Chapter 9: Talent Management
1
Chapter 9
Talent, Careers, and Development
Learning Objectives
After students have read this chapter, they should be able to:
• Identify the importance of talent management and discuss two reasons it may be
difficult.
Chapter Overview
This chapter describes talent management and development. Talent management is
concerned with the attraction, development, and retention of human resources. The first
section discusses the talent management “systems” and the scope of talent management.
Next, the chapter explores succession planning. Succession planning is the process of
identifying a longer-term plan for the orderly replacement of key employees. The
succession planning process, planning decisions, and the benefits of succession planning
are included.
Chapter 9: Talent Management
capabilities /competencies through lifelong learning and redevelopment and development
needs analysis using assessment centers, psychological testing, and performance
appraisals.
The chapter then describes a number of HR development approaches including job-site
(coaching, committee assignments, job rotation, and “assistant to” positions) and off-site
Chapter Outline
Chapter 9: Talent Management
HR Headline: Talent Management Should Be Solutions-Driven
HR professionals tend to develop policies that they think will help employees develop in
the long run, thus helping the organization succeed. However, many of these policies
often don’t address the current problems that line managers face as they help manage their
workers’ careers. Line managers do not always get excited about the initiatives because
they might not relate directly to the challenges that the managers currently experience.
Consequently, insufficient management buy-in is a common problem, and the newly
developed HR initiatives may not be very successful as a result.
Houston-based food supplier Sysco Corporation is one company that used such an
approach. After conducting research and determining that job tenure was related to leader
effectiveness, the company created a developmental program that taught people the right
information that prepared them for positions of authority. Managers were able to sell the
program because it addressed important business needs and did not require employees to
miss much work.
Workforce planning is broadly based on having the correct number of employees as they
are needed by the organization and its managers. Workforce planning works together with
talent management, which focuses on having the right individuals ready for the jobs when
I. Talent Management as Strategy
Successful talent management is inherently strategic because the development of
employees needs to be linked to the overarching objectives of the organization.
Organizations must respond quickly to changes in environmental demands, and having the
Chapter 9: Talent Management
HR development professionals should consider the company’s mission when creating
policies that develop employee’s careers talent management should be a strategic tool
rather than a cost. This is done by providing employees who create a competitive
advantage for the firm through individual competencies and appropriate roles. Greater
emphasis on building competencies and using talent management specialists can establish
a system that works well. The major components embedded in the employment life cycle
(i.e., training/development, performance and succession management, etc.) should be
integrated as one unit.
Companies can reduce the risks and increase the rewards of talent management by
adopting an approach that relies on the following:
• The development of current employees and hiring outside talent
II. Talent Management in Perspective
Choices for dealing successfully with talent needs are to:
• Emphasize stability in employment and develop talent internally
• Develop agility as an organization and buy talent as needed
• Use some combination of the first two choices
Chapter 9: Talent Management
One way to think of talent management is as a process that moves people from recruiting
and selection to meeting the needs of the organization with regard to talent. Along the way,
all the elements of talent management are encountered—training, succession planning,
career planning, development, and performance management (Figure 9-1).
A. Talent Management Information Systems
Talent management seems to lend itself to the use of various software-based systems
that purport to integrate all the pieces of talent management into one manageable whole.
However, according to one survey, although many companies are planning to use talent
B. Scope of Talent Management
As the nature of talent management has evolved, a variety of approaches and tools have
come along.
Target Jobs
The first issue is to identify the types of jobs that will be the focus of talent
management efforts. In some organizations, talent management focuses on the CEO
and other executive jobs, rather than focusing more broadly. Other organizations
High-Potential Individuals
Some organizations focus talent management efforts primarily on “high–potential”
individuals, often referred to as high-pos. Attracting, retaining, and developing high-
Chapter 9: Talent Management
When dealing with high-pos, employers sometimes utilize incorrect assumptions and
approaches, such as:
• Thinking they are fully engaged in the workplace
• Thinking they are willing and able to become leaders
• Not getting top leaders involved in their development
• Not giving them opportunities to build needed competencies
• Failing to reward and recognize them beyond others
• Not informing them of future plans
Competency Models
Competency models show knowledge, skills, and abilities (KSAs) for various jobs.
Competency models help to identify talent and gaps. Some companies maintain
Talent Pools
Talent pools are a way to reduce the risk that the company may not need a certain
specialty after developing it. The idea is to avoid developing for a narrow specialized
Career Tracks
Career tracks are a series of steps that one follows to become ready to move up.
Chapter 9: Talent Management
Assessments
Assessment most often involves tests of one sort or another. Tests for IQ,
Development Risk Sharing
The employer always runs the risk in developing talent that an employee who has
been developed will choose to leave with the valuable skills gained. A way to reduce
III. Succession Planning
The basis for dealing successfully with staffing changes such as retirements, transfers,
promotions, and turnover is succession planning. Succession planning encourages an
organization to prepare for the inevitable movements of personnel that create holes in the
hierarchy that need to be filled by other qualified individuals. “Bench strength” and the
leadership pipeline are metaphors for ways to prevent the void by having replacements
ready.
Chapter 9: Talent Management
firms must still focus on strategic business needs and identify the key jobs that will satisfy
these needs. Firms must also identify the proper talent to work in these positions and create
appropriate development activities. HR professionals will still need to demonstrate that
succession planning is an important part of talent management
A. Succession Planning Process
Whether in small or large firms, succession planning is linked to strategic planning
through the process shown in Figure 9-2. The process consists of first defining positions
that are critical to the strategy, and then making certain top management is involved
Role of HR in Succession Planning
Often HR has the primary responsibility for succession planning organization-wide.
However, for CEO and senior management succession efforts, top executives and
board members often have major involvement. In this case, HR often performs the
following actions:
• Functioning as an objective voice and increasing effectiveness of the program
Global Succession Planning
Succession planning is not just a U.S. issue. In fact, the percentage of older
employees in the workforce is even higher in countries such as Japan, Germany,
Chapter 9: Talent Management
both legal and workforce diversity issues. Even in countries with growing native
workforces, such as China and India, succession planning is important. Having
younger workers who can replace senior managers with international experiences
and contacts is a growing concern faced worldwide by employers of different sizes
and industries.
Succession in Small and Closely Held Organizations
Succession planning can be especially important in small and medium-sized firms,
but few of these firms formalize succession plans. The lack of succession planning is
B. Succession Planning Decisions
Many decision areas should be considered as part of succession planning. Finding an
answer to these decisions takes analysis because the best answer varies depending on
the situation.
Identifying Current Talent
Companies can be proactive in identifying the right managers and employees needed
for successful succession planning. Managers determine if individuals are ready,
“Make-or-Buy” Talent?
Employers face a “make-or-buy” choice—develop (“make”) competitive human
Chapter 9: Talent Management
particular approach.
Buy talent:
• (+) Company can tap into new knowledge/perspectives
• (+) Obtain needed skills that will help the company
• (-) Can be a costly strategy
• (-) Risk associated with hiring unproven employees
Make talent:
• (+) Can provide employees required competencies and advancement
opportunities
Other organizations are focusing on growing their own leaders. This is particularly
true for companies that are unable to find qualified job candidates in fields such as
the trades, sales, and engineering—some firms are even partnering with colleges to
help develop students who can make significant contributions after being hired.
Metrics and Succession Planning
A wide range of metrics are used to measure the impact of succession planning
depending on the company plans. The proper metric or metrics should be picked
Chapter 9: Talent Management
candidates, and success rates of succession decisions.
Computerized Succession Planning Models
The expansion of information technology capabilities has resulted in employers
being able to have succession planning components available electronically to staff
C. Benefits of Formal Succession Planning
Succession planning can be done formally and informally. As companies become larger,
the benefits of formal succession planning become greater. For larger companies,
formal planning is recommended. Key benefits of succession planning include
following:
• Having a supply of highly qualified individuals ready for future job openings
Common Succession Planning Mistakes
CEO succession should be a focus of the boards of directors, not solely HR. One
reason why boards have increased the priority of CEO succession is the Sarbanes–
Oxley Act provisions that have added more demands that boards do CEO succession
planning.
Chapter 9: Talent Management
managers, as well as other key nonmanagement employees. Some firms target key
technical, professional, and sales employees as part of succession planning. Others
include customer service representatives, warehouse specialists, and additional
hourly employees who may be able to move up into other jobs or departments.
Chapter 9: Talent Management
IV. Careers and Career Planning
A career is the series of work-related positions a person occupies throughout life. People
pursue careers to satisfy their individual needs. Careers are an important part of talent
management, but individuals and organizations view careers in distinctly different ways.
HR Perspective: Staffing Top Positions with Positive Succession Planning
Community Health Systems Professional Services Corp., the Tennessee-based health
care consulting and managerial services firm, has developed a unique homegrown
approach to the management of succession in the independent hospitals that rely on the
Several factors directly contribute to these successes. The company uses many screening
tools to identify the right individuals for top-level jobs, and these tools have enabled the
organization to get good candidates for over 75% of these open positions without the
assistance of outside recruiting firms. In addition, the company keeps an active dialogue
going with top leaders after they are hired, and training and development opportunities
are provided to enhance career management. Some noteworthy approaches that company
uses include:
• Using the Internet, social networking Web sites, and external/internal referrals to
develop stronger relationships with potential job candidates.
Chapter 9: Talent Management
and by providing positive work opportunities. When a company attempts to manage
careers internally, there may be a typical career path that is identified for employees.
A. Changing Nature of Careers
The old model of a career in which a person worked up the ladder in one organization is
becoming rarer, and in a few industries changing jobs and companies every few years is
becoming more common.
Different Views of Careers
Various signs indicate that the patterns of individuals’ work lives are changing in
many areas—more freelancing, more working at home, more frequent job changes,
Labels for several views of careers include the following:
• Protean career—assumes individuals will drive their careers and define goals
to fit their life; individuals adapt to career demands by shaping their own
KSAs.
• Careers without boundaries—views a manager as having many possible
trajectories for a career, and many are across organizational boundaries; careers
can span many companies or industries.
All these different views of careers have merit for different individuals, but they all
show that any organization-centered career planning effort will have to consider the
unique needs of the individual employee.
B. Organization-Centered Career Planning
Since careers are different than in the past, managing them puts a premium on career
development by both employers and employees. Effective career planning considers
Chapter 9: Talent Management
to career planning.
Organization-centered career planning frequently focuses on identifying career paths
that provide for the logical progression of people between jobs in an organization.
Individuals follow these paths as they advance in organizations.
The approach used by organizations to enhance careers should provide opportunities for
individual growth and development. Another system for managing individual careers is
the career path, or “map,” which is created and shared with employees.
Career Paths
Career paths represent employees’ movements through opportunities over time.
Employer Websites and Career Planning
Many employers have careers section on their websites. Such sections can be used to
list open jobs for current employees looking to change jobs. An employer’s Web site
Accommodating Individual Career Needs
Not everyone views a career the same way. These perceptions can be driven by
Chapter 9: Talent Management
in the succession pipeline by accommodating individual needs. Such flexibility is
often the difference between continuing a career at a firm and moving on.
C. Individual-Centered Career Planning
Organizational changes have altered career plans for many people. Individuals have had
Individual Actions for Career Planning
For individuals to successfully manage their own careers, they should be able to
perform several activities. Three key ones are as follows:
• Self-assessment—individuals need to think about what interests them, what
they do not like, what they do well, and their strengths and weaknesses.
Individual Career Choices
Four general individual characteristics affect how people make career choices:
• Interests—people tend to pursue careers that they believe match their interests.
But over time, interests change for many people, and career decisions
eventually are made on the basis of special skills, abilities, and career paths
that are realistic for the individual.
Less is known about how and why people choose specific organizations than about
Chapter 9: Talent Management
why they choose specific careers. One obvious factor is timing—the availability of a
job when the person is looking for work. The amount of information available about
D. Career Progression Considerations
The typical career for individuals today includes more positions, transitions, and
organizations—more so than in the past, when employees were less mobile and
organizations were more stable as long-term employers. But there remain general
patterns in people’s lives that affect their careers.
Contained within this life pattern is the idea that careers and lives are not predictably
linear but cyclical. Individuals experience periods of high stability followed by
transition periods of less stability, and by inevitable discoveries, disappointments, and
triumphs. These cycles of structure and transition occur throughout individuals’ lives
and careers. This cyclical view may be an especially useful perspective for individuals
affected by downsizing or early career plateaus in large organizations. Such a
perspective argues for the importance of flexibility in an individual’s career. It also
emphasizes the importance of individuals’ continuing to acquire more and diverse
knowledge, skills, and abilities.
Early Career Issues
Chapter 9: Talent Management
expenses) are some approaches employers use to make jobs more attractive.
However, individuals in the early stages of their work in a profession need to take
Career Plateaus
Those who do not change jobs may face another problem—career plateaus. Many
workers define career success in terms of upward mobility. As the opportunities to
move up decrease, some employers try to convince employees they can find job
satisfaction in lateral movement. Such moves can be reasonable if employees learn
new skills that increase individual marketability in case of future layoffs,
termination, or organizational restructurings.
E. Career Transitions
Three career transitions are of special interest to HR—organizational entry and
socialization, job loss, and retirement.
Entry Career and Job Loss
“Entry shock” is especially difficult for younger new hires who find the work world
very different from school. Entry shock includes the following concerns:
• Supervisors—the boss–employee relationship is different from the student–
Chapter 9: Talent Management
and political aspects of solving work problems are less certain.
Retirement Issues
The process of retirement can be seen in many ways. For instance, retirement
represents a decision-making situation whereby an individual makes a choice to
leave the workplace to pursue personal interests. Retirement can also be understood
as an adjustment away from the demands of the workplace to greater psychological
well-being achieved outside the job. Still another view of retirement is centered on a
protean-based philosophy that explores how well individuals manage their growth
and employment opportunities after leaving a career. Finally, retirement can be
thought of as a component of human resource management because companies
provide incentives, training, and other programs that influence retirement decisions.
Career development for people at the end of their careers may be managed in many
ways. Phased-in retirement, consulting arrangements, and callback of some retirees
as needed all act as means for gradual disengagement between the organization and
the individual. However, phased-in retirement faces major obstacles in current
pension laws. Under many pension plans, employees who are working may not
receive pension benefits until they reach a “normal” retirement age.
V. Common Individual Career Problems
Chapter 9: Talent Management
Four career issues are sufficiently common as to need individual treatment. These are
problems with technical and professional workers, women, dual-career couples, and
individuals with global careers.
A. Technical and Professional Workers
Technical and professional workers, such as engineers, scientists, and IT systems
experts, present a special challenge for organizations. Many of these individuals want to
B. Women and Careers
The percentage of women in the workforce has increased greatly over the last several
decades, with women making up about half the workplace. Women are found in all
occupations and jobs, but their careers may have a different element than those of men.
Women give birth to children, and they can be primarily responsible for taking care of
these children, which can disrupt their career planning and advancement.
Work, Family, and Careers
A career approach for women frequently is to work hard before children arrive,
plateau or step off the career track when children are younger, and go back to career-