Talent Management

At the end of 2007 the CIPD published a report which showed the results of a one-year study carried out in the UK to establish if talented people were more productive than average people. The results of the survey which were made available in 2008 concluded that “good people produce 40% more than average people”. Perhaps we shouldn't be surprised that this as Steve Jobs, the CEO of Apple was reported to have said in a speech “ good people produce 50% more per average people”. He was of course referring to people in the IT industry, of which he is very familiar. Out this course you will be hearing of examples of companies where talented people had changed the Company or have produced outstanding results in their own area of work. From the sheer volume of information available I don't think that there can be any doubt that talented people really are critical to any business in the commercial environment or any business that are looking to grow and grab market share. Of those businesses that don't embrace talent that they face a future of decline and possibly termination
Of the research published in 2007 and 2008 shows that talented employees significantly outperform average employees. Our challenge is to get more talented people than our competitors, and flood our competitors with some of the poor performance that we have in our organisation.

Another concept we will be looking at week is that of paying Talented people well. If talented people produce 40% more than average people then we need to deploy a new policy which has clear differentiation-this will not be easy. We also need to re-examine the concept of competencies as they are device which provides the organisation with competent but average employees.

The above model, known as the Miller talent pipeline model enables us to understand and be able to explain to others how the process works. Looking at stage one of the model we are looking to design and create processes to attract talent to organisation.
Still at stage one of the model we have filtration process namely testing, profiling and interviewing. This process needs to be exceptionally good. This process will also be used for promotion within the company for internal and external candidates and everyone needs to be treated exactly the same.
The second stage is to populate our model of the movers. We should have a clear idea of how many we want in this model and before we have spoken about 20%(this is our talent powerhouse). This requirement will drive our recruitment which can be either internal or external.
Succession planning which is critical to any organisation will draw its requirements from 20% pool. Depending on the type of job and level of job suitable people will be plugged in at any of the five levels shown on the diagram. They will either be an immediate fit or may require some further training and development prior to their taking up the position. I strongly recommend that you put this diagram on the wall of your office so that people can see what the processes and then will understand why you are carrying out the actions you are. Remember with talent there must not be any exception to the rule and the process. Getting and retaining talent is an ongoing process and we will see some companies carry on the process regardless of whether vacancies exist or not.
The basics provide us with a complicated array of choices. Most HR departments failed to maximise on the way that people are paid and the flexibility that different pay systems can offer. The familiar cry is “we can't change anything because they payroll program won't let us” I have recently had one HR Director say that pay and rewards cannot be changed because the procedure is in the staff handbook. Unless I've missed something-who is it who writes the staff handbook anyway? One word of warning about the way that we pay people, be careful of giving cumulative benefits and rewards, this produces high cost people in low cost jobs.


Allowances are not normally valued by the employee and therefore cease to be a motivator. In some companies the agreed allowances can be as much as 200% of the basic salary. The key financial factor that most employees understand is; basic salary and bonus. Therefore one needs to be very careful with what allowances are given and never to exceed those that are standard in the industry.

Is pay the only factor in retaining great people?

Most people would say – without thinking that pay is the only thing that matters. But is that true?
Consider this if you were paid twice your salary, with 100% job security then would your productivity double?
In a year’s time – what would your productivity be?
How about in two years time?

Pay is a complex issue – what we know is that employees who enjoy their jobs work harder and stay longer. We also know that talented people produce 40% more than the average employee.

Fortune magazine, the world premier business reporting magazine published in February 2008 the 100 best companies to work for in America. Published also in their article was how much the average salary ways. If you still believe money is the only motivator – then the list would be in salary order. The best companies being those that paid the most. Well let’s look at some comparisons:
3rd Wegham food markets $49,411 100th Texas Instruments $116,636
7th Starbucks $45,713 99th SRA International $76,686
20th The Container Store $43,806 90th PriceWaterhouse C $88,007

As you can see many of the companies employees have voted as the best – pay almost half as much as those at the bottom of the 100 list. If you company was put to the test - how would you score? Would your employees even bother filling out the voting form and posting it?
The real secret is that companies at the top manage to get the best from their talent at every level in their companies.

Within your organisation will be hidden talent, our job is to find that talent and develop it. The best way to do this is when you are advertising for an internal vacancy to run an assessment centre and ensure that is open to any member of staff . This will enable you to get the necessary measurement of people's potential and therefore discover what your talent pool is within the organisation. Do not rely of performance appraisals as they are notoriously ineffective. I suspect many people are in jobs for which they're not particularly good at. This would bed due to two factors – poor recruitment and peoples greed for power and money. Remember with talent management it is important always to test people to ascertain their potential rather than confirm how good they are in their current jobs.


The 70 - 20 - 10 principal was the brainchild of Jack Welch. Jack Welch was the CEO of General Electric in America. He is one of the most charismatic leaders of our time and has written a number of books on how he transformed General Electric from a loss maker to a very profitable and successful company.

The principle is very easy to understand what is important West is to recognize that the bulk of the organisation and accounts for approximately 70% of the organisation's staff-this 70% we label as stickers. They represent the solid fabric of the organisation and require training and motivation to ensure they are fully engaged with the company's activities. The next number is 20%, this forms what we have referred to as movers in the Company. This is talent pool for future development and of course for succession planning. The 20% the employees of the company who should receive the maximum amount of training and development and should be earmarked for various positions as part of your integrated succession plan. The next group is the one that will cause you most concern. If we are to create an organisation full winners, and we will also come across losers. The losers in this instance will be the bottom performing 10%. They don't require more training, they don't require coaching, what's needed is swift exit from the organisation. This in itself will send a powerful message that you are creating an organisation for all winners and that poor performance will not be tolerated under any circumstances. Before you start feeling sorry for this 10% keep in mind that they are taking the company's money and not providing the performance that they're being paid for-it's really not acceptable or fair to the rest of the employees in the Company.
In two recent surveys – clients admitted that the in their companies the split was more like 20% poor performers(leavers) , 75% stickers and only 5% movers (talent).

You may find getting rid of this 10% unpalatable and perhaps it's not within your culture but a powerful message has to be sent to those who do work well and those who are contributing fully to the Company. You could however just penalise the 10% - example invest no more money in training, stop paying any form of benefits or allowances and certainly no cost of living increments until their performance improves by the required amount. All of this presupposes that you have an accurate performance measurement system
The above is an extract from the Masterclass on Talent Management. 05.08