Talent Management is one of those terms that we glibly throw around in our HR strategy meetings and boardrooms. We all recognise that Talent Management is the process of recruiting, retaining, and developing our most talented employees, in line with our organisational goals. However, even with this precise definition, it’s clear that there is no template to manage talent and no foolproof way to bring our talent to the top.
By Peter Finch, Country Manager for Cubiks Greater China
Talent Management has the tendency to be an application of experience and skill, but is all too often based on personal opinion. So, can we take a more measured approach and apply greater objectivity to our talent management decisions? Can we can achieve a more insightful assessment of employee performance, and a more accurate indicator of their future potential in our organisation?
A useful aid might be the 9-box matrix, developed by McKinsey in the 1970s to help General Electric prioritize investments across its many business units. It was adapted more recently for HR to bring together performance and potential and identify a course of action to grow an organisation’s talent pool.
A high-performer with high potential sits in our right uppermost box and can be considered “Top Talent”. An “Under Performer” will sit in our bottom left box, showing low performance with little indication of potential. In between are another 7 categories of talent maturity.
This Talent Matrix gives a structure that is easy to relate to, but lacks meaningful content. Far too often we see Development Programs where departmental heads are asked to nominate their ‘Top Talent’ on to the program, who may be then vetted by a panel of top corporate executives who don’t know the candidates at all. The big issue here is that most managers, through lack of training, guidance, and experience, don’t have the insight to differentiate between current performance and future potential. To most managers this is one and the same thing and their “Top Talent” selection is a subjective judgement based on what they see as current performance.
Appraisal and the dominance of the marginal average score
A more structured approach of appraisal against KPIs might seem to be the solution, but what we so often observe is the dominance of the marginal average score – the cluster of candidates appraised as “moderately above average”, such that on a scale of 1 to 5, where the lowest performance is a 1 and the highest performance is 5, most employees are appraised as 3 (marginally above average). Very few are appraised as 2 or 4, and rarely will you see a 1 or a 5 with Line Managers showing great reluctance to award extreme scores. Some organisations adopt a “rank-and-yank” approach where managers are forced to assign a specified percentile of top and bottom talent. This forces the differentiation of performance, but the lack of standardisation in this approach creates disparity when comparing performance across an organisation.
It is very evident that we need a more comprehensive assessment of performance, and that we also need to understand that performance does not equal potential. An employee may not be able to display all aspects of potential. They may be in a job that doesn’t play to all their strengths, or they may be in an environment that doesn’t cultivate the potential within. So to really manage talent there needs to be a methodology that assesses both performance and potential, but recognises the difference between them.
Well known are the many 360 feedback tools that can assimilate the observations of the employee’s line manager along with those of peers and subordinates, and the employee himself, to give a wider assessment that more closely represents actual performance. Less well known is the contribution that advances in psychometrics have made that draw Talent Indicators from multiple assessor observations. Cubiks, global leaders in assessment and psychometric research have identified 6 indicators of potential that are driven by behaviours present in current performance.
The Cubiks Talent Indicator includes six dimensions, and 14 underpinning facets that are generally indicative of business orientated performance, but made specific to an organisation through benchmarking to the organisations own “picture” of performance.
The Talent Indicator approach gives us a window on the employee’s potential, but only that part of potential that is seen in current performance. We have already touched upon how potential may be inhibited by job role or by environment and might not be fully evident in today’s performance. If we can identify inhibited potential we stand a chance of releasing and realising it, and we can identify it if we can gain insight into what drives an individual, their needs and their role preferences. Here again, implementing a high validity work-based psychometric personality questionnaire can play a pivotal role.
In the chart below from a major global professional services organisation, Cubiks’ PAPI has been used for the assessment of these drivers. By plotting both observations against each other we have arrived at a full perspective on future performance. We have an assessment of potential drawn from the employee’s behaviours observed in current performance, and we have an assessment of their potential drawn from the drivers. Our highest potential candidates will show strength in both the Talent Indicators and the Talent Drivers.
The map becomes really powerful when it can be considered not just in total but sliced by department, by region, by seniority level, or whatever critical aspects you want to view. The map, once filled with data, can identify and direct resolutions to Talent Management issues. It can objectively identify your top talent. It can target which candidates to develop, and which areas to focus on. It can determine if a succession plan needs a “Build or Buy” strategy by identifying if the right talent is rising within the organisation or needs to be externally hired.
Early adopters of this methodology were apprehensive about turning people into statistics, but the outcome has changed not just their minds but those of their employees too. Far from it being seen as clinical it is recognised that this approach improves fairness and reduces bias. It increases diversity in the Talent Pool and gives a starting point for the development of each individual. It is a means of objective talent measurement and the foundation of a talent management strategy that is tangible and realises real results.
After all what gets measured gets managed!
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After Cubiks’ acquisition of GraduACE, Peter became Cubiks Country Manager for China and Hong Kong. He has worked in China for 15 years and has a long history of leading teams in creating successful business to business enterprise solutions.
Article originally published in Human Resources Online (March 2017) Page 30-31.