Talent Management

The meaning of talent management

Talented people possess special gifts, abilities and aptitudes which enable them to perform effectively. As defined by the CIPD (2007), Talent consists of those individuals who can make a difference to organizational performance, either through their immediate contribution or in the longer term by demonstrating the highest levels of potential. Talent management is the process of identifying, developing, recruiting, retaining and deploying those talented people.

The term ‘talent management’ may refer simply to management succession planning and management development activities, although this notion does not really add anything to these familiar processes except a new, although admittedly quite evocative, name. It is better to regard talent management as a more comprehensive and integrated bundle of activities, the aim of which is to secure the flow of talent in an organization, bearing in mind that talent is a major corporate resource.

However, there are different views about what talent management means (Michaels et al., 2001).   Michaels (2001) identified five imperatives that companies need to act on if they are going to win the war for managerial talent; these are as follows.

Five imperatives for talent management (Michaels, 2001)

1. Creating a winning employee value proposition that will make your company uniquely attractive to talent.

2. Moving beyond recruiting hype to build a long-term recruiting strategy.

3. Using job experience, coaching and mentoring to cultivate the potential in managers.

4. Strengthening your talent pool by investing in A players, developing B players and acting decisively on C players.

5. Central to this approach is a pervasive mindset a deep conviction shared by leaders throughout
the company that competitive advantage comes from having better talent at all levels.

The McKinsey prescription has often been misinterpreted to mean that talent management is only about obtaining, identifying and nurturing high flyers, ignoring the point they made that competitive advantage comes from having better talent at all levels.

The process of talent management

Talent management takes the form of a ‘bundle’ of interrelated processes, as shown in Figure 01

Figure 01 The elements of talent management

Talent management starts with the business strategy and what it signifies in terms of the talented people required by the organization. Ultimately, the aim is to develop and maintain a pool of talented people. This is sometimes described as the ‘talent management pipe line’. Its elements are described below.

The resourcing strategy

The business plan provides the basis for human resource planning, which defines human capital requirements and leads to attraction and retention policies and programs for internal resourcing (identifying talented people within the organization and developing and promoting them).

Attraction and retention policies and programs

These policies and programs describe the approach to ensuring that the organization both gets and keeps the talent it needs. Attraction policies lead to programs for external resourcing (recruitment and selection of people from outside the organization). Retention policies are designed to ensure that people remain as committed members of the organization. The outcome of these policies is a talent flow that creates and maintains the talent pool.

Talent audit

A talent audit identifies those with potential and provides the basis for career planning and development ensuring that talented people have the sequence of experience supplemented by coaching and learning programs that will fi t them to carry out more demanding roles in the future. Talent audits can also be used to indicate the possible danger of talented people leaving (risk analysis) and what action may need to be taken to retain them.

Role design

Talent management is concerned with the roles people carry out. This involves role design ensuring that roles provide the responsibility, challenge and autonomy required to create role engagement and motivation. It also means taking steps to ensure that people have the opportunity and are given the encouragement to learn and develop in their roles. Talent management policies focus on role flexibility giving people the chance to develop their roles by making better and extended use of their talents.

Talent relationship management

Talent relationship management is the process of building effective relationships with people in their roles. It is concerned generally with creating a great place to work, but in particular it is about treating individual employees fairly, recognizing their value, giving them a voice and providing opportunities for growth. The aim is to achieve ‘talent engagement’, ensuring that people are committed to their work and the organization.  Sears (2003) points out, it is “better to build an existing relationship rather than try to create a new one when someone leaves.”

Performance management

Performance management processes provide a means of building relationships with people, identifying talent and potential, planning learning and development activities, and making the most of the talent possessed by the organization. Line managers can be asked to carry out separate ‘risk analyses’ for any key staff to assess the likelihood of their leaving. Properly carried out, performance management is a means of increasing the engagement and motivation of people by providing positive feedback and recognition. This is part of a total reward system.

Learning and development

Learning and development policies and programs are essential components in the process of talent management ensuring that people acquire and enhance the skills and competencies they need. Policies should be formulated by reference to ‘employee success profiles’, which are described in terms of competencies and define the qualities that need to be developed. Employee success profiles can be incorporated in role profiles.

Management succession planning

Management succession planning takes place to ensure that, as far as possible, the organization has the managers it requires to meet future business needs.

Career management

Career management is concerned with the provision of opportunities for people to develop their abilities and their careers in order to ensure that the organization has the flow of talent it needs and to satisfy their own aspirations.

Developing a talent management strategy

A talent management strategy consists of a view on how the processes described above should mesh together with an overall objective to acquire and nurture talent wherever it is and wherever it is needed by using a number of interdependent policies and practices. Talent management is the notion of ‘bundling’ in action. The strategy covers the following aims.

The aims of talent management

·         Define who the talent management program should cover.

·         Define what is meant by talent in terms of competencies and potential.

·         Define the future talent requirements of the organization.

·         Develop the organization as an ‘employer of choice’ a ‘great place to work’.

·         Use selection and recruitment procedures that ensure that good quality people are recruited who are likely to thrive in the organization and stay with it for a reasonable length of time (but not necessarily for life).

·         Design jobs and develop roles that give people opportunities to apply and grow  their skills and provide them with autonomy, interest and challenge.

·         Provide talented staff with opportunities for career development and growth.

·         Create a working environment in which work processes and facilities enable rewarding (in the broadest sense) jobs and roles to be designed and developed.

·         Provide scope for achieving a reasonable balance between working in the organization and life outside work.

·         Develop a positive psychological contract.

·         Develop the leadership qualities of line managers.

·         Recognize those with talent by rewarding excellence, enterprise and achievement.

·         Conduct talent audits that identify those with potential and those who might leave the organization.

·         Introduce management succession planning procedures that identify the talent available to meet future requirements and indicate what management development activities are required.

Management succession planning

Management succession planning is the process of assessing and auditing the talent in the organization in order to answer three fundamental questions. First, are there enough potential successors available – a supply of people coming through who can take key roles in the longer term? Second, are they good enough? Third, have they the right skills and competencies for the future? At different stages in their careers, potential successors may be ranked in order, such as,  

1. Being ready to do the next job now,
2. Being ready for a certain higher-grade position in, say, two years’ time,
3. Being ready for job rotation at the same level, and
4. Being ready for lateral assignments on temporary relief or project work.

Succession planning is based on the information about managers gleaned from supply and demand forecasts, talent audits and performance and potential reviews. In some large organizations in which demand and supply forecasts can be made accurately, highly formalized succession planning processes exist based on the sort of management succession schedule illustrated in Figure 02.

MANAGEMENT SUCCESSION SCHEDULE

Figure 02 Management succession schedule

References

(CIPD, 2007) Talent Management Fact Sheet, CIPD, London

(Michaels: Handfield: Jones; Axelrod, 2001) The War for Talent, Harvard Business School Press, Boston, MA

(Sears, 2003) Successful Talent Strategies, American Management Association, New York

Strategic Human Resource Management in a Changing Environment

Introduction

The human resources of an organization consist of all people who perform its activities.

Human resource management (HRM) is concerned with the personnel policies and managerial practices and systems that influence the workforce. In broader terms, all decisions that affect the workforce of the organization concern the HRM function.

The activities involved in HRM function are pervasive throughout the organization. Line managers, typically spend more than 50 percent of their time for human resource activities such hiring, evaluating, disciplining, and scheduling employees. Human resource management specialists in the HRM department help organizations with all activities related to staffing and maintaining an effective workforce. Major HRM responsibilities include work design and job analysis, training and development, recruiting, compensation, team-building, performance management and appraisal, worker health and safety issues, as well as identifying or developing valid methods for selecting staff. HRM department provides the tools, data and processes that are used by line managers in their human resource management component of their job.

What is the focus of HRM department?

“The HRM focus should always be maintaining and, ideally, expanding the customer base while maintaining, and ideally, maximizing profit. HRM has a whole lot to do with this focus regardless of the size of the business, or the products or services you are trying to sell.” (Dr. James Spina, former head of Executive Development at the Tribune Company).  HRM is involved in managing the human resources with a focus on expanding customer base that gives profit to the company. The bottom line of the company is the focus of the HRM department as well as the function.

Contributing to the Bottom-line of the Company through HR Top-line Activities

A growing body research shows that progressive HRM practices have a significant effect on corporate bottom-line and middle-line performance. The positive effect on financial performance, productivity, product and service quality, and cost control are documented by researchers.


High-performance work systems (HPWS) is a term used to describe a collection of HR practices or characteristics of HR systems designed to enhance employees’ competencies so that employees can be a reliable source of competitive advantage. A summary of the research on HPWS indicated that a one standard deviation of improved assessment on a HPWS measurement tool increased sales per employee in excess of $15,000 per employee, an 8 percent gain in labor productivity.

The Activities of Human Resources Management

The activities performed by HRM professionals fall under five major domains:


(1) Organizational design,

(2) Staffing,

(3) Performance Management and Appraisal,

(4) Employee and Organizational Development, and

(5) Reward Systems, Benefits and Compliance


Acquiring human resource capability should begin with organizational design and analysis. Organizational design involves the arrangement of work tasks based on the interaction of people, technology and the tasks to be performed in the context of the objectives, goals and the strategic plan of the organization. HRM activities such as human resources planning, job and work analysis, organizational restructuring, job design, team building, computerization, and worker-machine interfaces fall under this domain.


Recruitment, employee orientation, selection, promotion, and termination are among the activities that fit into the staffing domain. The performance management domain includes assessments of individuals and teams to measure, and to improve work performance. Employee training and development programs are concerned with establishing, fostering, and maintaining employee skills based on organizational and employee needs.


Reward systems, benefits and compliance have to do with any type of reward or benefit that may be available to employees. Labor law, health and safety issues and unemployment policy fall under compliance component.

Major Trends Affecting HRM

The following trends have an effect on human resource management function and department. The importance of HRM increases due to some of them and the practices of HRM are affected to some extent due to some of them.


1. Increased globalization of the economy.

2. Technological changes and environmental changes.

3. The need to be flexible in response to business changes.

4. Increase in litigation related to HRM.

5. Changing characteristics of the workforce.

The Importance of HRM Measurement

Many HRM systems and activities are not subjected to systematic measurement. Many organizations do not assess either the short- or long-term consequences of their HRM programs or activities. A recurring theme of the book is that measurement and accountability are key components to organizational effectiveness and competitive advantage. Good measurement, allied with business strategies, will help organizations select and improve all of their HRM activities and provide a much stronger connection between HRM activities and organizational effectiveness.


Stanford University professor Jeffrey Pfeffer considers measurement to be one of the keys to competitive advantage. His book Competitive Advantage Through People cites measurement as one of the 16 HRM practices that contribute the most to competitive advantage.


A new book entitled The Workforce Scorecard by Professors Mark Huselid, Brian Becker, and Dick Beatty extends research on the "balanced scorecard" to a comprehensive management and measurement system to maximize workforce potential.

Competitive Advantage and HRM

Competitive Advantage refers to the ability of an organization to formulate strategies that place it at favorable position relative to other companies in the industry. Two major principles, namely customer value and uniqueness, are relevant for gaining competitive advantage.


Competitive advantage occurs if customers perceive that they receive more value form their transaction or relationship with an organization than from its competitors. HRM needs to make efforts to ensure that all employees are focused on understanding customer needs and expectations.


The second principle of competitive advantage derives from offering a product or service that your competitor cannot easily imitate or copy.



The status of HRM is improving relative to other potential sources of competitive advantage for an organization. Professor Pfeffer notes that "traditional sources of success (e.g., speed to market, financial, technological) can still provide competitive leverage, but to a lesser degree now than in the past, leaving organizational culture and capabilities, derived from how people are managed, as comparatively more vital."

For success in 21st century, HRM activities must be (1) responsive to a highly competitive marketplace and global business structures, (2) closely linked to business strategic plans, (3) jointly conceived and implemented by line and HR managers, and (4) focused on quality, customer service, productivity, employee involvement, teamwork, and workforce flexibility.

Importance of Study of HRM for Students Specializing in Other Functional Areas of Management

Even as line managers in any functional department, management students are likely to manage people at some point in their career. Research shows that the manner in which one conducts the human resource responsibilities of the management job will be the key for effectiveness and growth in one’s career.

Reference  

H John Bernardin, Human Resource Management, Fourth Edition, McGraw Hill, 2007

Review notes  for all chapters of the book

 http://nraomtr.blogspot.com/search/label/Human%20resource%20management

Full Chapters of the Book Human Resource Management by Laura Dias