By Tim Toterhi
Many companies have taken great pains over the last few years to install robust performance and talent management systems in an attempt to better identify, reward, develop, and ultimately retain their top talent. While some gains have been made with regard to high-potential (HiPo) identification and compensation, most struggle to provide impactful development programs that help anchor employees to the organization. This failing not only increases HiPo flight risk, it can send a message to core employees that despite what’s said in the mission statement, development is not a priority.
While some of the heartache can be attributed to simply automating lackluster paper-based processes, more often the issue has to do with a misguided talent management philosophy that lacks transparency and fails to align purpose and process.
Talent Reviews—A Broken Process
Consider the typical talent review process. After managers throughout the organization spend considerable time creating a straw man 9-box distribution, senior executives gather to discuss those few deemed high potential. While some conversation is substantive, in many cases, the focus is on negotiating performance and potential scores in hope of placing employees in the correct portion of the 9-Box (download PDF graphic below). These heated debates tend to center around the “usual suspects,” with leaders either focusing solely on their reports or allowing hearsay and anecdotal evidence to dominate the conversation.
Clearly, the process has its flaws. First, because talent reviews take time, rarely does the event extend deep enough into the organization to get a meaningful view of the true talent pipeline. Second, employees often are reviewed in silos with little thought given to cross-department moves. Finally, the amount of time (typically two to five minutes) spent on each employee is hardly enough to make intelligent decisions about a person’s career.
The Importance of Transparency
Organizations may never arrive at the perfect way to review employee potential. The forces of time will always work against the labor-intensive activity. The unfortunate part, however, isn’t the inefficiency of the talent review, it’s that too often leaders fail to capitalize on what actually works by shrouding the process in secrecy.
After all the effort, in many companies, leaders refuse to share the results of the talent review with their staff. Employees either are told nothing or provided with generic commentary such as “You are a highly thought-of employee.” These statements beg the question: So what?
Without details, how can an individual assemble a concrete development plan? How can an organization increase its bench strength and produce legitimate “Ready Now” successors? And how can an HR organization avoid co-sponsoring a repetitive talent review process that fails to address key people issues?
Organizations that have been effective in the space have taken some calculated risks. That means embracing transparency and stepping up to some of the words embedded in the standard-issue mission statement. One way to demonstrate this is by having each manager openly share with direct reports their placement in the 9-box.
Concerns With Transparent Talent Reviews
Thanks in part to coaching from skittish HR professionals, many business leaders visibly flinch at the mere mention of opening up the process. The following provides retorts to the most common concerns.
- Managers aren’t equipped to have coaching conversations. Let’s face it. If you have a performance management system, employees already know half the story (i.e., their long-term performance scores). The new information concerns potential at a specific moment in time. This concern can be addressed by clearly articulating how potential is defined, how it relates to each box, and, most importantly, what it means to them. With such talking points in hand, even a new manager should have the wherewithal to navigate the conversation.
- If you tell employees they are in the box 9 material, they will expect special perks. Perhaps they should. After all, the point of the talent review is to identify your most valuable human resources. Why wouldn’t an organization invest in and reward them? That said, while being placed in box 9 is “flattering,” it should come with certain expectations around performance, willingness to take on more, and the responsibility to act as a mentor to others. All relaying the information does is earmark an opportunity for growth, one that people need to work hard to capitalize on.
- If people expect to be in box 7, 8, or 9 and they find themselves in box 2, 4, or 5 they will quit or become disengaged. There simply isn’t much evidence to support this concern. Those boxes not only illustrate good, if not great, performance, they leave room for advancement. Employees want to be appreciated and regarded as doing meaningful work in an effective way. If you clearly articulate the difference between a 5 and a 9, for example, and illustrate a plan to bridge the gap, you should be covered.
Benefits of a Transparent Talent Review
The upside of transparency outweighs the risk. Consider the following benefits that come from opening up the process.
- Gives employees clear feedback on how they are perceived by leadership.
- Provides an opportunity for concrete development actions that can help employees achieve their goals in line with business needs.
- Removes the mystery from the process, allowing for open coaching discussions year round.
- Clarifies the company’s people investment strategy in line with robust succession planning.
- Helps managers truly understand their employees’ career goals and what they are willing to do to achieve them.
- Allows the company to shift the performance curve for the entire organization while actively addressing poor performance.
Comfortable First Steps
For many companies, this approach would mean a considerable culture change. While you can’t “sneak up on change,” there are a few things that can be done in advance of a full-scale effort to help you decide if transparency would work in your organization. Try the following first steps.
- Define “potential” in terms of real opportunities. Jargon and generalities don’t work. To increase the effectiveness of your talent reviews, clarify the term, “potential,” and provide specific examples so all managers operate from the same point of reference. It’s not enough to say that Bob Smith is a HiPo. To make a 9-box claim, a manager should be prepared to articulate how he meets the inclusion criteria, as well as specifically what job(s) he sees the person in and the steps necessary to get there. That requires thought and taking ownership and accountability for corporate talent.
- Align HiPo distribution with budgeted investment. There is no point having a performance bell curve, even a suggested one that allows for X percent of employees to be placed in the 7, 8 or 9 boxes, if your organization has no intention or means to develop them. Companies are fond of saying that people are their most important assess, but few leaders think through the implications of the talent plans. Success in this area comes from aligning budget to development strategy.
- Openly address the blocker issue. You can’t rotate talent if all the seats are filled. There is nothing wrong with being “well placed” in the 4 box. For many employees, this is a positive quality that speaks to long-term high performance within a specific job set. However, organizations should identify some key positions to serve as rotations. This helps build to a broader culture that drives performance and sends the message that the 5-box is a good place to visit but not a great place to live if you want to advance. Along the same lines, any performance issues in the 1, 3, or 6 boxes should be addressed quickly.
Coaching Conversation is Key
Whether you elect to revitalize your talent review process or keep it largely the same, the one non-negotiatable should be the post-meeting coaching discussion. The test is quite simple. If you change a person’s placement in the 9-box and that action does not alter the context of the conversation you have with the employee afterward, than you have effectively wasted your time.
Tim Toterhi is an executive coach and OD and change management specialist. He’s worked extensively with teams in the Americas, Europe, and Asia on talent management strategies. He can be reached at timtoterhi@yahoo.com.
