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MBA 405: Talent management

Faculty name: Ms. Neetu Deptt. of mgmt studies

PDM MBA

syllabus
UNIT-I Introduction Concept of talent management, strategic importance of talent, talent imperatives, elements of talent management, workforce diversity and talent management, role of HR in talent management UNIT-II Talent Procurement and Deployment Identifying talent needs, sourcing talent; developing talent, deployment of talent, establishing talent management system, talent multiplication UNIT-III Talent Retention Cost and consequences of talent departure, diagnosing causes of talent departure, measuring and monitoring turnover and retention data, designing engagement strategies, drivers of engagements UNIT-IV Return of Talent Measuring contribution of talent to business performance, talent metrics, measuring human capital investment, transformation and reorganization of HR, new imperatives, talent forces of tomorrow

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Unit-1

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What is Talent Management?


The purpose of TM is to ensure that the right supply of talented workforce is ready to realize the strategic goals of the organization both today and in the future Organizations efforts to attract, select, develop, and retain key talented employees in key strategic positions.
Talent management includes a series of integrated systems of recruiting, performance management, maximizing employee potential, managing their strengths and developing retaining people with desired skills and aptitude

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Talent Management
TM introduced by Mc Kinsey consultants, late 1990s TM is identified as the critical success factor in corporate world TM focuses on differentiated performance: A, B, C players influencing company performance and success identifying key positions in the organization !!! Surveys show that firms recognize the importance of talent management but they lack the competence required to manage it effectively
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What is Talent?
According to McKinsey; talent is the sum of a persons abilities, his or her intrinsic gifts, skills, knowledge, experience , intelligence, judgment, attitude, character, drive, his or her ability to learn and grow.
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Who are Talented People?


They regularly demonstrate exceptional ability and achievement over a range of activities They have transferable high competence They are high impact people who can deal with complexity (Robertson, Abbey 2003)

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TALENT MANAGEMENT

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Why Organizations Need Talent Development?


To compete effectively in a complex and dynamic environment to achieve sustainable growth To develop leaders for tomorrow from within an organization To maximize employee performance as a unique source of competitive advantage To empower employees: Cut down on high turnover rates Reduce the cost of constantly hiring new people to train

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Talent Management Model



1. 2. 3.

There are different approaches to talent management in organizations A successful TM model has to link
TM creed (culture, values, expectations) with TM strategy and TM system. (Lance and Dorothy Berger, 2011)

The values, expectations and elements of


the desired culture and the business excellence

should be embedded in HR systems as selection criteria, competency definitions, performance and promotion criteria and development processes.
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The Talent Creed


A TM creed is the set of core principles, values and mutual expectations that guide the behavior of an institution and its people It describes in general terms what types of people are expected to work in the organization and what type of a culture is desired to achieve success

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The Talent Strategy


Describes what type of people the organization will invest in and how it will be done Besides the specific elements of their creed, the talent strategy of all high performing organizations should have these directives: 1) Identify key positions in the organization (not more than 20, 30 %) 2) Assess your employees and identify the high performers (classify according to their current and future potential) 3) Retain key position backups 4) Make appropriate investments (select, train, develop, reward)

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Assessing the Employees


Superkeepers- greatly exceed expectations (3-5%) Keepers exceed expectations (20 %) Solid citizens- meet expectations (75 %) Misfits- below expectations (2-3 %)

(Berger and Berger, 2011)


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Allocating Investments in People


Superkeepers- receive about 5 % of all the resouces; need very high
recognition, compensate much more than the pay market, promote very rapidly

Keepers receive about 25 % of all the resources, need high recognition,


compensate more than the pay market, promote rapidly

Solid citizens- receive about 68 % of all the resources, need recognition,


compensate at the market level or just above

Misfits- receive about 2 % of all the resources for some, compensate at


below market average
(Berger and Berger, 2011)

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Talent Management System


Implementation program of the talent strategy which has a set of processes and procedures (1) assessment tools (2) multi-rater assessment (3) diagnostic tools (4) monitoring processes If the management is not willing to use assessment in their organizations they cant do talent management

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Assessment Tools for TM


The five assessment tools should be linked to ensure that each assessment is consistent with the four other evaluations Competency Assessment Performance Appraisal Potential Forecast Succession Planning Career Planning
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Multi-Rater Assessment
Employee. The owner of the career plan that is aligned with the succession plan Boss. The primary assessor Bosss boss. The key link in the vertical succession and career plan Bosss peer group. Source of potential new assignments in the same or other function
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Diagnostic Tools
SuperkeeperTM reservoir. SuperkeepersTM are employees whose performance greatly exceeds expectations, who inspire others to greatly exceed expectations, and who embody institutional competencies. Keeper Key position backups. The insurance policies that ensure organization continuity. Every key position should have at least one backup at the Keeper (exceed job expectations) level. Surpluses. Positions with more than one replacement for an incumbent. While ostensibly a positive result of the talent management process, it can be a potential source of turnover and morale problems if the replacements are blocked by a non-promotable incumbent and/or there is no realistic way most of the promotable replacements can advance. Voids. Positions without a qualified backup. Determine whether it will transfer someone from the surplus pool, develop alternative candidates, or recruit externally.
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Blockages. Non-promotable incumbents standing in the path of one or more high-potential or promotable employees. Problem employees. Those not meeting job expectations (measured achievement or competency proficiency). Give opportunity to improve, receive remedial action, or be terminated. The time frame should be no longer than six months.

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Monitoring Processes
Evaluate the results of talent management system on a regular basis for quality, timeliness and credibility

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What is competency?
Competencies are the core elements of talent management practices
They are the demonstrable and measurable knowledge, skills, behaviors, personal characteristics that are associated with or predictive of excellent job performance. Examples
Adaptability, teamwork, decision making, customer orientation, leadership, innovation etc.
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Competencies and Definitions


Action Orientation Targets and achieve results,overcomes obstacles, accepts responsibility, creates a results-oriented environment..... Interpersonal Skill Effectively and productively engages with others and establishes trust, credibility, and confidence with them Creativity/Innovation Generates novel ideas and develops or improves existing and new systems that challenge the status quo, takes risks, and encourage innovation Teamwork Knows when and how to attract, develop, reward, be part of, and utilize teams to optimize results. Acts to build trust, inspire enthusiasm, encourage others, and help resolve conflicts and develop consensus in supporting higperformance teams
(Berger and Berger, 2011)

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Why Competencies?
The challenge is to identify which competencies the organization expects to see in their people The starting point of the model is the creed (values, principles, expectations) and the business strategies Through a competency model the organization sends a consistent message to the workforce about what it takes to be successful in the job Helps employees understand what helps drive successful performance The Competency Model approach focuses on the How of the job. Competency model is behavioral rather than functional, focuses on the people rather than jobs Competency models are outcome driven rather than activities (Job descriptions focus on activities, competencies focus on outcomes) Integrates HR strategy with business strategy both focus on outcomes

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Why Competencies?
The competency model serves as the foundation upon which all workforce processes are built.
Competencies promote alignment of talent management systems by creating a common language that enables these systems to talk with each other! That is, results of one TM system is used as the input data for the following TM system.

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The Competency Model


The Competency Model identifies usually three groups of competencies:
Core competencies for the entire organization to shape the organizational capabilities and culture required to achieve the strategic goals(5 or 6) Leadership competencies for the management teams of various levels for selection, career planning and development Functional (technical)competencies (specific for each job family)

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Developing a Competency Model


Use commonly available ready to use models with small adjustments for your organization

Develop own competency model with help of consultants


Behavioral Benchmarking compare superior performers with other best people in the organization and in other benchmark companies
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Developing Organizations Own Competency Model


Overview of current tasks and responsibilities Come to agreement about what successful outcome driven performance looks like Review of competency library and selection of must haves for the position Rank top competencies as demonstrated by exemplary (superior) performers Identify of those competencies that align with the vision, mission and strategic plan of the organization Verify the competencies with a larger sample of the organization

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Choosing Competencies
Before choosing competencies in an organization following requirements must have been completed: Establishment of vision, mission, values Strategic business goals Identification of the tasks, responsibilities and outcomes expected from each position Identification of the superior (exemplary) performers Satisfactory competency library

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Talent Management
TALENT=COMPETENCE+COMMITMENT+CONTRIBUTI ON
Being competent is not only enough to be a talent The competent person should be committed to the causes and goals of the organization And should be able and willing to contribute to the success of the organization So, developing your talent is not enough, the organizations need to take all the measures to motivate, reward their talent pool to gain their commitment and contribution. Retention is also essential to gaurantee future alignment of the talent with the right key positions

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Talent Management Model

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Talent Management Model


Expectations for the future. Businesses should identify Job roles Spesific objectives Competencies Capabilities to meet the expectations Work environment Managerial support Rewards and recognition Removing barriers Feedback systems needed to Focus To keep on track Develop
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Talent Management Cycle

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Talent Management Process


Organization Analysis -Job descriptions -Job spesifications

Analysis
Potential Candidates

Performance Evaluation Buss. Results Personal Development Activities

Assessing the Emloyees

Assessment
Career Potancial Candidates Committees and Succession Lists

Approval of the Lists

Development
Talent Development Programs

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January - March April May on......

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Structure of a Talent Management Program


Building Block 1: Identification and assessment of competencies Building Block 2: Performance appraisals Building Block 3: Succession and career planning Development of talent (coaching, mentoring, training) Linking compensation with the program (reward and motivate) Targeting culture as an important driver of TM programs Secure senior executives commitment to make the talent management model work Evaluate the results of talent management system on a regular basis
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Integrated Functions of TM
Performance appraisals, assessments of potential, competency evaluations, career planning, and replacement planning (the core elements of talent management) should be linked to each other. Stand alone functions are destined to end with failure

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HR and TM
HUMAN RESOURCES MANAGEMENT o Broad Scope (entire employees) o Emphasize egalitarianism oFocus on administrative functions oTransactional oFocus on systems with silo approach TALENT MANAGEMENT

oFocus on segmentation (key group of core employees and key positions) o Focus on potential people oFocus on the attraction, development and retention of talent oFocus on integratation of PDM MBA 36 HR systems

The Emerging Talent Management Imperative.

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www.studygalaxy.com 37

Why is Talent Management important?


Recruitment and retention Getting the best of all employees Helps to deliver corporate objectives and plans Productive, committed working environment Succession planning

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Recognize talent Change Organization Culture Attracting Talent

WAYS TO MANAGE TALENT


Managing Succession Selecting Talent

Retaining Talent
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Some beginnings
Infosys has a rock band that plays at their amphitheatre and at outside concerts Organisations have started initiatives like
Film clubs that hold screenings every month, Knowledge sharing forums Job referral programmes such Frito Lays Bring a Friend to Work Blogs
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Cont
Infosys: widespread use of intranet, tele and video conferences, employee surveys, Brown Bag Lunches etc. to ensure two way communication Phillips Software: Express Yourself and Watch this Space boards for employees to write their views Elais, Greece: Lunch with CEO at a upmarket restaurant IKEA, USA: Express Yourself Postcards to CEO Forbes Marshall: Monthly Meetings; Quarterly Video Magazine
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Cont
Performance Management

FedEx: Professional Development Guide; Balanced


Scorecard (People-Service-Profit) based approach to employee goals; 90% of senior positions filled thru internal promotions

Aditya Birla Management Center: Common form and scale for all; right placement or outplacement for non-performers
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Cont
Performance Management RMSI: transparent system allows all employees to calculate their own bonus Sapient: Career Management Program: 70% turnaround rate thru PIP Honeywell: Self assessment of competencies; Higher education assistance to all employees; Annual Appraisal survey Adobe: Job rotation and alternative career path Godrej Consumer Products: Normalization by Leadership level; Total Talent Management process for assessing growth potential; use of 360 degree for senior managers

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The Corporate Challenge Ahead


Looking beyond the Executive for talent How do we assess our Talent Management effectiveness What tools will we use to embed good practice Balancing the development of individuals and the needs of the organisation Developing the skills for Talent Management

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Talent Management Strategy Outcomes


Impact of Talent Management: Integrating talent management strategies and processes brings better financial performance (73% of respondents) Focusing on competency development, on-the-job training and project-based learning leads to effective individual and team performance (66%) Promoting mentoring, coaching, social networking and collaboration brings about knowledge sharing and high morale (61%) Implementing succession planning and career development improves brand loyalty and quality of services (56%) Measuring workforce performance outcomes increases retention of high performers (52%)
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Talent Management Transforms Healthcare Recruiting, Onboarding and Employee Performance

Financial Impact of Talent Management on Recruitment and Retention: Reduces staffing costs Reduces staffing cycle times by 50-70% Reduces vacancy rates by up to 50% Reduces first-year turnover and overall turnover Improves productivity
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What does good Talent Management need?


Leadership Fairness Strategy Comprehensiveness
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Few Challenges.
The changing workplace The ethical dimension Creating a retentive organisation An understanding of employee behaviour
What do they seek? What makes them stick? What makes them leave?

Developing an employee value proposition


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Understanding Talent Management & The Global Scenario


Global Talent Scenario - Demographic shifts in the workforce
Developed Markets - Aging Workforce + Less skilled workforce = TALENT CRISIS

Emerging Markets - Wage inflation and attrition Can these be an alternative labor market ?

Labor Force Make-Up Percentage Change By Age Group


(projected 2002-2012)
30% 2002 2012

Labor Force Percentage Change By Age Group


(projected 2002-2012)

Labor Force Growth Rates Percentage Change


(projected 2002-2012)

65 + 55 to 64

19% 44% 11% 35 to 44 8% 7% 12%

Total White Black Hispanic Asian

12 % 8.5 % 19.3 % 32.6 % 50.8 %

20%

45 to 54 - 9% 25 to 34

10% 0

16 to 24 Total 16-24 25-34 35-44 45-54 55+

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Source: U.S. Bureau of Labor Statistics

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Understanding Talent Management & The Global Scenario


Global talent scenario- what is likely to happen Automation, reengineering, innovation, high-yield based jobs in developed Markets. Out sourcing of work from developed to emerging markets. Companies migrating to developing countries. Higher growth rates in emerging markets adding to demand. Unmanaged immigration to developed countries Technology and information penetration adding to transparency & instability Diminished ambitions and enhanced expectations, dissatisfaction and instability. Birth of entrepreneurial opportunities but scalability a challenge

Talent Management a GLOBAL challenge: Talent Crisis How to WIN in this environment? 1) INNOVATION 2) MOMENTUM
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3) TECHNOLOGY
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Understanding Talent Management & The Global Scenario


Why Talent Management ?
Create Strategic Recruitment Plans to attract the best talent. Identify and develop LEADERS at all levels. Create great places to work - attract & retain the best talent. Direct the positive energy of people to the right areas.

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Elements of Talent Management


Talent Planning Measure and Report Analyze Plan Recruiting

Succession Planning

Lead

Talent Profiles and Evaluate Objectives

Performance Management

Advance Compensation Management

Develop Learning & Development

Career Planning

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Key Questions for Policy Makers


Who are our top performers? How to hire and develop more people like them?

Are there Enough of them? Crisis Management? Replacement? Business Growth?


Are we Retaining the best employees? Where did we recruit them from? Is there a clear Growth / Succession plan for them ? Is there a two way Communication with them? Do workers have the Skills needed to achieve the performance goals? Are the Learning Initiatives positively impacting performance?

Where is the talent Demand outpacing Supply?


How much of the Turnover impacts Customers, Productivity, Innovation, Quality. What are the Financial consequences of talent decisions on our business? Is anyone in the Boardroom worried about the status of the talent pool ?
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POWERHUNT

What is POWERHUNT? An in-house Recruitment / Talent Management software driving over all Business Strategy with inbuilt business intelligence.

Who can benefit from it? It can be used by any recruitment consulting firm as well as by the recruitment division of any organization. Its modules are custom designed based on the clients needs.

INNOVATION

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TECHNOLOGY

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Talent Management Integration Management


Business Strategy Module Business Parameters Input Module Organization Structure / Divisional Structure Learning and Development Industrial and Functional details with sample and live JDs Business Intelligence (Auto/Manual)
Job allocation / Search / Invoicing / Payroll / Attendance / Taxation / Incentive / Revenue Sharing / Legal / mailers (thank you, confirmation, interview information etc)

Admin Branch Head / Product Head Team Leader Business Development / Coordination Talent Search Franchise Management Finance / Admin Client Module

Transparent Performance and Compensation Management Short-term (daily) /long term / Across levels and functions Business Analytics Output module Short-term (daily) /long term Central Data / CV management. Linked to main website Crisis Management Business Development Coordination PDM / Talent MBASearch

Franchise Partners Module 56

INNOVATION

MOMENTUM

TECHNOLOGY

Building Sustainable Leadership & Futuristic Talent Management Strategy

Talent Management - Simplified


Talent

Growth

Talent Management = Growth Management

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Talent Management is about


SUSTAINABLE INCLUSIVE GROWTH (Begin with the End = Well defined Business Model)
INCLUSIVE VISION Organizational SYNC Individual Developing Leaders

What do you require to implement Talent Management?

People (Mindset) Processes (Practices) Technology


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Key Questions for Policy Makers


Do we have enough leaders (quantity & quality) to execute ongoing and future business? Are current Leaders accountable for the cultural strategies supporting business goals? Is there any inbuilt mechanism to identify potential leaders across the organization early in their careers? Do we assess our high potential talent from the leadership perspective? Do we systematically accelerate the development of high-potential talent and improve the quality of executive leadership? Do we focus on growing better leaders at all levels from the first line upwards?

Invest in the bestFocus on the rest.


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Traditional Talent Management

Building Sustainable Leadership & Futuristic Talent Management Strategy

Acquire

Develop

Deploy

Retain
Focus: Managing Best People

Futuristic Talent Management

Acquire

Develop

CONNECT
Capability

Deploy

Retain

Commitment

Enhanced Performance PDM MBA

Alignment
60 Focus: Managing Best Positions

Workforce diversity

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Valuing Work Force Diversity


Primary and secondary dimensions of diversity Formation of prejudiced attitudes Discrimination in the workplace Organizational cultures that value diversity Individual and organizational enhancement of diversity Affirmative action programs
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Work Force Diversity A Definition


Not all countries are multicultural Some countries are homogeneous
Japan, China

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Work Force Diversity A Definition


The U.S. is a kaleidoscope of the worlds cultures
It is the most multiracial and multicultural country Foreign-born population is about 32.5 million and projected to increase

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Figure 15.1 Foreign-Born Population Trend

Source: Reprinted from April 24, 2000 issue of Business Week by special permission, copyright Inc. PDM MBA 2000 by The McGraw-Hill Companies, 15 - 65

Work Force Diversity A Definition


Diversity represents the U.S.s biggest challenge as well as its greatest opportunity Business practices must adjust accordingly Traditionally, U.S. organizations attempted to assimilate everyone into one way of doing things

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Work Force Diversity A Definition


Focus today is on valuing diversity
Appreciating everyones uniqueness Respecting differences Encouraging every worker to make his or her full contribution to the organization

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Work Force Diversity A Definition


Organizations that foster the full participation of all workers will enjoy the sharpest competitive edge in the expanding global marketplace

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Total Person Insight


No matter who you are, youre going to have to work with people who are different from you. Youre going to have to sell to people who are different from you, and buy from people who are different from you, and manage people who are different from you. J.T. Ted Childs, Jr. Vice President, IBM Global Workforce Diversity
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Dimensions of Diversity
Two dimensions
Primary Secondary

The greater the number of dimensions that are different, the more difficult it is to establish trust and respect

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Dimensions of Diversity
Primary dimensions are core characteristics of each individual that cannot be changed
Age Race Gender Physical and mental abilities Sexual orientation

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Primary Dimensions of Diversity


Form the individuals self-image The filters through which each individual views the world Interdependent, no one dimension stands alone Each exerts an important influence on life

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Secondary Dimensions of Diversity


Elements that can be changed or modified
Health habits Religious Education/training Appearance Relationship status Ethnic Communication style Income
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Figure 15.2 Primary and Secondary Dimensions of Diversity

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The Dimensions of Diversity


The interaction of primary and secondary dimensions shapes
Values Priorities Perceptions

They add depth to the individual

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The Dimensions of Diversity


Building effective human relationships is possible only when we value and accept these differences Without acceptance, both dimensions of diversity can become roadblocks to further cooperation and understanding

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Prejudiced Attitudes
Prejudice is a premature judgment or an opinion that is formed without examination of the facts
Often based on primary or secondary dimensions

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Prejudiced Attitudes
Prejudiced people tend to think in terms of stereotypes Generalizations made about all members of a particular group
Perceptions Beliefs Expectations

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Prejudiced Attitudes
When we bring stereotypes to the workplace, we are likely to misinterpret or devalue some primary and secondary differences, even after we have been exposed to them

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Prejudiced Attitudes
Most common and powerful stereotypes focus on observable attributes
Age Gender Ethnicity

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Prejudiced Attitudes
Stereotypes exist because they provide easy and convenient ways to deal with people Stereotypes often are based on one or several real experiences in dealing with others

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Prejudiced Attitudes
Xenophobia is a fear of foreigners or other strange-seeming people
Stereotype that has evolved into an anxiety disorder

Prejudiced attitudes are more likely to change when we take time to learn about others

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Total Person Insight


So long as black and white Americans see each other as stereotypes and not as people with the same dreams, ambitions, and values, this nation will be frozen in suspicion and hate. Vernon E. Jordon, Jr. Attorney and Civil Rights Leader

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How Prejudiced Attitudes Are Formed and Maintained

Major factors that contribute to formation of prejudice:


Childhood experiences Ethnocentrism Economic factors

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Childhood Experiences
The emotions of prejudice are formed in childhood Children learn attitudes and beliefs from family, friends, and other authority figures They learn how to view and treat different racial, ethnic, religious, and other groups

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Childhood Experiences
Prejudices from childhood are alterable Prejudice continues until new information replaces old perceptions

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Ethnic Identity
Ethnic a group united by similar
Customs Characteristics Race Other common factor

Ethnicity refers to condition of being culturally rather than physically distinctive

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Ethnocentrism
Ethnocentrism is the tendency to regard our own culture or nation as better or more correct than others The standards or values of one culture are being used as a standard to measure the worth of other cultures

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Ethnocentrism: The Iceberg Analogy


Surface aspects
Observable and relatively small i.e., color, gender, mannerisms, job talents, speech

Below the surface


Larger and deeper, and not observable i.e., beliefs, attitudes, worldview

Clash often happens below the surface


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Economic Factors
Hard to eliminate Rooted in basic survival needs Reinforced by wide wealth and income gap between whites and nonwhites

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Economic Factors
Peoples prejudice against each other increases when the economy goes through a recession or depression and housing, jobs, and other necessities become scarce

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The Many Forms of Discrimination


Discrimination is behavior based on prejudiced attitudes Individuals or groups that are discriminated against are denied equal treatment and opportunities offered to people in the dominant group

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Discrimination
Denial of
Employment Promotion Training Other job-related privileges

On the basis of
Race Lifestyle Gender Other characteristics

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Types of Discrimination
Gender Age Race Religion Disability Sexual orientation Other subtle forms

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Gender
Focus of much attention Traditional roles for women have been changing Women in the work force New roles for men

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Age
Applies to both older worker and younger workers based on perceptions
Youth for lack of practical experience Old for difficulty adapting to change

On the rise in the US

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Race
Race denotes a category of people perceived as distinctive on the basis of biologically inherited traits
skin color hair texture

People cannot change these traits A difficult discrimination to overcome

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Myth of Race
The use of racial categories by the U.S. Census Bureau has been criticized Critics say they are social inventions that reinforce racism No scientific justification in human biology Suggest elimination of traditional categories

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Myth of Race
Individual difference are greater than group differences Wide variety with any group
i.e. AsianFilipino, Chinese, Japanese, Korean Linguistic, cultural and physical diversity

Increase in mixed-race identity

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Race as Social Identity


Although not scientifically defensible Race is real socially, politically, and psychologically Proponents of race categories believe it is the only way to ensure all groups will be treated equally Racial pride viewed as positive reinforcement
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Religion
Religious discrimination has been an issue throughout history Intolerance for other religions Intolerance for different denominations within a religion
i.e. ChristiansCatholics, Mormons, Southern Baptist

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Religion in the U.S.


1. Christianity 2. Judaism
History of Anti-Semitism Expected to surpass Judaism

3. Islam

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Disability
Mentally or physically challenged people find it difficult to enter the job market Their right to do so are protected by the Americans with Disabilities Act (ADA) of 1991

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Disability
Some employers still unwilling or unable to make reasonable accommodations Possibly loosing
Hard-working employees New customer base Economic opportunities

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Sexual Orientation
Discrimination based on a persons sexual orientation is motivated by homophobia Sexual orientation is not the big secret it once was When we are comfortable about being ourselves, we are usually more productive and creative

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States Whose Hate-Crime Laws Include Sexual Orientation


WA

Source: From USA Today, May 18, 2000. Copyright 2000, USA Today. Reprinted with permission.

MT OR ID NV CA AZ

WY
UT CO

NM

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Sexual Orientation
Progressive companies are taking steps to provide a more open atmosphere
Employee associations Nondiscrimination policies Benefits for same-sex partners Recruitment efforts

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Subtle Forms of Discrimination


Discrimination based on gender, age, race, or disability is prohibited by law No legal protection for more subtle forms
Weight Accents Socioeconomic Education Politics Value differences
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What Can You Do to Deal with Subtle Discrimination?


Decide if you want to stay with the organization Determination whether the difference is something you can Address it directly if you cannot or will not change Review assertiveness skills Compensate by excelling
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The Issue of Valuing Diversity


During the 1990s there was a strong shift away from treating everyone the same and a strong movement toward valuing diversity

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Valuing Diversity
Valuing diversity means that an organization intends to make full use of all employees
Talents Ideas Experiences Perspectives

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Valuing Diversity
To remain competitive, organizations must recognize and hire the best talent regardless of
Skin color Gender Cultural background

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The Economics of Valuing Diversity


Valuing diversity is an issue of many dimensions
Legal Social Moral Economic

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The Economics of Valuing Diversity


An organizations most valuable resource is its people The cost of not helping employees learn to respect and value each other is enormous

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Costs of Not Valuing Diversity


Employee turnover
Loss of valuable employees Recruitment and training of new employees

Discrimination complaints Tension, stress, low morale Absenteeism and lost time Delayed production Increased conflict among employees
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Total Person Insight


More and more, organizations can remain competitive only if they can recognize and obtain the best talent; value the diverse perspectives that come with talent born of different cultures, races, and genders; nurture and train that talent; and create an atmosphere that values its workforce.
Lewis Brown Griggs and Lente-Louise Louw Authors, Valuing Diversity: New Tools For A New Reality
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Valuing Diversity
Managing diversity as an asset can exert a positive influence on
Productivity Cooperation

Companies that value diversity usually outperform companies that dont

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Managing Diversity
Process of creating an organizational culture where the primary and secondary dimensions of diversity are respected As workforce becomes more diverse, this becomes more challenging

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What Individuals Can Do


We cannot totally eliminate prejudices that have been deeply held and developed over time We can learn to change negative attitudes and behaviors

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What Individuals Can Do


Learn to look critically and honestly at the particular myths and preconceived ideas you have been conditioned to believe about others
Contact with other cultures is important

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What Individuals Can Do


Develop a sensitivity to differences
Do not allow prejudiced activity in your presence

Develop your own diversity awareness program


Diversity your lifefriends, activities, study

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What Organizations Can Do


A well-planned and well-executed diversity program can promote understanding and diffuse tension between employees who differ in age, race, gender, religious beliefs, and other characteristics.

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What Organizations Can Do


A comprehensive diversity program has three pillars:
Organizational commitment Employment practices Training and development

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Figure 15.4

The Three Pillars of Diversity

Figure 15.5

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Organizational Commitment
Diversity programs seen as an event, or quickfix can do more harm than good Organizational redesign in which diversity programs are seen as a process are more likely to be successful Objectives need to be clear in order to access outcomes

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Employment Practices
Actively recruit diversity Plug into alternative networks Foster a climate for retention

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Training and Development


Give managers and employees the tools they need to work more effectively with one another
Learn to value difference Uncover unconscious behavioral patterns

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Affirmative Action: Yesterday and Today


Affirmative action can be defined as a program that encourages the hiring and promotion of members of groups that have been discriminated against in the past It is an effort to make up for past wrongs

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insert table 15.5, page 379 Organizations Subject to Affirmative Action Rules and Regulations

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Protected Individuals
Sex/gender (women, including those who are pregnant) Racial or ethnic origin (not limited to those of color) Religion (special beliefs and practices) Age (individuals over 40)
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Protected Individuals
Individuals with disabilities (physical or mental) Sexual orientation (some state and city, not federal) Military experience (Vietnam-era veterans) Marital status (same-gender couples; some states, not federal)
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Affirmative Action Plans (AAP)


Formal documents that employees compile annually for submission to various enforcement agencies Clarifies activities to seek out, employ, and develop talents of individuals from protected classes

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Common Elements of AAPs


1. Active recruitment of women and minorities 2. Elimination of prejudicial questions on employment applications 3. Establishment of specific goals and timetables for minority hiring 4. Validation of employment testing procedures

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The Affirmative Action Debate


Some people believe it is time to rethink affirmative action Critics argue that no preferential treatment should be given to any groups

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The Affirmative Action Debate


Common arguments
Preferences are discriminatory Preferences do not make sense, given changing demographics

The debate will continue

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Summary
Work force diversity is a major issue for organizations that want to remain competitive in a global economy

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Summary
Primary dimensions of diversity include
Age Race Gender Physical and mental abilities Sexual orientation

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Summary
Secondary dimensions include
Health habits Religious beliefs Ethnic customs Communication style Relationship status Income General appearance Education and training
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Prejudice and discrimination are major barriers to effective human relations Prejudice is an attitude formed partly on ignorance, fear, and cultural conditioning

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Summary
Prejudiced people often see others as stereotypes rather than unique individuals Discrimination is a behavior based on prejudicial attitudes

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Summary
Groups protected by law from discrimination include
Gender Age Race Abilities Religion Sexual orientation Subtle forms
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The issue of valuing diversity is an economic one for most organizations Companies cannot afford to ignore the current changes in the pool of human resources

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Summary
Individuals can enhance diversity by letting go of their stereotypes and learning to critically and honestly evaluate their prejudiced attitudes Organizations must develop a culture that respects and enhances diversity

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Summary
Diversity training programs should become an internal process rather than one event Companies need to seek out and employ people from diverse backgrounds

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Summary
Affirmative action guidelines have helped bring fairness in hiring and promotion in many companies Some people believe these practices are discriminatory because of preferential treatment they were designed to protect

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Role of hr in talent management


TRANSLATING CORPORATE GOALS INTO WORKFORCE NEEDS MAKING THE PEOPLE-PROFIT LINK LINKING TALENT TO REVENUE POTENTIAL

Evaluate the tangible ROI associated with your people.


Be clear and objective when defining the value of talent. Communicate messages that are relevant to leadership in terms they understand. Be flexiblebusiness direction and objectives are always changing.

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Cont..
MANAGING TALENT PROCESSES Performance management, Succession planning/decision analytics, Targeted selection and talent reviews, Development planning/support (including learning management), Career development, Workforce planning, and Recruiting. TECHNOLOGY SUPPORT

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Uint-2

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Talent Procurement and Deployment


Identifying talent needs, sourcing talent; developing talent, deployment of talent, establishing talent management system, talent multiplication

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Identifying talent needs

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What Types of Assessment?


How can organizations assess existing staff to track high potentials and ensure new hires meet the future needs of the business? Assessment: Online Psychometric Assessments Leadership/Management Assessment Batteries Assessment and Development Centers 360 degree feedback surveys and business assessments Competency model profiling, behavioral based interviews, multi-rater assessment tools

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Assessment Benchmarking
Define performance standards Identify appropriate assessments

Identify incumbent sample

Gather performance data for each employee

Each employee completes assessment(s)

Match employees performance data with their assessment data


Statistically analyze data to determine which assessment(s) scale(s) predict on-the-job performance

Develop recommendations and plans regarding future assessment and selection

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Assessment/Development Centers?
What is an assessment/development center? An assessment/development center is a process designed to identify an individuals strengths, weaknesses, and potential in a current or future role. The assessment process is characterized by: Multiple participants rated by multiple assessors on several varied exercises Many of these exercises are designed to assess competencies Data integration: a structured evaluation of the participant in which assessors present objective evidence and reach a consensus decision The outcome of an assessment/development center are: Written reports detailing a participants competencies as they relate to job requirements One-to-one sessions examining the reports

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Why Assessment Centers?

Combine multiple assessment and business simulation methodologies to achieve the best possible predictor of future performance Offers comprehensive secondary evaluation of preferred candidate strengths and weaknesses Are the most powerful tool to predict the profile you want to hire save money over time Measure performance and potential therefore strengthening the leadership pipeline allowing organizations to develop training strategies to further develop and grow talent Hiring managers can be involved and refresh their own assessment/coaching skills Offer broad range of competencies, individually or in group Provide wealth of information available to feedback to all involved Offers great opportunity to seal psychological contract

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Assessment Centers Drive Performance


Competencies Questions
Do they have the required technical skills?

Technical Skills

Trainable

Discipline Understanding Knowledge & Experience Capability Demonstrated competencies Attributes Behaviours that infer potential

Do they have the experience and understanding necessary?

Can they demonstrate the behaviours necessary for high performance?

Do they have development potential?

Untrainable

Drivers

Motivational Fit

Will aspects of the role motivate them?

Career Fit
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Does the role meet their current career objectives?

and Tools To Assess Each Area


Technical Skills Discipline Understanding Knowledge & Experience Capability Demonstrated competencies Attributes Behaviours that infer potential
Resume Screening Technical Tests Preferential Interviewing Behavioural Interviewing

Trainable

Psych Assessment

Untrainable

Motivational Fit

Behavioural Interview

Career Fit

Preferential Interview

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Assessment Centers
Advantage Most powerful tool to predict profile you hire saves money over time Hiring managers can be involved and refresh their own assessment/coaching skills Performance and potential Broad range of competences, individually or in group Wealth of information available to feedback to all involved Offers great opportunity to seal psychological contract

Disadvantage Time investment required from candidate though they get more in-depth feedback in return and can also make an informed decision Relatively expensive in short term though saves money in the long run

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Case Study A Assessment Centers ROI In The Selection Process

Client Issue: Very high personnel turnover Young graduates selection procedure Only one interview Or a full assessment center (interview, BAQ, RAT, simulation exercises, etc.)
AC Objective: Reduce the turnover of personnel What is the percentage of young graduates who left the company within the first 3 years? What is the difference between the young graduates who were selected versus an interview and the young graduates who were selected versus an AC?

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Case Study AAssessment Centers ROI In The Selection Process

45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 25%

43%

AC Interview

The turnover of personnel was reduced by 41%.


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Case Study B
Talent Management Assesses Future Leaders

Challenge
The client, one of the worlds largest energy companies, had a program grooming high-potential employees for career advancement opportunities and broader leadership responsibilities. In 2008, the company revamped the process used to select employees for the program, making it more systematic and rigorous. As a result, the company needed a service provider with talent assessment expertise to evaluate candidates in the United Kingdom, the United States and Asia. Hudson was selected as the companys partner because of our robust methodology, global reach, the quality of our assessors and the cost-effectiveness of our offerings.

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Case Study B
Talent Management Assesses Future Leaders

Solution
Hudsons Talent Management team conducted a series of meetings to learn about the companys culture, values and leadership framework. Based on that background, we developed assessment materials that were uniquely suited to the clients leadership development program and trained our assessors to apply their high standards during interactions with candidates. In late 2008, we conducted assessments at three sites: London, Houston and Singapore. Some candidates were at a relatively early stage in their career with the client, while others had already attained senior-level positions. The type of assessments administered varied accordingly. Overall, about 85 candidates went through a series of ability and personality tests, simulation exercises, business case studies, interviews and group discussions.

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Case Study B Talent Management Assesses Future Leaders Results


Hudson provided comprehensive reports about the candidates aptitude for performing effectively in future leadership roles. Our guidance for the client throughout the process provided the company with useful information about tailoring their development efforts to ensure their high-potential employees can continue to progress throughout their careers. Candidates many of whom had never been through an assessment program before came away with a better understanding of their strengths, weaknesses and opportunities for personal development. Even those who did not make it into the leadership program found the experience valuable. The client was highly satisfied.

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Summary
Identifying talent is going to become more vital with the predicted skills shortage and therefore more science must be added to the selection process Although it may look like an additional cost, adding science to selection can save thousands in the future It is important to identify the right solution for your organization and the types of roles you hire Whatever you do, always start with the right competencies for each role and build from there Always remember, high potential is developed through a solid understanding of competency and behavior

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Sourcing
Instilling a new talent mindset and developing a powerful employee value proposition are important but they aren't enough. A robust sourcing strategy is crucial. That means being clear about the kinds of people that are good for the organization, using various innovative channels to bring them in, and having a complete organizational commitment to recruiting the best.

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Human Capital: Three Interdependent Activities

Exhibit 4.2
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Attracting Human Capital


Hire for attitude, train for skill Emphasis on
General knowledge and experience Social skills Values Beliefs Attitudes

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Attracting Human Capital


Sound recruiting approaches
Firms must take recruiting seriously Challenge becomes having the right job candidates, not the greatest number of them

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Developing Human Capital


Train and develop at all levels Encouraging widespread involvement Transferring knowledge Monitor progress and track development Evaluate human capital

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Best Practices to Recruit and Retain Young Talent


Dont fudge the sales pitch Let them have a life No time clocks, please Give them responsibility Feedback and more feedback Giving back matters

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How to Get Hired


It helps to know someone Play up volunteer work on your resume Unleash your inner storyteller No lone rangers need apply Be open to learning new things

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Developing Human Capital


Train and develop at all levels Encouraging widespread involvement Transferring knowledge Monitor progress and track development Evaluate human capital

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Talent Management System


A system that create organizationalexcellence by addresses competencygaps, particularly in mission-criticaloccupations, by implementing andmaintaining programs to attract,acquire, develop, promote, andretain quality talent.

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Talent Management As a System


Talent management as a system concept had its beginning inthe late 1980s when client/server technology, opticalcharacter recognition software and equal employmentopportunity reporting made applicant tracking possible andnecessary for most large corporations. It took off in themid-1990s with the advent of internet, web browsers anddatabase technology. It went mainstream in late 90s withthe explosion of online job boards, e-recruiting companiesand corporate employment web site.

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Cont
A study was conducted by LBA consulting group in1990s. The study examined organization that hadsurvived and prospered, and those had failed, over atime period of 25 years. The result of the studysuggested that six human resource condition had to bemet in employees selection and performanceevaluation processes.
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Cont..
A performance oriented culture Low turnover (particularly in premium employees groups) High level of employee satisfaction A cadre of qualified replacement Effective investment in employee compensation &development Use of institutional competencies in employee selectionand performance evaluation processes

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Outcomes
The identification, selection, development, and retentionof super keepers. The identification and development of highqualityreplacement for a small number of position designated askey to current and future organization success. The classification of and investment in each employee based on his/her actual and/or potential for adding valueto the organization.
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Key elements of TMS


The Talent Management system is comprised of two criticalsuccess factors that work together to ensure agencieshave people with the right skills, in the right places, at theright times. Addressing the critical success factors helpseliminate gaps and deficiencies in the skills, knowledge,and competencies of employees The two success factorsusually work together.
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Recruitment:The workforce plan drives the aggressiveand strategic recruitment of diverse and qualifiedcandidates for the agency's workforce.- Attracting Retention:Leaders, managers, and supervisors create andsustain effective working relationships withemployees.

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Cont
Attracting talent
Identifies the challenges involved in attracting a high-qualityworkforce Establish competency gap reduction goals and developaction plans to address current and future competencygaps Use appropriate hiring flexibilities and tools Attract and hires applicants who possess needed mission-critical competencies
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Cont..
Managing Talent
Utilize flexible compensation strategies to retain employees Develop short- and long-term strategies and targeted investments in current employees to eliminate competency gaps Train the current workforce in required competencies needed by the agency

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Cont..
Conclusion based on this study were simple: to optimize an organization's ability to achieve sustained excellence, it must recognize the need for proactive talent management and have a systematic way of accomplishing the activity. On the basis of research organization focus on three outcomes:

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Definition of talent multiplication


"Talent is typically thought of as an attribute of individuals. It is admired in artists, musicians and athletes. In business, we praise the talents of the exceptional leader, the brilliant strategist, the outstanding salesperson, the savvy marketer, the financial wizard," the authors state. "Most organizations talent management strategies and practices focus on individuals. An exclusive focus on leaders, stars and high-potential employees misses the opportunity to identify and nurture collective talents that may yield a whole that is greater than the sum of the parts." An example:

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Cont..
"Consider an organization whose talent primarily consists of twelve individuals: a US professional basketball team. In 2006, the Miami Heat won the National Basketball Association championship, and they won it by multiplying their collective talents. Statistical analyses of individual player performances and the teams performance with different combinations of players on the court revealed that Shaquille ONeal, one of the best basketball players ever, was not the driving force behind the teams success. In fact, he was not even part of the best five-player combination (based on point differential when players are both in and out of the game).3 It was the Heats ability to engineer the best combinations of players talents that led them to victory. "When organizations combine employees skills and knowledge in ways that foster collaboration, knowledge sharing and collective learning, they can multiply their talent and elevate the performance of all employees, as well as teams, workgroups and entire workforces."
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Unit- 3

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Cost & consequences of talent departure


Increase replacement cost Decrease productivity Loss:
Valuable knowledge Experience & skills etc. Key relationships Funding sourcies

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Lack of leadership Lack of support Lack of shared goals, vision, mission. Training or professional development Inadequate compensation Potential for career advancement/growth No employee retention investment
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diagnosing causes of talent departure


Effective communication Staff opportunity Inspire and motivate staff Listen and campionideas Develop, nurture and grow staff Flexible work schedules Incentives & recognition Compensation & benefits
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6 steps in deployment of talent


1. 2. 3. 4. 5. designing the process ensuring strategic integration assessing the current situation identifying and assessing talented individuals implementation: planning and undertaking development 6. evaluation
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1. Design the process


define a business case for succession management ensure transparency and confidentiality build in staff feedback systems develop a communication strategy

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2. Ensure strategic integration


identify roles/jobs critical to organisation's success identify distinctive leadership capabilities align with training and development and performance management systems

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3. Assess the current situation


conduct a risk assessment of potential departures from existing critical roles determine the extent of any pending position shortage by projecting requirements, internal mobility and attrition over the next 3-5 years Use relevant succession and talent management strategies to fill the gaps identified between current capability for key roles and future requirements

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4. Identify and assess potential


Outline the capabilities required for effectiveness in critical roles map essential skills and competencies identified using consistent & objective criteria also use criteria to identify high-performance and high-potential candidates with advancement potential

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Accurate identification & assessment


Use existing performance management data such as: biographical data current performance observed behaviour 360 feedback and formal appraisal outcomes interviews to determine career preferences behavioural interviews feedback from a range of senior managers performance external assessments such as assessment centres

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5. Implementation
outline the types of roles or experiences which may be offered as accelerated development opportunities develop each individuals required capabilities through a program of learning experiences development opportunities include: targeted job assignments, managing a project, a formal training program, access to a mentor etc

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6. Evaluation
establish clear timeframes for the organisation, evaluation could be in terms of whether organisational risk has been reduced or minimised. for the individual, evaluation includes selfassessment about the degree of capability development and demonstrated changes in performance and behaviour in the workplace.
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Talent Acquisition
Organizations need to get the right people on the bus and in the right seats to succeed. Good coaching, training, mentoring, etc., is not likely to make up for bad selection. Hire hard.Manage easy!

- Collins, J. (2001). Good to great.

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Talent Acquisition
Individual

Organization

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Talent / Employee Engagement

Employee Engagement is inversely proportional to stress.

Effort without distress (Engagement) Working harder and deriving satisfaction

Distress without effort (Disengagement) Giving up and feeling bad about it

Effort with distress (Strain) Working harder but with fatigue and anxiety

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Talent / Employee Engagement


What drives it?
Service Commitment

Organisational Commitment

Engagement

Work & Career Commitment

Job Satisfaction

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Talent Retention
Who are your competitors? Colleagues / partners within the organization looking for another job

Every partner / employee asks few key questions



Am I working for a winning organization? Can I get my day-to-day job done effectively? Am I treated well? Is my work enjoyable and fulfilling?

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Critical Elements of Attracting and Retaining TOP Talent


Constructive Relationships at Work Workplace Flexibility

Culture of Respect and Inclusion

Wellness, Health and Safety

ATTRACTION RETENTION

Opportunities for meaningful work

Benefits, Compensation are Fair and Attractive

Learning and Development

Provision of Employment is Secure and Predictable

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Talent retention

Engaged and Motivated Workforce

Productivity Increase

Inclusive Growth

Business Growth
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Retention Strategies
Maintain Company Image. Initiate Recruitment, Selection and Development. Leadership the maxim - Employees join companies and Leave Managers. Learning opportunities Engagement Performance recognition and rewards. Individual and independent projects. Individual contribution. Maintain Company Image. Initiate Recruitment, Selection and Development.

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Cont
Leadership the maxim - Employees join companies and Leave Managers. Learning opportunities Engagement Performance recognition and rewards. Individual and independent projects. Individual contribution.

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EMPLOYEE ENGAGEMENT
Companies with highly engaged employees financially outperform those with low engagement levels, tend to experience lower retention risk, and experience less absenteeism (Durgin, 2007.

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THE LINE MANAGER AS AN EPLOYEE ENGAGEMENT DRIVER

Managers have direct one-on-one relationship with employees through use of open communication. Managers are a conduct for the organisations strategic priorities, visions and values. Setting smart goals with their teams. Taking owners of continuous development of their teams through performance management. Challenge themselves and their staff to stretch performance.
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EMPLOYEE ENGAGEMENT
Become a high performance organisation
Capable Well Led Equipped Well Managed

Clear Shared vision mission values, strategies Priorities set clear/smart goals

High Performance
Committed Engaged Accountable Empowered Equipped - resources
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Need to engage the hearts, minds and capabilities talented people

Money cant buy loyalty


Care and concerns Employees want training to develop their long term, careers. They also want family-friendly benefits and concern in personal emergencies. Care and concern are global drivers and appear in the top two slots in loyalty surveys around the globe. Fairness at work Fair work policies and treatment of employees are the two main ways employees evaluate their jobs. While fair pair is not a key driver, 53% of respondents regard their pay as fair. Communication Employees want the right amount of information , in timely manner and, to a lesser extent, to be communicated within a way that considers their feelings. Accomplishment/recognition The biggest way to give employees a sense of accomplishment is to provide useful feedback about the performance at work. Other drivers include rewarding excellent achievements and noticing lesser achievements. Trust Employees want to be encouraged to try new ways of doing things, to be allowed to make work decisions and not to be punished if a decision is the wrong one

From the Soft Stuff Works by Heidi Brauer and Marc Drizin
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Organisational Culture Key to Talent Management

Organisations increasingly recognise the need to create a culture which makes employees feel valued, a culture that fully leverages the skills of their human capital. Organisations whose culture values the employees are in a better position to achieve the desired business results through their employees. Define the desired culture for keeping talent. Culture is dynamic and e over time. Creation of a conducive environment for success. Managers have a critical role to play in instilling the desired culture.
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WHAT IS ORGANISATIONAL CULTURE?


Culture is most commonly seen as the expression of the organisations values manifested by how people relate to one another, how information is disseminated, how people are led to feel about their work, how it values them, and how the organisation relates to the world.

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ELEMENTS OF ORGANISATIONAL CULTURE


An organisations corporate culture is often comprised of the following elements:
Employee motivation and loyalty Internal communication practices Decision- making Processes Operating styles Organisatinal philosophy Organisational Structure Organisational values Management style Leadership style sharedness of beliefs or values Acceptance & appreciation practices Concern for employees & fair treatment. Creativity & innovative Practices Open communication Respect for employees Employee engagement practices

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Conditions for talent retention


The individual The environment obtaining Industry status Employees understand the vision, mission, values and strategies of the organisation assigned Zeal to stretch performance Taking ownership for continuous development Collaboration and teamwork Globerasation trends setting keeping up with global market trends empowered to make decisions.

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Cont..
The organisation : employer branding Have resources to perform. There is recognition of performance Conducive organisational structure. Attractive employee value proposition Keeping up with technological advances

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Conditions of Talent Retention


Employer of choice brand Opportunity for development, to make a difference and succeed Feedback and recognition on performance and contribution Regular communication, feeling part of things or involved Leadership that is trusted and provides necessary support Work that is meaningful and worth striving for. Challenging, yet achievable, goals. Appropriate compensation (market-related and fair) Good work-life Cooperative relationships and teamwork Good fit with role and organisation including values. Individual life cycle
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Unit-4

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The Management Cycle


Figure 11.1,
Operating plans and budgets Project management

Needs Assessment

Performance Measurement

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The perfect world


In a perfect world, a measurement system will actively promote performance improvement by;
measuring what matters, providing corrective feedback and positive reinforcement to enthusiastic people who enjoy being measured and take improvement on as a challenge.
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ATTRIBUTES OF A GOOD MEASUREMENT SYSTEM


An effective performance measurement system should have the following attributes. FOCUS ON EFFECTIVENESS
1) We have a need to measure better. 2) We have a need to measure less.

FOCUS ON THE FUTURE

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ATTRIBUTES OF A GOOD MEASUREMENT SYSTEM

FOCUS ON OBJECTIVES, KEY RESULT AREAS


KRAs are those functions or divisions of performance in which your organization must continually improve to be successful.

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EXAMPLES OF KEY RESULT AREAS


Customer Product/service Public/society/natural environment Marketing Human Resources Production Maintenance Operations Finance

Good measurement systems dont just measure things done according to the organizational chart. Good systems measure things done to satisfy stakeholders.
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Key Performance Indicators KPIs


This is the essence of measurement. Lets make sure the concept of Key Performance Indicator is understood.
An indicator is a gauge or a measure that reports information. Performance is the result or activity we are looking for that fits in to strategic goals. Key means that this measure has been pinpointed so carefully that management knows precisely what to do. Measures are developed to capture both the input and output elements of a business system.

Some examples of measures follow.


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SPEED INDICATORS
response time records turn around time records cycle time records project completion dates meeting scheduled time records

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ACCURACY INDICATORS
judgment based climate or opinion surveys
focus groups comment cards telephone surveys advisory panels

opinions of community leaders meeting design specifications or passing an inspection point that ensures the product works. Customer returns or warranty claims.

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VOLUME INDICTORS
Measures the amount (Number of) of outputs or results from a specific activity or program. number of units produced
number of completed transactions % market share Back order statistics Number of failed sales due to being out of stock

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INVESTMENT INDICATORS
Measures the amount of resources expended on a specific program or activity or the unit cost (cost/number of units produced ($)).
operating costs per unit produced capital costs per unit produced cost per customer as to sales and marketing expenses cost per unit of after sales service and customer support.

Notice that the financial measures are per something


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Six Steps of a Measurement System


1. Separate Strategic Goals Into Input and Output Dimensions 2. Develop Output and Results Measures for each goal 3. Develop Input Measures for each goal 4. Check with SAVI to see if the set of measures is complete 5. Use an Effective Recognition System 6. Build the Culture
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Step 1, Separate Strategic Goals Into Input and Output Dimensions

Following from Vision, Mission and Values, organizations create strategic goals that identify Key Result areas of the organization where change and improvement is possible and desirable. Our first step in developing measures to reflect the goal is to dissect the goal into its input and output dimensions.
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Figure 11.2, Broad measurement concept of inputs

unit cost efficiency


Input dimension How well are materials used, (excessive waste) How well is labour used, (excessive idle time) How well is overhead used (idle capacity)

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Figure 11.3, Broad measurement concepts of Outputs

Internal Results
Output Dimension

maintaining and improving quality lower consumer prices

External Results

financial returns improve market share

meet current and future demand

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Step 2, Develop Output Measures or Each Goal


Outputs are accomplishments. In most organizations, accomplishments can be categorized into three groups.

Investment returns Customer Satisfaction Social Impacts


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Figure 11.4,

Measures of outputs or Results.


OUTPUT MEASURES
PERFORMANCE GOAL (changes of specific amounts over specific time frames)

CATEGORY

MEASUREMENT CONCEPT

PERFORMANCE MEASURE

Financial returns

% return on investment % return on assets employed Profit margin on sales % market share relative to the competition % market share relative to total market size PDM MBA

All should increase by a specific % change, to be accomplished by a specific date.

Investment Returns

Market share

The proportion of the market share against the competition should increase. The proportion of the market share relative to the total market should increase at a rate that is faster than the rate of change in total market size. 233

Measures of outputs or Results


Product or service quality Rejection rates in the production process Sales returns Both should decline by a specific amount in a specific timeframe.

Customer Satisfaction

Deliver on time and in sufficient quantity

Backorder and delivery statistics

Backorders should decline and delivery cycle times should improve.

Consumer prices

Retail price by product

The retail price matched to value should decline. Children using these toys should show a measured improvement in reading skills The proportion of toys presented for re-cycling should go up. 234

Child development

Improvement in reading skills Impact on landfills when the toy is finished PDM MBA

Social Benefits
Environment al impact

Step 3, Develop Input Measures For Each Goal


We normally develop input measures after we have developed output measures because it is a good idea to know where you are going before you decide how to get there.

Financial operating resources Financial capital resources Other organizational resources


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Figure 11.5,

Measures of Inputs or Efficiencies


CATEGORY MEASUREMENT CONCEPT

INPUT MEASURES for UNIT COST EFFICIENCY

PERFORMANCE MEASURE

PERFORMANCE GOAL

Materials and labour

Direct materials and direct labour per unit, expressed in both dollar and quantity terms

Material and labour cost and or consumption per unit should decline over a specified time period Overhead consumed per unit produced should decline

Financial Operating Resources


Overhead

Overhead charged per unit

% utilization of capacity

%capacity utilized should increase to or remain at optimal levels Dollars per unit of capital invested should decline over time as capital resources are used more efficiently

Financial Capital Resources

Capital investment in operating assets

Dollars of capital investment per unit produced

Other Organizational Resources

Non-financial resources consumed by the performance area

Management estimates of the resources of talent and energy and other nonfinancial resources that have been dedicated to this performance area

The amount consumed will increase as the project is developed and decrease after it is implemented

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Step 4, Check with SAVI to see if the set of measures is complete

Before we can be sure that we have a complete set of measures, we need to apply the SAVI framework to categorize the measures as to Speed, Accuracy, Volume and Investment.

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Figure 11.6,

Linking Output Measures to SAVI


OUTPUT MEASURES MEASUREMENT CONCEPT CATEGORY PERFORMANCE MEASURE

SAVI

financial returns Investment Returns market share

% return on investment % return on assets employed Profit margin on sales

Accuracy

% market share relative to the competition % market share relative to total market size

Volume

Product or service quality Customer Satisfaction

Rejection rates in the production process Sales returns

Accuracy & Volume Speed & Volume Investment Accuracy

Deliver on time and in sufficient quantity

Backorder and delivery statistics

Consumer prices

Retail price per product

Child development Social Benefits Environmental impact

Improvement in reading skills

Impact on landfills when the toy is finished

Volume

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Figure 11.7,

Linking Input Measures to SAVI


INPUT MEASURES for UNIT COST EFFICIENCY CATEGORY MEASUREMENT CONCEPT PERFORMANCE MEASURE

SAVI

Materials and labour Financial Operating resources Overhead

Direct materials and direct labour per unit, in both dollar and quantity terms.

Investment

Overhead charged per unit.

Investment

% utilization of capacity

Volume

Financial Capital Resources

Capital investment in operating assets

Dollars of capital investment per unit produced

Investment

Other organizational resources

Non-financial resources consumed

Management estimates of the resources of talent and energy that have been dedicated to this performance area.

Investment

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Testing the measures


Once we are satisfied that the set is complete we need to subject each and every measure to a test.

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Step 5, Use an Effective Recognition System


Use Measurement to Initiate Change
An effective measurement system will use the measured results as a management tool. Every result should have an automatic intervention strategy. When results are as expected we should offer congratulations and reinforcement to keep it going, when results are less than expected we should quickly isolate the cause and correct the process
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Step 6, Build the culture


Good systems need good people. There is no sense in examining a process unless at the same time you examine the people who govern the process. Improvement does not take place on paper.
Improvement happens when people employ enthusiasm, dedication, commitment, leadership and morale in their daily routine. A good system on paper is a healthy beginning but if you want results you need to follow up a paper system with a people system.

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Closing remarks
In the beginning of this chapter you were challenged to find measures and see the resulting behavior.
So how about the 30 minute pizza delivery guarantee. That promotes speeding and if a delivery person has an order at 28 minutes and another at 10, which does he deliver first? And what happens if Pizza delivery people are offered a cash bonus for every delivery made within 30 minutes, and what does this do to pizza quality?

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To be cont..
People are curious beings. We bring our own personal values to the job, we react differently to control systems, we are motivated by different things. A performance measurement system is a uniform set of measures that is trying to motivate a most un-uniform set of people.

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Talent Metrics:
Talent Metrics: Tangible Data (Easy to measure, Low Value). Talent metrics (also known as workforce analytics) measures tangible data such as headcount, attrition, and compensation. This is appropriate to recommend when you are selling to HR

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Measurement of Human Capital and Official Statistics

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Measurement of human capital


1. Measuring Australias Human Capital Development: The Role of Post-school Education and the Impact of Population Ageing (ABS)
2. Measuring the Education Output of Government Using a Human Capital Approach: What might Estimates Show? (Fraumeni and NBER) 3. The Measurement of Human Capital Development, also with Reference to Elderly Population (ISTAT)

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Why measure human capital?


Key concept in analysing central issues, such as Productivity and growth Impacts of an ageing population Sustainable development The returns to education OK but do we need the capital approach? Estimates of human capital may be compared to other assets Enables analyses of policy measures in important areas Even so what should be the role for NSOs?
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Human capital is an intangible asset!


Human capital definitions Wide: Productive capacity of individuals More narrow: Productive capacity related to knowledge and skills Improvements in labour quality may take many forms Healthcare Learning in families and neigbourhoods Formal schooling On-the-job training Empirical studies typically focus on formal education But stock figures include social capital as well?

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Human capital theory in a nutshell


Education is regarded as an investment Investment entails costs direct costs and opportunity costs of forgone earnings To be willing to undertake the investments, individuals must be compensated with higher wages ex post For employers to be willing to pay higher wages, individuals with higher education must have higher productivity Individuals make optimal choices based on net present value of investment in income or utility terms

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Approaches to human capital estimation


Direct volume measures in NA Volume indicators for types of education weighted together by unit costs The National Wealth Approach Implies a wide definition of human capital The Jorgenson-Fraumeni approach to measuring output of the education sector (the Australian and the US papers) More narrow: Analysing the contribution to national wealth from education The indicator approach (the Italian paper) Human capital as a multidimensional phenomenon A broad set of human capital-related indicators (OECD: Education at a Glance)
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The National Wealth Approach: Calculating human capital residually

Three steps:
1. Calculate resource rents from all natural resources (renewable and non-renewable) 2. Decompose Net National Income (NNI) into the returns from the inputs i.e. physical capital, natural resources etc. Human capital is calculated as the residual 3. Capitalize the income stream from the human capital component
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The NW Approach: Strengths and weaknesses


Making the intangible comparable to other (measurable) assets Based on (mostly) existing national account figures Based on rather simple methods and calculations The methods are not (necessarily) forward looking
In particular: demographic trends are not taken into account

The human capital estimate is a residual! There is (usually) no attempt to isolate the contribution to human capital from education

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The Jorgenson-Fraumeni Approach


Based on human capital theory Output of the education sector in a year is the increment in human capital stock of the population, i.e. the increase in productive capacity over the lifetime The distribution of individual productivity is measured by the corresponding wage differentials Relies upon the assumption that market wages reflect the productivity gains attributable to education The measure does not capture possible externalities from investments in education
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The JF Approach: Strengths and some critical questions


May uncover underlying structural changes, like
Demographic: if cohorts entering the labor market are smaller than cohorts leaving, human capital measured by the JF approach will ceteris paribus decline. Educational attainment: if cohorts entering the labor market have chosen types of education with on average lower market value than cohorts leaving, human capital measured by the JF approach will ceteris paribus decline.

Do relative wages reflect the output of the education sector? Can we neglect the value of leisure time? (the Australian paper vs. Fraumeni) How to deal with the value of basic education? Can the complicated calculations be implemented on a regular basis ie. as official statistics?

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Human capital measuring: What should be the role and ambitions of NSOs?

Three possible strategies: 1. Developing databases on human capital for research and analyses 2. Developing methods for output measures in the Government sector (NA) 3. Full integration of capital measures in the National Accounts
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transformation and reorganization of HR


Redefining the Business and Focusing on the Customer Teaming and Supporting Nonhierarchical Structures Leadership and Shared Values A Change in Language

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NEW ROLES FOR HUMAN RESOURCES


Functional Responsibilities Shift to the Line Human Resources As a Business Partner A Focus on Career and Competency Development Pay for Skills A More Egalitarian Organization

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Talent forces for tomorrow

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how
Passion to our recruitment industry Personal goals Embrace innovation- no fear of technology Hard work- the common foundation of all successful recruiters

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Truth
Force in play changes in behavior, technology, demographics, naturalresources and other areas force businesses to continually look ahead and adapt . Wherever talent scarcity takes hold, recruiting innovation responds. The most competitive organisations recruiters will be leaders in this space.
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why
Changes in behavior, technology, demographics, natural resources and other areas

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More changes
Arogance of supply Unnecessary monetized frction points Talent requires privacy, control and transparency Brand matters

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