Evaluating Performance Evaluations - CFO Careers - CFO.com

Evaluating Performance Evaluations - CFO Careers - CFO.com: "Evaluating Performance Evaluations
Employee evaluations that extend beyond the end-of-year ''to-do'' list improve performance.
Lisa Yoon, CFO.com
December 18, 2002
'It's the most wonderful time of the year.' Right?
Both lovers and haters of that ubiquitous holiday carol will agree on one thing: the song's title is definitely not referring to performance-review time. But while the process isn't a typical perennial favorite of employees, an upcoming study from Mercer Human Resource Consulting suggests that many employers are equally frustrated with the task.
advertisement In the consultancy's Effective Performance Management Practices Survey, in which more than 300 large North American companies assess their performance-measurement systems, one-third of the participants say their system is either completely (one percent), or to a great extent (33 percent), effective in achieving the company's desired results. About half (48 percent) claim their system is effective to some extent.
The rest—almost a fifth of those surveyed— assert that their system is only a bit effective (15 percent) or not effective at all (three percent).
What exactly is the problem? According to the study's findings, while company management is great at critiquing employees' performance, they are not as adept at improving the evaluation system.


Based on the survey results, it appears many managers merely go through the performance management motions as a routine—an annual event. Consider that more than three-quarters (78 percent) of workers surveyed attest that their managers routinely conduct annual performance reviews and communicate performance feedback and ratings. Yet only one-quarter (26 percent) say managers provide ongoing and constructive feedback and coaching.
That's not good enough according to employees want to know how to do better. Asked which single part of the performance-management system they would most like to improve, 25 percent cited performance planning. Another 14 percent cited ongoing feedback and development. Other priorities for change include leadership commitment and management accountability (11 percent), consistency between raters (11 percent), training and communication (9 percent), and automation (8 percent).
"Performance management should be an ongoing process, not a one-time event," says Colleen O'Neill, who leads Mercer's U.S. talent-management practice. "Companies are missing a tremendous opportunity to enhance both their employees' performance and their business results if they view performance management only as the annual performance review."
Of the companies in the survey that appeared to have the most successful review programs, two things stand out. One: engaged executives. "Performance management is often viewed as something 'the top tells the middle to do to the bottom,'" says O'Neill. In fact, direct engagement by top brass is critical to success, say Mercer officials.
The other key factor in polishing performance management is the ability to differentiate performance among workers. Sound obvious? Careful: Before depositing that recommendation in the circular file, ask yourself how many employees came out with low ratings during the last round of reviews. "Good performance management systems equip managers to differentiate reliably between strong, average, and weak performers," O'Neill notes. "Unless your business results are simply off the charts, the majority of your people should not be rated '4' or '5' on a scale of 1 to 5."
It seems the key to devising an effective performance management program is serious thought about a company's specific needs. Translation: don't run to the nearest "best practice" report and implement whatever plan your model company uses.
"Many organizations go about [improving their performance-management systems] the wrong way," explains O'Neill. "They focus only on revising the appraisal form or copying the rating scheme used by a 'best practice' company. In truth, the system that works for one organization may not produce the same value in another." After all, she says the goal is to "produce an edge that competitors will find difficult to replicate."
Another new survey, from PricewaterhouseCoopers LLP, reports that aligning human-resources strategies with business strategies ends up in higher profits.
Specifically, the study found that companies with a documented HR strategy squeeze out 35 percent more revenue per employee than in companies without a similar HR strategy spelled out. Plus, say PwC officials, documented HR strategies are linked to more effective reward systems, better performance management systems, and reduced absenteeism.
It's clear that more companies are finding the link between people management and the bottom line. One sure sign: In this year's PwC study, 43 percent of employers said they track employee satisfaction—up from 37 percent in 2000 survey.

Forced Ranking: Making Performance Management Work - HBS Working Knowledge

Forced Ranking: Making Performance Management Work - HBS Working Knowledge: "Forced Ranking: Making Performance Management Work
11/14/2005
Forced ranking may be the electrified third rail of human resource management. In an excerpt from a new book, author Dick Grote makes the case for the controversial employee-evaluation system—at least on an interim basis.
by Dick Grote
Editor's note: Forced ranking systems direct managers to evaluate their employees' performance against other employees, rather than the more common (and often grade inflated) measure of evaluating performance against pre-determined standards. The result of such a process is often brutally blunt: The top 20 percent of performers are amply rewarded, and the bottom 10 percent are shown the door.
Supporters such as former GE Chairman Jack Welch argue that forced ranking creates a true meritocracy, while critics charge that a 'rank and yank' approach is unfair to people performing at an acceptable level and creates an unhealthy cult-of-star culture.
The new book Forced Ranking: Making Performance Management Work agrees that the procedure is not right for all companies, nor something that should be done every year. But in the right company at the right time, says author Dick Grote, forced ranking creates a more productive workforce where top talent is appreciated, rewarded, and retained. This excerpt lays out the business case for forced ranking.
The business case for forced ranking
Forced ranking is the antidote to the problems of inflated rating and the failure to differentiate that many organizations have installed to help bring the truth into the performance management process.
By implementing a forced ranking procedure, organizations guarantee that managers will differentiate talent. While conventional performance appraisal systems may allow managers to inflate ratings and award Superior ratings to all, a forced ranking system ensures that distribution requirements will be met. Assuming that the system is wisely constructed and effectively executed, a forced ranking system can provide information that conventional performance appraisal systems can't.
But just ensuring differentiation, while valuable in itself, isn't the whole reason companies have gone to using forced ranking systems. Creating a forced ranking system forces a company to articulate the criteria that are required for success in the organization. GE, for example, has identified its four Es: the set of criteria it uses to rank its managers and executives: high energy level, the ability to energize others around common goals, the edge to make tough yes/no decisions, and the ability to consistently execute and deliver on promises. These criteria were determined over a period of several years and were the result of serious deliberation. Other companies have settled on different criteria. Some have used nothing more than "Good results, good behavior." Whatever the criteria the organization decides on, the deliberations that senior managers engage in in determining these criteria help them to define and understand what they believe genuinely is important for success in the organization. The discussion of criteria often sparks significant, even boisterous, arguments about exactly what the measures and factors should be. There is value in this process even if no further action is taken. And simply knowing the criteria that senior executives use to assess talent increases the probability that organization members will alter their behavior in order to demonstrate more of the attributes that they now know will lead to success.
By implementing a forced ranking procedure, organizations guarantee that managers will differentiate talent.
Another important business outcome that is often unrecognized is forced ranking's ability to provide the organization with useful data on the ability of managers to spot and champion talent. In one company I worked with, one of its criteria for its forced ranking system was the ability to make tough decisions. In the course of briefing the senior executive team, I pointed out that one of the best sources of data would be the way that the vice presidents, their direct reports, went about making the forced ranking decisions during the sessions where they would all be together. Who is able to come up with telling examples of a subordinate's strengths and weaknesses? How well do various managers really understand the major strengths and development needs of their subordinates? A forced ranking procedure forces managers to think in far greater depth about the quality of talent in their unit than conventional performance appraisal systems typically require, and their ability to describe and verbalize their assessments provides a good indicator of a critical aspect of their leadership ability.
Another important reason for proceeding with a forced ranking procedure flows from the frustrations surrounding the conventional performance appraisal systems in many organizations, since forced ranking can provide an independent verification of performance appraisal data. If there are significant variations in the talent data provided by the performance appraisal system and the data provided by the forced ranking process, that conflict is worth delving in to. In addition, forced ranking can provide something of great value that even the best performance appraisal systems can't—accurate cross-department comparisons. As larger groups are evaluated, and with criteria that can be applied equally across a variety of jobs, a forced ranking process may permit more accurate cross-department comparisons.
The business environment today is making the rationale for developing forced ranking procedures more important than it has been for the past few years. After a several-year period of slower growth marked by major layoffs in several sectors of the economy, the "war for talent" seems to be heating up again. The impetus for identifying and actively acting to retain top talent is more important in an economy that now allows that top talent greater employment options than it has had for several years.
Can forced ranking actually improve the quality of the workforce?Finally, the results of a major research project published in the First Quarter 2005 issue of the academic journal Personnel Psychology appear to answer in the affirmative the question of whether a forced ranking process will actually improve the overall quality of a workforce. An objection that has always been raised to forced ranking is that one of its fundamental principles is flawed—it is simply not possible to continually improve the overall potential of a workforce by systematically removing the bottom 10 percent every year and replacing them with better employees from the available applicant pool.
Professor Steven E. Scullen and his colleagues constructed a complex and sophisticated mathematical simulation of a multicompany, multiyear forced ranking process that they labeled "FDRS." FDRS is their acronym for a forced ranking system that they referred to as a "forced distribution rating system." For clarity's sake, I will use the term forced ranking for their FDRS acronym in quoting from their study.
In their model, one hundred companies of one hundred employees each over a thirty-year period identified the bottom 10 percent of their workforce every year, fired them, and then replaced them with the best available candidates from the applicant pool. In their simulation they controlled for the impact of voluntary turnover, the quality of the applicant pool, and the validity and reliability of the ranking assessments that were made. The basic question they asked was this: "Is it reasonable to expect that an organization would be able to improve the performance potential of its workforce by firing the workers judged to be performing most poorly and replacing them with its most promising applicants? If so, how much gain might be expected, and how quickly might that gain be achieved?"1
Their answer: "Results suggest that a forced ranking system could lead to noticeable improvement in workforce potential, that most of the improvement should be expected to occur over the first several years, and that improvement is largely a function of the percentage of workers to be fired and the level of voluntary turnover."2 They did not mince words in stating that the basic hypothesis underlying the forced ranking, rank-and-yank methodology is solid: "Results showed that a forced ranking system can improve workforce potential, in the sense that, on average, lower-potential workers can be identified and replaced by workers with higher potential."3
I find that most organizations are better served by implementing a forced ranking system as a short-term initiative.
They discovered that firing more poor performers provided greater benefit to the organization than releasing a smaller number: "In each case, however, results for 10 percent fired were superior to those for 5 percent fired."4 While they examined the relative importance of improving selection procedures and enhancing the quality of applicant pools in increasing the overall effectiveness of the workforce, they discovered that the best results were produced by getting rid of poorer performers: "It is interesting, however, that firing poor (i.e., low-ranked) performers was the quickest route to improvement, and that reducing voluntary turnover soon became important as well."5
Many critics of forced ranking have acknowledged that while the procedure may in fact improve the overall quality of a company's workforce, it may do so at a steep price, producing adverse consequences in such areas as employee morale, teamwork and collaboration, the unwillingness of applicants to sign on with an employer who uses a forced ranking process, and shareholder perceptions. In their discussion of their findings, the researchers examined the possible effects of implementing a forced ranking procedure on all of these areas. They found that the potential problems were in every case balanced by equally compelling benefits. For example, while they acknowledged that there could be a detrimental effect on morale if retained employees saw no compelling differences between employees who were terminated and those who were not, or if unjust treatment of coworkers was observed, they also noted, "It is not clear, however, that employees in general would see a forced ranking system in that negative light. In fact, many employees might applaud the organization's decision to eliminate underperformers."6 Concerning teamwork, they commented, "As with employee morale, however, it could be argued that the effects on teamwork and collaboration might actually be positive."7
Discussing the effects of installing a forced ranking system on the perceptions of the labor market, they noted that job seekers develop beliefs about an organization's culture while they are seeking employment. If an employment candidate becomes aware that an employer uses a forced ranking system and feels that the culture might therefore be too stressful or risky, the applicant might eliminate that company from consideration, causing the possible loss of some high-potential applicants. "It is certainly possible, however, that other high-quality applicants would see such a system as one where their contributions would be recognized and rewarded. These people would be eager to work in this type of environment. Thus, it is possible that a forced ranking system would improve the overall quality of an organization's applicant pools."8
Finally, they considered the impact on shareholder perceptions. While acknowledging that shareholders might have reservations about the company's use of a forced ranking system, because of potential lawsuits or other negative consequences, "investors might see the implementation of a forced ranking system as a clear signal that management is committed to accountability and to operating at an efficient staffing level. Perceptions of this sort should have a positive effect on stock prices."9
Finally, for many years I have argued that for most companies, forced ranking systems should be used for only a few years and then, once the obvious and immediate benefits have been achieved, replaced with other talent management initiatives. While some companies have been successful in using their forced ranking system for decades, I find that most organizations are better served by implementing a forced ranking system as a short-term initiative. Scullen and his fellow researchers confirm that advice. Early in their article they lay out clearly the basic problem of using forced ranking on an ongoing basis: "Despite the allure of having a continually improving workforce, we argue that each time a company improves its workforce by replacing an employee with a new hire, it becomes more difficult to do so again. That is, the better the workforce is, the more difficult it must be to hire applicants who are superior to the current employees who would be fired."10 Their mathematical simulation demonstrated that the greatest benefits came in the first 3.5 to 4.5 years after initiating a forced ranking system. They discovered that organizations got their best results immediately, in the first few years after implementing a forced ranking system: "The other outcome variable of interest is the rate at which workforce potential improved after the implementation of the forced ranking system. It is clear . . . that the bulk of the improvement in all scenarios was achieved during the first several years."11 Their summary: "Results suggest that a forced ranking system of the type we simulated could improve the performance potential of the typical organization's workforce and that the great majority of improvement should be expected to occur during the first several years."12

Talent Management: Ageing workforce: record takers - 10/10/2006 - Personnel Today

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Talent Management: Ageing workforce: record takers
10 October 2006 08:00


The workforce is getting older and organisations face a huge leak of valuable knowledge. How can HR help to stem the tide, asks Stephanie Sparrow?
Japanese factory worker Katsuya Hyodo has become a symbol of his time. The 72- year-old maker of automotive cylinders hit a nerve with businesses worldwide when he was profiled in the newspaper USA Today. Hyodo has spent his spare time transcribing 30 years' worth of manufacturing knowledge onto a home computer to create a dossier, which he hopes to hand over to his successors.
Hyodo's story shows that, as workforce demographics change, retaining knowledge has become one of the key issues in talent management.
On one hand, younger people now tend to follow 'portfolio careers', where they take between seven and nine jobs within their lifetime. On the other, some sectors face a demographic timebomb, as huge portions of their workforce approach retirement age. Both trends mean that a flow of valuable knowledge is escaping from organisations.
"We need to look at how we communicate and how we capture experience, and think more flexibly about working practices and how a job can be adapted to older workers," says Peter Cheese, managing partner of human performance at Accenture.
The forthcoming age discrimination legislation will also open the doors for people to stay in employment longer, but this does not mean they will stay in the same career.
"As people realise that they will spend a greater proportion of their life span at work, they are also thinking that they might want to try out other careers," says Isabel McGarvie, partner in HR services at professional services firm PricewaterhouseCoopers. Many workers in their mid-40s and 50s are returning to study, she adds.
Skills gaps
Employers are also struggling to hold on to valuable older workers thanks to the closure of many final salary pension schemes. At the same time, increasingly nervous younger people who are still in work are protecting their market value by keeping knowledge to themselves. "The focus is on being lean and mean, but not on assessing the effects of their current skills profile on business performance," says McGarvie.
But this could prove costly. A recent survey by consulting firm Accenture found that 60% of employers felt that gaps in skills or experience in their senior team were driving them to recruit externally to replace that knowledge.
Cheese advocates better deployment of people through work shadowing, mentoring and coaching and better use of technology, rather than expensive hiring policies.
Accenture offers clients an internet-based suite of tools that guides a team through a knowledge capture and transfer. It records experienced employees, known as 'instructors', as they execute key tasks (closing a client's financial books, for example), and these recorded sessions are then stored in a knowledge repository, which employees can access through an internet portal.
Managers can check the extent to which instructors have completed their activities and how much knowledge has been assimilated by the learners.
But is simply storing and distributing knowledge enough?
Christine van Winklen, director of the knowledge management forum at Henley Management College, advises organisations to review all the methods of creating and dispersing learning that they have at their disposal.
"This should include learning agendas, knowledge management, corporate universities and learning," she says.
Van Winklen urges organisations to create 'communities of practice', where groups of people come together to share and learn from one another face to face and virtually.
By doing this, says van Winklen, organisations can create emotional buy-in for retaining knowledge, since it is shared within a community, based on relationships with others, rather than direct transactions.
Coaching culture
Expensive IT systems will not solve the problem, says Akber Pandor, director of learning and development at KPMG. Formally recording someone's knowledge can stifle it and take it out of context, he says. "The best way to encourage young people and pass on the knowledge of older workers is to create a coaching culture," he says.
KPMG takes on 850 graduates a year, who benefit from on-the-job coaching as they work on their first client projects.
"When the job is finished, it is reviewed by a senior person. This ensures there is an element of coaching. Then the graduate who is reviewed acts as a reviewer for the following year's intake," says Pandor. In addition, KPMG's line managers are expected to act as coaches to their staff and senior people receive coaching and debriefing. Constant reviews keep knowledge alive and relevant - it is used, rather than stored.
Keeping knowledge alive is key. While not every organisation has a workforce with the tenacity of Katsuya Hyodo to write everything down, those that do not keep some record of corporate know-how could be faced with draining resources in years to come. M
How to... Retain knowledge
Peter Hall, knowledge management consultant and former chief knowledge officer of telecommunications company Orange, offers his advice on finding and keeping knowledge:
Look harder at who is being made aware of redundancy options. Instead of tempting the more experienced people (who stand to gain more from financial packages) to leave, consider offering them a work option that appeals to them.
Make opportunities for conversations to happen by creating shared tasks. The aim should be that tacit knowledge, which is in people's heads, becomes explicit (in other words, shared) knowledge.
Map an employee life-cycle that joins up knowledge management and HR processes right from induction, through developing expertise, through to retirement.
Encourage line managers to create collaborative, not competitive environments.
Take a company-wide perspective when dealing with promotions or recruitment. Have fewer conversations behind closed doors.
Case study: Defence procurement agency
The Defence Procurement Agency (DPA) is anticipating the ramifications of demographic changes by accelerating its knowledge management projects.
For the past 15 years, knowledge management has been branded internally at the DPA as Learning from Experience, and a dedicated department runs websites and databases on how different aspects of the organisation work.
"In the past 18 months, we have been working even harder at being a learning organisation, and are joining up with HR to look at where the skills are and how they could be lost as the workforce gets older," says Lucy Miller, Learning from Experience manager at the DPA.
"HR interviews people to extract tacit knowledge regarding the intricacies of different posts," she says. "It will also conduct exit interviews when relevant. Feeding this information to us means that the organisation will then be in a position to back fill rather than watch the knowledge haemorrhage."
Miller sees a broader role for knowledge management in succession planning. "This is not just about people retiring," she says. "It's about understanding that a line manager needs to
have a process that feeds back the information that they had. It's about getting people to ask questions about things they deal with on a daily basis."
The situation at the DPA goes against that of much of the private sector. As the private sector struggles with 'portfolio career' types who may only stay with their employer for a couple of years, the DPA has low attrition rates.
"People tend to be faithful to the Civil Service," says Miller. "It's a career organisation." But while the private sector tends to bring back retirees on a consultancy basis, this is less common in the Civil Service. "This means we need to plug the gaps before they happen," she concludes.

Talent management: Open up and prosper with diversity - 10/10/2006 - Personnel Today

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Talent management: Open up and prosper with diversity
10 October 2006 08:00


In the race to attract and retain top talent, employers must ensure they're inclusive, reports Margaret Kubicek.
For too many organisations, the issues of diversity and talent management are mutually exclusive, according to diversity consultant Anthony Wilkes.
'They will say, 'we're doing all we can', but while 10% of staff might be from black and minority ethnic (BME) groups, their fast-track talent identification programme will have fewer than 2% BME employees,' says Wilkes."
Wilkes, managing director of Crystal Education & Training Consultants, says one of the reasons diversity programmes are not delivering is because they have been designed by those in the majority, rather than minorities.
"You have to look at the process and then the people delivering the process and making the decisions about the process," he says. "Make sure they actually understand how subjective their decisions often are."
Employers are plunging millions of pounds into talent management initiatives such as leadership academies, but behind all the fanfare, just how inclusive are they?
In practice
Of those organisations serious about talent management, virtually all state diversity as an aim of their programmes, according to diversity specialist Binna Kandola, senior partner at occupational psychology firm Pearn Kandola. But while these schemes look great on paper, it is in the practice where it starts to fall down.
Specifically, says Kandola, employers too often fail to look at the details: how individuals are recruited into the organisation and then selected for progression, how objective and fair are the criteria for entry onto talent management programmes, and how are particular groups monitored as they progress - or not - up the organisational ladder and nurtured along the way.
To get over this, organisations need to do a diversity and equality health check on all talent management activities, suggests Wilkes. This should penetrate right down to the detail of why certain qualifications or years of experience are specified for certain posts, on the basis that to do so could be inadvertently discriminatory to certain groups (on age, for example).
Nigel Paine, head of training development strategy for the BBC, believes getting diversity right starts at recruitment. "It requires going beyond the conventional places and trying to open up new pipelines: reaching out, looking at advertising in different publications and at different kinds of events, attending fairs and places where we can get our message over about attracting ethnic minorities."
The basic question employers need to be asking is: 'Where are the qualified people that don't look at us?', according to Simma Lieberman, a US-based diversity strategy consultant. "Employers need to do some research, and with the internet, there's no excuse," she says.
Diversity champions
The BBC has specific corporate initiatives in place that support the diversity agenda in relation to talent management. There are diversity champions in every division, for example. There is also a black and Asian forum for junior to middle management employees and a dedicated diversity unit. The latter sets strategic direction and identifies training needs, so has real power in the organisation.
The key is to make diversity initiatives an integral part of talent management, rather than an add-on that will be seen by many employees as a box-ticking exercise.
The BBC's approach to diversity is "essentially self-regulating", says Paine, with the aim to raise awareness among managers and achieve buy-in for it that way.
Similarly, financial services firm ING Wholesale Banking does not rely on "overt diversity criteria" to identify talent. "Our approach has been to make managers aware of their diversity obligations up front so that their HR decisions, of which talent management is one, are inclusive," says HR leadership and development manager Penny Thompson.
Furthermore, formal audits and outright positive discrimination could land employers in hot water. Positive discrimination is unlawful, although employers can apply for an exemption to recruit from a specific group of people on the grounds of a specific business need.
"We've never taken the radical step of ensuring diverse shortlists," says Paine. However, once particular groups are in the workforce, the BBC aims to ensure there is a balance of representation on its programmes. "If you look at who is on the screen, you will see there has been a conscious effort that the faces are not just white."
Setting targets
In some sectors or organisations, targeted shortlists do work. Setting targets for minority representation on shortlists, as long as those taken forward for interview have met the personnel specification, can be an effective means of diversifying your workforce, says Wilkes.
"Targets are very powerful, but they are also highly contentious and, unless used sensitively, they will backfire," says Wilkes. "It must be expert-driven and thought through holistically."
The drawbacks of targeting certain groups are too great, says Kandola. "It can have a negative impact on those targeted. They suffer loss of confidence and self-esteem because they are seen as tokens," he says.
It is better to look at what the process is for new recruits entering the talent pipeline. "How fair is it? What criteria are being used? Are they objective?" says Kandola. For example, if an organisation runs a leadership scheme, it is crucial to guard against criteria that is - however unintentionally - gender, race or age-specific.
So which employers are getting it right? Some argue that the public sector has made greater strides on diversity - thanks to the political and legislative accountability affecting its employers - while lagging behind their private sector counterparts on talent management.
"In the private sector, accountability is much narrower, but if the public sector fails, then the legislative framework kicks in and funding could be removed," says Wilkes.
Regardless of where they work, line managers play a pivotal role in nurturing talent, and it is critical they take an inclusive approach in keeping with the organisation's wider aims around diversity. The job for HR is to assess managers' own learning needs and provide them with appropriate diversity training and development.
Opening up your talent pipeline to new horizons can provide real payback, but only if managers across the organisation have the right level of support. m
A diversity task list
Embed diversity in the organisation's strategic talent management objectives.
Do a diversity health check on all talent management activities and programmes.
Ensure criteria to identify talent is fair and objective, without gender, age, religion or race bias.
Pursue different pipelines and pathways when recruiting.
Provide development to make line managers aware of their own biases and stereotypes, and ensure they are not reflected in talent identification and recruitment.
Monitor staff, and obtain data on how particular groups are feeling to ensure they have equal access to career opportunities.
Track particular ethnic and minority groups to gauge whether they are being nurtured and developed in their roles.
Foster informal networks for particular groups.
Opinion... Building the business case for diversity
The business case for diversity is clear. If we look at the markets in which we operate - not just in the UK but globally - our customers and suppliers are more diverse than ever before.
Some organisations treat diversity purely as a moral obligation or because they are complying with some sort of discrimination law. That is just ticking boxes, in my view. We need to recognise what a diverse workforce can bring to the party, and only then do we have a real business case.
Organisations need to stop focusing purely on headcount, and look at their 'brain count' - for example, if 50% of the world's brains are female, then 50% of your talent needs to be female.
The traditional talent pool is shrinking. If HR wants to make a real impact on business, it must take the lead on seeking out talent where it exists. We need to look more widely beyond the traditional pools and recruit from groups that we haven't tended to employ before, particularly at senior level.
It has never been so important to integrate diversity into your talent programme. UK businesses are now competing against global players such as India and China. If we are to exploit the opportunities the new market dynamics provide, we need to be able to understand our potential customers and suppliers in these countries, but the starting point is here in the UK right now.
The best leaders recognise this. When I worked as director of diversity and inclusion for Royal Mail, our chairman said he wanted more women and more minority groups at senior levels - not because of who they were but because of the benefits the diversity of talent could bring to that business.
It is not just about how you recruit, either. It is also about how you do business - your image, how you communicate with your customers and your suppliers, how you value people.
Technology moves fast but is only ever temporary. What makes a company successful is the innovation and new thinking that people bring - that's diversity.
Satya Kartara is the founder and managing director of BeInclusive, a diversity consultancy. Her previous roles include director of diversity and inclusion at Royal Mail, and head of diversity for Ford. She is also a member of the Personnel Today editorial advisory board.

Organisations do not invest in talent management programmes - 16/10/2006 - Personnel Today

Organisations do not invest in talent management programmes - 16/10/2006 - Personnel Today: "You are in: PersonnelToday.com > Latest News
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Organisations do not invest in talent management programmes
PersonnelToday.com16 October 2006 09:19This article first appeared in Personnel Today magazine. Subscribe online and save 20%.


Lack of buy-in from senior directors prevents many talent management initiatives from getting off the ground, according to research from technology consultancy Diagonal Consulting.
More than one third of the 100 HR directors who took part in the survey said that company bosses often put little value on HR projects, so it was incredibly hard to win their support.
Nine out of 10 organisations do not bother with a formal talent management scheme, while 69% rely on basic procedures such as appraisals or development plans. Only one in five carries out questionnaires on employee engagement.
Most HR directors (83%) also criticised business managers for failing to communicate properly – including information about major changes such as mergers and acquisitions, as well as talent management programmes or other HR initiatives.
Diagonal Consulting’s HR practice head, Jason Kiely, said: “Every project faces difficulty getting buy-in from the board, so it is crucial for the HR department to clearly show the benefits – for the company and for employees – of implementing a talent management system.”"

Link recruitment, development and business goals to add real value - 07/11/2006 - Personnel Today

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Link recruitment, development and business goals to add real value
07 November 2006 00:00


No-one within the HR community should have been surprised, this time last year, when the Interim Leitch Review of Skills suggested that the UK's managers were significantly under-qualified. But, given the level of national corporate investment in training and development programmes, it is a concern that the situation has been allowed to continue.
Surveys in the past year have indicated that our managers and leaders are ambitious and want to do well. Our own research suggests that individuals have an, as yet unsatiated, appetite for reaching their potential, but they believe their organisations are failing to help them reach their goals.
What appears to be missing is the link between understanding that achieving potential is important, and the provision of appropriate training and development to ensure talent does not go untapped. If this continues, it will affect organisational performance and individuals will move on, taking their skills and drive with them.
This gap has expanded because there is still far too much training for its own sake, or ad hoc programmes that are not tailored to the long-term goals of the organisation (remaining competitive in a fast-changing business environment) or the aspirations of individuals (acquiring skills so they can take on new responsibilities and challenges).
The problem comes down to what HR can do to align these individual concerns with those of the organisation.
The profession is certainly becoming accepted by other departments for the vital role it can play in strategic development - and rightly so. But, to really make an impact, the onus must be on HR to drive performance by providing organisations with structured development programmes that have tangible measures attached.
But even this is only part of the answer.
To have genuine impact, HR teams must begin the process earlier, ensuring that recruitment is linked to the organisational plan. It's too easy to recruit people with good skills because they fill an urgent vacancy. But what happens if those skills are already present in a team? What if the scope of the role is no longer right for the strategic goals? In simple terms, the skills gap within a business widens, motivation declines and the ability to achieve success diminishes.
Ask the majority of HR professionals and they will say that there is a need to provide practical help if individuals are to succeed. But our research suggests that managers see professional qualifications, networking and cross-functional working as most helpful for career development.
Regrettably, the same respondents believe they are held back by bureaucracy, having poor strategic direction and little in the way of relevant training. In other words, they feel their needs are misunderstood. Failing to address this will only lead to disquiet as managers are developed in areas they don't see as adding value to the business.
To help individuals achieve their potential, opportunities for personal and professional development must be found. If that means enlisting external support or building tailored programmes, it is essential that HR works with the business units, but takes control and creates an environment in which individuals can grow.
The ability to achieve potential is clearly at the forefront of both the individual's and the employer's thoughts. With only 20% of the UK's management community boasting a professional qualification, it should be a comfort to HR that managers are actively seeking ways to improve. If individuals and organisations are to prosper, this situation must be addressed.
By Jo Causon, director, marketing and corporate affairs, Chartered Management Institute

A little less conversation a little more action please: Leadership survey results - 07/11/2006 - Personnel Today

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A little less conversation a little more action please: Leadership survey results
07 November 2006 00:00


Our 360-Degree Appraisal of HR revealed what your senior leaders thought about you. But what do you make of them? Karen Dempsey reports.
The majority of business leaders are all talk, not enough action, and guilty of putting their own egos first"

Developing talent
The success or otherwise of leaders is not just down to the structure of the organisation or how much change it has been through. Much depends on the qualities and characteristics of the leaders themselves.
Nearly half (48%) rate their leaders as 'having the right stuff but needing development', and a third (30%) believe their leaders are 'OK and occasionally have a glimpse of talent'. Only 8% believe their leaders are 'fantastic and extremely talented', and a worrying 14% believe their leaders are 'devoid of any real leadership talent'. Perhaps unsurprisingly, this rises to 58% in companies that have had lacklustre performance in the past couple of years.
This is where HR has a huge part to play in focusing efforts on the areas that will make leaders much more effective. Leaders need to pay the most attention to their interpersonal and communication skills (say 60% of respondents), while more than half (51%) believe they need to work on developing a leadership approach that minimises their personal agendas and egos.
The number of leaders deemed to have huge egos is 72% in low-performing organisations (and 35% in high-performing ones). You could therefore draw the conclusion that bosses with a dose of humility are inclined to preside over more successful organisations.
Egos are notably more prominent among larger rather than smaller organisations - perhaps a surprising statistic, given the entrepreneurial, personality-driven style of smaller businesses. Fifty-nine per cent say personal agendas come first in large businesses (more than 10,000 employees) compared with 49% in smaller businesses (500 or fewer employees).
More than half (55%) want leaders to display the organisation's behaviour and values - signifying that, on a personal level, most employees want to be inspired by their leaders, and to trust that their bosses truly believe in what they're doing.
However, given these figures, in many organisations, it seems to be a case of 'do as I say, not as I do'. While one-third of employees in a high-performing organisations may feel empowered to make decisions and are given clear decisions and rules, only 2% of those in low-performing ones can say the same.
These findings are likely to give food for thought to HR professionals in charge of formulating or reviewing their next leadership development programmes. With focus in the right place, HR can help transform leaders and give them the skills to run winning organisations - no matter how much change they are going through.
As Ross concludes: "Values and behaviours are very much HR's problem. Rather than walk away from change, embrace it, and it could make your career."
How do you believe leaders could best develop to become more effective?
Develop interpersonal and communication skills - 60%
Personally display the organisation's behaviours and values - 55%
Lead in a way that minimises their personal agenda or ego - 51%
Develop their strategy and planning skills - 48%
Influence others to do the work rather than doing it themselves - 28%
Develop their industry knowledge and technical skills - 7%

HR needs to be wary of losing its role altogether - 17/10/2006 - Personnel Today

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HR needs to be wary of losing its role altogether
17 October 2006 00:00



With all the discussion about business partners and HR becoming more strategic, there are three things that strike me.
First, the fact that there is a need for the 'HR business partner' job title at all is rather confusing. Surely HR, by its very nature, is already a partner of the business, working with chief executives and other directors to help achieve the organisation's strategic goals through maximising the potential of its people?
Second, with the outsourcing of transactional duties and the devolution of responsibility to line managers, could you be doing yourselves out of a job?
And third, now that many of the bread-and-butter activities are carried out by a shared-services centre, are you suitably equipped to add the value that business partners promise?
The latter was one of the topics debated at last week's HR Directors Club workshop on talent management, which was sponsored by Diagonal Consulting. Graeme Martin and Martin Reddington, two leading thinkers in the HR field, issued a stark warning to HR professionals: if you don't get your act together, then you risk being colonised by other parts of the business that are moving into the people management arena (such as marketing or communications), and which understand that people are the real drivers behind the brand, service and reputation of an organisation. HR's future relevance, they added, will be dependent on practitioners becoming familiar with employer branding, corporate governance and reputation management.
This, of course, has implications for the training of HR professionals. If you're going to avoid parachuting in these skills from elsewhere, then there is a strong argument for teaching on HR courses to focus less on HR, and more on what really matters in business.
As Martin and Reddington put it, whether HR staff operate under the 'business partner' job title or not, if they don't understand business, they risk becoming dinosaurs.

Employers failing to keep top talent as increasing numbers of expats walk out after return to UK - 09/11/2006 - Personnel Today

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Employers failing to keep top talent as increasing numbers of expats walk out after return to UK
PersonnelToday.com09 November 2006 13:03This article first appeared in Personnel Today magazine. Subscribe online and save 20%.


Companies that send employees on international assignments are failing to capitalise on this investment and losing talented staff through inadequate arrangements for repatriation and professional development
A study of 3,450 expatriates - by professional services firm PricewaterhouseCoopers (PwC) and Cranfield School of Management - looked at return on investment in this area and found that, on average, 15% of international assignees (often an organisation's top performers) resigned within 12 months of completing their posting.
As the trend for international assignments increases, organisations are placing more emphasis on selection. On average, a third of new expatriates are in the top performance category as assessed by their company.
Surprisingly, the report finds no correlation between higher pay for expatriates and improved performance. In fact, the higher the pay, the longer assignments tend to last, with some employees happy to prolong an enhanced financial existence abroad, with little incentive to return.
Among the report's recommendations are that home country managers need to retain a stake in performance assessment, establish clear finish dates at the beginning of the assign"

Managing Your ''Greatest Asset'' - Human Capital - CFO.com

Managing Your ''Greatest Asset'' - Human Capital - CFO.com: "Human CapitalEmail Print Link to us A A A Text Size You are here: Home : Topics A-Z : Human Capital : ArticleManaging Your ''Greatest Asset''
Talent-management software can add consistency to compensation programs and light a fire under ''laggards'' in your workforce.
Lisa Yoon, CFO.com
March 22, 2006
'People are our greatest asset.' That truism is too warm and fuzzy for Paul Murray, chief financial officer of Proxicom, a developer and manager of Internet-based software. The consultants who make up the majority of Proxicom's workforce are what Murray calls 'billable resources' — and they're not billing hours, he notes, if they're 'wasting time on administrative tasks.'
Take performance reviews, which hadn't been conducted in the three years before Murray joined the Reston, Virginia-based company in 2004. The first efforts to resume them lacked any discernable system or organization — 'tons of Word documents floating around' is how Murray remembers it.
advertisement Last October, Proxicom turned to a Web-based solution of its own: talent management technology from SuccessFactors. The San Mateo, California-based company is one of a growing number — others include Halogen Software, Authoria, Taleo, and Recruitmax — that are introducing sophisticated talent-management software that's much more user-friendly than in years past. Indeed, technology consultancy Yankee Group expects the market for such products to grow by 20 percent this year alone.
The SuccessFactors product is based on a suite of seven modules. The performance-management module, for instance, automates reviews (no more Word documents) and offers a 'writing assistant' to help managers and employees choose appropriate "