PROPOSAL ON IMPACT OF TALENT MANAGEMENT ON ORGANIZATIONAL PERFORMANCE

INTRODUCTION

The need to enhance the effectiveness of the business organization lies in the heart of the management of the firm, there are several resources to achieve this which include money men and the machine of these resources the most important is men. Over the years men working in the business organization have been accorded various values, they were once referred to as the factor of production at another time they were called the human recourse of the firm. Talent in general terms refers to the capabilities, skills or the art, a person possess in a particular field. It also refers to those people who have high potential, scarce knowledge and skill or who can successfully bring about transformation and change in the organization. Such individuals are usually sought after in the market and their contributions to the business add direct value to its strategic or competitive positioning. According to Leigh Branham, Vice-President, consulting service at Right Management Consultants and author of the book says, Keeping People Who Keep You in Business‖, a talent is not rare and precious. Everyone has talent too many to possibly name all. Talent is behavior; things we do more easily than the next person. We speak of natural born talent‖ but those with a gift, knack, ability or flair for something can refine and develop that talent through experience (Gebelein, 2006). Talent, however, cannot be taught. As someone once said, “you can teach a turkey to climb a tree, but it is easier to hire a squirrel.” Talent Management in an Organization, refers to those special steps an organization adopts to recruit, develop and retain its pool of top talent. The steps adopted should normally be creative and should not project bureaucracy. Talent Management also denotes a deliberate approach taken 10 up by an organization to attract, develop and retain people with the aptitude and abilities to meet not only the current requirements but also future organizational needs. As business searches for new and/or better means of achieving competitive advantage, the capacity of every functional area to improve organizational performance is under scrutiny. As a result talent management strives to develop and retain high potential employees, and thus provide organizations with managerial talent source and competitive human resource advantage which impact organization performance. The logic behind talent management is based on the fact that businesses are run by people. Processes, technology and capital are important but it is people who make the decisions. It‘s people who create value by using these corporate assets to create products an organization has, the better it will perform. This is the rationale behind talent management to attract, develop and utilize the best brains to get superior business results. The future of most businesses is reliant on the acquisition, development and retention of talented people to create the leadership capacity and talent required to implement new strategies so as to meet current and future business needs (Albion & Gagliardi, 2007). It on this view the researcher wants to investigate the impact of talent management on organizational performance.

TALENT MANAGEMENT

The term “talent management” as concluded by academicians, researchers and practitioners refers to the activities related to recruitment, selection, development and retention of employees. The foremost contribution by TM is the willingness of the system to analyze and bridge the gap between talent demand and talent supply by determining the weakness and strength of the employees and management as well as by the strategic flow of talent through an organization, which helps to connect individual goals to organizational goals and workforce strategies to business strategies (Kaur, 2013; Hilal, 2012; Iles, 2008). Thunnisen et al. (2013); Valverde, Scullion and Ryan (2013); Garrow and Hirsh (2008); Figiolini, Hofmann and Kanjirath (2008) defined TM as a process, which includes a complete and interrelated set of organizational activities such as identifying, selecting, developing and retaining the best employees as well as building their potential for the most strategic positions, and assisting them in formulating the best use of strengths in order to gain their engagement and contribution, which ultimately contribute to organizational benefits (Nankervis, 2013; Bano et al., 2010; Davies and Davies, 2010; Beechler and Woodward, 2009; Hughes and Rog, 2008; Ready and Conger, 2007; Chugh and Bhatnagar, 2006; McCauley and Wakefield, 2006). These activities start with the identification of most suitable individuals and end with retaining them (Silzer and Church, 2010; Lockwood, 2006). It encompasses all HR processes, administration and technologies for talent optimization and utilization (Schiemann, 2014; Schweyer, 2004).

EMPLOYEE ENGAGEMENT

In today’s market scenario organizations demand more productivity and efficiency than any other times in the history. Business houses are trying to increase their performances to stay ahead of competitors. “Employee engagement” is one of those slippery concepts that’s talked about a lot but is difficult to define. The theory, employee engagement arises from two notions that are the subjects of research Commitment and Organizational Behaviour but employee engagement is the amount to which employees contribute to the business growth and outcome. It’s a two way mutual process between the people and workforces. It is a state in which the workforce endeavour towards the company’s accomplishment and are driven to perform to the stage that exceeds the given job role. It tells how the employee feels about the employee, its leadership, the work atmosphere, compensation, R&R, they take delivery of for their efforts. Employee engagement drives the discretionary efforts, producing employee’s full productivity, highest assurance to the success of the firm. It is important to note that there are a wide variety of approaches to engagement and indeed definitions of the term. Some see engagement as a state of mind among employees. Others see it as being about the actions of employees. Employee engagement is a combination of attitude and behaviour(Purcell, 2010).In the words of Alfes et al, engagement is an employer’s actions; an approach to working with employees or something that is “done to” employees. The definition given by MacLeod (2009) tends to lean towards the latter but also references the former. It describes engagement as “A workplace approach designed to ensure that employees are committed to their organization’s goals and values, motivated to contribute to organizational success, and are able at the same time to enhance their own sense of well-being.” Further (MacLeod and Clarke, 2009) divided employee engagement into four enablers .i.e Strategic narrative, Engaging managers, Employee voice and Integrity.

ORGANIZATIONAL PERFORMANCE

Organizations have an important role in our daily lives and therefore, successful organizations represent a key ingredient for developing nations. Continuous performance is the focus Determinants of organizational performance of any organization because only through performance organizations are able to grow and progress. Thus, organizational performance is one of the most important variables in the management research and arguably the most important indicator of the organizational performance. Managers began to understand that an organization is successful if it accomplishes its goals (effectiveness) using a minimum of resources (efficiency). Thus, organizational theories that followed supported the idea of an organization that achieves its performance objectives based on the constraints imposed by the limited resources (Lusthaus & Adrien, 1998 after Campbell, 1970). In this context, profit became one of the many indicators of performance. The authors Lebans & Euske (2006) provide a set of definitions to illustrate the concept of organizational performance: performance constitutes both financial and non-financial indicators which offer information on the degree of achievement of objectives and results (Lebans & Euske 2006 after Kaplan & Norton, 1992). Performance is dynamic; requiring judgment and interpretation and it may be illustrated by using a causal model that describes how current actions may affect future results. To define the concept of performance is necessary to know its elements characteristic to each area of responsibility. To report an organization’s performance level, it is necessary to be able to quantify the results.

HUMAN RESOURCES AND TALENT MANAGEMENT

Human resources have a compelling mission to provide “value added” services; however, this expectation is often hard to describe. Further, HR leaders are asked to provide “line of sight” plans that support institutional strategy and challenges; again, not an intuitive task. It is, perhaps, more clarifying to examine effective, leading-edge practices that have been or could be put in place that deliver on the promise of excellence in human resource management. Here, some successful strategies are examined in the areas of talent retention, growth and employee engagement. HR’s responsibility related to talent management is to identify investments, design development required to fully deliver on its role in TM, and calculate the return on investment to the organization. HR should assess the ability of the organization’s decentralized leadership to implement local or unit-based actions required to close identified talent gaps. Assume that one initiative will be to retain high performers in strategic and core roles. A decision model may assist both central HR and local leadership to identify actions appropriate to different performance segments. This decision model is sometimes referred to as the “Can Do/Will Do Matrix.” The model identifies performance quadrants and HR or local leadership talent management initiatives to address each subgroup. The vertical axis represents ability, or “can do;” the horizontal axis represents willingness to contribute, or “will do.” In each quadrant, HR should plan with local leadership how to address and resolve issues of accountability, engagement, competency development, growth and reward.

PRACTICES AND APPROACHES TO TALENT MANAGEMENT (INDIVIDUAL VERSUS SYSTEMS LEVEL, STRATEGIC FOCUS)

According to Dessler (2011), talent management requires coordinating several human resource activities, in particular, workforce acquisition, assessment, development, and retention. Human Capital Institute (2008), also examined related current talent management Practices in five specific areas: Talent strategy, workforce planning and talent acquisition, capability development and performance, leadership and high potential development, and talent analytics. On the other hand, Armstrong (2006) further looks at the elements of talent management as the resourcing strategy, attraction and retention policies and programmes, talent audit, role development, talent relationship management, performance management, total reward, learning and development and career management. However Ringo et.al., (2008), studied six dimensions of talent management as develop strategy, attract and retain, motivate and develop, deploy and manage, connect and enable, transform and sustain. According to Ringo et.al (2008), the application of talent management practices makes a difference in organizational performance. They observed that knowledge-intensive industries tend to focus on developing and connecting their employees, financial services companies tend to concentrate on attracting and retaining employees, with little attention given to development or collaboration while retailers focus heavily on talent strategy, in addition to applying notable number of talent management practices overall. According to Smith and Lubitsh (2007), a research into the talent management practices of leading organizations was undertaken within four global businesses and one of the key findings from this research report is that leading organizations view TM as a strategic priority and an important long-term investment that needs reviewing, refining and reinvention as needs and priorities change. Ringo et al, (2008) confirms that many organizations believe that effective talent management practices can be a critical source of differentiation in today’s highly competitive, global integrated economy. Other studies done show that companies with established talent management capabilities achieve improved quality, speed and skills (Gabdossy Kao, 2004; Tansley et al., 2007), higher innovation ability (Kontoghiorghes & Frangou, 2009; Sullivan & John, 2009; Tansley et al., 2007), a higher job satisfaction among employees if they are given carrier and development perspectives (Mac-Beath, 2006; Steinweg, 2009) and above all, a higher retention rate of employees overall and of talent in particular (Di Romualdo et al., 2009; Sebald et al., 2005; Tansley et al., 2007; Yapp, 2009). With the approaches, there are basically two main approaches to talent management despite the various definitions given to it. These approaches are the individual and the systems-level, strategic focus. The individualistic or star approach originates from the McKinsey research (Michaels et al., 2001) which sees organizational performance as the aggregate of individual efforts within an organization. Also Iles et al., (2008) stresses that if you can attract and retain individuals who do well in an organization, you are bound to win every competition in the market and industry. These findings are however contrasted by Pfeffer and Sutton (2006) who are of the view that the result of an organization is not because it is able to effectively manage talents and note that natural talent is over emphasized especially in sustaining organizational performance. Beechler and Woodward (2009), argued that the overly rated individualistic approach as strategies adopted by companies in the talent war often fails. This concurs with the findings of the study of analysts from a start investment who experienced an ongoing deterioration of business performance even after switching firms (Groysberg et al., 2004). The Individualistic approach views talent as human capital which ignores the contribution of the social and organizational context in achieving organizational performance. Talent management has moved from an individualistic approach to a strategic approach through its development over the years though there is an ambiguity surrounding what the concept strategic means in talent management context. Authors such as Huckman (2006), Colling and Mellahi (2009), as well as Silver and Dowell (2010) use the terms ‘systems level, strategic perspective’, ‘systems level or strategic framework’, and strategic talent management respectively. They thus refer talent management to a strategic management function. Others such as Cappelli (2009), and Iles et al., (2010) simply draw attention on some part of talent management as having strategic connotations. Though Heckman uses the term ‘systems level, strategic perspective’, he tows on related literature to investigate what strategic means in the context of talent management. Collings and Mellahi (2009) defines strategic talent management as activities and processes that involve the systematic identification of key positions competitive advantage which differentially contribute to the organization’s sustainable, the development of a talent pool of high potential and high performing incumbents to fill these roles, and the development of a differentiated architecture to facilitate filling these positions with competent incumbents and to ensure their continued commitment to the organization. This definition essentially integrates the recent conceptual progression in talent management. Notable among them is the work of Huselid et al., (2005) and Boudreau and Ramstad (2005) who distinctively separates between jobs or roles within organizations, and in particular, an augmented focus on key positions alongside talented individuals, who have the potential to differentially impact the competitive advantage of a firm. Managing talent in organizations strategically does not focus on the human resources at the initial stage but rather on the set organizational goals and objectives (Cappelli, 2009). The strategic approach to talent management lays emphasis on the macro analysis which centers on systems-level issues rather than on the micro approach which focuses on the analysis of the individual level talent. The underlining premise of this approach is that the performance of talent in organizations is largely because of factors such as the leadership, team membership, technology, internal network, training and also processes and systems in which they operate. Without these processes and systems it will be very difficult for those classified as talents or high. Lengnick-Hall and Andrade (2008) second, demonstrating that a staffing system is needed to offer the required talent supply and movement to achieve organizational objectives. But as also noted by Lengnick-Hall and Andrade (2008), with reference to Von Bertalanffy (1974): optimizing sub-systems (that is, doing each part well separately) does not maximize organizational system performance; what is needed is the integration of subsystems to accomplish desired organizational goals. Indeed for Talent Management to be considered a strategic activity, its value to the bottom line must be demonstrated (McDonnell, 2011). Vance and Vaiman (2008) conclude that ‘if talent management is to make a significantly new contribution it must hold a more clear link with strategic human resource management (Boudreau and Ramstad 2005; Wright and Haggerty 2005)’. While most researchers take business strategy as the starting point with talent and HR aligning with strategy (McDonnell 2011; Silzer and Dowell, 2010), some (Boudreau and Ramstad, 2005; Lewis and Heckman, 2006) go further, arguing that for TM to be strategic, it must utilize talent investments that open new opportunities. Also Silzer and Dowell (2010) observed a ‘significant paradigm shift for HR to strategic talent management’ in which the emphasis was significantly different from traditional talent management.

STATEMENT OF THE PROBLEM

Talent Management is beneficial to both the organization and the employees. In these days of highly competitive world, where change is the only constant factor, it is important for an organization to develop the most important resource of all the Human Resource. In this globalized world, it is only the Human Resource that can provide an organization the competitive edge because under the new trade agreements, technology can be easily transferred from one country to another and there is no dearth for sources of cheap finance. But it is the talented workforce that is very hard to find. The biggest problem is how to retain the present workforce and stop them from quitting?

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