The evolution of talent and performance management

08 September 2015 Consultancy.uk

In a series of four articles on Consultancy.uk, Angel Hoover, EMEA Regional Practice Leader Talent Management & Organizational Alignment at Towers Watson, reflects on key trends and developments in the human capital space. In this article Hoover looks into the changing nature of talent management and its impact on performance evaluation cycles.

Over the past eighteen months or so, there has been a lot of conversation about performance management. I find myself thinking back to a decade ago when I was in a corporate role and the conversations were very similar. At that time, we were discussing the advantages and potential limitations of moving to a “ratingless” evaluation system. I specifically recall a meeting with our design team where we debated each facet of the system’s design and its linkages to other talent systems. We talked through how it would benefit the organisation, how the outcomes of a ratingless process would be used to develop talent and finally, how we would or would not be able to continue to reward employees based on performance.

Talent Management

As I read some of the articles published recently in Harvard Business Review and other renowned publications, I see similar themes emerging that provide an interesting parallel to those discussions a decade ago. What is different this time, is the scale and scope of media attention this debate is getting, in part due to the high profile of some of the organisations who have stated that they are moving or have moved to ratingless systems, or even, in their terms, “abolishing” performance management. This esteemed list includes companies like Microsoft, Adobe, Medtronic, Accenture and Deloitte.

Now, before you get excited, reader, I have to say that I have personally spoken with some of these organisations who have stated they are abolishing performance management and that’s not wholly true. There is still a measurement that exists somewhere in their system that enables leaders to categorise who gets the highest rewards at the end of a performance year. In a study that Towers Watson conducted in 2014 of 90 companies globally*, we found that 4% of the participating organisations did not use performance ratings. If we were to duplicate this survey in 2016, I think that number would stay relatively stable. Many organisations simply have not solved the challenge of creating a system without an employee “categorisation” that allows for differentiated reward allocation.

Microsoft, Adobe, Medtronic, Accenture and Deloitte

Having said that, this is a move that deserves our attention. As HR leaders and business partners, it is true that even we sometimes dread the administrative aspects of delivering the year-end performance process. So do employees. On top of that, research conducted by Mount, Scullen and Goff in 2000 suggests only 21% of the variance in performance ratings across an employee population was directly related to variance in performance. This is a pretty shocking statistic, given the time and energy that has traditionally been expended on performance management.

So, what do we suggest? There are a number of alternatives that an organisation can take, none of which includes abolishing the ultimate intent of the system. There is no doubt that data and research has confirmed we need a refresh of how we evaluate performance management, but there is still value for all employees in understanding what they need to deliver to benefit business and financial results. In addition to that, I firmly believe that this is a tool that top talent use to prove to leaders watching them, how highly they have achieved during the year.

Angel Hoover - Towers Watson

As organisations debate on the dilemma of what to do about performance management, we must articulate the employee performance evaluation strategy that considers two tenets: increasing impact and enhancing efficiency and effectiveness. Increasing impact is dependent on the business and model, while efficiency/effectiveness is about enhancing the employee experience.

In Hoover’s next blog she will dive into the impact on performance management tools.

* Ticking all the boxes? A study of Performance Management practices in the UK, Towers Watson, 2014.

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Why leaders must balance technical expertise with soft skills

17 April 2019 Consultancy.uk

Soft skills matter in the workplace just as much as technical expertise, writes Samantha Caine, Managing Director of Business Linked Teams.

For too long technical expertise has been seen as the marker of a strong candidate for development into a sales or leadership position. Sales and leadership candidates are tasked with demonstrating a diverse and wide-ranging set of technical skills, yet their aptitude in these technical skills or ‘hard skills’ cannot signify great leadership potential. This is why a healthy balance of soft skills and technical ability is required. 

So what exactly is the difference between technical skills and soft skills? In engineering, it’s crucial to demonstrate knowledge of physics as well as a strong grasp on mathematical equations. Yet, in any industry, it’s important for leaders to be able to interact with other people effectively with soft skills like communication, empathy and adaptability. 

Business Linked Team’s 2018 study into internal leadership development revealed that 69% of large organisations are prioritising the identification and development of future leaders from within the workforce. As more and more organisations begin to invest in sales or leadership development within their existing workforces, more focus needs to be placed on ensuring the right soft skills are in place. 

With those soft skills in place throughout the workforce, the business will benefit from a wider pool of potential leaders developing under their noses, and it should be the same where sales candidates are concerned. 

It’s not just about easier access to ideal candidates for these positions without the rigmarole of recruiting from outside of the organisation. The leadership development study also found that 89% of HR decision makers say succession planning has become a top priority. Those currently serving in leadership positions can’t lead forever and the same goes for those generating sales for the business.

Why leaders must balance technical expertise with soft skills

From people leaving for new opportunities or retirement, to people simply stepping aside to focus on other areas of the business, successful leaders and salespeople require experienced and capable successors that will be ready and able to confidently step into their shoes and pick up the mantle without the business experiencing any lapse in performance.

Soft skills make stronger candidates

When it comes to the soft skills required, a strong leader must be able to manage through clear communication and effective time management, coaching and goal setting. They must be able to demonstrate empathy and empower their teams to be successful, productive and fully engaged. And beyond simply giving direction, they must also be able to take direction from those above them and cascade the business strategy down through their teams. 

A strong sales candidate must possess the ability to communicate value to the customer, negotiate well and protect margin or the ability to increase the scope of a particular sales opportunity. 

With the relevant soft skills in place, the business will benefit from increased productivity, greater agility against changing market conditions and greater transparency. In turn, this will provide visibility on issues and inefficiencies while removing opportunity for miscommunication. All of this can transform the culture of a department, improving employee satisfaction and reducing staff turnover. 

Ultimately, developing leadership or sales candidates will require the business to strike the right balance between technical skills and soft skills, and this requires an effective and sustained learning journey.

A balanced learning journey

Facilitating and supporting the development of leadership and sales is best achieved by establishing training groups. By cultivating training groups, businesses are creating talent pools that will inspire and support each other on the learning journey. However, personal goals and learning objectives must be defined for each individual based on their own existing skillsets and the skills that each individual needs to develop. 

With the emergence of e-learning, businesses recognise the value of online-based learning activities, yet many make the mistake of opting for one-size-fits-all solutions which are solely focused on self-study. A development solution will only deliver true return on investment if it combines e-learning activities with group learning activities that provide opportunity for shared experiences and support.

A blended learning solution that combines self-study and face-to-face group learning activities will aid strong development of the talent pool through shared experiences. Through these shared experiences, those undergoing the training will organically develop a support network that supports the development of the group as much as it supports the development of each individual. 

The blended learning approach is supported by one of the seven principles of human learning that socially supported interactions aid the individual development of expertise, metacognitive skills, and formation of the learner’s sense of self. The strongest opportunities for development can be unlocked by blending workshops with online activities such as virtual sessions, peer coaching, self-study, online games and business simulations. But it’s crucial to provide a blend of one-to-one and group sessions too.

Beyond delivering a better learning outcome for the employee, the blended learning approach allows organisations to adapt their training quickly and easily to shifting business demands in an ever-changing landscape.