Talent Management

Description
The PPT describes about Talent Management Strategies in India.

Introduction

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A study of 1355 practitioners in 27 European countries, conducted jointly by the Boston Consulting Group and the European Association for Personnel Management (EAPM), found talent management as atop priority for UK. HR practitioners. Cappelli and Harmori (2001) examine TM – related issues in Fortune 100 companies in the USA and highlight their career advancement trends, they further state that executives in 2001 got to the top faster than their 1980 counterparts and did so by holding fewer jobs along the way. As latest estimates show, India needs 3700 top executives over the next 2 years and due to such a shortage, there seems to be a talent vacuum where most companies are struggling, there fill their core positions.

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As latest estimates show, India needs 3700 top executives over the next 2 years and due to such a shortage, there seems to be a talent vacuum where most companies are struggling, there fill their core positions. Many Indian companies, both in the public and private sector, have been hailed for the premium they put on their human capital.

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Sullivan (2004) states that talent management ensures an organization have a continuous supply of highly productive individuals in the ‘right job at the right time’. It integrates the previously independent functions of recruiting, retention, workforce planning, employment branding, workforce analysis, orientation and internal redeployment into a seamless process. For Wwaston and Wyatt, it covers issues related to employment branding, workforce diversity, selecting staff, high-potential programmes, succession planning orientation / on boarding, retention, relocation, and manageing nonregular workers. Others like Hanscome (2004) and McCauley and Wakefield (2006:4) add learning management and development, assessing talent and career development, along with targeting the most important jobs.

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Some scholars define it as amind set, which forces organizations to become aware of –and asses- their workforce talent and current and future talent needs. The time is for ‘just in time talent management strategy’. Thus a TM strategy involves the acquisition, development and deployment of resources while anticipating and responding to a large variety of market forces. It also involves anticipating and responding faster than the competitors in this arena. In a tight external (ELM) and internal labour market (ILM) skill sets are in short supply; as a result, strategic talent management is becoming relevant, with ‘talent raiding’ and ‘talent poaching’ becoming the norm amongst competing organizations. Another section of the literature faocus on ‘talent flight’, which is the natural corollary of a wrong employee retention strategy. This trend is reported in India by (Shankar, 2006, Saha, 2008), in public sector organizations where remuneration issues are

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Talent management is seen as a vital part of business strategy and of high quality HRM that has greater payoff and is expected to contribute to the overall performance of the organization. There is growing evidence that high performance HRM has a universal payoff across a wide range of industries Researchers have found associations between HRM measures and economic success, while Cantrell and Benton (2007) state that organizations create a ‘talent multiplier’. i.e., they enable companies to generate superior results from their workforces. This looks at the high performance work system, where high performers constantly raise the bar of performance.

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Alignment of human capital strategy with business strategy results in better talent amangemnet. Bergeron has cited Huselid and Becker’s classic study of over 2800 firms that pursued an integrated high performance work system (i.e., a talent strategy), which had 65 % higher market value over those using other systems that were not holistically integrated. Thus talent means profit, market share, share holder value, revenue and productivity. In India the study by Chugh and Bhatnagar (2006) reported five case studies falling in the HPWS context and pursuing talent management strategies in varying degrees. Further reported in their case study on MOotorola MBD, where the strategy of defenders, prospectors and analysers was applied to the HPWS.

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In order to attract and retain the best talent anywhere in the world, an organization must have a strong and positive employer brand. Employer brand interventions in recent research indicate talent management as a key driver for this strategy and are on the agenda for HR executives in 2007 and beyond. To attract and retain talent, hiring for compatibility is critical. It refers to the ‘fit’ between employer and employee. Further, it is also the person-organization fit that research is referring to (Srivastava and Bhatnagar, 2008). In addition, organizations with excellent reputations and strong brands are well positioned to attract top talent. Michales et al. (2001) proposed the development and communication of the employees to ensure the best match for the job and the company as well as honing skills and to the organization and specific roles and responsibilities are equally important. In India, Motorola went in for a talent acquisition strategy in early 2005, which led to high employee engagement and proved to be a source of competitive advantage.

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For, Motorola, employer branding was a differentiator and provided brand equity when attracting talent. Further, Shukla and Bhattacharya (2007) express their views on employer branding. Theyt state that in India one finds that organizations do not branding. They state that in India one finds that views on employer branding interventions internationally. For example, when Sasken Technologies was a growing company in 2001, they decided on the identity of their organization. This deliberation brought forth issues like single-status policy, wherein all employees, whether, the CEO or the young programmer, would be treated equally (such as every company executive would travel in the same class). Similarly, Infosys, Wipro and TCS never intentionally built a brand. They just built a productive workplace with happy employees. Employer branding becomes a tokenism when it doesn’t fit into the value system of an organization. The brand as an employer must provide a long-term advantage and a unique employee value proposition. Indeed, organizations such as Google and RMSI in India with a strong employer brand do not spend money on building the brand; instead they focus on living the brand. In employee meetings at RMSI, employees are invited to share their experiences that that reflect upon the extent to which RMSI is living its employer brand. CEOs and leadership teams in organizations with a strong employer brand live the brand values.

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According to the CEO speaks in the Hewitt Best Employers Survey(2004), among the many key people challenges, one of them is to build a fierce employer brand equity and away to do that

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The best indicator of a company’s health in the words of former GE Chairman and CEO Jack Welch is: ‘employee engagement first’. It goes without saying that no company, small or large , can win in the long run without energized employees who belive in the mission and understand how to achieve it. A recent survey of HR professional in Western countries reflects that most important issue anticipated in 2006 was about retaining and developing key employees (75% of the responses); the next issue was of employee engagement and enhanced productivity (60.7% of the responses), followed by leadership training and development ( 59.8 % respondents cited this issue). In the academic domain and in the Indian context, Bhatnagar (2007) attempted to study employee engagement in the ITeS and established the link between talent management and employee engagement. India has the highest % of highly engaged workers at 78% in Asia as compared to Japan, which has the lowest employee engagement level at 39%. The engagement level of the Indian workers is 20% more than his Chinese counterpart.

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Martel (2003; 30, 42) states that ‘engaging employeesespecially by giving them participation, freedom, and trust-is the most comprehensive response to the ascendant postindustrial values of self realization and self –actualization’. A case in point is HCL Comnet, which received the Best Place to Work Award in 2005 in India. It has set industry benchmarks in innovative employee engagement work practices by empowering the workforce (2008, personal communication).Effective talent management policies and practices that demonstrate commitment to human capital result in more engaged employees and lower turnover. Consequently, employee engagement has a substantial impact on employee productivity and talent retention. Employee engagement, in fact, can make or break the business bottom line.

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Employee engagement surveys are designed to gauge the employee engagement based on employees perceptions of the work environment. Furthermore, when done well, practices that support talent management also support employee engagement such as work-life balance programmes, flexi time, telecommunicating, compresse workweeks. Reward programmes and performance management systems. Employee engagement begins with an on-boarding programming and is essentially a part of the human capital pipeline or talent pipeline, as some researchers state 9e.g., Romans and Lardner, 2005). The nesting of the construct of employee engagement lies in the RBV of the firm (Joo and McLean, 2006), which posits that human and organizational resources, more than physical, technical or financial resources, can provide a firm with sustained competitive advantage because they are particularly difficult to emulate. The RBV points out that firm can develop sustained competitive advantage only by creating value in a way that is rare and difficult for competitors to imitate. This approach requires that a firm be seen, not through its activities in the product market, but as a unique bundle of resources that are complex, intangible and dynamic. These engaged employees are difficult to imitate and are unique to an organization, thus lending credence to the resource based perspective of the firm. Companies with highly engaged employees articulate their values and attributes through ‘signature experiences’- visible, distinctive elements of the work environment that spend powerful message about the organizations aspirations and about the skills, stamina, and commitment employees will need in order to succeed in these organizations. Employee engagement as a key to retention of talent is an area where the lead has been taken by practitioners but is an area where rigorous academic research is required (Bhatnagar, 2007). In India, with the exception of Bhatnagar (2007), scare academic work has been conducted in this area, which in this area, which raises the need to look into it more seriously. Bhatnagar (2007:

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The extant literature combines succession planning and leadership development as talent management. Research evidence suggest that many highly successful companies integrates the leadership development and succession planning process for optimal identification, development, and placement of leadership talent. Some refer to this as the ‘multiple effect’ (Bennet and Bell, 2004). Building a leadership pipeline using training and development intervention is another line of research, where line managers are responsible for developing talent pipelines at all levels and at critical roles. In India, Nestle, Larsen and Tubro, and TCS are such organizations, which develop talent from the grass root level. Yet, the world over, finding the right candidate mach for critical positions and for CEO level remains a gap for practitioners nad academicians. Recently, George (2008) reported on global succession planning fiascos like Citi Group and MerrillLynch. Unfortunately, these are just the latest examples of boards that failed to build solid leadership succession plans. In the past there have been problem at Morgan Stanley, Coca-Cola, Home Depot (HD),

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Almost 60% of the 550 organizations surveyed in the Hewitt Associates survey (2007) stated lack of sufficient leadership talent as the most pressing challenge, globally for the next three to five years. Further, even if organizations have pivot talent pools, which are the vital targets for HR investment and leader attention, it still becomes a serious task to find the right candidates for top positions. ICICI Bank faced a similar situation when its identified CEO successor Mr. N.Mor opted out of the CEO;s succession plan. He settled for his dream of heading the CSR- based ICICI Bank Foundation in Chennai. Next, we discuss the theme of talent identification.

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Creating a development talent pool, retaing talent and the cost of retaining talent add to the business value. These talent pools are ‘sold’ to the business units, and individuals are ploaced from the pools into jobs. Barclays Global Investors (BGI) held focus groups with over 100 mid-level managers and associates and interviewed 25 top executives specifically geared at revealing the critical abilities that needed to be developed in these pools. Similarly, 3M focused on specific levels such as executives, and a particular competency area, such as global leadership for the development of critical capabiloities. In India, there are organizations such as Bharati Airtel, Phillips, Tata Consulting Services, NTPC and Baxter Healthcare that have developed a talent segmentation strategy. Talent grids are maintained by HR. Talent grids, talent matrix or talent segmentation, all proposes the same model. Some researchers call it ‘talent segmentation’. Part of talent segmentation is identifying ‘pivot talent pools’- where human capital makes the biggest difference to strategic success. Talent segmentation uses A, B and C players. Talent management perspectives in organizations sometimes deal with the nine blocker inverted L strategy for top talent, which is for A players, while some organizations deal with the strategy of players in critical positions. This is the domain of high potential employees. This is why a prime concern of current HRM is high- potential managers, ‘those the company had singled out as being possible candidates, in time for a position on the board of directors’. In terms of the overall strategy, these people play a key role and companies need to recruit and train them, as well as develop their loyalty.

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To identify talent segmentation, competency profiling / mapping plays a vital role. Competency mapping in some organizations may be part of the performance management system. Identification of segmentation in talent management takes place with this foundation. It rests on job profiling, competencies, creating competency dictionaries and setting proficiency levels within each band of employees and then using this criterion for segmenting them into A, B, or C players. ‘A’ is the category of high performers, ‘B’ is the category of average performers and ‘C’ is the category of underperformers. Recently a report about a performance improvement plan that was initiated for the 10% of C players stated that if they did not improve within six months they would be asked to leave the organization. Cases in point are IBM and Wipro in India. Some industry sectors, specifically ITeS, may redeploy C players as the organization cannot afford to let them leave since attrition is high and the external labour supply is low.

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Implementing TM strategy is achieved through sophisticated data analytics. These imply workforce analytics; competency profilers; demographic and diversity ratios; retention and attrition analysis, amongst others. These are available in the data bank of mature systems and with the top management and HR for quick decisions (e.g., Larsen and Tubro; TCS; NTPC IOCL; Pantaloon Retails). Over emphasizing analytics can lead to sophisticated analysis with no connection to talent decisions while the overemphasis process may start the organization down a path towards an objective that is not strategically relevant (Lewis and Heckmen, 2006: 148). Having a human resource information system (HRIS) supporting this proves to be the linked to the integrated HRIS of the organization so that strategic decision support can be implemented (Bhatnagar, 2004; Lewis and Heckman, 2006). In Indian organizations HRIS is mostly of a transactional or strategic role of HR. Organizations such as ICICI Bank; Sapinent; GENPACT; Hewitt Associates; Tata Sons, TCS; and Motorola MDB, use this kind of a mature system, which utilizes transformational decision data based on decision –making in HR strategy.

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Pffefer (1996) stated that the leading organizations in the new economy from Walmart stores to Starbucks Corporation to South West Airlines are those that take care of the employees first, as these employees will take care of the customers. As a result, the financial balance takes care of the owners (Barnett and Hall, 2001). In India Sasken, RMSI, Classic Stripes, Mind Tree Consulting, NTPC, Godrej consumer products, CSC and Infosys are examples which have been able to successful manage their talent through innovative remuneration customized for different talent through innovative remuneration customized for different talent segments. Marriott Hotels, on the other hand, believes in work-life balance and offers a compulsory six days off to all employees every month. Further data compiled by the Ministry of Corporate Affairs show that 1,872 public and over 52,000 private limited companies were incorporated in 2005-6. Already, many companies are luring away senior-level executives from other wellestablished business houses, multinationals and other professionally managed firms with very high paychecks, stock option and other incentives. Wages in India have converged with global rates, so hefty hikes are the norm. A Hewitt report (Jayswal, 2007) suggests a hike of 150 % in remuneration for top management professionals at ONGC (a public sector oil company in India). For

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Similarly, another method is re-recruiting employees who had left the organization 4-5 years back. In the same innovative remuneration mode, Bharti Airtel’s Chairman Sunil Mittal is said to have given all his top managers a Mercedes (a status symbol) before rivals could poach them. Similarly, UB Group chief Vijay Mallya has gifted some senior executives brands new Jaguars to keep them in his companies. But not all incentives have the desired results. There still exist gap in the practices followed.

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This is supported by the academic literature as well, as institutinalising talent development I s done through anchoring it with innovative remuneration packages. Ready and Conger (2007) and Erickson and Gratton (2007) report similar trends in the Western literature. Leskiw and Singh (2007:454) report ‘Arrow Electronics in the USA encourages seasoned employees to take a ten- week sabbatical after every seven years of service. This allows other employees to temporarily fill the role and develop their leadership skills. Measures are increasingly beingt taken to achieve these aims, which, according to Dubouloy (2004), include attractive salaries, stock option, schemes for developing promising employees and training courses ; Further, there is a need –fit criterion, i.e., once the strategy are developed as per the unique needs of the pivotal talent pool, the organizations would see less attrition and higher levels of loyalty and organizational commitment.

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This section deals with the concept of the psychological contract(PC) which is defined as asset of promissory and reciprocal obligations that an employee has formed towards the organization. The process of PC is grounded in the social exchange theory, the basic tenet of which is ‘exchange’ argues that in the exchange relationship, there is abelief ‘ that contributions will be reciprocated and that… the actions of one party are bound to those of another;. Thus, if organizations fulfill employee expectations, the latter reciprocate by demonstrating positive attitudes and behaviors viz. job satisfaction, organizational commitment, organizational citizenship behavior, organizational performance and reduced intention to quit. Psychological contracts can be viewed as containing both transactional and relational aspects. Transactional and relational aspects. Transactional contracts are described as those contracting terms of exchange which have monetary value, are specific and of limited duration. Relational contracts, by contrast, contain terms which may not be readily valued and which broadly concern the relationship between the individual employee and the organization. Sparrow and Hiltrop suggest that psychological contracts help employees to predict the kind of rewards they will receive for investing time and effort in the organization. Guest (1998) has pioneered work in the area of relationship between the psychological contract and motivation, job satisfaction, etc., in his proposed model which investigates causes, content and consequenc4es of psychological contracts. The contracts idiosyncratic nature is widely accepted among researchers. Although it is widely accepted that psychological contracts are subjective and researchers have stressed the importance of individual characteristics, the empirical evidence is almost non-existent. This relational contract will have an impact on the retention of pivotal talent pools in

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The model suggests a talent management strategy based on a competency framework, where innovative recruitment looks for an employee-employer fit, Is need based when it comes to remuneration, and the organization may follow value-based employer branding, along with need –based reward and recognition; fast-track promotions based on consistent performance and high potential which is supported in to a seamless process by an internally consistent and integrated HR system; an HRIS-based HR system; process of mentoring and empowerment would impact the HRM outcome of employee engagement; organizational commitment; job and employee involvement; organizational citizenship behavior; and retention of key talent. This relationship would be mediated by the psychological contact, at both the transactional and relational level. This entire integrated strategy and outcomes would impact the firm performance indicators of those which are pointed out by Paauwe and Richardson (1997). The control variables here would be a talent mindset type of strategy followed by the organization, and creativity versus a control based HR system. Organizational –level variables would include the following: Organizational size; age technology followed; type of sector and type of ownership. While at the individual level, there would include the following: Organizational size, age technology followed; type of sector and type of ownership. While at the individual level, there would be variables such as age, gender, education level, job experience, nationality, locus of control and personality type. There is also a possibility that firm performance indicators may affect the talent management strategies through reverse causality.

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It is worth noting that this is a conceptual model amenable to empirical testing to prove its strength. Future studies may refine it further, based on empirical and grounded research-based findings. There is also a need to design a questionnaire on talent management, the items of which should reflect the integrated approach thrown up by the literature and which deals with issues of construct divergence and contamination through a rigorous research analysis, which further studies may look into. They can link all the elements of leadership pipeline development, developing it as a signature experience leading to retention, higher commitment, employee engagement and loyalty from the pivotal employees. What effect this has on firm performance and external and internal labour markets would be interesting areas for future research. Theoretical implica6tions exist for an integrated talent management approach based on a competency framework and supported by a HRIS which is more transformational in nature than a transactional one. Theoretical and practical implications for both academicians and practicing managers. On the basis of the literature analysis, although we find that management is based on the resource –based view of the firm, there is a need to find a theoretical framework for employer branding and employee engagement constructs



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