Managing corporate reputations, strategic human resource management and negative capabilities

As recent events have shown, particularly the global financial services crisis, how organizations manage their staff can have a significant impact on corporate reputations. One need look no further than the worldwide debate over executive pay and the use of incentive bonuses to attract, motivate and retain talent in certain sectors of the financial services industry, a problem one of us forecast might occur in an earlier case on the financial service industry in the UK when we described it as potentially \u27unfit for the future\u27 (Martin and Hetrick, 2006). This is not meant to demonstrate our particular brand of wisdom, since we were merely expressing what others had claimed, including the much maligned British regulatory body - the Financial Services Authority - regarding the use of incentives and the lack of a strategic approach to HR in the sector. What we were also trying to highlight was a collective blindness among senior leaders and HR staff in the industry concerning a single-minded faith in incentives, which would do long-term damage to the reputation of firms and, indeed, the industry. Financial services may be the most high profile example of a lack of strategic thinking in Human Resource Management (HRM) but most large organizations in other industries face similar problems created, we argue, by an inability to manage tensions between the simultaneous need for firms to be different and the same. In this chapter we discuss these tensions and propose a way of resolving them, which may help organizations become fit for the future in reputational terms