Read the introductory case ASML: HR Boosts Technical Innovation (pp. 3-4, chapter 1) and discuss on how ASML has built its competitive advantage to cope with the recession by making HRM its strategic focus and using its HRM practices to successfully implement its business strategy.

20200219_160465 - Windows Photo Viewer File Print E-mail Burn - @ x Open ENTER THE WORLD OF BUSINI ASML: HR Boosts Technical Innovation Most of you who have a personal computer or a laptop are not aware that the integrated circuits and chips inside your computer are probably man- ufactured with equipment which is built by a rather unknown enterprise located in a tiny village called Veldhoven in the south of the Netherlands. This enterprise, ASML, is one of the world's leading pro- viders of lithography systems for the semiconduc- tor industry and manufactures complex machines that are critical to the production of integrated circuits or chips. ASML has over sixty service points all over the world. Customers are manufacturers of integrated circuits and chips, such as Intel. Most of its turnover is earned in Asia (66%) and the US (25%). According to an ASML spokesman: "ASML pertains to follow Moore's law to provide produc- tion equipment of smaller, cheaper, more power ful and economical chips which are conditional for our customers' competitive advantage. ASML takes pride in providing possibilities for producing affordable micro-electronics which makes it pos- sible to improve the quality of life." As such, ASML invests much money in Research and Development. Huge investments in high-tech knowledge and equipment demand a labor force that is able to make the highest returns pos- sible on these investments. The demand for chips and integrated circuits often shows high peaks of demand and sharp downturns often not in line with worldwide economic developments. Also, high investments in time-consuming education or training of many people are necessary before employees become productive in high-tech envi ronments. However, what to do with these people in periods of economic decline? And, how does ASML make sure that the right numbers of highly educated and trained people are aboard when the market demand suddenly increases? These are important challenges for ASML. Hence, HR is an important condition for ASML's success and HRM is as strategically impor tant. ASML's workforce consists of 2500 employ. ees of which about 82% are highly educated with a bachelor's degree or higher. In the attrac- tion, selection and employment of employees, ASML is focusing on the most creative and bril- liant thinkers in physics, mathematics, chemistry, mechatronics, optics, industrial manufacturing, software and ICT. ASML has an immense attrac- tion for highly educated engineers and scientists who are standing in a queue to work for ASML even in times of economic prosperity. What binds the workforce in Veldhoven is the love torte nology, even among staff employees. An important characteristic of ASML's HRM strat- egy is the use of a flexible workforce. Installed in 2002, between 20% and 40% of all workers of ASML belong to this workforce since Dutch law employees with a labor contract for an indefinite period are protected from immediate dismissal. This flexible workforce enables ASML to adjust the number of employees to its production capacity and market demand. Most of the people who belong to this flexible workforce are deployed in the manufacturing process of lithographic equipment. Most of these employees who are in research and development have a contract for an indefinite period securing the continuity of R&D and retention of knowledge. But, how does ASML guarantee that flexible workforce workers return to ASML when they are wanted? According to Harry de Vos, vice-president, HR is the most important condition for attracting highly valu able people as well as a flexible workforce to invest in the attractiveness of ASML Harry de Vos believes that the first point of attraction is that ASML is willing to invest money in the competencies of all the people working for ASML, including people of the flexible workforce 4:15 PM 2/19/2020 C20200219_160443 - Windows Photo Viewer File Print E-mail Burn Open os in which people from each other and In addition, peo AL including loyees are working on a daily and develop. Employees are workir Introduction education and training programs basis in multi-disciplinary teams in which vary between one and a half and three years and listen to each other, learn from each other during these programs, employees work under exchange ideas and knowledge. In addition supervision on a real piece of equipment which le of collaborating partners with ASML includi costs about fifty million Euros. universities, knowledge centers and customer universities, k Every two years, new technology is launched with be involved in these teams which make the an increasing complexity; hence, besides the intro learning experiences even greater. Leadership duction program, continuous education and training for employees is necessary. Investments in educa. is focused on nourishing these intense collabo- tion and training are extremely high and therefore rations which provide an environment in which continuous working on state-of-the-art knowledge people can develop and grow. and skills is very attractive for flexible workers to Furthermore, ASML offers a program entitled return to ASML when asked, but also for the workers "Career Tracks" with which employees can keep with a definite contract. According to Harry de Vos, track of their progress in line with agreements attraction of workers for the flexible workforce is not an issue and turnover rates of staff are low. As an with their direct supervisors. ASML ensures as a example, with the start of the economic crisis in 2009 moted and another 15 percent move to another rule of thumb that at least 15 percent get pro- 1,100 flex workers were discharged. More than 60% returned to ASML in 2012 when demand increased job with the same salary per annum. In sum, The second point of attraction is the pack this entails that everyone moves to another job age of labor conditions including salaries and within three years. Strategic HRM within ASML bonuses. ASML is known for paying high salaries and bonuses which are competitive in compari- son with other European high-tech companies. Also, ASML pays attention to the different age categories and the possibilities these offer for deployment in the workforce. In contrast to some other high tech organizations, they believe older people are highly acclaimed because of their vast and robust knowledge. The most important point of attraction is the high-tech environment in which people can learn is an important condition for its success and ASML's story entails an optimal use of HRM in accomplishing its goals and strategy. However, the question of whether there are any loose ends still remains. Harry de Vos states:"The ongoing process of knowledge creation rent our challenge in relation to the increasing plexity of technology." tion remains SOURCE: Schaap, J. & Groothengel, P. (2013). Harry de We zijn strenger op non performance Managementscop RTL (2014). Recordomzet ASML in vierde kwartaal. www. economie/home/recordomzet-asml vierde kwartaal arry de Vos, ASML niscope (5-11-2013 www.rtlnieuws.nl Introduction Mars Incorporated illustrates the key role that human reen (HRM) plays in determining the survis U.S. businesses Com Competitiveness e manageni on 10 o 5 cx - - d) 4:14 PM 2/19/2020