifying and briefly discussing the key needs and directions suggested by these articles. The discussion is organized around four general themes: the HR function and its impact, the roles of HR professionals, the value of HR competencies, and the HR implications of globalization.

This study explores the role of compensation strategies in promoting organizational learning capability. By analyzing a sample of 111 Spanish firms from the chemical industry, we highlight how compensation strategies can be used to influence employees' commitment to learning and shape their understanding of the overall purpose of the organization. We also show that inappropriate strategies can lead to short-term efficiencies but damage longer-term learning.

HR outsourcing as an organizational strategy has increased substantially over the last decade. However, this trend has attracted little academic attention regarding how outsourcing decisions are made, the manner in which these decisions are implemented, how outsourcing effectiveness is measured, and its impact on organizational performance. In this article, we provide a critical review of the reasons for, the processes involved in, and the perceived effectiveness of HR outsourcing.We investigate the implications of HR outsourcing for the role of the HR function and for the various groups of people affected by this strategy. We argue that organizations should apply both the resource-based view and institutional theory when making outsourcing decisions.