The Talent Management Decision Making Discussion
Description
Question 1 : In his book ” First Break All the Rules”, Buckingham and Collins (1999) practical steps are to “select for talent…define the right outcomes…focus on strengths…find the right fit.
Compare the practical steps of “Practical Step to Empower Complaint Management” with those of Buckingham and Collins.
Your response should be a minimum of four paragraphs and should be a minimum of 400 and 450 words. The font is Times New Roman, font size should be 12, and the paragraphs are single-spaced. There should be a minimum of three references supporting your observations. Citations and references are to follow APA 7.0. Attached is the pdf.
Question 2 : The executive who ignited the transformations from good to great did not first figure out where to drive the bus and the get people to take it there. No, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it (Collins, 2001).
Read the article “Talent Management Decision Making” and compare one of the author’s concepts to that of Jim Collins.
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The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0025-1747.htm
Talent management decision
making
Talent
management
decision making
Vlad Vaiman
School of Business, Reykjavik University, Reykjavik, Iceland
925
Hugh Scullion
J.E. Cairnes School of Business and Economics, NUI Galway, Galway, Ireland, and
David Collings
Dublin City University Business School, Dublin City University, Dublin, Ireland
Abstract
Purpose The paper sets out to understand the key issues that emerge in the context of decision
making.
Design/methodology/approach The paper is a literature review.
Findings First, the authors review debates around talent management decision making. Second,
they examine some of the main factors currently influencing decision making in talent management.
Third, they seek to identify some future research areas that will inform future decision making in
talent management.
Practical implications The paper will be of interest to practitioners in designing and developing
talent management decision systems.
Originality/value The paper presents a state of the art review of talent management decision
marking.
Keywords Talent management, Decision making, Global talent, Human resource management,
Employees
Paper type Research paper
1. Introduction
In todays rapidly moving, dynamic, uncertain and highly competitive global market,
firms worldwide are facing major decisions and challenges in global talent
management (Schuler et al., 2011; Scullion et al., 2010; Tarique and Schuler, 2010).
For organizations across the globe, talent management of knowledge workers and high
potentials is of increasing strategic importance (Tymon et al., 2010; Vaiman, 2010).
Indeed, there has been growing interest in talent management among senior managers
and academics alike since the late 1990s when McKinsey consultants coined the phrase
the war for talent to underscore the key role of leaders and high potentials played in
the success of leading companies (Boudreau and Ramstad, 2007;
PricewaterhouseCoopers, 2008a; Scullion et al., 2010; McDonnell, 2011; Scullion and
Collings, 2011). A recent report by the Boston Consulting Group highlighted talent
management as one of five key challenges facing the HR profession in the European
context and, interestingly, that it was also one of the areas which the function was least
competent in (Boston Consulting Group, 2007).
It is important to note that there is considerable debate between researchers with
respect to their understanding of the meaning of talent management. Some researchers
see talent management from a primarily human capital perspective (Cappelli, 2008)
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DOI 10.1108/00251741211227663
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while others see it as essentially a mindset with talent as the key to organizational
success. Others see the alignment of talent management closely to the business
strategy and the corporate culture as a key feature of talent management (Farndale
et al., 2010; Kim and Scullion, 2011). Recent reviews have concluded that the lack of
precise definitions of talent management may have contributed to our limited
understanding of the area (Mellahi and Collings, 2010; Collings and Scullion, 2009).
While talent management has been criticized for lacking conceptual and intellectual
foundation, and still faces some difficult issues around its definition and intellectual
boundaries (Lewis and Heckman, 2006; Scullion and Collings, 2011), some recent work
has addressed this issue and has contributed theoretically to the study of talent
management (Boudreau and Ramstad, 2007; Cappelli, 2008; Vance and Vaiman, 2008;
Vaiman and Vance, 2008; Collings and Mellahi, 2009; Becker et al., 2009; Farndale et al.,
2010; Groysberg, 2010; Lengnick-Hall and Andrade, 2008; McDonnell et al., 2010;
Scullion et al., 2010; Tarique and Schuler, 2010; McDonnell, 2011; Asag-Gau and van
Dierendonck, 2011; Bethke-Langenegger et al., 2011).
As the field of talent management develops to a more mature stage over the coming
years, emergence of greater consensus around its definition and intellectual boundaries
will be an important measure of progress (Collings et al., 2011). However, it is equally
important not to loose sight of differences in how talent management is defined and
conducted in different national contexts. This comparative understanding will be
equally important as the field matures. Such an understanding should help to
counteract an overly ethnocentric or Anglo-Saxon conceptualization of talent
management which is not reflective of practice in many parts of the world (Luthans
et al., 2006; Vance and Vaiman, 2008; Mellahi and Collings, 2010; Tymon et al., 2010;
Scullion and Collings, 2011).
While a thorough debate on the variations in definitions is beyond the scope of the
current paper, for the objectives of this paper, we propose Scullion and Collings (2011)
definition of global talent management:Global talent management includes all
organizational activities for the purpose of attracting, selecting, developing, and
retaining the best employees in the most strategic roles (those roles necessary to
achieve organizational strategic priorities) on a global scale. Global talent management
takes into account the differences in both organizations global strategic priorities as
well as the differences across national contexts for how talent should be managed in
the countries where they operate.The empirical evidence on talent management
remains limited but does point to wide differences between the rhetoric of formal
policies and the reality of what happens in practice. While firms tend to recognise the
importance of talent management, they often fail to manage it effectively (Scullion et al.,
2007; Schuler et al., 2011; Collings et al., 2011). The global financial crisis has led to
questions on the continued relevance of traditional approaches to talent management,
but evidence suggests that it remains a rather significant issue for senior managers in
many large organizations. For some companies, identifying, attracting and retaining
talented, high value employees has actually increased in importance in recent years
(Beechler and Woodward, 2009; Farndale et al., 2010; McDonnell et al., 2010; Scullion
et al., 2011).
Talent management is likely to be a challenge for organizations in all the major
economies right across the world, with recent research suggesting that talent
management challenges may even be more acute in the emerging markets (Yeung et al.,
2008; Tymon et al., 2010; Vaiman and Holden, 2011). Yet, there is a dearth of empirical
research on talent management in the emerging markets, notwithstanding some recent
contributions on India and China, reflecting the growing strategic importance of these
markets (e.g. Teagarden et al., 2008; Illes et al., 2010).
Decision making in talent management increasingly needs to recognize that the
context in which people management takes place in different parts of the globe,
including the emerging markets, is significantly different to the US context where
much of the theory around talent management has emerged (Brewster, 1995; Brewster
et al., 2004; Holt Larsen and Mayrhofer, 2006; Dickmann et al., 2008).
This article has three main aims. First, it seeks to review debates around talent
management decision making. Second, it examines some of the main factors currently
influencing decision making in talent management. Third, it seeks to identify some
future research areas which will inform future decision making in talent management.
2. The linkage between talent management and management decisions
The linkage between talent management and management decision making is not new.
John Boudreau began using the term decision science in the context of talent
management and HR in the late 1990s (Boudreau and Ramstad, 2007). Boudreau and
Ramstad (2007, p. 25) defined the goal of talentship decision science as to increase the
success of the organization by improving decisions that depend on or impact talent
resources. Essentially, they argue that HR must reposition itself as a function and
shift the emphasis from the provision of services to supporting key decisions within
the business, particularly in relation to talent. In much the same way as marketing and
finance have evolved to become functions which very much inform and support
decision making by organizational leaders beyond their functions, Boudreau and
Ramstad argue that HR offers far great potential if it focuses on providing non-HR
leaders who ultimately make talent decisions with the decision framework and data
and analysis required to inform key decision around talent. However, even a cursory
examination of organizations suggests that decisions around talent are often made
without well-understood frameworks or consideration of the key relevant data
(Boudreau, 2010). Instincts and informed preferences and biases of key stakeholders
often unduly bias talent decisions (Mellahi and Collings, 2010; Boudreau and
Jesuthasan, 2011).
Moving beyond the limited role which the HR function has historically played in
key talent decisions involves moving beyond the provision of data requested by
organizational leaders towards bringing synthesis to the data, presenting them in
usable metrics and analytics, and explaining the nuances behind them (Boudreau and
Jesuthasan, 2011). This is important as information overload where managers have too
much data are far more common than a lack of data. When this is considered in the
context of bounded rationality, where the cognitive limits which individuals experience
in their ability to process and interpret large volumes of complex information often
results in poor decisions (Simon, 1979). In coping with their limited ability to process
such complex and incomplete information, managers often make decisions based on a
subset of the information available, often leading to biases in decision making (March
and Shapira, 1987; Bukszar and Connolly, 1988; Hammond et al., 1998). The idea of
bounded rationality has been applied to decision making in global talent management
(Mellahi and Collings, 2010; Makela et al., 2010). The implications of framing talent
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decisions around this include questions about the extent to which decision makers
search for pertinent information to guide their decision making and satisfying in terms
of the level of information required before managers feel they can make a decision and
stop the process of gathering information (Simon, 1979). In practice it is unlikely that
managers faced with global talent management decisions will have the time or the
capability to scrutinise all possible candidates from all subsidiaries who fit the criteria
(Mellahi and Collings, 2010). It has been argued that in such situations decision makers
are likely to select candidates closer to them who are considered good enough
based on previous experience and predispositions and biases. As Makela et al. (2010)
point out, talent decisions are often made on the basis of cognition-based choice
processes, in which boundedly rational decision makers evaluate available
performance data and anticipations of future potential.
In his contributions over the past decade or so Boudreau has attempted to move the
nature of talent decisions beyond such imprecise and bounded frameworks to decisions
supported by scientific data and processes. The aim is to improve decision makers
ability to make informed decisions around human capital and talent management.
More recent contributions point to evidence of the increasing adoption of sophisticated
methods of analyzing employee data in pursuit of competitive advantage (Davenport
et al., 2010b). Indeed, Davenport et al. (2010b) have developed a useful typology of
analytics which represents the different uses organizations can make of talent
analytics. These range from simple human-capital facts which include individual level
performance data and enterprise level data such as head-count, turnover and
recruitment metrics to sophisticated real-time deployment of talent based on quickly
changing needs. However, the potential of analytics in understanding which actions
have the greatest impact on business performance is also an important category in
their typology which some could argue is the most significant. Understanding the
impact of key roles or pivotal talent segments and optimising investments in human
capital are central aspects of maximising the efficiency of decisions around talent
management (Becker et al., 2009; Collings and Mellahi, 2009; Boudreau and Jesuthasan,
2011). All in all the effective use of analytics (Davenport et al., 2010a) and proven
business tools (Boudreau, 2010; Boudreau and Jesuthasan, 2011) in making talent
decisions are reflective of the shift towards evidence based management (Rousseau and
Barends, 2011) and represent an important step in maximizing the contribution of the
HR function to organizational decision making and performance.
In the following we consider some specific factors which add to the complexity of
decision making in talent management in the global context.
3. The key factors influencing talent management decision making in the
global context
As we have outlined previously, the framing of talent decisions in appropriate
frameworks and maximising the use of appropriate data in the decision process have
received increasing attention over recent years. Decision making around global talent
management has emerged as a key challenge for multinational enterprises (MNEs) in
the last decade (Scullion and Collings, 2011). We identify a number of factors which
have impacted on this complexity.
Talent shortages
First, there is a growing recognition of the critical role played by international talent
management in ensuring the success of MNEs (Scullion and Starkey, 2000; Black et al.,
2000). This reflects the intensification of global competition and the greater need for
international learning and innovation in MNEs (Bartlett and Ghoshal, 1989). Indeed,
the effective management of human resources, and particularly the quality of
leadership talent in the MNE are increasingly seen as major influences on the success
or failure in international business (Black et al., 2000; Scullion and Starkey, 2000;
Collings et al., 2007). Shortages of international management and professional talent
have emerged as a key HR challenge facing many MNEs that are competing for the
same global talent pool and facing difficulties in recruiting and retaining the
managerial talent required to run their global operations (Tarique and Schuler, 2010).
Research highlights that a shortage of leadership talent is a major obstacle that
many companies face as they seek to operate on a global scale (Scullion and Starkey,
2000; Stahl et al., 2007; Cappelli, 2008; Briscoe et al., 2009). This literature suggests that
management decision making in the area of global leadership is a critical area for
global talent management, and that decision making in this area needs to be strategic
and effective in order for MNEs to successfully implement their global strategies
(Scullion, 1994; Scullion and Brewster, 2001; Cohn et al., 2005; Ready and Conger, 2007;
Stahl et al., 2007; Bjo?rkman and Lervik, 2007; Farndale et al., 2010).
There is growing recognition that MNEs need to manage talent on a global basis to
remain competitive, reflecting the trend that competition between employers for talent
has shifted from the country level to the regional and global levels, and that talent may
be located in different parts of the global network (Sparrow et al., 2004; Farndale et al.,
2010). On the supply side, a number of factors have increased the level of international
mobility and opportunity for new forms of mobility, such as the volume of migration
and the shift towards skills-related immigration systems; the globalization of a number
of professional labour markets such as healthcare and information technology is also
significant in this respect (Sparrow et al., 2004; Solimano, 2010). On the demand side,
there has been an increase in demand for expatriates with the capability to develop
new markets, and there is a growing demand for alternative forms of international
assignments such as short term assignments, commuter assignments and the like
(Collings et al., 2007; Farndale et al., 2010).
Further, the importance of talent management decision making is no longer
confined to large MNEs or large domestic organizations. Research suggests that talent
management issues are becoming increasingly more significant than previously due to
the rapid internationalization of small and medium-sized enterprises and the
emergence of micro multinationals in recent years (Scullion and Brewster, 2001).
Demographics and societal trends
Second, declining birth rates and increasing longevity are key demographic trends
which increasingly impact the nature of the talent management decision making and
the nature of talent management challenges facing organizations (Taylor and Napier,
2005; Beechler and Woodward, 2009). Research has highlighted rapid shifts in the
demographic profiles of many countries which impact on the supply of labour
available to employers in those countries, and this requires many organizations to
introduce new approaches in their recruitment and retention policies and practices
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(Tarique and Schuler, 2010). There are a number of specific demographic trends likely
to influence talent management decision making, for instance, in Europe in the next
decade.
A major survey on HR trends in Europe identified managing demographics as one
of the key challenges facing the HR function (Boston Consulting Group, 2007). A
significant problem was the loss of capacity and knowledge, as workers retire in
increasing numbers. Another key problem is the aging of the workforce. These trends
are reinforced by a recent study which highlights the implications of the retirement of
baby boomers in terms of talent gaps in key economies around the globe (World
Economic Forum, 2011). The study suggests that in Western Europe the talent supply
will decline continuously, leading to almost empty talent pipelines beyond 2020
(World Economic Forum, 2011). The analysis suggests that in the UK and Germany
immigration and growth rates will not be enough to offset the reduction in the
workforce resulting from the aging population. The study also highlights that talent
shortages are expected to be major issues in Spain and Germany for the next 20 years
(World Economic Forum, 2011), and that the challenges for managing the labour force
in Poland and Russia are also considerable (Ward, 2011).
The nature of talent management decision making will also be influenced by the
increased significance of the so-called Millennials (i.e. those who entered the workforce
since the turn of the present century) which has emerged as a significant demographic
trend in recent years The Millennials are an employee group who are likely to be in
high demand given the demographic trends identified previously, and a recent report
suggests that they have rather different expectations in terms of the psychological
contract at work (PricewaterhouseCoopers, 2008b). They place a strong emphasis on
corporate social responsibility and highly value training and development. They also
have a preference for mobility at an early stage in their careers. Millennials also have
strong expectations that they will change organizations a number of times during their
careers (PricewaterhouseCoopers, 2008b) which reflects the characteristics of
boundaryless careers (Arthur and Rousseau, 1996). Senior managers making the key
strategic decisions in talent management will increasingly need to better understand
the role of employer branding in attracting and retaining this employee group. Also,
they will need to develop a greater understanding of the issues affecting the motivation
and engagement of this cohort, and its emergence will involve greater complexity of
decision making in talent management (Pate and Scullion, 2010).
Corporate social responsibility
Third, recent research suggests that increasingly many companies need to consider
Corporate Social Responsibility (CSR) as an important element of their approach to
decision making in talent management. Many companies see CSR as a key part of their
recruitment and retention strategy and regard CSR as a useful tool to attract
high-quality international talent. In addition, research suggests that contemporary
workers do not select a workplace only for money, particularly in dynamic and fast
moving markets (Summer, 2005; Tymon et al., 2010). Cultivating a reputation as a
socially responsible company can be an important lever in talent management and
retention. Managers can use CSR to enhance employee sense of intrinsic rewards rather
than becoming too dependent on increasing compensation or benefits. This helps
organizations to develop an employee value proposition that is more difficult for
competitors to copy compared to an alternative of offering higher compensation
(Bhattacharaya et al., 2008; Tymon et al., 2010). Once an employee is motivated by a
firms CSR efforts, the employer might experience lower staff turnover rates
(Redington, 2005), and research suggests that employees place a lot of emphasis on the
quality of their relationships within the organization: trust, pride, fun and development
are increasingly important to motivate and retain key staff (Levering and Moskowitz,
1983/1984).
We should not forget, however, that national context plays an enormous role in
defining the relationship between CSR and people management. Recent research by
Kim and Scullion (2011) highlights that not only there are very different conceptions of
CSR in different countries, but also there are very different ideas about the links
between CSR and global talent management in different national contexts, which
reflects that people are motivated for different reasons in different institutional
settings. Their study of the link between CSR and talent management in a comparative
context showed that the current state of knowledge exploring the links between CSR
and talent management were rather limited, and their research highlighted how its
practice may vary in different national contexts. Their empirical study demonstrates a
marked contrast in the approach of CSR towards talent management strategy between
Asian and western countries, and suggested that key decision makers in talent
management need to take account of cultural and institutional differences between
countries. The research highlighted the large divergence in CSR-HRM relationships in
different national contexts despite the strong pressures for convergence due to
globalization, isomorphism, and standardization of CSR. Future research should pay
more attention to the relationship between CSR and people management in different
national contexts, as to date the bulk of research on CSR has focussed on companies
using the Anglo-American corporate system (Kim and Scullion, 2011).
Diversity
Fourth, the challenge of managing diverse employee groups in a globalized
environment (Briscoe et al., 2009) is emerging as a significant factor impacting the
complexity of decision making in global talent management, as the level of diversity
within organizations is increasing (Beechler and Woodward, 2009). Gender diversity is
also on the rise, as reflected in growing female labour force participation rates across
the globe, yet women continue to be seriously underrepresented in senior management
positions and in international management ( Jacobs, 2005; International Labour
Organization, 2009; Linehan and Scullion, 2008). Recent research also suggests that the
level of ethnic, cultural and generational diversity of staff working in organizations
across the world is on the rise as well, which has a strong influence on the way the
employees are managed and decisions are made (Briscoe et al., 2009; Beechler and
Woodward, 2009; Scullion and Collings, 2011).
The increasing mobility
Fifth, the increasing mobility of people across geographical and cultural boundaries
progressively impacts on decision making in global talent management (Tung and
Lazarova, 2007; Vance et al., 2009). The trend towards greater mobility and emigration
rates are higher among professionals and high skilled workers; however, reverse
migration is also becoming more significant in recent years with many countries
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seeking to encourage returnee immigrants due to the growing recognition of the
potential benefits of their international management experience and networks in the
home country (Carr et al., 2005; Tung and Lazarova, 2006; Tung and Lazarova, 2007;
International Labour Organization, 2009; Solimano, 2010). In addition, researchers
have highlighted a trend where people with special talents show little loyalty to
country or region and are very comfortable crossing cultural and geographical
boundaries. This new global elite have been described as cosmopolitans (Kanter,
1995), and it has been argued that this trend results in a talent divide with a growing
number of talents spanning national borders, and at the same time, a large pool of
people who have few opportunities for international mobility due to lack of access to
education and career opportunities (Taylor and Napier, 2005; Baruch and Dickmann,
2011).
Permanent shift to a knowledge based economy
The move to knowledge based economies is a further factor impacting on decision
making in global talent management. The rapid growth of the service sector in
developed economies results in a growing need by companies to hire high-value
workers in more complex roles which requires higher levels of cognitive ability
(Chartered Institute of Personnel and Development, 2007), and this trend reflects the
shift towards intangible and human assets (International Labour Organization, 2009).
Key decision makers in many large organizations and MNEs are increasingly
concerned with the retention and motivation of these knowledge workers, which has
emerged as a key talent management challenge for many organizations (Johnson et al.,
2005; Beechler and Woodward, 2009; Vaiman, 2010; Sparrow, 2012). However, the
current global recession characterized by corporate downsizing has resulted in
professional managers increasingly trading security for flexibility and becoming less
dependent on a single employer. Some have argued that the traditional psychological
contract based on loyalty, commitment and accountability in return for job security is
currently being replaced with one where employees increasingly take responsibility for
their own employability and career development (Pink, 2001; Sparrow et al., 2004; Pate
and Scullion, 2010; Farndale et al., 2010; Cappellen and Janssens, 2010; Baruch and
Dickmann, 2011).
Recent research suggests there has been a growth of a wide range of international
assignment options over the last decade ranging from the traditional expatriate
assignment to the growing number of more flexible global staffing arrangements such
as short term assignments, international commuter assignments, virtual teams and
others (Collings et al., 2007; Mayrhofer et al., 2012). While researchers have highlighted
the absence of empirical data about the utilization of alternative forms of assignment
(Mayrhofer et al., 2008), it can be argued that rapid changes in the global competitive
environment mean that more flexible forms of global staffing will be progressively
used as alternatives to traditional expatriate assignments (Collings et al., 2007;
Mayrhofer et al., 2012). Therefore, key decisions on global talent management will
increasingly need to consider the emergence of more flexible forms of international
staffing as well as the traditional forms of international assignment.
Growing importance of emerging markets
Finally, the growth of the emerging markets has a major impact on decision making in
talent management. Organizations are seeking managers with distinctive
competencies and a desire to manage in culturally complex and geographically
distant countries (Li and Scullion, 2006; Bjo?rkman and Lervik, 2007; Scullion et al.,
2007; Li and Scullion, 2010; Farndale et al., 2010). In the current climate with high
unemployment in many countries, it may no longer be appropriate to talk about a
war for talent (Farndale et al., 2010). However, more people on the labour market does
not necessarily mean that employers are able to find the level of skilled managers and
professionals that they are seeking. The evidence suggests the demand for talent
remains high, and that there is still a scarcity of high-level knowledge talent in the
emerging markets. Also the evidence suggests that there is strong competition between
MNEs and local players for the available talent (Teagarden et al., 2008; Li and Scullion,
2010).
The retention of knowledge workers and managers in the emerging markets has
materialized as a major challenge for MNEs with annual turnover rates in key sectors
much higher than found in the West (Bhatnagar, 2007). For example, in India and
China problems in producing graduates in the numbers and quality needed by
multinational companies has resulted in acute skill shortages in key areas (Farrell and
Grant, 2007; Farndale et al., 2010; Li and Scullion, 2010; Tymon et al., 2010). In addition,
due to the intense competition for scarce professionals and managers in these markets,
the talents are able to be more selective in the assignments they choose to accept, and
may not be prepared to move to some of the emerging markets due to concerns about
quality of life, family, safety or related issues (Scullion et al., 2007; Farndale et al., 2010;
Yeung et al., 2008). Another point of concern is the issue of dual careers, which is now
regarded as a worldwide trend that poses significant restrictions on the talent
management decision making and career plans of multinational enterprises (Scullion,
1994; Sparrow et al., 2004; Scullion and Collings, 2006; Farndale et al., 2010;). And, more
generally, the restrictions on international mobility make decision making in global
talent management both more complex and more uncertain (Farndale et al., 2010).
Vaiman and Holden (2011) examine the emergence of talent management in the
context of the complex geopolitical and socio-economic countries of Central and
Eastern Europe (CEE) and highlight that talent management in CEE countries remain
relatively underdeveloped in comparison to many western countries. The challenges of
talent management are discussed in the context of transition economies which
although undergoing rapid economic and social transformation are still influenced by
the regions socialist legacy which strongly impacts mental models at the workplace.
Before the reforms, the management style was bureaucratic and authoritarian, and
managers were expected to follow centrally imposed rules and regulations which
limited the willingness of managers to take responsibility and restricted the use of
initiative and innovation (Piske, 2002; Suutari, 1998). Although in Polan
