Project on Talent Management

8/8/2019 Project on Talent Management

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ABOUT

RELIANCE

COMMUNICATIONS


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Reliance Communications started its operations in 1999 and is under the Anil

Dhirubhai Ambani Group (ADAG) of companies. The company Reliance

Communications Limited has been set up with the aim of providingcommunication and information to people at affordable price.

The company Reliance Communications business includes the whole range of

services related to the telecom sector such as fixed line telephones and mobiles.

The business of the company also includes services like broadband, data services,

international and national long distance services. Reliance Communications also

provides to its customers a wide range of value added applications and services.

The company is able to provide such a vast range of services to its customers for ithas a high- capacity, reliable, convergent, and integrated digital network.

The Company Reliance Communications Limited in order to provide the best

quality of services to its customers laid down 60,000 kilometers of optic fiber all

across India. The company launched the Reliance Mobile services in December

2002 and this has helped to increase the subscriber base of the company. The

company Reliance Communications Limited's subscriber base has increased a lot

over the years and at present stands at 38 million. The company providestelecommunication services to individuals and enterprises. Reliance

Communications Company has become the leading telecommunication integrated

company in India and the chairman of the company is Anil Ambani.

Reliance Communications Company's total revenue amounted to Rs.35, 260

million in 2005- 2006 and the next year, this figure stood at Rs.45, 785 million.

The net profit of the company amounted to Rs.7, 023 million and the next year,

this figure increased to Rs.13, 046 million. This shows that the company RelianceCommunications Limited's total revenue and net profit has registered a significant

growth in one year. The company is listed on the Bombay Stock Exchange and

National Stock Exchange. The company Reliance Communications Limited added a

record number of subscribers in December 2006thatis1.4million.


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The company Reliance Communications Limited's market capitalization reached

the top with Rs.1 lakh crore on the Bombay Stock Exchange in February 2007. The

company has bagged the E- Governance project of the West Bengal government

in May 2007. The company Reliance Communications has won the Frost and

Sullivan Market Leadership Award in October 2005 and also the CDMA Industry

Achievement Award for International Leadership in October 2004. This shows that

Reliance Communications has been doing very good work that has been

recognized by the industry. And this is the reason that the company has received

so many awards.

Reliance Communications Limited further plans to expand its operations and also

plans to upgrade its technology. This is sure to help the company serve its

customers better and will also increase its subscriber base. The Company RelianceCommunications Limited should always try to provide the best quality of services

to its customers for this would lead to customer satisfaction and loyalty. And this

will in turn help the company to grow and prosper even more

HISTORY OF THE COMPANY

The second son of a school teacher, Dhirubhai was born in 1932 in the village of

Chorwad in Gujarat in circumstances that can best be described as modest. Driven

by hardship and want, he had to drop out of school early. In 1949, at the age of

17, he went to Aden (now Yemen) in search of opportunity, and worked as a

dispatch clerk for A. Besse & Co. A couple of years later, the company became a

distributor for Shell products and Dhirubhai was promoted to manage the

companys oil-filling station at the port of Aden. It was here that he dreamed of

setting up and owning a refinery, which he later realized with his petrochemicals

venture. He returned to India in 1958 to launch his first business venture, a spice

trading company named Reliance Commercial Corporation.

In 1962, Dhirubhai identified an emerging opportunity in yarn trading and shifted

to the new business. Three years later, he changed the name of his company to


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RelianceTextileIndustring.In 1966, he purchased land in Naroda, Gujarat, to set up

a textile mill. In 1975, a technical team from the World Bank recognized the

Naroda mill as one of the best composite textile mills in India and certified it as

excellent even developed country standards. shareholders rapidly gave

Dhirubhai an iconic status in the Indian financial markets.

In 1977, the company went public. At the time of the Reliance

Textiles IPO, participate on in the Indian capital markets was largely limited to a

small but influential elite which dabbled in a handful of stocks. The great majority

of Indias middle class chose to stay away. Dhirubhais decision to prefer the

capital markets over banks as the primary source of funding for his ambitious

expansion plans was as daring as it was unprecedented. In the event, The Reliance

IPO was an unlikely success. Against all odds, Dhirubhai managed to convince asufficiently large number of skeptical middle class investors to put their money,

and faith, in what was then a small, relatively unknown company. The subsequent

growth and success of Reliance and its philosophy of generously rewarding

shareholders rapidly gave Dhirubhai an iconic status in the Indian financial

markets. Under Dhirubhais charismatic leadership, the Annual General Meetings

(AGM) of Reliance took on the character of large public spectacles. Typically held

in large public arenas, and attended by thousands of adoring shareholders, the

Reliance AGM became a day to remember in the annual corporate calendar of

India. In 1986, the Reliance AGM held in Cross Maiden, Mumbai, was attended by

as many as 30,000 stockholdersa record in Indias corporate history.

In the early 80s, he had taken the first important step in strategic

backward integration for Reliance with the commissioning of the Patalganga plant

which initially manufactured polyester filament yarn and polyester staple fibre.

But Dhirubhai was never one to rest on his laurels.By the mid-80s, Dhirubhai had

become something of a living legend, widely hailed by peers and critics alike as

one of the greatest corporate visionaries in the history of post-Independent India.

In 1986, Mr. Dhirubhai Ambani underwent a massive stroke and became paralytic.

After that the major operations were handled by Mukesh. In 1991-92 he was promoted as the RILs Vice Chairman and Anil became the JointManagingDirector. In 1992 93 Mukesh was further promoted as the Chairman of ReliancePetroleum. This move actually made it very apparent to the media, public and


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mostly to Anil Ambani that his elder brother was most likely the heir apparentwhile he saw himself as the righteous successor as much as Mukesh Ambani sawhimself.

There was a lot of distance created between the two brothers because severaloutsiders like Anand Jain. A bitter feud resulted between Anil Ambani and Mr.Jain over issues like the persons in contracts. These persons in contract (asthey were mentioned in the shareholders list) are nothing but 251 odd investmentfirms (as every company has) or benamis as they are called in India. They protectthe companies from takeover tycoons, from the prying eyes of the government,from tax and they also influence the share prices of the company. The fact that hiselder brother had found a confidante in Mr. Anand Jain, sidelining him, about sucha confidential matter was not taken lightly by Mr. Junior Ambani. These and manyother incidents gave this conflict a final boost.

Mr. Dhirubhai Ambani was a street fighter. For over decades, until his first

paralytic stroke in 1986, Dhirubhai had fought to create a near-monopoly in

petrochemicals and ensure that Reliance was miles above its competitors. The

fighters instincts of the legendary patriarch, imbibed in the genes of his sons an

intention to fight for their floor space i.e. to divide the Reliance pie and get the

best share for themselves. If there was one similarity between the two brothers it

was this that both saw themselves as the perfect descendent of their fathers

empire. This comprised the major intention for ensuing conflict. The behaviorstage includes the statements, actions and reactions made by the conflicting parties.

These conflicting behaviors are usually overt attempts to implement each partys

intentions. This is the stage where conflicts become visible. Dhirubhai left for

his heavenly abode on July 6, 2002

After Dhirubhai Ambanis death in 2002, there was an acute tension between his

two sons. But it was in 18th

November 2004, that the veil was lifted and the

conflict became public news. This happened at a business bash organized by

CNBC-TV 18.

For years, the media had believed this myth that Mukesh was an MBA fromStanford B-School. In all his official documents, CVs, loan applications and in thecompanys dealings with Indian and foreign stock exchanges, there was alwaysthis one line about Mukesh graduating from Stanford. It was the Microsoft CEO,


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Steve Balmer, who blew the whistle on this one during his trip to India inNovember 2004.At the bash, Mukesh sang praises of the Microsoft chieftain andtold everyone present that they were classmates in Stanford. Steve Balmerconfirmed this fact but he also added that in their class there were two studentswho dropped out at the end of the first year - Mukesh and himself. Mukesh wasvisibly shaken after this revelation. Within minutes, he walked out, only to run intoa journalist who was waiting to get some innocuous information from him. She

told him that they werent going live on camera and hence, he could say whateverhe wished to. His reply was a stunning public revelation of what was going on

behind the scenes within the Ambani family. It was the first time any of the familymembers openly admitted there was a problem between the brothers.

In the years to come, the conflict between the brothers intensified and they used themedia as a vehicle to promote their respective camps. There were rumors that

Reliance Mutual Fund, which is under Anil, pumped in money (Rs 39.62 Cr) intomedia, to run campaign against Mukesh Ambani. However, this was never provedand it turned out to be the work of a bunch of amateurs. In March 2005, Anil

alleged his phones were being tapped. He even wrote letters to the Prime Ministerand the Home Minister asking them to check this. The contents of the letters wereleaked to the media. Both brothers met Sonia Gandhi, albeit for different reasons.During this time, Anil resigned from IPCL, a former public sector unit that was

purchased by the Ambanis. He wrote a stinging resignation letter, addressed to hiselder brother, attacking Mukeshs aide Anand Jain. Anils sole intention was toestrange Jain from his elder brother .He acutely detested Jain, and blamed him forthe present state of affairs. This was also largely played by the media. NitaAmbanis active participation in Infocomms marketing campaigns was seen athreat by Anil who commented on it as unprofessional.

The action-replay interplay between the conflicting parties results in consequences.

In the case of the Ambanis, the end of the battle led to the division of empire asfollows:

Mukesh Ambani got: IPCL and Reliance Industries Ltd - Oil and gas,petroleum refining and marketing, petrochemicals, textiles; main subsidiaryReliance Retail Limited and Reliance Industrial Infrastructure Limited.

Anil Ambani got: ADAG (Reliance Communications, Reliance Capital,Reliance Power, Infrastructure, Big Entertainment, Reliance Health, NISSparta, Mudra Communications and Reliance BPO & KPO).


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ABOUT ANIL AMBANI

Anil Ambani (born June 4, 1959) is an Indian business baron and chairman of

Reliance Anil Dhirubhai Ambani Group Anil's elder brother, Mukesh Ambani, isalso worth more than 28 billion dollars, and owns another company called RelianceIndustries.As of 2010, he is the fourth richest Indian with a personal wealth of$13.7 billion, behind Mukesh Ambani,Lakshmi Mittal and Azim Premji.

He is a member of the Board of Overseers at the Wharton School of the University

of Pennsylvania. He is also the member of the Board of Governors of the IndianInstitute of Technology Kanpur: Indian Institute of management,Ahmedabad.| Heis a member of the Central Advisory Committee, Central Electricity Regulatory

Commission. In March 2006, he resigned. He is also the Chairman of Board ofGovernors of DA-IICT.Gandhinagar.

Career

Ambani joined Reliance,the company founded by his late father DhirubhaiAmbani, in 1983 as Co-Chief Executive Officer and is credited with having

pioneered many financial innovations in the Indian capital markets. For example,

he led India's first forays into overseas capital markets with international publicofferings of global depositary receipts, convertibles and bonds. He directed

Reliance in its efforts to raise, since 1991, around US$2 billion from overseasfinancial markets; with a 100-year Yankee bond issue in January 1997 being thehigh point, after which people regarded him as a financial wizard He along with his

brother, Mukesh Ambani, has steered the Reliance Group to its current status asIndia's leading textiles, petroleum, petrochemicals, power, and telecom company.\

He has been linked with several starlets in his long career including hiscurrent wife of more than 15 years. He is a close friend of movie star Amitabh

Bachchan and Subrata Roy. One of his major achievements in the entertainmentindustry is the takeover of Adlabs, the movie production to distribution to

multiplex company that owns India's only dome theatre and the recently announcedjoint venture worth US$ 825 million with Steven Spielberg.

He has been embroiled in a dispute with his brother, Mukesh Ambani, overthe supply of gas from the latter's KG basin.


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Think big. Think different. Think ahead.

Dhirubhai preached and personally practised one mantra throughout his life: Dream withconviction. He built the Reliance empire from scratchand, in a short span of 25 years, it catapulted to

become one of the top Fortune 500 corporations othe world an achievement unparalleled in history.

He was deeply rooted in traditional Indian values,and at the same time, Dhirubhai possessed a verymodern outlook - truly that of a 21st century person.His corporate philosophy was short, simple andincredibly effective: Think big. Think different.Think fast. Think ahead. Aim for the best. This wasclearly reflected in his passion for mega-sized

projects, as well as his fascination for cutting-edgetechnology and desire to always achieve the highest

possible productivity. At Reliance, Dhirubhai was a

pillar of inspiration for one and all. By practicingwhat he preached, he inspired and encouragedeveryone to surpass the best in the world

.

Dhirubhai fully realised that true empowerment of the people is possible


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only and through education. Being an effective communicator, he continued to inspire,guide, educate motivate everyone through his communications. He was a firm believer inthe power of information and communication, and how it can be utilised and turned to theadvantage of one and all, by making time and distance irrelevant.

He would always say that if a telephone call could be made cheaper thana postcard, it would transform every home, empower every Indian, remove every obstacleto opportunity and growth, and tear apart every barrier that divides Indian society. Hewas convinced that infocom could energise enterprises, drive governance, and renderlearning an interesting experience, apart from making life exciting.Keeping hisconviction as our credo, Reliance Communications is committed to transformDhirubhais dream into a reality.

VISION

We will leverage our strengths to execute complex global-scale projects to facilitate

leading-edge information and communication services affordable to all individual

consumers and businesses in India.

We will offer unparalleled value to create customer delight and enhance business

productivity.

We will also generate value for our capabilities beyond Indian borders and enable

millions of India's knowledge workers to deliver their services globally.

Looking back, looking forward

Reliance Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group founded by

Shri Dhirubhai H Ambani (1932-2002), ranks among Indias top three private sectorbusiness houses in terms of net worth. The group has business interests that range fromtelecommunications (Reliance Communications Limited) to financial services (RelianceCapital Ltd) and the generation and distribution of power (Reliance InfrastructureLimited).

Reliance ADA Groups flagship company, Reliance Communications, is India's largest private sector information and communications company, with over 100 million

subscribers. It has established a pan-India, high-capacity, integrated (wireless andwireline), convergent (voice, data and video) digital network, to offer services spanningthe entire infocomm value chain.


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Other major group companies Reliance Capital and Reliance Infrastructure arewidely acknowledged as the market leaders in their respective areas of operation.

ABOUT

HUMAN RESOURCE


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Human resources is a term used to describe the individuals who

comprise the workforce of an organization, although it is also applied in laboreconomics to, for example, business sectors or even whole nations. Human

resources is also the name of the function within an organization charged with theoverall responsibility for implementing strategies and policies relating to themanagement of individuals (i.e. the human resources). This function title is oftenabbreviated to the initials HR'.

Human resources is a relatively modern management term, coined inthe 1960sThe origins of the function arose in organizations that introduced 'welfaremanagement' practices and also in those that adopted the principles of 'scientific

management'. From these terms emerged a largely administrative management

activity, co-ordinating a range of worker related processes and becoming known, intime as the 'personnel function'. Human resources progressively became the moreusual name for this function, in the first instance in the United States as well asmultinational corporations, reflecting the adoption of a more quantitative as well asstrategic approach to workforce management, demanded by corporate managementand the greater competitiveness for limited and highly skilled workers

BACKGROUND

The use of the term 'human resources' by organizations to describe the workforcecapacity available to devote to the achievement of its strategies has drawn uponconcepts developed in Industrial/Organizational Psychology and Systen TheoryHuman resources has at least two related interpretations depending on context. The


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original usage derives from political economy and economics, where it wastraditionally called lobour one of four factors of production although this

perspective has shifted as a consequence of further ongoing research into morestrategic approaches. This first usage is used more in terms of 'human resourcesdevelopment' of the individuals within an organization, although the approach canalso be applied beyond the level of the organization to that of industry sectors andnations.

HISTORY OF HR

The early development of the function can be traced back to at least two distinctmovements. One element has its origins in the late 19th century, where

organizations such as Cadburys at its Bournville factory recognised the importanceof looking after the welfare of the workforce, and their families. The employmentof women in factories in the United Kingdom during the [[] lead to the introductionof "Welfare Officers". Meanwhile, in the United Kingdom the concept of humanresources developed as a reaction to the efficiency focus of Taylorism or "scientificmanagement" in the early 1900s, which developed in response to the demand forever more efficient working practices within highly mechanised factories, such asin the Ford Motor company.By 1920, psychologists and employment experts in theUnited States started the human relations movement, which viewed workers in

terms of their psychology and fit with companies, rather than as interchangeable

parts.

During the middle of the last century, larger corporations, typically those in theUnited States that emerged after the Second World War, recruited personnel fromthe US Military and were able to apply new selection, training, leadership, andmanagement development techniques, originally developed by the ArmedServices, working with, for example, university-based occupational psychologists.Similarly, some leading European multinationals, such as Shell and Phillips

developed new approaches to personnel development and drew on similarapproaches already used in Civil Service training. Gradually, this spread moresophisticated policies and processes that required more central management via a

personnel department composed of specialists and generalist teams.

The role of what became known as Human Resources grew throughout the middleof the 20th century. Tensions remained between academics who emphasized either'soft' or 'hard' HR. Those professing so-called 'soft HR' stressed areas like


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leadership,cohesion, and loyalty that play important roles in organizationalsuccess. Those promoting 'hard HR' championed more quantitatively rigorousmanagement techniques in the 1960s.

In the later part of the last century, both the title and traditional role of the personnel function was progressively superseded by the emergence, at least inlarger organizations, of strategic human resources management and sophisticatedhuman resources departments. Initially, this may have involved little more thanrenaming the function, but where transformation occurred, it became distinguished

by the human resources having a more significant influence on the organizationsstrategic direction and gaining board-level representation

Human resources purpose and role

In simple terms, an organization's human resource management strategy shouldmaximize return on investment in the organization's human capital and minimizefinancial risk. Human Resources seeks to achieve this by aligning the supply ofskilled and qualified individuals and the capabilities of the current workforce, with

the organization's ongoing and future business plans and requirements to maximisereturn on investment and secure future survival and success. In ensuring suchobjectives are achieved, the human resource function purpose in this context is toimplement the organisation's human resource requirements effectively but also

pragmatically, taking account of legal, ethical and as far as is practical in a mannerthat retains the support and respect of the workforce

KEY FUNCTIONS

Human Resources may set strategies and develop policies, standards, systems, andprocesses that implement these strategies in a whole range of areas. The followingare typical of a wide range of organizations:

y Recruitment, selection, and onboarding (resourcing)

y Organizational design and developmenty Business transformation and change management

y Performance, conduct and behavior management

y Industrial and employee relations

y Human resources (workforce) analysis and workforce personnel data

management


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y Compensation, rewards, and benefits management

y Training and development (learning management)

Implementation of such policies, processes or standards may be directly managed by the HR function itself, or the function may indirectly supervise theimplementation of such activities by managers, other business functions or viathird-party external partner organizations.

Human resources management trends and influences

In organizations, it is important to determine both current and future organizationalrequirements for both core employees and the contingent workforce in terms of

their skills/technical abilities, competencies, flexibility etc. The analysis requiresconsideration of the internal and external factors that can have an effect on the

resourcing , development, motivation and retention of employees and otherworkers.

External factors are those largely out-with the control of the organization. Theseinclude issues such as economic climate and current and future labor market trends(e.g., skills, education level, government investment into industries etc.). On theother hand, internal influences are broadly controlled by the organization to

predict, determine, and monitorfor examplethe organizational culture

underpinned by management style, environmental climate, and the approach toethical and corporate social resoposbilities.

MAJOR TRENDS

To know the business environment an organization operates in, three major trendsmust be considered:

1. Demographics: the characteristics of a population/workforce, for example,

age, gender or social class. This type of trend may have an effect in relation

to pension offerings, insurance packages etc.2. Diversity: the variation within the population/workplace. Changes in society

now mean that a larger proportion of organizations are made up of "baby

boomers" or older employees in comparison to thirty years ago. Advocates

of "workplace diversity" simply advocate an employee base that is a mirror


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reflection of the make-up of society insofar as race, gender, sexual

orientation, etc.

3. Skills and qualifications: as industries move from manual to more

managerial professions so does the need for more highly skilled graduates.

If the market is "tight" (i.e., not enough staff for the jobs), employers mustcompete for employees by offering financial rewards, community

investment, etc..

INDIVIDUAL RESPONSE\

In regard to how individuals respond to the changes in a labour market, thefollowing must be understood:

y Geographical spread: how far is the job from the individual? The distance to

travel to work should be in line with the pay offered, and the transportation

and infrastructure of the area also influence who applies for a post.

y Occupational structure: the norms and values of the different careers

within an organization. Mahoney 1989 developed 3 different types of

occupational structure namely craft (loyalty to the profession), organization

career (promotion through the firm) and unstructured (lower/unskilledworkers who work when needed).

y Generational difference: different age categories of employees have certain

characteristics, for example their behaviour and their expectations of the

organization.

Framework

Human Resources Development is a framework for the expansion of human capitalwithin an organization or (in new approaches) a municipality, region, or nation.Human Resources Development is a combination of training and education, in a

broad context of adequate health and employment policies, that ensures thecontinual improvement and growth of both the individual, the organization, and thenational human resourcefulness. Adam Smith states, The capacities of individuals

depended on their access to education. Human Resources Development is themedium that drives the process between training and learning in a broadly


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fostering environment. Human Resources Development is not a defined object, buta series of organised processes, with a specific learning objective (Nadler,1984Within a national context, it becomes a strategic approach to intersectoral linkages

between health, education and employment.

Structure

Human Resources Development is the structure that allows for individual

development, potentially satisfying the organizations, or the nation's goals.Development of the individual benefits the individual, the organizationand thenation and its citizens. In the corporate vision, the Human Resources Developmentframework views employees as an asset to the enterprise, whose value is enhanced

by development, Its primary focus is on growth and employee developmentitemphasises developing individual potential and skills(Elwood, Olton and Trott

1996) Human Resources Development in this treatment can be in-room grouptraining, tertiary or vocational courses or mentoring and coaching by senioremployees with the aim for a desired outcome that develops the individuals

performance. At the level of a national strategy, it can be a broad intersectoralapproach to fostering creative contributions to national productivity

Training

At the organizational level, a successful Human Resources Development program prepares the individual to undertake a higher level of work, organized learning

over a given period of time, to provide the possibility of performance change(Nadler 1984). In these settings, Human Resources Development is the frameworkthat focuses on the organizations competencies at the first stage, training, and thendeveloping the employee, through education, to satisfy the organizations long-termneeds and the individuals career goals and employee value to their present andfuture employers. Human Resources Development can be defined simply asdeveloping the most important section of any business its human resource by

attaining or upgrading employee skills and attitudes at all levels to maximiseenterprise effectiveness The people within an organization are its human resource.

Human Resources Development from a business perspective is not entirely focusedon the individuals growth and development, development occurs to enhance theorganization's value, not solely for individual improvement. Individual educationand development is a tool and a means to an end, not the end goal itself.(ElwoodF. Holton II, James W. Trott Jr). The broader concept of national and morestrategic attention to the development of human resources is beginning to emerge


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as newly independent countries face strong competition for their skilledprofessionals and the accompanying brain-drain they experience.

Recruitment

Employee recruitment forms a major part of an organization's overall resourcing

strategies, which identify and secure people needed for the organization to surviveand succeed in the short to medium-term. Recruitment activities need to beresponsive to the ever-increasingly competitive market to secure suitably qualifiedand capable recruits at all levels. To be effective these initiatives need to includehow and when to source the best recruits internally or externally. Common to thesuccess of either are; well-defined organizational structures with sound job design,robust task and person specification and versatile selection processes, reward,employment relations and human resource policies underpinned by a commitment

for strong employment trading,employer branding and employee engagement andonboarding strategies.

Internal recruitment can provide the most cost-effective source for recruits if the potential of the existing pool of employees has been enhanced through training,development and other performance-enhancing activities such as performanceappraisal, succession planning and development centres to review performance andassess employee development needs and promotional potential.

Increasingly, securing the best quality candidates for almost all organizations

relies, at least occasionally if not substantially, on external recruitment methods.Rapidly changing business models demand skill and experience that cannot besourced or rapidly enough developed from the existing employee base. It would beunusual for an organization to undertake all aspects of the recruitment processwithout support from third-party dedicated recruitment firms. This may involve arange of support services, such as; provision of CVs or resumes , identifyingrecruitment media, advertisement design and media placement for job vacancies,candidate response handling,shortlisting, conducting aptitude testing, preliminaryinterviews or reference and qualification verification. Typically, small

organizations may not have in-house resources or, in common with largerorganizations, may not possess the particular skill-set required to undertake aspecific recruitment assignment. Where requirements arise, these are referred on anad hoc basis to government job centres or commercially run employment agencies.

Except in sectors where high-volume recruitment is the norm, an organizationfaced with sudden, unexpected requirements for an unusually large number of new


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recruits often delegates the task to a specialist external recruiter. Sourcingexecutive level and senior management as well as the acquisition of scarce orhigh-potential recruits has been a long-established market serviced by a widerange of search and selection or headhunting consultancies, which typicallyform long-standing relationships with their client organizations. Finally, certainorganizations with sophisticated HR practices have identified there is a strategicadvantage in outsourcing complete responsibility for all workforce procurement to

one or more third-party recruitment agencies or consultancies. In the mostsophisticated of these arrangements the external recruitment services provider maynot only physically locate, or embed, their resourcing team(s) in the clientorganization's offices, but work in tandem with the senior human resourcemanagement team in developing the longer-term HR resourcing strategy and plan.

Despite its more everyday use terms such as "human resources" and similarly

"human capital" continue to be perceived negatively and maybe considered aninsulting of people. They create the impression that people are merelycommodities, like office machines or vehicles, despite assurances to the contrary

Modern analysis emphasizes that human beings are not "commodities" or"resources", but are creative and social beings in a productive enterprise. The 2000revision of ISO 9001 in contrast requires identifying the processes, their sequenceand interaction, and to define and communicate responsibilities and authorities. Ingeneral, heavily unionised nations such as France and Germany have adopted andencouraged such approaches. The International Labour Organization also in 2001

decided to revisit, and revise its 1975 Recommendation 150 on Human ResourcesDevelopment. One view of these trends is that a strong social consensus on

political economy and a good social welfare system facilitates labor mobilityl andtends to make the entire economy more productive, as labor can develop skills andexperience in various ways, and move from one enterprise to another with littlecontroversy or difficulty in adapting. Another view is that governments should

become more aware of their national role in facilitating human resourcesdevelopment across all sectors.

An important controversy regarding labor mobility illustrates the broader philosophical issue with usage of the phrase "human resources": governments ofdeveloping nations often regard developed nations that encourage immigration or

"guest workers" as appropriating human capital that is more rightfully part of thedeveloping nation and required to further its economic growth.


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Over time the United Nations have come to more generally support the developingnations' point of view, and have requested significant offsetting "foreign aid"contributions so that a developing nation losing human capital does not lose thecapacity to continue to train new people in trades, professions, and the arts.

[9].

In the very narrow context of corporate "human resources" management, there is a

contrasting pull to reflect and require workplace diversity that echoes the diversityof a global customer base. Such programs require foreign language and cultureskills, ingenuity, humour, and careful listening. These indicate a general shiftthrough the human capital point of view to an acknowledgment that human beingscontribute more to a productive enterprise than just "work": they bring theircharacter, ethics, creativity, social connections, and in some cases pets and

children, and alter the character of a workplace. The term corporate culture is usedto characterize such processes at the organizational level.

HUMAN RESOURCE MANAGEMENT

Human resource management (HRM) is the strategic and coherent approach to

the management of an organization's most valued assets - the people working therewho individually and collectively contribute to the achievement of the objectivesof the business. The terms "human resource management" and "human resources"(HR) have largely replaced the term "personal management" as a description of the

processes involved in managing people in organizations. In simple words, HRMmeans employing people, developing their capacities, utilizing, maintaining andcompensating their services in tune with the job and organizational requirement.

FEATURES

Its features include:

y Organizational management

y Personnel administration

y Manpower management


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y Industrial management

But these traditional expressions are becoming less common for the theoreticaldiscipline. Sometimes even employee andindustrial relations are confusingly listedas synonyms,although these normally refer to the relationship betweenmanagement and workers and the behavior of workers in companies.

The theoretical discipline is based primarily on the assumption that employees areindividuals with varying goals and needs, and as such should not be thought of as

basic business resources, such as trucks and filing cabinets. The field takes a positive view of workers, assuming that virtually all wish to contribute to theenterprise productively, and that the main obstacles to their endeavors are lack of

knowledge, insufficient training, and failures of process.

Human Resource Management(HRM) is seen by practitioners in the field as amore innovative view of workplace management than the traditional approach. Itstechniques force the managers of an enterprise to express their goals withspecificity so that they can be understood and undertaken by the workforce, and to

provide the resources needed for them to successfully accomplish theirassignments. As such, HRM techniques, when properly practiced, are expressive ofthe goals and operating practices of the enterprise overall. HRM is also seen by

many to have a key role in risk reduction within organisations. Synonyms such as personnel managementare often used in a more restricted sense to describeactivities that are necessary in the recruiting of a workforce, providing its members

with payroll and benefits, and administrating their work-life needs. So if we moveto actual definitions, Torrington and Hall (1987) define personnel management as

being:

a series of activities which: first enable working people and their employing

organisations to agree about the objectives and nature of their working

relationship and, secondly, ensures that the agreement is fulfilled" (p. 49).

While Miller (1987) suggests that HRM relates to:

".......those decisions and actions which concern the management of employees atall levels in the business and which are related to the implementation of strategies

directed towards creating and sustaining competitive advantage" (p. 352).

Academic theory


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The goal of human resource management is to help an organisation to meetstrategic goals by attracting, and maintaining employees and also to manage themeffectively. The key word here perhaps is "fit", i.e. a HRM approach seeks toensure a fit between the management of an organisation's employees, and theoverall strategic direction of the company (Miller, 1989).

The basic premise of the academic theory of HRM is that humans are notmachines, therefore we need to have an interdisciplinary examination of people inthe workplace. Fields such as psychology,industrial relations, industrialengineering,sociology,economics, and crirtical theories: postmodernism.post-structuralism play a major role. Many colleges and universities offer bachelor andmaster degrees in Human Resources Management or in Human Resources andIndustrial Relations.

One widely used scheme to describe the role of HRM, developed by Dave Ulrich,defines 4 fields for the HRM function

y Strategic business partner

y Change management

y Employee champion

y Administration

However, many HR functions these days struggle to get beyond the roles ofadministration and employee champion, and are seen as reactive rather than

strategically proactive partners for the top management. In addition, HRorganisations also have difficulty in proving how their activities and processes add

value to the company. Only in recent years have HR scholars and professionalsfocused on developing models that can measure the value added by HR.

Business practice

Human resources management involves several processes. Together they are

supposed to achieve the above mentioned goal. These processes can be performedin an HR department, but some tasks can also be outsourced or performed by line-managers or other departments. When effectively integrated they providesignificant economic benefit to the company.

y Workforce planning

y Recruitment(sometimes separated into attraction and selection)

y Induction,Orientation and Onboarding


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y Skills management

y Training and Development

y Personnel administration

y Compensation in wage or salary

y

Time managementy Travel management (sometimes assigned to accounting rather than HRM)

y Payroll (sometimes assigned to accounting rather than HRM)

y Employee benefits administration

y Personnel cost planning

y Performance appraisal

y Labor relations

HRM strategy

An HRM strategy pertains to the means as to how to implement the specificfunctions of HRM. An organization's HR function may possess recruitment andselection policies, disciplinary procedures, reward/recognition policies, an HR

plan, or learning and development policies, however all of these functional areas ofHRM need to be aligned and correlated, in order to correspond with the overall

business strategy. An HRM strategy thus is an overall plan, concerning theimplementation of specific HRM functional areas.

An HRM strategy typically consists of the following factors:

y "Best fit" and "best practice" - meaning that there is correlation between

the HRM strategy and the overall corporate strategy. As HRM as a field

seeks to manage human resources in order to achieve properly

organisational goals, an organisation's HRM strategy seeks to accomplish

such management by applying a firm's personnel needs with the

goals/objectives of the organisation. As an example, a firm selling cars

could have a corporate strategy of increasing car sales by 10% over a five

year period. Accordingly, the HRM strategy would seek to facilitate how

exactly to manage personnel in order to achieve the 10% figure. SpecificHRM functions, such as recruitment and selection, reward/recognition, an

HR plan, or learning and development policies, would be tailored to achieve

the corporate objectives.

y Close co-operation (at least in theory) between HR and the top/senior

management, in the development of the corporate strategy. Theoretically,


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a senior HR representative should be present when an organisation's

corporate objectives are devised. This is so, since it is a firm's personnel

who actually construct a good, or provide a service. The personnel's proper

management is vital in the firm being successful, or even existing as a going

concern. Thus, HR can be seen as one of the critical departments within thefunctional area of an organisation.

y Continual monitoring of the strategy, via employee feedback, surveys, etc.

The implementation of an HR strategy is not always required, and may depend ona number of factors, namely the size of the firm, the organisational culture withinthe firm or the industry that the firm operates in and also the people in the firm.

An HRM strategy can be divided, in general, into two facets - the people strategy

and the HR functional strategy. The people strategy pertains to the point listed inthe first paragraph, namely the careful correlation of HRM policies/actions toattain the goals laid down in the corporate strategy. The HR functional strategyrelates to the policies employed within the HR functional area itself, regarding themanagement of persons internal to it, to ensure its own departmental goals are met.

There are both generalist and specialist HRM jobs. There are careers involved with

employment, recruitment and placement and these are usually conducted byinterviewers, EEO (Equal Employment Opportunity) specialists or collegerecruiters. Training and development specialism is often conducted by trainers andorientation specialists. Compensation and benefits tasks are handled bycompensation analysts, salary administrators, and benefits administrators.

Professional organizations

Professional organizations in HRM include the Society for Human ResourceManagement, the Australian Human Resources Institute (AHRI), the ChartedInstitute of Personnel Development(CIPD), the International Public ManagementAssociation for HR (IPMA-HR), Management Association of Nepal (MAN) and

the International Personnel Management Association of Canada (IPMA-Canada),Human Capital Institute. National Human Resource Development Network inIndia.

Functions


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The Human Resources Management (HRM) function includes a variety ofactivities, and key among them is deciding what staffing needs you have andwhether to use independent contractors or hire employees to fill these needs,recruiting and training the best employees, ensuring they are high performers,dealing with performance issues, and ensuring your personnel and management

practices conform to various regulations. Activities also include managing yourapproach to employee benefits and compensation, employee records and personnel

policies. Usually small businesses (for-profit or nonprofit) have to carry out theseactivities themselves because they can't yet afford part- or full-time help. However,they should always ensure that employees haveand are aware ofpersonnel

policies which conform to current regulations. These policies are often in the formof employee manuals, which all employees have.

Note that some people distinguish a difference between HRM (a major

management activity) and HRD (Human Resource Development, a profession).Those people might include HRM in HRD, explaining that HRD includes the

broader range of activities to develop personnel inside of organizations, including,

e.g., career development, training, organization development, etc.

There is a long-standing argument about where HR-related functions should beorganized into large organizations, e.g., "should HR be in the OrganizationDevelopment department or the other way around?"

The HRM function and HRD profession have undergone major changes over the

past 2030 years. Many years ago, large organizations looked to the "PersonnelDepartment," mostly to manage the paperwork around hiring and paying people.More recently, organizations consider the "HR Department" as playing animportant role in staffing, training and helping to manage people so that people andthe organization are performing at maximum capability in a highly fulfillingmanner.

Human Resource Planning

Definition of Human Resource Planning, Objectives of Human Resource Planning,Human Resource Planning at Different Levels, The Process of Human ResourcePlanning, Assessing Current Human Resources and Making an Inventory,Forecasting, Matching the Inventory with Future Requirements, Managing the


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hours, early retirement and attrition to reduce the number of employees. EffectiveHRP reduces the pressures on the management and employees, as bothemployment and retrenchment would be well planned and phased out over acomfortable time span, avoiding unpleasant consequences.

Steps in the Human Resource Planning Process

Designing the Management System

1. A crosscutting issue in human resource planning is to ensure that a proper system is inplace to handle the process. The overall aim of this system is to manage human resourcesin line with organizational goals. The system is in charge of human resource plans,

policies, procedures and best practices. For example, the system should track emerginghuman resource management trends, such as outsourcing certain non-core functions,adopting flexible work practices and the increased use of information technology, and, ifappropriate, implement them.

Environmental Analysis

2. The first step in the human resource planning process is to understand the context ofhuman resource management. Human resource mangers should understand both internaland external environments. Data on external environments includes the following: thegeneral status of the economy, industry, technology and competition; labor marketregulations and trends; unemployment rate; skills available; and the age and sexdistribution of the labor force. Internal data required include short- and long-termorganizational plans and strategies and the current status of the organization's humanresources.

Forecasting Human Resource Demand

3. The aim of forecasting is to determine the number and type of employees needed in thefuture. Forecasting should consider the past and the present requirements as well as futureorganizational directions. Bottom-up forecasting is one of the methods used to estimate

future human resource needs by gathering human resource needs of variousorganizational units.

Analyzing Supply

4. Organizations can hire personnel from internal and external sources. The skill inventoriesmethod is one of the techniques used to keep track of internal supply. Skill inventories


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are manual or computerized systems that keep records of employee experience, educationand special skills. A forecast of the supply of employees projected to join theorganization from outside sources, given current recruitment activities, is also necessary.

Reconciliation and Planning

5. The final step in human resource planning is developing action plans based on thegathered data, analysis and available alternatives. The key issue is that the plans shouldbe acceptable to both top management and employees. Plans should be prioritized andtheir key players and barriers to success identified. Some of these plans include employeeutilization plan, appraisal plan, training and management development plan and humanresource supply plan.

Competencies for HRD Practitioners

There are five fundamental skill that need to be mastered by Human ResourceDevelopment (HRD) practitioners:(1) needs assessment(2) program design, development, and evaluation (including individual evaluation)(3) marketing of HRD program

(4) cost/benefit analysis(5) facilitation of learning.

1.NEEDS ASSESSMENT:- HRD practitioners must be proficient in designingand conducting needs assessments prior to designing and developing the learning

programs and training activities. There are four reasons for this: (1) to identifyspecific problem areas in the organization; (2) to identify specific learningdeficiencies to serve as the bases of programs and activities; (3) to determine the

bases of future learner evaluations; and (4) to determine the costs and benefits of

the programs and activities in order to get organizational support.

2.PROGRAM DESIGN, DEVELOPMENT, AND EVALUATION:-

At the heart of all learning programs and training activities is their design, a blueprint from which to construct all learning in the organization. Without aproperly designed program, learning will not be consistent, nor will desired results


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TALENTMANAGEMENT


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Talent management refers to the process of developing and integrating newworkers, developing and retaining current workers, and attracting highly skilledworkers to work for a company. Talent management in this context does not referto the management of entertainers.The term was coined by David Watkins ofSoftscape published in an article in 1998 The process of attracting and retaining

profitable employees, as it is increasingly more competitive between firms and of

strategic importance, has come to be known as "the war for talent."

Talent management is a process that emerged in the 1990s and continues to beadopted, as more companies come to realize that their employees talents and skillsdrive their business success. Companies that have put into practice talentmanagement have done so to solve an employee retention problem. The issue withmany companies today is that their organizations put tremendous effort into

attracting employees to their company, but spend little time into retaining anddeveloping talent. A talent management system must be worked into the business

strategy and implemented in daily processes throughout the company as a whole. Itcannot be left solely to the human resources department to attract and retainemployees, but rather must be practiced at all levels of the organization. The

business strategy must include responsibilities for line managers to develop theskills of their immediate subordinates. Divisions within the company should beopenly sharing information with other departments in order for employees to gainknowledge of the overall organizational objectives. Companies that focus ondeveloping their talent integrate plans and processes to track and manage their

employee talent, including the following:

y Sourcing, attracting, recruiting and onboarding qualified candidates with

competitive backgrounds

y Managing and defining competitive salaries

y Training and development opportunities


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y Performance management processes

y Retention programs

y Promotion and transitioning

Talent management is also known as HCM (Human Capital Management), HRIS(HR Information Systems) or HRMS (HR Management Systems), and HRModules.

Human capital management

Companies that engage in talent management (Human Capital Management) arestrategic and deliberate in how they source, attract, select, train, develop, retain,

promote, and move employees through the organization. Research done on thevalue of such systems implemented within companies consistently uncovers

benefits in these critical economic areas: revenue, customer satisfaction, quality,productivity, cost, cycle time, and market capitalization The mindset of this morepersonal human resources approach seeks not only to hire the most qualified andvaluable employees but also to put a strong emphasis on retention. Since the initial

hiring process is so expensive to a company, it is important to place the individualin a position where his skills are being extensively utilized.

The term "talent management" means different things to different organizations.To some it is about the management of high-worth individuals or "the talented"whilst to others it is about how talent is managed generally - i.e. on the assumption

that all people have talent which should be identified and liberated. From a talentmanagement standpoint, employee evaluations concern two major areas ofmeasurement: performance and potential. Current employee performance within

a specific job has always been a standard evaluation measurement tool of theprofitability of an employee. However, talent management also seeks to focus onan employees potential, meaning an employees future performance, if given the

proper development of skills and increased responsibility.

The major aspects of talent management practiced within an organization must

consistently include: performance management

y leadership development

y workforce planning/identifying talent gaps

y recruiting


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This term "talent management" is usually associated with competency-basedhuman resource management practices. Talent management decisions are oftendriven by a set of organizational core competencies as well as position-specificcompetencies. The competency set may include knowledge, skills, experience, and

personal traits (demonstrated through defined behaviors). Older competencymodels might also contain attributes that rarely predict success (e.g. education,tenure, and diversity factors that are illegal to consider in relation to job

performance in many countries, and unethical within organizations).

Talent marketplace

A talent marketplace is an employee training and development strategy that is setin place within an organization. It is found to be most beneficial for companies

where the most productive employees can pick and choose the projects and

assignments that are most ideal for the specific employee. An ideal setting is where productivity is employee centric and tasks are described as judgment-basedwork, for example, in a law firm. The point of activating a talent marketplacewithin a department is to harness and link individuals particular skills (projectmanagement or extensive knowledge in a particular field) with the task at hand.Examples of companies that implement the talent marketplace strategy areAmerican Express and IBM.

Special Features of TM

An overall picture of the profi led groups current managerial abilities.An individual picture of each manager detailing a list of strengths, aswell as areas for improvement.An analysis of managerial talent readiness for career advancement.

A tool for optimized succession planning.

Some of the talent management challenges

1. Attracting and retaining enough employees at all levels to meet the needs oforganic and inorganic growth. All three companies are facing a talent crunch.Essar, for example, has grown from 20 thousand employees to a staggering 60thousand in the past 3 years. Fifty-five percent of their employees have less thantwo years of tenure.


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firms that depend on a strong flow of top talent, such professional service firmslike Mercer. All three panelists agreed that making the business infrastructure moreattractive to Gen Y is a high priority.

8. Creating a workplace that is open to Boomers in their "second careers."

Age prejudice still exists, but smart companies are looking for ways to incorporatethe talents of Boomers and even older workers in the workforce. In many cases,this requires rethinking roles and work relationships.

9. Overcoming a "norm" of short tenure and frequent movement. Someindustries, such as specialty retail, are known for having a very disposable view oftalent. Companies intent on changing that norm, such as The Gap, must address

both external influences in the marketplace and an internal mindset. The Gap

believes retaining employees in roles for 3+ years will be a key to their future

earnings growth.

10. Enlisting executives who don't appreciate the challenge. Many talentexecutives complain that business leaders still believe that people are lined upoutside the door because of the power of the company's brand. The challenge ofenlisting the support of all executives for the transition from a talent culture thathas traditionally operated with a "buy" strategy to one that places more emphasison "build" is widely shared.

Talent management practices that

matter

Becoming a well rounded talent requires continuous learning and development of

knowledge and skills. Organizations that want to succeed in flat world

competition better be creating enriching workplace experiences if they wish to

attract and retain the high-caliber talent they need. Organizations know that

they must have the best talent in order to succeed in the hypercompetitive


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and increasingly complex global economy. Along with the understanding ofthe need to hire, develop, and retain talented people, organizations areaware that they must manage talent as a critical resource to achieve thebest possible results.Few, if any, organizations today have an adequatesupply of talent. Gaps exist at the top of the organization, in the first- tomidlevel leadership ranks, and at the front lines.Talent is an increasinglyscarce resource, so it must be managed to the fullest effect.During thecurrent economic downturn we may experience a short ceasefire in the warfor talent, but were all seeing new pressures put on the talent running ourorganizations. Are todays leaders able to do more with less? The A-players can, and there should be a strategic emphasis on keeping thoseleadersand developing their successors. Many organizations arereducing their workforces, but lets be careful not to cut so deep that talentis scarce when the economy rebound. The idea of managing talent is not

new.Four or five decades ago, it was viewed as a peripheral responsibilitybest relegated to the personnel department. Now, talent management is anorganizational function that is taken far more seriously.

Best Practice #1: Start with the end in mindtalent strategy must betightly aligned with business strategy.

Effective talent management requires that your business goals andstrategies drive thequality and quantity of the talent you need.Procter &Gamble, for example, views business decisions and talent decisions asone.And research put forth by the AberdeenGroup showed that best-in-class organizations are 34 percent more likelyto connect succession management strategies with organizationalstrategies. Below are statements made by organizations whose specificbusiness goals and strategies drive their talent needs:

>We acquired one of our largest competitors and have redundant talent.How will we ensure we retain the best? Who will oversee the integration?What is the right management team for our new company?Who will help us

focus on quality and cost containment, while pursuing new markets?Andwhich employees will best fit thenew culture?

> We are a global automobile manufacturer that has steadily lost marketshare. What sort of talent are we going to need to shake up the status quo,


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rejuvenate our brand, and give us the action-orientation required to turnthings around?

> We are introducing a blockbuster drug that requires us to double oursales force in the next eight months. In addition to sheer numbers, we alsoneed to add the right kind of talentsales reps who take a consultativeapproach with physicians.The real scenarios described above representclear-cut examples of why matching talent to business needs is sopowerful.These organizations all hold a common belief that businesssuccess hinges on having the right talent in placeat the right time. Eachof the organizations described aboveis proactively addressing its talentneeds.But far too often, the connection between talent and businessstrategy is considered long after strategic plans are inked.

Best Practice #2: Talent management professionals need to movefrom a seat at the table to setting the table.

When we gather groups of HR professionals for events, we often ask themwho owns talent management. They point to senior management Manyhave a seat at the table, where theyre involved in discussions aboutbusiness and leadership strategies that were previously held behind closedboardroom doors. But securing the right to listen in is not enough. Talentmanagers need to own parts of the process and serve as partners,guides,and trusted advisors when it comes time to talk talent. Research shows thisis no easy feat. In fact, it looks as though neither HR nor senior leader is atthe helm of the talent managementship. DDI regularly takes the pulse ofleadership practices around the world. In the most recent report, the GlobalLeadership Forecast 2008/200912, leaders were asked to rate the overallquality of HR. Only a quarter offered a very good or excellent rating, and

just 30 percent of CEOs viewed HR as a strategic partner. On the flipside,those critical CEOs face challenges of their own. Top corporate leaders,such as former General Electric CEO Jack Welch, report spending about50 percent of their time on their people.13 They got involved in recruitingtop talent, groominghigh-potentials, and reviewing talent pools. Speakingon the topic of talent management, Campbells CEO Doug Conant tells us,I would say CEOs, on average, understand and appreciate talent more


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needs to step up and play a critical rolemore so than in the past. Onewouldnt question who owns the marketing process, or the financialoversight of an organizationthats clearly the domain of the top marketingor financial officer and their teams. Likewise, HR needs to own and put inplace professional talent management processes. And they need to getcloser to the business. One way to do this: Work with line managers todevelop business plans that integrate talent plans, including advice on theability to meet the business goal with the talent on board. When gaps exist,talent management professionals need to offer solutions to close them. Inshort,talent management professionals have to be trusted businessadvisors that execute the organizations talent management process.

Best Practice #3: You must know what youre looking forthe role ofSuccess

ProfilesSM.

Numerous studies show that companies with better financial performanceare more likely to use competencies as the basis for successionmanagement, external hiring, and nside promotions. Research highlightsinclude:

>The Aberdeen Group found 53 percent of best-in-class companies haveclearly defined competency models, compared to just 31 percent of otherorganizations (which post less impressive performance).15

> Aberdeen research also shows that best-in class organizations are 45percent more likely to have models for key positions16 and 64 percentmore likely to have models for all levels of their organizations than otherorganizations.

> Research from the Hewitt Group illustrates that top global companiesconsistently apply their competency models across the organization, andtheir competencies are significantly more aligned with overall business

strategies. Eighty-four percent of top global companies demonstratedalignment, compared to just 53 percent of other organizations.18The power of competencies broadens when organizations use what we callSuccessProfilesSM. There are two reasons this approach is more effective thanmere competency


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models. First and foremost, Success ProfilesSM are designed to managetalent inrelation to business objectivesthey should reflect key plans andpriorities as well as change with new strategies. Additionally they gobeyond just competencies to include four complementary components:

> Competencies: A cluster of related behaviors that is associated withsuccessor failure in a job.

>Personal Attributes: Personal dispositions and motivations that relate tosatisfaction, success, or failure in a job.

> Knowledge: Technical and/or professional information associated withsuccessfulperformance of job activities.

> Experience: Educational and work achievements associated withsuccessful performance of job activities.

The end result: detailed definitions of what is required for exceptionalperformance in a given role or job. Success Profiles can be used acrossthe entire spectrum of talent management activitiesfrom hiring andperformance management to development.

Best Practice #4: The talent pipeline is only as strong as its weakestlink.

Many organizations equate the concept of talent management with seniorleadership succession management. While succession planning isobviously important, our belief isthat talent management must encompass a far broader portion of theemployee population.Value creation does not come from senior leadership alone. The ability of

an organization to compete depends upon the performance of all its keytalent, and its ability to develop and promote that talent. Many people knowthis as a Leadership Pipeline. Figure 2 illustrates DDIsapproach to managing talent using aLeadership Pipeline strategy

FIGURE 2: DDIs Leadership Pipeline Model


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The Aberdeen Group19 found evidence to support the importance of aLeadership Pipeline approach in a 2008 report on successionmanagement. They found the bestin-clas organizations they studied are 40percent more likely than all other organizations to focus on developing a

Leadership Pipeline across all levels of the organization.A moreencompassing approach to managing talent is also essential to proactivelymanage career transitions. Each level in our model has different, butoverlapping,Success Profiles,as well as its own set oftransitional challenges. Effective talent management requires not onlydeveloping peoplefor their current roles, but also getting them ready for their next transition.For example, individual contributors being considered for frontlineleadership positions must make a critical transition from defining successbased on their own performance to the performance of the team they

manage. Similarly, the operational leader being groomed for a strategicleadership position must shift from a business unit or functional perspectiveto that of an enterprise guardian.A planned approach to transitions isespecially important as organizations place moreemphasis on growing their own leaders rather than making often riskyoutside hires.


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competition is no promise that the athlete can keep up at the next level.Early on in that athletes career, its likely that someone somewhere likelyrecognized his or her potential. The young athlete may still be learning thecorrect way to hold a bat or throw a ball, but coaches can see innate talentthat signals a star athletewith years of practice and coaching, of course.Taking a leader from potential to readiness is an equally long process. Ittakes, on average,10 years for a high-potential leader to advance into asenior position and along the way, that individual needs mentoring, stretchassignments, personalized development plans, and development activitiesto build key skills. In short, its a lot of work. And its work, weve found, thatorganizations are not doing. The Global LeadershipForecast reports thatonly about half of the worlds organizations identify high potentials. Evenfewer (39 percent) have programs to accelerate development.22 Iforganizationslike athleticsdont scout for talent and then prepare

individuals for top performance, how can they expect to have a winningteam in the future?

Best Practice #7: Talent management is all about putting the rightpeople in the right jobs.

The late Douglas Bray, Ph.D., a reveredthought leader in the field ofindustrial and organizational psychology, devoted much of his career to oneof the most famous and respected studies ever done on talentmanagement:The AT&T Management Progress Study. Bray followed AT&Tmanagerial talent throughout their 30-plus-year careers, marking changesin their skills and motivations over time. More than a decade ago, he madea statement that stuck with one of the authors of this white paper: If youhave only one dollar to spend on either improving the way you developpeople or improving your selection and hiring process, pick the latter. Whyshould an organization place the higher priority on selection rather thandevelopment?

>Not everything can be developed. Many elements of Success Profiles are

impossible,or at least very difficult, to develop.Training people to improvetheir judgment,learning agility, adaptabilityall core requirements for mostof the talent hired todayis difficult, if not impossibleLack of motivation fora specific role or a poor fit between employees values and those of theorganization leads to poor performance, and no classroom experienceor learning activity will change this fundamental mismatch. But you can geta read on these areas during a well-designed hiring/promotion process.


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factors most effectively to execute development strategiesoutperformingorganizations with the least effective development programs by 28-62percentage points!

Best Practice #9: Software does not equal talent management.

Claiming a piece of software can provide a full talent management systemis a bit like a food processor will produce a five-star meal. food processorwill produce a five-star meal.These tools are valuable in support of a goodplan or recipe. The right tools clear the path for smoother execution andmay improve the end product. But tools mean nothing without the rightexpertise and the right ingredients behind them. A recipe for five-star talentmanagement includes a potent blend of content, expertise, and technology.It takes best-in-class content to drive the assessment and development of

people, and a system constructed by knowledgeable experts who haveseen a range of implementationsthey should know what works, and whatdoesnt. Software should support the process, but it cant stand alone.

THE VALUEOF PLANNING

Talent management has never been moreof an immediate concern than itis right now. But in the rush to fill a perceived talentmanagement void,organizations must be careful not to rush into implementing initiatives orprograms that are more abouttaking action than about implementing awell-crafted solution.Careful planning, culminating in a sound talentstrategy that is tightly connected to the organizations overall businessstrategies and business needs, is required for talent managementtobecome ingrained in an organizationsculture and practices. Only when thishappens is it possible for talent management to be both effective and

sustainable

WHATS DRIVING THE CURRENT EMPHASIS ON TALENTMANAGEMENT?


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Organizations have been talking about the connection between greatemployees and superior organizational performance for decades. So, whythe current emphasis on managing talent?

There are several drivers fueling this emphasis:

1. There is a demonstrated relationship between better talent andbetter business performance. Increasingly, organizations seek toquantify the return on their investment in talent. The result is a body ofproof that paints a compellingpicture of the impact talent has on businessperformance. To highlight just a few:

> A 2007 study from the Hackett Group3 found companies that excel atmanaging talent post earnings that are 15 percent higher than peers. For

an average Fortune 500 company, such an improvement in performancemeans hundreds of millions of dollars.

>A study from IBM found public companies that are more effective at talentmanagement had higher percentages of financial outperformers thangroups of similar sized companies with less effective talent management.4

>Similarly, a 2006 research study from McBassi & Co.5 revealed that highscorers in five categories of human capital management (leadershippractices,employee engagement, knowledge accountability, workforceorganization, and learning capacity) posted higher stock market returns andbetter safety recordstwo common business goals that are top of mind fortodays senior leadership.

2. Talent is a rapidly increasing source of value creation. The financialvalue ofour companies often depends upon thequality of talent. In fact, theBrookings Institution found that in 1982, 62 percent of an averagecompanys value wasattributed to its physical assets (includingequipmentand facilities) and only 38percent to intangible assets (patents,intellectual

property, brand, and, most ofall, people). By 2003, these percentagesnearly flip-flopped, with 80 percent of value attributable to intangible assetsand 20 percent to tangible assets.6

3. The context in which we do business is more complex anddynamic.


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Hyper-competition makes it more difficult than ever to sustain a competitiveadvantage long term. New productsand new business modelshaveshorter life cycles, demanding constant innovation.Technology enablesgreater access to information and forces us to move at the speed ofbusiness. Global expansion adds to these challengesa single companymay, for example, have its headquarters in Japan, its R&D function inChina,and its worldwide sales operations based in California.And as wementioned already, the recent economic downturn following years ofrapid economic growth adds a whole new dimension to how we managetalent.Record layoffs, lower engagement,and less opportunity foradvancement all present additional challenges to managing talent.

4. Boards and financial markets are expecting more. Strategy +Businessmagazine once described CEOs as theworlds most prominent

temp workers In 2007, CEO turnover was 13.8 percent,and the mediantenure for a CEO who left office was six years.8 Boards and investors areputting senior leadersunder a microscope, expecting them tocreate value.This pressure, most visibleat the CEO level but generally felt up anddown the org chart, drives a growing emphasis on the quality of talentnot

just at the C-level, but at all levels.

5. Employee expectations are also changing. This forces organizationsto place a greater emphasis on talent management strategies andpractices.

Employees today are:

>Increasingly interested in having challenging and meaningful work.

>More loyal to their profession than to the organization.

>Less accommodating of traditional structures and authority.

>More concerned about work-life balance.

>Prepared to take ownership of their careers and development.

Responding to these myriad challenges makes it difficult to capture boththe hearts and minds of todays workforce.Yet, its critical to do so, asresearch from IBM and the Human Capital Institute highlights.9 Their July


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2008 study showed that 56 percent of financial performers understand andaddress employee engagement. This is just one piece of a large body ofevidence that illustrates how the cultures built within our organizations arecrucial to attracting and retaining key talent.

6. Workforce demographics are evolving.Organizations wage a newwar for talent these days. Today, 60 percentof workers over the age of

60 are electing to postpone their retirement due to the financial crisis,according toa 2009 survey by CareerBuilder.10 Manyhold top positions,squelching the opportunity for lower-level talent to advance and leavingyounger workers feelingstuck (and potentially looking for opportunitieswith other organizations). At all levels, each deferred exit from theworkforce is one less new hire in an already depressed job market.


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[edit] Current application of talent management

In current economic conditions, many companies have felt the need to cutexpenses. This should be the ideal environment to execute a talent management


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system as a means of optimizing the performance of each employee and theorganization. However, within many companies the concept of human capitalmanagement has just begun to develop. In fact, only 5 percent of organizationssay they have a clear talent management strategy and operational programs in

place today.[10]

Use talent management strategies and technology to build a great workforce

The term talent management refers to managing the entire employee lifecycle,from attracting and hiring to promoting and finding a successor upon retirement.

Talent management is increasingly a part of the corporate strategy for mostorganizations. You dont have to look very far to see articles about attracting,developing, and retaining talent. Forecasts abound on retirements, labor shortages,

quality of new hires, and lack of future leaders. All point to the need fororganizations to act now or risk losing competitive advantage.

To maintain a competitive advantage and to meet the demands of business,organizations need to identify, select, and develop their employees in a way that

both supports the companys business goals and provides employees with a clear

career path. In other words, organizations must become deliberate and strategic intheir programs for managing their talent.

Documents

Project on Talent Management