Customizing Talent Mgmt to the Individual: article

Published April 2008
Make Every Person Count: Customizing Talent Management
by David Smith and Susan Cantrell

Most HR practitioners would agree people learn in different ways, are motivated by different rewards and perform at various levels. Yet, for the most part, they design and apply talent management practices as if everyone were the same.

In an era of workforce abundance, a general talent management approach might have worked. Generic practices were good enough for the majority of workers. As for the rest — well, they had to adapt or find another line of work.

Today, as most industries and organizations enter a period of talent scarcity, talent managers have to adapt. To achieve high performance in an era of stiff competition for talent, organizations must address the unique and diverse needs of individuals they hope to attract and retain.

Further, when talent management practices are not relevant to business goals, nor tailored to workers individual performance needs, productivity can suffer. Organizations can no longer absorb poor individual productivity within the general cost of doing business. Talent management practices today must reflect the fact that every person counts.

Recent Accenture research — conducted with more than 60 organizations using a proprietary human capital measurement tool — suggests the key to creating customized talent management solutions lies in a close and integrated partnership between HR and an organization's line managers.

An organization is more likely to support individual workers' needs if it gets closer to where the work is performed. That means integrating talent management practices into the very fabric of business — away from the centralized domain of HR and closer to those who have direct contact with people as they perform: the line managers.

HR retains responsibility for setting the broad context of policies and programs and for creating specific, coherent and logical talent management practices at a global level, while also remaining open to flexible interpretation and implementation at the local level. Line managers are charged with making the policies and practices come to life. Because they are more knowledgeable of particular workers and their situations, and more attuned to local needs and pressures, line managers are optimally positioned to tailor general HR practices to the situations and individuals at hand.

Here are some ways companies are tailoring talent management practices and processes to local and individual needs.

Customize Performance Management

Top-down processes to manage employee performance are useful, but must be supplemented with more customized, day-to-day development and performance management discussions that managers have with their employees. Managers at higher-performing companies provide feedback and recognition in a more frequent, informal and personalized manner than at more average-performing companies.

The primary goal of customized performance management is to treat every employee as a unique and important contributor. All too often, formal performance reviews rely on performance criteria that are neither relevant nor customized to an individual's work -— nor is the feedback typically delivered how an individual receives feedback best. To avoid these problems, leading companies such as Microsoft and U.S. mechanical contractor TDIndustries supplement formal reviews with organizational systems in which managers and employees can confidentially record frequent, informal feedback.

Jessie McCain, managing director of human resources at TDIndustries, said informal performance reviews are "live, organic and working documents filled with edits, updates and changes that encourage frequent, honest and specific feedback at the point of need." Issues can be dealt with in a manner best suited to the individual and resolved on an ongoing basis rather than once a year under formal, often uncomfortable, circumstances.

Similarly, companies focused on individual employee development do not wait until the end of a year to reward employees with bonuses or raises. Instead, they offer frequent, informal recognition and praise customized to what motivates an individual most effectively.

For example, SAP Americas, the U.S. subsidiary of German software company SAP, established a multi-tiered, values-based recognition program to encourage managers and peers to reward performance throughout the year. The program is based on recognizing and rewarding employees for demonstrating the company's core business values. Managers are provided with a list of predefined reward choices — ranging from movie tickets to trips to designer handbags — and can select from that list based on their employees' unique preferences.

Customize Career Development

Career development paths should not presume all employees have the same sense of how their careers are to play out. Career development is no longer a linear phenomenon. It may involve organizational cross-jumping or job experiences that take an employee away from the mother ship for a time.

Instead of narrowly defined HR policies that define lockstep, linear career paths, HR staff at Procter & Gamble encourage managers to work with employees to define their ideal destination jobs anywhere in the company and to create plans to help them get there.

At Nike, the movement of employees across functions and divisions as they mature is seen as especially valuable, both to the individuals and the company as a whole. Line managers get together periodically to identify new stretch opportunities for their people or where experiences in other parts of the organization might benefit them based on their unique strengths and interests. The process was originally targeted only at leadership candidates, but many divisions have adopted it to support all employees.

Customize Learning

People learn in different ways, and different learning experiences are more appropriate for different roles and environments. Enterprise learning departments must continually explore ways to engage employees with the right content, in the right form, at the right time.

For example, Health Partners, a nonprofit HMO, encourages managers to help employees choose learning that best meets their needs and preferences. Options include classroom-based training, simulated role-playing programs, e-learning, books and one-on-one coaching.

Other organizations use line managers to help employees structure experience-based learning paths. This approach increases the need for managers to become learning coaches, not just project managers and supervisors.

The Coventry Building Society, a savings and loan institution in the United Kingdom, moved five of its 50 call-center employees into full-time manager-coach positions. In this new role, the manager-coaches provide two hours of coaching each week for every employee by listening to calls and providing immediate feedback and suggestions for improvement. Although the number of people taking calls went down, the call center's performance went up.

Technology research firm Forrester also encourages this close learning relationship by pairing a novice with an experienced manager in an open, transparent work environment so newcomers can improve their competence through day-to-day observation of an experienced mentor or coach.

Active manager involvement is key to creating customized talent management solutions for an increasingly diverse workforce. Companies that successfully engage line management in talent issues may do the following:

Create Flexible Practices and Policies

If line managers are to actively tailor talent management practices to individual employees, policies and practices must be flexible. Such flexibility is not the norm. Research revealed many managers say job competencies and descriptions are too generic or out-of-date to be of real value. Further, their organizations' one-size-fits-all learning or rewards programs do not enable them to account for the unique ways employees learn or are motivated. Predefined career paths and narrow salary ranges also limit managers' ability to place employees in positions to maximize their strengths and capabilities.

Global talent management practices and policies need to be designed so they can be applied to differing local needs. In the past decade, many companies have achieved customization by offering flexible work arrangements, cafeteria-style benefits plans and broadband compensation schemes in which job titles are collapsed into fewer, wider salary ranges. But companies must break new ground to design discretion, choice and flexibility into all talent management practices and programs.

To get different behaviors, talent managers may need to offer different incentives. Putting new incentives in place is especially important if line managers are to take on new talent management responsibilities. Organizations often attempt to hold managers accountable for human capital development, but do little more than ask managers to check off various activities and processes.

At Procter & Gamble, managers' compensation, stock options, performance ratings and assignments are tied to their success in recruiting, developing and retaining top-performing employees. At a leading medical equipment maker, managers are assessed on whether they are "net exporters of talent," a metric indicating how many of their employees have been promoted into management in other parts of the company.

Support Managers

Busy and overworked line managers are more likely to maximize performance if they are coached to handle a variety of situations and problems involving their people. Effective people management is not a skill learned at most business schools, nor is it easily picked up on the job without conscious attention and practice. Many organizations now require line managers undergo extensive training for effective people management.

Training is a step in the right direction, but the informal and everyday interactions between line managers and employees are less amenable to being shaped by formal training. More focused coaching and mentoring is needed.

At SAP America, HR business partners work with managers one-on-one. The company boasts low ratios of HR business partners to line managers and conceives the HR business partner's primary role as consulting to line managers. One HR business partner, for example, works with 30 line managers and spends about 60 percent of her time coaching them on people issues.

Line managers can make or break performance and must be charged with a broader sense of responsibility to maximize the impact of an organization's talent. Those given freedom to customize basic talent management practices and tailor generic programs to the unique needs of their people can propel their organizations toward high performance.