Analysis of the Identification and Development. Of High Potential Employees. Courtney Middleton. A Research Paper

Transcription

1 1 Analysis of the Identification and Development Of High Potential Employees by Courtney Middleton A Research Paper Submitted in Partial Fulfillment of the Requirements for the Master of Science Degree m Training and Development Approved: 4 Semester Credits Dr. Renee Surdick The Graduate School University of Wisconsin-Stout December, 2011

2 2 Author: Middleton, Courtney, L. Title: Analysis of the Identification and Development of High Potential Employees Graduate Degree/ Major: MS Training and Development Research Adviser: Dr. Renee Surdick Submission Term/Year: December, 2011 Number of Pages: 56 Style Manual Used: American Psychological Association, 6th edition 'ri! I understand that this research report must be officially approved by the t;';aduate School and that an electronic copy of the approved version will be made available through the University Library website (:~ I attest that the research report is my original work (that any copyrightable I materials have been used with the permission ofthe original authors), and as such, it is automatically protected by the laws, rules, and regulations of the U.S. Copyright Office. STUDENT'S NAME: Courtney Middleton STUDENT'S SIGNATURE: DATE: 12-( 2-t/ /2J) I t ADVISER'S NAME (Committee Chair ifms Plan A or EdS Thesis or Field Project/Problem): Renee Surdick //1 I ADV18'ER'S tsignatulffi: _-tj.j-'7--~<a_~----,;_/, I J /!. /? ~ 7 (~/,po.: ~- /_...._ ~ ) DATE: /? J.- z_ -I I /J,/

3 3 Middleton, Courtney, L. Analysis of the Identification and Development of High Potential Employees Abstract As organizations consider succession planning and talent management efforts, it is common practice for many organizations to indentify candidates internally. Companies acknowledge the importance of developing their top performing employees in order to prepare them for future roles. This study examines emerging practices and methods for building upon employees that exhibit high performance and leadership in their current position, and have capacity for more responsible positions in the future. The report contains the attributes that define a high potential employee, with the processes and developmental practices used for developing high potential employees.

4 4 Acknowledgements I would like to take a moment and thank the people who have helped me tremendously throughout Graduate school. First, I would like to thank each of my professors in the Training and Development program for the passion, inspiration, and knowledge they have shared with me. Also, I would like to thank Brian Schmitz for all of his efforts throughout the survey distribution process. This paper would not have been possible without his dedication and expertise. I thank my advisor, Dr. Renee Surdick, for everything she has done to help me succeed. She is a mentor, and I am forever grateful for her knowledge and patience. Lastly, I would like to thank Derek for his support and encouragement. Thank you for always believing in me.

5 5 Table of Contents Abstract...3 Chapter I: Introduction...7 Statement of the Problem...7 Purpose of the Study...7 Assumptions of the study...8 Definitions of Terms...8 Methodology...9 Chapter II: Literature Review...10 Definition of High Potential Employee...10 Explaining the Need for Program...12 Identifying High Potential Employees...13 Developing High Potential Employees...14 Chapter III: Methodology...17 Subject Selection and Description...17 Instrumentation...18 Data Collection Procedures...18 Data Analysis...18 Limitations...19 Chapter IV: Results...20 Chapter V: Discussion...30 Recommendations...32 References...33

6 6 Appendix A: Survey Instrument...35 Appendix B: Tables...48 Table 1: Industries Participating in Survey...48 Table 2: Company Net Sales...49 Table 3: Reasons For Not Implementing a Program...50 Table 4: Methods Used to Identify High Potential Employees...51 Table 5: Methods Used to Develop High Potential Employees...52 Table 6: Reasons Employees Are Removed From Program...53 Appendix C: Figures...54 Figure 1: Overall Time Commitment for Program...54 Figure 2: Employee Assessment Traits...55

7 7 Chapter I: Introduction In 1947, XYZ Corporation started a tiny manufacturing shop in the Midwest. Over the next sixty-four years, the company grew from a small shop with only two employees, to a multinational corporation with over 2,300 employees. Today, corporate headquarters are still located in the Midwest; however, steady growth has resulted in additional assembly facilities spanning multiple states and reaching globally. Pending retirements can quickly push succession planning to the top of the priority list for a Human Resource team. Currently, an organization will spend three times the amount of money to recruit new employees than they will spend on retaining existing employees (Sirota, 2010). Many organizations are making the decision to shift their focus from recruiting strategies to retention strategies, to be prepared to internally move high potential employees into key leadership roles as they become available. With the pending retirement of many employees in leadership positions, and a continual surge in sales, XYZ Corporation has decided to take a proactive approach to Active Career Management and Succession Planning. XYZ Corporation stakeholders want to develop a sustainable high performing organization by identifying and developing high potential employees for leadership roles within the organization. Statement of the Problem Due to the upcoming retirement of many employees in leadership positions, XYZ Corporation is experiencing a lack of properly developed candidates to fill the open positions internally. Purpose of the Study The purpose of this study is to assess and understand the current methods used to identify and develop High Potential employees within various industries.

8 8 Assumptions of the Study Succession planning with active, organized, and focused career management programs is unique in nature; this study assumes that there are commonalities between organizations in which generalizations can be drawn. A second assumption is that respondents will be knowledgeable about which practices lead to a successful program based on prior experiences. It is important to gather information about which components are successful so that they can be examined to see if various practices or processes hold more promise in preparing high potential employees than others. Definition of terms Active Career Management: A practice utilized by organizations to assist with continuing growth and increased productivity by focusing on retaining and developing high performing employees. High Potential Employee (HIPO): An employee who exhibits high performance in their current position and shows potential to move into increased roles of leadership and responsibility within the organization. Succession Planning: The identification and development of high potential employees who are interested, available, and capable of internally filling management and leadership positions as they become available. Limitations The limitations of the study are as follows: 1. Participants must have a valid address to receive the survey 2. The study is limited to organizations in the Midwest with 500 or more employees 3. Participants who do not know specific survey answers may guess

9 9 4. Subjects may perceive the survey to be junk mail, therefore deleting it immediately Methodology Subjects will be chosen to participate in a benchmarking survey where they will be asked if they have a HIPO development program currently in use and if so, to explain the most successful practices within the organization. Subjects will be chosen from the Hoovers and Reference USA databases, using criteria of: Organizations who employ more than 500 employees Organizations within the states of Wisconsin, Minnesota, Illinois, Michigan, South Dakota and North Dakota. The cover letter, survey and informed consent will be ed to approximately 1,400 organizations in the Midwest. Responses will be analyzed and compiled. Findings will be presented to XYZ Corporation, and recommendations will be made regarding the implementation of such a program at XYZ Corporation. The following report includes a statement and overview of the problem, a review of literature related to high potential employees, methodology for the research, results, and finally, recommendations for further research on the topic.

10 10 Chapter II: Literature Review Many companies would benefit from attention and effort dedicated to various programs that identify and cultivate future leaders within the organization. A review of current literature indicates that there is a need for companies to have an effective program for identifying and cultivating high potential individuals, but little research exists on the actual process of identifying and developing such employees. Organizations are looking for employees who are not only great performers, but those who also have the interest and ability to move into leadership roles within the organization. High potential (HIPO) employees move into increased roles of responsibility, and they are viewed as the future leaders of an organization. HIPOs are rare, compiling only the top 3% to 5% of the total talent pool (Ready, Conger & Hill 2010). Definition of a High Potential Employee A review of literature revealed several commonalties when defining a high potential employee. The specifics may vary slightly depending on the industry and the organization; however the general requirements remain the same. Ready, Conger and Hill s (2010) article, Are You a High Potential? defines high potential employees as those who consistently and significantly outperform their peer groups in a variety of settings and circumstances. While achieving these superior levels of performance, they exhibit behaviors that reflect their companies culture and values in an exemplary manner. Moreover, they show a strong capacity to grow and succeed throughout their careers within an organization more quickly and effectively than their peer groups do (p. 80). High potential employees strive for excellence and build credibility through hard work and strong results. HIPOs tend to have excellent performance appraisals as they strive to go above and beyond every time. A high potential employee has a positive attitude and represents

11 11 the companies values and mission in an exemplary way. They are always willing to help out others in the organization succeed. HIPOs pick up new tasks and responsibilities quickly and efficiently; they enjoy the challenge of learning and conquering something new. They do well at new endeavors, and almost always will out-perform their peers (Zielinski, 2006; Ready, Conger & Hill, 2010). Sirota Survey Intelligence has been conducting employee attitude research since According to their Employee Engagement survey, employee engagement can best be defined as the extent to which employees think, feel and act in ways that represent a high level of commitment to the organization (Sirota Science: Employee Engagement, 2010 para. 1). Engaged employees will share their knowledge and skills to help the organization succeed as they care about the organization, and want to contribute to its success. Employee engagement and motivation can be described using the Three Factor Theory of Human Motivation in the Workplace (Sirota, Mischkind, and Meltzer, 2005). This theory states that employees seek three things from work: Achievement, Camaraderie and Equity. Employees desire to achieve something meaningful at work. They want to grow and develop their skills and they want to be recognized for their efforts. Employees are social beings who seek healthy interpersonal relationships at work (Sirota et al, 2005). The management and subordinate relationship, along with peer to peer relationships is crucial in creating and maintaining motivated, highly engaged employees. Leadership. Leadership is an essential attribute of high potential employees. HIPOs demonstrate integrity, humility and acumen; and are viewed by peers as passionate, curious visionaries who

12 12 are willing to take risks and willing to admit when they are wrong. They are respected, and viewed as role models to others. They are open-minded and people centered, trustworthy and results driven (Burke, 1997; Ready, Conger & Hill, 2010; Read, 2007). Explaining the Need for HIPO Development Programs The two most likely groups of employees to leave an organization voluntarily are the immediate managers and high potential employees (Sirota, 2010). Often, these are the groups who deal with the most organizational change, and therefore experience burnout or other dissatisfaction at work (Sirota, 2010). Common areas of dissatisfaction at work are culture, work environment, growth opportunities, and pay. When a high potential employee experiences dissatisfaction in any area of work, a HIPO will not hesitate to leave the organization in search of a job that will meet their satisfaction. A HIPO development program offers many benefits for the employee and for management. The process for employee development involves a strong partnership between management and HIPO. The development process provides benefits for both at risk groups. The HIPO gets an opportunity to grow and develop skills, while the manager now is being held accountable, and has a sense of ownership toward the outcome. Management and HIPO are challenged during the development process, and both must be engaged in order for the process to be effective (Cohen, Allen & Cromidas, 2010; Bettinger and Brown, 2009; Sirota, 2010). Recent studies have shown that employees are more likely to stay at an organization when they feel supported by their immediate manager (as cited in Giosan et al, 2005). A supportive work environment directly contributes to employee engagement. Moving a nonengaged employee to an engaged employee reduces probability of voluntary turnover by 87% (Bettinger & Brown, 2010). According to one study done in 2008, work environment and

13 13 culture was the single highest contributor to employee turnover, and the cost of turnover ranged from % of the exiting employees salary (as cited in Cascio, 2000). This reality is motivating companies to shift toward investing in retention programs rather than recruiting new hires. Identifying HIPOs While performance is a critical aspect to consider, it should never be the primary or only method of identifying candidates for a high potential program (Vona, 2010; Zielinski, 2006). Having clearly defined performance standards will help reduce bias and subjectivity. An employee with exemplary performance appraisals may not be HIPO material. Stay interviews are gaining popularity as a retention tool; however, a stay interview meets all of the criteria for a HIPO identification method as well. Stay interviews are parallel to an exit interview but instead of asking the employee why they are leaving the organization, management asks the employee why they stay with the organization. Stay interviews involve every employee in the department, and their immediate manager. During a stay interview, management can find out directly from the employee what they like and dislike about their current roles. The Stay Interview is a great time to sit down, one on one, and discuss with the employee development opportunities. Perhaps the employee is not challenged enough in their current role. Perhaps they are seeing themselves as that free agent and considering looking elsewhere for satisfaction. Simply sitting down with them and asking them how they feel about their job is in itself a retention strategy (Kaye & Evans, 2011; Finnegan, 2010). Employees have a desire to feel cared about and valued at work. If an employee states that they are yearning for more challenging work assignments, this is an ideal opportunity to get them involved in the HIPO development program. A particular study conducted in 2009 indicated that 24% of

14 14 employees who voluntarily left their job would have stayed if management would have offered them development or advancement opportunities (Bettinger & Brown, 2009). Assessments are a reliable and valid method to identifying HIPOs. Assessments are a way for potential high potentials to take multiple selection tests, and determine their qualification in various competencies like leadership or emotional intelligence (Burke, 1997; Zielinksi, 2006). These tests can be individual, group or self-assessment tests. Nominations are a great method to indentify HIPOs but should not be used as the primary or only form of identification. The downfall to nominations is that there the possibility of subjectivity and bias on behalf of the nominator. Many managers use the gut feeling as a method of identifying high potentials and this does not work. If an organization chooses to utilize nominations, management should be trained on how to spot these leadership qualities in their employees. A round table discussion takes place where an employee is only deemed a HIPO when round table consensus is reached (Zielinski, 2006). Developing High Potential Employees Once an employee is recognized as a high potential, they begin the process of development for leadership roles within the organization. Many companies have debated whether or not to inform the high potential of their status. While the reasoning for keeping the status private is to prevent others from feeling left out, the secretive status rarely remains so. Research has shown benefits to informing the HIPO of their status, as well as informing the HIPO if they are no longer being considered for the position. Reports state that on average, between 5% and 20% of employees who were initially labeled a HIPO, will not succeed in the development program (Ready, Conger & Hill, 2010). The development process requires a heavy commitment from management as well as the HIPO. During the development process, the HIPO must feel

15 15 trust, privacy and honesty from management and HR. They tend to have great ideas regarding how to make the organization better. It is wise to include them in decision making and allowing them to feel a sense of ownership for what happens in the organization. The HIPO and manager must establish what each of them hopes to gain from this experience. The HIPO should be informed of the pros and cons to having the status. Increased responsibility may result in higher pay and a promotion, but it may also mean less free time. It is also important to inform the HIPO of both developmental activities and the established timeframe to assist with personal planning. HIPOs are not on the list forever (Burke, 1997; Bettinger & Brown, 2009; Ready, Conger & Hill, 2010; Zielinski, 2006). HIPOs benefit from facing new and challenging situations. Role playing and challenging simulations help build confidence and engagement. HIPOs benefit from various forms of job rotation and stretch projects that are designed to intentionally place the HIPO out of their comfort zone (Chavez, 2011). Job rotation is an excellent tool used in training new management, but can also be very useful in developing high potentials (Bettinger & Brown, 2009; Burke, 1997; Chavez, 2011; Read, 2007; Zielinski, 2006). Job rotation gives the HIPO a wide variety of experiences, and exposes them to various parts of the organization. Intra-functional moves occur when a HIPO is rotated among several assignments within a focused area. Inter-functional moves occur when a HIPO is given experience in an area that is not in their primary focus of expertise. Mentoring can take place in many form and has shown itself to be a great tool for building talent (Chavez, 2011; Emelo, 2011; McCauley, 2007; Vona, 2010). There are multiple benefits to every type of mentoring. One is that mentoring provides the HIPO the opportunity to receive support and feedback from a trusted peer. Mentoring programs can be modified and designed to cater to the specific needs of the organization. HIPOs do well in group mentoring

16 16 situations, as this allows them to learn from each other as well as their mentor. Individual mentoring does not need to require years of commitment and thousands of dollars. Mentors and mentees can meet monthly for lunch or coffee, or just stop by the office and check in with each other. Reverse mentoring is gaining popularity with the surge of younger people entering the workplace. Reverse mentoring involves the subordinate mentoring the more experienced manager. They give management their opinions and share ideas and knowledge. It builds confidence in the HIPO and helps management improve areas of the organization (Vona, 2010). Evaluation of success. An appropriate evaluation method must be in place to measure the success of the HIPO program. Key decision makers must decide what criteria they will use to monitor the program and its effectiveness. The benefits of the program should be assessed in relation to productivity, employee retention and turnover, job satisfaction and engagement (Burke, 1997). According to Herzberg's hygiene factor, fair compensation will remove dissatisfaction at work, but it will not motivate (Bettinger & Brown, 2009). The two types of compensation most offered to attract and retain employees in the manufacturing industry are bonuses (40%) and above market pay (26%). In surveys about employee engagement and job satisfaction, compensation follows behind: exciting and challenging work, career growth opportunities and working with great people (Sirota, 2010; Bettinger & Brown, 2009; Jones, 2006). It is to be expected that if an employee has increased responsibility, their pay or bonuses should increase as well, however; it should not be used a motivator or to increase engagement. Considering a bonus or other forms of compensation could be used as a way to get management commitment and to ensure the success of the program.

17 17 Chapter III: Methodology Understanding what other companies deem as effective HIPO development methods will assist the researchers in identifying and describing cutting edge practices that will help organizations such as XYZ Corporation to develop responsive, effective, and sustainable career management programs. This chapter covers subject selection and descriptions, data collection procedures and analysis, as well as limitations to the study. The objectives for the study are as follows: 1. Define high potential identifiers and developmental activites. 2. Understand various practices that are currently being used by companies in the midwest to identify and develop high potential employees. 3. Explore methods that hold promise for being an effective practice in developing high potential employees at XYZ Corporation. Subject Selection and Description Subjects were selected to participate in the survey using both Reference U.S.A. database and Hoovers database. In order to be chosen to participate in the survey, participants must match the deteremined criteria. The survey was sent to a total of 1,484 Human Resources professionals currently working in organizations that consist of 500 employees or more; and are located in the states of Wisconsin, Minnesota, Illinois, Michigan, South Dakota and North Dakota. For the purpose of this study, researchers did not specify industry, tenure or sales revenue criteria. Subjects who met the criteria from the two databases were sent an introductory letter, informed consent letter, and survey via . The introductory letter contained important information regarding the background and significance of the study, and the timeline for completion of the survey should they choose to participate.

18 18 Instrumentation A survey was designed for the purpose of this study. Survey questions included openended, ranking, and multiple choice. The questions were aimed at determining if 1) the respondent had a program in place, and 2) what were the most effective practices in identifying and developing high potential employees in their organization. Data Collection Procedures A 32 question survey was administered to subjects chosen from the databases. The survey, introductory letter, and consent form were sent to participant s addresses. Respondents were given six weeks to complete the survey via Qualtrics. Respondents were first asked if they had a systematic approach to identify and develop employees deemed high potential. If they indicated that they did not have a program in place, the survey prompted them to provide their reasoning for not having a program in place, and to specify their industry. If respondents indicated that they did have a program, they were prompted to move ahead with the survey. The main purpose of the survey was to uncover what methods were the most commonly used in identifying and developing high potential employees, what challenges organizations faced when implementing such programs, and which industries are more likely to apply high potential development programs. Data Analysis Upon completion of the survey, data was automatically recorded and entered into the research software program Qualtrics; where results were tracked and analyzed. All results were anonymous, unless the respondent indicated that they were interested in follow up contact. Results from each question were entered into either table format or displayed in a figure. Limitations

19 19 The limitations of this research are: Broad survey respondent criteria Outdated or invalid addresses provided by the databases Voluntary participation in the survey Survey responses are anonymous

20 20 Chapter IV: Results The purpose of this study is to explore and understand methods currently used in organizations to identify and develop high potential employees. High potential employees are defined as those who perform well in their current role, and are capable of more responsible roles in the future. The survey was sent out to 1,484 Human Resource professionals in the Midwest who employ at least 500 employees. The survey was sent electronically and respondents had six weeks to complete the survey and submit it through Qualtrics. In total, 39 respondents returned the survey. This resulted in a 2.6% return rate. The survey responses were analyzed using Qualtrics computer software and theme identification. Theming is the process of grouping of grouping together similar responses to gain an overall feeling about a topic. Seven questions and their responses have been eliminated from this report as they were added per request of the industry partner and do not provide any relevant information on the identification and development of high potential employees. This chapter examines the qualitative data that was received. High Potential Employee Program Survey Responses A 32 question survey (Appendix A) was administered to participants. Qualitative results were analyzed using the Qualtrics software program. Some responses have been grouped using theming. Participants were asked to provide some information about their company. The results of the survey indicated that multiple industry sectors shared their insight on current practices of providing high potential employee development.

21 21 1. Please indentify your industry. Majority of the respondents (see Table 1) indicated that they worked in manufacturing, the healthcare industry, and other industries (education, hospitality, and entertainment) industries. 2. What were your net sales in 2010? Majority of organizations indicated that had net sales greater than one billion dollars (see Table 2). 3. Do you have an international presence? Yes: 62% No: 38% 4. Do you have multiple U.S. locations? Yes: 57% No: 43% 5. Do you currently have a systematic approach for the development of high potential employees within your organization? Majority of respondents (75%) indicated that they currently have a systematic approach in place to identify and develop high potential employees within the organization. 6. What best describes your reason for not having a program? (Check all that apply) Of those respondents who indicated that there was not a program currently in place, majority (see table 3) stated other priorities in the organization took precedence. Respondents also indicated that such a program was under consideration.

22 22 7. What methods do you use to identify high potential employees in your organization? (Check all that apply) A vast majority (94%) indicated that performance appraisals were an instrument used to identify high potential employees. Other commonly used methods include career mapping and nomination by consensus. Other methods (see table 4) are defined as key project assignments, annual talent reviews, and annual management development and planning process meetings. 8. Do you inform the high potential employee of their status? Yes: 69% No: 31% 9. What methods do you use to develop high potential employees? (Check all that apply) Results show that internal development activities like training, workshops and meetings are among the most widely used methods to develop employees (see table 5). In addition, employers use increased responsibility and mentoring when developing high potential employees.

23 What is the overall time commitment per employee in the high development program? The time required to complete the development program varies. Majority of respondents (see figure 1) indicated the program takes one to two years to complete. Some organizations require more than two years to successfully complete the program. 11. From a time management perspective, how do employees devote their time to participate in developmental activities? From a time management perspective, 73% of employees devote additional time to developmental activities along with their current job duties. This can require additional hours at work. Forty seven percent report that a portion of the employee s time is freed up to participate in various activities, and thirteen percent indicated that the employee is pulled almost entirely out of their current role in order to participate in developmental activities. Seven percent stated that the amount of time devoted is dependent on the need of participation required for specific activities. 12. How are high potential employees monetarily rewarded for their efforts? (Check all that apply) Majority of employees (86%) are rewarded for their efforts with opportunities for pay increases and adjustments. Forty three percent are rewarded with pay adjustments, 29% are given bonuses, and 14% are rewarded with paid time off. 13. Do you inform the employee if they are removed from high potential status? Yes: 54% No: 46%

24 What are the reasons employees are removed from high potential status? Most of the respondents (see table 6) indicated that an employee is removed because they lack the skill/ability to effectively perform their job with increased responsibility. Others commonly cited that the employee voluntarily withdrew from the program or voluntarily left the organization. 15. What percentage of your professional staff do you identify as high potential annually? Respondents reported that on average, 17% of their professional staff were identified as high potential employees each year. 16. What percentage of positions is filled by internal promotions? On average, 40% of open positions are filled by internal promotions. 17. Please summarize your high potential identification process. Employee s assessment traits (see figure 2) Annual performance review Observation of employee s work performance, level of engagement, work ethic and values Nomination Interview with Human Resources Ability to relocate Career pathing Training, seminars Mentoring Job rotation

25 Which tools do you use to help indentify high potential employees? Performance Reviews Peer Assessment 360 Assessment Executive Assessment External Assessment (books and online tools) Group and individual interview Learning Matrix Personality Inventory Ranking Succession Planning 18. What percentage of employees successfully completes your program? On average, 47% of employees who begin the high potential program, complete the program successfully 19. What are the fundamental components that make your program successful? Clear path to success Training and Development Employee s ability to deal with the pace of the program Communication Management s involvement Peer mentoring Awareness of goals Consistency

26 26 Support from management Correct employee selection Drive Engagement Management assessment Management visibility Realistic projects Understanding role Succession planning 19. What are the greatest challenges in the high potential employee development process? Finding additional time to develop employees Money/Resources Finding mentors Relocation Turnover/Costs of training Commitment/Motivation Formalizing/Program consistency Lack of objectivity Realizing potential/engagement 20. How do you evaluate the effectiveness of your program? Rate of promotion 360 Feedback Performance Evaluations

27 27 Employee retention/turnover Percent of employees who successfully complete the program Survey Interview The following data assesses the role that different departments/positions take for each activity in the high-potential employee development process. The activities involved in the employee development process are: Support employee development Employee selection to participate in program Training Mentoring Assigning jobs Creating a development plan Implementing the development plan Monitoring progress Accountability for employees success Respondents were asked to indicate whether the department leads the activity and is responsible for program implementation, is engaged and actively involved in the activity, or informed and has knowledge of the activity. 21. Explain the role of the Human Resources department in the high potential employee development process. The primary role of Human Resources (HR) is to lead the development process, and to

28 28 remain highly engaged throughout. The HR team assumes a leadership role in the selection and development of high potential employees. This includes leading the creation of the development plan: training, mentoring and job assignment. The HR department remains highly engaged regarding the implementation of the development plan, as well as accountability for employees success in the program. 22. Explain the role of the CEO/President in the high potential employee development process. The CEO/President remains highly informed in all aspects of the process, including: Employee selection Training Mentoring Assigning jobs Creating the development plan Implementing the development plan Monitoring employee progress Accountability for employee success 23. Explain the role of Executives (Vice President/Director) in the high potential employee development process. The role of Executives is to lead the selection of employees, and to support their development throughout the process. Executives lead training and mentoring, and are engaged in creating, implementing, and monitoring the development plan. They are engaged regarding employee success in the program. 24. Explain the role of Front Line Supervisors in the high potential employee development process.

29 29 The role of Front-Line Supervisors is to lead in employee selection, supporting employee development, mentoring and job assignment. Front-Line Supervisors are held highly accountable for the success of employees participating in the development activities. Front-Line Supervisors are engaged in the creation, implementation, and monitoring of the program. 25. Explain the role of Management in the high potential employee development process. The role of Management is to provide leadership throughout the process. Noted leadership is especially apparent in the creation and implementation of the development plan. Managers play a significant role in assigning jobs to employees, and monitoring the progress each high potential is making in the program. Managers are held accountable for the success of employees participating in the program. Management consistently remains engaged in supporting employee development, training, and mentoring.

30 30 Chapter V: Discussion The purpose of this study is to explore and understand methods currently used in organizations to identify and develop their high potential employees. A 32 question, online survey was sent to organizations in the Midwest who employ at least 500 people. The survey included questions regarding the current processes used in the identification and development of employees who are performing well in their current roles, and are capable of more responsible roles in the future. Limitations The limitations of this research are: Broad survey respondent criteria Outdated or invalid addresses provided by the databases Voluntary participation in the survey Survey responses are anonymous Conclusion The survey results proved to align well with the findings in the literature review. The literature review offered excellent insight into what characteristics comprise a high potential employee with traits like leadership, engagement, motivation and performance. In addition, the literature defined possible methods that could be used to prepare employees for roles with increased responsibility with activities like mentoring, job rotation, assessments, and stretch assignments. Current literature provided an excellent overview of the parts of the process, but lacked the ability to provide insight into the process as a whole. The literature was not specific to industry, location, or company size. This research attempted to examine the process as a whole in relation to industry, company size and location. Although the response rate was lower

31 31 than hoped for, the results of the survey provided some very interesting insight into the holistic processes that organizations are using to identify and develop their high potential employees. The primary industries that participated in this study were Manufacturing, Construction, Wholesale/Retail, Healthcare, Education, Hospitality, and Entertainment. Majority of respondents (70%) indicated that they do in fact have a systematic approach to identifying and developing high potential employees in the organization. The most common approach for identifying these special employees includes performance reviews, nominations, interviews and assessments. Common development activities are comprised of additional training, workshops, seminars, tasks with increased responsibility, and involvement in a mentoring program. In order for a program to be successful, the employee must have a clear understanding of the path to success, and be willing to participate in the training and development activities. In addition, open communication, clear goals, and management involvement are crucial components to program success. The greatest challenge to program success is the additional time that is required by the employee and management. Sometimes the employee s time is freed to allow for participation in developmental activities, but most often, the activities must be done in addition to the employee s already busy day. If an employee is removed from the program, it is most often because they lacked the required skill and ability to perform well in roles with increased ability, or the employee voluntarily withdrew from the program for various reasons. Program effectiveness is determined by the rate of promotion, performance evaluations, surveys, interviews, employee retention, and turnover.

32 32 Recommendations This study provided a look at the whole process of a high potential development program from a quantitative perspective. The survey has successfully examined how organizations identify and develop their top talent. Going forward, an examination of qualitative research will provide insight into the why. A suggestion for further research would include face to face or phone interviews with HR professionals who have a successful development program in place. This would allow the researcher to understand the process on individual levels. Processes that work well for one organization may not work well for another. Another suggestion for further investigation is to conduct a focus group comprised of all departments involved in the high potential development program. The focus group should include HR, management, executives and high potential employees. This could provide insight into how employees at all levels feel about the program.

33 33 References Bettinger, J., & Brown, S. (2009). The talent vacuum-keeping your best talent in a downturn. AACE International Transactions, Brohaugh, B., & Ferguson, R. (2009). The talent wars: a case study. Journal of Consumer Marketing, 26(5), doi: / Burke, L. (1997, March/April). Developing high potential employees in the new business reality. Business Horizons, Chavez, J. (2011). The case for succession planning. Strategic Finance, Conger, J., Hill, L., & Ready, D. (2010). Are you a high potential?. Harvard Business Review, Emelo, R. (2011). Creating a new mindset: guidelines for mentorship in today's workplace. Training and Development, Eriksson, T., & Ortega, J. (2006). The adoption of job rotation: testing the theories. Industrial and Labor Relations Review, 59(4), Finnegan, D. (2010). Before it's too late: the stay interview. Proceedings of the SHRM retention institute (pp. 2-25). Retention Institute. Jones, J. (2006, August 7). Personal fulfillment frequently cited as a top job like. Retrieved from Kaye, B., & Jordan-Evans, S. (2011). Stay interviews: the leader's role in engaging and retaining talent. Leader to Leader, 2011(59), McCauley, R. (2007). Building a successful mentoring program. The Journal For Quality and Participation,

34 34 New retention strategy: focusing on individuals. (2001, January). Harvard Business School, 6(1), 1-4. Predicting pent up turnover. (2010, September). Sirota Survey Intelligence, Read, S. (2007, November 15). Coaching high potential employees [Web log message]. Retrieved from Top notch retention strategies for these tight-money times. (2002, December). Compensation and Benefits for Law Offices, Vona, M. (2010). The seven tall tales of talent management. Aon Hewitt, Zielinski, D. (2006). Best and brightest. Training, 43(1),

35 35 Appendix A: Talent Development Survey Thank you for participating in our survey. UW Stout and its industry partner recognize your time and input are very valuable. We anticipate this survey should take you approximately 20 minutes to complete. Definition for a high potential employee: An employee who exhibits high performance and leadership in their current position and is capable of more responsible positions in the future. Q2 Please identify your industry Manufacturing Construction Wholesale/Retail Transportation Communication Business and Finance Healthcare Agriculture Internet Transportation Non-Profit/Government Services Energy/Utilities Insurance

36 36 Other: Q3 Number of full time employees Hourly Salaried Q4 Company net sales Less than $1m $1m - $5m $5m - $25m $25m - $50m $50m - $250m $250 - $500m $500 - $1b Greater than $1b I prefer not to answer Q5 Do you have an international presence? Yes No

37 37 Q6 Do you have multiple U.S. locations? Yes No Answer If Do you have multiple U.S. locations? Yes Is Selected Q7 How many locations do you have in the US? Q8 Do you currently have a systematic approach for the development of high potential employees within your organization? Examples of systematic approaches include Assessment, Nominations, Interview, Job rotation, Mentoring and Performance appraisals. Yes No If Yes to Q8, survey skips to Q 10, if No to Q8 this question will appear Q9 Please indicate which of the following best describe your reasons for not having program Other priorities take precedence Do not see as a critical need in your organization Tried in the past with limited to no success Cost Prohibitive Too many roadblocks Not yet fully implemented Under consideration

38 38 Other (please explain) Then Survey Skips To Q31 Q10 What methods do you use to identify a high potential employee in your organization? (Check all that apply) Performance appraisals Interview (stay interview) Assessments (personality, IQ, emotional intelligence, leadership, worker type) Nominations (round table consensus) Job matrix (career mapping) Other (please explain) Q11 Do you inform the high potential of their status? Yes No Q12 What percentage of positions are filled by internal promotions? Q13 What percentage of your professional staff do you identify as high potential annually? Q14 Please summarize your high potential identification process.

39 39 Q15 What methods are used to develop high potential employees? (Check all that apply) Internal development activities (training, workshops, meetings) External development activities (retreats, immersion workshops, seminars) Specialized career paths Simulations (action learning) Job rotation Lateral moves Increased responsibility Mentoring (group or individual) Stretch assignments Other (please explain) Q16 What is the overall time commitment per employee in the high potential development program? Less than 6 months 6 months - 1 year 1-2 years Greater than 2 years Q17 How do employees participate in developmental activities? (Check all that apply) Additional work along with their current job responsibilities, A portion of employee's time is freed up to participate Employee focuses almost completely on the developmental activities

40 40 Other (please explain) Q18 Indicate all methods high potential employees may be rewarded for their efforts (check all that apply) Additional opportunities for pay increase(s) Pay adjustment Bonus Time off Other (please explain) Q19 What percentage of employees successfully complete your program Q20 Do you inform the employee if they are REMOVED from high potential status? Yes No Q21 What are the reasons employees are removed from high potential status? (Check all that apply) Employee lacked required skill/ability to perform with increased responsibility. Employee couldn't balance development activities & current responsibilities Management couldn't support development activities with current responsibilities. Progress wasn't made within the established timeframe. Financial support was reduced/eliminated.

41 41 The employee voluntarily withdrew from the program Program supporters (management, mentors, H.R.) left organization. The employee left the organization voluntarily Other Q22 How do you evaluate the effectiveness of your program? Q23 Please list the fundamental components that makes your program successful Q24 What are your biggest challenges in this process?

42 42 Q25The following questions will help assess the role of different departments in the High Potential Employee Development Process For each activity, please select one of the following: Lead - Responsible for program implementation Engaged Has information/capability for program success Informed - Informed of results of program Q26 What role does human resources play in the development process? Lead Engaged Informed Not Applicable/Don't Know Support employee development Employee selection Training Employee mentoring Assign/create job assignments Creation of development plan Implementation of development plan Monitor progress Accountable for success of employee

43 43 Q27 What role does the CEO/President play in the development process? Lead Engaged Informed Not Applicable/Don't Know Support employee development Employee selection Training Employee mentoring Assign/create job assignments Creation of development plan Implementation of development plan Monitor progress Accountable for success of employee

44 44 Q28 What role do executives (CFO, VP's, Directors) play in the development process? Lead Engaged Informed Not Applicable/Don't Know Support employee development Employee selection Training Mentoring Assign/create job assignments Creation of development plan Implementation of development plan Monitor progress Accountable for success of employees

45 45 Q29 What role does management play in the development process? Lead Engaged Informed Not Applicable/Don't Know Support employee development Employee selection Training Mentoring Assign/create job assignments Creation of development plan Implementation of development plan Monitor progress Accountable for success of employee

46 46 Q30 What role do first line supervisors play in the development process? Lead Engaged Informed Not Applicable/Don't Know Support employee development Employee selection Training Mentoring Assign/create job assignments Creation of development plan Implementation of development plan Monitor progress Accountable for success of employee

47 47 Q31 I am interested in receiving the results of this survey Yes No Q32 I would be interested in additional contact for a follow up interview Yes No Q33 I would like my responses to remain confidential from the industry partner Yes No We thank you for sharing your insight and experiences.

48 48 Appendix B: Tables Table 1 Industries Participating in Survey Answer Response % Manufacturing 10 45% Construction 0 0% Wholesale/Retail 1 5% Transportation 1 5% Communication 1 5% Business and Finance 0 0% Healthcare 4 18% Agriculture 0 0% Internet 0 0% Non- Profit/Government 2 9% Services 0 0% Energy/Utilities 0 0% Insurance 0 0% Other: 3 14% Total %

49 49 Table 2 Company Net Sales Answer Response % Less than $50m $50m - $250m $250 - $500m 0 0% 4 22% 2 11% $500 - $1b 0 0% Greater than $1b I prefer not to answer 7 39% 5 28% Total %

50 50 Table 3 Reasons for Not Implementing a Program Answer Response % Other priorities take precedence 5 56% Do not see as a critical need in 1 11% organization Tried in the past with limited 0 0% success Cost prohibitive 1 11% Too many roadblocks Not yet fully implemented Under consideration Other (please explain) 0 0% 2 22% 4 44% 1 11%