Winning 100 battles for your accounting firm.
April 22, 2010
The phrase talent management gained attention in the 1990s, but its roots were in the 1950s and 1960s in the form of three management theories: Chris Argyris’ theory about personality and organization; Frederick Herzberg’s two factor theory; and David McClelland’s concept of achievement orientation. As well, Jim Collins’s 2001 Good to Great provides important guidance as to the fundamentals of talent management. Once these foundations are in place, human resource management techniques that facilitate talent management are a piece of cake or perhaps three or four pieces of cake. But addressing fundamental management concerns will, in some firms, at least, require a mental revolution. Applying human resource management-oriented talent management techniques in the absence of a high achieving management culture just amounts to gimmickry.
Personality and Organization
First, in the 1950s Chris Argyris, in Personality and Organization, claimed that corporate jobs had become stultifying. Normal human development implied increasing autonomy, responsibility and time horizons, but jobs limited responsibility, were overly specialized and reduced time horizons. Controlling or manipulative managements made employees indifferent to their jobs. The average employee disengaged from the jobs of those days. The talented employee would find greener pastures in self-employment, career change into an alternative profession or moving up through the hierarchy. Since only a small fraction of employees could move up the ladder, Argyris’ seminal argument implied that talented employees did not typically have a future in most organizations. In fact, it was unlikely that management would identify talented employees or that talented employees would aim to stay. Management Psychologist Abraham Zaleznik made similar claims in his 1990s book Managerial Mystique.
The second management theory was Frederick Herzberg’s two-factor theory in which Herzberg claimed that workers are primarily motivated through interesting, intrinsically motivating work. Compensation needs to be competitive and adequate (which in many instances it is not, causing some MBA students to be skeptical of Herzberg’s claims), but once lower-order needs such as physiological, safety and social needs are met, challenging and interesting work motivates employees. The message is that talented employees need to be retained and developed through challenging assignments and adequate pay. But what is adequate?
The third theory was that of David McClelland, who argued in his 1961 Achieving Society that societies become successful to the extent that they have a personality trait that he calls achievement orientation. He offers classical Athens as an example. Athens invented western science, democracy, the rule of law, literature, philosophy, theater, history, art and architecture. The explosion of talent in a city state with a population of 100,000 citizens, less than half of Rochester, New York, was unprecedented and never duplicated. It was accompanied, according to McClelland, by achievement-oriented language in written documents. As well, as sociologist Max von Weber had claimed earlier, McClelland pointed out that the English and American Protestants of the 1600s also used intensely achievement-oriented language. Thus, where societies emphasize achievement, achievement-orientated individuals succeed and societies become more affluent and industrialized. In such societies, rewards focus on merit. Talents that result in achievement are encouraged and rewarded. A culture that supports achievement evolves. Avenues for success are opened based on achievement rather than politics. McClelland emphasized that other-direction and interpersonal skills need to accompany achievement orientation.
High-Performing Leadership Personalities
More recently, in Good to Great, Jim Collins shows that high performing CEOs who build outstanding executive teams tend to have personalities that are different from most CEOs. They tend to be selfless, considerate and fundamentally moral to a greater degree than other CEOs. They give full credit to the achievements of their management teams and ask none for themselves. They focus on gradual, continual improvement as opposed to fast turnarounds or quick-fix strategies.
In a firm that has an achievement-oriented culture, jobs are designed to motivate and retain competent and high-achieving employees; leadership that gives even more credit than is due to employees; and an evenly focused, evolving strategy, is already on the way to a successful talent management program. Once the fundamentals are in place, human resource management techniques are excellent at supporting and reinforcing a firm’s high performance culture.
As defined by Shawn Fegley in a 2006 report (PDF) for the Society for Human Resource Management, talent management involves “integrated strategies or systems designed to improve processes for recruiting, developing and retaining people with the required skills and aptitude to meet current and future organizational needs.” In other words, talent management ought to be fundamental to any human resource department. In the past, the disciplines of recruiting, compensation, retention, training and development were viewed as distinct. The concept of talent management is to integrate these considerations into a unified strategy; to identify skills needed to execute future business strategies; to identify gaps between required skills and skills available in the firm; and to develop ways to close the gaps. Crucial among these is the development of organizational cultures that encourage a committed workforce as well as more traditional human resource tactics such as staffing, employee relations, performance management and organizational design.
Measurement is of critical importance to the successful execution of these and any other human resource tactics. For example, if there is a gap with respect to a certain technological skill, the human resource department might ask whether it makes sense to train current employees to learn the skill or to hire from outside, to make or buy. In conjunction with top management, a decision may be made to hire employees from outside. But the decision should not end there. Rather, human resources would be better off training some employees and hiring others. The performance of both groups could be tracked. Then, a better decision might be made in the future.
Example: Say existing employees lack a skill. After consultation with line management, human resource management may devise a training program. That step should be viewed as the beginning of an integrated program, not the end of a training strategy. The program needs to be studied. What are the effects of the training, both proximal (at the time of training, measured through testing) and distal (on the job)? Does transfer from the training program to on-the-job performance occur? What are the turnover effects of the training program? What are the productivity effects? Productivity effects would be measured by comparing units that have received the training with units that have received a placebo, such as stress management training. Results might be compared to the performance of experienced employees hired from outside.
Ability measurement has made advances in many areas, such as intelligence quotients and assessment centers. But performance appraisal as executed in most firms is riddled with threats to validity. Firms need to determine how effective performance appraisal is; whether alternative methods such as assessment centers might be useful; and to validate appraisal methods.
In some human resource departments, a rigorous measurement methodology will be as revolutionary as the required management culture change will be in others. When effective measurement-oriented human resource practices are coupled with high performance management cultures, firms will, as Sun Tzu — an ancient Chinese military general and strategist and philosopher — put it, “win a hundred battles without a single loss.”
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Mitchell Langbert, PhD, is an Associate Professor at Brooklyn College. Widely published on the subject of human resource management, Langbert has consulted and served as an expert witness.