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Cisco: Human Resource Management Case Study

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Updated: Apr 25th, 2019

External recruitment

What were some of the key reasons Cisco needed to recruit employees externally?

The 1990s marked the boom time for Silicon Valley companies, and Cisco System was one of them. As revenues grew, the company increased the size of its workforce considerably. Cisco had more than 500 recruiters and increased the number of its employees by 1,000 every month. By late 2000, Cisco doubled the number of its employees to 44,000.

Cisco had a challenge of “acquiring the right management team to handle its phenomenal growth” (Cisco Case study, p. 138). Consequently, the company resorted to external recruitment of employees through acquisitions. The company was able to acquire “both technology and the management talent it required to run its business” (Cisco Case study, p. 138). Cisco also targeted best talents from competitors. At the same time, Cisco also had opportunities of career growth for its talented employees.

In the 1990s, the company had to “recruit top talents to meet its growth requirements” (Cisco Case study, p. 138). Cisco’s overall goal was to attract the top talent in the industry. The company wanted to get the best talent, motivate them, and be the industry leader.

The company focused on the growth, acquisitions of other companies, and the generation of revenues. As a result, Cisco neglected development of leadership talents because it was not a high priority. The company did not have a strategy to develop management talents. The ‘buy’ strategy only led to the development of management through testing experiences. People had great responsibilities.

Cisco also aimed to get new talents that could develop new products and drive sales. The company argued that the strategy worked well during the early development stages.

Evaluate the recruitment and retention tactics of Cisco. Do you think it was the best option Cisco had? Why or why not?

Cisco adopted several recruitment strategies for different purposes. First, the company recruited talents through acquisitions. The company adopted this strategy because of its rapid growth. Cisco wanted to get both technology and management teams from its acquisitions. It also aimed at attracting between ten and 15 percent of the best talent in the industry.

Cisco resorted to luring competitors’ best talents. Critics referred to this strategy as the kind of ‘tricks used to hawk soft drinks and sneakers’. The company targeted ‘passive job seekers’. This category represented successful and happy individuals in places where they worked. Cisco turned to its Web page to lure potential recruiters.

This strategy worked well because Cisco managed to attract many talented people in a week, especially people from the rival company, 3Com. This is an act of poaching competitors’ best talents. The strategy served Cisco well. The company was able to leverage on its Web site in order to attract these talents. In fact, the idea of ‘Friend Program’ increased the number of recruits.

According to Sidhu, the company strategy brought superior talents. However, it led to recruitment imbalances. In the end, Cisco had disproportionate team that consisted of high-performers and strong leaders. This strategy ignored fresh talents from colleges during initial stages of development because it wanted both experience and leadership.

Cisco used retaining strategy on its new hires as a competitive advantage. The company had low attrition rate that never went above 7.3 percent. It enabled other workers to have window areas with the executives. Cisco also provided modern day-care for working parents who could use ‘nanny cams’ without leaving their desks.

The CEO, Chamber also supported employees in difficult times. The company introduced ‘buddies’ to new hires in order to enhance Cisco’s culture and values. Reward systems also favoured the company’s values and strategy. All employees had stock option of over 40 percent.

There were also other reward systems like cash and free dinners. The company encouraged the management team to distribute these benefits. These retention strategies favoured Cisco and kept its rate of attrition low compared to competitors.

Organisational culture and HR strategies

Discuss some of the problems Cisco had with its old organisational culture. How did Cisco overcome these problems with its HR strategies?

In the earlier days of expansion, Cisco failed to nurture leadership within its employees. As a result, it had imbalances of power. Initially, the company’s aim was revenue and acquisition. This also led to internal competition. The company old culture focused on all products. However, the approach had to change through HR strategies.

The company had to focus on leadership development. Therefore, productivity and cross-functional alignment became the restructuring strategy of creating a new culture in the company after 2000. However, the company still insisted on strong customers’ focus and success.

Pond claimed that one culture at Cisco was DAN (denial, arrogance, and nostalgia). This led to inefficiencies because the company’s efforts were not coordinated. Based on these problems, the CEO identified how to enhance efficiencies. The HR department had to play a significant role in this process.

Cisco had a problem with leadership development. In fact, the former HR considered it impossible. Line managers recognised the need to develop new strategies and not just training. This strategy had to support productivity and cross-functional alignment.

The company also had to change its strategic goals. This implies that Cisco had to stop a ‘buy’ talent strategy and create a ‘build’ talent strategy from within its existing workforce. Therefore, the company had to eliminate external recruitment strategies of the past.

In this regard, Cisco had to focus on motivating and developing talents internally. The focus was specifically on developing leadership talents. This is because the company realised that it was difficult to maintain the rate of acquisition and ‘buy’ new talents.

The company also had to produce talents who were capable of building products that generated revenues and increase productivity rather than create scale. However, the company HR had to introduce a new mindset within the workforce. This was sharing of talent with others.

Cisco noted changes in the market and needed to change its approaches. For instance, the company noted that in the past, it sold its products to technical decision-makers. However, this approach had changed as business decision-makers began to take part in making purchasing decisions. They wanted products that would offer solutions to both business problems and technical issues.

Cisco also noted that companies required new and complex products coupled with technology that could integrate with other systems, software and offer high-levels of quality and reliability. In this realisation, Cisco noted the need to have employees who had broad and deep knowledge in building, selling, and servicing new products that customers needed. At the same time, employees had to possess sophisticated knowledge in technology.

Cisco needed to create talents with both technical knowledge of products and knowledge about a customer’s business. Therefore, Cisco had to apply internal cross-functions to coordinate and mobilise its human resources in order to solve customer’s problems.

The HR had to create an environment of continuous learning that would enable it to create various business solutions, which could support different needs such as financial, IT, customers, engineering, and sales. Cisco had to use its internal human resources to achieve these new initiatives.

Therefore, HR created Pathfinder software that would enable Cisco employees to post their qualifications in high growth areas. This encouraged the HR department to capture internal talents, and line managers had to support this initiative.

Human Resource Planning

Evaluate how Cisco carried out its Human Resource Planning. Do you think this was the best option?

In order to transform Cisco, nurture talent and leaders through internal strategy, Eckenrod had to understand HR challenges adequately. The company required an integrated HR effort that could create global talents, provide employees with required skills to change their careers and ensure effective transition of current leaders.

This meant that Cisco could not rely on convention executive development programmes. Cisco’s board supported the initiative to develop a generation of next leaders.

Cisco had to use its new human capital model to turnaround the company’s talent. The company recognised the importance of involving the entire organisation when developing a new approach for leveraging its talent. This team had to incorporate Chamber’s vision of productivity and cross-functional endeavours that aimed at developing a culture of development through Cisco University (an initiative and not an organization).

Cisco had an elaborate strategy that aimed at enhancing leadership development with various approaches at all levels of the company. The company recognised the role of its University in this effort. The University had to develop and promote five key aspects of organisational capabilities (from the case study, p. 155).

  • An agile workforce with knowledgeable employees who can move quickly to areas of highest need
  • A workforce that thrives on change
  • Employees who understand customers and can deliver quality products and services
  • employees whose cross-functional experiences improve their productivity and enhance their business acumen
  • Develop people throughout the organization who have strong capabilities in process

The University had to achieve these efforts in order to create and promote leadership within Cisco. In order to do this, the University adopted three clear approaches or the ‘3E model’. The 3E model recognised experience, exposure, and education. Potential leaders had to acquire experience through both traditional and on-the-job learning and assignments.

Exposure involved leadership development through mentoring, online learning, talent reviews, periodic forums, and shadowing. Finally, education concentrated on a number of customised and focused programmes, which had elements of teaching and involvement of senior executives of Cisco.

In addition, the approach also involved the use of external faculty. This made Cisco University the main point for all career development and management. In addition, the University provided opportunities for “feedback, job opportunities, coaching, training, and mentoring” (Chatman, O’Reilly and Chang ). Cisco aimed to design the process to be employee-driven.

Propose an alternative Human Resource Planning method Cisco could use

Cisco HR planning can also adopt a three-approach model that looks at current staff skills, experiences, and tenure. This is because the company embarked on internal recruitment and must consider internal talent. The HR must consider the current skills, experiences, and tenure. The company must identify existing gaps in skills and experience required to achieve its current customer’s demands.

Cisco must also identify training efforts required to fill the current gap in leadership. This process also identifies new staffing requirements the company needs for its development. Finally, the HR must consider tenure of employees at Cisco in order to prepare for any potential turnover and retirements in key areas.

Therefore, HR must develop a succession plan for the company in order to utilise internal talents. Cisco must adjust the strategy to dynamic needs of the market.

Performance Management

Discuss the performance management strategies Cisco had implemented to assess its employees

First, DCamp proposed a formal assessment and evaluation process. The company had to review its performance review system with the aim of enhancing dialogue between managers and employees. The company also built performance feedback on an automated performance management form (ePM).

Cisco also introduced the Talent Assessment Process (TAP), Leadership 360-degree Development Feedback (LDF), and Leadership Review Process (succession management).

Cisco aimed at aligning individual’s goals with organizational strategies, collecting, and sharing feedback for continuous improvement and talent development.

Talent Assessment Process (TAP) evaluated employees’ performance in relation to their peers. The indicators included individual achievement, versatility, productivity, alignment, and an organisation-unique criterion.

Cisco also had the Leadership Review Process as a succession management plan. The company could identify the best 20 percent among its leaders, review their progress and future opportunities. Cisco conducted this process on an annual basis.

The Leadership Development Feedback (LDF) focused on “managers with a customised 360-degree aspect” (Chatman, O’Reilly and Chang 158). LDF provided feedback for managers on their teams, managers, peers, and other areas of interests. This approached also concentrated on managers with more than three direct lines.

In 2003, Cisco embarked on integrating its HR tools with aim of expanding results and achievements on developments. The automated system, ePM enhanced dialogue between employees and managers with regard to career growths and aspirations.

Which of the performance management strategies appeared more effective, and why?

The TAP process was the best performance management strategy. This is because it focused on the entire organisation and all employees. It enabled the HR to identify top employees from various based on leadership or knowledge capabilities with aim of developing such individuals.

The process also identified needs of other employees. TAP process also took place twice a year. DCamp also noted that TAP enabled them to provide feedback to their best performers for purposes of improvements.

The Leadership Review Process also was effective in identifying potential leaders for succession plan. Data from the ePM system enabled managers to evaluate leadership potential of their teams against company’s development plans. The Leadership Review Process also had the advantage of 3G criteria. Therefore, it accounted for multiple areas of leadership development at Cisco.

What are some of the advantages of performance management over performance appraisal – Explain

Performance management enabled Cisco to focus on its best talents for purposes of development and succession planning. It also enabled the company to provide feedback for improvements purposes. This was an objective way of handling performance issue among employees.

Performance management also enabled Cisco managers to understand their strengths and weaknesses. They could use such information to develop their leadership effectiveness.

Performance management also provided opportunities for top talents to get exposure to executive teams. They were also able to collaborate with other employees outside the team. The aim of exposure and collaboration was to improve performance.

Performance management also focused on the company’s success rather than an individual achievement. In addition, it enhanced fairness and respect, role modelling, development of Cisco’s culture and values, promote customers’ interest, and develop leaders within the company.

Performance management at Cisco aimed at developing efficient and effective process. On the other hand, performance appraisal concentrates on employees’ performance and sets high standard as targets.

Leadership Training and Development Programmes

Explain Cisco’s leadership training and development programs

Cisco launched leadership development programmes to facilitate the alignment of productivity and cross-functional available talents. Cisco wanted its leaders to grow the business, team, and themselves. Programmes also aimed at growing the 3G model. ‘Grow the business’ accounted for growth in customer success, profitability or productivity, and business knowledge.

‘Grow our team’ focused on teamwork, collaboration, alignment, vision, talent, and change initiatives. ‘Grow yourself’ looked at “issues about employees’ integrity, perspective, judgment, learning, communication, influence, and adaptability” (Chatman, O’Reilly and Chang 160).

Executive coaching at Cisco aimed at creating directors and vice presidents with high potential in leadership positions.

The Cisco Leadership Series consisted of four programmes that aimed at building leadership strength within the company. Every programme offered unique opportunities for career development.

The Executive Leader Programme (ELP) only targets vice presidents with high-performance records. It aims at increasing sustainable competitive advantage through collaboration globally.

The Strategic Leader Programme (SLP) focused on senior directors. The program aimed at enhancing agility, cross-functional leadership with regard to strategic perspective.

The Business Leader Programme (BLP) targeted senior executives and directors with high-performance. This was a global programme with a focus on single areas like functions, business units, technology, countries, and homogenous areas.

The Emerging Leader Programme (EmLP) aimed at increasing business outcomes by using leadership, teamwork, collaboration, and people development. EmLP targeted early career managers.

All Cisco’s leadership training and development programmes admitted a specific number of participants for a given session.

Cisco also used traditional learning to train and develop its employees. This aimed at promoting career development, best management practices, promote feedback, create job, training, and mentoring opportunities.

(b) Propose a training and development design and delivery program that Cisco could use with its Software Engineers. You need to provide some degree to appropriate details on this.

Training Programme Objectives Delivery programme Target participants
Customer training
  • Gain insight in customer demands
  • Understand changes in the market
  • Enhance customer success
  • Lectures
  • Presentations
  • Software Engineers
IT training
  • Understand market demands
  • Create new products
  • Develop procedural knowledge
  • Encourage teamwork with marketers
  • Eliminate competing projects
  • Encourage knowledge sharing
  • Drive productivity
  • Distance learning
  • Web-based training (WBT)
  • Computer-based training (CBT)
  • Software Engineers
Leadership training
  • Develop leadership strategies succession
  • Developing teamwork strategies
  • Enhance leadership through effective communication
  • Align personal development with Cisco’s strategies
  • Involvement of senior executives
  • Identify different people for leadership positions
  • Promote Cisco’s values and culture
  • Enhance human touch other than online interactions
  • On-the-job training
  • Coaching
  • Mentoring
  • Software Engineers
Performance management
  • Reduce potential employees attrition
  • Instil best reward practices at Cisco
  • Align strategic objectives with individual performance
  • Enhance cross-functional strategies
  • Presentation
  • Coaching
  • Software Engineers

Works Cited

Chatman, Jennifer, Charles O’Reilly and Victoria Chang. “Cisco Systems: Developing a Human Capital Strategy.” California Management Review 47.2 (2005): 137-167. Print.

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