Developing your Talent Management strategy – Part Two

Developing your Talent

Management Strategy

– Part Two

part of our series of White Papers

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Developing your Talent Management strategy – Part Two

Talent® and Talent Cloud® are registered trademarks of Head Light Ltd. All other trademarks belong to their respective owners. © Head Light Ltd, 2019

Contents

About this series of White Papers 3

The role of the competency framework in talent management 3

Competencies and Values 4

Defining the values ................................................................................................................................. 4

Translating values into behaviours ......................................................................................................... 5

The competency framework ................................................................................................................... 6

Adapting an ‘off the shelf’ competency model ........................................................................................ 6

Designing a bespoke competency framework ........................................................................................ 6

Off-the-shelf framework vs bespoke model ............................................................................................ 9

Validating the competency framework .................................................................................................... 9

Assessment for promotion and development 12

Assessment centres ............................................................................................................................. 12

360-degree feedback ............................................................................................................................ 13

Talent reviews ....................................................................................................................................... 14

Managing performance 19

The challenges of performance appraisal ............................................................................................ 19

Overcoming the challenges .................................................................................................................. 21

Improving the quality of performance conversations ............................................................................ 21

Working with the framework in a talent management system .............................................................. 23

Coming up 25

References and further reading 25

Next steps 26

About Head Light 26

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About this series of White Papers In Part One of this series of White Papers, we explored the impact an effective, and implemented, talent

management strategy can have on your business. As part of this discussion, it became clear that in

order to have a solid approach to talent management, practices need to be embedded throughout the

organisation.

In Part Two, we shall explore how you can design a competency framework to provide a common and

shared language across the business which can then form the backbone of the core talent management

activities of recruitment, assessment for promotion and performance management.

The role of the competency framework in talent management There have been challenges to the competency-based approach when looking at talent management,

but it’s hard to see how effective talent management can work in the absence of a tailored competency

framework. Recruitment, development, training, reward and performance management are all talent

management activities concerned with the match between individuals and the requirements of the job.

Common sense tells us that the better our understanding of the demands of the role, the culture in

which people have to operate and the qualities that lead to higher performance, the more we will get out

of our investment in talent management.

Talent management, if it is to be formed by an integrated set of activities, needs a common language

and a framework grounded in a thorough, clear and evidence-based understanding of what makes for

superior performance in your organisation provides such a common language. How can you effectively

focus your people development, recruitment and promotion efforts if you don’t know what it is you want

more of? Or, indeed, what you want less of?

Having addressed the questions raised in Part One of this series, you now need to establish whether

you have a firm foundation in place: do you know exactly what you need to look for, identify internally,

develop and promote within your organisation? If you already have a competency framework, when

was the last time it was reviewed? Does it meet both the current and future needs of your organisation?

Does it allow you to assess potential for more complex or more senior roles? How widely and

consistently is it used?

Knowing how your competency framework will be used across all of your talent management activities

is essential if you are to produce something that has high utility, relevance and value all of which are

critical to achieve to obtain buy-in.

If you use the competency framework within a 360 process where the data from these 360s is

integrated with information from performance appraisals and assessment centres to give a rounded,

holistic view of an individual’s performance, it would make sense to ensure that your rating scale, for

example, is the same across these three activities allowing for ease of comparison. To do this, the

underpinning competency framework would need to be sufficiently detailed and flexible enough to lend

itself to the development of assessment criteria, performance indicators and 360 degree questions. It is

worth knowing this before you embark on a full scale competency development project.

However, research has shown that there is a direct correlation between business outcomes, such as

high growth and above-average profitability and the competencies used in performance management.

Best practice tells us that successful organisations regularly review the competency models they use,

keep them simple and focus on a few key competencies. So, if you’re going to have your own

competency framework, this is worth remembering.

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Competencies and Values In our experience, the most effective competency frameworks are driven by organisational values.

Having a clearly defined set of values and a supporting competency framework which then translates

these values into specific behaviours which employees can demonstrate, can have significant benefits.

A 2003 study carried out at the University of Chicago by Professor Curtis Verschoor found that

companies with a defined corporate commitment to ethical principles do better financially than

companies which don't make ethics or clear values a key management component.

In order to realise the benefits of an organisational value system, the values must be embedded within

the organisation and inform what people do; how they behave, how they manage people, how they

interact with clients and how they represent the company externally. A competency framework is the

starting point for achieving this. It goes without saying that identifying and establishing the corporate

values cannot be a standalone HR exercise.

Defining the values When defining the organisational values, the process often looks like this:

• A review (and potentially a refresh) of the current vision, mission statement and business

strategy. This is likely to involve a series of discussions with the senior management team.

• Conducting workshops, focus groups and surveys to gather views and data from employees (at

all levels) on what they see as being the values, ethos and culture of the organisation. This is

likely to include asking questions such as:

1. What is important around here?

2. What do we want our clients to think of us?

3. What do we want the public to think of us?

4. What attracts people to work here?

5. What informs the way we do business?

6. What are our guiding principles?

7. How do we expect our colleagues to behave?

8. How do we do what we do?

9. What do we do best?

10. What’s good about working here?

11. What sets us apart from our competitors?

12. What makes us successful?

• Using the data gathered to collaboratively agree and finalise a clear set of agreed organisational

values with the business.

• Presenting these values back to the business for discussion and review, possibly as a series of

internal briefings.

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Translating values into behaviours The next step is then to translate these values into behaviours, or a competency framework. This

means ‘bringing the values to life’ by describing exactly what someone might do, say, think or

demonstrate if they possessed and supported each value.

Asking ‘what do you think our key competencies are?’ might yield some useful information, but it is also

important to use a range of questions and draw on people’s actual experience and performance to

ensure you don’t create a picture of an unattainable ideal.

Some suggested questions for your focus groups and senior stakeholder interviews:

• How would you describe the perfect employee?

• What’s different about employees here?

• What do you value most in your staff/colleagues?

• What really sets apart the best people from others?

• Think of the most effective person in your team. What characteristics and qualities make them

effective?

• What do people need to do to get promoted?

• What will get in the way of people getting promoted here?

• What gets you noticed around here?

• What sorts of behaviours are ‘career limiting’ around here – i.e., what might cause an individual to

derail, or what would prevent them from ‘fitting in’?

The last question is important as it helps to elicit negative or contra-indicators of behaviours and this

reflects Peter Drucker’s observation that: “half the leaders I have met don’t need to learn anything new,

they just need to learn what to stop doing”.

So, once you have your values, you then need to feed this into developing the behavioural framework. A

robust methodology for developing a competency framework is shown in Figure 4.

Figure 4: Developing a Competency Framework

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The competency framework The development of a bespoke competency framework for your organisation can mean significant

investment, so it is pragmatic to include ‘strategic’ competencies in the framework so that it can take

account of the anticipated future state of the business, the behaviours needed to maintain competitive

advantage, forthcoming challenges and what is needed to deliver in the medium- to long-term.

There are generally two approaches to developing a competency framework; either licence an ‘off-the-

shelf’ framework, or develop one from scratch. Each approach has its pros and cons and the approach

chosen will be determined largely by what is driving the need for the competency framework, whether

you have any existing (outdated) frameworks in place and the available budget for competency

development.

As a general rule, it is expedient to build on and tailor what exists.

Adapting an ‘off the shelf’ competency model Head Light has developed its own generic leadership framework, incorporating four levels of behaviour

and contra indicators, and this can be adapted to fit our customers’ organisation, culture and specific

role requirements.

The four clusters of ‘Thinking’, ‘Learning’, ‘Interacting’ and ‘Delivering’ bring together the 12

competencies which we have identified as being key areas of focus through our work with customers

over the years.

As well as being able to work with the Head Light Competency Framework, we are also a licensee of

the Chartered Management Institute’s Frameworks. This means that our starting point is always a valid

framework which can then be altered to take on many of the characteristics of a fully tailor-made

framework.

By starting with an already established framework, the process is quicker and less expensive than

developing a bespoke model from scratch but does carry the risk that ‘short cuts’ will lead to a

framework that is not presented in the language of the organisation.

It is also possible that the constructs which are present in the original model limit the research phase

and constrain people’s thinking. As such, we would always advocate using a wide range of research

and engagement methods and to validate the resulting model once it has been produced.

Designing a bespoke competency framework

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A professionally-developed, bespoke framework will take into account the need for sufficient detail,

flexibility and practicality to ensure that the framework lends itself to the development of assessment

criteria, performance indicators and 360 degree questions. You cannot specify, upfront, how many

competencies would be appropriate; this would emerge from the research.

In our experience of working with a vast range of competency frameworks, we have seen many different

ways of constructing and presenting such models, and have identified a number of common pitfalls. It is

important to remember that competency frameworks are not a ‘magic bullet’ and if poorly constructed

they can be more of a hindrance than a help.

Areas to avoid are:

• Creating ‘competencies for competencies’ sake’, or jumping to the conclusion that a competency

framework is what is needed to address a broader business issue without engaging in a more

systemic approach.

• A failure to focus on the skills that drive success and superior performance in that specific

business or organisation.

• Short cuts in job analysis (e.g. restricted amounts of consultation and involvement with the

business, or use of too limited a range of research methods).

• Lack of investment in evaluation of a model – a rigorous process which determines whether the

application of the competency framework actually does lead to the identification of superior

performers, or which tests the assumptions made within the model.

• A reluctance to review or challenge competency frameworks which are out of date.

• A focus on factors which have created success within the organisation in the past, without

enough thought given to those which will allow the business to thrive and grow in the future.

• The development of a long list of ‘nice to haves’ leading to an unwieldy, user-unfriendly

description of a super-human employee.

• The assumption that the creation of a competency framework is sufficient to enable behavioural

change in individuals and will automatically lead to performance improvements across the

business.

When developing a bespoke competency framework, there is a need to achieve an optimum balance

between consulting widely for increased reliability with the practicalities of time, cost and disruption.

With our customers, we combine a variety of different techniques including:

• Critical Incident Technique or Behavioural Event Interviews

• One-to-one interviews or focus group sessions

• Card sort exercises

• Expert panel sessions

• Repertory Grid sessions

• Questionnaires or surveys

• Observation

• Work diaries

• Future focus sessions

• Evaluation of other quantitative data

• 360 degree feedback

Face-to-face interviews and focus groups (using the questions listed previously, for example) are an

essential part of the process, especially to gather input from key stakeholders, as they allow us to

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explore areas that would not be possible though more structured/closed methods. They also allow us to

explore the views and attitudes of key stakeholders and uncover concerns or potential obstacles that

may become significant in later stages. In our experience investing in sufficient stakeholder interviews

at this point is invaluable in terms of building the credibility of the project and gaining commitment and

support from key stakeholders for subsequent phases. However, this stage can also open a ‘can of

worms’ if not handled carefully, and we make a point of ensuring that this stage is driven and owned by

internal stakeholders (HR and senior management).

At this point it is worth extolling the virtues of two more tried-and-tested techniques.

For gathering information (in a relatively quick and cost effective manner) as to how superior performers

operate we find that Critical Incident Technique (CIT) and Repertory Grids are hard to beat. The

former is an event-based interviewing technique which gets the job incumbent to describe situations and

personal experiences they consider to have been particularly significant. Through these personal

anecdotes we explore the competencies that are being demonstrated in those situations.

Repertory Grid, in our view, is an often overlooked but powerful means of drawing out what’s really

important within a role, task or job family. One of its key benefits is that it elicits the constructs (or

competencies) from the individuals directly, rather than providing them with a set of ready-made

competencies which may narrow the focus of the research. The Repertory Grid is a technique for

identifying the ways that a person interprets or gives meaning to his or her experience and is based on

the Personal Construct Theory of personality. The process involves comparing groups of people and

determining what differentiates them, in behavioural terms. Participants label these differences in their

own way and the results from a number of Repertory Grids are then statistically analysed to ascertain

the most important and significant differences. It is a very neat process and again, one which is

engaging and interesting to complete.

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Off-the-shelf framework vs bespoke model When deciding whether to adopt a bespoke model which is built on organisation-specific research or

whether to use an off-the-shelf competency dictionary (or a blend of the two!), consider the following

benefits of each approach outlined in Table 1.

Off-the-shelf competency frameworks

or dictionaries

Fully bespoke models

Tend to be less expensive and less time-

consuming, even if you adapt the model

to the values and culture of your

organisation

Should mean that you are drawing on a

framework that has already been

validated and thoroughly researched

Allow for benchmarking against other

organisations, industries or sectors

Use a common language and facilitate

movement between organisations:

highlight the portability of competencies

Rely less on the quality or characteristics

of existing staff

Allow for exploration of what is genuinely important in

that specific environment, and are less likely to constrain

thinking

Tend to create more buy-in from staff through the

process of research and consultation

Don’t suffer from the ‘not made here’ problem

Ensure that the competency framework is presented in

the language of the organisation

Enable identification of what separates high performers

from those who are less effective

Are developed specifically with the purposes for which

you are going to use them in mind. So, can include

markers of ‘high potential’, or highlight development

needs/contra indicators

Table 1: Competency Framework Development Strategies

Validating the competency framework Talent management software such as our Talent® application portfolio has made the evaluation and

validation of competency frameworks much easier.

Using Talent 360®, on-line 360 degree assessments allow us to capture high volumes of data and can

easily generate the kind of information needed to determine how people are conceptually linking

behaviours together and which competencies are the most accurate predictors of high performance.

The Talent® portfolio exports its data in a form that is readily usable and removes the need to input line

after line of ratings or scores into sophisticated statistical packages for analysis, saving time and effort,

and reducing the chance of errors.

The use of on-line surveys and assessments also allow us to collect valuable data for evaluation

projects, and on-line appraisal tools (such as Talent Performance®) make it easier for us to draw on

relevant performance data with which we can correlate competency ratings and determine the predictive

validity of our frameworks.

We will now look in more detail at some of the talent management practices which rest on your

organisation’s competency framework and which contribute to your broader talent management

strategy. However, if you don’t get the foundations right, your investment in areas such as 360s,

appraisals and recruitment are unlikely to yield the returns the business requires.

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Strategic recruitment

With a robust analysis of what talent ‘looks like’, attention turns to establishing the means to accurately

identify it.

The CIPD reported in 2009 that the average spend on hiring managers or professionals was in the

region of £11,000 (including labour costs and recruitment spend). When adding this to the salary for a

low-performing employee, the cost of making hiring mistakes begins to become significant. SHL’s

report estimated the cost of management time spent on poor performance in the UK at £16.7 billion.

Organisations who have taken a thorough and focused approach to identifying the behaviours, skills

and values that are important within their business have been shown to achieve up to a 15% increase in

things like productivity and profit, and an associated reduction in turnover and errors and omissions

(source: Hay McBer). Essentially, strategic, targeted recruitment is more cost effective.

Figure 5: Talent Management-aligned Recruitment

Take a hard look at your assessment tools and processes; are they up to the job? Are you making

effective use of psychometrics? Are your hiring managers sufficiently skilled? Are there any

methodologies that you are not yet making use of?

For instance, in a recruitment context, situational judgement tests, which tap into specific competencies

or indicators of potential can be a powerful selection tool. These can be designed to expose the

candidates to the sorts of scenarios they would face in the target role and can be used to determine an

individual’s preferred style when dealing with issues and the effectiveness of their judgement. An

example is below:

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Example 1 – Situational Judgement Test Question

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Assessment for promotion and development Of course, talent management is more than just sourcing and selecting the best talent from outside the

organisation. Finding and promoting talent internally is equally, or arguably more, important. In terms

of the processes you might apply to do this, here are some illustrative examples:

A large public sector organisation which needed to streamline and improve internal promotion

processes, facilitating the moves between grades and increasing the quality of its leaders:

Transition between key grades had previously been managed largely through the performance

appraisal process. Managers were responsible for identifying those who had the drive, motivation

and capability to perform at the next level and for ensuring they were developed accordingly.

When positions or opportunities arose, applications were requested and the successful

candidates selected by a promotion panel, which consisted of senior managers. However,

feedback from some of those who were managing (and reporting to) the newly promoted people

indicated that this process was not consistently successful and there were clear concerns that

some very good candidates were slipping through the net.

The HR department decided to make this process a more objective and robust one. They

engaged in some refresher training for the promotion panel and instigated standard-setting

meetings, where the panel presented, reviewed, debated and discussed their assessments

following each set of panel interviews. HR also introduced a 360 degree assessment, based on a

set of indicators developed through internal research which highlighted those aspects of

performance which tended to indicate better future managerial performance. This provided a

more holistic view of candidates and focused the panel’s questioning on likely areas of strength

and enabled them to challenge around potential considerations.

A small, city solicitors firm which was looking to capitalise on internal promotion opportunities:

Being a young organisation, managed by the Partners who founded it, there were few formal

structures around recruitment and talent management. There had been a strong reliance on

using market intelligence, first impressions and ‘professional judgement’ when selecting new

recruits. Internally, there was no churn at Partner level, little movement among other key senior

positions but high turnover among the rest of the staff. When an opportunity arose at senior

levels, or when a new team was created, it was critical that the best people were selected since

they couldn’t afford to lose or disengage their high performers.

The HR Business Partner commissioned the implementation of a development centre process,

which involved participants in a series of exercises and observed activities which mirrored the

responsibilities of the Managing Partners and Solicitors. There was an emphasis on testing

people’s ability to balance a busy workload and a range of client commitments with line

management duties, and on dealing with the challenges of managing a group of highly intelligent

and capable professionals. The process was supported by an open application process and a

flexible development programme (a series of short managerial and career-development

workshops) which catered for both those who were successful and for those who were not.

There are a number of mechanisms by which organisations find and promote talent internally. They may

draw from talent pools, have an internal application and assessment process or have people go through

interviews by promotion boards. They may conduct talent reviews, using performance data from 360

degree feedback, performance appraisal or manager’s assessments.

In any event, finding talent internally does require the previously-discussed foundations; clear criteria

and role requirements against which people can be assessed to determine person-job fit, readily

accessible data from assessment processes, commitment from the line and clear agreement on who the

‘talent’ might be and where they might be found.

Some of the more widely-used assessment methods are outlined and discussed below.

Assessment centres

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Assessment centres are a popular way of managing the gateways between grades and key points of

transition within organisations. Usually, they are designed to measure a set of criteria, identified as

being required at the target level or grade, and lead to a decision as to whether an individual:

• Is ready for promotion now.

• Is likely to be ready for promotion after a period of time, and should be entered into a formal

development programme or period of preparation for the role.

• Is unlikely ever to develop the requisite skills, competencies or knowledge and should find an

alternative career path, or be further developed in their current role.

Some of the pitfalls that need to be managed (or avoided) when using assessment centres for this

purpose include:

1. Failure to be sufficiently forward-looking or specific in the assessment and the criteria used.

Assessing people against an overly generic set of performance criteria will not allow for accurate decisions

to be made about suitability for the post in question. Also, assessing individuals against the criteria that are

applicable to their current role will not provide information on their potential for future roles.

2. Failure to manage those that do not meet the required standards and are deemed unlikely to meet

the criteria in the future. These people may still form part of your ‘engine room’ and their careers,

expectations and levels of engagement still need to be carefully managed.

3. Managing the expectations and learning journeys of those who show potential, but who need further

development. It can be difficult to ensure that these people have access to the experiences and

opportunities they need in order to develop to the required level as well as ensuring that the role

opportunities are there at the end of these journeys.

4. Cost. Assessment centres can be expensive, particularly if (as many organisations do), you have to use

external assessors and providers to manage the process. For a number of reasons (e.g. external assessors

having greater credibility and less perceived bias than internal ones, lack of internal resources to staff the

ACs), it is common practice to have promotion ACs managed by external consultancies. However, it is

always worth exploring the options for co-delivery (for instance, having internal resources act as Programme

Managers and Administrators) and using internal venues to increase cost efficiency.

360-degree feedback Since the cost of a full assessment centre process can be prohibitive, some organisations opt to use a

combination of more traditional, internally-managed processes (such as promotion boards and talent

reviews) in tandem with a carefully designed 360 degree process.

Traditionally, 360 has been seen as ‘strictly for development only’ but increasingly organisations are

realising that, with careful management, positioning and communication, it can be effectively used in

higher-stakes applications, such as promotion. The advantages of using 360 for promotion include:

• It is an assessment in the ‘real world’; it is about the individual operating within their role, in the

organisation, so it is face-valid and does not suffer from the feeling of artificiality that assessment

centre exercises sometimes can.

• It is an holistic view of the individual; the effects of things such as rater bias or strength of

relationship between the individual and the ‘assessor’ are minimised, since feedback is drawn

from a range of sources.

• It is a fairer, perhaps more accurate, assessment since it draws on performance data over a

period of time, rather than being just a ‘snapshot’ of a person and reliant on performance on a

single day, as an assessment centre is.

Clearly, again there are pitfalls associated with using 360 in this context. One of the main ones is the

risk of an individual being able to skew their data by selecting raters who will provide them with overly

positive ratings.

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In Talent 360®, Head Light has developed a number of review options to help mitigate against this risk,

including moderated and governed reviews, where central moderators exercise a degree of control over

the individuals who are selected to provide feedback.

Managed carefully, 360s can provide extremely valuable assessment data; after all, if you were

promoting someone into a more senior management position, wouldn’t you want to know exactly what

impact they have on those they currently manage?

Talent reviews The purpose of the talent review process is essentially to map the business needs of the organisation,

or of a specific business area, against the capacity, capability and potential of the people within it. It is

also often the mechanism by which your High Potential people (HiPos; see further discussion on this in

Part Three) are identified and filtered into the organisations accelerated promotion or development

programmes.

Of course, talent reviews will look considerably different from business to business, but generally they

consist of a series of structured, facilitated meetings where employees are reviewed in terms of their

key strengths, career goals, degree of readiness for promotion, development needs and their

development plans. It is usually a manager’s responsibility to represent their employees at this meeting

and the responsibility of HR to oversee the process and calibrate the evidence and information shared.

The outputs of these meetings are generally captured (e.g. on a summary spreadsheet, a

Performance/Potential, or 9-Box Grid or inputted into a talent management database) with the aim of

using this for succession planning, training needs analyses, development strategies, workforce planning

and human capital risk management.

A typical talent review process is shown in Figure 6.

Figure 6: Typical Talent Review Process

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How talent reviews work

A typical first stage in the talent review is for a manager to complete and review the performance

management outcomes and documentation. This might also involve gathering evidence of current

performance levels to support decisions and recommendations to the ‘Talent Review Board’ – the

meeting where discussions around current and future talent pipelines are held. The assessment may

require a manager to determine strengths, areas for development, performance ratings and potential

level for each team member and might also incorporate an analysis of critical roles or functions, key

people and critical dependencies, a review of the business strategy and corporate plans and

succession issues.

However, there are a number of limitations in performance management data, including:

• Inconsistency in the quality of objectives – the degree of stretch in them, how measurable

they are, etc.

• Different processes are often used by different parts of the business, making comparison

across the board very difficult.

• Variability in the degree of leniency demonstrated by different managers when assessing

achievement against objectives.

• Different roles have very different requirements and challenges, and it is difficult to compare

relative levels of performance and potential by looking at achievement against objectives alone.

It is worth thinking critically, therefore, about the reliability and breadth of data that is used to inform

judgements about individuals, and therefore the quality of the evidence that managers bring to Talent

Review Boards.

Whichever assessment methodologies you employ when conducting a talent review, make sure that

you are not just focusing on outputs against job objectives, or the hard skills and competencies such as

strategic thinking or problem solving. Ensure there is a balance with the softer skills such as emotional

intelligence and include motivation, drive, values, work preferences and learning capacity. These all

form an integral part of a person’s ability to realise their potential and in order to make accurate

decisions about future capacity and should all be taken into consideration.

Having assessed each of the individuals within their area, the manager’s next task is usually to

document the outcomes and prepare for the Talent Review Board meeting. Templates or proforma are

often provided by HR for these purposes. The tools and methods used to gather and prepare this

information again vary, but can include:

• Talent review spreadsheets or templates

• The Performance/Potential (or ‘9-Box’) Grid

• SWOT

• Talent management systems and databases

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Many organisations provide a bespoke talent review spreadsheet which is completed by managers prior

to the Talent Review Board meeting. These often require a manager to record the following kinds of

information on each team member:

• Current level and role

• Achievement against objectives

• Behavioural assessment against competencies

• Overall performance rating (sometimes a combination of the previous two)

• Potential rating

• Readiness for promotion in the context of potential future roles and career aspirations

• Key strengths and areas for development

• Position on the Performance/Potential Grid

Whilst the Performance/Potential Grid is an extremely useful tool, it does have its limitations and will not

lead to the best talent decisions as a standalone exercise.

Performance/Potential Grids can be expanded to incorporate more valuable information, such as the

ones generated by Head Light’s Talent® software (example shown in Figure 7). These can also

highlight ‘Flight Risk’ and ‘Readiness to Progress’ as additional internal dimensions.

Figure 7: Talent Performance/Potential Grid

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Often, the line manager will place each individual on the grid, and then this positioning is debated and

altered through a process of peer challenging and moderation during the Talent Review Board meeting.

The usefulness of plotting individuals on such a grid depends on a number of things:

• The quality and validity of the criteria used to determine current level of performance;

• The quality and validity of the criteria by which ‘potential’ is determined;

• The ability of line managers to convince others of their arguments and the reliability of

their assessments;

• The consistency and quality of objective-based ratings and the outputs of performance appraisals

(where these are used to determine level of current performance);

• The quality of the discussions held around the placing of individuals, and the skill with which the

debates are facilitated and mediated.

Good quality facilitation at the Talent Review Board stage is essential, but if the initial assessments of

performance and potential are based on weak criteria, then debate around ‘who goes where’ is likely to

prove fruitless.

An alternative approach is conducting a SWOT analysis, which looks at the strengths and weaknesses

inherent in a business, or team, and the opportunities and threats you face and is also often used in the

preparation for a Talent Review Board meeting. By focusing on the key factors affecting you, now and

in the future, a SWOT analysis provides a clear basis for examining business performance, decisions

and possibilities. SWOT can be used as part of a talent review, to map out individual or team strengths

and weaknesses and to help with planning decisions.

The Talent Review Board is usually the next step. Part of this process should be some sort of gap

analysis, with the aim of developing a clear picture of the health of the talent pipeline: what we need

versus what we currently have and what is in the process of being developed. As mentioned above, the

overriding focus of the Talent Review Board meeting is often the debate over ‘who goes where’ in the

Performance/Potential Grid. Whilst it is important to come to an agreement over those who have clear

potential, it is equally important that decisions are then made as to what should be done to support and

manage those individuals. Simply placing people in boxes won’t get you very far.

One of the other derailers of the Talent Review Board process is that it relies on the decisions made by

individuals, and groups, as to an individual’s potential. However, these decisions are subject to a

minefield of psychological biases which means that the decisions made are not always the correct ones,

nor the best ones; for any of the stakeholders. These biases are sometimes the effects of mental

shortcuts, or heuristics, at work. Whilst these short cuts are necessary (or else our brains would not be

able to cope with the wealth of data and information that is constantly flooding in to them), they can

sometimes lead us down the wrong path and we may not even be aware that it’s happening.

However, by becoming more aware of these biases and by putting strategies in place to minimise or

reduce their effects during talent reviews – or indeed any aspect of people management - we can

improve the quality of the decisions we make. We can’t remove the influence of biases completely – in

fact, we are biased towards not consciously picking up on them! So, involving third parties or trained

facilitators in the quality checking and reviewing of decisions is invaluable. The individuals who mediate

the process should be well-versed in personnel assessment, have the presence and credibility to be

able to challenge senior managers and be aware of the pitfalls in individual and group decision-making;

so when they spot them, they can surface them and address them.

For more information on decision-making biases in talent reviews and a simple ten-point process for

counteracting the common biases, see our additional resource ‘Making Talent Reviews More Effective’.

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Following a Talent Review Board, the various stakeholders then go away and put wheels in motion. This

may involve:

• Updating the organisational or division succession plan with the new data.

• Inviting individuals to become part of a fast-track scheme, leadership development programme or

talent pool.

• Promoting those who are deemed ready to available positions.

• Specific development actions for those who are currently underperforming or who need to take

steps to ready themselves for the next role.

• Providing feedback to each individual.

Often the follow-up process lacks structure, or loses momentum. Or it can focus too much on the

leadership pipeline at the expense of other critical paths. For those that are not in one of the top boxes,

the results of the talent review may remain an eternal mystery. It’s essential that this process – which is

hugely expensive in terms of managerial time – benefits from sound project management and

implementation once the talent review documents have been completed. Effective talent review

processes require consistent and rigorous follow-up to ensure that the decisions made are implemented

and have the required impact on the business.

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Managing performance An effective performance appraisal process, when integrated with your talent management strategy will

reflect the priorities of that strategy. With performance management in place, you will be able to identify

development needs, help to close skills gaps and enable internal career progression within the

organisation.

As you develop your talent management strategy, look to consider your current performance appraisal

arrangements. Do they support your other talent management efforts? How do they feed into or it with

other parts of your talent management strategy? Do you get the information you need from it? Does it

include a discussion or assessment of the competencies that are relevant to people’s roles, or career

goals? How are staff appraised and against what measurement? Is it practiced consistently across the

organisation? Do people at the top level do it? Is it time for the process to be updated?

The challenges of performance appraisal Is the performance appraisal process trying to do too much? Yes, according to Coens & Jenkins (2002)

in their controversial work ‘Abolishing Performance Appraisals’. They cite that while the practice of

bundling multiple functions of the process together may make good sense in terms of being economical

with people’s time, it is a key contributor to the dismal track record of performance appraisal. It is also

worth revisiting why the performance appraisal exists as this often sheds light on why it might not be

working as effectively as it could within an organisation. Table 2 shows the multiple and often

conflicting needs of a performance management system. This can highlight areas of vulnerability of

your appraisal process.

Employee need Line Manager need HR need Business Leader need

To make sure that I’m supported and thought of well by those in control and of influence

To find out/recap on what the employee sees as their future

To identify those with high potential

To know that everyone is following corporate goals and strategy

To identify a future in this organisation – promotion, training etc.

To identify performance blockers and work process issues

To be able to plan for future workforce needs

To ensure that the workforce is correctly sized and of the right mix of skills to meet corporate goals

To raise issues with work, processes, rewards and relationships and have them acknowledged

To plan work and priorities for the next period

To inform essential training and development provision

To gain structured and unstructured feedback from the workforce on their important issues

To participate in goal and target setting

To identify potential training and development needs and plan their action

To ensure correct specification of roles and personal characteristics to improve other HR practices such as recruitment

To communicate current priorities to those who are at the sharp end

To gain some clarity and direction on what it is that I need to deliver

To find out/recap on personal situations and other outside influences that might affect performance and motivation

To ensure that we have the people management processes we need in order to maintain our IIP accreditation

To improve overall capacity and capability

To understand how the work that I do fits in with the bigger picture

To help me deal with under or poor performance

To ensure we meet compliance/ regulatory or legal requirements

To ensure our managers are doing what they need to do

To get some feedback – I want to know what I’m good at and what I could do better!

To help me develop the capability of my team so I can delegate work effectively to them

To help provide evidence to support cases of dismissal, poor performance etc.

To enable the business to get the most out of its workforce

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To know that the work I do is valued by my managers and makes a positive contribution to the team and organisation

To help me meet my own objectives

To ensure line managers fulfil the requirements of their roles with regard to people management, allowing HR to focus on strategic interventions

To minimise the costs associated with errors, omissions and poor performance

Table 2 – Competing Demands on a Performance Appraisal Process

In addition to these sometimes conflicting needs, it seems that there are several key challenges that

organisations face when deploying a performance appraisal process.

• Embedding it as an on-going ‘process’ rather than a one-off event; new priorities, competitor

activity, strategic shifts and market changes mean that role demands are rarely static. An annual

one-hour discussion is not sufficient as a ‘performance management process’. To get value from

and engagement in performance management, feedback, conversations and reviews need to be

frequent and on-going. The formal ‘appraisal’ at the end of the year should hold no surprises; it

should just be a summary of what has been covered during the year, with perhaps a focus on

forthcoming objectives and development plans.

• Monitoring the process and keeping it on track; Managers need to be able to see at a glance

what has been updated and what is overdue so that remedial action can be taken and HR

Administration can issue specific targeted reminders.

• Accessing and recording relevant information; Business and Line Managers, HR and Talent

Managers and employees alike need to be able to access their goals and their performance

against these goals easily, and be able to record relevant events as they happen.

• Deploying a performance appraisal system which allows flexibility and customisation; A

‘one-size fits all’ approach does not work. You should look for a performance appraisal tool which

can grow with you as your talent strategy becomes more sophisticated and adapt as your

business changes.

• Engaging both line managers and employees in the process; many people see performance

appraisal as a tick box exercise, a piece of HR bureaucracy that adds little or no value to the

business and simply takes valuable time away from the ‘day job’. People need to understand the

benefits that a good, business-focused, flexible and culturally appropriate performance

management process can bring to them as individuals and to the organisation. Addressing the

cultural issues that prevent people from engaging in performance management, ensuring that the

links between performance management and career development, improved performance,

business strategy, effective management practice is actually even harder than designing the

‘perfect’ system, and for this reason many organisations pay far less attention to the cultural

blockers and skills gaps than they do to developing their performance appraisal process.

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Overcoming the challenges Head Light’s Talent Performance® system has been created to overcome these challenges as it:

• Supports on-going review rather than a one-off annual performance meeting

The system enables you to carry out interim, ‘snap shots’ throughout the year which encourages

performance review to be at the core of the business; managers can check on progress and

assess likelihood of objectives being met.

• Encourages gathering and recording progress as it happens via a Performance Journal

Rather than relying on memory and recollection when it comes to the performance appraisal

meeting.

• Provides an holistic view of the organisation

The system provides a consolidated view of performance by enabling you to look at low or

overdue goal alignment, performance rating anomalies, and consolidated training and

development needs.

• Monitors the process of performance

Dashboards and reminders help to keep the process on-track.

• Records relevant information

Using Talent®, stimulates a feedback-friendly performance culture as it is straightforward to get

feedback from anyone at any time, and also allows for team objectives to be created and the

team to them collaborate and stay up-to-date on the progress of these shared objectives.

• Aligns performance objectives of the individual to those of the business

Each person understands the part they play in the achievement of the business strategy, and

links the performance assessment with the competencies identified in your competency-based

role description.

• Pulls together development goals from various sources

When using a 360 degree feedback review or an identified skills gap, Talent® will bring them

together in one place to be monitored.

• Links with career plans of the individual and succession plans of the organisation

• Allows for flexibility and customisation

The process itself can change over time or be adapted to meet the needs of your current talent

management strategy.

Improving the quality of performance conversations Having a flexible, easily accessible and user friendly system is, of course, only part of the picture.

As we said above, most organisations spend a great deal of time designing forms, rating scales and

performance management cycles but far less time addressing the attitudinal, skill and cultural barriers

that prevent performance management from gaining real traction and impact on the business.

Alongside your ‘process’, you should also be thinking about the quality of the conversations that happen

around performance. Every organisation is different, and it depends on what is going to work within

your organisation, but here are some areas that you could consider as part of your performance

management strategy which could lead to better quality of performance conversations.

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360 degree feedback

If you are not already using 360 degree feedback, the alignment of your performance appraisal process

with the talent management strategy is a good opportunity to consider it. Used alongside performance

appraisal, a 360 degree review can provide a much more rounded view of an individual’s performance

and capability than the traditional 180 degree approach and can lead to really enlightening

conversations; for the individual and the line manager. If you select the right 360 degree feedback

instrument and ensure that people have in-depth feedback discussions, it can also be developmental in

itself, or at least provide the basis for a focused personal development plan.

When introducing a 360 degree feedback process gradually, it is important to think about which groups

it will be made available to first. Getting the leadership team to set the example can be a quick win and

helps to send out the right message regarding openness, honesty and receptiveness to feedback. If

you start with the top team, ensure clear messages are sent out to the organisation about how leaders

are using their feedback and what changes they are making in response.

Role model from the top

As we have said above, think carefully about where you are going to start and who needs to be

engaged in any attempts to enhance the performance management process. Do you have ‘champions’

at senior levels, or role models who are known to have really good performance conversations with their

direct reports? It is very difficult to get the rest of the organisation to follow if senior management are

not leading by example.

Personal Management Interviews

In a recent book, Kim Cameron (2008) cites the implementation of Personal Management Interview

programmes as a means of increasing clarity, ownership and accountability and a way of embedding

the values and increasing individual understanding of the organisational culture. According to Cameron

the only way that this relationship can be developed, improved, and nurtured is through devoting time

and energy to it. The Personal Management Interview is a way to ensure that managers devote enough

time to their direct reports and to ensuring a good two-way flow of communication. They are low-cost

can help to engage and retain key people.

Train managers – and staff – to have good conversations

Addressing skills gaps is a key step in improving the impact of any performance management process;

appraisals often fail to have the desired impact because managers – understandably – find it difficult to

give effective, honest and constructive feedback and having those ‘courageous conversations’ is

something that most people do not enjoy.

Developing in-house, culturally-appropriate workshops which can help line managers build their self-

awareness, explore the difficulties around performance management and give them some tools and

frameworks to help them hold those critical conversations can reap benefits. It is also worth considering

offering training or support to individuals to develop their skills in constructive challenge, managing

upwards and critically evaluating their own performance can increase the frequency of important

conversations.

Using approaches such as these can significantly increase the utility, impact and flexibility of

performance management processes; ensuring individuals are fully engaged in the process, that

development plans are recorded and followed up and that performance appraisal isn’t just a yearly ‘tick

box exercise’.

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Working with the framework in a talent management system Once you have a framework in place, it needs to be able to ‘speak’ to all of your talent management

processes, and this can be a significant challenge. Investing in integrated talent management software

(such as Head Light’s Talent® suite) can reduce the amount of duplication and rework required to

integrate your competency framework into areas such as performance appraisal, 360, development

planning and succession planning.

Below are two examples of skills or competencies and how they are represented within the

Talent® software.

In this example above, the competency has been described at five levels – ‘Level 0’ to ‘Level 4’ – and a

level with contra-indicators, with a brief description of what each level means and how the skill or

behaviour would manifest itself. It shows the Development Options (e.g. the training, learning &

development options or opportunities which exist within the organisation) which have been linked to the

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competencies, so individuals can access these and transfer them to personal development plans if a

360 or performance appraisal reveals a development need in a particular area.

An alternative example, which has a greater focus on behaviours than the previous example, is given

below.

In this example, it shows how a competency and its requisite indicators would be represented within

Talent 360®, Head Light’s 360-degree feedback tool.

Example 4: Competencies in Talent 360®

Taking the example of ‘Decision Making’, above, these are some possible behavioural indicators for

this competency:

Example 5: 360 degree Feedback Questions

In our Talent® software, these frameworks would be combined into a role profile for the purposes of

assessment for processes such as performance management, development and competency-based

interviewing.

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With some scenario planning that includes future workforce requirements, you are able to build a picture

of the overall sets of skills required by the business in the future, which is an essential part of talent

management.

We shall be looking at the identification of high potential in Part Three of this White Paper, but you could

also consider developing a model which defines the early indicators of superior performance. What do

people do in their early career that signals potential for a senior leadership role? A framework that has

these forward-looking elements therefore becomes useful in talent management processes such as

succession planning.

Coming up We have seen how important the competency framework is to an organisation which wishes to invest in

the development of its talent. This framework is best developed taking into account the values of the

organisation and ensuring they are incorporated. Once validated the competency framework can inform

the core talent management processes adopted by the organisation; those of recruitment, assessment

for promotion and development and performance management.

In Part Three, we will look to explore some of the more advanced talent management practices

including succession planning, identifying high potential, engaging your people and career mapping.

References and further reading Cameron, K. (2008). Positive Leadership. Berrett-Koehler Publishers, Inc. San Francisco.

The Chartered Institute of Personnel and Development. Annual Survey Report 2009. Recruitment,

Retention and Turnover.

Coens,T. and Jenkins, M. (2002). Abolishing Performance Appraisals: Why they backfire and what to do

instead. Berrett Koehler.

Covey, S. (1990). The Seven Habits of Highly Effective People. Simon & Schuster Ltd.

Dulewicz, V. and Higgs, M. (2000). Emotional Intelligence: a Review and Evaluation Study. Journal of

Management Psychology 15(4): 241-72.

Huselid, M. and Becker, B. (1995). High Performance Work Systems and Organisational Performance.

Paper presented at the 1995 Academy of Management annual conference, Vancouver, B. C.

McCall, M.W. Jr, Spreitzer, G. and Mahoney, J. (1994). Identifying Leadership Potential in Future

International Executives; a Learning Resource Guide. Lexington MA: International Consortium for

Executive Development Research.

Spencer, L.M. and Spencer, S.M. (1993). Competence at Work. John Wiley & Sons. New York.

Verschoor, C. (1998). A Study of the Link Between a Corporation’s Financial Performance and Its

Commitment to Ethics. Journal of Business Ethics. Vol. 17, No.13.

Verschoor, C. (2003). Ethical corporations are still more profitable. Strategic Finance.

Warren, C. (2006). Curtain Call. People Management. Vol 12, No 6, 23 March. P24-29.

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Next steps If you would like to take a closer look at developing your Talent Management Strategy, please get in

touch.

About Head Light Head Light is an award-winning talent management software and consulting firm that works with clients

to define and implement impactful talent management strategies.

Talent Cloud® is our cloud-based portfolio of integrated talent management software tools designed for

those who expect the maximum return from talent management processes. Our training and consulting

services uniquely complement our breakthrough software that engages employees, managers and

senior leaders in the selection, development and progression of people in their businesses.

Companies in the FTSE 350, public sector, large and small, from retailers to high tech innovators

have all benefitted from our tools, techniques and expertise. Founded in 2004, we are headquartered

in the UK.

Head Light has attained the ISO27001 standard for Information Security.

Certificate No 217613.

How do I…

transition to Continuous Performance Management

How do I…

introduce robust Succession Planning

How do I...

spot High Potentials and Future Leaders

How do I…

drive Engagement through Career Conversations and Development

How do I…

embed new values and improve culture

How do I…

conduct Skills Assessments and a Gap Analysis

E: [email protected] W: www.head-light.co.uk

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Developing your Talent Management strategy – Part Two

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