Comparison of Talent Management Evaluation Methods

According to a recent study from Bersin by Deloitte (Carroll et al., 2016), conducted amongst 220 UK organisations, the spending on Learning and Development (L&D) increased from 2014 to 2015 to an average of £1,068 per learner per year. It was also reported that the number of training hours per employee rose from 14.5 in 2012 to 16.2 in 2015. This increased focus on L&D can be seen as an answer to today’s global economy that has created a more complex, dynamic and volatile environment in which companies must learn to compete effectively to achieve sustainable growth. In addition, most organisations are facing internally several challenges including the effective management of talent flow, a shortage of needed competencies and an increasingly diverse and mobile workforce which requires them to put a greater focus on L&D (Tarique & Schuler, 2010).

Against this background, it becomes apparent that the high investments in L&D and thereby the possibility for consistent skill up gradation are of great importance, as what might be an effective training program in the past may not be so in the future. However, with this also the question of the measurability of L&D practices and in turn of their identifiable impact on the organisations’ overall effectiveness arises (CIPD, 2015).

In this light, this essay strives to explain the importance of the evaluation of talent management practices by contrasting and comparing different ways of monitoring and evaluating the impact and success of these whilst considering possible issues related to fairness, ethics and diversity. It aims to provide a comprehensive and in-depth analysis, yet it is naturally bounded by the constraint scope ofwords.

The wider context of Talent & Talent Management

According to Wilson (2005) Strategic Human Resource Development is a holistic and disciplined ‘systems’ approach to facilitate learning and knowledge within the organisation with an explicit intention to deliver organisational performance. Organisational performance, however, is connected to various measures and goals depending e.g. on the corporate strategy and size (Richard et al., 2009). Moreover, due to the fact that especially HRM outcomes are dependant on skills, attitudes and behaviours of employees, the evaluation of HR and therefore the measurability of HRM outcomes on an organisational level remains difficult (Crawshaw et al., 2014).

One way to accomplish desired HRM outcomes are L&D interventions, events deliberately undertaken to support, provoke, stimulate or assist learning of individuals, groups or across organisations. By ensuring that the organisation’s employees have the relevant skills and knowledge needed to be able to execute the HR strategy, L&D interventions constitute a pivotal link between an organisation’s HR and its overall business strategy (Mabey et al., 1998). The various types of L&D interventions and strategies thereby depend on the specific context and objectives. In fact, their scope is fairly broad as they can be of formal or informal nature and being provided internally or externally. Examples are for instance accredited courses, coaching and mentoring interventions as well as action learning, e-learning, and 360 degree feedback appraisals (Stewart & Rigg, 2011).

Organisations that facilitate the learning of all of its members and continuously transform themselves are referred to as learning organisations (Pedler et al., 1991). This term was originally brought forward by Peter Senge (1990) who established the notion of the five learning disciplines that are seen as vital dimensions in building a learning organisation, namely personal mastery, mental models, shared vision, team learning, and system thinking. It could be argued, that understanding these is crucial in regard to Talent Management, as for instance personal mastery is “used to describe the discipline of personal growth, the goal of which is to expand one’s ability to produce desired results” (Appelbaum & Goransson, 1997, p.121).

The terms ‘talent’ and ‘Talent Management’ (TM) became popular when in 1997 the American consultancy firm McKinsey referred to the ‘war of talent’ as being a key driver for corporate performance, thereby referring to human resources (HR) as an organisation’s competitive advantage (Stewart & Rigg, 2011). This bears on the resourced-based view (RBV) of the firm, arguing that resources such as HR hold the potential of sustained competitive advantages as they are valuable, rare, inimitable and non-substitutable. It can be argued that it is these resources and the way that they are combined, which make firms different from one another and hence result in above-average profitability (Burnes, 2009).

With that in mind, individuals who can make a difference to the organisational performance, either through their immediate contribution or by demonstrating the highest levels of potential, can be considered as talent (Tensley et al., 2007). However, as Dries (2013) notes, there occur different tensions in the literature about talent, for instance, when discussing what or who is considered as talent and whether it is an attainable ability or an innate motivation. In fact, perspectives on talent vary greatly, as a look in the literature reveals. Whereas one might differentiate talent as an individual capability, others see it as an organisation-wide capacity. Furthermore, it is distinguished between the consideration of talent as an exceptional, rare resource or as potentially broad (Stewart & Rigg, 2011).

Hence, it is difficult to identify the precise meaning of TM (Lewis & Heckman, 2006). Tarique and Schuler (2010) state that global TM deals with the systematical utilisation of HRM policies and practices to attract, develop, and retain individuals that are considered talent by aligning these with the strategic directions of the company in its environmental context. This bears on one popular definition, seeing TM as the systematic attraction, identification, development, retention, and deployment of those individuals who are of particular value to the organisation (Tensley et al., 2007). However, others might define TM more as an ongoing capacity issue for members of an organisation by defining it as the enhancement of employees’ abilities to cope with changes related to work demands (Garavan et al., 2009). Nevertheless, despite these various challenges in defining, the available research on the relationship between TM and organisational performance has found it to be positive (Bethke-Langenegger et al., 2011).

Questions of ethics, fairness & diversity

Drawing on this, not only the question may arise what talent is but also once defined, who is and who is not considered to be talent (Stewart & Rigg, 2011). Informing talented people that they are included in TM programmes can have demonstrably a motivational effect (Bjorkman et al, 2013). However, communicating this has to be undertaken carefully to avoid undermining the sense of equity.

Equity shall be understood as what an ethical behaviour seeks to achieve. Establishing a strong ethical purpose for an organisation does not only result in an enhanced ability to attract and retain talent, particularly important if considering the strong association of younger generations with environmental awareness (Harrison, 2009). Moreover, by striving to achieve fairness and justice, equity is also vital in ensuring positive outcomes of TM (Gelens et al., 2013). In fact, even if they have not participated in TM activities employees will make attributions about its motives and purposes (Nishii et al., 2008). Hence, when an organisation implements a TM programme, the issue of fairness and its close link to the perceptions of organisational justice have to be taken into account.

According to Greenberg (2005) the latter can be distinguished into three components: distributive justice, dealing with the perceived fairness of the distribution of outcomes, rewards and opportunities; procedural justice i.e. the perceived fairness of the processes and procedures undertaken; and lastly interactional justice, considering the perceived fairness of treatment and communication that organisational actors have used. These perceptions about fairness and justice are closely linked to the fulfilment of the psychological contract, an intangible construct built on the mutual expectations and promises of employee and employer (Rousseau, 1995). Hence, it can be argued that fairness in TM programmes is incredibly important as it ultimately influences employee’s behaviours due to the fulfilment of intrinsic psychological needs. In turn, through addressing these needs sufficiently enthusiasm and optimism is elicited, energising employees to become more involved in their work (Ryan & Deci, 2000). This is further supported by studies, showing that intrinsic motivation is important for translating perceived TM practices into positive outcomes (Kuvaas & Dysvik, 2009). Hence, fairness can be seen as an issue of great importance for the success of TM programmes as it influences employee’s justice perceptions and thus their behaviour.

Besides the importance of equity and fairness also legislative regulations dealing with equality as e.g. expressed in the Equality Act (2010) can have a direct impact on the handling of an organisation’s overall ethical code and furthermore its workforce diversity (Harrison, 2009). The latter is considered to be an approach to both, equity and equality that involves harnessing and valuing a wide range of visible and invisible differences in employees (Kersten, 2000).

Yet, ensuring that an organisation is ethical in its goals, strategies, management and leadership is not always easy to align with the business objectives and various demands of stakeholders. Having said that, one vital task for L&D professionals is to communicate their company’s ethical code of conduct and help leaders and employees to understand how to put ethics into practise (Harrison, 2009). This becomes particularly apparent when discussing the importance of evaluation for the success of TM programmes.

Evaluating Talent Management programmes

As stated earlier, L&D interventions play a key role in the fulfilment of strategic HR objectives, particularly when people are considered to be one of the organisation’s sources of competitive advantage. However, this not only requires a good understanding of the strategy and objectives within those responsible for L&D. Moreover, as part of an effective training system also the opportunity to assess whether to continue conducting training that proved to work or to adjust or discontinue training that did not yield the desired effects, must be given (Salas et al., 2012). This need for accountability becomes particularly apparent with view on todays competitive pressures in a global environment (Blanchard & Thacker, 2010). Hence, to allow meeting the strategic goals of the organisation whilst maintaining ethical principles and ensuring an appropriate alignment of the strategic needs with TM programmes a precise evaluation of the latter is crucial (Anderson, 2009).

Generally, to evaluate means to assess the value or worth of something. In economic terms this can be expressed in the return on investment (ROI) or in relation to key stakeholder’s expectations also in the return on expectation (ROE) (Stewart & Rigg, 2011). Besides, the value of L&D can also be judged by efficiency measures such as the number of training days per employee or by internal performance indicators and external benchmarks as e.g. the service quality or sales per employee (Anderson, 2007). A recent study conducted by the CIPD (2015) shows that most organisations evaluate the majority of their L&D initiatives in some way. However, only a small minority evaluates the wider impact on business and the behaviour change of participants by assessing the transfer of learning into the workplace. This is in fact worrying, as the organisational context after training can influence the extent of transfer to the job and in turn the effectiveness of training greatly. Thus, effective evaluation means going beyond a traditional reactions- focus based on a simplistic assessment of learners’ levels of satisfaction with the L&D provisions (Salas et al., 2012).

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