| Jan 20 2009 |
George Clemenceau had said, “War is too serious a matter to be left to the
generals.” Nothing could be more apt in the war for talent. It is too crucial a
matter to be left to the human resource function alone. The CEO and the C-suite
must be actively involved in the pursuit of talent — in mentoring, nurturing and
ensuring the blossoming of outstanding people.
Talent management is a
delicate art, which requires passion, dedication and above all an appreciation
that outstanding people make all the difference in a competitive
environment.
Many CEOs have faith in the assumption that a good HR manager
and high compensations are the only keys to talent acquisition and retention. I
do not wish to underplay the importance of good compensation and an efficient HR
function. But they are foundation attributes. If your compensation structure is
poor or your HR is dysfunctional, then you do not even get the opportunity to
play the game.
But permission to play the game does not necessarily ensure
your win. To win in the war for talent, you need to create an ambience of
learning, provide opportunities to grow, ensure fairness and, above all, invest
in leadership that inspires and infects the team with passion. Young people like
to work in great places, not just good places, and no place can be a great place
to work if the CEO and his team are not passionate.
In the talent game, bad
talent drives out good talent. Just as outstanding talent needs to be carefully
nurtured — poor performers and dead wood must be systematically weeded out. And
this is where many leaders and CEOs fail to deliver. Culturally, perhaps, Indian
business leaders find it difficult to deliver the message: “Your future is
bright, elsewhere” promptly, hu-manely and openly, but without being personal.
In many cases, poor performance results not from an innate incompetence of an
individual, but because a square peg has been inserted in a round hole. Or
perhaps the skill requirements or even the business has changed and the
individual has not been able to adapt.
Of course, there are cases of personal
problems, attitude or plain lack of ability to perform. Most business leaders
find it difficult to grasp the nettle and look at talent in categories. On a
scale of 5 — the 1 rater may the people who are outstanding and have great
potential to grow. The 2 raters are those who excel in their work and are great
performers. The 3 raters are those who meet all expectations. The rater 4s are
those whom I call “purgatory” folks — they have to become at least rater 3 next
year or slip into rater 5 whom I classify as ETL (encouraged to leave).
In
companies, which employ thousands of people and where there are a large number
of managers who evaluate it is often difficult to implement a consistent and
fair system across divisions and geographies unless uniform evaluation methods
are employed and some kind of “force fitting” technique is used to classify the
ratings of people. For example, the company may decide that only the top 15%
only can be 1 — rater, next 20% and 50% can be 2 and 3 raters, respectively. Of
the balance 10% can be 4 raters and the bottom 5% are 5 raters who need to be
counseled out. GE and Jack Welch were strong proponents of pruning year after
year consistently — come rain, come shine and, ironically, it is one of the
tried and tested techniques of retaining your best talent.
Companies which
are over-managed and under-led usually do not have a fair and consistent way of
moderating the rating process and are fearful of putting in place an appeals
mechanism. But “normalising” or “moderating” across divisions, business units
and geographies is key to consistency and an appeals process is crucial to
ensure fairness.
In times of economic slowdown and turbulence, the core
values of a company are usually put to severe test. Some companies mindlessly
reduce headcount to curtail costs and often do it in an insensitive and clumsy
way.
If the revenues are in jeopardy, it is only natural that the management
would seek to reduce costs and adopt reduction-in-force (RIF) options. But care
must be taken to preserve the core of the talent pool. Constant and candid
communications are of great importance.
In stressful times, owing to economic
slowdown or even brand dilution, the leaders must put their arms around their
best people and tell them the true story.
If sacrifices are to be made, costs
are to be cut and economies driven — the leadership must take a fair share of it
to set an example.
The worst decision a company could take is to provide
generous bonuses to the generals, while reducing the compensation and headcount
of the foot soldiers and the cavalry.
If that happens it would justify J K
Galbraith’s cynical view: “The salary of the chief executive of a large
corporation is not a market award for achievement. It is frequently in the
nature of a warm personal gesture by the individual to himself.” Talking the
walk is the worst posture of the leadership in times of stress and
slowdown.