3

BUILDING MICRO-FOUNDATIONS
FOR TALENT MANAGEMENT
David G. Collings
Dana B. Minbaeva

Introduction
Talent management (TM) has captured the attention of senior organizational leaders, human resource
professionals, and academic scholars since entering the mainstream when McKinsey declared the
War for Talent in the mid-1990s (Cappelli & Keller, 2017; Collings, Cascio, & Mellahi, 2017). While
initial interest in the topic was largely restricted to a practitioner audience, since about 2009, we
have seen a significant body of academic work on the topic emerge (Gallardo-Gallardo et al., 2013;
Gallardo-Gallardo et al., 2020; McDonnell et al., 2017; Meyers et al., 2020). However, this lit-
erature is highly diverse, ranging from discussions of the conceptual boundaries of TM, to TM
practices and the intended outcomes or effects of TM (Thunnissen et al., 2013: 1744). The literature
has, however, failed to develop consensus around the meaning and definitions of TM (Cappelli &
Keller, 2017; Collings & Mellahi, 2009). The link between TM and performance has also yet to be
established (Collings et al., 2019), and indeed, there is little consensus on dominant TM practices.
In many ways, the field is still operating with generic notions of “attract, develop, and retain” and
lacks specificity.
Theoretically the foundations of the literature on TM are also diverse. For example, Gallardo-
Gallardo et al. (2013) identified four dominant theoretical frameworks informing TM research – the
resource-based view, international human resource management, employee assessment, and the institu-
tional lens. They criticized the field for applying multiple frameworks in single projects, claiming that
such combinations may create “an inconsistent ‘story’ and often also a severe mismatch between theory
and data” (2013: 276). A more recent review by McDonnell et al. (2017) concluded that there are two
primary streams of the literature that dominate TM research: “the management of high performers and
high potentials, and the identification of strategic positions and TM systems” (2017: 86). The authors
also lament the disjoined nature of the field and call for greater clarity around the conceptual bound-
aries of TM. Achieving such clarity is central to the exposition of the relevant underlying mechanisms
of TM, which are currently only partially understood.
This chapter aims to begin to fill in this gap. We provide a mapping of conceptual boundaries using
a micro-foundational approach (Felin & Foss, 2005). We then use this mapping as a diagnostic tool to
help us identify some of the key but under-researched issues that future research in this important field
must explore. We begin by defining TM and reviewing the basic logic behind the arguments of micro-
foundations. Then we illustrate that the key state-of-the-art discussions in TM are currently happening
at a number of different levels. We finally argue that these discussions will benefit from explicating
underlying mechanisms at the individual level.

DOI: 10.4324/9781315474687-332
 Building Micro-Foundations

Defining Talent Management

Given the lack of agreement over defining talent management, it is important to be clear on how the
construct is defined in the context of the current chapter. We adopt Collings and Mellahi’s (2009) def-
inition, which was identified by Gallardo-Gallardo et al. (2013) as the most cited definition of TM.
They define TM as:

… activities and processes that involve the systematic identification of key positions which differ-
entially contribute to the organization’s sustainable competitive advantage, the development of a
talent pool of high potential and high performing incumbents to fill these roles, and the develop-
ment of a differentiated human resource architecture to facilitate filling these positions with com-
petent incumbents and to ensure their continued commitment to the organisation. (2009: 304)

This definition broadens the TM agenda beyond a sole focus on leadership talent and highlights the
importance of key positions that have the potential to disproportionately contribute to competitive advan-
tage. As we outline below, key positions thus become the locus of differentiation from a strategic perspec-
tive. They are defined by their centrality to organizational strategy and by the potential for significant
difference in output between an average and top performer in the position (quality pivotal) or by the
potential differential in output when the number of people in the role increase (quantity pivotal) (Becker
& Huselid, 2006; Cascio & Boudreau, 2016; Collings & Mellahi, 2009; Minbaeva & Collings, 2013).
The focus on talent pools calls for a move from vacancy led recruitment toward “recruiting ahead of
the curve” (Sparrow, 2007). This reflects an emphasis on “flow” or “process” notions of human capital,
as opposed to the more traditional “static” or “stock” perspective on human capital (Burton-Jones &
Spender, 2011; Collings et al., 2017). Peter Cappelli likens this approach to managing talent through a
supply chain. This approach aims to minimize talent risk in the supply chain. Such risks can be quali-
tative, meaning the organization does not have the types of knowledge, skills, abilities, and other
characteristics (KSAOs) required to deliver on its strategy, or quantitative, when the firm does not have
the requisite number of people available to deliver on its strategy. The challenge for organizations is to
systematically identify future business needs in terms of knowledge, skills, and capabilities that will be
required in the future but are not currently available in house and recruit on this basis (Collings et al.,
2019). Stahl et al.’s (2012) study of global TM confirmed that the high performing organizations they
studied followed a talent pool strategy – recruiting the best people and then finding positions for them.
Finally, the differentiated HR architecture is intended to increase organizational performance through
maximizing the work motivation, organizational commitment, and extra- role behavior of those in the
talent pool (Collings & Mellahi, 2009). Extant research provides some support for this position. Marescaux
et al. (2013) demonstrated that employees who perceived they had received more favorable treatment in
the workplace displayed higher levels of affective commitment. Similarly, Gelens et al. (2014) found that
being designated as “talent” was perceived as a signal of organizational support, which, in turn, triggered
affective commitment. However, the evidence is not conclusive on the positive impact of differentiating
HR, and there is ample opportunity for further study here (Collings, 2017; Meyers et al., 2017).

Micro-Foundations: A Brief Overview

Micro-foundations have been an important theme in management research and can be seen as an instance
of “reductionism” (Foss, 2010). Advocates of the micro-foundations movement in management argue that
micro-foundations must be provided as building management theories for three critical reasons:

1. Alternative explanations: There are likely to be many alternative lower-level explanations of macro-
level phenomenon that cannot be rejected with macro-analysis alone. Even if a large sample can be
constructed on the basis of macro units of analysis, a problem of alternative explanations may persist.

33
 David G. Collings and Dana B. Minbaeva

2. Managerial interventions/practices: The ultimate goal of managerial interventions is to modify

individual behavior. However, not every organizational practice gets implemented as intended, and
not everything that is implemented affects individual behaviors to a similar degree. The differences
between intended and implemented managerial practices are caused by a range of organizational
antecedents that would cause variations in the implementation across organizational units. There
are also variations in individuals’ reactions to the actual/implemented practices, which may explain
differences in perceived practices. Hence, a single-level perspective can never be adequate for
research on managerial interventions.
3. Fundamental causes and predictability: Fundamental to micro-foundations perspective is the
recognition that micro-level phenomena are embedded in macro contexts and that “macro phe-
nomena often emerge through the interaction and dynamics of lower-level elements” (Kozlowski
& Klein, 2000).

All three arguments speak directly to the need for building micro-foundations in TM research.
However, the fundamental question for TM research is “where this deep structure is located, as there
may be several analytical levels below a given aggregate phenomenon” (Foss, 2010: 13; original italics).
We argue that for TM, given its focus on KSAOs, individuals should be considered as ultimate “micro”,
and individual heterogeneity must be treated as a source of explanations for variance observed at
organizational level.
Yet, until now, the TM field has taken a more collective level (aggregate) approach, reasoning in
terms of “talent pools”, “talent management systems”, and “talent architecture”, which are posited
to somehow directly influence firm performance. However, the link between aggregate “talent”
and performance at the organizational level is merely a correlation, and one that has yet to be veri-
fied empirically. Building a causal link between aggregate “talent” and performance will require
acknowledgement of the fact that “the system’s behavior is in fact resultant of the actions of its com-
ponent parts” and hence “knowledge of how the actions of these parts combine to produce sys-
tematic behavior can be expected to give greater predictability than statistical relations of surface
characteristics of the system (Coleman, 1990: 3). Because little attention has been paid to heterogen-
eity between individuals, nor indeed to heterogeneity within individual performance (Minbashian,
2017), it is reasonable to characterize the treatment of the linkages between TM practices and organ-
izational performance as a black box. We argue that exposition of this black box is the most pressing
challenge facing TM field. Finally, we know very little about the link between investments in TM
and corporate performance (Collings, 2014; Collings et al., 2017). This is largely because we lack the
understanding of the dynamic processes of aggregation from individual talent contribution to col-
lective, organizational performance.
Overall, we argue that drilling for micro-foundations in TM will allow researchers to discover
“novel aggregate consequences of explicitly micro-foundational assumptions” (Foss, 2010: 29).
Because individuals are treated as a homogenous group, there are a number of questions that remain
unanswered. “To fully explicate organizational analysing … one must fundamentally begin with and
understand the individuals that compose the whole, specifically their underlying nature, choices,
abilities, propensities, heterogeneity, purposes, expectations and motivation” (Felin & Foss, 2005:
441). This will also create a much more fine-grained understanding of how organizations are better
able to cope with challenges associated with human-capital-based competitive advantage (Coff &
Kryscynski, 2011).

Multiple Levels, Overlooked Individual Heterogeneity and Unanswered Questions

Currently, central discussions in TM are happening at a number of different levels. This may be a
consequence of the diversity of theoretical frameworks applied in the area to date. Yet, in all of these
discussions, heterogeneity of individuals is often assumed but not articulated.

34
 Building Micro-Foundations

We focus on two key ongoing conversations, which will benefit significantly from explicitly articu-
lating micro-foundations:

1. Choosing the point of differentiation for TM

2. Building a differentiated architecture for organizational performance.

Choosing the Point of Differentiation: Strategic Positions or Stars

The notion of workforce differentiation is fundamental to TM. This focus emerged as a result of the
squeeze on resources after the economic crisis of the 1970s when firms found it increasingly challen-
ging to sustain an inclusive approach (Cappelli & Keller, 2017), combined with an increasing realization
that investing equally in all employees led to unnecessarily high costs for firms (Becker & Huselid,
2006). Workforce differentiation has its roots in the strategy literature and emphasizes the importance
of choices about where to invest in human capital (Collings, 2017). It recognizes that firms can create
value through differences in the design and management of workforce strategy (Becker et al., 2009) and
calls for a greater investment in employees expected to deliver greater value or return of investment for
the firm (Collings, 2017; Gallardo-Gallardo et al., 2013; Huselid & Becker, 2011).
However, a key question for firms is choosing a point of differentiation for their TM systems. The
individual star was identified as the nexus of differentiation in earlier approaches to TM (Collings,
2017). This work takes a bottom-up focus in theory development, and foregrounds the perspective
that employees contribute to the firm’s strategic objective simply because of their individual value
and uniqueness (Becker & Huselid, 2006). This perspective was central to the McKinsey perspective
emphasized in the War for Talent, and was given further credence by high profile advocates such as Jack
Welch at General Electric. It recognizes a relatively small group of employees as generating the greatest
value for the organization. Employees are thus classified into two broad groups: a small group of stars
or A-players “with talent” and a larger group of B- and C-players who are considered average or below
average performers (Meyers & von Woerkom, 2014).
This view is also reinforced by recent literature on stars that explains that star performance is better
captured by a power distribution than a normal distribution, owing to the disproportionate out that
these exceptional performers deliver (Aguinis & O’Boyle, 2014). A central notion to differentiating
at the level of the individual employee is that talent is relatively stable and reflected in intelligence
and other individual differences (DeLong & Vijayaraghavan, 2003; Meyers & von Woerkom, 2014;
Pfeffer, 2001), or graduating from a top school (Gladwell, 2002). Hence, recruitment and selection are
prioritized in the context of attracting top talent given the stable and innate view of talent underpin-
ning the perspective (Vaiman et al., 2012). Performance management was also viewed as a key enabler
of such differentiation as tools like forced distribution emerged as central in identifying talent and for-
cing managers to differentiate in identifying those employees (see Collings, 2017, for a more elaborate
discussion).
More recently the locus of differentiation in TM has shifted to the job level and the importance of
strategic or pivotal jobs as the driver of competitive advantage is central to this perspective (Boudreau
& Ramstad, 2007; Becker et al., 2009; Collings & Mellahi, 2009). This shifts the focus to a top-down
perspective in theorizing. As Becker and Huselid note “When employees are able to contribute to a
firm’s strategic objectives they have (strategic) value” and that “…not all strategic processes will be
highly dependent on human capital” (2006: 904). In line with more recent shifts in the strategic HR
literature, this reflects an increased focus on the practices that impact human capital rather than the
human capital itself (Delery & Roumpi, 2017; Wright & McMahan, 1992). This approach recognizes
that human capital is of little economic value unless it is deployed in the implementation of the
organization’s strategic intent (Becker & Huselid, 2006; Bowman & Hird, 2014) and that the organ-
izational capabilities that harness this human capital are as central as the human capital itself in this
context (Linden & Teece, 2014).

35
 David G. Collings and Dana B. Minbaeva

Theoretically dynamic capabilities are identified as the fulcrum of workforce differentiation (Collings,
2017; Collings et al., 2018). From this perspective, competitive advantage is found from the unique way in
which a firm can execute business processes in implementing its strategy. Such capabilities are reflective of
the unique history, assets, and capabilities that any firm possesses (Bowan & Hird, 2014) and generally built
as opposed to bought (Rumelt, 1984). While the production and sale of a relatively defined and stable port-
folio of goods and services can be achieved through stable capabilities or ordinary capabilities, in more fast-
paced or evolving contexts more dynamic capabilities are called for (Linden & Teece, 2014). This is reflective
of more recent theorizing on human capital that acknowledges the more dynamic business environment
that firms are faced with and recognizes that static conceptualisations of human capital requirements are no
longer effective (Cascio & Aguinis, 2008; Cappelli, 2008; Lepak et al., 2011). This perspective also considers
the potential impact of the future value of human capital beyond its present value (Lepak et al., 2011).
Dynamic capabilities are reflective of the firm’s capacity to integrate, build, and reconfigure internal
and external resources in adapting and responding to the evolving business environment (Linden &
Teece, 2014). Routines are identified as key in reconfiguring intangible assets, such as human and social
capital, in ways that facilitate the renewability, augmentation, and creative responses to dynamic and
unpredictable business conditions and have been applied to recent conceptualizations of TM (Collings,
2014; Collings et al., 2018; Teece et al., 1997). This reflects the value of organizational routines – repeti-
tive, recognizable patterns of interdependent actions involving various actors through which work is
accomplished in organizations – in creating stability and boosting efficiencies and guiding organiza-
tional activity (Feldman & Pentland, 2003).
In a recent example of this perspective, Collings et al. (2018) identify pivotal positions as the starting
point in any consideration of TM (see also Cascio & Boudreau, 2016). Their approach very clearly
reflects the job as the locus of differentiation, and they adopt a top-down approach to theorizing con-
sistent with this logic.
The discussion around the point of differentiation could benefit greatly from strengthening the focus
around individual heterogeneity. First, when arguing for the choice of critical/pivotal positions, the lit-
erature often fails to recognize the importance of the fit of the individual to the chosen strategic position,
given the individual’s KSAOs. O’Boyle and Kroska (2017) frame this question in the context of the great
person theory, arguing that it is premised on the notion that some individuals innately display particular
traits and abilities that make them destined for greatness regardless of context. Using the example of Julius
Caesar, they question if he were born in 19th-century London, would he have risen to a similar level of
prominence as he did in late-republican Rome two millennia previously? This view is reflective of earlier
contributions to the TM literature were premised on loading the organization with star performers.
More recently this approach has been challenging. Recent research points to the potential benefits
of stars to teams as boundary spanners providing early access to critical new knowledge (see Kehoe,
Rosikiewicz, & Tzabbar, 2017) but equally the potentially destructive effect of star overload in firms
(Groysberg, Polzer, & Elfenbein, 2011). For example, Aguinis, O’Boyle, Gonzalez-Mulé, and Joo
(2016) point to the impact of environmental factors that can serve as conductors in enhancing emer-
gence and star performance versus insulators that can minimize and impede stars (see also O’Boyle &
Kroska, 2017). Yet, much of the literature continues to treat stars as a homogenous group and hence
implying the additive effect overlooking issues of complementarity and possible synergies between stars.

Building a Differentiated Talent Architecture for organizational performance

As noted above, a central premise of differentiating the talent architecture is to increase organizational
performance through maximizing the work motivation, organizational commitment, and extra-role
behavior of those in the talent pool (Collings & Mellahi, 2009). The underlying objective is to invest
disproportionately in positions that offer the potential for above average impact (Boudreau & Ramstad,
2007). This is consistent with recent strategic HRM literature that acknowledges that better man-
agement of the core workforce will likely have the greatest impact on value creation and sustainable

36
 Building Micro-Foundations

competitive advantage (Delery & Shaw, 2001; Lepak & Snell, 1999; Schmidtt, Pohler, & Willness,
2017). This means that organizations should make informed decisions around the optimal level of talent
required in key positions and other roles (Huselid & Becker, 2011) and the appropriate levels of invest-
ment in individuals in those roles (Collings, 2017).
A key tension that emerges in discussions of a differentiated HR architecture is that while heterogen-
eity in aspects of the employment experience has the potential to motivate those in the talent pool, it
also raises the risk of perceptions of inequality or injustice for those outside the talent pool (De Boeck
et al., 2018; Meyers et al., 2017). De Boeck et al.’s (2018) recent comprehensive review of the literature
concerning how those who were and were not designated as talent reacted to the designation is a useful
contribution in this regard. It is important to state that their findings should be considered with the
caveat that there is little empirical research showing a direct relationship between workforce differenti-
ation or strategic TM more broadly and organizational performance outcomes (Collings, 2017; Meyers
et al., 2017). Indeed, the extant research has tended to focus on proxy measures of performance at the
individual level, as opposed to organizational-level outcomes. A key example is affective commitment.
Theoretically affective commitment has been proposed as a key bridge between TM and organizational
performance (Collings & Mellahi, 2009; Gelens et al., 2014).
De Boeck et al.’s (2018) analysis showed that TM practices generally correlated with positive affective
( job satisfaction and organizational commitment) and behavioral (task performance and reduced turn-
over intentions) outcomes, with smaller positive effects on cognitions (psychological contract fulfil-
ment and beliefs in knowledge, skills, and abilities). An interesting finding from qualitative studies they
reviewed was that talent status was simultaneously associated with more negative affective reactions
such as stress and insecurity. However, when they compared the evidence on the differential impact
between those designated as talent versus those not designated, the former was also correlated with
higher reported levels of work effort and stronger intentions to remain with the organization.
The situation with regard to differences between the groups in terms of attitudinal and cognitive
reactions was less clear. This was largely traced to imbalance between the perceived employer and
employee obligations. Those designated as talent often expected to receive more from their employers
than they were prepared to give in return and also reported higher levels of psychological contract
breech. This suggests the designation of talent translates into a more demanding attitude towards their
employer from the perspective of the talented employees (Meyers et al., 2017). However, we need far
more research that considers both positive and negative impacts of bundles of TM practices and of the
differentiated HR architecture has on these outcomes.
By bringing the individual level of analysis, we should be able to better understand how individual
employees deliver performance outcomes that are linked to the strategic intent of the organization.
Based on a micro-perspective, this literature positions individual knowledge, skills, abilities, and other
characteristics (KSAOs) as positively related to performance regardless of context. Hence, the value
is additive and a more-is-better approach is appropriate (c.f. Ployhart & Moliterno, 2011). Equally,
as is evidenced through the human capital resources literature individual-level human capital is not
necessarily isomorphic with firm-level human capital. This literature highlights that, while individual
human capital may facilitate individual performance, this will not necessarily translate to firm-level
performance (Ployhart & Molierno, 2011). This points to the value of micro-foundations in developing
a multi-level understanding of TM to which we now turn.

Towards a Multi-Level Understanding of Talent Management

As we illustrate above, TM is discussed at multiple levels. We have also argued that regardless of the
level, to advance the discussion, it must be rooted in the individual behaviors, since individuals are
embedded in various contexts.
Figure 3.1 illustrates the causal relations of embeddedness and simplifies causal mechanisms under-
lying TM with “arrows” linking various “nodes” located at multiple levels of analysis. This visualization

37
David G. Collings and Dana B. Minbaeva
Figure 3.1 Road map
38
 Building Micro-Foundations

should only be viewed as a map for future research, rather than a complete theoretical model. The
model is further specified in the below guidelines for research and practice.
Guideline 1 (arrows 1, 2, and 3): Future research and practice in talent management should be more explicit
about the choice of the point of differentiation, its origins, and its consequences.
Level: from macro (organizational) towards meso (working group), disaggregation.
Towards this, the starting point should be in business strategy and the guiding question is “What kind
of organizational capabilities are needed to deliver our business strategy?” As a Chief Human Resource
Officer (CHRO) explains: “Business strategy defines the capabilities needed to win. Those capabilities
drive the definition of talent and the decisions about how it is deployed organizationally. All other
processes support the deployment of talent to build capabilities” (Alziari, 2017: 379).
Depending on the point of differentiation, the differentiated talent architecture needs to be built.
It should include TM practices aimed at developing individuals (e.g., stars or talents) and/or identi-
fying critical/pivotal positions and ensuring they are resourced appropriately. A useful consideration
is how core (HR practices that have equal value in all strategic business processes) and differentiated
HR architectures (TM practices designed based on the point of differentiation) would interact in the
organization. A central consideration is that employees perceived the system to be fair. For example,
Bjorkman et al.’s (2013) research on perceptions of talent status and impacts on key individual level
outcomes found that the perceptions of fairness of the system by which individuals were designated as
talent were central in explaining their reaction to their designation. This is key, as individual employees
may withhold effort if they perceive that the firm has not dealt fairly with them (Minbaeva, 2013;
Wright & McMahan, 1992).
Guideline 2 (arrows 4 and 5): Future research and practice in talent management should account for variance in
individual perceptions of differentiated HR architecture, resulting in variance in AMO and subsequently individual
behavioral responses to talent management.
Level: micro-level, embedded individual.
To stimulate multi-level thinking in future studies, we suggest that TM practices included in the
differentiated HR architecture could be further specified as intended, implemented, and perceived
HR practices. Wright and Nishii (2007) define intended HR practices as those that are “tied directly
to the business strategy or determined by some other extraneous influences” (p. 11), and distinguish
such practices from implemented (those that “are actually implemented”) and perceived (practices that are
“perceived and interpreted subjectively by each employee”) HR practices (Wright & Nishii, 2007: 11).
Fundamental to the understanding of the relationship between employee performance and organ-
izational outcomes is the ability (individual KSAOs), motivation (drivers of individual behavior), and
opportunity (conditions that enable or constrain task performance beyond an individual’s direct control)
(AMO) framework (Blumberg & Pringle, 1982). Generally expressed as Performance = f(A × M × O),
the factors interact in a multiplicative fashion. All three elements must be present for high performance;
a low value on any dimension results in markedly lower performance outcomes (Blumberg & Pringle,
1982; Kim et al., 2015). Kim et al. (2015) liken this to a virtuous cycle, with each factor supporting the
other two. If any of the three are weak, however, a vicious cycle may emerge, reducing value in the
organization.
Guideline 3 (arrows 6 and 7): Future research and practice in talent management should develop the measures
for the effectiveness of talent management at the work-group level, which when aggregated could explain the variance
in performance in between differentiated talent and core group. It should be possible to observe a disproportionate con-
tribution of the differentiated talent to business performance.
Level: aggregation from meso (working group) to macro (organizational).
With this guideline, we advocate a more nuanced understanding of how talent performance unfolds
in the firm. We believe that a more expansive measure of “return on talent” should be developed at a
working group level. The measure should capture a group-level shared response to the implemented
differentiated HR architecture, treating some employees differently from others (based on the choice of
the point for differentiation). Although individuals form the perceptions, a social information processing

39
 David G. Collings and Dana B. Minbaeva

perspective suggests that such work-related perceptions are “filtered through the collective sense-
making efforts of the group of employees with whom an individual most often works and interacts”
(Kehoe & Wright, 2013: 370; see also Bowen & Ostroff, 2004).
Furthermore, when forming the judgments, employees who have no experience or cannot recall personal
responses to differentiation are likely to rely on the experience of co-workers to whom they are socially
close (Kehoe & Wright, 2013). To evaluate differentiation effectiveness, the analysis needs to be under-
taken at the organizational level where the performance of the differentiated group needs to be compared
to a non-differentiated one. For example, a growing body of literature on strategic TM calls for the con-
sideration of pivotal positions as a key point of departure for building differentiated talent-management
systems. After the pivotal positions are identified, the organization can investigate whether there is high
variability in performance among the people who occupy them. This requires creating metrics able to
capture performance variability. For example, Nathan Myhrvold, former Chief Technology Officer at
Microsoft, says “the top software developers are more productive than average software developers not by
a factor of 10X or 100X or even 1,000X but 10,000X” (Becker, Huselid, & Beatty, 2009: 61).
Equally, while this may be a relatively small proportion of overall employees (10–20% of employees),
based on insights from the literature on “stars”, we argue that these employees are likely to contribute
disproportionately to unit performance. By definition, star employees display disproportionately high
and prolonged performance relative to peers (Aguinis & O’Boyle, 2014; Call et al., 2015; O’Boyle &
Kroska, 2017). The disproportionate impact of star employees is reflected in recent research that points
to a power distribution in star performance where a smaller percentage of employees contribute a dis-
proportionate amount of value, the so-called 80:20 rule (O’Boyle & Kroska, 2017). The value that
stars generate is also considered to be multiplicative as opposed to additive in contributing to higher-
level outcomes (O’Boyle & Kroska, 2017). The value of non-stars or so called “B-players” is of course
recognized in enabling stars and in performing well in less pivotal roles (Groysberg & Lee, 2008).
However, as noted above, individual capability and performance may not be fully isomorphic with
firm-level outcomes, and the organizations TM system should be designed to maximize the contribu-
tion of star employees (Collings et al., 2018; Ployhart & Moliterno, 2011).

Implications

Implications for Research

Individual talent is simultaneously embedded in several contexts, such as the specific context of his/
her team, organization, and the external business-network context. However, current research on
TM often fails to recognize this multiple embeddedness of talent. Individual interactions with various
contexts in which this individual is embedded may also be an important source for variance observed at
supra-individual level (in addition to the variance created by individual heterogeneity). We argue that
future research should recognize the nested nature of talent as it has implications for talent identifica-
tion, talent mobility, and performance implications of TM programs.
Future research should also explicate the causal mechanisms behind the assumed aggregation
from individual behavioral responses to the expected “return on talent” at the organizational level.
Aggregation from “micro” to “macro” assumes complex interdependencies between action of indi-
vidual and that of others in the same context. Explaining such interdependencies has proved to be a
“main intellectual hurdle both for empirical research and for theory that treats macro-level relation via
methodological individualism” (Coleman, 1986: 1323).
Theoretically, the HR process literature might represent a useful lens through which to explore these
questions in the context of TM (Ehrnrooth & Björkman, 2012; Nishii, Lepak, & Schneider, 2008). This
perspective can provide important insights into how individuals perceive TM practices and how this
can impact on the effectiveness of these practices in achieving individual and unit level performance.
An alternative theory which could significantly aid in exploring the micro-foundations perceptive is

40
 Building Micro-Foundations

the human capital resources perspective (Ployhart & Moliterno, 2011; Ployhart, Nyberg, Reilly, &
Maltarich, 2014; Weller, Hymer, Nyberg, & Ebert, 2018). Theoretically human capital resources pro-
vide a useful means of theorizing how individual human capital can be valuable for unit level outcomes.

Implications for Practice

A micro-foundations preceptive also has significant implications for practice. Key among those is a rec-
ognition that designing a TM system that appears to meet an organization’s strategic requirements is a
necessary but not sufficient condition to improve organizational effectiveness. This is because how that
system and the practices underlying it are implemented will have a significant impact on their effect-
iveness. Equally significant is how these practices are perceived by the employees that are the target of
the interventions. All three of these steps must be aligned for practices to have the desired effect. This
brings the line managers as implementers of such practices to the fore as key stakeholders (Alfes, Truss,
Soane, Rees, & Gatenby, 2013; Ehrnrooth & Björkman, 2012).

Conclusions
Despite over two decades of discussion of talent management, our understanding of the link between
TM and organizational outcomes such as performance is very limited. In this chapter, we argue that this
limited understanding is explained in part by the unclear conceptual and intellectual boundaries of the
area. One key limitation in this regard is a poor understanding of the mechanisms by which TM links to
organizational outcomes. Our argument is that a micro-foundations perspective provides a key building
block in explicating the linkages between TM and these organizational outcomes. This is premised on
our understanding of individuals as the key source of variance in organizational level outcomes. Our
hope is that the chapter will motivate further research from this important prescriptive.

References
Aguinis, H., & O’Boyle, E. 2014. Star performers in 21st century organizations. Personnel Psychology, 67(2),
313–350.
Aguinis, H., O’Boyle Jr, E., Gonzalez-Mulé, E., & Joo, H., 2016. Cumulative advantage: Conductors and insulators
of heavy-tailed productivity distributions and productivity stars. Personnel Psychology, 69(1), 3–66.
Alfes, K., Truss, C., Soane, E. C., Rees, C., & Gatenby, M., 2013. The relationship between line manager
behavior, perceived HRM practices, and individual performance: Examining the mediating role of engage-
ment. Human Resource Management, 52(6), 839–859.
Alziari, L. 2017. A chief HR officer’s perspective on talent management. Journal of Organizational Effectiveness:
People and Performance, 4(4): 379–383.
Becker, B., & Huselid, M. 2006. Strategic human resource management: Where do we go from here? Journal of
Management, 32(6): 898–925.
Becker, B. E., Huselid, M. A. and Beatty, R. W. 2009. The differentiated workforce: Translating talent into strategic
impact. Boston, MA: Harvard Business Press.
Blumberg, M. & Pringle, C. D. 1982. The missing opportunity in organizational research: Some implications for
a theory of work performance. Academy of Management Review, 7(4): 560–569.
Boudreau, J. W., & Ramstad, P. M. 2007. Beyond HR: The new science of human capital. Boston, MA: Harvard
Business Press.
Bowen, D. E., & Ostroff, C. 2004. Understanding HRM–firm performance linkages: The role of the “strength”
of the HRM system. Academy of Management Review, 29, 203–221.
Bowman, C., & Hird, M. 2014. A resource-based view of talent management. In. P. Sparrow, H. Scullion &
I. Tarique (Eds.), Strategic talent management: Contemporary issues in international context: 87–116.
Cambridge, UK: Cambridge University Press.
Burton-Jones, A., & Spender, J. C. 2011. The Oxford handbook of human capital. Oxford, UK: Oxford University
Press.
Call, M. L., Nyberg, A. J., & Thatcher, S. M. B. 2015. Stargazing: An integrative conceptual review, theoretical
reconciliation, and extension for star employee research. Journal of Applied Psychology, 100: 623–640.

41
 David G. Collings and Dana B. Minbaeva

Cappelli, P. 2008. Talent on demand: Managing talent in an uncertain age. Boston, MA: Harvard Business School
Press.
Cappelli, P., & Keller, J. R. 2017. The historical context of talent management. In D.G. Collings, K. M.,
& Cascio, W. F. (Eds.), The Oxford handbook of talent management: 23–42. Oxford, UK: Oxford
University Press.
Cascio, W. F., & Aguinis, H. 2008. Research in industrial and organizational psychology from 1963 to 2007:
Changes, choices, and trends. Journal of Applied Psychology, 93: 1062–1081.
Cascio, W. F., & Boudreau, J. W. 2016. The search for global competence: From international HR to talent man-
agement. Journal of World Business, 51: 103–114.
Coff, R. & Krycynski, D. 2011. Riling for micro-foundations of human capital based competitive advantages.
Journal of Management, 37(5):1429–1443.
Coleman, J. S. 1986. Social theory, social research, and a theory of action. American Journal of Sociology, 91(5):
1309–1335.
Coleman, J. S. 1990. Foundations of social theory. Cambridge/London: The Belknap Press of Harvard University
Press.
Collings, D. G. 2014. Integrating global mobility and global talent management: Exploring the challenges and
strategic opportunities. Journal of World Business, 49: 253–261.
Collings, D. G. 2017. Workforce Differentiation. In D.G. Collings, K. Mellahi, & W. Cascio (Eds.), The Oxford
handbook of talent management. Oxford, UK: Oxford University Press.
Collings, D. G., & Mellahi, K. 2009. Strategic talent management: A review and research agenda. Human Resource
Management Review, 19: 304–313.
Collings, D. G, Mellahi, K., & Cascio, W. F. (Eds) 2017. The Oxford handbook of talent management. Oxford,
UK: Oxford University Press.
Collings, D. G., Mellahi, K., & Cascio, W. F. 2019. Global talent management and performance in the MNE:
Exploring its impact across multiple levels. Journal of Management, 45: 2, 540–566
De Boeck, G., Meyers, M. C., & Dries, N., 2018. Employee reactions to talent management: Assumptions versus
evidence. Journal of Organizational Behavior, 39(2): 199–213.
Delery, J. E., & Roumpi, D. 2017. Strategic human resource management, human capital and competitive advan-
tage: Is the field going in circles? Human Resource Management Journal, 27: 1–21.
Delery, J. E., & Shaw, J. 2001. The strategic management of people in work organizations: Review, synthesis, and
extension. Research in Personnel and Human Resource Management. 20: 165–197. Bingley: Emerald Group
Publishing.
Ehrnrooth, M., & Björkman, I., 2012. An integrative HRM process theorization: Beyond signalling effects and
mutual gains. Journal of Management Studies, 49(6): 1109–1135.
Feldman, M. S., & Pentland, B. T., 2003. Reconceptualizing organizational routines as a source of flexibility and
change. Administrative Science Quarterly, 48: 94–118.
Felin, T., & Foss, N. J. 2005. Strategic organization: A field in search of micro-foundations. Strategic Organization,
3, 441–455.
Foss, N. 2010. Micro-foundations for management research: What, why, and whither? Cuadernos de Economía y
Dirección de la Empresa, 42: 011–034.
Gallardo-Gallardo, E., Dries, N., & González-Cruz, T. F., 2013. What is the meaning of “talent” in the world of
work? Human Resource Management Review, 23(4): 290–300.
Gallardo-Gallardo, E., Thunnissen, M., & Scullion, H. 2020. Talent management: Context matters. International
Journal of Human Resource Management, 31(4): 457–473.
Gelens, J., Hofmans, J., Dries, N., & Pepermans, R. 2014. Talent management and organisational justice: Employee
reactions to high potential identification. Human Resource Management Journal, 24: 159–175.
Gladwell, M., 2002. The talent myth. The New Yorker, 22, 28–33.
Groysberg, B., & Lee, L. E. 2008. The effect of colleague quality on top performance: The case of security analysts.
Journal of Organizational Behavior, 29: 1123–1144.
Groysberg, B., Polzer, J.T., & Elfenbein, H. A., 2011. Too many cooks spoil the broth: How high-status individuals
decrease group effectiveness. Organization Science, 22: 722–737.
Huselid, M. A. & Becker, B. E. 2011. Bridging micro and macro domains: Workforce differentiation and strategic
human resource management. Journal of Management, 37: 421–428.
Kehoe, R. R., Rosikiewicz, B. L., & Tzabbar, D. 2017. Talent and teams. In D.G. Collings, K. Mellahi, & W.
Cascio (Eds.), The Oxford handbook of talent management. Oxford, UK: Oxford University Press.
Kehoe, R. R., & Wright, P. 2013. The impact of high-performance huan resource practices on employees’ attitudes
and behaviors. Journal of Management, 39, 366–391.
Kim, K. Y., Pathak, S., & Werner, S. 2015. When do international human capital enhancing practices benefit the
bottom line? An ability, motivation, and opportunity perspective. Journal of International Business Studies,
46: 784–805.

42
 Building Micro-Foundations

Kozlowski, S. W. J., & Klein, K. J. 2000. A multilevel approach to theory and research in organizations. In S. W.
J. Kozlowski, & K. J. Klein, (Eds.), Multilevel theory, research, and methods in organizations: Foundations,
extensions, and new directions: 3–90. San Francisco: Jossey-Bass.
Lepak, D. P., & Snell, S. A. 1999. The human resource architecture: Toward a theory of human capital allocation
and development. Academy of Management Review, 24: 31–48.
Lepak, D. P., Takeuchi, R., & Swart, J. 2011. Aligning human capital with organizational needs. In A. Burton-
Jones, & J. C. Spender (Eds.), The Oxford handbook of human capital. Oxford, UK: Oxford University Press.
Linden, G., & Teece, D. 2014. Managing expert talent. In. P. Sparrow, H. Scullion, & I. Tarique (Eds.) Strategic
talent management: Contemporary issues in international context: 87–116. Cambridge, UK: Cambridge
University Press.
Marescaux, E., De Winne, S., & Sels, L., 2013. HR practices and affective organizational commitment: (When)
does HR differentiation pay off ? Human Resource Management Journal, 23(4): 329–345.
McDonnell, A., Collings, D.G., Mellahi, K., & Schuler, R., 2017. Talent management: A systematic review and
future prospects. European Journal of International Management, 11(1): 86–128.
Meyers, M. C., De Boeck, G., & Dries, N. 2017. Talent or not: Employee reactions to talent designations. In D.G.
Collings, K. Mellahi, & W. Cascio (Eds.), The Oxford handbook of talent management. Oxford, UK: Oxford
University Press.
Meyers, M. C., & Van Woerkom, M. 2014. The influence of underlying philosophies on talent management:
Theory, implications for practice, and research agenda. Journal of World Business, 49(2): 192–203.
Meyers, M. C., Van Woerkom, M., Paauwe, J., & Dries, N. 2020. HR managers’ talent philosophies: Prevalence
and relationships with perceived talent management practices. The International Journal of Human Resource
Management, 31(4): 562–588.
Minbaeva, D. M. 2013. Strategic HRM in building micro-foundations of organizational knowledge-based per-
formance. Human Resource Management Review, 23(4): 378–390.
Minbaeva, D. M., & Collings, D. 2013. Seven myths of global talent management. International Journal of Human
Resource Management, 24(9): 1762–1776.
Minbashian A. 2017. Within-Person Variability in performance. In D.G. Collings, K. Mellahi, & W. Cascio (Eds.),
The Oxford handbook of talent management. Oxford, UK: Oxford University Press.
Nishii, L. H., Lepak, D. P., & Schneider, B. 2008. Employee attributions of the “why” of HR practices: Their
effects on employee attitudes and behaviors, and customer satisfaction. Personnel Psychology, 61(3): 503–545.
O’Boyle, E. H., & Kroska, S. 2017. Star Performers. In D. G. Collings, K. Mellahi, & W. Cascio (Eds.), The Oxford
handbook of talent management. Oxford, UK: Oxford University Press.
Pfeffer, J. 2001. Fighting the war for talent is hazardous to your organization’s health. Organizational Dynamics.
Working Paper 1687.
Ployhart, R., & Moliterno, T. 2011. Emergence of the human capital resource: A multilevel model. Academy of
Management Review, 36(1): 127–150.
Ployhart, R. E., Nyberg, A. J., Reilly, G., & Maltarich, M. A., 2014. Human capital is dead; long live human cap-
ital resources! Journal of Management, 40(2): 371–398.
Rumelt, R. P. 1984. Towards a strategic theory of the firm. In R. B. Lamb (Ed.), Competitive strategic manage-
ment: 566–570. Engelwood Cliffs, NJ: Prentice-Hall.
Schmidt, J. A., Pohler, D., & Willness, C. R. 2017. Strategic HR system differentiation between jobs:
Effects on firm performance and employee outcomes. Human Resource Management. doi:doi.10.1002/
hrm.21836.
Sparrow, P. R., 2007. Globalization of HR at function level: Four UK-based case studies of the international
recruitment and selection process. The International Journal of Human Resource Management, 18(5):
845–867.
Stahl, G., Björkman, I., Farndale, E., Morris, S.S., Paauwe, J., Stiles, P., Trevor, J., & Wright, P. 2012. Six
principles of effective global talent management. MIT Sloan Management Review, 53(2): 25–42.
Teece, D. J., Pisano, G., & Shuen, A. 1997. Dynamic capabilities and strategic management. Strategic Management
Journal, 18: 509–533.
Thunnissen, M., Boselie, P., & Fruytier, B. 2013. A review of talent management: ‘Infancy or adolescence?’. The
International Journal of Human Resource Management, 24(9): 1744–1761.
Vaiman, V., Scullion, H., & Collings, D. G. 2012. Talent management decision making. Management Decision,
50: 925–941.
Weller, I., Hymer, C., Nyberg, A. J., & Ebert, J. 2018. How matching creates value: Cogs and wheels for human cap-
ital resources research. Academy of Management Annals, 13(1). doi:https://doi.org/10.5465/annals.2016.0117
Wright, P., & McMahan, G. 1992. Theoretical perspectives for strategic human resource management. Journal of
Management, 18(2): 295–320.
Wright, P., & Nishii, L. 2007. Strategic HRM and organizational behavior: Integrating multiple levels of analysis.
Working Paper 07-05. CAHRS Working Paper Series, Cornell University.

43
 4
THE EMPLOYEE AND TALENT
MANAGEMENT
An Interaction Framed Through Three Lenses:
Work, Team, and the Organization
Karin A. King

Introduction
Talent management has become an established priority for organizations today such that leaders com-
monly report “talent” as their top priority (PricewaterhouseCoopers, 2017), and the human capital
that the talented employees are seen to possess are considered of crucial relevance to business per-
formance advantage (G. S. Becker, 2008). Organizations manage their talent requirements through
human resource (HR) processes that involve the attraction, development, and retention of human cap-
ital (Collings & Mellahi, 2009) as a central component of business value creation (Sparrow & Makram,
2015). Today, talent management (TM) has become of central relevance to business strategy and HR
management (Al Ariss, Cascio, & Paauwe, 2014; Collings & Mellahi, 2009; Vaiman & Collings,
2013). The nature of today’s global economy as increasingly dependent on knowledge workers further
emphasizes the demand for people who have portable knowledge and skills (Cascio & Aguinis, 2008;
Collings, Mellahi, & Cascio, 2019) and who may choose to contribute their individual human capital
resources to their current employer or may choose to take their individual knowledge and experience
outside of their current organization. However, in practice, TM as a strategic priority, is often reported
to be challenging, one that eludes management’s full control (PricewaterhouseCoopers, 2017) and
presents a persistent constraint (Cappelli, 2009). Yet others have questioned whether “talent manage-
ment” is simply another phrase for very good people management (Lewis & Heckman, 2006). Talent
remains a top priority that leaders are increasingly concerned about (Cheese, 2010).
TM presents challenges to businesses that aim to employ TM to enable their organization’s per-
formance in service of its business objectives. Challenges range from claims of scarcity and shortage,
which are not always well evidenced (Cappelli, 2008), to implementation issues (Mellahi & Collings,
2010), such as the difficulties achieving consistency in talent practices even when global and local HR
practices are consistently defined (Morris et al., 2009). There are persisting challenges even in the scope
and definition of TM (Collings & Mellahi, 2009). The challenges of implementing Society for Human
Resource Management (SHRM) and TM strategy in practice may in part explain why the empirical
SHRM literature has largely focused on process (Wright & McMahan, 2011). The process orientation,
however, has resulted in limited consideration of the employee as a recipient of organizational SHRM
practices (Wright & McMahan, 2011) and as a participant of organizational TM (King, 2015a, 2016b).
In choosing to join an organization, individuals make decisions not only about their careers. In career
decisions, employees also make choices regarding how and where they will contribute the individual
human capital resources that they hold. As employees perceive and experience TM practices in their
organizations, what “talent” means to them and “how” they experience TM in their organizations is

DOI: 10.4324/9781315474687-444
 The Employee and Talent Management

increasingly relevant to their employment experience, even as organizations continue to pursue effect-
iveness in TM.
While the structural and theoretical foundations of TM continue to evolve, the employee continues
to be a central actor in the organizational TM system (King, 2015a) through whose performance the
organization aims to achieve competitive performance advantage. TM is expected to create value for
the organization (Sparrow & Makram, 2015) through the contribution of talented employees, but to
do so requires the practice of TM to function effectively. Literature has argued that not enough is yet
known about the implementation of HR practices (L. Nishii & Wright, 2008) including TM (Cappelli
& Keller, 2014) or the employee response to organizational talent practices (Björkman, Ehrnrooth,
Mäkelä, Smale, & Sumelius, 2013; Dries, 2013; King, 2016b). For example, being identified as talent by
one’s organization, which has only relatively recently been explored in the literature (Björkman et al.,
2013) but is expected to be perceived as being of significance to the employee (Meyers, De Boeck, &
Dries, 2017; Smale et al., 2015). As the scholarly TM literature continues to develop, it has become clear
that a deeper understanding of the talent system and its consequences for the employee is necessary,
given that the employee is a central participant in the organization’s talent practices (King, 2015a). Lack
of sufficient consideration of employee views of TM practices in their organizations to date has been
called a “serious omission” (Björkman et al., 2013, p. 196). It is the employee as a central actor in the
organizational talent system that is the topic of focus in this chapter.
In the literature, there are multiple definitions of talent and correspondingly, a range of approaches
for TM. Philosophies of TM vary by organization and may include an inclusive or exclusive approach
or a combination of both (Meyers & van Woerkom, 2014). Adopting a more inclusive approach, all
employees in the organization may be viewed as the company’s “talent” (Swailes & Blackburn, 2016).
Adopting an exclusive approach, only a sub-set of the workforce is identified as talent, based on some
criteria established by the organization, and this approach is often adopted in large global multi-nationals
that manage talent on a global basis (Stahl et al., 2012). In practice, many organizations today adopt a
blend of both approaches. That is, while they invite the contribution of all employees in the workforce
to deliver high performance for the business-specific strategic purpose, they may additionally require
close management of a differentially identified group of employees known as talent or high-potential
employees. For the purposes of providing a broad introduction to the topic of TM from the employee’s
perspective, this chapter adopts a hybrid view of talent as referring to both the wider workforce of
employees in an organization and including segments of the workforce that can be identified as talent
pools, in which employees hold skills or experience that are of specific relevance to an organization’s
business strategy and competitive advantage. This hybrid view is also consistent with the scholarly lit-
erature that provides many examples of conceptual and empirical work from both perspectives.
This chapter aims to present an introduction to the organizational TM system from the perspective
of the employee’s participation in the workforce. To do so, the chapter is presented in four parts. The
first section introduces the three-lens framework as a guide for the reader in this chapter and argues
that to be effective in practice, TM must also be considered from the perspective of the employee. In
the second section, a review of the literature is presented in three parts, corresponding to the three
lenses of the framework: the individual, team and organizational lenses on TM. In the third section,
limitations of the extant literature are discussed, followed by recommendations for future research. The
final section presents recommendations for leaders and business managers today, following which the
chapter is concluded.
This chapter presents three main learning points. First, TM is implemented as an organizational system
and the employee is a central participant in TM (Dries, 2013; King, 2015a). Second, the implications of
the use of TM in organizations can be described from the employee’s perspective through at least three
lenses: the employee’s work and career, their team and manager, and their views of the organization.
Third, managers in business and human resources in organizations today can support effective TM
by considering how TM practices impact the experience of their employees in the organization. The
following section introduces the framework to the reader.

45
 Karin A. King

Employees and Talent Management in their Organization:

A Three-Lens Framework
Talent management (TM), as presented in the chapters that appear previously in this volume, is
concerned with how organizations use human resources <HR> strategy and practices to attract,
develop, and retain individuals who possess the specific human capital of interest to their organization,
for service of the strategic priorities of the business (Tarique & Schuler, 2010). The aim of TM is to
systematically identify those employees who are high-performing and demonstrate high-potential for
future performance in the roles that are most crucial to business performance (Collings & Mellahi,
2009). Through the implementation of a systematic approach, these employees are often managed as a
pool, and developed to assume increasingly senior roles in the organization (Collings & Mellahi, 2009).
This is achieved through a differentiated HR structure of systems and processes designed to spe-
cifically manage the talent pool(s) (Collings & Mellahi, 2009) as priority segments of the workforce
(Boudreau & Ramstad, 2005). Where the approach to TM is highly selective and only a limited pro-
portion of the population are included in the talent pool, the approach is known as exclusive talent
management, whereas when the approach to talent identification considers the wider workforce to be
the organization’s talent pool, this is known as inclusive talent management (Stahl et al., 2012). In exclu-
sive TM systems, employees may be identified as top talent, high-potentials, or even as star employees
(Huselid, Beatty, & Becker, 2005). An exclusive talent philosophy is also known as a form of workforce
differentiation (B. E. Becker, Huselid, & Beatty, 2009).
Organizations generally implement TM practices as part of a wider strategic HR and employee
engagement strategy. In order to design and implement TM strategies and practices that are effective
in supporting the organization to attract, develop, and retain the talent that it requires to compete and
grow over time, it is valuable to consider how such practices may fit with overall HR bundles and how
these practices influence the workforce.
When we consider an organization’s use of TM as one component of an integrated bundle of strategic
HR management practices, it becomes evident that the use of TM practices must be considered in at
least three levels at which we would reasonably expect there to be an interaction between the employee’s
employment experiences and the use of TM. The levels are: 1) the individual level interactions, which
are concerned with the employee’s individual work; 2) the team level interactions, which are concerned
with the employee’s line manager and team; and 3) the organizational level interactions, which are
concerned with the employee’s views and experience of their organization.
Figure 4.1 presents a simple three-lens framework that categorizes the potential range of interactions
of organizational TM system from the central view of the employee.
In what follows, we will consider how TM may interact with the employee experience in the work-
place, through each of the three lenses.

Individual Level Lens: The Employee’s Work and Employment Relationship

Attributions
Research indicates that when HRM practices are implemented, employees make observations about
these practices (L. H. Nishii, Lepak, & Schneider, 2008) and in doing so, employees perceive HRM
practices as signals from their organization (Höglund, 2012). Employees then interpret these signals as
indicators of the relative importance of specific work behaviors and learn to identify what is valued in
the organization (Guest & Conway, 2002; Guzzo & Noonan, 1994; Höglund, 2012) and therefore what
to prioritize in or to achieve performance and the status associated with a high-performer. As TM is
often a highly visible practice and one that is intended to demonstrate the organization values its people,
employees are very likely to observe TM practices to some degree. Based on Sense-making Theory
(Weick, 1995), whereby employees seek to interpret and make sense of the signals they perceive in their
day-to-day work within organizations, when employees observe HRM practices in the workplace,

46
 The Employee and Talent Management
47

Figure 4.1 Talent management and the employee: A three-lens framework of interaction
 Karin A. King

they infer the purpose of those practices and make what are known as attributions of “why” the
organization undertakes these practices (L. H. Nishii et al., 2008). In the case of HR practices,
research has shown that employees differentiate between at least two purposes for the use of HRM
practices as either to control the employee or to support employees, or some combination of both
(L. H. Nishii et al., 2008). In the case of TM, research that examines employee attributions of TM
practices, that is, the “why” of TM has not yet been presented. However, given the nature of TM as
an often-visible business strategic priority, researchers have argued that being included in one’s organ-
izational TM programs or identified as talent is likely to be associated with a promise of heightened
exchange or investment in the employee’s future career and development (King, 2016b).

Psychological Contract and Job Attitudes

The use of TM practices has been theorized to have consequences for the employee’s individually-held psy-
chological contract, that is, the views an employee develops regarding their obligations to their employer
and their employer’s obligations to them, within their overall employment relationship (Rousseau, 1989).
These beliefs about obligations may be explicit or implicit (Rousseau, 1995) Specifically, as TM occurs
within a context of social exchange in the workplace (Blau, 1964), the use of organizational TM practices
is expected to be involved as one factor that shapes the employee’s psychological contact, based on the
premise that TM is a differentiated investment in specific employee’s or pools of employees and therefore
may signal increased exchanges between the employee and the organization. Psychological contracts have
been shown to vary for specific groups of employees, such as high-potentials (Dries & De Gieter, 2014),
which form part of the organization’s talent pool, however, much more needs to be examined to closely
understand the employee’s psychological response to TM (Dries, 2013).
Research has shown that employees develop an awareness of their talent status (Meyers et al., 2017),
and that talent status awareness is associated with positive employee attitudes (McDonnell, Collings,
Mellahi, & Schuler, 2017). However, the literature argues that the relationship between employees iden-
tified as talented and their organizations, is not one of simple economic exchange (Thunnissen, Boselie,
& Fruytier, 2013b), but that it involves expectations of enhanced exchange over time (King, 2016b).
Research also theorizes that where information held by employees and the organization differs regarding
the employee’s status as talent or not, this asymmetry may create risk of psychological contract breach if
perceived promises, for example of future career development, may be unfulfilled (Dries & De Gieter,
2014). Incongruence in talent status perception (whereby the assessment of the employee by the organ-
ization differs than the employee’s self-assessment of talent status) mediates the relationship between the
number of talent practices and contract fulfilment (Sonnenberg, van Zijderveld, & Brinks, 2014).

Perceived Talent Status

When an employee believes they have been identified by their organization as talent or included in a
talent pool, this is known as perceived talent status (Dries & De Gieter, 2014). Employees who perceive
talent status have been shown to hold several beneficial job attitudes moreso their peers who do not per-
ceive talent status. Research has shown that TM practices do indeed influence job attitudes. For example,
when an employee perceives they have been identified by their organization as “talent” or belong to their
organization’s talent pool, the employee is more likely to accept increasing performance demands, report
increased commitment to building their competencies, support the strategic priorities of their employer
in their daily work, and are less likely to leave their employment (Björkman et al., 2013).
Based on the signal of strategic value and differentiated identification of an employee as “talent”, it has
been theorized that talent status or perceived talent identification can be considered to be a crucial event
in the employee organization relationship, defined as an event that can “suddenly and durably” change
the nature of the employee-organization relationship (Ballinger & Rockmann, 2010, p. 373). Given the
theorized influence of TM practices on the employee psychological contract, it is therefore not surprising
that employees who perceive they have been identified by their organization as talented or identified as a

48
 The Employee and Talent Management

member of the talent pool, are more likely to report they intend to stay with their organization than those
who do not perceive they have been identified as talent. This opportunity for increased retention through
using TM practices to identify and engage high-performing high-potential employees is an advantage for
organizations that seek to retain their top talent for development and advancement to critical roles in future.

Talent Retention, Career Development, and Advancement Opportunities

Employees who perceive they have been identified by their organizations as talented, would reasonably
expect to be provided with the additional resources and investment that status corresponds to in their spe-
cific organization (King, 2016b). While this investment, such as leadership development and mentoring,
and developmental job assignments may vary by organization, some differentiated focus on the employee’s
development of their talent potential is a component of TM. Therefore, involvement in the talent pool is also
a benefit to employees in their organization’s investment in and focus on them and their career advancement.
Retention by the organization of its talent pool is a priority for most organizations today (Cappelli, 2008;
Hausknecht, Rodda, & Howard, 2009) and research has shown that advancement opportunities is posi-
tively associated with retention of high-performers, and moreso than other employee groups (Hausknecht
et al., 2009). While in practice, TM is linked with career progression, in empirical literature, more research
is required to understand this increased exchange between the employee and their organization over time
(King, 2015a, 2016b). Literature calls for a shift from the current focus of TM research primarily on talent
retention (Thunnissen, Boselie, & Fruytier, 2013a) and on SHRM distal performance measures (Jiang,
Lepak, Hu, & Baer, 2012) to more proximal outcomes (Boudreau & Ramstad, 2005; Boxall & Purcell,
2000). This focus on proximal outcomes may also help to shed light on possible unintended consequences
of TM that have been highlighted in the literature. These include the exit of high-potential talent when
in a dual-career couple (Petriglieri, 2018) and an increased sensitivity to employer investments when the
employee is aware of their talent status compared to those who are not (Ehrnrooth et al., 2018). The second
lens, the employee’s view of their team and line manager, is considered in the next section.

Team Level Lens: The Employee’s Team and Line Manager

At the team level, there are a number of interactions that are notable between the business’s use of TM
practices and the perceptions of employees within their teams and of their line managers. First, the
supervisor is expected to play a significant role in TM given the supervisor’s direct observation of per-
formance daily (King, 2015a, 2016b). As line managers in today’s organizations are increasingly respon-
sible for HR practices that are increasingly devolved into the line rather than delivered directly by HR
(Cappelli, 2013), the effectiveness of the line manager in performance of people management practices
is increasingly important. Variation in line manager performance of people management activities has
been shown to impact performance of the team (Mollick, 2012).
In the specific context of TM, line managers or supervisors are often the individual accountable for
identification of talent and talent potential (King, 2016b), which is then discussed and reviewed by lead-
ership in a two-step process of talent identification and assessment (Mäkelä, Björkman, & Ehrnrooth,
2010). Given the variability between planned HR practices and implemented HR practices (known as the
“intended-actual gap”) (L. Nishii & Wright, 2008), further research is needed to understand the influence
of the line manager in motivating, engaging, and supporting talented employees and their teams.
Second, the nature of work in today’s organizations is increasingly team-based and knowledge-
based both of which have been shown to require considerable interaction with co-members of one’s
team in order to achieve high-performance. In the case of talent identified employees, little is known
yet with regard to how team talent composition, that is, the presence and mix of talent identified and
non-talent identified individuals within a given team affects the individual team member’s motiv-
ation and performance or that of the overall team. What is clear is that the organization relies on
employees voluntarily contributing their individual human capital resources in support of strategic
priorities. As mentioned earlier, employees who believe they have been identified as talented by their

49
 Karin A. King

organization are more likely to support their organization’s strategic priorities and also more likely
to stay (Björkman et al., 2013).
However it is not always clear to employees whether or not they have been identified as talent by
their organization because organizations vary in their practice of disclosing talent status to employees
or not. The often-vague approach to communication of talent status by organizations often appears
opaque to employees and has been criticized as potentially detrimental to the employment relation-
ship if TM practices are viewed as subjective, exclusive, or procedural unfair or unjust (Swailes, 2013b;
Swailes & Blackburn, 2016; Swailes, Handley, & Rivers, 2016). Research indicates that only one-third
of organizations today disclose talent assessments and ratings to their employees (Dries & De Gieter,
2014). Given the evidence that creating an inclusive culture in organizations contributes to performance
and productivity as well as to the ability to attract talent (Nilsson & Per-Erik, 2012; L. H. Nishii, 2013),
inadvertently creating a perceived exclusive culture through a non-transparent exclusive TM practice
is a potential risk organizations must be aware of. Further, talent assessment practices or TM generally,
may be perceived as being procedurally unjust (Swailes, 2013a, 2013b) if the criteria for inclusion in the
talent pool are not well communicated, understood, or transparent.
The support of one’s manager can also be seen as relevant to employees who experience TM or who
are working in organizations that adopt TM practices. TM at its core involves the differentiation of indi-
vidual employees and employee groups as “talent” or “talent pools” and is a dynamic process occurring
over time rather than a single event (King, 2016b) and consequently, the line manager or supervisor is
an important factor in TM (Asag-Gau & Dierendonck, 2011), whose support the employee may require
to access resources for performance or development opportunities. In HRM, the direct supervisor has
been argued to be the “missing link” as the central influence of the psychological contract as it develops
and of PC fulfilment (McDermott, Conway, Rousseau, & Flood, 2013). Perceived supervisor support
has been shown to moderate perceived organizational support and is positively associated with organ-
izational commitment. Therefore, the extent to which talented employees perceive they are supported
by their supervisors is also an important consideration. The third lens, the employee’s view of their
organization, is considered in the next section.

Organization Level Lens: The Employee’s Organization

Development of Potential over Time

Organizations that use TM practices use various methods to assess the potential of employees (Dries
& Pepermans, 2012) to develop skills and knowledge the organization will require in the future. This
is the potential for the employee to advance to roles of increasing accountability (such as leadership
positions) or roles of critical value to the business. Talent practices have been shown to mediate the
skill-enhancing HRM practices that support overall human capital development for the firm (Höglund,
2012) and for its individual employees.

Performance and Organizational Value through Talent Management

Talent management is expected to create value for the organization as a differentiated management of spe-
cific segments or pools of the workforce identified as having potential for greater contribution to organiza-
tional performance (Collings & Mellahi, 2009) than other individual employees or workforce segments.
The literature explains that there are four value-drivers of TM: value creation, value capture, value pres-
ervation, and value leverage (Sparrow & Makram, 2015). This is in part due to the expected enhanced
alignment of talented employees to the business priorities and strategic goals, through the use of TM
practices. Research has shown that indeed talent-identified employees do demonstrate greater support for
the strategic priorities of their organizations (Björkman et al., 2013), however, further research is required
to understand how this translates into the increased performance or value for the firm.

50
 The Employee and Talent Management

Perceived Organizational Support

In order to achieve competitive advantage through talent, organizations seek higher and competitive per-
formance (Collings, 2014). To achieve this performance through the enhanced contribution of individual
talented employees, the use of differentiated TM practices to provide additional support and management
is warranted to achieve differentiated performance. From social exchange theory (Blau, 1964), we would
expect that employees who perceive that heightened performance is expected of them may also reasonably
expect additional support of their organization in exchange. We also know from psychological contract
theory (Rousseau, 1989, 2011), that employees develop expectations about their implied contributions and
rewards from their organizations. Talented employees may therefore expect to be provided with additional
support by their organizations to deliver the heightened performance that they perceive is expected of
them, however, the perceptions of employees as to their organizational support is not yet well examined.
A recent study has found that employees who have been designated as talent by their organizations, in
an exclusive TM context, were significantly more likely to report that they feel supported by the organ-
ization (Gelens, Dries, Hofmans, & Pepermans, 2015). As being identified as talent by one’s organization
may be interpreted as a signal of support by the organization, other researchers call for consideration
of potential unintended consequences of such signalling (Ehrnrooth et al., 2018). For example, there is
some evidence that employees may struggle to manage with the challenges and demands of being iden-
tified talent (Petriglieri & Petriglieri, 2017). This highlights the need for greater examination of the role
of organizational support in effective TM, to understand the influence of TM on employee well-being.

Organizational Climate
As mentioned earlier, organizations vary in their use of TM as an exclusive or inclusive practice (Stahl
et al., 2012), such that only specifically identified individuals are seen as talent or alternatively, such that
the whole workforce is understood to be the company’s talent. Organizations have an opportunity to
intentionally establish clear and consistent processes that support perceptions of procedural justice in
TM and also to create an overall organizational climate that is supportive of talent, potential, develop-
ment, and careers. Supportive climates have been shown to help both organizations and their employees
to achieve high-performance and organizational commitment (L. H. Nishii, 2013; Ostroff, Kinicki, &
Tamkins, 2003; Schneider, Ehrhart, & Macey, 2013) and improved customer service outcomes (Schulte,
Ostroff, Shmulyian, & Kinicki, 2009). As a top stakeholder of TM, CEOs and their leadership teams
are key actors in shaping TM (Boada-Cuerva, Trullen, & Valverde, 2019; King, 2015b) as a specific HR
practice and can have a significant influence on how TM in undertaken in the firm and the climate that
a strategic focus on talent may generate (King, 2016a).
In the previous sections of this chapter, organizational TM has been reviewed from the perspective
of its interactions with the workforce and the perspective of the employee. A three-lens framework was
introduced as a tool to structure the review of the range of interactions of organizational TM practices
with the workforce. The following section, third in this chapter, presents a critical review of the TM
literature from the perspective of the employee as a central actor. A summary overview of current
knowledge and limitations is presented.

Limitations of the Current Literature and Opportunities

for Future Research
As reviewed in the previous section, an organization’s use of TM practices, as with any other HRM
practice, inevitably has resulting implications for the workforce who experience the effects of the talent
or HRM practices. The previous section has explored these interactions through a three-lens frame-
work that represents the interaction of TM practices with the workforce at multiple levels. We have seen
that the employee’s experience of the overall climate of their workplace is impacted by HR practices,
that an employee’s experience of their work within a team and their perceived support of their line

51
 Karin A. King

manager are also influenced by human resource practices. There is also evidence from research that
perceived talent identification or perceived talent status also has influence on the employee’s views of
their individual careers and job attitudes.
As TM as a body of literature has only recently, albeit rapidly, emerged, there is much still to dis-
cover in theory development and in examining management practice. The TM literature requires further
theoretical development and further empirical examination. As described, TM is positioned as a stra-
tegic endeavor of high importance to the organization and frequently (primarily in the exclusive model)
involves a practice of differentiation of talent and potential for future career advancement. However, there
is little yet known about how employees respond to talent identification processes or how perceived talent
status influences the employee psychological contract or job attitudes. Lack of empirical insight as to the
consequences of the organization’s use of talent practices on their workforce and through the eyes of their
employees presents a risk to organizations and may interfere with the organization’s attempt to oper-
ationalise HR and TM practices effectively. Literature calls for increased individual level analysis of TM
(Collings & Mellahi, 2009; Gelens, Dries, Hofmans, & Pepermans, 2013) to consider how TM responds
to both organization and individual needs (Farndale, Pai, Sparrow, & Scullion, 2014) and as a relational
construct (Al Ariss, Cascio, & Paauwe, 2014) beyond the primary process orientation currently.
The empirical examination of TM at each of these interaction levels as an organizational system is still
emerging and requires further investigation. For example, the influence of team talent composition on
team and individual level outcomes such as performance in support of innovative team work, has not been
examined. Tensions continue to exist in the literature, such as how talent is defined and whether there is
competitive value in adopting either exclusive or inclusive TM or some hybrid version of each. The current
research is also limited in its consideration of cross-level interactions. For example, the influence of talent
status awareness on the relationship between the employee and their leader and team and its influence on
team-level work climate. Table 4.1 below, presents an overview of recommended future research themes,
corresponding to each of the three lenses of interaction: the individual, the team, and the organization.
The following final section in this chapter briefly discusses how developing one’s knowledge of TM
and its influence on the workforce is important for business leaders and HR managers.

Talent Management and Today’s Organizations

Both management practitioners and academic literature today recognize the potential value of talent
and TM (Cappelli & Keller, 2014; INSEAD, Adecco, & HCLI, 2017; Stahl et al., 2012; Varma, 2005;
Wright, Dunford, & Snell, 2001). TM by organizations today is expected to generate differentiated
firm performance and competitive advantage outcomes through differentiated engagement and devel-
opment of talented employees and their human capital. Consequently, understanding of the employee
experience of TM through these three lenses is important. A critical understanding of the interaction
of TM with the employee’s experience of their work, their team and manager, and their views of the
organization and future career opportunities is valuable if business leaders and HR practitioners are to
effectively implement TM practices and systems to enable employee engagement. If effective, TM has
the potential to foster engagement, to support an inclusive workplace, and to support employees to con-
tribute actively as one of the central actors of the talent system.
This chapter has presented a three-lens framework that can be used by organizations to critically
consider how their organizational TM strategy and practices can effectively support the attraction,
engagement, development, and retention of talented employees who possess the human capital and
potential required to create value and competitive advantage for the organization today and in the
future. Opportunities exist to create and embed a climate supportive of talent and talent develop-
ment through inclusive climate and while differentiating talent pools aligned with business strategic
requirements for skills and workforce capability. Using the framework to examine how employees
experience and respond to TM in their organizations, managers can further shape and design talent
systems to best support employee experiences as active participants in TM.

52
 The Employee and Talent Management

Table 4.1 Future research opportunities in talent management

Level of study Future research themes

Individual-level • Talent status and employee job attitudes and behaviors

• Employee psychological contract and the influence of talent management (TM) practices
• Employee perceived talent status and its association with a range of job attitudes
• Influence of TM practices on priority talent outcomes at the individual level (including
innovation, performance, contribution of human capital)
• TM as a relational construct and its influence on the employee-organization relationship
• Employee attributions or beliefs as to why or for what purpose the organization undertakes
TM and associated outcomes
• Influence of talent organizational management practices on employee well-being
Team-level & • Role of line managers or supervisors in the day-to-day management of talent in the business
line manager • Influence of team talent composition on other individual team members and individual job
attitudes (including engagement, commitment, work strain, inclusion, leader-member exchange)
• Influence of team-based talent practices on employee perceptions of supervisor and organ-
izational support
Organization • Influence of top management in TM effectiveness (including communication, decision making)
or firm-level • Influence of TM practices on organizational climate, including inclusion and diversity
• Relationship between TM practices and firm-level outcomes (including workplace innov-
ation, firm performance, corporate brand, employer brand, customer outcomes)
• Investigation of the intended-actual gap in TM implementation (including estimations of
cost, value, effectiveness, efficiency)
Cross level and • Cross-level mechanisms by which TM creates competitive value through individual
multi-level employee-level and team-level outcomes of priority interest (including contribution of human
capital resources, proactive behaviors, problem solving, innovation, citizenship behaviors)
• Cross-level investigation of the outcomes of TM practices at the individual, team, and firm
level on a range of measures at each level (for example: individual human capital growth,
team-based human capital development, firm level human capital growth)
• Multi-level investigation of variance in TM outcomes relative to specified predictors of
interest (such as the influence of line manager training in TM, use of exclusive versus
inclusive talent philosophy, use of talent development programs)

Conclusion
This chapter has introduced talent management as an organizational system and has argued that the
employee is a central actor in the talent system, whose perceptions of TM practices must be considered to
conduct TM effectively in organizations today. A three-lens framework for considering the practice of TM
and its interactions with the workforce is presented along with a review of the literature related to each of
the three lenses: the individual, team, and organization. Adopting a hybrid view of TM, the chapter has
considered how the implementation of TM practices in an organization may interact with the workforce
and individual employee perceptions of their work today, their team and supervisor and their organization
and future career. Finally, the chapter has argued that effective TM requires informed knowledge of the
influence of TM on the employee and the wider workforce, and ongoing management of talent programs
and practices by skilled HR managers and leaders in alignment with business requirements for talent.
TM continues to represent a promise of heightened organizational performance and competitive
advantage through its people and their individual human capital resources. To resolve current imple-
mentation challenges and reach the expected value and advantage through talent, organizations are
advised to examine how the use of TM practices fits with their overall HRM bundle of strategic people
practices and to closely understand how their workforce and talented employees experience TM day to
day in the organization in their work roles, teams, and interactions with their leaders, and over time in
their developing careers.

53
 Karin A. King

References
Al Ariss, A., Cascio, W. F., & Paauwe, J. 2014. Talent management: Current theories and future research directions.
Journal of World Business, 49(2): 173–179.
Asag-Gau, L., & Dierendonck, D. V. 2011. The impact of servant leadership on organizational commitment
among the highly talented: The role of challenging work conditions and psychological empowerment.
European Journal of International Management, 5(5): 463–483.
Ballinger, G. A., & Rockmann, K. W. 2010. Chutes versus ladders: Anchoring events and a punctuated-equilibrium
perspective on social exchange relationships. Academy of Management Review, 35(3): 373–391.
Becker, B. E., Huselid, M. A., & Beatty, R. W. 2009. The differentiated workforce: Transforming talent into
strategic impact. Cambridge, MA: Harvard Business Press.
Becker, G. S. 2008. Human capital. In E. David R. Henderson (Ed.), The concise encyclopedia of economics.
Library of Economics and Liberty.
Björkman, I., Ehrnrooth, M., Mäkelä, K., Smale, A., & Sumelius, J. 2013. Talent or not? Employee reactions to
talent identification. Human Resource Management, 52(2): 195–214.
Blau, P. M. 1964. Exchange and power in social life. New York, London: Wiley.
Boada-Cuerva, M., Trullen, J., & Valverde, M. 2019. Top management: The missing stakeholder in the HRM
literature. The International Journal of Human Resource Management, 30(1): 63–95.
Boudreau, J. W., & Ramstad, P. M. 2005. Talentship, talent segmentation, and sustainability: A new HR decision
science paradigm for a new strategy definition. Human Resource Management, 44(2): 129–136.
Boxall, P., & Purcell, J. 2000. Strategic human resource management: Where have we come from and where
should we be going? International Journal of Management Reviews, 2(2): 183–203.
Cappelli, P. 2008. Talent management for the twenty-first century. Harvard Business Review, 86(3): 74–81.
Cappelli, P. 2009. A supply chain model for talent management. People & Strategy, 32(3): 4–7.
Cappelli, P. 2013. HR for neophytes. Harvard Business Review, 91(10): 25–27.
Cappelli, P., & Keller, J. 2014. Talent management: Conceptual approaches and practical challenges. Annual
Review of Organizational Psychology and Organizational Behavior, 1(1): 305–331.
Cascio, W. F., & Aguinis, H. 2008. Staffing twenty-first-century organizations. The Academy of Management
Annals, 2(1): 133–165.
Cheese, P. 2010. Talent management for a new era: What we have learned from the recession and what we need to
focus on next. Human Resource Management International Digest, 18(3): 3–5.
Collings, D. G. 2014. The contribution of talent management to organization success, The Wiley Blackwell handbook
of the psychology of training, development, and performance improvement. John Wiley & Sons, Ltd. pp. 247–260.
Collings, D. G., & Mellahi, K. 2009. Strategic talent management: A review and research agenda. Human Resource
Management Review, 19(4): 304–313.
Collings, D. G., Mellahi, K., & Cascio, W. F. 2019. Global talent management and performance in multinational
enterprises: A multilevel perspective. Journal of Management, 45(2): 540–566.
Dries, N. 2013. The psychology of talent management: A review and research agenda. Human Resource
Management Review, 23(4): 272–285.
Dries, N., & De Gieter, S. 2014. Information asymmetry in high potential programs. Personnel Review, 43(1):
136–162.
Dries, N., & Pepermans, R. 2012. How to identify leadership potential: Development and testing of a consensus
model. Human Resource Management, 51(3): 361–385.
Ehrnrooth, M., Björkman, I., Mäkelä, K., Smale, A., Sumelius, J., & Taimitarha, S. 2018. Talent responses to
talent status awareness—Not a question of simple reciprocation. Human Resource Management Journal,
28(3): 443–461.
Farndale, E., Pai, A., Sparrow, P., & Scullion, H. 2014. Balancing individual and organizational goals in global
talent management: A mutual-benefits perspective. Journal of World Business, 49(2): 204–214.
Gelens, J., Dries, N., Hofmans, J., & Pepermans, R. 2013. The role of perceived organizational justice in shaping
the outcomes of talent management: A research agenda. Human Resource Management Review, 23(4):
341–353.
Gelens, J., Dries, N., Hofmans, J., & Pepermans, R. 2015. Affective commitment of employees designated
as talent: Signalling perceived organizational support. European Journal of International Management,
9(1): 9–27.
Guest, D. E., & Conway, N. 2002. Communicating the psychological contract: An employer perspective. Human
Resource Management Journal, 12(2): 22–38.
Guzzo, R. A., & Noonan, K. A. 1994. Human resource practices as communications and the psychological con-
tract. Human Resource Management, 33(3): 447–462.
Hausknecht, J. P., Rodda, J., & Howard, M. J. 2009. Targeted employee retention: Performance-based and job-
related differences in reported reasons for staying. Human Resource Management, 48(2): 269–288.

54
 The Employee and Talent Management

Höglund, M. 2012. Quid pro quo? Examining talent management through the lens of psychological contracts.
Personnel Review, 41(2): 126–142.
Huselid, M. A., Beatty, R. W., & Becker, B. E. 2005. A players or A positions? Harvard Business Review, 83(12):
110–117.
INSEAD, Adecco, & HCLI. 2017. INSEAD Global Talent Competitiveness Index (GTCI) 2017: Talent and tech-
nology. In B. Lanvin, & P. Evans (Eds.): INSEAD.
Jiang, K., Lepak, D. P., Hu, J., & Baer, J. C. 2012. How does human resource management influence organiza-
tional outcomes? A meta-analytic investigation of mediating mechanisms. Academy of Management Journal,
55(6): 1264–1294.
King, K. A. 2015a. Global talent management: Introducing a strategic framework and multiple-actors model.
Journal of Global Mobility: The Home of Expatriate Management Research, 3(3): 273–288.
King, K. A. 2015b. Sustained Value through Talent Management: A multi-stakeholder approach., European Institute
for Advanced Studies in Management (EIASM). 4th Workshop on Talent Management. Valencia, Spain.
King, K. A. 2016a. The talent climate: Creating space for talent development through a strong talent system,
EIASM. European Institute for Advanced Studies in Management. 5th workshop on talent management.
Copenhagen, Denmark.
King, K. A. 2016b. The talent deal and journey: Understanding how employees respond to talent identification
over time. Employee Relations, 38(1): 94–111.
Lewis, R. E., & Heckman, R. J. 2006. Talent management: A critical review. Human Resource Management
Review, 16(2): 139–154.
Mäkelä, K., Björkman, I., & Ehrnrooth, M. 2010. How do MNCs establish their talent pools? Influences on indi-
viduals’ likelihood of being labeled as talent. Journal of World Business, 45(2): 134–142.
McDermott, A. M., Conway, E., Rousseau, D. M., & Flood, P. C. 2013. Promoting effective psychological
contracts through leadership: The missing link between HR strategy and performance. Human Resource
Management, 52(2): 289–310.
McDonnell, A., Collings, D. G., Mellahi, K., & Schuler, R. 2017. Talent management: A systematic review and
future prospects. European Journal of International Management, 11(1): 86–128.
Mellahi, K., & Collings, D. G. 2010. The barriers to effective global talent management: The example of corporate
élites in MNEs. Journal of World Business, 45(2): 143–149.
Meyers, M. C., De Boeck, G., & Dries, N. 2017. Talent or not. In D. G. Collings, K. Mellahi, & W. F. Cascio
(Eds.), The Oxford handbook of talent management. Oxford UK: Oxford University Press.
Meyers, M. C., & van Woerkom, M. 2014. The influence of underlying philosophies on talent management:
Theory, implications for practice, and research agenda. Journal of World Business, 49(2): 192–203.
Mollick, E. 2012. People and process, suits and innovators: The role of individuals in firm performance. Strategic
Management Journal, 33(9): 1001–1015.
Morris, S. S., Wright, P. M., Trevor, J., Stiles, P., Stahl, G. K., Snell, S., Paauwe, J., & Farndale, E. 2009. Global
challenges to replicating HR: The role of people, processes, and systems. Human Resource Management,
48(6): 973–995.
Nilsson, S., & Per-Erik, E. 2012. Employability and talent management: Challenges for HRD practices. European
Journal of Training and Development, 36(1): 26–45.
Nishii, L. H. 2013. The benefits of climate for inclusion for gender-diverse groups. Academy of Management
Journal, 56(6): 1754–1774.
Nishii, L. H., Lepak, D. P., & Schneider, B. 2008. Employee attributions of the “why” of hr practices: Their effects
on employee attitudes and behaviors, and customer satisfaction. Personnel Psychology, 61(3): 503–545.
Nishii, L. H., & Wright, P. M. 2008. Variability within organizations: Implications for strategic human resources
management. In D. B. Smith (Ed.), LEA’s organization and management series. The people make the place:
Dynamic linkages between individuals and organizations (p. 225–248). Taylor & Francis Group/Lawrence
Erlbaum Associate.
Ostroff, C., Kinicki, A. J., & Tamkins, M. M. 2003. Organizational culture and climate. Handbook of Psychology.
John Wiley & Sons, Inc.
Petriglieri, J. 2018. Talent management and the dual-career couple. Harvard Business Review, 96(3): 106–113.
Petriglieri, J., & Petriglieri, G. 2017. The talent curse: Interaction. Harvard Business Review, 95(4): 19–19.
PricewaterhouseCoopers. 2017. PricewaterhouseCoopers CEO survey. PricewaterhouseCoopers, Inc.
Rousseau, D. M. 1989. Psychological and implied contracts in organizations. Employee Responsibilities and Rights
Journal, 2(2): 121–139.
Rousseau, D. M. 1995. Psychological contracts in organizations: Understanding written and unwritten agreements.
Thousand Oaks, CA: SAGE Publications.
Rousseau, D. M. 2011. The individual–organization relationship: The psychological contract. APA handbook of
industrial and organizational psychology, Vol 3: Maintaining, expanding, and contracting the organization,
pp. 191–220. Washington, DC: American Psychological Association.

55
 Karin A. King

Schneider, B., Ehrhart, M. G., & Macey, W. H. 2013. Organizational climate and culture. Annual Review of
Psychology, 64(1): 361–388.
Schulte, M., Ostroff, C., Shmulyian, S., & Kinicki, A. 2009. Organizational climate configurations: Relationships
to collective attitudes, customer satisfaction, and financial performance. Journal of Applied Psychology,
94(3): 618–634.
Smale, A., Ehrnrooth, M., Björkman, I., Mäkelä, K., Sumelius, J., & Taimitarha, S. 2015. Letting the chosen
ones know: The psychological effects of talent status self-awareness. Academy of Management Proceedings,
2015(1): 16195.
Sonnenberg, M., van Zijderveld, V., & Brinks, M. 2014. The role of talent-perception incongruence in effective
talent management. Journal of World Business, 49(2): 272–280.
Sparrow, P. R., & Makram, H. 2015. What is the value of talent management? Building value-driven processes
within a talent management architecture. Human Resource Management Review, 25(3): 249–263.
Stahl, G. K., Björkman, I., Farndale, E., Morris, S. S., Paauwe, J., & Stiles, P. 2012. Six principles of effective
global talent management. MIT Sloan Management Review, 53(2): 25–32.
Swailes, S. 2013a. The ethics of talent management. Business Ethics: A European Review, 22(1): 32–46.
Swailes, S. 2013b. Troubling some assumptions: A response to “The role of perceived organizational justice in
shaping the outcomes of talent management: A research agenda”. Human Resource Management Review,
23(4): 354–356.
Swailes, S., & Blackburn, M. 2016. Employee reactions to talent pool membership. Employee Relations, 38(1):
112–128.
Swailes, S., Handley, J., & Rivers, L. 2016. Talent management: Critical perspectives. Palgrave.
Tarique, I., & Schuler, R. S. 2010. Global talent management: Literature review, integrative framework, and
suggestions for further research. Journal of World Business, 45(2): 122–133.
Thunnissen, M., Boselie, P., & Fruytier, B. 2013a. A review of talent management: ‘Infancy or adolescence?’. The
International Journal of Human Resource Management, 24(9): 1744–1761.
Thunnissen, M., Boselie, P., & Fruytier, B. 2013b. Talent management and the relevance of context: Towards a
pluralistic approach. Human Resource Management Review, 23(4): 326–336.
Vaiman, V., & Collings, D. G. 2013. Talent management: Advancing the field. The International Journal of
Human Resource Management, 24(9): 1737–1743.
Varma, A. 2005. Mark A. Huselid, Brian E. Becker, and Richard W. Beatty. The workforce scorecard: Managing
human capital to execute strategy. Human Resource Management, 44(3): 359–361.
Weick, K. E. 1995. Sensemaking in organizations ( foundations for organizational science). Thousands Oaks: Sage
Publications Inc.
Wright, P. M., Dunford, B. B., & Snell, S. A. 2001. Human resources and the resource based view of the firm.
Journal of Management, 27(6): 701–721.
Wright, P. M., & McMahan, G. C. 2011. Exploring human capital: Putting ‘human’ back into strategic human
resource management. Human Resource Management Journal, 21(2): 93–104.

56
 5
TALENT MANAGEMENT
From Resource-Based View to Dynamic Capabilities
Kushal Sharma

The Need for Talent Management

During the last decade, talent management (TM) has become a key management issue for business
leaders (Collings, Mellahi, & Cascio, 2018; Gallardo-Gallardo et al., 2020; Groysberg & Connolly,
2015; King & Vaiman, 2019; Thunnissen, Boselie, & Fruytier, 2013). The interest in TM spiked after
McKinsey consultants came up with the idea in the 1990s that organizations faced imminent shortage
of talent, especially for filling positions of strategic importance (Mellahi & Collings, 2010; Minbaeva &
Collings, 2013). The implication was that shortages emanating from multifarious reasons such as glo-
balization, ageing workforce, and poaching (Preece, Iles, & Jones, 2013) pitted organizations against
each other in a “war for talent” (Festing, Schäfer, & Scullion, 2013).
Underlying the perceived need to engage in this “war” is the assumption that possession of
superior talent enables an organization to perform better than its competitors, i.e., achieve sustain-
able competitive advantage (SCA). Some implicit assumptions are that TM produces positive reactions
among talented employees, such as higher engagement, retention, and other positive work attitudes
(De Boeck, Meyers, & Dries, 2018). Some authors (e.g., Huselid, Beatty, & Becker, 2005; Morris, Snell,
& Björkman, 2016) have suggested that firms should use differentiated human resource architecture to focus
on those employees who can contribute more towards the success of an organization.

Existing Conceptualization of Talent and Talent Management

In an organizational context, the term talent refers to the quality of labor (Minbaeva & Collings, 2013)
and talent is defined as “people who make valuable contributions to organizational objectives” (Morris
et al., 2016: 724), the collection of those “exhibiting future leadership potential” (Mäkelä, Björkman,
& Ehrnrooth, 2010: 134); “key individuals without whom the company would not operate so effect-
ively” (Valverde, Scullion, & Ryan, 2013: 1842); and individuals who are a part of the “human
capital in an organization that is both valuable and unique” (Vos & Dries, 2013: 1818). Others have
defined talent as individuals who, in addition to being competent in terms of knowledge and skill,
are “committed, motivated, loyal and closely involved with the company” (Valverde et al., 2013:
1843–1844); “individuals who can make a difference to organisational performance either through
their immediate contribution or, in the longer-term, by demonstrating the highest levels of poten-
tial” (CIPD, 2014); and “those employees who are high performing and continuously improving
within their current position…are mobile and have the potential and the willingness for further
growth in other key positions” (Mäkelä et al., 2010: 137). Some authors claim that creativity (Tansley,

57 DOI: 10.4324/9781315474687-5

 Kushal Sharma

2011) and social capital – the ability to develop and maintain networks and relationships (McDonnell
& Collings, 2011) – also are elements of talent.
From this short overview of how different scholars define talent, it is evident that definitions of talent
are not fixed and that they may vary from organization to organization (Swailes, 2013). In short, there
is no agreed upon definition of what constitutes talent. However, across all the definitions presented
above, a common understanding appears to be that only a minority who differentially contribute to
organizational success are talents (Tansley, 2011; Swailes, 2013). This minority is supposedly a “com-
petitive weapon” (Mellahi & Collings, 2010: 143) or a source of competitive advantage (Oltra & Vivas-
López, 2013). This idea that the focus on a selected few individuals produces the greatest benefits for an
organization is the mainstream, exclusive view of talent.
Lewis and Heckman (2006) report that there are three distinct viewpoints of TM. The first per-
spective is simply a rebranding of traditional HR and involves the same activities such as recruitment
and selection, development, and succession planning. The only differences between traditional HR
management and TM from this perspective is that in TM, activities are carried out faster through the
use of technology or outsourcing and that the scope of HR is expanded across the whole organiza-
tion instead of being limited to a single unit. The second perspective is focused on the development
of talent pools; emphasis is on finding internal talent rather than external. This perspective is closely
linked with succession planning or HR planning. The third perspective has two variations: either
consider that the goal of TM is to help every employee in the organization achieve high-performance,
or manage highly talented employees selectively – this might sometimes involve hiring and differ-
entially rewarding competent employees regardless of their roles or organization’s requirements.
Except that the last variation that is exclusive and elitist, all other perspectives summarized by Lewis
and Heckman (2006) might be considered as variants of the inclusive school of thought identified by
Festing et al. (2013).
To the three perspectives identified by Lewis and Heckman (2006), Collings and Mellahi (2009)
add a fourth perspective that focuses on identifying key positions that can positively contribute
towards SCA of the firm. This perspective is exclusive since it advocates that the focus of TM should
be on a selected few positions and that the process of TM should start by identifying key positions
rather than talented individuals. These authors note that the key positions are not strictly limited to
the top positions and may vary between operating units. From their perspective, TM also involves the
development of a “differentiated human resource architecture” so that the process of hiring compe-
tent candidates to key positions and obtaining commitment from such candidates faces is facilitated
(Collings & Mellahi, 2009: 305). In their later work, Mellahi and Collings (2010) argue that TM
systems that are grounded in identification of key positions should strive to assign “A performers”
(Huselid et al., 2005) to such positions.
From the brief discussion of the literature on TM above, it is clear that regardless of whether scholars
focus on strategic positions or on individuals who occupy those positions, advocates of TM concep-
tualize talent as a resource that can assist an organization to achieve SCA. Conceptualization of talent
as a potential resource for generating SCA is largely influenced by Barney’s (1991) seminal paper on
resource-based view (RBV) of the firm and by subsequent ideas developed regarding RBV.

Resource-based View (RBV) of Talent

Rooted in the ideas of Penrose (1959) and Chandler (1977), RBV conceptualizes an organization
as “a unique bundle of resources” and focuses on what kind of resources a firm should possess to
acquire SCA (Santos & Eisenhardt, 2005) and consequently above-average financial performance
(Becker & Huselid, 2006). By shifting the emphasis from external environmental factors to internal
firm characteristics as sources of SCA, RBV legitimized the claim of HR practitioners that human
resource has the potential to be a source of SCA (Wright, Dunford, & Snell, 2001). RBV is the most
popular theory both for theory-building and empirical research in the field of Strategic Human

58
 Resource-Based View & Dynamic Capabilities

Resource Management (SHRM) (Wright et al., 2001). Since TM borrows many of its ideas from
SHRM (Lewis & Heckman, 2006), it is of little surprise that TM should continue to be governed by
the same ideas of RBV.
While laying down the main ideas of RBV, Barney (1991) notes that all aspects of a firm’s resources
are not strategically relevant. Researchers (e.g, Barney, 1991; Boxall, 1996; Kraaijenbrink, Spender, &
Groen, 2010) add that to contribute towards achieving SCA, resources must be valuable, rare, inimit-
able, and nonsubstitutable (VRIN). Building on this idea, some researchers (e.g, Huselid et al., 2005)
advocate for the idea of “differentiated human resource architecture” through which employees who
contribute more towards a firm’s success are rewarded more as compared to the employees who con-
tribute less. The differentiated human resource architecture approach assumes that not all employees
of an organization will be high-performers. Such an approach can be considered an exclusive form
of TM. Huselid et al. (2005) recommend that organizations should fill important strategic positions
with the best performers (A players) and support positions with “good” performers (B players). These
authors further suggest that positions that do not add value should be eliminated along with the “non-
performing” employees (C players) who occupy such positions. In practice, larger organizations tend to
take a more exclusive view of talent than smaller organizations (Meyers et al., 2019).
In HR and TM literature, many scholars echo the idea that different resources (positions or employees)
contribute differentially and thus should be treated differently. Kraaijenbrink et al. (2009) are of the
opinion that typologies are needed to classify and differentiate between resources based on how they
contribute to an organization’s SCA. Popular typologies in HR and related literature often stem from
Barney’s (1991) work. For example, Lewis and Heckman (2006) categorize talent based on the inter-
action between nonsubstitutability and value, while Lepak and Snell (2002) classify employment modes
on the basis of uniqueness (degree of rareness) and value.

Limitations of the Resource-based View

While typologies based on or inspired by Barney’s (1991) VRIN resources – for example, Lepak and
Snell’s (2002) framework, Lewis and Heckman’s (2006) talent typology, Kang and Snell’s (2009) intel-
lectual capital architecture – arepractically applicable tools for managing talent, they suffer from the
following limitations:

• Treatment of talent devoid of larger context,

• RBV scholars (Barney, 1991; Barney, Ketchen, & Wright, 2011) divide a firm’s resources into
three categories: physical capital, human capital, and organizational capital. Of particular
interest to human resource and talent scholars is the human capital resource, which comprises
“training, experience, judgment, intelligence, relationships, and insight of individual managers
and workers in a firm” (Barney, 1991: 101, italics original). RBV literature is criticized for over-
emphasizing the possession of individual resources and underemphasizing the important role of
bundling resources and of human involvement in value creation (Kraaijenbrink et al., 2010). In
the HR literature, there is an unwarranted tendency to view organizational performance as the
simple aggregation of individual performance (Wright et al., 2001). Presented as a more focused
approach than HRM, TM runs the risk of being too myopic a focus on individuals. In contem-
porary discussions on TM, the original emphasis by Barney (1991) on the term “individual” is
pushed to such extreme that the mainstream view often understands talent as “nurtured by the
competences of (especially relevant) single individuals” (Oltra & Vivas-López, 2013: 1857) and
is discussed devoid of the larger context in which it exists. Such discussions are problematic
because how employees perceive TM practices depends on their organizational context. For
example, Asplund (2019) finds that TM might produce less favorable outcomes among employees
in the education sector. Incompatibility between TM and the conceptualization of talent as a
VRIN resource.

59
 Kushal Sharma

RBV has two foundational assumptions: 1) firms within an industry possess heterogeneous resources,
and 2) those resources are not perfectly transferable across firms (Barney, 1991). Owing to this lack of
mobility, it is assumed that heterogeneity can be sustained over time and thus can contribute towards
SCA of a firm. However, unlike other resources, talent has agency of its own. Talent has mobility and
cannot be owned by a firm in the material sense of ownership. So talent violates RBV’s basic assumption
of immobility as a precondition for SCA. To minimize the risk of losing top talent, firms might try to
make their star contributors as unique as possible. The most obvious option is to convince talents to
acquire firm-specific skills – such skills not only make talent unique and thus inimitable but also achieve
the purpose of immobility. The anticipated result is that since firm-specific skills are not transferable
across firms, competitors cannot derive significant benefits from acquiring such unique talents and thus
talent is retained.
However, such a strategy might have a downside: although firms may be able to derive SCA,
uniqueness and inimitability derived from firm-specific skills might result in opportunistic behavior
from individuals who possess such skills (Schilling & Steensma, 2002). Accumulating firm-specific
knowledge has its risks and the link between such knowledge and better financial performance is
unclear (Wang et al., 2013). Firms “get stuck” with such individuals and they are unable to innovate or
to adapt to changes in the environment. Such resources produce core rigidities – resources that were once
valuable but have become obsolete and “inhibit development, generate inertia, and stifle innovation”
(Ambrosini & Bowman, 2009: 32).
Moreover, there still is a possibility that firms might lose their talents despite the barriers they create.
Although it is often argued that talent is not perfectly mobile owing to idiosyncratic skills, talent does
not need to be perfectly mobile to be taken away from the focal firm. For example, even if competitors
cannot make use of a talent’s firm-specific skills, it would be worthwhile just to create a setback for
the focal firm by luring away its key talent and depriving it of its most valuable resource (see Sturman,
Walsh, & Cheramie, 2007). Or a talent might decide to leave the firm to start her own entrepreneurial
venture. The point is that no matter how firm-specific the skills, a firm cannot be absolutely certain of
retaining its talents. Hence, it is imperative that an effective TM system should account for such events
and plan accordingly for the possibility that its key talents might leave. In other words, if it is to function
smoothly, a TM system must not be bound by resource specificity. The first step is the acknowledgment
that talent is mobile and that the attempt to retain top talent at any cost is an unjustified obsession.
Mobility of talent necessitates that firms prepare for the possibility that their top talent might leave.
Such preparedness naturally involves finding a replacement in the event that a talent is lost so that the
system continues to function smoothly. Such a scenario is incompatible with the assertion that talent
is nonsubstitutable. It has been argued that “executive level human capital” – senior position holders
in an organization – possess complex skills and hard-to-imitate, unique, and tacit knowledge often
accumulated from learning in the course of a long career (Sturman et al., 2007). Executives possessing
such knowledge and skills “while replaceable, cannot be duplicated” (292, italics added). The point here
is that since it is replaceable, talent fails the test of nonsubstitutability. Even though the replacement
talent might not have the exact, complex skills as the former talent, individuals need to be replaced if a
firm is to operate efficiently.
In the context of organizations, all employees are required to perform a set of predefined activities
depending upon their position in the organization. Such activities require some form of training –
either formal or informal. As per Pfeffer (2001), individuals considered talent in performing such activ-
ities develop such skills not due to some kind of innate abilities but from training. This applies especially
to managerial talent as managerial training is largely formalized and disseminated through structured
education and training.
Finally, rare talents are no longer rare in the long run. Over time, skills considered rare get formalized
and widely disseminated, especially if firms deem that they are useful and are willing to provide high
compensation to talents with such skills. When other individuals observe that a certain individual (or
a few individuals) possess some skills by virtue of which they command higher rents, they too become

60
 Resource-Based View & Dynamic Capabilities

interested in developing such skills. Since skills are not uniquely and inherently attached to individuals,
any reasonably competent person can copy such skills with proper training. In short, talent is definitely
not inimitable and it is also not rare in the long run.

Misidentification of the Source of SCA

One of the accepted premises in TM is that talent is a potential source of SCA and debates are centered
on pinpointing the exact source of SCA – the talents themselves, the positions they hold, or the skills
they possess. Some argue that talents (individuals) produce SCA because competitors do not possess such
talents. This argument is easily refuted since the focal firm’s advantage is lost as soon as competitors are
able to lure away the talent. Others argue that certain positions create SCA (e.g., Mellahi & Collings,
2010). However, SCA stems from the inability of competitors (both current and potential) to duplicate
a focal firm’s strategy (Barney, 1991). So the argument that positions create SCA is not very convincing
as each position entails certain duties and responsibilities that competitors can easily replicate into their
own structures when they identify such positions of advantage. Hence, as they are imitable, positions
cannot be a source of SCA.
A less discussed third view could be that a certain set of unique skills create SCA. This assertion is
also flawed because, as discussed earlier, individuals do not have inherent unique skills. Skills have to be
developed through learning, engaging in training, experience, etc. So if one individual can develop a set
of skills, another individual can more or less replicate such skills with proper training and development.
Unless they are very idiosyncratic so as to be unusable by competitors, even skills cannot be a source of
SCA. Especially in the case of managerial talent, highly idiosyncratic firm-specific skills appear unlikely.

RBV 2.0: Dynamic Capability Perspective as an Extension to RBV

The limitations of RBV pointed out in section 2 imply that talents, positions, and skills cannot be
sources of SCA because RBV discusses talent without taking the broader context into account, because
talent might be substituted, and because organizational positions as well as skills can be imitated. The
counterargument to such an assertion is that talents, positions, and skills can be sources of SCA: talents
can produce SCA if they continuously engage in training and development to gain new competencies;
positions can produce SCA if new positions are continuously created; and skills can produce SCA if new
skills are continuously invented and developed. The problem is that the current TM literature adopts
a static RBV perspective. RBV explains how a firm can gain SCA only in equilibrium conditions
and as such, it is ill-equipped to explain how the existing resource base of a firm can be refreshed in
dynamic environments (Ambrosini & Bowman, 2009). RBV is inadequate in unpredictable environ-
ments characterized by emergence of new markets, new technologies, and drastic change in the value of
resources (Kraaijenbrink et al., 2010). This limitation of RBV can be overcome by adopting a dynamic
capabilities perspective.
Built upon Nelson & Winter’s (1982) ideas of how routines shape and constrain firm-responses to
changing environments (Ambrosini & Bowman, 2009), dynamic capabilities are defined as a firm’s
“ability to integrate, build, and reconfigure internal and external competences to address rapidly chan-
ging environments” (Teece, Pisano, & Shuen, 1997: 516). While both dynamic capabilities and RBV
share similar assumptions, the major difference between the two is that while RBV is a static view,
the dynamic capabilities view helps to explain how SCA is created through the evolution of a firm’s
resource base (Ambrosini & Bowman, 2009). Dynamic capabilities are “the organizational and strategic
routines by which firms achieve new resource reconfigurations as markets emerge, collide, split, evolve,
and die” (Eisenhardt & Martin, 2000: 1107). Rather than solely focus on the individual, dynamic cap-
abilities perspective focuses on an organization’s capability to utilize its human capital (Collings et al.,
2018). This perspective has been adopted in studies of human capital development and TM in large and
global organizations (e.g., Collings et al., 2018; Griffith & Harvey, 2001; Teece, 2007).

61
 Kushal Sharma

Impetus for the Push towards Dynamism

Criticism is directed towards TM primarily for being obsessed with a small closed group of elites and
for ignoring the majority of employees. From an ethical and moral standpoint, acknowledgement that
some individuals are more valuable than others might be controversial (Thunnissen et al., 2013). Critics
of the approach of treating a selected few as talents argue that labeling a selected few as stars demotivates
the majority, causing them to perform below their potential (e.g., Pfeffer, 2001). Another downside of
differential treatment of a selected few employees is that those labeled “talent” might experience mar-
ginalization and resentment from co-workers who envy them for being “the brightest and the best”
(Tansley, 2011: 270).
The above-mentioned problems arise largely because TM adopts a static view that understands talent
as an enduring and unchanging quality of individuals. Not only is such conceptualization ethically
unsound but it also misrepresents reality. Due to the static conceptualization of talent, extant TM lit-
erature assumes that talents will indefinitely be valuable and unique. However, this is not necessarily
true. Over time, skills can become obsolete due to several reasons, e.g., change in technology. Or it is
also possible that skills that were once rare are no longer rare because of change in workforce. Another
possibility is that individuals not included in the talent pool can develop skills by themselves or with the
help of their organizations to become talents.
Static view of talent might be one of the main reasons why exclusive TM is seen as being an unfair
system and one that works at the peril of antagonizing the majority of employees. To gain acceptance
as a legitimate process of managing talented employees, TM needs to be grounded on strong norms of
fairness. This mindset – that there can and will be shifts in an organization’s talent pool – might also
serve the additional purpose of discouraging complacency from those labeled talent because they will
have to continually upgrade their skills to remain a part of the talent pool.

Dynamic Capability and Its Applicability to TM

To address the issues of fairness discussed above and to meet the challenges of the changing business
environment, organizations need to consider the following two types of dynamism:

Dynamism of Individuals
Communicating TM as a process that allows for movement of individuals in and out of talent pools
is ethically justifiable and has better chances of acceptance by organizational members as it provides
opportunities to those not initially included in the talent pool to join it later through hard work. As
opposed to closed group of elites, talent pools can then be seen as accessible groups open to all individ-
uals provided that they meet certain criteria. Hence it is likely that those not included in the talent pool
will not only accept the system but also be willing to exert more effort to be a part of the talent pool.
For this, talent needs to be defined not as inherent quality of individuals but as set of skills that can be
developed through learning and refined through training and experience. Krishnan & Scullion (2017)
propose, in the context of small and medium enterprises, that talent is dynamic and context-specific.
This idea of dynamism equally applies to large and multinational organizations where the context plays
an important role in determining organizational outcomes.

Dynamism of the Environment

Environment, the external context within which an organization operates, might be constantly changing
with regards to governmental policies, political climate, and broader economic conditions. Dynamism
of the external environment necessitates organizations to make changes to their existing human
resource. However, changes of large magnitude are difficult to achieve mainly because organizations

62
 Resource-Based View & Dynamic Capabilities

are incapacitated by their existing human resource architecture (Wright et al., 2001). This is precisely
why a dynamic conceptualization of talent is needed as opposed to the static view that talent is con-
stant. To achieve change, organizations might need to release some of their existing talent and acquire
new talent (Wright et al., 2001). Research on boundaryless careers has revealed that a moderate levels of
turnover is good for organizations pursuing exploratory knowledge because turnover allows inflow of
new knowledge as well as diversity of knowledge and attitudes (Lazarova & Taylor, 2009). In support of
this, some practitioners (see Aghina, De Jong, & Simon, 2011: 5) agree that releasing poor performers
allows a firm to import “fresh talent and ideas”.

Barriers to the Transition from RBV to Dynamic Capabilities

The preceding discussion points out some features of the dynamic capabilities and argues that it is a
more rational and realistic representation of the environment within which an organization operates.
Although it appears logical that TM should adopt a dynamic perspective, there are some barriers that
contribute towards the perseverance of a static view of talent. In other words, some challenges prohibit
a smooth transition from RBV to a dynamic capabilities perspective of TM. As discussed below, perhaps
the most important one is the confusion regarding the concept of dynamic capability.

Confusion Surrounding Dynamic Capability

Barney (1991) argues that anything—whether it is an asset, a capability, or a process—that contributes
towards increasing a firm’s effectiveness and efficiency is a resource. In other words, RBV uses the
terms resources and capabilities interchangeably to refer to a firm’s tangible and intangible assets
(Becker & Huselid, 2006). However, some scholars distinguish capability from resource and assert
that capability serves as “intermediate goods” (Amit & Schoemaker, 1993: 35) that interacts with
resources of a firm to make them more productive (Becker & Huselid, 2006). Penrose asserts that
possession of resources does not create value; value creation depends on how those resources are
deployed (Ambrosini & Bowman, 2009). Particularly regarding talents, firms need to have both
talents (resource) as well the capability to manage them. Both are necessary; one without the other
might not be sufficient to create SCA (Coff, 1999). This is the guiding principle behind conceptual-
ization of capabilities as different from resources.
In line with Ambrosini & Bowman (2009: 33), this chapter defines dynamic capability as inten-
tional organizational efforts to change its resource base. As defined here, dynamic capabilities are not
resources but repeatable processes that interact with the existing resource base (Ambrosini & Bowman,
2009) to produce new resources. Such processes enable organizations to alter “their routines, services,
products, and even markets over time” (Wright et al., 2001: 712). The term dynamic does not refer to
capabilities that can change or evolve over time; rather, dynamic capabilities are quite stable (Ambrosini
& Bowman, 2009).

Confusion Regarding the Source of Dynamism

Ambrosini and Bowman (2009: 30, 34) argue that the term dynamic refers to the environment, and “the
dynamism does not consist in either the dynamic capability or the resource base”. This chapter agrees
with these authors that dynamic capabilities are stable processes but disagrees on the point about the
static nature of the resource base. Ambrosini and Bowman (2009) might have considered only inani-
mate resources when they argued that the resource base is not dynamic. However, in the context of
TM, human resources has agency and talents can upgrade their knowledge, skills, and competencies.
Hence, this chapter conceptualizes talents not as passive receivers upon which organizational processes
act to bring about changes but as a dynamic resource base that actively acts on itself as well as on organ-
izational processes to produce change.

63
 Kushal Sharma

Confusion Regarding the Relationship between Dynamism and SCA

Although TM helps in producing SCA, it does not directly contribute to SCA. The idea of an indirect
effect of the process on SCA is in line with Eisenhardt and Martin’s (2000) assertion that the potential
for SCA does not lie in dynamic capability itself but in the resource configurations it creates. Due to the
general value-creating strategies to “acquire and shed resources, integrate them together, and recom-
bine them” (Eisenhardt & Martin, 2000: 1107), this is a broad process that can be replicated in different
organizations. Findings that multinational companies (MNCs) adopt more sophisticated and similar
styles for managing talents (e.g., Mäkelä et al., 2010) further buttress the point that conceptualization of
TM as a replicable process is a sensible approach.

The Practitioner-academic Divide

The gap between research and practice, especially in management science, is an ongoing issue, and TM
as a field is not an exception. While one might expect that a field such as TM that traces its origins in
the practitioner literature of the 1990s (e.g., Chambers, Foulton, Handfield-Jones, Hankin, & Michaels,
1998) would be closer to and reflect the workings of real organizations, the dearth of empirical studies
has hindered its progress. This prevents academics from having a clear and accurate picture of the field.
As an example, from a practical standpoint it appears likely that organizations would sometimes let go
of poor performers even if they belong to talent pools, and at the same time include high-performers
who were not initially included. If true, such practices would point towards the dynamism of the pro-
cess. However, not a single empirical study on TM directly addresses this issue of movement within
a talent pool. The result is that academic literature continues to build upon the extant, static view of
talent while discounting the dynamic view, if not disregarding it altogether.
The main implication of the discussion in section 4 is that unless the confusion regarding dyna-
mism and other barriers for the adoption of dynamic capabilities can be removed, TM will continue
to be governed by the idea of stable and static nature of talent and thus misrepresent the TM issues
surrounding organizations by disregarding the dynamism of the TM process.

Recommendations for Research

Adopting a dynamic capabilities view will help to develop coherent frameworks of TM that will be
relevant to theory and practice alike for better conceptualizing talent and TM. This does not imply
that we erase ideas based on RBV or forget the progress that the field has made so far. On the contrary,
re-examining existing ideas from a dynamic capabilities lens will make research in this field richer and
more relevant to practice. In this vein, some suggestions are made below about possible future avenues
of TM research.
This chapter has argued that research has to account for the dynamism of the environment as well
as the resource base. Thus, one possible area of research could be the impact of movement within a
talent pool. In instances where organizations make new talent acquisitions, it might be interesting to
study how a firm can successfully integrate the new resource by adjusting existing resources and/or
transforming newly acquired resources (Kraaijenbrink et al., 2009).
Another area where research is needed is on the fairness aspect of exclusive TM. While it is argued
in this chapter that a dynamic approach that provides opportunities for individuals to become part of
talent pools or that penalizes under-performers within the pool by removing them might be perceived
as fair by the stakeholders, such an assertion needs to be backed up by empirical data. It might also be
interesting to revisit these TM issues from ethical and moral standpoints.
Perhaps most importantly, even when adopting a dynamic perspective, we need to compile existing
knowledge in a coherent form so that we can draw upon prior research. In this regard, one of the
frontiers in TM research is the establishment of linkages between different fields that study the same

64
 Resource-Based View & Dynamic Capabilities

population of talented employees but name them differently as high-performing employees, high-
potentials, stars, or talent. We need better integration and cross-linkages between the disparate fields
that research high-performing employees.
From a research perspective, we also need to clearly delineate between traditional HRM research and
TM research. If TM is not to be limited to merely being a management fad, it needs to carve out a niche
and evolve as a separate discipline. All the research to date has slowly but surely clarified the boundaries
between these two closely related disciplines; however, we need more theoretical grounding as well as
empirical research to solidify TM’s status as a separate discipline.

Conclusion
It its initial phases, TM might have been considered a management fad that would go away after a few
years. That TM is still being discussed after more than 20 years since its emergence is a testimonial to
the fact that it is here to stay. From infancy to adolescence (Thunnissen et al., 2013) to what we now
might call early adulthood, the field has seen increasing growth and interest. It does not show any signs
of going away; on the contrary, scholars have built upon the concept of TM and have applied it to the
practices of multinational enterprises (MNEs). In MNEs, TM takes on an additional layer of complexity
due to the global nature of MNEs’ operations. TM practices of MNEs have thus been termed as global
talent management (GTM), which is a sub-field of TM in its own right.
If the field is to advance and become relevant to practice, it needs to adopt a dynamic capabilities view
because of the limitations of the static view of talent. Whereas TM has been built upon the resource-
based idea that talent is a valuable, rare, inimitable, and nonsubstitutable (VRIN) resource, the notion
that talent is a rare, inimitable, and nonsubstitutable static resource is incompatible with the idea of a
dynamic TM system that seeks to provide a firm with the talent it needs to pursue SCA. The focus on
dynamism is especially important as one of the main challenges for TM will be to establish itself as a
legitimate effort to improve organizational efficiency in the face of accusations and criticisms that it
focuses only on a minority and demotivates the majority. This is where a shift from a static to a dynamic
view of talent will come in handy by increasing the perceived fairness and integrity of the system.

References
Aghina, W., De Jong, M., & Simon, D. 2011. How the best labs manage talent. McKinsey Quarterly, 1–6.
Ambrosini, V., & Bowman, C. 2009. What are dynamic capabilities and are they a useful construct in strategic
management? International Journal of Management Reviews, 11(1): 29–49.
Amit, R., & Schoemaker, P. 1993. Strategic assets and organizational rent. Strategic Management Journal, 14(1):
33–46.
Asplund, K. 2019. When profession trumps potential: The moderating role of professional identification in
employees’ reactions to talent management. The International Journal of Human Resource Management,
1–23.
Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17(1): 99–120.
Barney, J. B., Ketchen, D. J., & Wright, M. 2011. The future of resource-based theory. In J. B. Barney, D. J.
Ketchen & M. Wright (Eds.). Journal of Management, 37(5): 1299–1315.
Becker, B. E., & Huselid, M. A. 2006. Strategic human resources management: Where do we go from here?
Journal of Management, 32(6): 898–925.
Boxall, P. 1996. The strategic HRM debate and the resource-based view of the firm. Human Resource Management
Journal, 6(3): 59–75.
Chandler, A. D. 1977. The visible hand: The managerial revolution in American business, Vol. 52. Cambridge,
MA: Harvard University Press.
CIPD. 2014. Talent management: An overview. Chartered Institute of Personnel and Development. http://www.
cipd.co.uk/hr-resources/factsheets/talent-management-overview.aspx.
Coff, R. W. 1999. When competitive advantage doesn’t lead to performance: The resource-based view and stake-
holder bargaining power. Organization Science, 10(2): 119–133.
Collings, D. G., & Mellahi, K. 2009. Strategic talent management: A review and research agenda. Human Resource
Management Review, 19(4): 304–313.

65
 Kushal Sharma

Collings, D. G., Mellahi, K., & Cascio, W. F. 2018. Global talent management and performance in multinational
enterprises: A multilevel perspective. Journal of Management, 1–27.
De Boeck, G., Meyers, M. C., & Dries, N. (2018). Employee reactions to talent management: Assumptions versus
evidence. Journal of Organizational Behavior, 39(2), 199–213.
De Vos, A., Dries, N., De Vos, A., & Dries, N. 2013. Applying a talent management lens to career manage-
ment: The role of human capital composition and continuity. The International Journal of Human Resource
Management, 24(9): 1816–1831.
Eisenhardt, K. M., & Martin, J. a. 2000. Dynamic capabilities: What are they? Strategic Management Journal,
21(10–11): 1105–1121.
Festing, M., Schäfer, L., & Scullion, H. 2013. Talent management in medium-sized German companies: An
explorative study and agenda for future research. The International Journal of Human Resource Management,
24(9): 1872–1893.
Gallardo-Gallardo, E., Thunnissen, M., & Scullion, H. 2020. Talent management: Context matters. International
Journal of Human Resource Management, 31(4), 457–473
Griffith, D. A., & Harvey, M. G. 2001. A resource perspective of global dynamic capabilities. Journal of International
Business Studies, 32(3): 597–606.
Groysberg, B., & Connolly, K. 2015. The three things CEOs worry about the most. Harvard Business Review
Digital Articles, 2–5.
Huselid, M. A., Beatty, R., & Becker, B. 2005. A players or a positions? The strategic logic of workforce manage-
ment. Harvard Business Review, 83(12): 110–117.
Kang, S.-C., & Snell, S. A. 2009. Intellectual capital architectures and ambidextrous learning: A framework for
human resource management. Journal of Management Studies, 46(1): 65–92.
King, K. A., & Vaiman, V. 2019. Enabling effective talent management through a macro-contingent approach: A
framework for research and practice. Business Research Quarterly, 22(3), 194–206.
Kraaijenbrink, J., Spender, J.-C., & Groen, A. J. 2010. The resource-based view: A review and assessment of its
critiques. Journal of Management, 36(1): 349–372.
Krishnan, T., & Scullion, H. 2017. Talent management and dynamic view of talent in small and medium enterprises.
Human Resource Management Review, 27(3): 431–441.
Lazarova, M., & Taylor, S. 2009. Boundaryless careers, social capital, and knowledge management: Implications
for organizational performance. Journal of Organizational Behavior, 30(1): 119–139.
Lepak, D. P., & Snell, S. A. 2002. Examining the human resource architecture: The relationships among human
capital, employment, and human resource configurations. Journal of Management, 28(4): 517–543.
Lewis, R. E., & Heckman, R. J. 2006. Talent management: A critical review. Human Resources Management
Review, 16(9): 139–154.
Mäkelä, K., Björkman, I., & Ehrnrooth, M. 2010. How do MNCs establish their talent pools? Influences on indi-
viduals’ likelihood of being labeled as talent. Journal of World Business, 45(2): 134–142.
McDonnell, A., & Collings, D. G. 2011. The identification and evaluation of talent in MNEs. In D. G. Collings
& H. Scullion (Eds.), Global Talent Management. New York and London: Routledge.
Mellahi, K., & Collings, D. G. 2010. The barriers to effective global talent management: The example of corporate
élites in MNEs. Journal of World Business, 45(2): 143–149.
Meyers, M. C., van Woerkom, M., Paauwe, J., & Dries, N. (2019). HR managers’ talent philosophies: Prevalence
and relationships with perceived talent management practices. The International Journal of Human Resource
Management, 31(4): 1–27.
Minbaeva, D., & Collings, D. G. 2013. Seven myths of global talent management. The International Journal of
Human Resource Management, 24(9): 1762–1776.
Morris, S., Snell, S., & Björkman, I. 2016. An architectural framework for global talent management. Journal of
International Business Studies, 47(6): 723–747.
Nelson, R., & Winter, S. 1982. An evolutionary theory of economic change. Cambridge, MA: Harvard University
Press.
Oltra, V., & Vivas-López, S. 2013. Boosting organizational learning through team-based talent management:
What is the evidence from large Spanish firms? The International Journal of Human Resource Management,
24(9): 1853–1871.
Penrose, E. 1959. The theory of the growth of the firm. Oxford, UK: Basil Blackwell.
Pfeffer, J. 2001. Fighting the war for talent is hazardous to your organization’s health. Organizational Dynamics,
29(4): 248–259.
Preece, D., Iles, P., & Jones, R. 2013. MNE regional head offices and their affiliates: Talent management practices
and challenges in the Asia Pacific. The International Journal of Human Resource Management, 24(18):
3457–3477.
Santos, F. M., & Eisenhardt, K. M. 2005. Organizational boundaries and theories of organization. Organization
Science, 16(5): 491–508.

66
 Resource-Based View & Dynamic Capabilities

Schilling, M., & Steensma, H. 2002. Disentangling the theories of firm boundaries: A path model and empirical
test. Organization Science, 13(4): 387–401.
Sturman, M. C., Walsh, K., & Cheramie, R. A. 2007. The value of human capital specificity versus transferability.
Journal of Management, 34(2): 290–316.
Swailes, S. 2013. The ethics of talent management. Business Ethics: A European Review, 22(1): 32–46.
Tansley, C. 2011. What do we mean by the term “talent” in talent management? Industrial and Commercial
Training, 43(5): 266–274.
Teece, D. J. 2007. Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise
performance. Strategic Management Journal, 28(13): 1319–1350.
Teece, D. J., Pisano, G., & Shuen, A. 1997. Dynamic capabilities and strategic management. Strategic Management
Journal, 18(7): 509–533.
Thunnissen, M., Boselie, P., & Fruytier, B. 2013. A review of talent management: “Infancy or adolescence?” The
International Journal of Human Resource Management, 24(9): 1744–1761.
Valverde, M., Scullion, H., & Ryan, G. 2013. Talent management in Spanish medium-sized organisations. The
International Journal of Human Resource Management, 24(9): 1832–1852.
Wang, H., Choi, J., Wan, G., & Dong, J. Q. 2013. Slack resources and the rent-generating potential of firm-
specific knowledge. Journal of Management, (April). doi: https://doi.org/10.1177/0149206313484519.
Wright, P. M., Dunford, B. B., & Snell, S. A. 2001. Human resources and the resource based view of the firm.
Journal of Management, 27(6): 701–721.

67
 6
THE “VALUE” PERSPECTIVE TO
TALENT MANAGEMENT
A Revised Perspective
Heba Makram

Introduction
Almost two decades have passed since the topic of talent management (TM) first emerged in recog-
nition of the importance of an organization’s precious talent. Since then, TM has gained mainstream
interest, first from practitioners and then from academics, and has become a topic of considerable
debate (McDonnell, Collings, Mellahi, & Schuler, 2017). The emergence of TM is mainly attributed to
McKinsey et al. and the great concern they expressed about the increasingly competitive landscape for
the attraction and retention of talent, resulting in a “war for talent” (Chambers, Foulton, Handfield-
Jones, Hankin, & Michaels Ill, 1998).
Axelrod, Handfield-Jones, and Welsh (2001) and Dries (2013) argue that the popular war for talent
notion is rooted in two assumptions: the first is to recognize talent as a source of competitive advantage
that is critical to organizational success, the second is to recognize that the attraction and retention of
talent have become increasingly difficult. Such assumptions emphasize the importance of TM to organ-
izational success and bring its direct positive impact on bottom-line and competitive advantage to the
forefront (Clake & Winkler, 2006; The Economist, 2006) (of course, such a statement is based on a
belief rather than any demonstrated linkage).
This increased interest in TM was also triggered by a number of global challenges, such as: (a) changes
in global demographics and economic trends associated with the decline in birth rates, (b) an increased
number of retiring Baby Boomers, (c) the global mobility and diversity of workforce, (d) the globaliza-
tion of business, and (e) the movement towards a knowledge-based economy (Beechler & Woodward,
2009; Schuler, Jackson, & Tarique, 2011). These challenges highlight the ability of organizations to
attract, develop, and quickly deploy talented people with the requisite capital (be that human, social,
intellectual, and political). Together these challenges led organizations to acknowledge the importance
of TM to corporate success and the strategic role of high-potentials in creating economic value and
enhancing organizational performance (Amit & Belcourt, 1999; Tymon, Stumpf, & Doh, 2010). It also
created questions about the nature of talent, and the nature of the TM practices, processes, and systems
developed and implemented to match this.
A substantial number of academic publications discussed TM over the last decade or two (Thunnissen,
2016), for example, in special issues such as the International Journal of Contemporary Hospitality (D’Annunzio-
Green, 2008), the Journal of World Business (Al Ariss, Cascio, & Paauwe, 2014; Scullion, Collings, &
Caligiuri, 2010), the European Journal of International Management (Collings, Scullion, & Vaiman., 2011),
the Asia Pacific Journal of Human Resource Management (McDonnell, 2012), the International Journal of
Human Resource Management (Vaiman & Collings, 2013), and the Journal of Organizational Effectiveness:

DOI: 10.4324/9781315474687-668
 The “Value” Perspective

People and Performance (Vaiman, Collings, & Scullion, 2017) as well as a series of influential practitioner
publications (Ashton & Morton, 2005; Creelman, 2004; Heinen & O’Neill, 2004; Michaels, Handfield-
Jones, & Axelrod, 2001; Tucker, Kao, & Verma, 2005). Despite all these, the literature on TM is mainly
characterized by a managerialist and unitarist orientation, and has a limited view of the human resource
practices that might be involved (McDonnell et al., 2017; Thunnissen, Boselie, & Fruytier, 2013). It is
also dominated by consultant and practitioner research (Al Ariss et al., 2014).
Some of the obvious limitations to the TM literature are the lack of consensus on the conceptual
boundaries of the field (i.e., what TM is and what it is not) (McDonnell et al., 2017). There is also little
knowledge about how TM systems are designed and implemented in organizations, with the main
focus on understanding the broader context of TM rather than delving into the practices or processes
that organizations use to effectively manage their talent (McDonnell et al., 2017). Thus, there remains a
need for researchers to investigate the individual practices that are employed by organizations to manage
talent and explain how these practices might (or might not) differ from other traditional HR practices.
The literature is also driven by narrow organizational views on the nature of TM. These views
pay limited attention to the actual talent (i.e., individual human beings) and fail to examine their
perspectives and their experience of TM (McDonnell et al., 2017; Thunnissen et al., 2013). Accordingly,
there is a need for more empirical research that takes individual talent as its main unit of analysis and
examines how talent perceives and experiences the practices of TM implemented by their organizations.
Despite such limitations, the field of TM is currently going through a critical stage of its develop-
ment. It is at a turning point, and researchers have the opportunity to cross boundaries of the traditional
and familiar HR literature landscape into other unaccustomed territories to draw on the theoretical
developments in such fields. This chapter does exactly that. It recognizes the increased number of
implicit value claims (Barney, 1991; Becker & Huselid, 1998; Collings & Mellahi, 2009; Lepak & Snell,
1999; Wright, Dunford, & Snell, 2001) that suggest that TM is a source of sustained competitive advan-
tage and value creation.
The chapter provides a review of strategic management (Amit & Schoemaker, 1993; Gans & Ryall,
2017; Rumelt, 1984), value and value creation literature (Bowman & Ambrosini, 2000; Sirmon, Hitt,
& Ireland, 2007; Skilton, 2014), and resource-based view (RBV) and dynamic capabilities literature
(Barney & Clark, 2007; Helfat et al., 2007; Teece, Pisano, & Shuen, 1997). The objective is to revisit
the previously proposed value model by Sparrow and Makram (2015) that suggests how TM may add
value to organizations in relation to four value processes – value creation, value capture, value leverage,
and value protection – and provide an updated theoretical perspective on how TM may generate value
in relation to the proposed four value-driven processes.
Sparrow and Makram explain each of the four processes as follows:

Value creation is the process through which the organization attracts, acquires and accumulates
valuable and unique talent resources and exploits their potential to create value.
Value capture is the process through which an organization then bundles its talent resources
with other resources to increase their dependency on the organization context, and hence
weaken their bargaining power.
Value leverage is the process through which an organization develops and extends the
captured capabilities of its talent resources to add new use value.
Value protection is the process through which an organization develops isolating mechanisms
to protect its talent resources from being lost to other competitors. (emphasis added; 2015: 250)

The chapter beings by first explaining how the notion of “value” is defined and understood in the lit-
erature. It then presents a critical review of the value literature, lays out the broader theory of value
to describe how TM may add value in relation to the four value-driven processes, and provides an
updated description of the initially proposed processes. It then concludes by providing direction of
future research and implication to practice.

69
 Heba Makram

Value – What Does it Mean?

What is value? To understand what value is, we need to recognize that the nature of value is elusive,
and the reason behind its elusiveness stems from the meanings of value that are strongly embedded in
the foundations of economics and the study of market exchange (Vargo, Maglio, & Akaka, 2008). The
nature of value has been widely debated and discussed in the literature. In his attempts to understand
the meaning of value, Aristotle (1959) was one of the first to discuss the concepts of “exchange value”
and “use value”. To understand exchange value, he initially deliberated about whether “money” and
“need” were conterminous (sharing common boundaries) with exchange value before rejecting both,
explaining that money should not be a measure of value, and that a person’s need lacked a unit of meas-
urement. Aristotle was one of the first to consider these concepts, but they were subsequently picked up
and elaborated on by other academics (e.g., Ambrosini & Bowman, 2000).
Despite being examined by many scholars in a special forum (Lepak, Smith, & Taylor, 2007), there
seems to be a number of limitations in the value literature that hinders our understanding of what value is.
For example, there is little consensus on the meaning of value (Pitelis, 2009). Lepak et al. (2007) suggest
that this lack of consensus is perhaps the result of a number of factors. Firstly, they argue that the multi-
disciplinary nature of the field of management introduces a plurality of perspectives related to the targets
of value (i.e., who is value created for) and the potential sources of value (i.e., who creates value). This
introduces a number of challenges, including developing a definition of value. Secondly, they argue that
the difficulty of differentiating between the content of value and the process of value creation (i.e., what
is value, who values what, and where does value reside) makes it difficult to understand value creation.
Finally, they suggest that confusion about the processes of value creation and value capture has contributed
to the existing disagreements and confusion surrounding the terms value and value creation.
A number of scholars have attempted to address this definitional problem. For example, Bowman and
Ambrosini define two aspects of value:

• “perceived use value” – how customers perceive the quality and value of a service or a product in
relation to their needs. Use value is “the specific qualities of the product perceived by customers in
relation to their needs” (2000: 2);
• “exchange value” – the monetary amount customers are willing to pay in exchange for a desired
good or service. Exchange value is “the monetary amount realized at a single point in time when
the exchange of goods takes place” (2000: 3).

Both definitions suggest that value is subjective and is therefore predominantly dependent on the perceptions
of customers and their willingness to exchange a monetary amount for the value received. Similarly, Pitelis
(2009) defines value as the “perceived worthiness” of a product or service for a final target user. More recently,
Bowman and Ambrosini (2010) argue that value has a different meaning for different stakeholder groups,
and categorize a firm’s key stakeholders as its customers, suppliers (of separable inputs and human inputs), and
owners (Clarkson, 1995). In summary, then, value means different things to different stakeholders depending
on their motivations and what they aim to optimize on (be it value for money, monetary amounts received
in exchange for services and products, or efforts or return on investments).
Since judgments about value are subjective and dependent on perceptions, to understand the value
of TM, there is a need to address two important questions: how is value created and how it is captured?
The remainder of the chapter answers these questions and outlines the value of TM in relation to the
four value-driven processes (initially introduced in Sparrow & Makram, 2015)

Value Creation and Talent Management

Creating value and the quest to achieve sustained competitive advantage are two critical concerns of
researchers in strategic management and organization studies (Collis & Montgomery, 1995; Teece,
2007). Value is created when organizations exploit their internal resources and capabilities to implement

70
 The “Value” Perspective

strategies that enable them to respond to market opportunities (Andrews, 1971; Penrose, 1959). On the
other hand, the literature on dynamic capabilities (Teece, 1982; Wernerfelt, 1984) suggests that value
creation resides in the organization’s ability to “integrate, build and reconfigure internal and external
compiesetences” (Teece et al., 1997: 516) and in its capacity to “purposefully create, extend and modify
its resource base” (Helfat, 2007: 4). Moreover, Sirmon et al. (2007) suggest that a firm’s resource port-
folio establishes an upper limit to the creation of value. Organizations should, therefore, structure their
resource portfolio by acquiring a repertoire of resources (i.e., unique and valuable resources), accumu-
lating resources (i.e., internally develop resources), and divesting resources (i.e., actively evaluate and
divest less valuable resources) to be able to create value.
To conceptualize the process of value creation, there is a need to define the sources of value creation
(i.e., who creates value). Lepak et al. (2007) suggest three sources of value creation: the individual (by
developing unique tasks or services that are perceived to be valuable by target users), the organiza-
tion (by inventing new ways of doing things to benefit target users), and society (by developing new
programs and incentives intended to benefit its members). Relating this to TM, two sources of value
creation can be identified: the individual talent, who create value when they develop their role and
deliver novel and appropriate outcomes that appeal in the eyes of their employer (Lepak et al., 2007);
and the organization, which creates value by inventing and devising the appropriate TM (i.e., practices,
systems, and processes) that enable it to exploit the potential of their talent resource to work towards
value creation (Wright & McMahan, 1992).
In the HRM literature, many scholars argue that employees are an important determinant of value
creation due to their uniqueness, their ability to increase productivity by learning, the way they work
together to help create the distinctive personality of the organization, and their ability to execute and
deliver on organization strategies, as well as the HR systems and architectures implemented to link
human resources with value creation in the organization (Garavan, Carbery, & Rock, 2012; Lepak &
Snell, 2002; Peteraf, 2006; Pfeffer, 1994; Pitelis, 2007).
On the other hand, the SHRM literature describes the process of value creation in relation to how
the HR systems (sets of processes, practices, and policies) implemented by the organization build
employees’ skills and motivate them to work towards achieving organizational goals and contribute to
value creation (Wright & McMahan, 1992). It is argued that HR systems contribute to value creation
when they elicit the desired behavors that are critical to executing the strategies of value creation, and
when they impact the skills and knowledge of valuable talent and their willingness to expend effort and
express their talent in the workplace (Boxall, 2012; Huselid, 1995; Macduffie, 1995; Schuler & Jackson,
1987). Value creation is also described in terms of how HR systems foster and facilitate the gener-
ation, accumulation, and internalization of knowledge and spark the involvement and commitment of
valuable talent (Lado & Wilson, 1994). The fundamental focus of these various explanations of value
creation, both in the general management literature and the HRM literature, is the organization’s
“valuable talent” and their contribution to value creation.
Revised Perspective: Value is created when organizations implement the appropriate talent management systems
and practices that enable them to attract, acquire, and accumulate valuable and unique talent resources and elicit the
desired behavors critical to value creation.

Value Capture and Talent Management

Much of the literature, for example, the RBV literature (Barney, 1991; Collis & Montgomery, 1995;
Peteraf, 1993), focuses mostly on the concept of “value capture” rather than “value creation”. Therefore,
it is important to recognize that value capture and value creation are two distinct albeit related activ-
ities (Sparrow & Makram, 2015). In the strategic management literature, scholars have distinguished
between these processes by recognizing that in some cases, firms that create value may be unable to
capture this value if they need to share it with others such as customers, employees, or stakeholders
(Makadok, 2001). This is referred to as “value slippage” (Lepak et al., 2007). On the other hand, in

71
 Heba Makram

the coalitional game theory literature (Brandenburger & Nalebuff, 1995), it is suggested that value is
captured through freedom of exchange, in which the value created by one partner is only captured
when the resources and capabilities of the other partner are equal.
Others argue, that value capture (the realization of the exchange value) is determined by the bargaining
relationship between parties. It is “a function of a bargaining process” (Bowman & Swart, 2007: 492)
between the creators of value (i.e., customers, suppliers or employees) and the capturers of the value (i.e.,
firms), in which the economic basis of this bargaining relationship is a function of perceived dependence
(Bowman & Ambrosini, 2000; Coff, 1999; Pfeffer, 1995). From this point of view, it is reasonable to say
that the value created by a firm’s resources becomes critical only if the firm manages to capture that value.
With respect to human capital as a source of value creation, it is argued that the bargaining power of
employees is very much dependant on how they perceive themselves. For example, if they perceive their
livelihood to be dependent on their organization, it is unlikely that they will exert strong bargaining
power, but if they perceive that their role in the value-creation process is crucial, that the talent they
possess is critical to their organization, and if they can take it elsewhere, then they will most likely exert
strong bargaining power (Bowman & Swart, 2007).
The literature also suggests, that to capture the value that has been created, be it by human capital
or other firm resources and capabilities, organizations need to create separate processes referred to as
“isolating mechanisms” (Rumelt, 1984), which should enable them to capture any value they create.
Isolating mechanisms can become strategies of value capture to obstruct the flow of knowledge thus
increasing the uncertainty of imitation and preventing competitors from accessing and utilizing firm’s
resources, capabilities, and strategies (Lippman & Rumelt, 1982; Mahoney & Pandian, 1992). With the
protection of isolating mechanisms, firms may enjoy capturing the value created by its resources and
capabilities.
While talent can contribute to value creation, it is important to realize that this is mostly dependent
on their willingness to share their knowledge, capabilities, and expertise with their organizations and
willingness to engage in the process of value creation. In such a case, organizations need to develop the
right systems that would enable them to capture the knowledge and expertise of their valuable talent,
and stop the flow of such knowledge and expertise outside of the organization. This is important if an
organization wishes to retain the value created by its talent resources.
Revised Perspective: Value is captured when organizations design and implement talent management systems and
practices that enable them to extract the knowledge and expertise of their valuable and unique talent resources and
thus weakening their bargaining power.

Value Leverage and Talent Management

Thinking about the role of TM in the creation and capture of value raises the question of whether there
may be other ways in which TM may add value to organizations. A review of the literature brings to
the surface two more value processes to which TM may contribute: value leverage and value protection.
Although value leverage was not widely discussed in the literature, we can detect several implicit
debates to explain how TM may enable organizations to leverage the value being created by their talent
resources. Bergmann Lichtenstein and Brush (2001) argue that owning resources and bundling them to
develop capabilities is not enough to realize value creation; instead, firms need to leverage and extend
their capabilities to ensure a continuous process of value creation.
Similarly, Miller et al. (2002) argue that a firm’s resources and capabilities are of no value unless these
can be extended to create more value and superior returns. To understand more how TM may enable
organizations to leverage the value created by talent resources, we turn to the dynamic capabilities lit-
erature (Eisenhardt & Martin, 2000; Teece et al., 1997), which suggest that firms can leverage the value
of their resources (be that tangible, intangible, or human resources) and capabilities by engaging in these
activities that create, modify, and extend their resources base (i.e., acquisition, innovation, entrepre-
neurial, knowledge management) (Helfat, 2007).

72
 The “Value” Perspective

On the other hand, from the RBV literature (Barney & Clark, 2007), we learn that value may be
leveraged if a firm combines its resources and capabilities with its tacit knowledge in order to create
novel and valuable outcomes (Sparrow & Makram, 2015). The process of value leveraging is therefore
critical for the maintenance of value creation.
Perhaps the most relevant discussion to TM is one by Sirmon et al. (2007) in which they describe
the process of value leverage in relation to a firm’s ability to mobilize its idiosyncratic capabilities.
The intent of mobilization is to identify the capabilities needed by the firm and design the capability
configurations required to exploit such capabilities in a way that would enable the continued creation
of value. Hamel and Prahalad (1994) argue that mobilizing firm capabilities requires an action of con-
tinuous adjustment to ensure that the appropriate capabilities are available for sustainable value creation.
In addition, Sirmon et al. (2007) refer to the importance of capability coordination. Coordinating firm
capabilities involves the effective and efficient integration of such capabilities to create the capability
configurations required to implement leveraging strategies and thus result in sustainable value creation.
Moreover, debates in the TM literature make implicit reference to the process of value leverage, for
example, Sparrow et al. (2010) argue that value leverage requires firms to invest in the appropriate TM
practices to enable them to (a) build on their current talent capabilities, (b) manage the knowledge of
their talent resources in ways that lead to executing strategic outcomes and (c) respond to talent shortage
and recognize organizational capabilities that are central to the business model.
Similarly, Andreas et al. (2007) suggest that the process of value leverage includes those activities
required to improve the efficiency and effectiveness of existing value creating resources such as: struc-
turing talent resources, managing talent knowledge and transferring it across the organization to gen-
erate new ideas, and creating a collaborative and creative culture to effectively manage talent. Taking
into consideration what has been suggested in the different lines of literatures, one can argue that in
addition to enabling organizations to create and capture (acquire, accumulate, and exploit the potential
of talent resources) value, TM may also enable organizations to continuously enjoy the process of value
creation and value capture. This is perhaps possible when the processes, systems, and strategies of TM
are designed to enable organizations to leverage the value of their talented rescores.
Revised Perspective: Value is leveraged when organizations design and implement talent management systems
and practices that enable them to extend, mobilize (replicate), integrate, and deploy the capabilities of valuable and
unique talent resources.

Value Protection and Talent Management

Although most of the scholarly discourse on the topic of value has focused mainly on understanding a firm’s
ability to create and capture value rather than understanding how it might protect the returns of value
creation (Reitzig & Puranam, 2009), a number of discussions were detected to inform our thinking and
understanding of value protection. For example, Rumelt (1984) suggests that organizations can only pre-
serve value if they succeed in protecting their value-creating resources from being captured or duplicated
by competitors. This involves deploying isolating mechanisms that prevent rivals from having access to
value creating resources. Isolating mechanisms occur in situations, when the relationship between the
firm’s resources and the competitive advantage is not understood (i.e., causal ambiguity), when sources of
competitive advantage are “socially complex” (i.e., embedded within the firm’s relationships and social
systems), and when decisions are “path-dependent” (i.e., on the firm’s unique history).
On the other hand, Barney and Clark (2007) suggest that organizations can protect its valuable
human resources from being imitated by other competitors if they succeed in developing a firm-specific
skill base. This is accomplished by training and developing employees on processes and procedures
that are specific to the organization (Hatch & Dyer, 2004), or by developing firm-specific knowledge
and disseminating it throughout the organization (Senge, 2006). They also suggest the development of
complex social systems that are not transferable across organizations and embedding talent resources
within these systems can protect the value they create.

73
 Heba Makram

Strategic HRM scholars (i.e., Becker & Huselid, 2006; Huselid & Becker, 2011; Wright & McMahan.,
2011) advocate that the development of an integrated HR system that provides a synergetic effect to
manage valuable human resources rather than investing in independent practices contributes to value
creation. Itami (1987) suggests that HR systems are considered “invisible assets” that can create value
if they were deeply embedded in the organization operational system to enhance its capabilities. The
interrelatedness and integration of the HR system components make it difficult if not impossible for
competitors to imitate such system.
Scholars such as Barney (1991) and Collis and Montgomery (1995) suggest that causal ambiguity and
path dependency are two key factors behind such difficulty of imitation. For example, without being
able to understand how an HR system works and how its many elements and components interact and
integrate, competitors cannot figure the precise practices and policies that generate value. Moreover,
such practices and policies are usually developed over time, which precludes competitors from imme-
diate imitation.
While there is no agreement on which HR practices constitute a high-performance work systems
(HPWS), these systems play an important role in generating value to organizations and protecting
their value creating resources (human capital) ( Jackson, Schuler, & Jiang, 2014). A significant body of
research suggests that there is a positive association between HPWS and employee retention (Gardner,
Wright, & Moynihan, 2011; Huselid & Becker, 1997; Jensen, Patel, & Messersmith, 2013; Way, 2002).
From the social exchange theory (Stirpe & Zárraga-Oberty, 2017), we detect several arguments
asserting how employees perceive such systems as signs of appreciation, recognition, and an employer
attempt to build a long-term relationship with their employees. Such perceptions motivate employees
to remain with their employer and equally invest in the relationship by performing and contributing to
the organization success (Evans & Davis, 2005). Pioneers in the strategic HRM literature argued that
HRM systems co-evolve along with business strategies where organizations develop their HR systems
to implement specific business strategies to enable them to improve employees’ commitment, involve-
ment, and performance (Arthur, 1992; Camps & Luna-Arocas, 2009; Jackson et al., 2014).
Revised Perspective: Value is protected when organizations design and implement talent management
systems and practices that are interrelated and integrated into ways that make it difficult for competitors to imi-
tate these systems and thus enable them to introduce a number of isolating mechanisms to protect their valuable
and unique talent resources.

Future Research Directions

First, while the theoretical development presented in this chapter attempts to address important questions
about TM and value, there is an opportunity for future research to focus its efforts on examining the
value of TM from both an organizational perspective and an individual talent perspective. The litera-
ture could examine how the individual TM practices (that make up a TM system) are designed and
implemented in organizations and whether the concepts of value are taken into consideration while
these systems are being designed, or not. There is also an opportunity to examine how system designers
think about and understand the value of TM, and how their perceived value (if it exists) might impact
the design and the implementation of TM systems in organizations. Research could also benefit from
examining how the value of TM is perceived by the individual talent themselves. This could sur-
face interesting insights into whether there is a disconnect, or there is an alignment between system
designers and individual talent views.
The proposed value model can also be used to generate several propositions for further empirical
testing. Therefore, it may guide future research to examine the actual bundles of TM practices that
might contribute to each of the proposed four value-driven processes and validate the above-proposed
descriptions of each process.
Finally, researchers may want to use research methods that are designed to reveal the implicit
assumptions and debates that shape an organization’s practice and policy within the TM space. These

74
 The “Value” Perspective

methods will likely need to be qualitative, such as cognitive mapping techniques, if researchers
wish to surface the working assumptions of talent strategists or techniques that reveal organizational
narratives and sensemaking if researchers wish to understand the ways in which HRM functions put
their strategy into practice.

Implications for Talent Management Professionals

This chapter has critically examined the use of the concepts of value in the TM discourse. It encourages
talent professionals to step away from their traditional approach to TM and think more strategic-
ally about the design and implementation of TM systems. HR/TM professionals are encouraged to
look at developments in other fields (i.e., strategic management) to understand how best TM systems
may add value to organizations. The four value-driven processes (initially introduced by Sparrow &
Makram, 2015, and revisited in this chapter) can be used as the blueprint to critique the TM practices
implemented by organizations and decide whether these practices are adding value to the organization
or not. These may also help HR/TM professionals view TM as a collective set of integrated practices
rather than separate practices.

Conclusion
The critical review of the talent management literature should lead us to the following conclusions.
First, despite the significant volume of publications and research in the TM field, there are still obvious
gaps in the literature that require the attention of academics and researchers. One of these gaps is the
dearth of empirical evidence to support the many implicit value claims (found in both academic and
practitioner literature) that suggest that TM is a source of sustained competitive advantage and value
creation (Barney, 1991; Becker & Huselid, 1998; Cascio & Boudreau, 2016; Lepak & Snell, 1999;
Sparrow, Scullion, & Tarique, 2014; Wright et al., 2001).
This chapter sought to borrow and draw on the theoretical developments in other literature, such as
strategic management, RBV, value and value creation, and dynamic capabilities, to explain the value
of TM and how it may contribute to four value-driven processes (creation, capture, leverage, and pro-
traction). This chapter has attempted to address an important question of TM and value. Its central
argument suggests that the rational answer to the value question lies in the way in which the activities
and practices of a TM system are designed and integrated to add value to organizations. It reinforces the
idea that invigorating a better and broader way of thinking about TM and its practices (more specific-
ally around its value) enables academics to develop a better understanding of how TM may add value to
organizations, and how it may enable them to exploit the pote0ntial of their talent resources. Finally, it
provides a revised perspective of the initially proposed value-driven process (Sparrow & Makram, 2015)
in an attempt to further develop the value model to guide future research.

References
Al Ariss, A., Cascio, W. F., & Paauwe, J. 2014. Talent management: Current theories and future research directions.
Journal of World Business, 49(2): 173–179.
Amit, R., & Belcourt, M. 1999. Human resources management processes: A value-creating source of competitive
advantage. European Management Journal, 17(2): 174–181.
Amit, R., & Schoemaker, P. J. H. 1993. Strategic Assets and organisational rents. Strategic Management Journal,
14: 33–36.
Andreas, N. A., Annie, G., & Michael, S. 2007. A framework of intangible valuation areas and antecedents. Journal
of Intellectual Capital, 8(1): 52–75.
Andrews, K. R. 1971. The concept of corporate strategy. Homewood, IL: Dow Jones-Irwin.
Aristotle. 1959. Politics. H. Rackham (trans.). London: Heinemann.
Arthur, J. B. 1992. The link between business strategy and industrial relations systems in American steel minimills.
Industrial and Labor Relations Review, 45(3): 488–506.

75
 Heba Makram

Ashton, C., & Morton, L. 2005. Managing talent for competitive advantage: Taking a systemic approach to talent
management. Strategic HR Review, 4(5): 28–31.
Axelrod, E. L., Handfield-Jones, H., & Welsh, T. A. 2001. War for talent, part two. The McKinsey Quarterly: 9.
Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17(1): 99–120.
Barney, J. B., & Clark, D. N. 2007. Resource-based theory: Creating and sustaining competitive advantage. Oxford,
UK: Oxford University Press.
Becker, B. E., & Huselid, M. A. 1998. High performance work systems and firm performance: A synthesis
of research and managerial applications. Research in Personnel and Human Resources Management, 16:
53–101.
Becker, B. E., & Huselid, M. A. 2006. Strategic human resources management: Where do we go from here?
Journal of Management, 32(6): 898–925.
Beechler, S., & Woodward, I. C. 2009. The global “war for talent”. Journal of International Management, 15(3):
273–285.
Bergmann Lichtenstein, B. M., & Brush, C. G. 2001. How do “resource bundles” develop and change in new
ventures? A dynamic model and longitudinal exploration. Entrepreneurship: Theory and Practice, 25(3): 37.
Bowman, C., & Ambrosini, V. 2000. Value creation versus value capture: Towards a coherent definition of value
in strategy. British Journal of Management, 11(1): 1–15.
Bowman, C., & Ambrosini, V. 2010. How value is created, captured and destroyed. European Business Review,
22(5): 479–495.
Bowman, C., & Swart, J. 2007. Whose human capital? The challenge of value capture when capital is embedded.
Journal of Management Studies, 44(4): 488–505.
Boxall, P. 2012. High-performance work systems: What, why, how and for whom? Asia Pacific Journal of Human
Resources, 50(2): 169–186.
Brandenburger, A., & Nalebuff, B. 1995. The right game: Use game theory to shape strategy. Harvard Business
Review, 73(4): 57.
Camps, J., & Luna-Arocas, R. 2009. High involvement work practices and firm performance. The International
Journal of Human Resource Management, 20(5): 1056–1077.
Cascio, W. F., & Boudreau, J. W. 2016. The search for global competence: From international HR to talent man-
agement. Journal of World Business, 51: 103–114.
Chambers, E. G., Foulton, M., Handfield-Jones, H., Hankin, S. M., & Michaels, E. G. 1998. The war for talent.
McKinsey Quarterly (3): 44–57.
Clake, R., & Winkler, V. 2006. Reflections on talent management. London: CIPD.
Clarkson, M. B. E. 1995. A stakeholder framework for analyzing and evaluating corporate social performance. The
Academy of Management Review, 20(1): 92–117.
Coff, R. W. 1999. When competitive advantage leads to performance: The resource-based view and stakeholder
bargaining power. Organization Science, 10(2): 119–133.
Collings, D. G., & Mellahi, K. 2009. Strategic talent management: A review and research agenda. Human Resource
Management Review, 19(4): 304–313.
Collings, D. G., Scullion, H., & Vaiman., V. 2011. European perspectives on talent management. European Journal
of International Management, 5(5): 453–462.
Collis, D., & Montgomery, C. A. 1995. Competing on resources: Strategy in the 1990s. Harvard Business Review,
73(7–8): 118–128.
Creelman, D. 2004. Return on investment in talent management: Measures you can put to work right now.
Washington, DC: Human Capital Institute.
D’Annunzio-Green, N., Maxwell, G., & Watson, S. 2008. Concluding commentary on the contemporary human
resource issues for talent management in hospitality and tourism. International Journal of Contemporary
Hospitality Management, 20: 831.
Dries, N. 2013. The psychology of talent management: A review and research agenda. Human Resource
Management Review, 23(4): 272–285.
The Economist. 2006. The CEO’s role in talent management: How top executives from ten countries are nurturing
the leaders of tomorrow. London: The Economist.
Eisenhardt, K., & Martin, J. 2000. Dynamic capabilities: What are they? Strategic Management Journal, 21(Special):
1105–1122.
Evans, W. R., & Davis, W. D. 2005. High-performance work systems and organizational performance: The medi-
ating role of internal social structure. Journal of Management, 31(5): 758.
Gans, J., & Ryall, M. D. 2017. Value capture theory: A strategic management review. Strategic Management
Journal, 38(1): 17–41.
Garavan, T. N., Carbery, R., & Rock, A. 2012. Mapping talent development: Definition, scope and architecture.
European Journal of Training and Development, 36(1): 5–24.

76
 The “Value” Perspective

Gardner, T., Wright, P., & Moynihan, L. 2011. The impact of motivation, empowerment, and skill-enhancing
practices on aggregate voluntary turnover: The mediating effect of collective affective commitment.
Personnel Psychology, 64(2): 315.
Hamel, G., & Prahalad, C. 1994. Competing for the future. Harvard Business Review, 72(4): 122–130.
Hatch, N. W., & Dyer, J. H. 2004. Human capital and learning as a source of sustainable competitive advantage.
Strategic Management Journal, 25(12): 1155–1178.
Heinen, J. S., & O’Neill, C. 2004. Managing talent to maximize performance. Employment Relations Today, 31:
67–82.
Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf, M. A., Singh, H., Teece, D. J., & Winter, S. F. 2007. Dynamic
capabilities: Understanding strategic change in organizations. Malden, MA: Blackwell Pub.
Huselid, M. A. 1995. The impact of human resource management practices on turnover, productivity, and cor-
porate financial performance. Academy of Management Journal, 38(3): 635.
Huselid, M. A., & Becker, B. E. 1997. The impact high performance work systems, implementation effectiveness,
and alignment with strategy on shareholder wealth. Academy of Management Best Papers Proceedings, 8(1):
144–148.
Huselid, M. A., & Becker, B. E. 2011. Bridging micro and macro domains: Workforce differentiation and strategic
human resource management. Journal of Management, 37(2): 421–428.
Itami, H. 1987. Mobilizing invisible assets. Cambridge, MA: Harvard University Press.
Jackson, S. E., Schuler, R. S., & Jiang, K. 2014. An aspirational framework for strategic human resource manage-
ment. The Academy of Management Annals: 1–89.
Jensen, J. M., Patel, P. C., & Messersmith, J. G. 2013. High-performance work systems and job control. Journal of
Management, 39(6): 1699–1724.
Lado, A. A., & Wilson, M. C. 1994. Human resource systems and sustained competitive advantage: A competency-
based perspective. The Academy of Management Review, 19(4): 699–727.
Lepak, D. P., Smith, K. G., & Taylor, M. S. 2007. Value creation and value capture: A multilevel perspective.
Academy of Management Review, 32(1): 180–194.
Lepak, D. P., & Snell, S. A. 1999. The human resource architecture: Toward a theory of human capital allocation
and development. The Academy of Management Review, 24(1): 31–48.
Lepak, D. P., & Snell, S. A. 2002. Examining the human resource architecture: The relationships among human
capital, employment, and human resource configurations. Journal of Management, 28(4): 517–543.
Lippman, S. A., & Rumelt, R. P. 1982. Uncertain imitability: An analysis of interfirm differences in efficiency
under competition. The Bell Journal of Economics, 13(2): 418–438.
Macduffie, J. P. 1995. Human resource bundles and manufacturing performance: Organizational logic and flex-
ible production systems in the world auto industry. Industrial and Labor Relations Review, 48(2): 197–221.
Mahoney, J. T., & Pandian, J. R. 1992. The resource-based view within the conversation of strategic management.
Strategic Management Journal, 13: 363–380.
Makadok, R. 2001. Toward a synthesis of the resource-based and dynamic-capability views of rent creation.
Strategic Management Journal, 22(5): 387–401.
McDonnell, A., Collings, D. G., & Burgess, J. 2012. Asia Pacific perspectives on talent management. Asia Pacific
Journal of Human Resources, 50(4): 391–398.
McDonnell, A., Collings, D. G., Mellahi, K., & Schuler, R. 2017. Talent management: An integrative review and
research agenda. European Journal of International Management, 11(1): 86–128.
Michaels, E., Handfield-Jones, H., & Axelrod, B. 2001. The war for talent. Boston, MA: Harvard Business Review
Press.
Miller, D., Eisenstat, R., & Foote, N. 2002. Strategy from the inside out: Building capability-creating organizations.
California Management Review, 44(3): 37–54.
Penrose, E. 1959. The theory of the growth of the firm. New York, NY: John Wiley.
Peteraf, M. A. 1993. The cornerstones of competitive advantage: A resource- based view. Strategic Management
Journal, 14(3): 179–191.
Peteraf, M. A. 2006. New domains and directions for research in organizational identity. Presentation at the IIB
Organizational Identity Workshop, Stockholm.
Pfeffer, J. 1994. Competitive advantage through people: Unleashing the power of the workforce. Boston, MA:
Harvard Business School Press.
Pfeffer, J. 1995. Producing sustainable competitive advantage through the effective management of people.
Academy of Management Perspectives, 9(1): 55–69.
Pitelis, C. N. 2007. A behavioral resource-based view of the firm: The synergy of Cyert and March (1963) and
Penrose (1959). Organization Science, 18(3): 478–490.
Pitelis, C. N. 2009. The co-evolution of organizational value capture, value creation and sustainable advantage.
Organization Studies, 30(10): 1115–1139.

77
 Heba Makram

Reitzig, M., & Puranam, P. 2009. Value appropriation as an organizational capability: The case of IP protection
through patents. Strategic Management Journal, 30(7): 765–789.
Rumelt, R. 1984. Toward a strategic theory of the firm. In R. Lamb (Ed.). Competitive strategic management:
556–570. Englewood Cliffs, NJ: Prentice-Hall.
Schuler, R. S., & Jackson, S. E. 1987. Linking competitive strategies with human resource management practices.
The Academy of Management Executive, 1(3): 207–219.
Schuler, R. S., Jackson, S. E., & Tarique, I. 2011. Global talent management and global talent challenges: Strategic
opportunities for IHRM. Journal of World Business, 46(4): 506–516.
Scullion, H., Collings, D. G., & Caligiuri, P. 2010. Global talent management. Journal of World Business, 45:
105–108.
Senge, P. M. 2006. The fifth discipline: The art and practice of the learning organization. London: Random House
Business.
Sirmon, D. G., Hitt, M. A., & Ireland, R. D. 2007. Managing firm resources in dynamic environments to create
value: Looking inside the black box. Academy of Management Review, 32(1): 273–292.
Skilton, P. F. 2014. Value creation, value capture, and supply chain structure: Understanding resource–based
advantage in a project–based industry. Journal of Supply Chain Management, 50(3): 74–93.
Sparrow, P. R., Hesketh, A., Hird, M., & Cooper, C. L. 2010. Performance-led HR. In P. R. Sparrow, M. Hird,
A. Hesketh, & C. Cooper (Eds.). Leading HR: 1–22. London: Palgrave Macmillan.
Sparrow, P. R., & Makram, H. 2015. What is the value of talent management? Building value-driven processes
within a talent management architecture. Human Resource Management Review, 25(3): 249–263.
Sparrow, P., Scullion, H., & Tarique, I. 2014. Strategic talent management: Contemporary issues in international
context. Cambridge, MA: Cambridge University Press.
Stirpe, L., & Zárraga-Oberty, C. 2017. Are high-performance work systems always a valuable retention tool? The
roles of workforce feminization and flexible work arrangements. European Management Journal, 35(1):
128–136.
Teece, D. J. 1982. Towards an economic theory of the multiproduct firm. Journal of Economic Behavior and
Organization, 3(1): 39–63.
Teece, D. J. 2007. Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise
performance. Strategic Management Journal, 28(13): 1319–1350.
Teece, D. J., Pisano, G., & Shuen, A. 1997. Dynamic capabilities and strategic management. Strategic Management
Journal, 18(7): 509–533.
Thunnissen, M. 2016. Talent management. Employee Relations, 38(1): 57–72.
Thunnissen, M., Boselie, P., & Fruytier, B. 2013. A review of talent management: ‘Infancy or adolescence?’ The
International Journal of Human Resource Management, 24(9): 1744–1761.
Tucker, E., Kao, T., & Verma, N. 2005. Next-generation talent management: Insights on how workforce trends
are changing the face of talent management. Business Credit, 107(7–8): 20–27.
Tymon, W. G., Stumpf, S. A., & Doh, J. P. 2010. Exploring talent management in India: The neglected role of
intrinsic rewards. Journal of World Business, 45(2): 109–121.
Vaiman, V., & Collings, D. 2013. Talent management: Advancing the field. The International Journal of Human
Resource Management, 24(9): 1737–1743.
Vaiman, V., Collings, D. G., & Scullion, H. 2017. Contextualising talent management. Journal of Organizational
Effectiveness: People and Performance, 4(4): 294–297.
Vargo, S. L., Maglio, P. P., & Akaka, M. A. 2008. On value and value co-creation: A service systems and service
logic perspective. European Management Journal, 26(3): 145–152.
Way, S. A. 2002. High performance work systems and intermediate indicators of firm performance within the US
small business sector. Journal of Management, 28(6): 765–785.
Wernerfelt, B. 1984. A resource-based view of the firm. Strategic Management Journal, 5: 171–180.
Wright, P. M., Dunford, B. B., & Snell, S. A. 2001. Human resources and the resource-based view of the firm.
Journal of Management, 27(6).
Wright, P. M., & McMahan, G. C. 1992. Theoretical perspectives for strategic human-resource management.
Journal of Manage, 18(2): 295–320.
Wright, P. M., & McMahan., G. C. 2011. Exploring human capital: Putting ‘human’ back into strategic human
resource management. Human Resource Management Journal, 21(2): 93–104.

78