Five Christmas Gifts for Talent Management

The festive season is upon us, and the first semester of this blog is drawing to an end.Quite a journey if you ask me!As Christmas draws near, I thought we would finish off the year with a little wish list for talent management, based on research and companies’ realities. See it as five really nice gifts to put under the tree for your organization’s talent management.

1. A well-reasoned definition of talent. Very often, ”talent” and ”talents” become terms that are just thrown around without much consideration. When you say that your organization needs talent, what exactly are you referring to? A clear common theme for organizations with a mature and successful talent management is that they have spent considerable time answering this question. This is especially important considering that ”talent” is such an enigmatic term. Does talent primarily imply innate abilities, or a certain mindset and attitude? Is ”talent” always versatile, or can you be a talent in just one specific function or role? Are everyone talents, or should the term apply to a small organizational elite? Research can only get you so far in answering these questions – to some extent, it always comes down to the organization’s values, culture, and strategy.
2. An honest consideration of whether and why you need a talent program. It is safe to say that the trend of talent programs has become somewhat of a bandwagon in the last five-or-so years. And for some companies, they certainly fulfill important purposes, such as increasing attraction of candidates and speeding up employees’ development. However, there are indications from research that talent programs may also have adverse consequences if not thought through beforehand. Not least, questions and frustration may arise when it is not clear to other employees why some have been selected for this precious initiative. In other words; talent programs need to be handled with care. HR teams and management teams should ask themselves prudently: Do we really need this program? For what exact purposes? How do we avoid negative reactions? If these questions cannot be answered properly, it is usually better to put the idea on hold.
3. More focus on how talent decisions are communicated. There are few hard truths within research on HRM and Organizational Behavior, but one of them could be summed up as follows: It is not the thing in itself, it is how that thing is communicated. We know this from literature on performance ratings, developmental talks, promotion decisions, and more. How managers and HR professionals formulate these things has an enormous impact on how employees react, and what the longer-term effects are. Talent decisions are no exception in this regard. Be sure to spend enough time discussing how managers should notify selected talents of their appointment, and how these decisions should be communicated to other employees. Consider, for instance, the difference between describing the program as a reward for being outstanding, versus a forward-looking encouragement to keep on challenging yourself.
4. A switch from identifying to developing. It is clear that many organizations today have very elaborate processes for identifying talents: Calibrations, assessment centers, rating matrices, etc. Quite often, however, you end up with a very well-founded talent pool – but fewer ideas on how to develop them. Opportunities for vertical promotions are often scarce, and formal trainings are expensive. Still, development must be seen as a real core process of talent management – otherwise, what is the point of identifying them? One avenue is to start looking at the possibilities for horizontal movements, e.g. rotations. Most importantly, however, is usually to ramp up on on-the-job training.
5. A clear management of expectations. If it is one side effect of talent management that must be attended to, it is the raised expectations of those appointed as talents. Tell someone ”we consider you one of our talents” – and that second, you have re-negotiated the psychological contract with that employee. He or she will start expecting more development and career opportunities, and often within a rather limited time. If nothing then happens, chances are you will lose this person instead. Managing expectations from day one is thus key. Some organizations address this by working intensely with gap analysis: Clearly identifying and communicating where the talent’s development areas lie, and what will need to happen before the person can take the next step.

There we are – five nice Christmas gifts for basically all organizations’ talent management. With this list, I would like to wish you all a very Merry Christmas and a Happy New Year! I am very much looking forward to seeing you again in 2017, continuing our journey into the fascinating landscape of the psychology of work.

 

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Why a Talent May Not Always Be a Talent: The Importance of Context

“Talents, they just come in and shine from day one.” “I can spot a talent the minute they walk through the door.” As a researcher, I hear these kinds of statements quite often when I’m out talking to HR specialists and line managers about talent management. The idea of talent as a generic, stable, and portable characteristic is rather widely spread, not least in companies of North American origin. This is also the view that underpins the whole notion of “the war for talent”: There is a scarcity of talented individuals, and all organizations are fighting for the same people. A talent, according to this view, is a talent no matter where you place them. This has lead companies to focus their talent management efforts on attracting “the A players”, often not worrying too much about how to make the best use of them within the company. Just get the talents in here, and they will excel no matter where we put them.

There is some truth to this claim, of course. We know from decades of research that some stable inner traits – most notably, general mental ability and the personality trait conscientiousness – tend to predict work performance in a very broad range of roles and lines of business. In other words, there are some foundational parts of talent that you could consider portable. However, there are other chapters to the story as well.  Over the last decade, there have been increasing indications that talent is also very much a matter of context.

This line of research has been championed by Boris Groysberg at Harvard Business School. For over a decade, he and his colleagues followed a total of 1,000 financial analysts at Wall Street. One of the things they looked at was what happened when star analysts switched firms. What they found was that after changing employer (still doing the exact same kind of work), top analysts’ performance decreased significantly in about half of the cases. The drop was by an average of 20 percent, and not just in the short run. In fact, it took around five years to get back to where they were before switching jobs (Groysberg, Eling Lee, & Nanda, 2008; Groysberg, Nanda, & Nohria, 2004).

Why would this happen? Groysberg argues that portable, individual skills and abilities really only constitute one part of what you might call talent. The rest is firm capabilities, such as leadership, training, systems, teams, and reputation. Since the star performers cannot bring those capabilities with them when they move, performance is likely to drop.

However, there are also some very interesting qualifications to this conclusion. For one, moving to an investment bank with similar capabilities and culture as the old one tended to decrease the performance drop. This was supported by another study, where Groysberg and colleagues showed that similarity in structures and culture between the old and the new company had a very significant effect on the performance of a new CEO, regardless of the person’s performance in the previous role (Groysberg, McLean, & Nohria, 2006). Furthermore, the study of star analysts showed that when the stars took members of their original team with them to the new firm, the drop in performance was eased significantly. In other words, top performance is not only a matter of individuals, but also group structures.

The important role of context is not limited to the finance industry or to managerial roles. In a study that received a lot of attention, Huckman and Pisano (2006) looked at the performance of star surgeons performing surgical operations in several different hospitals. Using risk-adjusted mortality as the outcome, the researchers saw that the same surgeon’s performance differed significantly depending on the hospital he/she was operating in. Notably, the surgeons performed better in hospitals where they had performed many surgeries. Furthermore, there was no general improvement in performance the more procedures the surgeon completed in total: Performance improvement in one hospital was only related to doing a larger number of surgeries within that specific hospital. In other words, performance was closely tied to context. The authors concluded that the surgeon’s familiarity with the specific setting – key staff, team structures, and routines – was vastly important for their performance.

To conclude, these studies convincingly show that the “once a talent, always a talent” philosophy is only partly true. The individual surely brings his or her knowledge, skills, and abilities, but the context enables, enhances, hinders, or blocks. Talent development is enabled by teams, cultural fit, and deep understanding of the specific setting. This is a crucial fact to keep in mind for talent management officials in any industry.

 

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Think Potential, Think Male?

Already when we set out on our exploration of the concept of potential, I mentioned that danger lurks in ill-defined concepts. The reason is simply the way humans work: give us a fluffy term, and we will fill it with our own interpretations, experiences, and values. Further, it is seldom coincidental what particular interpretations and values that go into those concepts. The usual suspect is ingroup favoritism, i.e., that we tend to like (and judge more favorably) those that are a lot like ourselves.

Potential, no doubt, often represents a fluffy term. As mentioned previously, organizations seldom employ a solid definition of what they mean by “high potential”. There has been relatively little direct research on how this affects diversity and inclusion in e.g. talent pools and companies’ leadership pipelines – but drawing on what we know from prior HRM literature, chances are that it opens up for bias and stereotypes influencing the decisions. The studies that do exist certainly point in a worrisome direction, particularly regarding gender.

Warren (2009) conducted a study of talent management documents and systems, and found that they to a large extent represented male stereotypes of assertiveness and competitiveness. And in a very interesting Swedish doctoral dissertation from 2009, Linghag looked directly at judgments of potential in companies’  internal leadership programs. One of her main findings was that men were viewed as having unlimited potential, and women as having what she called delimited potential: While male participants were perceived as able to take on basically any future management role with the right training, female candidates were viewed as having potential only for specific roles and positions. This, Linghag argued, in the long run amounts to women being held back in their careers compared to their male colleagues.

In other words, there are indications that potential can easily become a gendered term. If we look at research on other HRM practices, such as recruitment and performance management, there is plenty of evidence showing that the less structure and clear definitions are adopted, the more these practices become scenes for bias and stereotypes. Thus, there is good reason to try to counter bias in assessments of potential. Below are some ways of doing this – methods that actually also tend to counter the fallacy we talked about last time; confusing performance for potential.

• Define the concept clearly – and make sure the definition is used. Even when a company has adopted a definition of potential centrally, there is usually little monitoring of whether this definition is actually used in managers’ assessments  (Silzer & Church, 2009). It goes without saying that compliance to the definition is key to counter discrimination.
• … and scrutinize the definition for gendered assumptions. Festing, Kornau, and Schäfer (2015) advised companies to go over their talent frameworks and make sure that the wordings are not reflecting a mental prototype of a male person.
• Make the process as open as possible. van den Brink, Benschop, and Jansen (2010) showed that gender-biased decisions in recruitment were more prominent when the assessment process was not made public within the company. There is no reason why this should not apply to assessments of potential too.
• Increase the use of methods with less adverse impact. We know, not least from research on recruitment and selection, that less structured selection methods tend to have a stronger adverse impact. Instead, consider methods such as personality and GMA tests, structured case exercises, and well-thought out assessment centers.
• Train HRBPs to counter bias in calibrations. In most organizations, the sessions where potential is discussed are facilitated by HR representatives, usually HR business partners. In other words, these are key actors in countering both bias and the muddling of performance and potential. Thus, they should receive training in helping managers distinguish between the present and the future, and between relevant and irrelevant factors.
• Hold managers accountable. According to Henson (2009), one key ingredient in more rigid potential assessments is that managers are given a clear responsibility – ideally, tied to a measure – to “deliver” a diverse enough pool of high-potentials.

As we have seen throughout this series, much of the challenge regarding potential lies in defining the concept and basing judgments on information that actually has a predictive power – rather than on hunches and intuition. By taking on those challenges, companies will be able to make much better use of potential assessments in their strategic talent management.

 

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