Electronic Applications Corporation is a major producer of silicon chips for the computer industry. It is located in Gauteng in an area of high technology firms. Since its founding in 1988, the company has grown rapidly in terms of sales and profits, thus enhancing its stock price many times over. Human resource policies, however, have tended to lag behind company growth. Emphasis has been on reactive policies to meet the regulatory requirements of external stakeholders such as the government. In short, human resources have not been a high priority. Recently, Thabo Ndaba has been hired as Human Resources Director for the company. Ndaba had previously worked as HR Manager for a large blue-chip corporation. He accepted his present position at Electronic Applications not only because of an increase in pay and responsibility, but also because of what he termed the challenge of bringing this company from a 1980s human resources mentality to one more compatible with the realities of the 2020s. Ndaba has been on the job for four months and has been assessing the situation to determine the more significant human resources problems. One problem seems to have been the high turnover among electrical engineers who work in Research and Development and are the core of the research function. Prior to the 2023 cost of living crisis, the turnover rate averaged about 30% per year. However, because of the current poor economy, most technology companies are not hiring at all or are only hiring individuals on a highly selective basis. The result is that most employees have decided to stay put in the short term but will be looking to take advantage of more attractive opportunities elsewhere when and if the economy improves. Ndaba was aware of these intentions and wanted to take steps now to minimise future employee turnover. In assessing the cause of the problem, Ndaba checked salary surveys and found Electronic Applications paid 5% to 8% above the market for various categories of electrical engineers. Since the company did not have a formal exit interview system, he could not check out other possible explanations through that mechanism. However, through informal conversations with many individuals, including the engineers themselves, he learned that many of the engineers felt dead-ended in the technical aspects of engineering. In particular, the Research and Development Department had lost some of the younger engineers who had been on the fast track. Most had gone to competitors in the local area. One research and development employee who impressed Ndaba was Prisha Khoosal. Khoosal is 29 years old, has a BSc degree in Electrical Engineering from a well-known South African university, and is studying for her MBA part time through MANCOSA. Khoosal had been employed for seven years at Electronic Applications, three in an entry-level engineering position and four as a section manager. The latter promotion was the highest position in Research and Development other than the position of Director of Research and Development. Khoosal claimed that the company doesnt really care about its good people. In her view, the present Research and Development Director, Harry James does not want to allow his better people to move up in the organisation. He is more interested in keeping them in his own department so he can meet his own departmental goals without having to orient and train new employees. Khoosal also claimed she was told she Has a bright future with the company both by James and the former HR Director. Her performance appraisals have been uniformly excellent. She went on to criticise the company for using an appraisal form with no sections for dealing with employee development. Khoosal recommended that steps be taken to remedy each of the problems she identified. Among these steps were helping employees identify future development opportunities, rewards for supervisors who successfully mentor subordinates, planning to identify future job opportunities, better communication of job opportunities, identification of career paths and career ladders, greater efforts to help employees achieve work / family life balance, childcare assistance and telecommuting opportunities. Ndaba checked out the information Khoosal had provided him and found it to be accurate. Moreover, he heard through his grapevine that Khoosal has been approached by a competitor with the offer of an excellent position. Clearly, he has an even greater challenge than he had anticipated. He realises he has an immediate problem concerning turnover of certain key employees. In addition, Ndaba also has a series of interconnected challenges associated with career development. However, he is not quite sure what steps to take and in what order.

Strategic HRD can be viewed as a proactive, system-wide intervention, linked to strategic planning. This contrasts with the traditional view of training and development as consisting of reactive, piecemeal interventions in response to specific problems (Beer and Spector in McCracken and Wallace, 2000)

1.1 Critically discuss the extent to which Electronic Applications approach to Human Resource Development (HRD) is strategic [20 Marks].