Innovative Strategic Human Resource Development


The purpose of this paper is to identify a human resource development need and establish an innovative approach to meet it. The need for top talent retention forms the core of the present study, and the selected innovative approach is competitive remuneration.

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To facilitate the achievement of the above objective, a hypothetical company was profiled, and a range of literature was explored. It has been established that, despite some disadvantages of the competitive remuneration, the approach is a very effective one in meeting the need for retaining top talent.


According to Chen and Huang (2009), the essence of the development of human resources has vastly increased as companies strive to adopt a strategic context. Human resource development involves assisting employees in fulfilling themselves in the workplace. This context forms the bulk of the present paper. The current study involves a hypothetical organization, in which the objective is to identify an innovative method of strategic human resources development. To be precise, the paper involves the identification of existing needs in the organization and thus devising an innovative strategic human resource development strategy aimed at solving that particular need. The proposed innovative approach is a competitive remuneration.

Historical background and environmental conditions that led to the development of an innovative solution

The company, which is the center of interest in the present study, plies in the fashion industry, producing fragrances. Having been in the industry for the past five years, one of the major challenges that the company has faced is employee turnover. The issue has especially been experienced in the last two years as the company sought to expand. As in the third year, despite its relatively small experience in the industry, the company had about twenty employees.

During the fourth year, three of them resigned and were absorbed by a rival company. However, in the fifth year, which is current, the company was able to recruit others as a replacement. After three months, one of the newly recruited and six others that had served in the company for three years left. This left the company in a very precarious position. The company had begun establishing itself successfully in the industry in the face of the increasing competition among the players (Yorks 2004).

Especially in the first three years, the company had been listed as one of the most promising, considering the expansive revenues it was achieving. As such, the company had gained considerable market share and competitive advantage over its key rivals, even those that had preceded it. However, after it started experiencing an alarming rate of employee turnover, the positive market attribution started being eroded. The company was overtaken by its competitors; its revenues fell drastically, and it started making grave losses.

The company thus has to reestablish itself in the fashion industry, and as the above context clearly reveals, the problem lies in employee retention. The human resource department of the company had been deemed as the strongest. However, one key weakness is its inability to implement an innovative employee retention approach, the thing that has led to dwindling performance. These are the very circumstances that led to the identification of competitive remuneration as the ideal employee retention method.

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A description of the approach, attitudes, and behaviors involved in the innovation

According to Subramaniam and Youndt (2005), one of the key considerations in applying for a position in a given organization is the nature of remuneration. In addition to this, where an organization focuses on providing the employees with an appealing level of remuneration, there is a huge chance that the workers will stay put in that organization, and thus, talents are retained. However, in response to increasing competition, organizations not only within the fashion industry, but also across all other sectors in the world are attempting to outdo each other, and this includes attracting the best talents from rival companies.

To prevent employee poaching, organizations have incorporated innovation by offering a competitive remuneration. A competitive remuneration implies paying the employees a salary that is above the current market value and providing a set of benefits, on top of the salary (Yorks 2004).

The proposed solution to the low rate of employee retention that the company was currently facing was innovative in its attributes. The proposed competitive remuneration was anchored on the twin principles of being industry competitive and rewarding for performance. The company would adopt a holistic approach towards not only rewarding but recognizing the employees, as well for exemplary performance that exceeds the traditional monetary components.

The competitive remuneration that the company sought to implement was designed in such a manner that the workers can look forward to attractive development, along with promotional activities, in addition to special recognition awards for exceptional contributions (Yorks 2004).

The performance management system would adopt a competence orientation and will aim at providing a greater level of objectivity and more transparency about the assessment of the work performance of the employees. In addition to this, the system was to enable the company employees to enhance their work performances, continual trough learning and development chances. Besides this, the benefits package that was to be offered will be a comprehensive and attractive one, characterized by flexible and core benefits.

According to Buykx, Humphreys, Wakerman, and Pashen (2010), there are usually various factors that contribute towards the inability of an organization to retain the top talents. Such a claim necessarily implies that, when seeking to identify an innovative solution to the need for better employee retention, the organization has to adopt an appropriate method to identify the root cause of the issue. The proposed innovative solution was centered on remuneration since the key problem was the level and nature of remuneration offered by the company to its employees.

However, to identify the issue of remuneration as the core problem, the company sought to conduct a survey, in which the employees were required to answer a set of questions, which touched on the potential areas with the capability of giving rise to retention issues. The issue that was to receive the highest number of responses was to be identified as the core problem. It is from this that the management of the company inferred the issue of remuneration as the center of interest. Once this was done, the management of the company then engaged the employees in another survey, this time with the aim of seeking their attitudes regarding the present remuneration system.

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The responses that the employees provided served as the foundation of the above-proposed innovative solution. From his survey, most employees identified that the current remuneration program was not competitive. They indicated that the salary level was way below what other companies trading in the same industry were offering and that the remuneration did not incorporate the range of benefits that a customer would desire.

The strategies employed and the ones that contributed the most to the success of the innovative approach.

The competitive remuneration that the organization adopted has achieved considerable success, but such a success is dependent on the various innovative strategies incorporated. The very first strategy was offering a level of salary, which is market-competitive. The core factors that determined the salaries included the educational background, the market value, and the level of work performance. In addition to this, the solution required that no employee was to be discriminated against due to their attributions such as gender, political stance, religiosity, race, or ethnicity (Lengnick-Hall, Andrade & Drake 2009).

A further strategy used was the incorporation of both core and flexible benefits. There was a range of benefits stipulated by the innovative solution implemented. Foremost was a 40-hour workweek, and this meant that the employees had considerable time to spend with friends and families. In addition, the employees were provided with annual and sick leave. The size of the annual leave that an employee accrued is determined by the number of years that an employee has been in service.

On its part, sick leave is used when an employee receives medical, optical, or dental examination or treatment. It also applies where an employee is incapacitated by mental or physical illness, and injury childbirth or pregnancy. Other sets of benefits included a paid holiday leave, health insurance, thrift savings, retirement plan, and a work/life program.

The above two strategies could be attributed as the chief reason for the huge success that innovative solutions implemented have continued to experience. Since it was implemented three months ago, the company has not experienced an incident in which an employee has moved to seek to work opportunities in other companies or have shown a willingness to do so. Following the implementation of the solution, the outcomes of an innovative program were monitored using a survey.

It was established that the majority of the employees were willing to stay with the company until they reached the age of retirement. They acknowledged the decision as precisely due to the increased salaries and the range of benefits offered. Most of them indicated that the company has shown that, since the implementation of the new-innovative remuneration program, the company has depicted a positive change in paradigm, moving from production-oriented to customer-focused.

Considering that the new program has sought to favor the employees, besides increasing the rate of intention, the workers have become highly motivated and satisfied, a thing that has led to the company significantly reestablishing itself within the fashion industry. The employees have become more committed to their jobs, and this has raised the level of performance among employees. Consequently, the organization has started operating optimally and thus causing an increasing trend in its finances.

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Evaluation of the pros and cons of the implemented innovative remuneration program

The key advantage of the identified innovative approach is that it has been effective in retaining the top talents within the organization. As mentioned earlier, since the program was implemented, the rate of turnover has reduced dramatically. Given the massive employee turnover, the company identified that there was a need for employee retention. While there are several innovative approaches to meet this need, the company decided to adopt a competitive remuneration approach. Based on the performance so far, the approach could be deemed as effectively and efficiently meeting the intended objective. According to Samuel and Chipunza (2009), the success of a program intended to solve a given problem is usually measured by the extent to which it meets the intended targets.

A further advantage of the competitive remuneration approach is that it has served as a motivating factor among employees. As Schuler and Jackson (2008) established, salaries, bonuses, and other core benefits are essentially fundamental for the motivation of not only employees but also managers. Armstrong and Murlis (2007) added to this indicating that the motivation is not just about compensations. Rather, the compensation provided ought to support the general motivational framework within an organization in an adequate manner. The strategy set by the adopted model is in line with the job market. Given this, the employees have increasingly become more motivated and are willing to engage with the company for a considerable time, going into the future (Samuel and Chipunza 2009).

The new-innovative remuneration approach has also led to the organization gradually building a competitive advantage within the fashion industry. McKeown (2002) revealed in his scholarly article that the competitive advantage in the compensation area is not all about exceeding the market pay through providing higher salaries and bonuses to every employee. Rather, the better the level of pay, the more competitive an entity is. The implemented strategy has been able to deliver a competitive advantage to the organization through a general long-term competitive position in the pay market.

Despite the widespread benefits presented to the company by the competitive remuneration approach implemented, the company has had some damaging experiences with it. The major disadvantage has been increased costs. Given that the company has not been in the industry for long, and considering that it had been experiencing low productivity and profitability due to employee turnover, pursuing a competitive remuneration approach has been a challenge. From experience, the company has found it difficult to balance the competitive pay packages with the requirements in order to maintain the labor costs at lower levels.


In this paper, the need for talent retention has been explored. Using a hypothetical company, it has been established that employee turnover is very detrimental to the organization. However, it is an opportunity since it spells the need for devising an employee retention approach. An innovative approach to meet such a need is offering a competitive remuneration, which is comprised of salary level above the market value, and topping with both core and flexible benefits.


Armstrong, M & Murlis, H, 2007 Reward management: a handbook of remuneration strategy and practice, Kogan Page Publishers, London, UK.

Buykx, P, Humphreys, J, Wakerman, J & Pashen, D, 2010, “Systematic review of effective retention incentives for health workers in rural and remote areas: Towards evidence‐based policy”, Australian Journal of Rural Health, vol. 18, no. 3, pp. 102-109.

Chen, CJ & Huang, JW, 2009, “Strategic human resource practices and innovation performance—The mediating role of knowledge management capacity”, Journal of Business Research, vol. 62, no. 1, pp. 104-114.

Lengnick-Hall, ML, Lengnick-Hall, CA, Andrade, LS & Drake, B, 2009, “Strategic human resource management: The evolution of the field”, Human Resource Management Review, vol. 19, no. 2, pp. 64-90.

McKeown, JL, 2002, Retaining Top Employees, McGraw Hill Professional, London, UK.

Samuel, MO & Chipunza, C, 2009, “Employee retention and turnover: Using motivational variables as a panacea”, African Journal of Business Management, no. 3, vol. 8, pp. 410-415.

Schuler, RS & Jackson, SE, 2008, Strategic human resource management, John Wiley & Sons, London,UK.

Subramaniam, M & Youndt, MA, 2005, “The influence of intellectual capital on the types of innovative capabilities”, Academy of Management Journal, vol. 48, no. 3, p. 450-463.

Yorks, L, 2004, Strategic Human Resource Development, Cengage Learning, Belmont, CA.

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