Human capital

Management - Concept
Session 1
 Definition

HC theory conceptualizes workers as

embodying a set of skills which can be
“rented out” to employers (Ehrenberg
and Smith(1997)
 Human Capital

Intangible assets (like copyright,

customer relations, brands and company
image).
Know-how, imagination and creativity of
employees as important as hard assets.
HC theory describes the link between HR
practices and business performance.
 HC is

Non-standardised,
Tacit,
dynamic,
context dependent
and embodied in people
 Intellectual Capital

Consists of intangible resources of the

stocks and flow of knowledge other than
financial and physical assets.
Elements:
Human Capital
Social Capital
Organizational Capital
 Origin of Human capital

Adam Smith (1776) – return on investment

in skills can be compared to ROI in
physical capital.
Schultz(1961) – proved yield on HC
investment > than investment in physical
capital.
Elliot (1991) quality than quantity of HC
 Features of HC

Represents the human factor, People

bring HC to Organizations
Worker also invests in HC as employer
For a worker the investment in HC
brings him higher level of earnings,
greater job satisfaction, better career
prospects and job security.
His cost of investment – psychological,
social and monetary)
 Workers as Assets?!
Workers are not passive assets.
Companies don’t own HC as other assets
No model of Human Asset accounting has
captured the financial values of HR.
Workers choose how and where they invest
their talents, time and energy.
But people add value.
 Social capital

Features of social life – networks,

norms and trust- that enable people to
act together – horizontal associations –
that help in transferring, sharing,
transforming and disseminating
knowledge.
 Organizational Capital

Concerned with embedding and

institutionalizing knowledge, to be retained and
accessed through documentation and
maintenance of databases.
OC is created by HC through SC.
Belongs to the firm.
Developed by KM processes that aim to obtain
and record explicit and tacit knowledge.
HC theory and HR practices

Resourcing Strategies
Constraints – skill shortage, problems
in recruiting and retaining people, low
productivity, high absenteeism,
employee relations climate.
Make or buy decisions
Talent management
HR Development strategies
Organizational and individual learning
 SC theory and HR
implications
Link between social capital and value
creation.
Task forces and teams to facilitate info
flow.
Organizational design
Organizational development
Culture Change programmes
 Aims of HCM
To determine the impact of people on business.
To demonstrate that HR practices produce ROI.
To provide guidance on future HR and business
strategies.
To provide predictive data to take informed decisions.
Introduction to Talent
Management
Session 2
Merlin Mythili S
“The dominant competitive weapon of the
twenty first century will be the education
and skills of the workforce”
Lester Thurow
 Talent
• Is an identifiable ability that is
perceived to add immediate or future
value to any prescribed activity,
discipline or enterprise.
 What is TM?
• Refers to identifying the employee
talent and utilizing it effectively and
retaining the same to compete with
similar organizations.
• Talent is a competitive advantage.
 Key Drivers of Talent
Management
• Quest for Competitive Advantage
• Workforce Diversity
• Global Outlook (cross cultural
sensitivity)
• Global Competition
• Customer Focus
• Mobile Workforce
• Variety of Competencies
• Knowledge driven Organisations
 Framework for Talent
Management
• McKinsey’s Framework(2000)
– Embrace a talent mindset
– Craft a winning employee value
proposition
– Rebuild your recruitment strategy
– Weave development into your
Organisation
– Differentiate and affirm your people
 Talent Mindset
• Establish standards for talent
• Active involvement in people related
decisions
• Probing review process
• Invest real money in talent
• Accountability for the talent pools
built
 Value Proposition to potential
talent
• Refer to Kuttan of Galle
 Recruitment strategy
• Hunt for talent all the time
• Tap many diverse pools of talent
• Find ways of reaching the passive
people
• Break the compensation rule
• War for Talent
 Three distinct threads of
thought regarding TM
• Requires what HR has always done,
but doing it faster
– Sourcing talent
– Growing talent through succession
planning/leader development and use of
compensation and performance
management processes
 Three distinct threads of
thought regarding TM
• Set of processes to ensure adequate
flow of employees into jobs
throughout the Organisations
– The first in TM in this perspective is to
gain a solid understanding of the
internal workforce
 Three distinct threads of
thought regarding TM
• Focus on talent without regard for
organisational boundaries or specific
positions
– High performers are to be sought,
differentially rewarded
– Performance pools rather than
succession pools of talent
– Encourage rigorous performers
• TM is rooted in exhortation and
Anecdotes rather than data and
builds an argument based on
selective self-reports of executives

• Aligning people with roles

• Aligning roles with people
 In summary
• It is important to first emphasize the development
of all individuals
• Talented people do not fit in easy classifications
( Extraordinary individuals certainly make life
more interesting)
• Talent development only happens when a culture
based on shared values and beliefs is created
with leadership commitment
• Always fight against the push toward uniformity
• Only 10% are going to be top, should
organisations chase the same talent or build an
organisation for regular folks to perform as the
top 10 %
Need and Importance of
TM
Session 3
Merlin Mythili S
When the winds of change
blow, some people build
walls and others build
windmills

- Chinese
proverb
 Talent Imperatives for a New
Economic world
• 20th century economy focused on productivity and efficiency.
• Enabled by technology they obtained high productivity from a
workforce whose costs were rising.
• Narrow focus- developed economies-excluded more than of half
of the world.
• New global economy – changed by politics and technology.
• First stage of globalisation – movement of production from
developed to developing economies – cheaper costs
• Now the era is –truly multi-polar world – working everywhere –
going where talent is- connecting people and processes –
breaking traditional barriers
• “The war of talent is over and talent won” Ridderstale and
Nordstrom (Funky Business, 2002)
 The New context and TM
• Global abundance but local scarcity of talent.
• Fewer young people and more older people.
• Rising demand for new skills aggravated by
demographic pressures and educational
shortcomings.
• New methods of working and new relationships
between users and suppliers of talent.
• More diverse, remote and virtual workforces, with
different attitudes to work across generations.
• Steady change in the nature of work.
• Challenge of Engagement.
 5 Talent Imperatives – Critical
to Organisational Success
• Talent is a strategic issue.
• Diversity is the biggest asset.
• Learning and Skill Development – most
important capability.
• Engagement is the mystery ingredient.
• Nurturing and developing talent is
everyone’s concern in the Organisation.
 Why Talent is a strategic
Issue?
• Relentless pace of growth.
• In 20 yrs- India and China –largest economies
followed by US and EU.
• Only constant is Change- Organisation need to
respond – with Talent.
• Changing nature of work and value – tangible and
intangible assets.
• Shift from centralized production with repetitive
methods to a more devolved system – shared and
scattered production –often independent of the
producer.
• Unique knowledge of production, service and
delivery methods, brand value, workforce
capabilities.
 The need to embrace
diversity
• Global demographic shifts and dynamic labour
markets has made talent acquisition more
complex.
– Shifting populations and ageing workforce
– 4-2-1 problem.
– Japan's answer –’dark factories’ – production
automation.
– Government agencies, energy, heavy engineering,
non ‘eco-friendly’ industries does not attract youth.
– Global abundance and local scarcity.
– Knock-on effect –high salaries – skill shortage -
turnover is high.
 The importance of Learning
and Skill Development
• The world is becoming more educated – but is
education creating the skills organisations
need?
– Deficiencies in applied skills, written
communication, leadership, professionalism/work
ethics.
– Levels of investment in education (7 to 8% of GDP).
– Migration of Skills and Jobs. (Obama’s recent
legislation on off shoring).
 The Challenge of
Engagement
• Change in attitude about work and life priorities.
– Baby Boomers, Generation X (60s to 70s), Generation Y
(beginning 80s) or Net Generation
– Above 70 geezers, below 35 geeks.
– Managing mutigenerational teams is tough, reskilling,
retraining, motivating them tougher.
• Rise of knowledge work and workers (P.Drucker).
– KW add value by processing existing info to create new
information.
– HSPALTA policy Davenport’s acronym Hire Smart people and
leave them alone. Old command and control would not work
• Changing patterns and nature of work (part time, flexi
time, off shore time, virtual workers)
 Change in “Psychological
Contract”
Loyalty Effect Employability Effect
• If you • If you
– Develop skills we need
– Are loyal – Apply them to help company
– Work hard succeed
– Behave consistently with our
– Do as you are told new values
• We will provide • We will provide
– A challenging work
– A secure job environment
– Steady pay increase – Support to your development
– Reward your contribution
– Financial security
• You are
• You are – In a Challenging work
environment
– Ina dull environment
– Rewarded
– Safe
– Ina static environment
 Changes in HR Practice
Loyalty based
• Low differentiation
• Guaranteed increase in pay
• Weak performance appraisal
Subjective decision on
•
compensation
• Little consequence management
• Little investment in competence
development
• Dominant motive n- Affiliation
• Paternalistic Management Style
Performance based
• High Differentiation
• Pay increase at risk
• Strong Performance appraisal
system
• Formal assessment of competency
and potential
• Data based decision on
compensation
• Job security linked to continuing
contribution
• Significant increase in competence
development
• Dominant motive: n-Achievement
• Development Management Style
Talent Management and
Human Resource
Management
Session 4
Merlin Mythili S
• Demographic shift has changed the
nature of psychological contract.
• “Volunteer” Employees as they can
pick and choose between Employers
based on work life balance, diversity
policy and the extent to which they
will have a voice.
• Time to spend more time with people
than with finances.
 Psychological Contract

'It is concerned with assumptions,

expectations, promises and mutual
obligations' Guest et al (1996)
It encompasses the actions employees
believe are expected of them and what
response they expect from their
employer.
 Change in “Psychological
Contract”
Loyalty Effect Employability Effect
• If you • If you
– Develop skills we need
– Are loyal – Apply them to help
– Work hard company succeed
– Do as you are told – Behave consistently with
our new values
• We will provide • We will provide
– A secure job – A challenging work
environment
– Steady pay increase – Support to your
– Financial security development
– Reward your contribution
• You are
• You are
– In a dull environment – In a Challenging work
– Safe environment
– Rewarded
– Ina static environment
 Changes in HR Practice
Loyalty based Performance based
• Low differentiation • High Differentiation
• Guaranteed increase in • Pay increase at risk
pay • Strong Performance
• Weak performance appraisal system
appraisal • Formal assessment of
competency and potential
• Subjective decision on
• Data based decision on
compensation compensation
• Little consequence • Job security linked to
management continuing contribution
• Little investment in • Significant increase in
competence competence development
development • Dominant motive: n-
• Dominant motive n- Achievement
Affiliation • Development Management
 Three distinct threads of
thought regarding TM
• Requires what HR has always done,
but doing it faster
– Sourcing talent
– Growing talent through succession
planning/leader development and use of
compensation and performance
management processes
 Three distinct threads of
thought regarding TM
• Set of processes to ensure adequate
flow of employees into jobs
throughout the Organisations
– The first thing in TM in this perspective
is to gain a solid understanding of the
internal workforce
 Three distinct threads of
thought regarding TM
• Focus on talent without regard for
organisational boundaries or specific
positions
– High performers are to be sought,
differentially rewarded
– Performance pools rather than
succession pools of talent
– Encourage rigorous performers
• TM is rooted in exhortation and
Anecdotes rather than data and
builds an argument based on
selective self-reports of executives

• Aligning people with roles

• Aligning roles with people
 Succession Planning & TM
• SM integrates TM with Organisational
strategic planning and anticipates
changes in management.
• Good succession planning is more a
culture than an activity.
• Peter Principle (people promoted to
their level of incompetence).
• Pick key people and Delegate.
• Develop potential for promotion to be
successful.
• Succession is a deliberate process.
 Career Management & TM
• If it is ‘volunteer’ employee then he decides for
himself.
• TM approach – Organisation takes responsibility
for nurturing talent.
• Fine balance – balance of power in the
employment relationship.
• Dual responsibility, mutual investment.
• Long term relationship is formed on offered
inducement of company and expected
contributions of the individual than on
commitment and loyalty.
• Mentoring provides both professional guidance
and psychological support.
• Competence development.
 Development and TM
• Assessment tools for measuring core
competencies.
• Training and development solutions.
• Coaching.
• Job rotation.
• Idea of corporate universities.
 Recruiting, Retaining and
Rewarding Talent
• Recruiting talent
– Reactive, emergency driven recruitment?
– To be an ‘employer of choice’.
– New ways of recruitment.
– Entice and keep them.
• Retaining talent
– Meeting their long term objectives.
– Good opportunities.
– Way they are treated.
– Inclusion, feedback, career planning.
– Frontline leaders to develop retention skills.
• Rewarding talent
– Rewards are based on business
performance pitting employees against
each other.
– Mercenary culture (money before
teamworking)
– Networked culture ( political backstabbing
and hidden agendas)
– Performance driven culture (driven by
numbers)
– Communal culture (too inward looking too
slow to change)
– Communication culture (little feedback,
action don’t mirror words)
 Is TM another HRM fad?
• HR had already moved from command
and control style to shared success.
• TM is part of HRM.
• TM breaks HRM’s egalitarianism.
• TM emphasizes differentiation.
• TM works from people’s perspective
than managerial functions.
• TM is from the perspective of
Organisational development.
 TM Territory
Strategy

Retention
Recruitment

Succession TM
Planning
Develop
-ment HRM
 In summary
• It is important to first emphasize the
development of all individuals
• Talented people do not fit in easy
classifications ( Extraordinary individuals
certainly make life more interesting)
• Talent development only happens when a
culture based on shared values and beliefs
is created with leadership commitment
• Always fight against the push toward
uniformity
• Only 10% are going to be top, should
organisations chase the same talent or build
an organisation for regular folks to perform
as the top 10 %
The Talent Myth

Session 5
Merlin Mythili.S
 Real Success of modern
economy
• Talent mind-set at all levels.
• System is also equivalent to talent.
• These star Organisations don’t just
create, they execute, compete and
co-ordinate the efforts of many
different people and not just the
talented few.
 The case of Enron
• Best companies, McKinsey preached:
– Leaders obsessed with the talent issue.
– Singled out and segregated stars.
– Rewarded them disproportionately.
– Pushed them to even more senior positions.
– Placed premium on first-tier business schools.
– Lavish compensation packages.
– System is only as strong as the stars.
 Enron Timeline
• 1985 Enron was created on merging Houston Natural
Gas and Interworth by Kenneth Lay.
• Jeffery Skilling Joined as McKinsey’s consultant at Enron.
• CFO Andrew Fastow.
• McKinsey earned 10 billion dollars a year and has done
20 projects for Enron, was on the board.
• Enron rated most innovative company in America in
2000 by Fortune magazine.
• Skilling sold most of his shares after he retired citing
personal reasons in August 2001.
• Stock price 90$ in mid 2000 plummeted to 1$ by Nov
2001.
• Filed for bankruptcy by Dec 2, 2001.
 The case of Enron contd...
• Skilling started his corporate division in
1990 Enron Capital and Trade brought
MBAs from the best of colleges.
• 250 MBAs a year in the 90s.
• Super Saturdays.
• Kenneth Lay said Enron’s talent
differentiated them from their
competitors.
 Enron in
• Selling electricity and natural gas at market prices
as markets were deregulated.
• Indulged in lobbying to keep price volatility.
• Got into Online trading mode with Enrononline, i,e
complex weather derivatives.
• Diversification strategy – broadband assets, pulp
and paper plants, electricity and water plants.
• Fabricated financial reporting.
• Arthur Anderson, its auditing partner.
Did Enron fail in spite of its
Talent mind-set or because
of it?

What if smart people are

over-rated?
McKinsey’s Differentiation and
Affirmation
• A’s to be challenged and
disproportionally rewarded.
• B’s to be encouraged and affirmed.
• C’s to be told to shape up or be
shipped out.
• ‘Rank and yank’ process
• But how to rank?
• Link between I.Q and job performance is
distinctly underwhelming.
• People with I.Q might not pick up
effectively common-sense sort of things
like working with people.
• That is tacit knowledge.
• Employer should assess performance not
potential.
• I.Q in not also equal to ethics/morals.
 Exercise -What will you do?
1. Always delegate to the most junior person
who can be trusted with the task.
2. Give your superiors frequent progress
reports.
3. Announce a major reorganisation of the
department that includes getting rid of
whomever you believe to be ‘dead wood’.
4. Concentrate more on your people than on the
tasks to be done.
5. Make people feel completely responsible for
their work.
 The Talent flipside at Enron
• Freewheeling culture.
• Annual turnover on promotions was 20%.
• Performance evaluations were not based on
performance.
• People deemed talented were pushed.
• For E.g. Lynda Clemmons (weather derivative) in 7
years jumped from trader to heading a business unit.
• Lou Pai (power trading business)lost 10s of millions of$
in selling electricity to residential customers in newly
deregulated markets.
• Further he was given commercial electricity outsourcing
business which ran up several more years of losses.
• Kitchin - Enrononline project 250 people working for it.
Skilling gets to know after 6 months.
• Open market hiring 50 people would leave to the new
business unit, leaving holes in the existing ones.
 The dark side of charisma
• Hogan, Raskin and Fazzini
• 3 types of flawed managers:
– High Likability Floater.
– Homme de Ressentiment.
– Narcissist
• Great confidence.
• Self nominate.
• Will take credit for success.
• Avoid responsibility and will not own up failure.
What happened to talent at
Enron?
• Talent was given newer opportunities
and tolerated for mistakes.
• War of talent was about indulging A
employees and fawning over them.
• This inflated their ego.
• When their self image was challenged
they cannot face consequences, they
lied.
• Though lives are enriched by individual
brilliance,
– Only those organisations are successful where the
system is the star and not the other way around.
– Cases of Wal-Mart and Procter and Gamble.
• If everyone has to think outside the box,
maybe it is the box that needs fixing.
The Talent Value Chain

Session 6
Merlin Mythili S
• Talent driven ‘idea centric’ economy
• Talent breeds Innovation
• Imagination + Knowledge = Innovation
• Imagination is more powerful than
Knowledge.
• Walt Disney, Henry Ford, Bill Gates,
Michael Dell
Five Links in the Idea-Talent
Chain
• Anticipation – anticipate, ride better
create the wave.
• Articulation
• Acceptance
• Action ‘on time’
• Leverage the idea, create wealth
– Idea dies anywhere on this chain if there
is not commitment to the idea.
 Five ways to create value
• Make sure your idea is unique, authentic, and
genuine.
• Expose the idea to the right people and
involve those people intensely.
• Ensure that all information is adequate,
accurate and free flowing at all levels.
• Provide the right resources to people
involved.
• Expect something unexpected: many failures,
surprises and setbacks will come , so learn
from these.
 The idea value Chain
• Invest in yourself
• Different Thinking
• Emotional Commitment
• Action
 A core competency
• is a specific factor that a business
sees as being central to the way it, or
its employees, works. It fulfills three
key criteria:
– It provides consumer benefits
– It is not easy for competitors to imitate
– It can be leveraged widely to many
products and markets.
 Indian Innovators
• Cavin Care
– Sachet innovation
– CK Ranganathan
• Amul
– Milk Revolution
– Verghese Kurien
• HoTMaiL
– Sabeer Bhatia
– $400 million to Microsoft
Four Steps to Talent
Management
Session 7, 8
Merlin Mythili S
 LBA Consulting Group’s
study
• On identifying HR factors that
contributed to the creation and
sustenance of Organisational
excellence.
– A performance-oriented culture
– Low turnover (particularly of premium
employees)
– High levels of employee satisfaction
– A cadre of qualified replacements
– Effective investment in employee
compensation and development
– Use of institutional competencies in
employee selection and evaluation
processes
 Three Outcomes of
Organisational Excellence
• Identification, selection,
development, retention of
Superkeepers
• Identification and development of
high-quality replacements for a small
number of key positions
• Classification of and investment in
each employee based on his
actual/potential for adding value to
the Organisation
 Classification of Employees
• Superkeepers –GEE
• Keepers –EE
• Solid Citizens – ME
• Misfits – BE/GBE
 A core competency
• is a specific factor that a business
sees as being central to the way it, or
its employees, works. It fulfills three
key criteria:
– It provides consumer benefits
– It is not easy for competitors to imitate
– It can be leveraged widely to many
products and markets.
 Step 1 of 4 Steps to TMS
• Develop assessment tools and scales
– Develop competency definitions and
measurement scales.
– Establish a performance appraisal
definition and measurement scale.
– Establish a “talent potential forecast”
definition and measurement scale.
– Apply the measurement scales to each
job
 Core/Institutional
Compentency
• Action Orientation
• Communication
• Creativity/Innovation
• Critical Judgement
• Customer Orientation
• Interpersonal Skill
• Leadership
• Teamwork
• Technical/Functional Expertise
 Measurement Scale for a
Competency
1 2 3 4 5 6

Clearly and Adapts Promotes

appropriatel communicat open
y expresses ions to expression
his audience of ideas and
desires/nee requirement without
ds s to retribution
optimize
understandi Actively Is
Understands
ng presents recognised
the
importance information as one who
of and to all levels effectively
clearly and leads clarifies and
demonstrat others to do communicat
es good the same es
key/strategi
 Sample Competency Grid
Competency EVP VP&CFO VP HR Dir R& D Opera Sales Clerk
Manager man

Action 6 5 5 5 4 3 1
Orientation
Communicati 6 6 6 5 4 3 1
ons
Creativity 6 6 5 6 4 3 1

Critical 6 6 6 5 4 2 1
judgement
Customer 6 5 5 5 4 2 1
Orientation
Interpersonal 6 5 6 5 4 3 1
Skill
Leadership 6 6 5 5 4 3 1
Teamwork 6 6 6 5 4 2 1
Technical 6 6 6 5 4 3 1
Expertise
 Performance & Potential
Measurement Scale
Performance Potential Forecast
• 5 GEE • 5 High potential
• 4 EE • 4 promotable
• 3 ME • 3 lateral
• 2 BE • 2 Marginal
• 1 GBE • 1 None
 Step 2 of 4 Steps to TMS
• Develop Training and Development
Solutions that support your
Organisation’s core competencies
– Create a Coaching guide
– Assemble a directory of best T & D
programmes organised by competency
– Create a directory of top books
associated with each compentency
Some training programmes
– On the job coaching/mentoring
– Staff meeting on current problems
– Job Rotation
– Emergency fill-in Assignments
– Special one person projects
– Task force assignment
– E-learning (company educational courses)
– Courses outside Company
– Guided Reading
– Teaching Educational courses
– Assistance from Counsellor
– Extra curricular activity
 Step 3 of 4 Steps to TMS
• Evaluate each employee using the
Assessment Tools
 Step 4 of 4 Steps to TMS
• Prepare action Reports
– Create a “Bench Strength” summary
– Create individual talent competency
development forms
 Bench strength Summary
report
Position PotentialPerform Next Status Replace Status
ance Position ment

Charles P EE President Now John. 12 to 24

EXE VP & CEO Linda months
Mike HP GEE President 12 to 24 John, 12 to 24
EXE VP & CEO months Linda months
VP & CFO Now

Roger LR ME Blocking Now

VP & CFO Mike
Surplus
Martina NP GBE Void
VP R & D
Developing Talent through
Competencies
Session 9
Merlin Mythili
 Competency models:
History
• Competency models concern making transparent the
skills an Organisation needs to be successful.
• Until 1970s most organisations thought that technical
skills and intelligences mattered most for success.
• McClelland “Toward a theory of motive acquisition” “
Testing for Competence rather than for Intelligence”
• These characteristics can be measured and people can
be trained.
• Skills such as ability to network, sense others’ feelings
were important that best school for individual success.
 Daniel Goleman’s Emotional
Intelligence
• Self Awareness • Social Awareness
– Emotional Self-awareness – Empathy
– Accurate Self-assessment – Organisational awareness
– Self-confidence – Service Orientation

• Relationship Management
– Developing Others
• Self Management
– Inspirational Leadership
– Emotional Self-control
– Influence
– Transparency
– Change Catalyst
– Adaptability
– Conflict Management
– Achievement
– Teamwork and collaboration
– Initiative
– Optimism
 Transparency: maintaining
integrity
• 4. Acts on Values

• 3. Publicly admits to mistakes

• 2. Brings up ethical concerns

• 1. Keeps Promises
 Teamwork and Collaboration

• 4. Builds Bonds

• 3. Encourages others

• 2. Solicits Input

• 1. Cooperates
 Building a model
• For a critical role
– Difference between a superior and
average performers
• What they are good at
• How they do it differently
• Why they do it differently?
• For job families
• Of leadership
• Behavioural Benchmarking
 Competency: Decisiveness
Description: The ability to make firm and resolute decisions as the
situation demands, especially in the face of adversity or in cases
where there is no clear solution
• 1. limited:
– Ability to good judgement where there are clear answers
– Frequently seeks guidance from others in adversity
– Requires guidance in understanding when to take decisions independently
• 2. Basic:
– Ability to good judgement where there are clear answers
– Sometimes seeks guidance from others in adversity
– Understands when to take decisions independently
• 3. Intermediate:
– Frequently exercises sound judgement where there are unclear answers
– Seeks guidance from others in case of unusually difficult decisions
– Makes decisions in a timely manner
• 4. Advanced:
– Exercises sound judgement where there are unclear answers
– Demonstrates the ability to make firm decisions without guidance
– Quickly makes decisions that are appropriate
• 5. Expert:
– Exercises sound judgement in extremely difficult situations
– Leads others by setting guidelines on how to weigh factors and make
decisions in adversity
– Consistently takes appropriate decisions in keeping the best inserts of the
organisation
Competency models underpin
HR systems
 Talent Management
through Performance
management
Merlin Mythili S
Session 11 & 12
 Nature of Performance
Management
• Goal setting
• Feedback
• Reviewing performance in relation to
agreed objectives
• Performance Management System
has two parts to it:
– Performance Appraisal
– Performance Review
 Law of Effect
• Behaviour That leads to reward tends
to be repeated.
• What gets measured gets done. If
you want to change how an
organisation behaves, change the
measurement system.
 Choice of Appraisal System
• Trait based
• Behaviour based
• Knowledge/Skill based
• Results-based
 Choice of Appraiser
Rater Strengths Weaknesses
Employee’s Immediate Personal bias Might not have the
Supervisor opportunity to observe the
appraisee at work
Peers Excellent opportunity to Low rating may create
observe resentment
Good knowledge of job Possibility of collusion
requirements May weaken group trust
Subordinates Excellent opportunity to May distort ratings to curry
observe performance favour – or to get even
Good knowledge of job May be afraid to be negative
requirements when it is deserved
May weaken the supervisory
relationship

Clients/Customers/Suppliers
Outside Experts
May observe the most critical May not see some important
aspects of performance aspects
May distort the proper
business relationship
Possibility of collusion
May possess excellent Limited opportunity to
appraisal Skills observe performance
High degree of objectivity May not understand all
aspects of the job
Can be expensive
 Criteria for measures
• Relevant
• Specific
• Obtainable
• Practical
• Reliable
• Timely
 Performance Management Process

Plan

Review Act

Monitor
 Criticisms
• Appraisal as we know it has outlived its usefulness. It is time 
to get rid of it (Hartle 1997).
• A great deal depends on the extent to which you have a good 
relationship with your boss…if you get off badly with your first 
two managers, you may just as well forget it (Barlow 1989).
• Muddle and confusion still surrounds the theory and practice 
of appraisal (Randell 1994).
• Institutionally elaborated systems of management appraisal 
and development are significant rhetorics in the apparatus of 
bureaucratic control (Barlow 1989).
 Criticisms contd...
• Process viewed as burdensome and
transactional in nature, a necessary evil to
arrive at performance rating and pay
increase.
• Key elements of PM set in vacuum, with no
link to key business processes.
• Perceived low return on investment, seen
as a cost rather than an investment.
Causes for Bias and Error in
appraisal process
• Halo or horns effect
• ‘Similar to me’ effect
• Central Tendency, Leniency, Strictness
• Primacy and Recency of Events
• Contrast effect
• Escalation of Commitment
 Purpose of PM Defined
• Drive results
• Building capability
• Carving up consequences
 TM strategies
• Develop different purposes and
approaches for different employee
groups.
• Integrate the enterprise with the
individual.
• Create a culture of conversation and
performance information.
• Invest more in process execution than
program design.
 Features of Performance
Management
• Objective setting and review
• Annual Appraisal
• Personal Development Plans
• Self- Appraisal
• Performance-related Pay
• Coaching/Mentoring
• Career management
• Competence assessment
• Twice-yearly appraisal(180-degree)
• Subordinate feedback
• Continuous assessment
• 360-degree feedback
• Peer Appraisal
• Balanced Score-card
 360 Degree Feedback
• Systematically collecting and
analysing information about
someone's performance from the
person’s manager,
• direct reports,
• colleagues,
• and sometimes,
• customers and suppliers
 Performance Management in its most
developed form
• Involves all members as partners
• Is performance in its broadest sense (inputs, outputs,
processes)
• Agreed objectives
• Team performance
• Continuous process
• Review is a joint affair
• Focus on developing performance, skills, competence,
by providing feedback, recognition and opportunities
to develop competencies.
• Self managed learning
• Basis for PRP
• Recognizes the need for training
 Corporate Mission and Strategic
Goals

Business
Plans
Role
Definition
Competence
Requirements Performance Performanc
Agreement e Standards
Personal Development
Competence
Plan
Evidence
Performanc
Action-Work Development and e Measures
Support
Continuous Monitoring and
feedback
Formal review, feedback and joint
assessment
Performance-rating

Performance-related
pay
 Talent management
Strategies: Recruitment
and Selection
Session 13
Merlin Mythili.S
 Finding and Hiring Fast-
Track Talent
• Retaining In-house Superkeepers.
– Cost of their replacement is staggering.
• Why do they leave
– No longer feels good
– They won’t miss me
– No support
– Lack of opportunity for advancement
– Inadequate compensation
 Five strategies for Retention of
Talent
• Conducive Environmental factors
– Clarify mission and value statement
– Communicate positive feelings
– Stay focused on customer
– Be fair and honest
– Promote integrity
– Do not tolerate sub-par performance
– Insist on workplace safety
– Reduce meetings
– Make work fun
• Relationship with employees
• Support to Excel (resources, moral and mental)
• Growth Options (learning culture)
• Compensation
 How to recruit Superkeepers
from Competitors
• Identifying Superkeepers of other/competitor
Organisations.
– Networking
– External recruiters
– Synergistic organisations
• Use your own superkeepers to recruit them.
• Personal Touch and an appealing job content.
• Compensation package
– Stock options
– Employment contracts
– Change of control positions
– Pension plans
– Health care and flexi benefits
• Ensure Diversity
• Build Bench strength of Superkeepers
– Communicate clear and exciting career path opportunities
– Career development
 Recruitment methods
• Employee Referrals
– Reputation of the current employee
– Realistic information to make informed
decisions
– Current employees would help the new
hire
• Organisational websites
• Social networks
• College recruiting
What motivates/drives talented
people?
• Money
• Promotion
• Recognition
• Praise
• Feedback
• Not to be ignored
• Not to be restricted
• Ambiguity, paradox and uncertainty
 Seven Intelligences
• Linguistic
• Logical – Mathematical
• Musical
• Spatial
• Kinaesthetic
• Interpersonal
• Intrapersonal
 Making their contribution
worthy
• Willingness to attend
• Willingness to contribute
• Willingness to work with others
• Willingness to lead others
• Willingness to make a discretionary
contribution
• Recognise that one size does not fit all
– Different personal development needs
– Different hopes and aspirations
– Motivate people by tapping into their values and
passions
– Work must be challenging and rewarding,
positive feedback
– Delegate real authority to people , giving them
power to take decisions and the required
support and information to do so
 Coaching/Mentoring,
Succession Planning and
TM
Merlin Mythili S
Session 14, 15
 Coaching
• Challenge is to integrate a range of
meaningful experiences in a systematic way
that will appropriately build character and
skill.
• Developmental efforts
– Planning
– Location
– Timing
– Context
– Cost
 Developing Star Talent
• Structured Orientation to the Organisation and Role
• Coaching/mentoring (sounding board, cheer leader for the young
star)
– Peer Coaching
– Group Coaching
• Issue Development Meetings
• Job Rotation
• Interim and Emergency Assignments
– How one’ own action caused mistake
– Willingness to own and discuss openly
– Understanding of how organisation reacts to mistakes
• Task Force assignments
• Internal Education and Training
• Executive programmes and External coursework
• Guided Reading
• Teaching as Learning
• Extra curricular activity
• E-Learning
 Succession Planning
• It is doing all you can to ensure you have the right people in
the right jobs at the right time.
• Buy:
– Keep pace with changing market demands.
– Acquire specialized skills.
– Bring in new ideas and fresh perspectives.
– Expensive.
– The talent you buy is unproven in your organization.
• Build:
– Develop people to your ‘‘spec’’.
– Save money – lots of it!
– Enhance career mobility & engagement within existing
workforce.
– You know what you’re getting into.
– Less opportunity for injecting new knowledge/energy.
Tips to Succession Planning
• Flex with the future
• The 3Cs of fit; competence, connection
and culture
• The magic is in the mix of experience,
coaching and formal learning
• Involve the talent in the planning
– interesting work;
– meaningful work; and
– work/life balance.
• Cast a wider net
Employee Engagement
Introduction
Merlin Mythili S
Session 16
 Definition
• Harnessing the Organisational
members’ selves to their work roles.
• Engagement is the level of
commitment and involvement an
employee has towards their
Organisation and values.
• Passion and energy.
• Willingness and ability of employees to
give sustained discretionary effort to help
their Organisation succeed.
• Is more a psychological contract.
• Is how positively the employee
– Thinks about the organisation
– Feels about the organisation
– Is proactive in achieving Organisational goals
for customers, colleagues and other
stakeholders
• Indifference
• Cynicism and unhelpfulness
• Positive and proactive approach
• Not engaged
• Actively disengaged are cave
dwellers
• Actively engaged are builders
 Benefits of employee
engagement
• Will stay
• Will perform better
• Are more motivated
• Significant link between employee engagement and
profitability
• Emotional connect
• Passion, commitment and alignment with company values
• Increased trust in the Organisation
• High energy working environment
• Boost business growth
• Employees effective brand ambassadors for the company
 Factors leading to Employee
Engagement
Career Development –
opportunity for personal
development
Career Development –
Effective Management of
Leadership- talent
Clarity of Company
values Feeling
Leadership- Respectful
valued and
treatment of ethical behaviour
involved
Leadership- company’s
standards of ethical behaviour
Empowerment
Image Health & safety
Equal opportunities & fair Job satisfaction
treatment
Performance Appraisal Communication
Pay & Benefits Family Friendliness
Co-operation
 Role of Culture in
Employee Engagement
Merlin Mythili S
Session 17 & 18
 Organisational Culture
• Culture ‘The complex mixture of
assumptions, behaviours, stories, myths,
metaphors (symbols) and other ideas that fit
together to define what it means to be a
member of a particular society’
Stoner and Freeman, Management (1995 p181)

• Corporate Culture ’Official way we do things

here’ (Mullins, 1999 p803)
• Organisational Culture ‘Way things are
actually done’’ (Mullins, 1999 )
 Organisational Culture
• The collection of relatively uniform
and enduring values, beliefs,
customs, traditions and practices
that are shared by an Organisation’s
members, learned by new recruits,
and transmitted from one generation
of employees to the next.
 Hofstede’s cultural
dimensions
• Power distance,
• uncertainty avoidance,
• individualism vs. collectivism,
• masculinity vs. femininity,
• Long term vs. short term orientation
 Schien –model of 3 Levels of
Culture
SURFACE Visible organisational
MANIFESTATIONS structures and processes
(hard to decipher)

Strategies, goals,
ESPOUSED VALUES philosophies, act without
even thinking(espoused
justifications)-

Unconscious , taken-for
BASIC UNDERLYING granted beliefs, perceptions
ASSUMPTIONS thoughts and feelings
(ultimate source of power
and action)
 Factors that affect the
Organisational Culture
• History and ownership
• Size of organisation
• Technology
• Goals and objectives
Organisational Culture-Formal or Informal?
Herman’s (1984) Iceberg Metaphor
No
problem-
we’ve
FORMAL (OVERT) ASPECTS avoided
Goals conflict
Technology
Structure
Policies and Procedures
Financial Resources

INFORMAL (COVERT ASPECTS)

Perceptions, Attitudes, Feelings (Anger, fear, liking,
disappear) on formal/informal system.
Values, Informal interactions, group norms.
Drivers of Engagement 

Merlin Mythili S 
Session 19 
 Components of High Engagement 
• Vigour – Physical 
• Absorption‐ Intellectual 
• Dedication – Emotional 
Engagement is a combination of heart and mind 
and is a result of: 
• Sense of identity, 
• Feeling valued 
• Emotional and intellectual connect with 
colleagues etc 
• At the high‐end 
– Is the degree to which they are aligned, confident 
and committed to achieving discretionary effort to 
their work 
• At the low end 
– It manifests itself in low levels of responsiveness 
and energy, and high absenteesism 
 Factors leading to Employee Engagement 
Career Development – opportunity 
for personal development  E
N
Career Development – Effective  G
Management of talent  A
Leadership‐ Clarity of Company values  G
Feeling valued 
Leadership‐ Respectful treatment of  E
and involved 
ethical behaviour  M
Leadership‐ company’s standards of  E
ethical behaviour  N
Empowerment  T
Image  Health & safety   
Equal opportunities & fair treatment  Job satisfaction 
Performance Appraisal  Communication 
Pay & Benefits  Family Friendliness 
Co‐operation 
What do you do with the disengaged? 
• Some people stick around adding no value 
• Others wreak havoc 
• Highly engaged people respond to 
– Leadership and management effectiveness 
– Organisational values 
– Opportunities to grow and make meaningful 
contributions 
• Complacent employees respond to 
– Supervisor effectiveness 
– Organisational focus on customer needs 
– Opportunities for long term employment 
 Drivers of Engagement – Six Cs 
Career 
Where am I Going? 
Community  Congruence 
Is it socially rewarding?  Do Values Align? 

Compensation 
Am I fairly rewarded? 

Content  Coping 
Do I enjoy what I do?  How am I supported? 
• Content – Spicing up jobs and work –sensitivity to 
employees’ concerns 
• Coping – energy n engagement are limited and renewable 
resources – exertion and recovery need to be balanced i 
issues at the physical, intellectual and emotional levels 
need to be tackled 
• Compensation‐ valuing and rewarding people – ‘ 
underappreciated and unaccountable’ ‐ effective feedback 
• Community – putting the fun back into work 
• Congruence – achieving alignment from top to bottom – 
belief  that intention will translate to action 
• Career – providing opportunities for achievement and 
balance 
• Line managers very important for employee engagement 
 EVP of Google 
• Top ten reasons to work at Google 
– Lend a helping hand 
– Life is beautiful 
– Appreciation is the best motivation 
– Work and play are not mutually exclusive 
– We love our employees 
– Innovation is our bloodline 
– Good company everywhere you look 
– Uniting the world, one user at a time 
– Boldly go where no one has gone before 
– There is such a thing as Free lunch – healthy, yummy, and 
made with love 
Leading Employee Engagement 

Session 21 
 The Ten C’s 
• Connect 
– Not only profit sharing and work‐life balance are 
important, employees’ relationship with their 
managers is equally important. Leaders should 
walk the talk 
• Career 
– Challenge employees and instill confidence in 
them that they can be achieved 
– Provide with knowledge and tools 
• Clarity 
– Communicate a clear vision 
• Convey 
– Clarify expectations and provide feedback 
– Keep track of small improvements, create small wins and 
share his/her thoughts with the employees 
• Congratulate 
– Exceptional leaders give recognition and they do a lot, they 
coach and convey 
• Contribute 
– People want to know that their inputs matter 
– Good leaders help employees see and feel how they are 
contributing to the Organisation’s success 
• Control 
– Employees value control over the flow and pace of 
work 
– Leaders should create opportunities for 
employees to exercise control 
– Leaders should consult with their employees 
– Flexibility 
– Involve employees in decision making 
– Allow smart people to drive initiative 
 
• Collaborate 
– Great leaders are team builders 
– They create an environment that fosters trust and 
collaboration 
– Need to be cared by colleagues get strengthened 
• Credibility 
– Leaders to strive to maintain company’s reputation and 
demonstrate high ethical standards 
– Employees want to be proud of their Organisations 
• Confidence 
– Great leaders are individual exemplars of high ethical and 
performance standards 
 
Engagement levels 
    
Positive Attitude     
   
Yes Men  Stars 
   
   
   
   
Negative Attitude     
Victims  Cynics 
   
   

Inaction  Action 
 Stars 
• Are fully engaged 
• Give discretionary effort to serve the customer 
• See the silver lining hidden beneath dark clouds 
• View change as a challenge and opportunity 
• Treat life as a continuous learning experience 
• Expand willingly their personal comfort zone 
• Like to be challenged and stretched 
• Realists, not afraid of short tem mistakes and 
setbacks 
• Optimistic about long term future 
 
 Cynics 
• Keen to disassociate and actively tell others why change won’t 
work 
• Always see the negative 
• Criticize ideas and solutions 
• Express frustration 
• Argue against change 
• Focus on past 
• Oblivious to the consequences of their negativity 
• Bring other people round to their perspective 
• Angry at being ignored, not listened to, excluded, constrained 
• Overtly confident in their own ability 
• Rebellious 
• Unsympathetic to stress caused to others 
 Yes Men 
• Avoid taking risks 
• Keep a low profile 
• Trying to tide things without drawing 
attention to themselves 
• Acknowledging good ideas but being reluctant 
to change themselves 
• Coasters, prepared to drift along 
 Victims 
• Have negative attitude but lack drive 
• Avoid confronting issues 
• Retreating into ‘safety’ – burying their heads 
in the sand 
• Avoid risks, doing the minimum 
• Avoid thinking about what might happen 
 Employee Engagement 
• Is the primary enabler of successful execution of 
business strategy 
• Is not a short term initiative 
• Must be driven from the top 
• Hire naturally engaged people 
• Is all about fit 
• No one impacts EE more than the immediate leader 
• Measuring EE and demonstrating its business impact is 
crucial 
• It means reaching out to the heart 
 
 
Engagement Drivers  Engagement value Preposition 
•Right employees in the right job 
•Exceptional Leadership 
•Organisational Systems and Drivers 
Work Environment 
•Aligned effort and Strategy 
•Empowerment 
•Teamwork and collaboration 
•Growth and Development 
Engaged Employees  •Support and Recognition 
•Greater Loyalty 
•Enhanced Effort 

Organisational Success 
•Satisfied and Loyal Customers 
•Increased Retention 
•Higher Profits and Profitability 
•Revenue Growth 
Motivation, Reward and 
Engagement 
 Aims of this session 
• Process and types of motivation 
• Main motivational theories 
• Relationship between money and 
motivation(pay & performance) and 
engagement 
• Factors that affect satisfaction with pay 
• Practical implications of motivational theory 
• Need for fairness, equity and consistency in 
reward systems 
 What is motivation? 
• Motive – reason to do something. 
• Motivation is about factors that influence 
people’s behaviour(goal directed behaviour). 
• 3 components: 
– Direction 
– Effort 
– Persistence 
 2 types of motivation 
• Intrinsic  
– Responsibility 
– Freedom to act 
– Scope to use and develop skills and abilities 
– Interesting and challenging work 
– Opportunities for advancement and growth 
• Extrinsic 
– What is done to or for people to motivate them 
– Rewards such as increased pay, Praise & Promotion 
– Punishments such as disciplinary action, withholding 
pay or criticism 
 Content theories of motivation 
 
• Content theories explain the behaviour of 
people in terms of motives that drive them. 
• Answers the what of motivation. 
 
– Maslow’s hierarchy of needs  
– Alderfer’s ERG theory 
– McClelland need theory (PAA) 
– Herzberg’s two factor model(S,DS) 
 Process theories of motivation 
• process theories explain how people make 
choices with respect to desired goals and the 
means through which they pursue them. 
– Expectancy theory 
– Goal theory 
– Equity Theory 
 
 Vroom’s Expectancy theoy 
• This theory holds that individual motivation 
depends on the valence of outcomes, their 
expectancy that effort will lead to 
performance and the instrumentality of 
performance in producing valued outcomes. 
• F= V x I x E 
 
 Porter and Lawler Model 
Perceived value  Perceived 
of rewards  equity of 
rewards 

Individual  Intrinsic 
abilities & traits  rewards 

Effort  Job  Job 

Performance  satisfaction 

Extrinsic 
Role  rewards 
perceptions 
Expectation that 
performance will lead 
to reward 
 Stacy Adams Equity theory 
 
• This process theory argues that perception of 
unfairness leads to tension, which then 
motivates to resolve the unfairness in 
different ways. 
   My rewards      Your rewards  
          =   
    My efforts      Your efforts 
 
 Goal theory 
• Motivation and performance are higher when 
individuals are set specific goals 
• Difficult but accepted goals 
• Feedback on performance 
 Money and Motivation 
• Money  is a goal that people strive for; although to different 
degrees 
•  acts as an instrument which provides valued outcomes  
• Can be a symbol that indicates the recipient’s value to the 
Organisation 
• Acts as a general reinforcer of desired behaviour 
• Satisfies the basic needs of survival and security and self‐
esteem 
• Lack of it causes dissatisfaction; but does not result in lasting 
satisfaction 
• The euphoria can rapidly die away 
 
 Factors that affect satisfaction with pay 

• Satisfactions with pay based on external 
market comparisons and internal comparisons 
• Other aspects of organisational life 
• Satisfaction short‐lived 
• Dependant on the degree to which one feels 
their rate of pay has been determined fairly 
• Commensurate with the self perception about 
ability, value and contribution 
 
 Practical implications of motivational 
theories 
• Extrinsic & Intrinsic motivating factors 
• Significance of social and psychological needs 
as well as economic needs 
• Influence of goals and feedback mechanism 
• Importance of expectations 
• Fairness, equity and consistency in reward 
systems and treatment of employees