Talent management – a perpetual strategic priority

Talent management is a topic that is almost always present in corporate strategic plans with a horizon of 3-5 years. Human Resources priorities are usually a very small part of medium term strategies, often reduced to one slide among 40 others dealing with financial ambitions. But these several HR paragraphs are in the majority of cases setting objectives regarding Talent Management. These objectives are in general responding to the major talent management issues: How to identify talents and How to develop talents.

This article backs up the idea that Talent Management is a strategic issue independent of the general economic and social context, corporate financial achievements or share price.

1. Talent management is strategic in growth periods – When the economy registers growth, a natural tendency of corporations is to hire more people, in order to cover their increasing activity. Consequently, HR Directors position themselves as Talent Hunters, a role that recognises their importance to corporate success. The previous “Recruitment” department becomes “Talent Acquisition” department. Talent management occupies the recruitment and compensation areas, explained by the increasing competition for the best Talents. Talents are attracted and retained with interesting and complex compensation schemes, explained by the abundance of cash.

2. Talent management is strategic in crisis periods – In contrast with the escalation period, the crisis period changes  Talent Management practices dramatically. While the role of an HR Director is to master and reduce the wage bill, focusing, let’s face it, on firing people (please notice the contrast with the previous period), Talent Management becomes one of the most challenging HR priorities. Thus the objective is to identify and to retain those specific Talents who will alleviate the shock of the crisis and build the new business model. In a context of austerity, Talent Managers research and develop non-monetary solutions in order to retain and recognise talent. Social packages, corporate entertainment, learning and development opportunities replace the complex Compensation & Benefits packages (again a dramatic contrast with the previous period)

3. Talent management is strategic for joint ventures – Talent Management is the first lever of the organizational and cultural harmonization of joint ventures.

Example : The joint venture, Group Banque Populaire et Casse d’Epargne (Strategic Plan for 2013: Together), made public an ambition to harmonize the development of top leaders in order to reinforce the commitment to a unique Groupe. 

4. Talent management is strategic for international companies – As for joint ventures, Talent Management contributes to standardization, harmonization and systematization of processes, practices and corporate culture in entities located all over the world.

Example : Société Générale qualified as strategic the objective to increase the number of Talents in all the Société Générale countries until 2015. This ambition (Strategic plan: Ambition 2015) was materialized through an international project aiming at systematizing Talent Management processes. 

Thus Talent Management is strategic “through good times and bad, in sickness and in health, as long as a company shall live”.

© Copyright Ecaterina Panu – All rights reserved

March 6, 2012 – 12:53 pm Categories: Talent Management | Post a comment

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HR internationalization in ex Soviet Union

In this article, I would like to focus on the various circumstances that facilitate or block HR internationalization in the Commonwealth of Independent States, that is, the implementation of HR policies applied in Western Europe to countries in the former Soviet Union.

This article concerns all of the former Soviet Union countries except the Baltic states which have joined the European Union and so have a different local reality.

This article is addressed notably to European corporations that plan to expand their activity and also implement homogeneous HR policies and practices at an international level.

This article is not about behavioural differences between two parts of the planet, a topic that would deserve a separate article. I also excluded reflections about corporate social responsibility, which is probably not respected by the ambition for global culture.

The corporations in the former Soviet Union are at various levels of HR maturity, a diversity that is not specific to Western Europe. HR maturity is conditioned by the company origin, which could be local or international, and the company history, that could have begun before or after the Soviet Union split. Generally, HR maturity is more advanced in international companies and companies created after the Soviet Union split.

Disregarding corporate reality for the moment, certain other social factors impact on HR internationalization.

1. A core aspect in my opinion is ‘unsecured employment’, determined by the facility to fire employees when the labour tribunal is perhaps judged too corrupt to objectively arbitrate the relationship between employees and employers. The equivalent of the French Prud’Hommes Tribunal does not exist in the former Soviet Union. How does this impact on HR management? This situation offers a favourable context for exploitation, harassment, inequity and also a high rate of turnover. It is difficult to implement career progression processes and tools to motivate and recognize people.

2. Another interesting aspect is the positioning of the HR department, especially in companies with Soviet origins. The general trend is that the HR department centralizes HR activities. Generally, international companies that try to implement HR decentralization projects in former Soviet Union countries face resistance from the HR department and line managers. The HR department perceives HR centralization as a source of the power and prestige that are core for the HR professionals’ recognition. On the other hand, line managers judge it to be unacceptable and humiliating to be in charge of HR activities. This mentality blocks HR decentralization and decreases HR maturity.

Resistance to change is observed notably in projects aiming at systematizing HR processes. As HRIS software packages are conceived according to a European logic, they tend to descentralize HR processes and give more autonomy to the various stakeholders involved.

3. One particular obstacle for the implementation of HR information systems is the issue of personal data protection. In the majority of cases, companies do not include a personal data use clause in the labour contract, but instead the country’s legislation forbids exporting personal data abroad without asking for the written agreement of employees. This process is time consuming for big subsidiaries and consequently the implementation of an international HR Information System could be delayed or even interrupted. It is better to assess and minimize personal data protection risks before launching the project.

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CASE STUDIES IN BAD PRACTICE

One of the leading global banks launched an HR administrative data collection project across all of their entities located internationally. Because the project management team was not aware of the constraints on the export of personal data in the ex-Soviet Union countries, the data collection deadline was delayed for several months, as one Russian entity had over 10 000 employees; thus, the process of signature collection was time-consuming. In order to streamline this process, a decision was taken to introduce a compulsory personal data protection clause into their employment contract.

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4. In contrast with Western Europe, in former Soviet Union countries the activity of trade unions is limited to the organization of entertaining corporate activities. Trade unions do not exist to protect the interests of employees and do not arbitrate the relationship between employees and employers. Thus, trade unions are not an obstacle for the implementation of innovative projects in terms of performance assessment and recognition and talent management, which is a positive point for HR internationalization.

5. In Western Europe, companies are not validating the technical competencies and knowledge of applicants for job positions, because they are relying on the applicants’ higher education degrees. Thus, higher education institutions must be legitimate in order to confirm the professionalism of future  employees via the qualifications they deliver. In the former Soviet Union, the majority of stakeholders involved in providing higher education are corrupt. Consequently, diplomas are not sufficient and representative criteria for sourcing and selecting future employees. Lower-performing students often have the opportunity to buy exam pass marks and even buy fake diplomas. Thus, corporations in these countries should establish their own testing and selection methods in order to assess the competency of future applicants. Actually, HR professionals in these countries often assert that they “look at the potential and not at the degree of the applicant”.

We can see that there are several issues and some advantages to HR internationalization in the countries of the former Soviet Union. Large corporations should consider these before implementing large- or small-scale HR projects in these countries, and ensure they are aware of the issues.

© Copyright Ecaterina Panu – All rights reserved
December 31, 2011 – 8:26 pm Categories: Career progression synergies, People Development processes | Post a comment

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Where are the HR professionals?

I have been becoming more concerned recently about the suffering that work seems to be imposing on employees. The public statistics concerning the increasing number of suicides at work, the high percentage of psycho-social troubles and repetitive strain injuries are relevant indicators that, for the majority of people, work is not representing a source of self-actualization, but is just a means to obtain the resources to assure life’s necessities.

And the questions that arise naturally are: “Where are the HR professionals?”, “Where are the People Development and Talent Management teams?”And the next question would be, “Why were HR professionals needed in the first place?” and, “What will they become in the future?”.

We have in front of us today all the evidence proving that the HR function in a company has nothing to do with ‘humanization’ or ‘social responsibility’, in spite of what the majority of students think when they choose to take an HR specialization. HR practices were originally required in order to build organizations that would produce added value. The table bellow details the HR roles within the major economic models operating in the industrialized countries.

Consequently, the major HR role has been to adapt people to organizational development and not vice versa, thus human nature was not taken into account at the foundation of these models. By human nature, I mean the natural need for development, for being multi-skilled for creativity and spontaneity, for financial and psychological independence, for variety in activity and communication. Obviously, self-actualization cannot be achieved by someone who is concerned about his / her basic life necessities.

I can imagine two possible answers to the question, “What will HR professionals become in the future?”. The optimistic hypothesis is that HR professionals and also organizational leaders will understand and facilitate the self-realization needs of employees by building effective career opportunity portfolios and also building a culture appropriate to human development. That is to say, the debate around HR trends is already travelling in this direction in the industrialized countries.

The pessimistic hypothesis is that HR professionals will continue to align their activity to some external pressure, like for example becoming ‘economic crisis managers’, and focus more on financial criteria management than on people development.

 © Copyright Ecaterina Panu – All rights reserved
December 12, 2011 – 5:11 pm Categories: Career progression synergies | Post a comment

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The performance appraisal interview is not yet a source of recognition

A metaphor for the “Management by Objectives” method

“Management by Objectives” aims to “cascade” organizational objectives

The Strategic Center of Analysis, that is, the consultancy arm of the French Government, conducted a study entitled HR Management practices and well-being at work: the case of the annual performance appraisal in France. The study was published in September 2011, and its conclusions were based on data collected from 14,000 private sector employees  in 2006.

 The empirical conclusion of the study is that the annual performance appraisal is a source of satisfaction for the assessed employees. This is explained by the fact that the performance appraisal is a unique opportunity to discuss eventual salary increases, while the stress employees experience is more often related to reorganization, as well as their fixed objectives, which tend to become more challenging year on year. Consequently, it turns out that stress is not directly related to the performance appraisal interview.

 On the other hand, the study obscures two cenral ideas:

  • The performance appraisal interview is the most used, and most effective, tool of the Management by Objectives methodology, thus it is in effect a tool to increase challenges, and consequently stress.
  • Even though more than half of the assessed employees acknowledged that they earned an appropriate salary, almost 50% claim that their hard work and the results they achieve are not given enough recognition…

Source :  Note d’analyse n°239 (Septembre 2011), Centre d’analyse stratégique auprès du Premier Ministre

Consequently, employees would like to benefit from more non material recognition. That is to say, the performance appraisal interview could become an effective tool to recognize people, but this objective is not currently achieved for two reasons :

  • Recognition is out of the  scope of the Management by Objectives methodology, which aims simply at dispatching objectives by “cascading” them down the management structure.
  • Managers are not trained to recognize people, consequently they are not able to effectively apply recognition during that unique moment of communication with employees, the performance appraisal interview

Personally, I wonder about the sources and the goals of the empirical conclusions of the study we’ve discussed here, taking into account that even the presented statistics, as well as good sense and logic, actually express the opposite idea. The application of 2006 statistics, in order to promote a positive message in 2011, considering that each day a suicide is recorded in a French workplace, is in my opinion absurd. I would only suppose that the conclusion of the study matches the orientation of the French government to apply the managerial practices of the private sector into the public sector. Thus, even if these measures are necessary, they encompass a certain amount of risk. The next article in this blog will focus on the risks of applying the Management by Objectives philosophy to the public sector.

© Copyright Ecaterina Panu – All rights reserved

November 16, 2011 – 1:34 pm Categories: Career progression synergies, People Development processes | Post a comment

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HR maturity scorecard

The HR function has passed through deep transformations in the last 5 decades. These transformations have been inherent to the global and local changes in society, technological innovations, demographical evolution and the financial crisis. 

The transformations of the HR function have not been homogenous over all countries. Often, the maturity of the HR function is different between organizations or offices situated in the same country, or even in the same town. These differences in terms of HR maturity between organizations or even within them makes the centralization of HR services and the creation of intra-group synergies difficult.

But before launching an HR maturity homogenization project, that is, a project to internationalize and standardize HR processes, a deeper understanding of the criteria of HR maturity should be gained.

What is a mature vs. an immature HR function? What aspects should be analyzed, in order to assess HR maturity?

Below several suggestions in terms of criteria for HR maturity‘ assessment. The list below is not exhaustive and should be modified according to the particular situation of each company.

I. HR processes covered – To what extent are the various HR processes represented within the entity / organization? Certain processes may be absent from some organizations, which could represent a critical gap for large corporations, but could be acceptable for small and medium companies. This also depends on the company’s field of activity. For example, even a very small consulting company will require special career opportunities for its employees, as people are the main asset of this type of organization.

The illustration below is a representation of the major HR processes and their presence in an organization. The processes map illustrated below is a classical case that focuses on core administrative activities, without investing much effort into people development.

Illustration 1 : HR processes map

II. HR competencies covered – To what extent are HR professionals specialized in the major HR roles and competencies? For example, they could be change agents, employee champions, administrative experts or business partners, according to the Dave Ulrich model, but any HR competencies model could be used to assess HR specialization. Accordingly, strategic HR competencies depend on the field of activity, but also on the strategic priorities of the organization. In a period of financial crisis, cost reduction may be the major corporate priority. HR professionals become critical figures and they are expected to show and develop competencies of labour cost control and reduction.

The illustration below is an example of a set of core HR competencies distributed over the various HR roles suggested by Dave Ulrich. We will throw some light on the fact that this selection of competencies corresponds to modern trends in HR management resulting   from the business model transformation: wage bill control, connecting people into social networks, leading HR transformation projects …

Illustration 2 : Core HR competencies map (adapted to Dave Ulrich model)

III. The extent of HR activity decentralization, that is the delegation of some specific HR tasks to line managers,  for example, annual evaluation and recruitment. Resulting in both advantages and inconveniences, the average HR decentralization rate does not exceed 30%, according to a study undertaken by CEGOS on CAC 40 companies. While the qualification as immature of a 100% centralized HR function is beyond dispute, the qualification of a 100% decentralized HR function  is liable to arouse debate. A totally decentralized HR function testifies to either a line management heavily involved in people development, or, on the contrary, the non-priority of the human side of the system.

The image below is a representation of the various roles involved in HR activities. The participation of managers and employees in various HR activities may be assessed as an indicator of HR maturity, or on the contrary, as non-relevant, according to the context.

Illustration 3 : Extent of HR activity decentralization 

IV. Extent of HR processes systematization – The assessment of this criteria depends on the size of the organization, the status (private vs. public), the core activities. Generally, we may consider an HR function as mature, if at least the administrative activities are systematized. Nevertheless, this may depend on the size of the company, as there may be no interest in systematizing the administrative data of the employees of a small or medium company. Local reality is also an important criteria to take into account. On the other hand, for a big company, that provides intellectual services, for example, and consequently for which people represent the major asset, the rationalization and systematization of HR processes are critical success factors.

V. Outsourcing of HR processes – A set of HR processes may be outsourced : administrative management, payroll, recruitment, training, career progression coaching… Is the outsourcing of a maximum of HR processes an indicator of HR maturity? This is subject to debate. While repetitive HR activities, such as payroll,  administrative management, or even candidate sourcing can be easily outsourced without an impact on the core corporate activities, competencies and career management often represent a corporate asset and even a factor of competitiveness, that should not be delegated to external companies, for a couple of reasons, notably the fact that they do not possess a true understanding and mastery of the company’s strategic corporate orientation and competencies. Secondly, there is always the risk that the core competency development methodologies will be used also for competitors, by the outsourcing companies. We must focus on the case of outsourcing within public organizations, which have very specific features.

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GOOD PRACTICE CASE

A semi-public French railway company is positioned as a recruiter of people from under-privileged social classes, thus the organization has developed an active and effective Corporate Social Responsibility policy. In order to assure jobs for this population, the organization does not outsource any peripheral activities, as this does not correspond to its corporate culture. That is to say, the only HR processes that the organization outsources are a very reduced part of candidate sourcing ; thus even employee health care and medical analysis laboratories are internal services, which in modern times seems unbelievable. So, this is an example of a reduced rate of outsourcing that does not decrease the HR maturity qualification, as this activity is embedded appropriately in the socially responsible corporate brand. 

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Once defined and assessed, the various HR maturity criteria may be represented in a map that will enable a general view of the level of HR maturity of various entities. According to the situation, a map may be imagined for every HR maturity criterion. Otherwise, a formula of the entire HR maturity may be conceived by encompassing all the relevant HR maturity criteria, which  varies according to the company’s context.

Illustration 4 : HR maturity map

© Copyright Ecaterina Panu – All rights reserved

October 25, 2011 – 2:33 pm Categories: People Development processes | Post a comment

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Professional experiences portfolio

Services provided :
  • description, evaluation & improvement of career progression processes
  • career development training
  • creation and development of competencies models
  • creation and development of experience portfolios
  • consultancy in systematization of career progression processes

The major principles of competencies and career management are generally accepted and shared by People Development professionals, thus the management of a company’s career progression structure should be based on a competencies model aligned to the People Development strategy of that company.

In an ideal situation, career progression should be based on a competencies model that is validated and updated each year at an executive level. The strategic competencies model should be limited to truly strategic competencies that will enable the organization to achieve its long term objectives. More detailed sets of required competencies may coexist with the strategic model, without requiring special focus on their development. The difference between the critical and non critical competencies of an organization, as well as the principles involved in constructing a strategic competencies model are the subjects of other articles published on this blog. We will give a special mention here to the fact that effective methodologies for competency model conceptualizing and development have been put together by specialized companies such as Hay, Wyatt and Hewitt. Their methodologies attribute a special rate to each competency and to each job.

Another ideal situation is the alignment between the strategic competencies model and the company’s career progression structure. That is to say, the professional progress of an employee depends on the evaluation and development of specific competencies. And, while we are talking about professional progress, an organization is supposed to offer employees a portfolio of fulfilling experiences leading towards  mastery of specific competences, at a specific level.

Besides the optimization and the  rationalization of career progression, this  portfolio of experiences would essentially facilitate career related tasks and consequently motivate People Development professionals to focus on the assistance provided to employees in progressing along their chosen career path. A company that develops a professional experience portfolio has an advantage over competitors in terms of high potential retention and motivation.

Nonetheless, in reality, career processes are heterogeneous and not embedded in clear competencies models. Often, competencies management is limited to the evaluation process and to soft skills. Thus, corporations assume that the educational system is responsible for delivering certified technical skills. (Actually, this is an interesting question to reflect on: what are the advantages / disadvantages / impacts of an organization focusing on technical skills assessment and development?) Nowadays, corporations are more focused on individual performance than on the individual competencies development, that is, they prioritize a short term view. Consequently, instead of being embedded in competencies development, the various career stages are based on individual performance.

The experience portfolio that we have presented as a hypothetical idea is generally neither developed nor applied within corporations. Career paths are often organized randomly.

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GOOD PRACTICE CASE

Below we discuss a best practice case study of competencies and experience management in a global not-for-profit youth organization.

A global youth organization, that aims at developing youth potential, describes four major roles that its members could take:

  • Taking a responsible role in local project management
  • Taking a leadership role in organization management, leading a functional department or working towards becoming the president of the organization at both local and global levels
  • Exchange opportunities relating to a ‘responsibility’ or ‘leadership’ role internationally
  • Heading for the future by providing coaching and mentoring to existing and new members of the organization and also applying the competencies they have developed during their time within the organization when they move on into external organizations

This simple but effective model is an illustration of all the experiences that a member of the organization could have, which provides a great source of motivation and inspiration for young volunteers, who are not in fact paid salaries to lead organizational projects.

Experience cycle

In fact, the competencies model and the experiences management of this organization represents a best practice case study; thus each experience detailed above is based on a specific level of competence.  The table below shows how the specific competencies are measured and developed for each experience:

Level of core competencies for “taking responsibilities” experiences

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© Copyright Ecaterina Panu – All rights reserved

October 25, 2011 – 1:33 pm Categories: Career progression synergies | Post a comment

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Opaque vs. Transparent

Services provided :
  • description, evaluation & improvement of Talent Management processes
  • systemization of Talent Management processes

As stated in the article “Talent Management vs. Elite Management”, Talent Management policies are kept under strict confidentiality in the majority of corporations. This secrecy is justified by several arguments:

  • Argument 1 : The special services provided to Talents in terms of development are cost- and time-consuming, thus the capacity of a corporation to deliver this kind of service is limited to a minority of employees
  • Argument 2 : Trade Unions are often against Talent policies, as this approach is based on differentiation among employees. This differentiation is similar to the white vs. blue collar workers, workers vs. intellectual class, rich vs. poor…  Although relatively powerless in America, the Trade Unions’ position is still a factor impacting corporate orientations and decisions in Europe
  • Argument 3 : The retention of strategic knowledge and competences within the organization, that is, the Talent Development methodology, is a valuable asset, that could be stolen and reproduced by competitors
  • Argument 4 : Another argument is embedded in the intention to develop a very competent executive class, and to restrain the development opportunities for the majority of the employees, who are supposed to have a slower progression in terms of position and revenue

This list of arguments can be used to prove the legitimacy of a top secret Talent Management policy. Nevertheless, what if the Talent Management policy was made transparent? How would this impact modern organizations?

Firstly, let’s discuss ways of achieving a transparent Talent policy …

  • Step 1 : Disseminate information concerning the criteria necessary to be recognized as a Talent
  • Step 2 : Communicate your Talent campaigns and promote the people that have acquired the quality of Talent

This communication effort would not be cost- or time-consuming, as all the efforts to guarantee the confidentiality of the Talent policy would be replaced by these communication activities.

The cultural change would be, on the other hand, enormous. Below is presented a list – and it’s not exhaustive – of impacts produced by a transparent Talent policy:

  • Impact 1: More accurate Talent selection guaranteed by the impartiality of the management roles in the process of suggesting new Talents.
  • Impact 2 : Increased motivation of the employees to develop themselves in order to obtain a Talent role within the corporation
  • Impact 3 : Risk that Trade Unions would object against the increase in competition among employees and would clamour for the abandonment of the Talent policy: in particular the Talent quality assessment (Talent review) would be criticized
  • Impact 4 : The company risks facing a high rate of turnover, as many employees would simply leave, not being comfortable with the  culture of excellence
  • Impact 5 : Since the number of Talents would increase, the company would have to design more complex and ambitious Talent Development policies. This development would be cost generating, as the company would have to increase investment in external development programmes, as well as in the Talent Management department. Nevertheless, the return on investment produced by highly motivated and competent people would be very likely to exceed the expenses related to Talent programmes

To conclude, making the Talent policy transparent is an action of great corporate courage, but as with every risky operation, it may result in great profits.

© Copyright Ecaterina Panu – All rights reserved

October 24, 2011 – 5:55 pm Categories: Talent Management | Post a comment

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Talent Management vs. Elite Management

 
Services provided :
  • description, evaluation & improvement of Talent Management processes
  • assistance in the systematization of Talent Management processes
     

The meaning of ‘Talent’ differs depending on the company. This article throws some light on two of the meanings of the word Talent:

“Talent as a very attractive component of the Employer Brand”

 Here are a couple of examples of Talent branded employers and their slogans: L’Oreal, “To build beauty we need Talent”, and Cirque du Soleil, “Let your talent shine”. The result? In these cases Talent management is promoted as a common policy, impacting all employees, that aims to identify and develop human potential. For the majority of companies, the Talent approach is simply a marketing strategy to increase recruitment and diversify the profiles of the attracted candidates. The real approach to employees is far more ordinary administrative HR management. 

“The Talent as a recognized and developed quality”

 Here we are talking about real Talent Management, a sustained effort to identify and develop people with high potential. As the job of the majority of companies is not to develop people but to assure a production process, the Talent management approach concerns only a few employees who are labeled as “Talent”. Talent management is thus a necessity to guarantee succession in key positions. Since this approach addresses a reduced number of employees, Talent management principles and methods are often top secret and known only to those few HR professionals who have acquired the noble title of “Talent Manager”. What is most surprising is the fact that Talents are often not supposed to know that they are recognized as Talent, and they are trained and developed in absolute confidentiality. This approach is very popular in the European Union as a measure against eventual Trade Union objections. The preservation of a serene social climate and the avoidance of internal competition among employees are other reasons for the confidentiality of Talent status. Since the secrecy of the Talent policy seems to be legitimate, it is often dissonant with the Employer Brand that promises that everyone will be treated as having high potential.

This contradiction produces deceptions and demotivation among employees and essentially reduces the added value of a common and transparent Talent Policy. How can the artificial marketing effect of the Talent Policy be avoided? One of the possible solutions for a company is to become a real Talent recruiter and developer, that is, to make the Talent Management policy transparent by publicly communicating the talent review criteria and the special opportunities available only for people that fit the Talent criteria. The next article “Opaque vs transparent” will discuss the various ways of approaching a transparent Talent Management policy and its impact.

© Copyright Ecaterina Panu – All rights reserved

October 24, 2011 – 9:16 am Categories: Talent Management | Post a comment

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