managing capabilities for talent engagement and pipeline development

Managing capabilities for talent engagementand pipeline development

Jyotsna Bhatnagar

Abstract

Purpose – With talent management becoming an area of growing concern in the literature, this paper

seeks to investigate talent management, employee engagement and talent pipeline development.

Design/methodology/approach – A case study of best practice in talent pipeline development is

followed using interviews and archival data as shared by the organization.

Findings – The findings of the case looked at interventions of employee engagement and dialogue.

Establishing talent pools and identification of talent through talent matrix is highlighted. A basic HR

architecture is emphasized. Global managerial diversity with rotational assignments in different markets

is another finding of the case which grooms future leaders for the organization.

Originality/value – The present study indicated that a good level of engagement may lead to high

retention and grooming of future leaders for the organization.

Keywords Management strategy, Employees

Paper type Research paper

Introduction

Digitization, labor shortages, growth through acquisitions, simultaneous downsizing and

expansion, workforce demographic changes, and globalization are just a few of the trends

that have made talent a top priority (Boudreau and Ramstad, 2004). There is a seismic shift,

which began some ten years ago, and which according to Charan (2006), brought about

three forces. These were: mobility of talent, mobility of capital, and mobility of knowledge,

thanks largely to the internet. Resultant of this shift was that anyone from anywhere with

determination could restructure a global industry. Case in point is of Lakshmi N. Mittal who

used know-how from his family’s steel business in India to build London-based Mittal Steel

Co., the world’s largest. Similarly Mexico’s Cemex is a new world leader blossoming far from

traditional business centers like New York and Tokyo (RamCharan, 2006).

The clustering of talent is just as prevalent in the emerging economies, especially India and

China, where economic and technological activity is becoming far more concentrated than

in the advanced world. A small number of booming mega-regions like Bangalore, New Delhi,

Shanghai, Beijing, and Guangzhou are sucking talent from the countryside, connecting to

the world economy, and leaving the rest of their countries behind. Within these regions, too –

as within US metros – the economic divide between high-skilled and low-skilled is growing

(Florida, 2006). Talent management is fast gaining top priority for organizations across

countries. It is not easy to miss the potential of new technologies, the impact of new

competition, and the shifting power of customer and suppliers – critical points in time that

Grove called strategic inflection points. It is believed that the war for talent is a similar to

critical strategic inflection point. It rose quietly from the ashes of the Industrial age in 1980s,

jumped into the headlines in 1990s, and will continue to reshape the workplace in the

decades ahead (Grove, 1998).

DOI 10.1108/00197850810841602 VOL. 40 NO. 1 2008, pp. 19-28, Q Emerald Group Publishing Limited, ISSN 0019-7858 j INDUSTRIAL AND COMMERCIAL TRAINING j PAGE 19

Jyotsna Bhatnagar is

Associate Professor in the

Human Resource

Management Area,

Management Development

Institute, Sukhrali, Gurgaon,

India.

The talent pools (such as jobs, roles or competencies) in organizations, see some

improvement in quality but make the biggest difference to organizational success. The

‘‘pivotal talent pools’’ are the vital targets for HR investment and leader attention (Boudreau

and Ramstad, 2005) and provide a fierce employer brand equity (Fitz-enz, 1997) in a market

where talented employees are in short supply. A way to retain these employees is to provide

them a passion to work, an engrossing environment which peaks their performance and

gives a continuous work experience which is difficult for competitors to replicate. Employee

engagement is driving employer Brand equity. Employer brand interventions in recent

research indicate talent management as a key driver for this strategy (HR Focus, 2006).

Recent research indicates the war for talent happening due to labor market shortage

(Branham, 2005; Brewster et al., 2005; Lawler, 2005 Boudreau and Ramstad, 2005; Gardner,

2002; Cappelli, 2000; Nybo, 2004; Sparrow, 2004; Rivenbark, 2004; Frank and Taylor, 2004,

Scheweyer, 2004; Chambers et al., 1998) yet very little research attention has been aimed at

competitive strategies of the firms in this battle. Talent has become the key differentiator for

Human capital management and for leveraging competitive advantage. There has been a

spate in Indian Literature on the same (see Bhatnagar, 2004; Chugh and Bhatnagar, 2006;

Bhatnagar, 2007) yet firm specific strategies are needed. Many Indian companies, both in

the public and private sector, have been hailed for the premium they put on their human

capital (see Businessworld, 2007).

Leadership development: pivotal talent pools

As competition for critical talent heats up, organizations must rethink the actions they take to

retain and attract talent. To begin, they must identify the segments of the workforce that drive

current and future growth. Then, they must focus on the issues that employees care about

most: development in a way that stretches individual capabilities, deploying into work that

engages their heads and hearts, and connecting with the people who will help them achieve

their objectives (van Dam, 2006). Creating the Leadership bench strength then becomes a

critical inflection point. This is possible through development of a talent mindset, developing

deep pockets and pools of talent, and differentiating between star performers in terms of

performance and potential. Besides these points, of course creating lynchpin positions and

rewarding them through continuous learning stretch targets is another strategy of developing

leadership talent pipeline (Conger and Fulmer, 2003). Some researchers call it ‘‘talent

segmentation’’ which is as vital as ‘‘customer segmentation’’ (Boudreau and Ramstad, 2004,

2005). Part of talent segmentation is identifying ‘‘pivotal talent pools’’– where human capital

makes the biggest difference to strategic success (Boudreau and Ramstad, 2005).

Yet there is a ‘‘leadership crisis’’ where leaders of the future will need to be ‘‘home-grown’’

rather than attracted from outside the organization. As such, it is important that organizations

take an active role in identifying and cultivating their own people who have the capability and

potential to become effective leaders (Parry and Proctor-Thomson, 2003, p. 318).

Furthermore, the academic literature primarily suggests that if organizations do participate in the

professional development of leaders, they do so as a source of competitive advantage (e.g.

Fulmer et al., 2000). Within the extant literature, the concepts of career development and

leadership development are seldom considered concurrently. In particular, within the leadership

development literature the concept of leadership and organizational responsibility for a leader’s

career has always been implied rather than stated (Parry and Proctor-Thomson, 2003, p. 319).

Talent pipeline development needs high potential development, and recent empirical

studies have found that job rotation and mentoring/coaching are quite popular activities and

formal external training has the most diversified application for such development.

‘‘ Talent management is fast gaining top priority fororganizations across countries. ’’

PAGE 20 j INDUSTRIAL AND COMMERCIAL TRAININGj VOL. 40 NO. 1 2008

As expected, high-potential development takes up more time and offers a wider scope of

activities than is the case for other managerial development initiatives. Especially,

organization size may bring some variation in these patterns (Vloeberghs et al., 2005).

The most powerful talent-management practices are firm specific and respond to an

organization’s unique business and human capital context (Heinen and O’Neill, 2004).

Brockbank (2002) believes that career planning (now a part of talent management) is not in

the hands of employees. As companies try to respond to a fast-changing marketplace, they

will have to continually shuffle their employees to businesses with the highest returns.

The paper presents a case study of a multinational organization in India. The name of the

organizations has been changed at the organization’s request for confidentiality. The

organization is hence Organization Sense. With a presence in more than 190 countries,

Organization Sense is one of the most international organizations. For 150 years, innovations

have shaped the organization. The Group in India is in the field of electrical and electronics

engineering. It has the capability to integrate diverse products, systems and services into

turnkey solutions across the life-cycle of a project. It is a multinational organization in the

area of energy, lighting; transportation; information and communication and healthcare. The

operations include 15 manufacturing plants and 16 sales offices. It is also part of a vast

global network of 461,000 employees, operating in over 190 countries.

The talent pipeline system is described in detail at the organization spanning the entire HR

value chain and the employee life cycle starting rightly from: On boarding; development of

competencies, job rotation, learning and development, nurturing of high potential

employees, talent pools; talent identification through talent matrix, talent pipeline

development. This is followed by implications for HR practitioners.

Organization Sense: talent capability system

Talent onboarding. Organization Sense grows with its people. They believe that it is their

people who make them a world leader. Individuals who are bright, motivated and versatile

and have the ability to explore and generate innovative ideas and the courage to implement

them are sought for to match the organization needs and culture. Several campus programs

are there for fresh recruitment which include: Studentship Program: Scholarships and

in-plant project work are offered to third year students from selected colleges. Final

placement offers then may be made to these students at the end of their projects.

Campus resourcing. Candidates are recruited from various colleges based on their

academic record and a selection process in which specially trained interview panel

members assess them on certain pre-determined competencies Apart from recruiting the

right people, it has recently launched an initiative to increase the ratio of female scientists

and technocrats in its ranks. ‘‘Yolanda’’ is not only a woman’s name. It is also the acronym for

a new Organization Sense initiative launched in Germany in 2002. The ‘‘Yolanda’’ program is

providing 100 young women with mentorship for the entire duration of their studies. Yolanda

is aimed at female students in the engineering and scientific fields. The focus is on the

technological disciplines since there are fewer female graduates in these subjects than

Organization Sense would like to hire – the percentage of women students in some technical

fields is considerably less than ten percent.

Nurturing and grooming of talent

Trainee Engineers Induction: Graduate Trainee Engineers are inducted with a training period

of one year. During this year trainees undergo a complete information program. Every

quarter inputs are given in technical, behavioral and functional areas. They are also

assigned a mentor to be their coach and friend during this year. The fresh entrants are

formally coached on the job by their reporting officers and mentored by senior executives.

This helps them to quickly settle down, adapt to the company culture, understand the

company philosophy and assimilate the company core values. Based on a performance

evaluation at the end of the year the trainees are confirmed.

VOL. 40 NO. 1 2008 j INDUSTRIAL AND COMMERCIAL TRAININGj PAGE 21

Development of competencies

The competency development model of Organization Sense encompasses all levels of

employees and development in both fields-technical as well as managerial. Various

initiatives include:

B Job rotation: At the worker level, monotony of production jobs involving repetitive actions

is quite likely to demotivate an employee. To overcome the fatigue, a long recognized and

recommended remedy is job rotation. This results in an additional benefit to the

organization by way of multi-skilled employees.

B Cross-functional projects/task force assignments: One of the tools of quality improvement

programs is encouragement by management of formation of cross functional groups to

tackle specific problems requiring cross functional expertise.

B Technical training: is a necessity both for the workers on a periodic basis, as well as the

executives to assimilate new technologies so that they are constantly exposed to and

keep in touch with the cutting edge of technological developments in the industry.. As old

technologies become obsolete, there is a constant need to renew the talent renewal too.

B Management development centers: are entrusted with the task of developing the

managerial talent of identified executives of the company.

B Long term management development program: The company has tied up with Indian

Institute of Management, Bangalore for imparting specific managerial inputs for its senior

managers. These interventions are long term management programs for mindset

changing which are developed and customized specifically for Organization Sense. The

importance and commitment to training by the top management is reflected in the fact

that even during the time of severe Budget cuts, the program continued.

B Functional and business diversity: This involves exposing talent to their diversified

businesses across the country. The diversified product portfolio of Organization Sense

India including traction motors for Indian railways to switchgears for power plants to

highly sophisticated medical equipment for the health care industry, gives it the flexibility

to provide a wide range of experience to its personnel.

B General management exposure: This calls for shifting talent from functional or specialist

role to that of a general manager, as he moves up the hierarchy. Various interventions are

planned in order to better prepare these individuals for tackling new assignments.

International exposure calls for moving selected high performers across countries in order to

give them experience in International business operations and cultures. It widens their

perspective and they are likely to manage better in the larger organizational interest.

Selection of high potential-high performers

In selection of high potential the Talent Management Initiative at Organization Sense takes a

holistic view and:

1. Sets a framework for identification, development and deployment of hi-potential

employees.

2. Aligns the system with various other local HR systems and processes which include:

B increments;

B recognition;

‘‘ . . . it is important that organizations take an active role inidentifying and cultivating their own people who have thecapability and potential to become effective leaders. ’’


B promotions;

B career development;

B learning;

B counseling/warning;

B re-deployment; and

B out-placement.

3. Integrates organization sense HR initiatives.

Goal setting and performance measurement

Organization Sense Management Review (SMR) is a formal performance appraisal system.

It recognizes that rewarding an employee for a job well done also motivates an

under-performer to pull up his socks. The first step towards an effective model of

performance management system is: job evaluation, which is an ongoing process at

Organization Sense India. This is considered an important input for designing a fit between

the employee and the organization. The company uses the Mercer model for job evaluation

wherein the CEO’S job is taken as benchmark and all other jobs are evaluated on the

parameters as defined by the Mercer model. It classifies jobs based on:

B size of responsibility – impact on organization and supervision;

B scope of responsibility – area of responsibility and interaction; and

B job complexity – qualification,problem solving and environmental condition.

Performance is assessed on an overall basis considering each of the following:

B actual results achieved vis-a-vis specific targets set for the financial year;

B performances in areas of responsibility other than those in which specific targets were

set; and

B circumstances under which the results were achieved.

Considering the above, the superior rates whether the subordinate’s performance:

B exceeds expectation;

B meets expectation; or

B needs improvement.

Potential to assume jobs involving higher levels of responsibility/complexity are rated taking

the following factors into consideration:

B impact on organization;

B supervision;

B area of responsibility;

B interaction;

B qualification;

B problem solving; and

B environment conditions.

Individuals are rated on potential rating as follows:

B CF – Current fit; matches current requirement.

B P – Potential to assume responsibilities at the next higher level.

B P þ – Potential to assume responsibilities beyond the next higher level.

B New – Too new in the current level (note: current level and not current job), for potential to

be reasonably assessed.


Potential as per above is assessed for over a period of the next five to seven years. Based on

the superior’s ratings (P þ , P, CF), and the position level to which the employee belongs,

they are classified into categories Priority 1, 2 and 3 categories as represented in the talent

matrix below (Figure 1).

Based on the above talent matrix, the hi-potentials are classified in different talent pools at

different levels. Various other HR interventions are also planned based on the position of an

employee in the above matrix. For example increments, recognition, promotions, career

development and learning are all planned interventions for performers, while

non-performers get a dose of counseling/ warning, are re-deployed or in extreme cases

out-placed.

In order to make the whole process dynamic and responsive, round tables are identified at

each of the levels, which ‘‘own’’ these talent pools. This basically involves the senior-most

executives sitting together periodically to discuss the progress being made by the top of the

talent pool. The following parameters are constantly reviewed with respect to the identified

talent pool members:

B identification of next developmental step (options);

B identification of other developmental support;

B review of progress; and

B review of pool membership.

At any given point of time, up to date information is available to the company top leadership

regarding who is ready to take up the mantel of leadership at various levels, and what their

growth profile has been (see Table I).

Talent pipeline

Another lead undertaken by Organization Sense is the Leadership Excellence Project,

wherein potential future leaders are identified and groomed for assuming higher

Figure 1 Potential-performance grid


responsibilities. The project works under the Organization Sense Leadership Framework

(SLF). The selected potential candidates are trained across various companies and given

challenging assignments, to develop their skills and prepare them better for donning the

mantle of leadership.

At Organization Sense India, as part of the strategy of the parent, promising talent is

identified, and given international exposure by assigning them to countries across the globe.

The result of this is that an International Development Database (IDD) is always available

with the organization from where suitable selection can be made for various assignments

from within the talent pool.

Building employee engagement through employee dialogue

Organization Sense believes that the employee dialogue is the core instrument of their

leadership culture. This involves the facilitation of a dialogue between the employee and his

boss at the start of an assessment period, so that role clarity is there and performance

expectations are crystallized. It realizes the principle of dialogue and commitment, and is the

vehicle for transforming business strategies into people activities. By actively participating in

the dialogue, employees get to set their work targets that are aligned to the business

strategies, develop their competencies required for the current and future positions,

understand how they are being assessed and rewarded for their career growth with the

company. The employee is aware that she/he plays an active role during the employee

dialogue and can influence.

At Organization Sense, the best practice that emerges from its talent management model is

its talent pipeline. The entire process of enhancement of homegrown talent into the future

leaders of tomorrow speaks of its commitment to bench strength and succession planning

through development of a very strong second line. For leadership positions they focus at the

four interventions, namely: functional diversity; business diversity; general management

exposure; and international exposure. Organization Sense does face challenge in retaining

its hi-potential managers once they are exposed internationally and are given overseas

assignment however close tracking, innovative compensations through reverse bonds is

sure to stand it in good stead in facing this talent flight and future raids.

Implications

For leadership development the strategy of developing business diversity across 190

countries and 16 operations provides rich insights to the leader talent who is being groomed.

This is supported by functional diversity as well as managing International assignments and

general management positions.

Besides of course the best practices in establishing the talent pipeline development through

the competency framework, identification through a transparent system of talent matrix. The

base of talent management is a robust performance management system which is visible

through this case, as also a systemic and simple HR architecture which is the foundation of

such a successful talent strategy.

This is supported by the employee dialogue practice, which is an essential part of the

employee engagement intervention. Employee engagement recently is appearing as an

important talent management intervention (see Bhatnagar, 2007).

Table I System of round table in Organization Sense at various levels

Talent pool Pool ownership Round table Participants

I Corporate I-Regional Organization Sense managementreview-India

Corporate management

II Corporate/divisional II-CorporateII-Divisional

Divisional heads & Corporate HRDivisional line þ First line þ Personnel head

III Divisional III First line of Divisional head þ Personnel head


The best indicator of a company’s health (BusinessWeek advice column), in the words of

former GE Chairman and CEO Jack Welch is: ‘‘Employee engagement first’’. How do leaders

maintain that consistent sense of purpose and employee engagement when at the same

time the employee is juggling all of these different types of new relationships, global

relationships, being able to address conference calls early in the morning in Europe and late

at night in Asia and still being able to manage one’s personal time. At the same time, being

able to motivate others in that environment as well (IBM, 2006). This is a challenge which has

been well accepted at this organization. A way to retain these employees is to provide them

a passion to work, an engrossing environment which peaks their performance and gives a

continuous work experience which is difficult for competitors to replicate. The managers are

an important key in this equation (Baumruk et al., 2006; Lockwood, 2006).

Going back to this idea of the concept of world is becoming flatter, the need to have a greater

understanding about who are you working with, where are they located, and to be able to

adjust to their individual circumstances. In some of the research two very important types of

trust are seen. One is around competence based trust: how do you know that someone

actually knows something and what they’re telling you is valid? While the other is relationship

trust, which enumerates that people are able to come together quickly around shared goals

and objectives (IBM, 2006). These are what build in the engagement levels. In fact

researchers Butler and Waldrop (2004), call this interpersonal facilitation, which leaders

manage in the background to keep colleagues committed and engaged so as to not to derail

the projects. There is of course relational creativity, team working and influence which are the

other essentials for leadership, resulting in a talent to task fit rather than the other way round

(Butler and Waldrop, 2004).

In fact the above quoted best practice in talent management has been quoted in Procter and

Gamble and HSBC (Ready and Conger, 2007). These two organizations use similar talent

pipeline interventions with employee engagement interventions to support. This approach

nurtures globally diverse and flexible talent pools which are nurtured with a specific strategy

of growing home grown leaders. Yet all the leadership pipeline development is anchored in

compensation of the senior managers as has been done in Phillips India. This is reported by

Ready and Conger (2007) in Procter and Gamble.

Ayman et al. (1994) distinguish between an international manager and a global manager:

‘‘International refers to an exchange across nations, whereas global represents a sense of

unity across multiple borders. A global orientation is represented by a more collective

awareness and inclusive perspective than is international but international may be a

precursor to global’’ (p. 64). This is what is encouraged at Organization Sense.

Further the social complexity found in the unique configuration of the firm’s environment will

also be enabled by a robust HR architecture, leveraged by a leader who supports the HR

drivers and provide the Human Capital advantage. This would be the winning proposition for

the Capability building through talent pipeline development and Employee engagement. In

the organization quoted above Talent management was taken up as a business priority and

not alone a HR intervention. The Implications for practitioners in India lies for first building a

robust HR system. Talent Management to be successful has to be built upon a robust

performance management system. Further top Management has to ensure it remains a

political system by institutionalizing transparent round table discussions once talent is

identified. Supporting this with constant employee dialogue would take care of the

engagement levels within the organization.

‘‘ The most powerful talent-management practices are firmspecific and respond to an organization’s unique businessand human capital context. ’’


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Corresponding author

Jyotsna Bhatnagar can be contacted at: [email protected]


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