Included in collection: Human Resource Management (HRM)
Talent, Performance, Training and Development Lecture
Getting the right people into the right positions is a central focus of human resource management but it is also more than this, it can stimulate and facilitate long-term organisational success. Throughout this chapter, talent management strategies are presented and shown to be integrated with a wide range of business processes needed to create a talent mind-set (Ashton & Morton, 2005). Underpinned by the focus that organisations are people orientated, this chapter argues that an organisations success is dependent upon their ability to transform a vision for its people into reality through talent management strategies discussed in this chapter. If firms want to competitively benefit from the people within their firm then they need to be able to attract, develop and effectively retain individuals (McCauley & Wakefield, 2006).
The precise meaning of talent management is varied and often talent management is interchangeable with the terms succession planning and human resource planning. In order to understand what we mean by the term talent management, reflect upon the following statements:
‘ensure the right person is in the right job at the right time’ (Jackson & Schuler, 1990: 235).
‘managing the supply, demand, and flow of talent through the human capital engine’ (Pascal, 2004: 7).
The two statements above highlight a different focus. Whilst both statements reflect upon the individual and the employee each differ in their focus. Whereas the first one focuses upon outcome the second focuses upon a specific decision. The terms in talent management highlight effective management and employee talent. For the purpose of this chapter, the following definition is used:
‘Talent management seeks to attract, identify, develop, engage, retain and deploy individuals who are considered particularly valuable to an organisation. By managing talent strategically, organisations can build a high performance workplace, encourage a learning organisation, add value to their branding agenda and contribute to diversity management’ (CIPD, 2016: 1).
The business environment is increasingly complex and dynamic in nature and it is likely to remain this way for the foreseeable future. In addition to dynamism in the external environment, organisations are facing difficulties including talent flow and a shortage of necessary skills in the workplace. One major challenge organisations face is that they have to be global but that they also have to be systematic in their approach to human capital (Tarique & Schuler, 2010).
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Talent within the organisation may be demonstrated within the firm in one of two ways:
- High Performance. Those individuals or group of individuals who consistently demonstrate high ability and strength across a variety of situations and for a sustained period of time.
- High Potential. The potential of the individual or the group of individuals is above that of what is expected of them.
The strategic management of talent is fundamentally important with emphasis being placed on the need to manage people for performance to contribute to strategic goals and outcomes. This has most recently contributed to the emergence of strategic human resource management (Truss, Mankin & Kelliher, 2012). The emergence of this more strategic focused human resources practice supports a move towards strategic talent management where planning skills are put into play in order to overcome many of the challenges organisations now face. Reflecting upon the contention that human capital is important, organisations now need to consider how best to invest in people and how to plan for future human resources needs especially in light of increasingly dynamic environments.
Throughout this chapter, it is made clear that talent management has to be underpinned and driven by a meaningful, strategic and thoughtful strategy. The dynamic environment has created volatility and turbulence, which has laid, bare the limited talent organisations have and their limit appraisal of planning capabilities. As a result, increased attention is being directed towards the need to move towards a more strategic appraisal of talent.
The very possession of talent to an organisation is important and an understanding of talent can stem from the individual, to the institutional to the social understanding of talent. The very concept of employability alone is wider than that of talent but organisations must be able to attract those who have talent and employees must be able to possess talent in order to have value in the market. The very definition and development of talent however becomes difficult and consequentially there is a need to adopt a strategic outlook as discussed in this chapter.
To develop strategic skills there is a need to think about the need to align individual goals to the wider corporate strategy of the organisation. Those talent plans, which are considered to be most effective, are those, which align to individual employee needs within the firm. However, in order to achieve this goal alignment there is a need to clearly ensure that the values and vision of the organisation are well communicated and documented across the organisation. This will ensure that employees are able to work together aiming to execute the strategy effectively.
A strategic approach to talent management allows an organisation to become pro-active as opposed to reactive. It allows for an organisation to adopt a critical approach to talent management, which is needed in order to address both industry and organisational characteristics. A pro-active approach also allows the organisation to gain the time needed to plan for future labour needs. This planning and pro-active approach can be used to ensure that labour requirements and thus talent within the organisation support any strategic decisions. A strategic approach to talent management also supports a focus on an identification of essential skills and this is regularly approached through a talent appraisal. An organisation, for example, would be expected to carry out an examination of existing talent needs in order to then be able to focus upon those areas, which require focus. Finally, it is expected that a focus on strategic talent management will facilitate a longer-term, sustainable recruitment plan, which is underpinned by the organisation being able to recruit individuals with the skills set, and talent they required. This in turn can be linked to the unique competencies of the organisation.
One tool, which can be used by organisations to define talent and to identify existing talent needs within the organisation, is the talent matrix, which is presented in figure one.
Outputs and Results
TALENTS MAY LIE ELSEWHERE
FUTURE TALENT OR POSSIBLE TALENT
Input and Capability
In the above matrix, the term capability is used and this move towards an appreciation of competence and the need for employees to have a wide range of skills. The matrix allows organisations to identify talent within the organisation and use this in a way, which could influence outputs and results. The matrix also considers the need for organisations to focus upon input and capability in order to trigger the future potential for talent. The more an organisation invests in individuals the more potential they have to influence the potential for top talent within the firm. With talent management on the agenda, Tesco provide an example of a firm who have focused upon a sustainable approach to the management of people.
Tesco invest £3million in the development of a leadership academy. Drawing on a need to focus upon the future input of talent into the organisation, Tesco took things into their own hands and invested in the development of a leadership academy. Tesco recognised that there was a gap in the top at the organisation and therefore sought to invest in potential leaders of the future to ensure a sustainable future for the organisation.
The organisation noted:
“Our investment is the largest of its kind in the retail sector and our academy aims to develop leaders who have a vision that they can align the business behind and who live our values” (Churchard, 2009: 1).
The course named the Advanced Leadership Programme sought to prepare individuals for direct roles and used mentoring to support this. This is an example of an organization that are committed to planning ahead to support their future competitive position.
The talent challenge faced by organisations around the world is the demand-supply gap. Demographic trends are creating a talent shortage and as a result companies more than ever need to focus upon how to develop talent often through training and development mechanisms within the firm. The talent challenge also gets increasingly more difficult when we consider the job mobility of individuals and the increasingly picky nature of employees. Employees with great skills set and qualifications have the potential to choose their place of work and consequentially there is a need for organisations to ensure that they are committed to training and development programmes within the organisation.
Procter and Gamble (P&G) provide an example of an organisation who are committed to supporting their talent management strategies with training and development within the firm. The CEO of P&G claims that the company spend nearly ½ of their time developing the ‘promote from within policy’ which they promote throughout the organisation to develop future leaders. In particular, the company create a culture of shared leadership with the idea being that leaders can be found throughout the firm and should in turn be fostered and encouraged.
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Three trends for talent management can be identified:
- Recruitment, Staffing and Succession Planning
- Training and Development
- Retention Management
This chapter will now move on to focus upon training and development and how this supports the wider practice of talent management.
Excellent, high performing companies have a commonality which is their commitment to leadership development as seen in the cases of Tesco and Procter and Gamble. To support such practices, companies have established a real focus on training and development in order to support employee development. Working with local education providers or universities, many companies including IBM and McDonalds have learning campuses within the organisation which they use to incorporate the latest learning and knowledge transfers within the firm.
Whilst training is important, sophisticated and focused training programmes are not enough and instead there is a need to develop a culture of talent throughout the organisation. Companies that excel in training, make training and development an integral part of their culture and actively seek to involve employees at different levels of the organisation.
Promotion from within policies are increasingly viewed as a sustainable approach to training and development within the firm. By promoting from within it is possible to help companies retain talent within the organisation by providing promotional opportunities. This in turn links to motivational theories where often the need for progression is key. Offering a strong incentive for performance, a promotion from within policy encourages a commitment across different levels and it actively reflects decentralization. Open job postings internally provide an opportunity to effectively identify talent within the organisation. However, it is necessary to consider the challenges which promoting internally may result in. For example; internal recruitment alone may result in a lack of new knowledge and perspective being bought into the firm.
Training and skill development can be encouraged within the organisation in a number of ways including:
- Establish a learning culture within the firm which is not just contained in one part of the organisation.
- Determine learning objectives and a vision for the organisation.
- Recognise that every employee learns differently and that every individual has different learning styles.
- Don't forget soft skills e.g. customer service, etiquette.
- Recognise learning achievements within the organisation.
A focus on training and development within the firm is commonly linked to higher levels of organisational innovation (Sung & Choi, 2014). If organisations spend money on internal and external training then they are often able to benefit from increased innovative and organisational performance. Further, as noted in the work of Dhar (2015) an investment in training is regularly linked to higher levels of employee commitment. If employees feel invested in then they feel able to exert more positive employee behaviours within the organisation. This in turn links back to motivational theories discussed in a previous chapter where employees need to feel invested in to experience higher levels of job motivation.
Knowledge transfers between employees are the intended outcome of effective training and development programmes. Such knowledge transfers ideally need to occur across organisational levels and thus need to be able to be transferred from employee to employee and from managers to employees. This supports a wider vision of talent management to create a culture of talent throughout the organisation. To facilitate knowledge transfers, Ford (2014) argues that there is a need to focus upon applied training where employees learn something they are able to actively apply in the workplace. Moreover, recent developments have highlighted the importance of developing a mentorship programme within the firm.
Mentorship programmes within the firm promote communication and they encourage a transfer of experience from a more experienced employee to a less experienced employee. This level of professional interaction supports a culture where individuals are able to learn from each other.
Once an identification of existing skills has been carried out within the organisation as part of a training and development programme, the firm must then focus on being able to identify how to build skills in those areas where weakness exists. A central skill of upmost important within today’s dynamic workplace is a focus on continuous learning and a need to have independent thinking skills capable of stimulating success. The investment in workplace skills is important and is required in order to be able to enhance productivity and support an ability of organisations to deal with a dynamic environment. Table one below presents a focus on the returns an organisation can gain from an investment in skills.
To develop skills and focus upon the benefits outlined above, there is a need to think about developing a step-by-step process to be able to develop essential skills. To start, an organisation must be able to assess the skill level of the organisation and in order to do this, this requires a need to identify skills gaps in particular in those areas where employees may have weaknesses which restrict their ability to carry out tasks. To further assess organisational skill there is a need to develop job specific skills to support employee performance. Once the organisational skills have been identified and developed, emphasis has to then be placed on determining the individual skills gap of employees in order to focus upon the individual level. Employers must be able to engage their employees and this individual focus can develop a greater focus on the development of a talent management culture. Finally, aligned to individual employees, emphasis must also be placed on the need to identify possibilities for future training on the job. This culture of continuous learning triggers an ability of organisations to support their competitive stance within dynamic environments, something, which has been regularly praised in the literature (Teece, 2009: 2012).
To further drive the development of skills within the firm, a practical focus must be applied to the need to design appropriate training to meet essential skills targets. Organisational targets must be developed and they must be used in order to be able to schedule training and ensure individuals are motivated towards meeting their skills targets, something which may be achieved through performance appraisals.
The development of a continuous culture of skill development is important and is fundamental to the future development of the organisation. Employers have to take a pragmatic approach and they have to be able to derive maximum benefit to support the development of a talent management culture within the organisation.
A strategic approach to performance management facilitates managerial and behavioural approaches in a way that stimulates success (De Waal, 2013). The fundamental way in which performance management can be approached is in a way, which links it to improved employee effectiveness and a continuous process where managers and employees work together to plan monitor objectives and goals to ensure that each individual is contributing to the organisation and its overall success.
Often presented and treated as a strategic and somewhat holistic process, performance management runs across multiple human resources activities and is concerned with centrally focusing on the contention that employee performance must contribute to the wider organisational goals of the firm. For this to take place, there is first a need to be able to identify what those goals are and the way in which they are established in the first instance. The promotion of employees and managers working together supports the inherent essence of talent management and this allows for attention to be directed towards important cultural variables i.e. the development of a talent management culture.
As highlighted in the work of Kloot and Marting (2000) a balanced approach to performance management is often needed in order to promote a truly holistic approach towards performance management. This balanced approach can be achieved through a focus on strategic management and a sustainable approach to organisational innovation. A strategic approach to performance management can be defined as:
‘The process in which steering of the organisation takes place through the systematic definition of mission, strategy, and objectives of the organisation, making these measurable through critical success factors and performance indicators in order to be able to take corrective and preventative actions to keep the organisation on track to great performance’.
Underpinning this definition is a need to understand the definition of performance. Performance can be viewed as an achievement of goals and ultimately individual goals need to support organisational performance. Performance management has a variety of goals and outcomes and it predominately focuses upon a variety of aims and objectives, which include:
- Helping to achieve a sustainable focus on performance.
- Increasing the motivation, learning and commitment for employees within the organisation
- Supporting organisational activities to allow individuals to focus upon organisational learning and development.
In order to facilitate performance management there is a need to draw out the sub-processes of strategic performance management.
A focus on the development of clear objectives, which allow for performance to be translated into actionable, measurable constructs. Often, within firms strategic targets are not focused upon and as a result potential for value creation and sustainability is reduced. Further, there is a need to place importance on a focus on ambitious goals and how this can be achieved through employees within the firm.
The budget setting process sets into plan an operational focus, which inspires value within the organisation. In light of the dynamic and volatile business environment, attention has to be directed towards using data to support decision making within the firm. One of the central issues is that often too much data is collected which can then restrict the extent to which it is possible to interpret the data collected.
Performance management processes collect data and they do so to support the development of critical success factors. To facilitate performance, there is a need to focus upon targets and forecasts, which must be supported by an ability to define performance.
- Target Setting
Any consideration of target setting needs to balance an approach between targets being achievable versus ambitious. As a result there is a need to employ targets which are focused and specific in nature. In order to set appropriate targets there is a need to develop SMART goals. SMART goals are those, which are Specific, Measurable, Attainable, Realistic and Timely. SMART goals allow for specific goals to be developed which can support the appropriate development of targets.
A specific goal is necessary to focus employees. In order to develop a specific goal the following questions have to be asked:
- Who is involved?
- What is the purpose?
- What are the requirements?
Example: Join in on the departmental meeting once a week for the next 4 weeks.
Measurable: Goals have to be measurable in order to be able to ascertain and review if they have been met.Questions such as how many and how much have to be asked in order to be able to track if progress is being made towards the goal.
Attainable: A goal also has to be attainable. It has to be able to be attained within the time frame set and thus it must be, in the mind of the individual thought to be attainable.
Realistic: SMART goals must also be realistic in nature. In order for a goal to be realistic it must represent something, which is achievable and represents a step towards progress.
Timely: A goal must be developed within a specific time frame in order to focus activity and behaviour. A date can be used to ensure that the work directed towards the goal is specific in nature.
Research suggests that the most effective goals are those goals, which have struck the right balance between being achievable and ambitious. Too simple and an individual or team might not be focused enough to achieve the goal. Too hard and this may make individuals feel that the goals are not realistic or achievable and so may not try. It is therefore necessary to ensure that the development of any goal is placed within an understanding of individual skills needs. Discussions between managers and their employees might therefore be valuable to stimulate a partnership for the development of goals, which are the right balance between being achievable and ambitious.
The creation of a talent management environment in the 21st century is an important and necessary part of any modern organisations agenda. A shortage of talent, facing an ageing population and a dynamic business environment has all fuelled a commitment to a need to focus upon how talent can be attracted and retained within the organisation. To standstill and to be static is a dangerous game and thus firms have to be focused upon adaptability to trigger a sustainable approach through talent. To build a strong, consistent and sustainable talented workforce requires a need to develop employees who can act in the global business environment. First, to achieve this through an identification of skills, attention has to also be directed towards the cultural dynamics of talent management.
Monitoring and control in a talent management environment requires a focus on keeping the organisation on track whilst not limiting creativity and innovation within the firm. With the implementation of SMART goals, there is a possibility to support a specific and measurable approach to goals. However, whilst monitoring and control are important, emphasis must also be placed on ensuring that too much monitoring is not enforced so that talent creativity is limited within the firm. As such, it is important to consider the cultural dynamics of talent management.
Flexible approaches to monitoring and control tied up with an understanding of SMART objectives may be achieved by a focus on informal communications and feedback sessions within the firm. Underpinned by the concept of double loop learning, feedback enables individuals to reflect upon each other’s development and activities to promote a continuous focus on learning. This focus on continuous learning and improvement is likely to be a fundamental driving force in promoting the sustainability of any talent management approach.
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The development of a talent management culture within the modern dynamic organisation requires passion and motivation and there are plentiful examples of organisations that have developed a talent management culture to promote change. In each of the cases presented below, consider the review questions.
To build a talent management culture requires commitment, a focus on continuous learning and a focus on a commitment to the sustainability of the organisation. As seen in the cases below, organisations have to develop the building blocks in order to develop a talent management culture.
Case Study 1
TALENT MANAGEMENT AT TESCO.
Resource forecasting, discussions with employees and an inherent focus on talent planning are central to the development of a talent management culture at the UK supermarket chain: Tesco. With strong promotion opportunities within the organisation, Tesco employees have great promotional opportunities which sees a number of lower level employees work their way within the company in order to gain representation on the board. The talent management culture within Tesco has been developed across all levels and talent spotting exists across the firm not just at the top. With over 26, 500 employees, talent spotting within the firm has become a central activity and discussions with employees exist to ensure that employees are driving their own skill development and their own career plans.
Talent management within Tesco can be positively reflected upon due to their focus on the individual and their focus on the employee. Employees drive their skill development and feedback is delivered in a simple manner. This focus on simplicity is fundamental and avoids the process being complicated, which reduces interest. Tesco are an example of a talent management organisation and passion at the top stems down throughout.
- Simplistic process
- Commitment from the top of the organisation
- Strong promotion and progression opportunities supporting learning and knowledge exchanges.
- Complete your own research on Tesco - can you find any examples of employees who have had their talent fostered by the firm?
- Do you agree with Tesco keeping performance review discussions separate to discussions of career planning?
Case Study 2
A long-term approach to talent management at KPMG consultancy.
With a focus on mistakes on the past and learning from them, KPMG have placed recent emphasis on the critical role of talent management and the way in which this can be used to inspire future strength and sustainability. With the human resources department playing a central and critical function, KPMG are an example of a firm who have developed a structure capable of supporting capabilities and skills development within the organisation. Underpinned by a focus on profitable growth, KPMG focus upon the following key areas:
- Define and utilise a strategic workforce planning model capable of approaching talent management in a critical and strategic manner.
- Use and focus upon analytical data and the way in which it is interpreted.
- Manage stakeholders to support the transfer of knowledge
- Protect and safeguard knowledge to strengthen the organisational culture of the firm.
- Re-think and think long-term about the value proposition of employees.
To stimulate and foster a talent management culture within KPMG requires a commitment to the recruitment and retention process. The long-term success of a company requires on its ability to be able to hire people in the first instance. This talent can then be developed and retained. If the focus is this starting point then there is a need to ensure that the firm put energy into attracting people early in their careers. KPMG have a strong focus on the new generation and have been transparent about their approach to meeting the expectations of a demanding generation e.g. corporate social responsibility, ethical view of the firm requirements.
Recognising that there is a talent challenge, KPMG have put a goal in place to get the talent management crisis under control. They do some through measures, which not only cut costs but also allow for competitive plans to take place through a commitment to employees. Employees are regularly praised and encouraged to develop their own career within the firm and KPMG ensure a focus on talent through their commitment to flexible working.
- In what ways do you think flexible working promotes a talent management culture?
- How would you as a manager promote a positive, talent management culture?
This chapter has critically introduced the notion of talent management and it has both defined it and broken it down into its component parts including a focus on recruitment and selection and talent management skill development. Hand in hand with the concept of performance management, this chapter has promoted the importance of talent management and has highlighted the need for firms to tackle the existing talent challenge facing firms. In order to be sustainable, there is a need for employers to encourage career development and develop skills within the workplace. This is required to support a critical and sustainable approach to talent within the firm. However, as discussed within this chapter, the very definition of talent management is contested and varying in nature. As a result, there is a need for the field to come together to support consensus as to what it means. Future development in this area is likely to be an interesting area for future discovery.
Ashton, C., & Morton, L. (2005). Managing talent for competitive advantage: Taking a systemic approach to talent management. Strategic HR Review, 4(5), pp. 28-31.
Churchard, C (2009) Tesco invests £3million in leadership academy [Online]. Available:
http://www2.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2013/01/29/tesco-invests-3-million-in-leadership-academy-2009-10.aspx [08 November, 2016].
De Waal, A. (2013). Strategic Performance Management: A managerial and behavioral approach. Palgrave Macmillan.
Dhar, R. L. (2015). Service quality and the training of employees: The mediating role of organizational commitment. Tourism Management, 46, pp. 419-430.
McCauley, C., Wakefield, M. (2006). Talent management in the 21st century: Help your company find, develop, and keep its strongest workers. The Journal for Quality and Participation, 29(4), p. 4.
Sung, S. Y., Choi, J. N. (2014). Do organizations spend wisely on employees? Effects of training and development investments on learning and innovation in organizations. Journal of organizational behavior, 35(3), pp. 393-412.
Tarique, I., Schuler, R. S. (2010). Global talent management: Literature review, integrative framework, and suggestions for further research. Journal of world business, 45(2), pp. 122-133.
Truss, C., Mankin, D., Kelliher, C. (2012). Strategic human resource management. Oxford: Oxford University Press.
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