Performance Management: Talent Management Beyond Appraisals

Talent management is about assessment of performance and potential, not just annual appraisals...

• Effective talent management encompasses evaluation of both performance and potential
• Talent councils and talent matrix are important tools to keep tabs on the progress of talent management initiatives

Many organisations use the terms ‘talent management’ and ‘performance management’ interchangeably. This only reflects a lack of understanding. Organisations consider annual performance appraisals as the be-all and end-all of talent management. However, it would be worthwhile to note that performance management is just about performance evaluation, while talent management encompasses both performance evaluation and potential assessment. Further, talent management has the capacity to elevate an organisation’s position by incorporating processes that are innovative, forward-looking and strategic in nature. Thus, understanding this difference between performance management and talent management will help leaders and managers steer their efforts in the right direction.

Holistic development

Talent management and development is a complex process. It involves a number of sub-processes that are governed by an interesting interplay of factors, both internal and external. The process aims at maximising employee performance at the micro level, while expanding organisational reach at the macro level. Achieving talent management objectives can be challenging if organisations do not have clearly defined goals. Every organisation, therefore, must ascertain its talent management goals before setting out on the path of performance enhancement. Typically the goals should include:

• Identification and segmentation of employees on the basis of performance
• Focus on top talent
• Creation of opportunities for top talent to excel
• Creation of a high-performance work culture
• Focus on business development and growth

Each of these goals will help leaders achieve their talent management objectives of maximising employee performance, while creating growth opportunities for the organisation as a whole. Understanding how these goals are interlinked can help leaders frame a comprehensive plan of action.

At Amcor...

Amcor, the global packaging company, presents an excellent example of how organisations can benefit from a systematic and well-conceived talent management plan. The packaging giant follows a five-step approach to talent management. The approach covers a range of issues starting from establishing a talent council to identifying options for leadership succession. The following is a detailed account of the five-step process at Amcor:

Talent councils

At Amcor, talent councils complement the process of performance evaluation. The talent councils comprise top executives, VPs, and other functional heads, who keep a close vigil on employees pegged as future leadership talent. They also act as a surveillance body that re-assesses employee performance, thereby validating the results of the performance evaluation system. Talent councils, thus, take performance management one step beyond the traditional one-to-one assessment.

Performance management

Performance management is the most important component of an effective talent management system. At Amcor too, performance management holds the key to effective talent management. The company emphasises on the need for frequent performance assessment, as opposed to the traditional annual or biannual appraisal system. The packaging giant also uses the Human Resource Management System (HRMS) with embedded performance management functionality. An effective software platform can make talent management a whole lot simpler.

Potential evaluation

Talent management efforts can get wasted if organisations fail to evaluate employee potential for charting career graphs. Managers and leaders need to evaluate employee potential to ascertain if the identified candidate is fit to go through the development process. At Amcor, evaluation of potential is a serious business. The principal objective of the exercise is to identify future leadership talent by ascertaining the motivation levels, aptitude, commitment and cultural fit of the employees. Amcor conducts capability gap assessments to understand how far people are from where they should be. The assessment is aimed at sieving the not-so-competent lot, and work towards creating an effective succession plan for those deemed fit to take on future leadership roles.

Talent matrix

Charting a talent matrix that gives a graphic representation of employee performance and potential can help leaders get an insight into the progress of leadership development. In addition, the matrix also helps leaders and managers adjust their expectations in terms of future leadership capabilities.

Talent tagging

The ultimate goal of any talent management initiative is to create a robust talent pipeline that makes succession smooth and effective. Thus, top talent at Amcor is tagged for future leadership roles, indicating the intended succession plan clearly. Organisations like Amcor that align talent management efforts with a validated succession plan keep their staff motivated and inspired to move to the top block.

Talent management is a business imperative and organisations that integrate talent management with a comprehensive human resources management strategy will only gain from their efforts. In addition, aligning performance management initiatives with the larger talent management strategy will help organisations elevate their growth plans.

Reference:
The ManageMentor