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How do organisations identify talentand assess potential?A benchmark study of high potential assessment methods

Amsterdam, April 22nd 2009 Dimmy van Zanten, Country Manager NL

Cubiks Talent Benchmarking Study

• To help employers understand how organisations identify talent and assess potential, Cubiks recently conducted a detailed study of the Talent Management processes that are being used in commerce and industry today

• The study involved:

– Review of the Talent Management approaches adopted by over 30 multi-national companies

– Stakeholder interviews – Review of academic literature to

identify the latest models and research

The study gave insights in two aspects:

• Findings on important aspects of the process

• Insights in the characteristics employers consider to be the most reliable predictors of potential

Agenda

Findings on the process• Short or long-term focus?• Who conducts the assessment?• What rating system is applied?

Insights in the characteristics• What are the critical high potential competencies?• What role does personality play?• General Mental Ability• Understanding the role of derailment factors

Short-term focus on financial results results in short-term focus on potential

• Most organisations focus on predicting short-term career progression rather than identifying the ultimate management level an individual can reach in their organisation

• Organisations that adopt a short-term approach to talent identification often have:

– Relatively high staff turnover– Short-term focus on financial results– Highly dynamic operational environment

• These organisations typically use annual or bi-annual assessment to identify individuals who can progress one or two ranks or levels within the next 2 years.

Low staff turnover leads to long-term focus

• Organisations characterised by low staff turnover tend to adopt a longer-term approach to talent assessment

• Such organisations seek to identify potential as early as possible in the career of an employee, and focus on attempting to predict ultimate career success

• Assessment processes in these organisations tend to be initiated every 2 to 3 years

• In most cases, line managers are asked to rate individuals and the ratings are then further reviewed in discussions with wider groups of senior managers

• Some organisations ask high potential candidates to assess themselves

• Some use 360 degree feedbackas a way to assess potential

• In rare cases, talented individuals are identified by senior managers during steering group meetings facilitated by HR

Who conducts the assessment?

What rating system is typically applied in Talent Assessments?

• The most popular method used to rate high potentials is by applying a double-rating

– 50% on performance

– 50% on potential

• Some organisations use a box grid(see example on following slide)

• Often a ‘forced distribution’ is applied to spread individuals across the different areas of the grid

Example box grid

This group may need exposure to different areas of the business

This group is given entry to high potential programme

Individuals in this group may be given a performance improvement plan or be managed out

Individuals in this group could move to achieve high performance with the right training or coaching

Low

High

High

Performance

Potential

5 - 10%

5 - 10%

40%

40%

Those not considered to be High Potentials…

• Tend to be offered restricted training and career development opportunities

• Are given limited exposure to stretch assignments and projects

Consequently these individuals:

• Have limited visibility in the organisation• Do not come to the attention of

senior management • Are not able to achieve the recognition

which may place them on a faster track

Agenda

Findings on the process• Short or long-term focus?• Who conducts the assessment?• What rating system is applied?

Insights in the characteristics• What are the critical high potential competencies?• What roles does personality play?• General Mental Ability• Understanding the role of derailment factors

What are the critical high potential competencies?

• Organisations and academics both seek to identify key behavioural competencies for high potentials

• The critical high potential competencies identified include:

• Leadership• Teamwork• Vision• Planning• Judgement• Risk taking

• Strategic Thinking• Communication skills• Confidence• Entrepreneurship• Presentation skills

‘Meta-competency’: Learning focus

• A number of the academic studies reviewed emphasised the importance of ‘Meta-competency’

• Meta Competency is:

– An individual’s awareness of their own learning patterns– A willingness to go against the grain of previous learning

patterns to do something new– Flexibility and adaptability in learning efforts

• The presence of Meta-Competency is essential in the identification of high potential as this helps individual's to acquire the key behaviours which are required to achieve success

Organisation specific competencies

• Some organisation-specific competencies are also relevant to the assessment of potential:

– Eg. Creativity is likely to be important in scientific or technological organisations

• In other instances, the operational culture may play an important role:

– Eg. Safety awareness is an important competency in petro-chemical organisations

What role does personality play?

• The most common trait linked to effective job performance cited in the academic studies was ‘Conscientiousness’

– i.e. the degree to which an individual is achievement-oriented, careful, hard-working, organised, persevering, responsible and thorough

• ‘Extraversion’ was identified as a valid predictor for some managerial roles

• ‘Openness to Experience’ is likely to be important for training efficiency and has links to learning focus

Emotional intelligence

• Some aspects of Goleman's four quadrant emotional intelligence model can predict potential

• In particular the competencies of‘Self-awareness’ and ‘Willingness to seek and respond to feedback’ were deemed to be important indicators of potential

General Mental Ability

• General Mental Ability (sometimes referredto as 'G') was identified as the most consistentpredictor of potential up to 5 years into servicewith an organisation

• Many organisations include cognitive tests as part of their high potential assessment processes

• Some organisations use assessments together with other evidence to build an overall picture of an individual's applied intellectual capacity and cognitive ability

Understanding the role of derailment factors

• Derailment factors consist of a range of personality traits and behavioural tendencies, which can potentially have a negative impact on an individual's longer-term career success.

• Depending on the severity of impact, these factors may cause an employee's career to stall temporarily or derail prematurely

• The impact of derailment factors is likely to be exacerbated by an escalation in workplace challenges and responsibilities (inherent with taking on more highly pressured senior management roles)

Derailment factors include:

• Tendency to over-control

• Egotistical tendencies

• Aggressive tendencies

• Irritability

• Insensitivity

• Aloofness

Summary

• The short/long-term focus of the organisation will influence the approach taken towards Talent Management

• Most employers consider both performance and potential as well as hard performance measures

• High potentials receive a lot of investment – but are companies missing an opportunity by failing provide opportunities to other important players?

• Competencies, personality, emotional intelligence and general mental ability are widely deemed to be important factors in High Potential assessment

• Derailment factors and the pressure of being placed on the fast track cannot be overlooked

How Cubiks can help

• Establish the key behavioural competencies required for success in your organisation, particularly at senior management levels

• Assess staff to gather evidence of their existing strengths and development needs

• Provide you with the tools to measure the key behavioural competencies yourself

• Assess personality to identify job performance, training efficiency and elements of potential

• Help staff become aware of their learning patterns and develop flexibility in their learning styles

• Pay close attention to derailment factors• Provide a range of interventions such as leadership programmes and

one-to-one coaching that will enable talented people to achieve their true potential

Your questions