Talent Management: Watching Your Investments

Whether they are called resources, assets, or human capital, people in organizations are an investment a company makes in order to meet business goals as well as growth projections. Like any investment, talent must be managed with care and adjustments must be made accordingly.

One of the main challenges that HR leaders face in managing talent is getting business leaders to follow through on each of the three critical stages in the talent management process.

Performance Management

Performance management is perhaps the most dreaded aspect of the talent management process. It is time-consuming and it involves attention to detail. It is primarily dreaded however, due to its emotional component. Not only are managers assessing the employee’s performance, which is essentially a process of critique, but also the employee’s future compensation is intrinsically tied to that assessment.  Expectations on the part of the employee on both the performance evaluation and the compensation piece may vary wildly from that of the manager’s views. Performance management is however, the building block on which we base how talent is managed and must therefore, be treated with rigorous discipline.

Common challenges that HR leaders must be vigilant to, include:

Poor Manager-Employee relationship – At times, during the performance management process, managers may surface a situation, performance issue, or perceived lack of skill in relation to an employee which they had not brought up to the employee before. This poses a difficult situation at several levels:  * the employee won’t have an opportunity to address the problem and course-correct in time; * the element of surprise for the employee signals a communication problem between manager and employee ; * it sends the message – whether on purpose or  not – that the manager waited for the annual evaluation to disclose all of the employee’s opportunities.   Just as bad, HR is also caught by surprised and forced to determine whether they have a poor performer in either the employee, or the manager. Managers who don’t invest time and effort in knowing their employees and in building a relationship, may find it more difficult to approach them with timely and constructive feedback.  Sadly, engaging in this wait-and-surprise game eventually catches up with the manager and his or her career. Just as sad, employee reputations may be ruined on the occasions that the problem may actually be with the manager, not with the employee. This is more difficult to gauge when the manager may be good at meeting business goals, but less than effective at managing others. They may have been promoted to management based on the former, but never fully assessed based on the latter. In such a case, the employee’s reputation is compromised making it difficult for them to recover from the incident. If the relationship is not repaired, the odds of employee and manager being fully effective in the future drastically diminishes. In the best-case scenario, the employee transfers to a new manager and a better relationship is formed. In the worst case, the employee is not able to recover from the damage to their reputation and ends up leaving the company, whether voluntarily or involuntarily.

Employees Managing Up – On the opposite side of the previous scenario is the “halo effect” that managers bestow on certain employees and that directly impacts how they evaluate them.  Everyone knows the importance of good relations at work and everyone should aim to have a good relation with their manager and help him or her be successful. Taking this aim to an extreme however, may cloud how the manager sees an employee. An astute employee and a less-than-aware manager may end up shifting the relationship from manager-employee to manager-ally with all the emotions that the shift may entail. In the current social media age, “friending” one’s boss through some of the common online outlets is still something that many organizations are not certain on how to handle. Again, we’re not talking about a healthy strong relationship, but one where the efforts of the employee of endearing him or herself to the manager results in their raising to the top of the pack forsaken better performers in the team.  One way the “halo effect” manifests itself in the performance management process is when the same employee year after year is rated “exceptional” by their manager while other stakeholders may disagree with the employee’s contribution. This may be perceived as style trumping substance.

Timing – As unbelievable as it may seem, many of us in HR have seen it sometime or another in our careers…No, not Big Foot, but another elusive being. That of the manager who cannot seem to get around to completing their employee’s evaluations in time. If you speak with enough people, you’ll find examples of employees whose evaluations were due in January, but they received them in June. To me, that spells disdain. This is a major flaw in the organization’s culture and a huge hit to employee engagement. Some organizations have solved this problem by instituting performance management systems that limit the amount of time a manager has to work on and deliver employee evaluations before the employee is given direct online access to their own evaluation. If the evaluation is deemed as incomplete, the manager’s manager is notified of the lapse.

For the above scenarios, HR must get involved and partner with the manager to bridge any gap in the manager’s skill-set or provide appropriate coaching with the involvement of the manager’s manager. For more serious cases, a remedial step is to penalize the manager’s compensation directly for their lack of effective execution. This of course, in addition to receiving a low rating for their managerial competencies.

A good manager complies with the set deadlines; a great manager manages performance every single day.

Talent Reviews

While performance management is the building block of talent management, talent reviews are the backbone of the entire process. This is where performance and potential are assessed. As another time-consuming endeavor, talent reviews require a close partnership between line managers and HR leaders. The goal here is to assess the health of the organization as it relates to its people, in particular, its senior and high caliber talent. Do we have the right people? Are they in the right roles? What do they know (skills, organizational knowledge, etc.)? How do they use their skill-sets (competencies)? Who do they know (political capital)? Who knows of them (political savvy)? Who should they know (mentoring)?  Who should know of them (next potential role)?

Common challenges that HR leaders must be vigilant to, include:

Managers not fully engaged in the process – Despite being a process designed to help the manager in managing their employees, there are those who invariably fail to commit to the process and neglect to comply with the required steps. Such steps usually include obtaining feedback from important stakeholders with whom their employees work, and completing pre-assigned talent review forms to be sent to HR in time for the live discussion. Managers who don’t engage effectively may lack a vision for what the talent review process is or how it is used.

Lack of candor – The basis of the talent review is the live discussion that takes place around the table as employees are assessed one by one. At times, managers may feel discomfort with this practice and a desire to “protect” their business or unit takes over during the discussion. In practice, it can take the form of not sharing important information, downplaying someone’s talent for fear of “losing” the employee to another team, or overstating their team’s talent and capacity in order to appear to be in top shape.

Both of the above practices border on distrust and the HR leader must be quick to intervene and dissipate the gridlock.

Talent Development

Alas, the third stage in the talent management process signals anything but closure. This is where the agreements on future steps as it relates to the employee’s development are put in place. On the light side, managers are expected to give feedback to employees based on information surfaced during the talent review. Beyond this however, are all the important follow-up conversations that managers should hold with their employees on their development, particularly with those deemed as high potentials or people-to-watch.

Common challenges that HR leaders must be vigilant to, include:

Not giving feedback – Despite the focus given to this important step, time and time again, employees report not receiving enough feedback and recommendations for their development. When the employees are ones that have been deemed as high potential or even high performers, lack of feedback on their opportunities can not only delay their growth, but they can also become frustrated by the lack of managerial focus on their career development.

Not formally partnering in the employees’ success – A demonstrated commitment on the part of the manager is necessary for key talent to thrive. Creating stretch assignments, finding mentors, locating opportunities for involvement in higher-level activities and exposure, are all actions the manager can take to advance someone’s development.

Commitments made during the talent review process towards the development phase must be adhered to if the organization is serious about retaining and growing its talent. The organization cannot advance if its talent is not as agile as needed. As HR leaders seek to continually align people strategies to business objectives, development of the organization’s talent is a key priority that must be tackled with urgency.

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This entry was posted on Sunday, February 21st, 2010 at 5:26 pm and is filed under Talent Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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