Tag Archives: Talent Management

Pay for performance doesn’t apply – to the boss

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09value.graphic.190Over the weekend, the NYT (again) tackled the subject of top executive compensation. But this time, they added some cool charts and graphs to illustrate how utterly out of synch pay has become with corporate results.

My favorite is this one which contrasts some of the worst offending companies (where pay went up when a company’s performance went down) with some of the best values in CEOs (where performance went up but pay didn’t keep pace).

As more and more companies move to a system where performance is correlated directly to pay for their employees (as well it should be) it seems only logical that the same would be true for top executives. One would think that a scenario in which employees are denied raises of a few percentage points because the company didn’t have a good year, while the CEO walks off with bundles of cash would make “employee engagement” somewhat of a difficult job.

The Times also questioned the impartiality of compensation consultants in a separate piece, from which I truly enjoyed this particular quote from Warren Buffett:

Too often, executive compensation in the U.S. is ridiculously out of line with performance,” he wrote in his most recent annual report. “The upshot is that a mediocre-or-worse C.E.O. — aided by his handpicked V.P. of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet & Bingo — all too often receives gobs of money from an ill-designed compensation arrangement.

People tools for people people

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ConversationsHere’s an article at Baseline that talks about some of the ins and outs of talent management applications by showcasing some of the companies that have chosen to implement them. We’re mentioned in there, as are competitors Authoria and Vurv.

My most favorite bit includes a quote from (our customer) Gary Short of Kimberly-Clark:

Human-resources professionals caution, though, that it’s important not to use such systems to replace face-to-face meetings, which are vital for evaluating candidates or reviewing employees. “You want an efficient process,” says Gary Short, senior consultant for talent management at paper-goods maker Kimberly-Clark, “but you want an effective process.”

This hits on something I’ve been thinking about lately – the idea of “conversations.” Technology is an excellent enabler, but I’m moving towards the belief that the real point of any of these HR related applications is to support more and better conversations between people. Results come from conversations.

The technology serves, among other things, to provide the supporting data to enforce a process. But the value will remain in the conversations that take place as a RESULT of the technology. The better, more sophisticated and more usable the technology, the better and more sophisticated the conversations.

 

 

 

Catch the wave

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Yankee LogoJason Corsello of The Yankee Group (who writes a blog in his spare time and has a nice looking dog called Larry) in his growth forecast for the talent management market says: “”As the workforce becomes increasingly mobile and global, companies that invest in talent management solutions and examine it from a worldwide perspective will reap tremendous benefits for their business organization and operations.”

As such, Jason’s firm is forecasting that the market for talent management applications will be growing by 25% year over year (from $2.3 Billion in 2006)for the next 4 years, reaching $4 Billion by 2009.

That’s some wave.

Interestingly, the release also mentions that while Yankee’s definition of of talent management includes “Recruitment management, performance management, compensation management, succession management, learning management and other (knowledge management, self-service, analytics and reporting),” the market is largely being driven by the “the performance and succession management segments.”

The fatal flaw of self-assessments

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SelfevalEveryone thinks they’re above average.

This tidbit found via the Damn Interesting blog where they deconstructed a report by some Cornell researchers on the topic. What they found was that the worst performers in a variety of tested categories often rated themselves on par with the best performers and in most cases far above average. Top performers are of no help either. Even they weren’t able to accurately assess themselves, rating themselves lower than their performance merited.

The reasoning for these behaviors is fascinating. Poor performers lack the skills to perform – which are the same skills required to evaluate their performance. They don’t understand that they don’t understand, and so believe their abilities compare positively to their peers.

On the other hand, Top performers incorrectly assume that their competence is shared among their peers – leading them to rank themselves lower than they deserve.

You can see what this looks like in the chart above. People that fall into the lower three quartiles believe they performed better than they actually did. The highest performers underestimate themselves.

There’s relevance here to self-assessments as the HR world understands them. When asked to evaluate themselves on a variety of competencies, it would seem that people can be expected to incorrectly rate themselves most of the time. Poor and average performers will overestimate their abilities, and top performers will underestimate them.

So what to do? I think that the importance of gap analysis makes itself evident here. It’s only through external feedback that people can understand the difference between what they believe to be true and others’ perceptions of the reality. There’s nothing clearer than a competency gap:

Competency-gaps

 When you can see what you think about yourself right next to what others think about you – there’s simply nothing more compelling to a change in perceptions and ultimately, in behavior.

 

What drives employee engagement?

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Ee.of.monthOur new poll for the next couple of weeks is on the topic of employee engagement. Specifically, what, in your opinion, are the most important drivers of engagement?

The responses are based on a 2003 report from Towers Perrin called “Understanding what drives employee engagement.” (PDF) Based on some statistical analysis, they arrived at 10 workplace attributes that they determined to be the most critical in driving employee engagement.

Of these 10, which are the most important in your organization?

Performance Reviews most pressing HR issue

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You may have noticed a poll in the left-hand column over the past couple of weeks. Though clearly not scientific in any way, the poll has provided some insight into what’s on the minds of our readers.

We asked, “What is your most pressing HR issue?” 

We had 50 people respond to the poll, and the results are interesting. Despite all the talk about succession and compensation, the core issue (28%) for our respondents was Performance Reviews followed followed closely by Goal Alignment (24%).

Poll1Results

To me, it indicates that Performance Management and Goal Alignment are still the biggest pain points for HR practitioners. They represent the heart of talent management initiatives, and Succession and Comp. are just further down in the hierarchy of HR needs.

I’d be curious to hear what you guys have to say about the results. Do you think they’re generally representative, or are they skewed for some reason?

Engagement is core to retention

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A management issues article points out that employee engagement is THE KEY concept in retention:

Rather than working on employee engagement in parallel with staff retention and talent management, a high quality strategic emphasis on employee engagement will as a matter of course positively influence both staff retention and talent management.

Make employee engagement your ‘hub’ not an after-thought.

Stop checking your BlackBerry when I’m talking to you!

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Via Gautam, I came to this Time article about “microinequities” and “microgestures” – fancy talk for the horribly frustrating, inconsiderate, rude and otherwise small but rage-inducing behaviors like using your BlackBerry in the middle of a conversation or saying someone’s name incorrectly or talking on your cell phone during a meeting, etc.

Besides the crass ignorance displayed by such actions, it turns out they may actually have a negative impact on workforce performance as they work to demotivate otherwise engaged employees.

And, of course, there’s a consultant who goes around advising companies on these issues.

Nobody quantifies human capital

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481159_a_closeup_of_a_desk_calculator_5So says this AP article in the Chicago Tribune. Across a two year study done by Mercer, they found that only 20% of the 100 largest publicly traded American companies discussed the contribution of human capital in their annual reports.

Conclusion:

“Imagine a company spending one-third of its revenue on a capital investment or an interest payment and never addressing it with shareholders in their annual report,” said Rick Guzzo, a Mercer consultant. “It’s unthinkable.”

Indeed.

Leveling the playing field and other tales of meritocracy

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The Human Capitalist (known more properly as Jason Corsello of the Yankee Group) shares his views on Performance and Talent Management. Hint: he likes it. To wit:

The solutions are not the “end-all-be-all” and will not solve all of the issues in the performance review process.  They are though a huge enabler to level the playing field, eliminate (or at least minimize) the emotional factors involved during the difficult review process, and have the ability to build in the necessary flexible required to accommodate the changing demands of an increasingly dynamic workforce.