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Introduction

The objective of any private sector organization is to generate products or services and sell them to clients. No matter whether the focus is on best quality, lowest cost, or on maximizing both, one important asset in optimizing productivity will always be an organization’s best people – its top talent. Leveraging the benefits of effective Talent Management is a key competitive advantage of any organization. Why? Because effective Talent Management helps increase organizational efficiency and effectiveness and has a proven strong link to financial returns: e.g. in a study of high-performing companies across industries and geographies, those organizations with the top financial results were five times more likely to run mature career development processes than the bottom performers.

 

Talent Management is about:

  • Filling positions with the right (knowledgeable and productive) candidates,
  • Promoting high potentials in order to increase their organizational impact on productivity,
  • Developing staff to increase their efficiency in their current role,
  • Increasing performance and consistently retaining the best employees.

These inbuilt factors become more relevant in light of demographic factors such as aging, globalization of the workforce and generation-X syndrome.

This series focuses on the success factors for a comprehensive talent management framework, and how this can be realized using SAP technology.

Cornerstones of Talent Management

A word of caution: Implementing TM is simple but not easy! TM requires a fine balance of cultural acceptance, processes, organizational structures and the right degree of system support:

 

Image 1 - Cornerstones of TM

 Figure 1: TM Cornerstones

 

Culture: TM requires acceptance and sponsorship from top management. Before even thinking about any first step, top management need to buy into the idea and must be convinced that:

  1. Recognising and promoting talent is worthwhile and has a positive bottom-line effect on the P&L
  2. Professional development via the organisation’s personnel function is the surest way to establish independence, fairness, validity and acceptance throughout the organisation. Processes must be lived and adhered to by all levels. Building up trust requires time and effort; loss of trust, however, is achieved very quickly.

In order to have a chance to successfully implement TM, it is crucial to ensure that the cultural foundation is established – the so-called cornerstones for vital TM:

  • Organizational appreciation of talent is required to establish a performance culture,
  • Fair promotion of talent creates reliability. The process must be transparent, equal and predictable,
  • Clear correlation between performance and potential, as well as between payments and promotion.

Processes: The system of different TM processes must be consistent and coherently integrated. Each process must create transparency about the performance and potential across the organization.

In order to reach that, it is necessary to embed the processes into the business context routine and to adhere to them; as an exampl, high potentials should be identified and assessed on an annual basis according to clear criteria, and be discussed and rated by management panels to increase cross-functional levelling and transparency.

Structure: TM can only be sustained on a permanent basis if an organization ensures the management of talents independently of company politics, functions and hierarchy. The organization must be empowered to set guiding principles and to be the last authority, ensuring the use of objective assessments over individual, subjective opinions.

System: TM is an integrated set of processes involving all employees, managers and functions. Dialogues need to happen, agreements need to be reached, decisions need to be approved and maintained.

The right Talent Management system ensures efficient processes, reduces administrative effort and increases organizational acceptance.

Find more details about possible system support on part 2.

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This post is part of a white paper on Talent Management written in conjunction with Gerhard Bader, Director at Lodestone Management Consultants

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