The Talent Management Handbook - MIM

xPrefacerepresent between 20% and 25% of an organization’s workforce. Largeinvestments should be made in this group. Solid Citizens representabout 70% of the workforce. They meet expectations for performance,enhance the work of others, and meet expectations in demonstratingorganization competencies. Organizations invest in enhancing thisgroup to ensure that Solid Citizens continue to contribute to organization success. They must not invest at the same level per employee asthey do for Superkeepers and Keepers. Last, there are Misfits. This groupcontains employees who do not meet organization expectations for performance, working with others, and /or organization competencies.Some remedial investments might be made with this group, but unlessa Misfit rapidly becomes a Solid Citizen, the “plug” should be pulled onall investments and the employee should be terminated. Typically, nomore than 5% of an organization’s employees are designated as Misfits.The book is organized into seven parts. The arrangement of the chaptersis designed to provide the reader with a series of logical steps to realizing thebenefits of the three strategies stated above.Part I presents a comprehensive approach to talent management. It showshow the various assessment, planning, and implementation elements can beintegrated into a single talent management approach that addresses the threehuman resources strategies. Each talent management component describedin this part is explored more deeply in other parts of the book. This part alsoframes the external talent management forces that impact on talent management activity.Part II focuses on examining each of the talent management building blocks.The blocks are assessment tools that are used to build the talent management plan and create the basis for associated development actions. Theblocks are organization competencies, performance appraisal, and forecast ofpotential. They are essential for the accurate placement of employees intothe various investment categories and, in particular, the identification ofSuperkeepers.Part III shows how the building blocks identified in the preceding section areassembled into a talent management plan. The talent management planidentifies the actions necessary for an organization to align its currenthuman resources capabilities with its current and future organizationrequirements. This chapter also illustrates different perspectives on the talent management planning process.Part IV focuses on helping organizations ensure that employees from diversegroups are represented in their reservoir of Superkeepers, Keepers, and SolidCitizens.

PrefacePart V describes the actions an organization can take to improve its employees’ capabilities for meeting the requirements of the talent managementplan. The emphasis in this part is on coaching and mentoring, since the editors believe that the overwhelming investment in employee improvement ismade on an ongoing basis through constructive dialogue and feedback frommany organization levels (boss, peers, functional experts, etc.). We do notemphasize technical aspects of training and development, since this topic iswell covered in other books and widely available through the resources ofthe American Society for Training and Development.Part VI presents a set of reward approaches designed to properly allocatecompensation dollars to employees based on their current and/or projectedvalue contribution to the organization. The effectively distributed combination of career development, coaching, and rewards is a powerful way to reinforce the three key talent management strategies.Part VII provides a straightforward overview of the various types of computer approaches that support talent management. It is intended to be astarting point for a much deeper exploration of the technology necessary tosupport an organization’s human capital needs.AcknowledgmentsThe editors wish to thank our blue-ribbon group of contributors who havehoned their skills as practitioners and theoreticians over many years of experience on the battlefront and in the think tanks of talent management. Theyhave generously provided their time and expertise to provide guidance tothose involved in talent management.The Talent Management Handbook is dedicated to our colleague,Edward Straub of Aon Consulting, who did not survive September 11, 2001,to our cousin, Jack Berger, who did survive, and to all impacted by this terrible event. Every human being is ultimately a Superkeeper—an irreplaceable member of his or her business community, family, and society.xi

ContributorsCraig M. Berger, Director of Education and Professional Training, Society forEnvironmental Graphic Design, Washington, D.C. (Chapter 35)Dorothy R. Berger, Managing Director, Lance A. Berger & Associates, Ltd.,Bryn Mawr, Pennsylvania (Chapter 3)Lance A. Berger, Chief Executive Officer, Lance A. Berger & Associates,Ltd., Bryn Mawr, Pennsylvania (Chapters 1 and 2)Nila G. Betof, Chief Operating Officer, The Leader’s Edge, Philadelphia,Pennsylvania (Chapter 26)Geof Boole, Executive Vice President Career Transition Services, RightManagement Consultants, Philadelphia, Pennsylvania (Chapter 14)Richard E. Boyatzis, Ph.D., Professor and Chair Department ofOrganizational Behavior, Case Western Reserve University, Cleveland, Ohio(Chapter 30)Dennis C. Carey, Vice Chairman US, Spencer Stuart, Philadelphia,Pennsylvania (Chapter 21)Paul Conley, Principal, Towers Perrin, Minneapolis, Minnesota (Chapter 34)Murray M. Dalziel, Managing Director North American Operations, HayGroup, Philadelphia, Pennsylvania (Chapters 5 and 10)Christian M. Ellis, Senior Consultant, Sibson Consulting, The SegalCompany, Cary, North Carolina (Chapter 8)Luanne Fisher, Ph.D., President and Chief Executive Officer, LibertyLutheran Services, Philadelphia, Pennsylvania (Chapter 16)Cindy Frick, Director of Organizational Development and HR Planning,Roadway Express, Inc., Cleveland, Ohio (Chapter 30)William Y. Giles, Chairman and Honorary President, Major League BaseballNational League, Philadelphia, Pennsylvania (Chapter 4)Rosemarie B. Greco, Principal, GRECOventures, Ltd., Philadelphia,Pennsylvania (Chapter 23)xiiCopyright 2004 by The McGraw-Hill Companies, Inc. Click Here for Terms of Use.

ContributorsLori Grubs, Senior Consultant, Hewitt Associates, The Woodlands, Texas(Chapter 17)John Haworth, Executive Vice President, BrassRing, Inc., Waltham,Massachusetts (Chapter 34)Edwin A. Hoover, Ph.D., Family Business Consultant and Mentor, Hooverand Associates, Willowbrook, Illinois (Chapter 24)John A. Hunter, Senior Vice President Customer Services, QVC, WestChester, Pennsylvania (Chapter 11)Marc Knez, Senior Vice President, Sibson Consulting, The Segal Company,Chicago, Illinois (Chapter 20)James Kochanski, Senior Vice President, Sibson Consulting, The SegalCompany, Cary, North Carolina (Chapter 19)Lea Ann Koniski, SPHR, Director Organizational Development, Ken-CrestCenters; Interim President, United Staffing Services, Plymouth Meeting,Pennsylvania (Chapter 16)Helen Krewson, Director Human Resource Development, The Children’sHospital of Philadelphia, Philadelphia, Pennsylvania (Chapter 27)Leon T. Lanier, Sr., Vice President and Chief Operating Officer, The WintersGroup, Rochester, New York (Chapter 25)Paul W. Larson, Vice President Executive Services, Right ManagementConsulting, Irvine, California (Chapter 28)Sarah Larson, Consultant, Towers Perrin, Minneapolis, Minnesota (Chapter34)Renee Lassonde, Consultant, Towers Perrin, Minneapolis, Minnesota(Chapter 34)Gerald E. Ledford, Jr., Ph.D., Senior Vice President and Global PracticeLeader Employee Effectiveness, Sibson Consulting, The Segal Company, LosAngeles, California (Chapter 19)Richard Lepsinger, Managing Vice President, Right ManagementConsultants, Stamford, Connecticut (Chapter 9)Anntoinette D. Lucia, Managing Vice President, Right ManagementConsultants, Stamford, Connecticut (Chapter 9)Moira Madell, Consultant Rewards and Performance Management, TowersPerrin, Chicago, Illinois (Chapter 33)Christopher A. Michalak, Principal, Towers Perrin, Chicago, Illinois(Chapter 33)xiii

xivContributorsRolf D. Naku, Senior Vice President, Sunoco, Inc., Philadelphia,Pennsylvania (Chapter 13)William J. Nolan, CFP, Executive Director, Ken-Crest Services and KenCrest Centers, Plymouth Meeting, Pennsylvania (Chapter 16)Dayton Ogden, Co-Chairman, Spencer Stuart, Philadelphia, Pennsylvania(Chapter 21)Jack J. Phillips, Ph.D., Author and Consultant, The Jack Phillips Center forResearch, Division of Franklin Covey Company, Salt Lake City, Utah(Chapter 18)Patricia Pulliam Phillips, Chief Executive Officer, The Chelsea Group, Inc.,Chelsea, Alabama (Chapter 18)Richard J. Pinola, Chairman and Chief Executive Officer, RightManagement Consultants, Philadelphia, Pennsylvania (Chapter 22)Vikki L. Pryor, President and Chief Executive Officer, SBLI USA MutualLife Insurance Company, Inc., New York, New York (Chapter 12)Matthew T. Richburg, Ph.D., Vice President Consulting, Right ManagementConsulting, Atlanta, Georgia (Chapter 28)Andrew S. Rosen, Vice President, Aon Consulting, Inc., Conshohocken,Pennsylvania (Chapter 31)Donald H. Ruse, Senior Vice President, Sibson Consulting, The SegalCompany, Cary, North Carolina (Chapter 20)Anne M. Saunier, Senior Vice President, Sibson Consulting, The SegalCompany, New York, New York (Chapter 8)Molly Dickinson Shepard, Principal, The Leader’s Edge, Philadelphia,Pennsylvania (Chapter 26)Lyle M. Spencer, Jr., Ph.D., President, Spencer Research & Technology, St.Augustine, Florida (Chapter 6)David B. Turetsky, Vice President, Aon Consulting, Inc., Philadelphia,Pennsylvania (Chapter 36)Ellen Brooks Van Oosten, Assistant Dean Executive Education and BusinessDevelopment, The Weatherhead School of Management, Cleveland, Ohio(Chapter 30)Judith M. von Seldeneck, President and Chief Executive Officer, TheDiversified Search Companies, Philadelphia, Pennsylvania (Chapter 15)Karol M. Wasylyshyn, Psy.D., President, Leadership Development,Philadelphia, Pennsylvania (Chapter 29)

ContributorsAustin Whitman, Marketing Specialist, BrassRing, Inc., Waltham,Massachusetts (Chapter 34)Thomas B. Wilson, President, Wilson Group, Inc., Concord, Massachusetts(Chapter 31)Martin G. Wolf, Ph.D., President, Management Advisory Services, Inc.,Jalisco, Mexico (Chapter 7)Patricia K. Zingheim, Ph.D., Partner, Schuster-Zingheim and Associates,Inc., Los Angeles, California (Chapter 32)xv

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Part IIntroducing a TalentManagement SystemCopyright 2004 by The McGraw-Hill Companies, Inc. Click Here for Terms of Use.

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Chapter 1Creating a TalentManagement System forOrganization Excellence:Connecting the DotsLance A. Berger, Chief Executive OfficerLance A. Berger & Associates, Ltd.In the 1990s, LBA Consulting Group undertook a major study thatfocused on identifying the factors that most contributed to the creationand sustenance of organization excellence. The study examined organizations that had survived and prospered, and those that had failed, over a 25year period. The results of the study suggested that six human resources conditions had to be met. These conditions were: a performance-oriented culture, low turnover (particularly in premium employee groups), high levels ofemployee satisfaction, a cadre of qualified replacements, effective investment in employee compensation and development, and the use of institutional competencies (success factors) in employee selection and performanceevaluation processes. The successful organizations focused on proactivelyand systematically managing their human resources along these lines. Theorganizations that failed took a more casual, traditional approach.Our conclusions based on this research were simple: to optimize an organization’s ability to achieve sustained excellence, it must recognize the needfor proactive talent management and have a systematic way of accomplishing the activity. Before launching into a systematic approach to managing3Copyright 2004 by The McGraw-Hill Companies, Inc. Click Here for Terms of Use.

4Part I. Introducing a Talent Management Systemtalent, however, it’s important to understand the goals of proactive talentmanagement. Based on our research, we discovered that successful companies either articulate or intuitively focus on three outcomes.1. The identification, selection, development, and retention of Superkeepers. Superkeepers are a very small group of individuals who havedemonstrated superior accomplishments, have inspired others to attainsuperior accomplishments, and who embody the core competenciesand values of the organization. Their loss or absence severely retardsorganization growth because of their disproportionately powerfulimpact on current and future organization performance. Bill Gates oncesaid, “Take our twenty best people away from us and I can tell you thatMicrosoft would be an unimportant company.”2. The identification and development of high-quality replacements for asmall number of positions designated as key to current and futureorganization success. Gaps in replacement activity for key positions arehighly disruptive, costly, and distracting to the organization.3. The classification of and investment in each employee based on his/heractual and/or potential for adding value to the organization. Theemployee groups are Superkeepers, those employees who greatly exceedexpectations; Keepers, those employees who exceed organizationexpectations; Solid Citizens, those employees who meet organizationexpectations; and Misfits, those employees who are below organizationexpectations. Poor allocation of compensation and training and development resources can lead to unwanted turnover and morale and performance problems, particularly in Superkeeper and Keeper groups. (SeeFigure 1-1)Once an organization commits to excellence through the three outcomesstated above, it will need a carefully constructed human resources processthat links together the core elements of human resources planning (the dots)and then joins them to strategies, policies, and action plans. Additionally, theprocess must be easily understood, credible, cost-effective, and time-efficient.Obstacles and SolutionsThe research conducted on excellent organizations revealed that the infrastructure of human resources systems and processes for the failed organizations was typically an incoherent mosaic of unconnected, incomplete, missing, and inconsistent assessment, planning and development tools, and methods. This meant that performance appraisal, assessment of potential, competency evaluation, career planning, replacement planning, development andtraining, compensation, and selection (the core elements of human resources

Creating a Talent Management System for Organization ExcellenceSuperFo keepcus erKeyBa Posck itioup nsEXCELLENCEResource Classificationand InvestmentFigure 1-1. The components of excellencemanagement) were unlinked and largely irreconcilable. Additionally, thereturn on the cost of implementing these separate and distinct programs waslow, time expenditure was high, credibility was low, and employee dissatisfaction was pervasive.Additional research indicated that, after 70 years of growing sophisticationin human resources management, there was no commonly acknowledged,espoused, and/or utilized approach for identifying, assessing, and developing acadre of high-talent people for meeting an organization’s current and futureneeds. Had the failed companies recognized the importance of the three success drivers, there still would be the issue of the availability of valid humanresources processes to power them to excellence.The purpose of this chapter is to present a valid talent managementmodel that connects the metaphoric dots (human resources processes), toaddress the concerns outlined above, and to provide a structure for implementing specific actions leading to the development of a high-caliber talentcadre capable of contributing to sustained excellent competitive performance.Beyond this chapter, the book builds upon, and enhances, the modeldescribed here.ApproachThe model presented here is called TalentReservoir . It is labeled thisbecause its goal is to build a pool of high-talent people capable of supportingan organization’s current and future business requirements consistent withthe three objectives outlined earlier.5

6Part I. Introducing a Talent Management SystemTalentReservoir has three major components. These are:1. Designing and building a TalentReservoir solution.2. Capturing the TalentReservoir solution in a software package.3. Implementing an integrative TalentReservoir process.Designand BuildCaptureSolution inSoftwareImplementIntegrativeProcessFigure 1-2. TalentReservoir Designing and Building a TalentReservoir SolutionThe most successful TalentReservoir solutions are initiated and designed bya senior executive team with strong CEO input, accountability, and approval.The process is typically facilitated by the most senior human resources executive and is supported by his/her staff and IT professionals. Consultants frequently help drive the process in larger organizations, but smaller organizations often rely principally on internal staffs to coordinate efforts.In order to design the infrastructure of human resources processes,TalentReservoir teams collect information on organization structure, jobhierarchy, employee demographics, projected organization and businessplans (potential new jobs), company values, culture descriptions, employeesurveys, current human resources policies and practices, annual reports, current training and development, industry studies, and other relevant data.Much of this data is already codified in company documents, but their meaning and value is enhanced through interviews with the CEO and members ofthe executive staff. Their observations, recommendations, and ownership ofthe core elements of the TalentReservoir solution are necessary to developand implement the assessment tools and talent management processes thatwill be used by the entire organization.The information developed through data collection and interviews isused to develop the assessment tools described below. The composite definitions of the assessment tools were developed from research studies and consulting company assignments.Talent Management Assessment ToolsPerformance Appraisal: A measurement of actual results achieved withinthose areas for which the employee is held accountable and/or the competencies deemed critical to job and organization success.Potential Forecast: A prediction of how many levels (organization/job) anemployee can progress within an organization based on his/her past/current

Creating a Talent Management System for Organization Excellenceperformance appraisals, training and development needs, career preferences,and actual and projected competency levels.Measurement Scales for Performance and Potential: Our study of 350 organizations involved in some type of successful talent management processshowed that the vast majority used a five-point scale to measure performanceand potential. The most common scale for performance measurement is:greatly exceeds expectations (5), exceeds expectations (4), meets expectations(3), below expectations (2), greatly below expectations (1). The most commonscale for potential assessment is: high potential (5), promotable (4), lateral (3),marginal (2), none (1). Our conclusion is that most organizations believe thatsimpler is better. These scales are simple, but they apparently achieve accurate results.Core/Institutional Competencies: Behavioral/skill expectations that are crucial to the success of each employee and to the success of the entire organization. Our research has determined that there are no more than 30 core institutional competencies and most organizations use between nine and 11 competencies in their TalentReservoir process. Table 1-1 illustrates a list of 10representative core competencies and their defin

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