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by Geof Cox, published by AskHow2.com, December 2003
There is no doubt that hiring and retaining the right people has a huge impact on financial performance, and `talent management' has become the new biz-word, yet research carried out by OPP Ltd shows that companies are not doing enough to capitalise on the asset: 84 percent believed that there is undiscovered talent in their organisations and over three-quarters had no strategies in place to either recruit or retain talented employees.
Whilst money is important, survey after survey identifies that it is seldom the prime reason for someone leaving a job. One carried out over 20 years identified 85 percent of people leave organisations for reasons other than pay – poor supervisory behaviour being reported as the most predominant reason. The day to day communication with their manager is the single most important factor in determining employee productivity, morale and retention.
In terms of retaining and motivating top performers, the basics that motivate and de-motivate all employees still ring true, yet will be felt more acutely in this group as they will be, in all probability, more aware of their talent and their value, and more likely to trust the marketplace. There is no step-by-step solution to top performer retention and development – it is likely to be a combination of a number of activities that fit the style and culture of the industry and organisation. And many practices cost nothing to implement.
A large proportion of top performers are likely to come from `Generation X', a term coined to describe those born between 1963 and 1977 who now form the core of the workforce. (Their younger siblings Generation Y or the net-generation is coming on-stream fast – think of them as Generation Xers with self confidence and on fast-forward). Gen-Xers have a significantly different approach to employment than their `Baby-Boomer' parents: they see themselves as free-agents, willing to negotiate hard and move jobs in order to achieve their goals. In today's business climate, this free-agent mindset is migrating to workers from different generations, especially top performers who have less confidence in employers' long term promises of reward and security, and put more emphasis on the day-to-day rewards like flexibility of working conditions, the interest of the work they are doing, and the ability to utilise and develop their talent and skills (and, of course, their communication with their manager).
In all likelihood, and especially if your organisation is large or long-established, many of your employment and management policies will have been developed for a different time and a different group of employees when time served was more important than results. Even though most will now be espousing a different story, a look at the reality in the organisation will show that the old culture is still alive and in control.
The two are not the same, despite most organisations' HR policies to promote people to higher positions based on their past performance in a different role. A great salesperson does not automatically make a great sales manager, or any other manager. Equally, someone can be performing below par because the job isn't the right one for them. In a different environment, they can be a top performer. Different skills and behaviours are required in different jobs and need to be assessed in some way in order to identify the potential for success in the different role. Past performance is also no predictor of future performance, especially if the organisation or its environment is changing. Performance assessment systems tend to fall short in only measuring what the individual does, and not how they do it. Making decisions to develop talent based solely on typical performance appraisal systems is risky.
Structuring a Performance Management system to provide clear objectives, with feedback based on objective evidence that is delivered in a timely and regular manner, not dependent on formal reviews, is a start point for talent management in most organisations. This performance management system should include assessment against a behavioural competence model to not only give a more balanced view of performance, but also facilitate feedback on the `how' of the current job, and provide the basis for assessment and development of the behavioural skills necessary for the different roles in the organisation and therefore improve selection of high potentials.
In most organisations, potential is synonymous with management progression, yet in reality of course, everyone has the potential to improve, succeed, achieve. So in assessing potential, it is important to identify first what you are assessing and selecting for: The CEO's replacement? A senior manager position? A step up the managerial ladder? The ability to work in a changing business environment? The answers to these questions will produce a different set of profiles for the assessment and selection process to work to.
Once the profile of skills, knowledge and behaviours has been identified, the most successful way of assessing and developing individuals to meet those requirements is through well designed assessment or development centres – specialist workshops where candidates can demonstrate the characteristics needed to meet the new role through simulations and tests. Unfortunately they can be perceived as expensive to run, as they require considerable planning and take up a great deal of time in carrying out the assessor role. But the cost of making one poor promotion decision usually outweighs the cost of running a centre.
One should also take into account the aspirations of individuals – Do they want to be a high potential? Do they aspire to be CEO? Some years ago Beverley Kaye wrote a treatise entitled `Up Is Not The Only Way' to highlight the connection that most of us make between development and promotion. This perception tends to devalue career development opportunities that do not have a grade differential attached, which are increasingly difficult to provide in flatter organisational structures. So a process of potential and career planning in an organisation ought to be accompanied by training for managers in life and career designing skills to enable them to make better personal choices and priorities. It is of no value to an organisation to select, train and groom a candidate for a senior managerial post over a number of years only to find that the individual is not prepared to make that move.
Provide challenging work that really matters.
People put their energy into work because they believe in what they are doing. That's why there is an increasing number of people setting up their own businesses or working for small organisations - they have a sense of belonging and contributing, they have more of a sense of purpose. The core of any performance management system, and certainly the demand of top performers, is to have a clear line of sight between what they are doing and the company strategies and performance. In larger organisations this `clear line of sight' is more difficult to create, but no less important.
Once people are linked to organisation strategies and goals, it is much easier to reward key elements of business performance through the pay system, and with individual differentiation, top performers will have clear feedback on how they are creating extra value for the organisation.
Provide flexible structures
Work needs to be reorganised to provide the best value added use of talent. Reward structures need to be flexible to allow negotiation of individual arrangements that reflect the contributions made. "It's not our policy" is not a valid answer any more, your talent will go and find what they are looking for elsewhere, whether that be more or less responsibility, or different and more rewarding work. The more a job can be organised around the skills and abilities of the individual contributor, rather than the demands of a job description, the more the individual will be able to contribute and feel more valued. Give people the chance to reinvent themselves inside the company so that they don't have to resort to leaving – new tasks, new skill areas, new people, new location, re responsibilities...
The other flexibility demanded is in working hours and practices. A survey of BT managers found 38 percent refusing promotion because of the perceived damage to their home lives. Providing individual friendly, family friendly, carer friendly policies and the sort of flexibility of working location and working times demanded by top performers and top potential people is much easier when there is a clear performance management system in place. Clear goals and feedback make it easier for managers to focus on outputs and outcomes rather than measuring inputs – but many managers are not comfortable in offering the flexibility as they fear a loss of control.
There is an implicit `new contract of employment' that exists between the organisation and the free-agent top performer: I will be loyal and committed to the company's vision and goals, work hard and deliver top performance; in exchange I expect to be given challenging work and learning opportunities to acquire marketable job skills. This ensures their continued employability – with another employer if necessary. for whom they will deliver the same loyalty and commitment so long as the contract is kept.
For many organisations this need is translated into costly MBA programmes and training courses which paradoxically do not actually deliver the marketable skills that are demanded. Much more effective is to provide learning and development opportunities through varied assignments and projects designed to stretch the individual whilst delivering value added to the organisation as well. While employees are learning voraciously on the job, they are unlikely to get bored and seek to leave, and at the same time they are developing the practical, transferable and marketable skills and experience that they crave.
Top performers are nearly always self-motivated – they don't need to be handed learning opportunities on a plate, they will seek out the resources they need to develop the skills they require. They just need those resources and opportunities to be available and accessible - an infrastructure and a culture of knowledge sharing or Action Learning. Don't forget as well, that the younger the individual, the more adept they are likely to be in processing information – they have grown up in the midst of a massive increase in information availability and the technological means to manipulate it with ease. They seek and process information differently than older managers – so the training and development opportunities need to be different as well.
Use of the company intranet has allowed some major organisations to deliver Just-In-Time development to the desktops of employees, and even provide an fully interactive internal job market. An individual can record their own skills, experience, development and aspirations and compare them to the database of job and project assignment opportunities to find a match. Equally, they can interrogate their preferred role profiles to identify where they need to develop their skills and experience and thus plan their own career pathway. Without an intranet, smaller organisations can achieve the same level of opportunity and responsiveness by enhanced communications and information sharing.
When all else fails – ask them! Seriously, the more you know about an individual, the more you will be able to provide the conditions for motivation and respond to their aspirations. Top performers respond well to appreciation and personal attention, and the dialogue created in continual review of their performance and development will satisfy a number of the needs identified earlier. Top performers and high potentials are all individuals, corporate reward and career management systems do not easily satisfy their needs – and as with other needs that are not met, they will seek to satisfy them elsewhere.
The dilemma of giving top performers the freedom to operate on clearly defined assignments, yet maintaining a close relationship with them, requires their managers to be skilled in delegation, motivation and communication. They need to be able to give regular, focused feedback, yet allow space for the performer to deliver. They need to be able to identify and provide development and learning opportunities. A well organised performance management system will provide the structure for this to take place, but managers need to be able to manage in a coaching style to develop individuals to their full potential.
Because top performers and top potentials are different to the average employee, then very often they need coaching and encouragement from sources other than their immediate manager. Maintaining performance in the current role is the responsibility of the line manager. Developing performance and potential often lies better elsewhere in the form of a mentoring relationship.
Mentoring provides top employees with a role model; someone to share experiences with (especially about more senior roles in the case of high potentials); someone who will care about them and identify their concerns and aspirations; someone who can challenge them to higher achievements; someone who can open doors and introduce them to others in order to provide opportunities for growth, challenge and development; and someone who can equally learn from them and value their input.
In a classic research experiment by Robert Rosenthal a school teacher was told that half of the students were of high intelligence and half of low intelligence. The high intelligence half performed well, the low intelligence half performed poorly. Then the researchers told the teacher they had made a mistake and got the groups the wrong way round. Once again, the children performed according to the teacher's expectations and performance reversed. In managing high potential and high performance systems in organisations, we need to be aware of the Pygmalion Effect. Anyone identified as high performing or high potential is likely to achieve that status partly through the expectations of their managers. Once labelled, it is also difficult for any manager to focus objectively on that individual if they are not living up to the expected performance standard. The Pygmalion in the Classroom experiment also showed that teachers would adapt their interpretations of behaviour according to their expectations – so exuberant, noisy interruptions would be interpreted as `enthusiastic self expression' or `disruptive behaviour' depending on which group the student belonged.
And what about the message given to people who are not `top potential'? All of the processes and methods above apply to all employees to help them develop to their potential and to perform. Perhaps there needs to be some differentiation for recognising and developing top performers and top potentials, but not at the expense of being divisive and counterproductive to developing the capacity of the whole organisation.
Geof Cox
New Directions Ltd
December 2003
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