Managing "Best" Talent in Volatile Economy


Joydip Dey
Vice President-Human Resources
Fortune Five Hundred Company
New Delhi

As the economy booms, companies are scrambling to find, and retain talent. With the economy on fast track, these are heady times for large number of companies. Corporate sector across the globe already undergoing such massive transformation and the main climax of this game is yet to come. Global IT major such as Infosys and TCS has already announced their highly ambitious corporate restructuring programme with youngsters as the prime focus. Many other corporate houses are in the waiting list and gearing up for dramatic restructuring. Focus is very much clear, encourage Gen.X for higher and critical responsibilities. As a result, workplace dynamics is changing dramatically. Value systems of next generation workforce is undergoing massive change and this is the most significant change society is facing today.

Ironically, in this process the basic fundamental definition of "Best" employee is changing today in next generation companies. Many emerging factors are influencing in defining the "Best" employee. Traditional definition of "star performer" of the market or "best performer" of the competitors company no longer remains the "Best" employee in today's marketplace. While hiring, every organization in today's highly competitive marketplace is looking for this new breed of "Best" available candidate. Who is this new breed of "Best" employee? Companies are increasingly realizing that this new breed of employees present a significant opportunity to move the organization forward in carrying out their business plan. Moreover by virtue of changing workplace dynamics, employees experiences highly complex work environment. For example, in today's environment an employee may be responsible for integrating and coordinating complex functions, have to cope with complex reporting relationships and manage considerable ambiguity and change. They are making decisions, which often affect many people and are held directly accountable for results. Highly complex work environment because workforce dynamics has changed dramatically over the period of last few years. Here is how…

Changing Value System: As a result of massive economic liberalization, information explosion and technological innovation the core value system of next generation youth has changed dramatically over the period of last few years. Youth of today has seen massive change in last few years than their parents did in past many years. They experienced the way dot-coms came and went, and also how the IT bust has surpassed the IT boom. They are running for knowledge explosion and financial security. They want to be financially self-sufficient as soon as possible. They are full of ideas and energy. Massive internet boom has helped them to keep themselves up-to-date with all latest development, which enables them to think differently. They look for assignments/projects which are adventurous and can deliver a range of interesting experiences. As a result they are sending a clear message, that "I'm the one in charge of my career."  According to psychologist that is the real change corporate sector is facing today.

Moreover by their nature youth of today are highly individualistic, focused on winning at any cost, low respect for authority, moral values, and highly materialistic. They want to survive for today, long-term benefits does not makes much sense to them, take home salary is everything for them. They does not look for life long employment, they want a career where they can enhance their knowledge and competencies very fast, and therefore they will quit if a company cannot offer the same. Knowledge and education are the only driver, they know will lead to their empowerment and therefore they also realizes that unlearning of current knowledge has become the part and parcel of future career path.  Ability of an individual to learn and unlearn is virtually  deciding the survival of their future in today's marketplace. Hence workforce of next generation is under tremendous pressure to update their competencies. Hence message is very much clear, those who would take charge of their careers should commit themselves to a lifetime of learning-including exploring new job possibilities.

Under the circumstances to attract and retain talent today, companies are offering accelerated growth programmes, massive learning opportunities, hefty bonuses/incentives and pay higher-than –market salaries. Coaching and mentoring programme has received very high importance in this environment. to groom and integrate the workforce into the fast changing dynamic culture companies are investing heavily in grooming, counseling and job rotation programmes.  Besides improving the skills of the workforce, today large number of companies are investing heavily in training which can help them to attract and retain desirable employees. They believe that training and management development can increase employee commitment if it is used to teach knowledge that is less company-specific and more generalizable. Ironically, in-house management development programmes are found to be developing more committed employees and higher performance if the programme focuses on competencies that are needed by other companies than if it focused on competencies needed within its own company. This is definitely proving to be the "new psychological contract" that many highly reputed companies are offering to their employees.

In addition companies are aggressively binding valued employees with contracts, larger gobbets of freedom, or a bigger share of profits. Companies operating in highly skilled-and therefore highly mobile-professionals, for instance high tech sectors are undergoing similar syndrome. At the same time in order to remain competitive in the fast changing market, companies are not only inducting young and new talent steadily into the system, but they are also weeding out the non-performers very aggressively.

Moreover youth of today does not give high priority to the family and matters of spirit as considered by the previous generation. They have low attention span, get frustrated easily, and  start seeking change. They evaluate their performance through rewards, and believes in instant gratification. As a result today, we have lot of highly ambitious people with huge career expectations competing for a diminishing number of positions.

Ironically in many companies, senior management team has found such massive transformation difficult to accept. Commenting on this phenomenon top executive of a highly reputed company said "you are telling top management that their 30 years of personal experience is less valuable as we move forward. This is so traumatic. Our senior managers will find it hard to change unless there is a crisis."

Transformation in Workplace Dynamics :- Today's young people are not what they used to be. Massive transformation in the value system of next generation workforce coupled with globalization and technological innovation have created a business environment of high risk, erratic markets, and unpredictable resource-needs.  Average employee, feel challenged to take care of themselves. They are under pressure to balance desires for long-term security with short-term needs for opportunities, work-life, reward and recognition. As a result workplace values and norms are changing very fast.

As relations between employers and employees begin to rely more on voluntary behaviour, the niceties of relationship is becoming more important. In this changing environment leadership is playing a significant role by nurturing experimentation in the workplace that results in learning. The perception of fairness, rationality, and reward based on merit has become the critical component of the emerging culture. As a result, line managers are becoming most important member in the workplace today. Employees think of their line manager as the primary representatives of their employers missions, policies, and practices. They rely on line managers more than any other individuals for assignments of tasks, responsibilities, special projects, resource planning, planning to avoid problems, identifying and solving problems, training opportunities both informal on-the-job and formal, consideration and approval of desired work conditions, resolution of disputes with all stakeholders, coaching and performance evaluation feedback etc.

On the other side due to this massive transformation, line managers role has become more and more challenging. Line managers are under increasing pressure from senior management to increase productivity and quality, that means getting more work and better work out of fewer employees, while utilizing less resources. Average span of control ( the number of employees officially reporting to each line manager) are increasing; in addition, line managers are given more responsibility for staffing, recruiting, selection, orientation, training, performance management, and retention. These trends are forcing line managers to learn to deal with and accommodate the needs and expectations of an increasingly diverse workforce. Employees are demanding more from the line managers on assignments and other work related areas or other special needs than they received in past.

In this process many line managers are found to be increasingly frustrated and facing difficulties in their efforts to deliver special rewards for high performers, hold employees accountable for overall performance standards as well as meeting daily goals and deadlines, implement effective performance improvement plans with low performers; terminate recalcitrant low performers. To manage the situation effectively many line managers are spending less time engaged in managing employees spend more time in rectifying employees errors, salvaging last resources, mediating conflicts etc.

To remain viable, companies are forced to adopt extremely flexible and efficient employment practices. In turn, employees are increasingly adjusting by adopting more aggressive attitudes, expectations and behaviour.

Emergence of Network Organization:- Traditionally companies have enforced their productivity by improving efficiency of activities such as extraction of raw materials in manufacturing industry or of transactional activities such as work of accounts payable function etc. The advantage of such system is the scope for automation. Aided by technology, companies are driving massive automation initiative of such processes and reducing variability of performance.  Over the period of time companies are raising their operating productivity with the help of automation.

However with the emergence of network model of organizational structure, life in an organization has become more and more complex. Flatness, autonomy and diversity has become the name of the game. Companies around the globe considers innovation and the free flow of information as the primary drivers of an accelerating pace of change. Managing risks has become one of the prime factor of corporate success in a fast-moving increasingly competitive global marketplace.

Eventually senior managers are sharing more power with people they once regarded as subordinates, and employees of nominally lower rank is experiencing the joys and burdens of increased responsibility. To the companies, there's no practical alternative to empowering employees. This makes employees competency supremely important and eventually many leaders are learning how to follow. As a result leadership responsibilities are frequently changing, and teams of employees are working together across great distances, developing yet another type of relationship skill.

Ironically these developments has also increased interdependencies, the more potential for conflicts that constrain the range of solutions. Increased interdependencies are making change difficult because a positive change in one part of the network can influence and have a negative impact somewhere else. As companies size and complexity grow, its degree of freedom drop. Companies having such organizational structure can sometimes become very complex and lead to serious threat for large scale change initiative. Many large companies are finding it difficult to adopt to such circumstances.

In addition, with the emergence of network team, today most employable people are the flexible youngsters who can move easily from one function to another, integrating diverse disciplines and perspectives. Similarly, people who can operate comfortably in a variety of environments are fare better than those stuck in the mind-set of a particular corporate or even national culture.

Network structure has also changed the nature of work and the way employees interact with each other. Sharing, searching, coordinating, and monitoring activities has gained tremendous importance in the newly emerging corporate environment. As a result volume and the value of interaction has increased dramatically. Across the globe number of jobs chiefly involving in such complex interaction has grown faster than any other type of job. Companies increasingly realizing that they must manage these employees differently. Under the circumstances, challenge before organization is to improve the interaction among such team members. In this process Trust, fostering change, learning, collaboration, shared values and innovation has become the foundation of such organizational culture. Such interaction involves the ability of an individual to connect with all stakeholders of the team, problem solving ability, innovation etc.

Who is the "Best" Talent:- Under  the changing environment, question before us is what determines who is the "best" talent? There are many top executives who strongly believe that they can resolve most critical challenge of their business by hiring a star performer from another company or from their competitors.

Hence companies are making huge investment in recruitment campaigns and strategies to ensure that the newly inducted star performers will be strong performers in the long run. But there is no guarantee that a star performer of the broad market or competitors company will eventually prove to be the very good performer in another company. Since fast changing workplace environment demands an individual to share his/her knowledge, negotiate, persuade, cooperate and collaborate extensively with other team members to get the job done, hence performance of an individual in the workplace exclusively depends on his/her relation with other team members and ability to get the job done from other besides several other important factors.

Many companies have traditionally concentrated on the assessment of candidate's "Credentials, technical knowledge and skills competencies" during recruitment process. This approach has some fundamental reasons for wide acceptance. Credentials are very easily checked and the assumption is that candidate with the identified credentials will have more to offer than those without. It also allows a company to appear more "Professional" when employees have credentials. Knowledge and skills testing is the easiest to design, to administer, and to evaluate. These evaluations tend to be the least subjective, if well designed, and thus they are not very open to challenge. It assumes that recruits have the "right" underlying motive and trait competencies or that good management can instill these.

However this approach has back-fired in many leading companies since knowledge and credential testing has been found to be one of the least reliable predictors of a candidate's future successful work performance specifically for senior executive level. While many companies have hired individuals based on credentials and knowledge, and promoted employees based on skills and abilities, they seriously neglect individuals based on values.

Value Assessment: - Ironically, in this process companies failed to appreciate that when an employee has a value system that is intrinsically in direct conflict with the values of the organization, there will be serious problem in the individual performance regardless of their level of knowledge and /or skills. This syndrome emerges because underlying our perceptual processes are our values and beliefs, which colour what, we see and how we interpret events. Understanding these better may help explain why we choose some solutions over other. Therefore impacts of values are more pronounced in decisions where there is ambiguity and consequently a greater degree of subjectivity. Hence if this problem increases substantially among large number of employees and especially within senior executives of any organization, it looses its ability to compete in the highly competitive marketplace and becomes a sick organization.

It has also found widely that company that uses a broad base of assessment tools and techniques including elements of credentials, knowledge, skills and abilities miss assessing candidates in the value area. As a result company would identify candidates who offer poor long-term prospects for the company.

Compounding this problem is the fact that in general, knowledge and skills can be imparted on an individual in a relatively short times while values are developed and shaped over a longer period of time and are often affected by influence beyond the companies control.

Good companies across the globe always believed that the values and beliefs of the senior executives have more impact on the direction and purpose of the organization than any other single influence. It is important, therefore to have a mechanism to select and recruit senior executives on the value based framework where they may be helping together in solving critical organizational problems. Certainly, good decisions are more difficult to make if executives do not know what their guiding values are.

Moreover by hiring and promoting only those candidates whose values are deemed to be compatible with the organization, it is hoped that performance problems created by "values" clashes will be lessened and managerial resources can be better focused on business critical issues. In addition newly inducted senior executives can serve as role models and influence the employees by their behaviour that has become critical to the success of the organization.

Joydip Dey
Vice President-Human Resources
Fortune Five Hundred Company
New Delhi

Source: E-mail November 3, 2007



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