TALENT MANAGEMENT FASHION, EVOLUTION OR REVOLUTION?

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1 Journal of Information, Control and Management Systems, Vol. 7, (2009), No TALENT MANAGEMENT FASHION, EVOLUTION OR REVOLUTION? Miroslav PALKA Silesian University in Opava, School of Business Administration in Karvina, Institute of Doctoral Studies, Czech Republic [email protected] Abstract This article deals with the issue of talent management in companies. The basic terminology is explained. Emphasis is placed on understanding the historical development of talent management, using historical experience in today's turbulent period. It also provides an insight into a system of talent management in the Baťa management system which was from the historical point of view a pioneering one. Keywords: Talent, Talent management, Baťa management system 1 INTRODUCTION At present, when the companies from one day to the next got from the situation of the lack of people to the situation of their surplus, it is very important to recognize the fact that the value of the company is determined not only by financial assets but more and more by people. Being bearers of knowledge capital, they form the company as the only ones who can reverse the development and even in times of crisis they can ensure the survival of companies [16]. 2 DEVELOPMENT OF HUMAN RESOURCES MANAGERS ROLES As indicated by experts from the consulting firm Bersin & Associates [1], the role of human resources managers has gone through the rapid development in the world in the last decades. It started with the role of the personnel department in the 70s and 80s of the last century, whose main features were to search for employees, calculate and pay their wages and provide necessary benefits, i.e. they did only simple business functions. In the second stage, in the 80s and 90s of the last century, they started to perform more of Human Resources (HR) functions, which were much more interesting - they

2 156 Talent Management Fashion, Evolution or Revolution? became business partners and carried out particularly strategic human resources management. Recruiting the right employees, training them, describing their job roles and setting an organizational structure became priorities. At the same time they were creating compensation packages, including mainly benefits, share options, bonuses, etc. Nowadays a new era is beginning - talent management seeking answers to strategic questions has been discovered: How can we streamline the recruitment process? How can we better develop managers and leaders to reinforce culture? How can we quickly identify the competency gaps so that we can deliver training and development programs to fill the gaps? How can we manage people in a solid and measurable way? How can we identify high-successors for key positions? How can we train significantly, flexibly, appropriately and timely? I have used the term talent management in this text. So what is talent management then? We have already encountered the fundamental questions, answers to which it seeks. The question is WHAT we can imagine if we come to this term. There are several definitions. But, first of all, we should answer the question of WHO we can imagine if we think of a talent : TALENT is a gift or ability understood as the possibility, potential or ability that predetermine the individual to extraordinary intellectual, artistic, sporting and other achievements [4]. To meet our needs we need to look for other definitions of talent, for instance TALENT is: A worker whose share of the performance is higher than required and the value they create for customers and shareholders exceeds the standard. It is an employee with a high potential who has very good prospects for further professional growth in new areas [5]. A man who easily handles the tasks and activities and who without any effort excels in solutions and the way of their implementation as to ideas, quality, costs and time [6]. An employee who is expected to bring long-term growth of benefits into the area of trade, production or service activity (and it's not 100 % committed only to age) [7]. In corporate practice, TALENT means the ability to achieve sustainably abovestandard performance - that is what corporate practice requires, measures and values [8].

3 Journal of Information, Control and Management Systems, Vol. 7, (2009), No As the management Guru Stephen Covey [9] says, the vast majority of workers in an organization is equipped with far greater ingenuity, skills, talent and creativity than their current job requires. And talent management is precisely about that to find people who abound in sufficient potential in all areas (organization, work, personality, management, etc.) and they serve the company with such potential to improve its results. According to the consulting firm DDI, the simplest definition of talent management is: Recruitment, development and retention of people, planned in line with the organizational flow and future objectives of the company [10]. According to the HAY Group [11], talent management means ensuring exceptional performance of the organization through identifying, acquiring, developing and motivating talents and caring about them. Talents in this case are those workers who are able to hold key positions in the near future as well as from the long term point of view. For companies the term talent management mostly means finding talent outside the organization or eventually within graduate recruitment in schools and then subsequently hiring them for their companies. In their system of talent management, companies seek to take into account its strategic framework with its values, strategy as well as the strategy for managing people. They do not forget to select talents and then they apply their deployment in various forms, particularly bearing in mind evaluating the results of working with talents. The better ones do not only look at individual results, but they seek to measure the contribution of talents to the performance of the business. Talent management is not isolated from other management systems in an organization; it is not so simple and straightforward but it is placed at the level of development strategies and it is incorporated directly into the company s vision. Mutual interactions occur among the components of this model. The management of talent performance is in the very heart of these interactions which is a substantial part of the entire talent management. After all, a new era also corresponds with the views of Michaels [2], who had previously published views of the old and the new reality:

4 158 Talent Management Fashion, Evolution or Revolution? Table 1 The old and the new reality in management Old reality New reality People need companies. Companies need people The advantages are machines, The advantage is talented staff. technologies and geographic location. Employees are loyal and work is People are mobile and their commitment guaranteed. is for a shorter time. People accept standard packages they are People expect more. offered. Work is rare. Talents are rare. This implies that it is not a revolution - it is a natural development and talent management plays a vital role in it. This confirms the paramount role of people in the business because the market value, as Dvořáková [3] also suggests, particularly consists of the financial capital and intellectual capital: Market value Financial capital Intellectual capital Human capital Structural capital Customer capital Organizational capital Innovation capital Process capital Figure 1 Structure of the market value of the company 3 EVOLUTION OF MANAGING TALENTS Talent management itself is a relatively new professional term which emerged in 1997 and was first used by experts of the consulting firm McKinsey & Comp. - Ed Michaels, Helen Handfield-Jones and Beth Axelrod in his study with the same name. This means the process of developing and supporting new staff through their selection, development and retention. The term talent management also means different approaches to different people. Companies also try to make work attractive to highly skilled workers from other companies with the objective of getting them into theirs. In my opinion we can identify (so far) 3 stages in the era of talent management: 1. "Prehistory" of talent management which can be dated back to the end of the 1920s it was a booming period of Baťa management system in the former

5 Journal of Information, Control and Management Systems, Vol. 7, (2009), No Czechoslovakia. It was the period when the world had not a clue about management, not to mention talents... As Kudzbel [12] states, those who in the Baťa companies demonstrated that they know and want to work, they were given the possibility to realize themselves. The most important posts were assigned (by Baťa) to their own employees who had been systematically prepared. Business philosophy of Tomáš Baťa focused clearly on a man. After all, professor Zelený also gives evidence of this in his monograph [13] where he states that the lack of leading people with great character, will and knowledge was critical even in the Baťa s era. He finally decided to train them by himself and founded his well-known school of work. Tomáš Baťa was indeed a visionary with ideas and thoughts that went far ahead - in this case 70 years ahead. This system of talent management uniquely combined elements of recruitment and selection of future employees as Baťa s choice started with appropriate types of people for his schools. They then had the opportunity to develop their potential (talent) at work. They were monitored and motivated and best of them got the opportunity to climb up the corporate ladder to get higher, more demanding and better paid jobs. 2. The period of earliest beginnings of talent management - from 1997 lasting approximately 10 years in the world (in our country Slovak republic and Czech republic - majority of firms are currently still at this stage, with several exceptional companies with foreign capital investment). In this case it is a simplified model of talent management - talents were sought from outside, particularly from the student s environment or if necessary companies tried to get the best and prepared people, often at any price. They focused their efforts on the potential outside their own company. After recruitment or eventually selection of people, hiring them, their deployment in the company and adaptation followed. Most of the time there were not sophisticated managing systems. Very soon, however, companies found out that the system only increased costs (salaries, employee search etc.) and at the same time it did not ensure employees loyalty, their development and especially - to ensure purposeful and sustainable use of their potential. 3. Inevitably a further period of talent management, which is in the developed world today, had to come. Even the time of economic crisis contributed to the fact that firms have started to save costs (though there is a very important and considerable contradiction in the fact that in the current situation there is a surplus availability of staff and therefore the search and the establishment of them within their own firms could be more efficient and cheaper...). This fact had already been reflected abroad earlier and more systems of talent management began to focus on finding talent within the organization and the following work with them. The point in this case is that not only personnel managers can be involved in the whole system, as it was in the previous model. It is a broadly-based model coming from the company s strategy and human capital management strategies. I am deliberately using the term

6 160 Talent Management Fashion, Evolution or Revolution? human capital and not resource because working with people is becoming a strategic activity for managers at all levels of management. All employees must be regularly assessed by systematic work of managers, not only in terms of their performance but especially in terms of their potential which they can deliver. Based on this assessment a bank of talents is created and it is necessary to work with them further - personal development plans are created, they are involved in training activities and internal projects so that they are given the possibility to grow personally and professionally even in their initial job position. Such employees are ready then for more challenging positions in the company and their loyalty is increasing. As a matter of course this evaluation process does not stop here. A system of regular staff performance assessment continues to be in practice and, moreover, a system of evaluation of talent management efficiency, achievement of competencies of employees or using the potential must be introduced. The superior cannot manage such techniques by themselves but in such an evaluation system also other employees are involved. This evaluation is connected with the company s performance ratings as talent management here is not just for achieving efficiency and performance of individual employees but mainly because of increasing efficiency of the whole company. 4 TALENT MANAGEMENT FASHION, EVOLUTION OR REVOLUTION? If we return to the initial question from the title of this article, we should answer the fundamental question of whether talent management is fashion, revolution or evolution. First of all we must be aware of the importance of these concepts: FASHION - from Latin modus means rate, image or method. In a broader sense it is unstable and transient popularity, largely based on the outer expression [14]. EVOLUTION - development, the idea that changes of things are part of the longterm and coherent changes that lead to a certain direction. It's an overall vision of the world as continual evolution towards more complex forms in nature, culture, etc. It is a gradual development seen as development for the better [15]. REVOLUTION - means a generally sudden and substantial change in a system or subsystem. It is a breaking point of development, a radical solution to accumulated and still unsolved problems; it leads to constitution of the new conditions, assumptions, methods of organization and the like [14]. Following the above mentioned it is clear that: 1. Talent management is a MUST for companies these days and it is not in any case a FASHION - despite fashion tends to return after years. Historical and lasting success of the Baťa company says clearly that a well managed and

7 Journal of Information, Control and Management Systems, Vol. 7, (2009), No sophisticated system of searching, selection, promotion and motivation of people is a guarantee of good performance and company s success. 2. Talent management was a REVOLUTION in its prehistory, i.e. in the Baťa era, as I have already suggested. Unfortunately for many domestic companies it is not over yet because in many cases there were neither developed nor implemented even the basic tools for a continuous increase of the human capital value. 3. The current talent management is an EVOLUTION from the perspective of the historical development it has come into this stage gradually by improving techniques, procedures and tools simultaneously with understanding and realizing the value of a human in society. 5 CONCLUSION Why is it important to know the historical patterns of development of views on management? Also the published example says that it often pays back to return to the prehistoric times and see that what is being worked out rather massively nowadays can be applied from one s own available resources proved by years of functioning. Moreover - Baťa has built its system purposefully for many decades, it is substantially linked to our culture and 70 years of application the main ideas of this system confirm, that it is still valid for today's practice. The question is how the system will be developing further. It will definitely be more complex. A link to the corporate strategy will be even tighter; it will be much more insisting on going after competencies of staff and individual contributions of employees to increasing the company s performance to which they will be well motivated. It will also increase the pressure on possibly fastest application of talent management with provable results it is also indicated by the reality that there are quite many software tools for evaluating talents on the today s market which means that the future will be mainly about this. Acknowledgement This article represents one of the outputs of scientific project SR VEGA č. 1/0149/09. REFERENCES [1] [2] MICHAELS, E., HANDFIELD-JONES, H., AXELROD, B.: The War for Talent. McKonsey & Comp., Inc ISBN [3] DVOŘÁKOVÁ, Z.: Management lidských zdrojů. Nakladatelství C.H.Beck, Praha ISBN [4] PAULIČKA, J. a kol.: Všeobecný encyklopedický slovník S-Ž. Ottovo nakladatelství Cesty, Praha ISBN

8 162 Talent Management Fashion, Evolution or Revolution? [5] SVÁKOVÁ, A.: Talent management. Materiály z workshopu Deloitte, Bratislava [6] DENCI, J.: Zamestnanci sú naše talenty využime to! Personálny manažment, vydavateľstvo Raabe, PM [7] MŘ, 4/2009, príklad z praxe Hartmann Rico. [8] MÍKA, F.: Zaostřeno na talenty. HR Forum, březen [9] [10] [11] Prieskum prístupov k talent manažmentu. HAY Group [12] KUDZBEL, M.: Baťov systém riadenia. Marada Capital Services, Bratislava ISBN [13] ZELENÝ, M.: Cesty k úspěchu Trvalé hodnoty soustavy Baťa. Nakladatelství Čintámani, Zlín ISBN [14] PAULIČKA, J. a kol.: Všeobecný encyklopedický slovník M-R. Ottovo nakladatelství Cesty, Praha ISBN [15] PAULIČKA, J. a kol.: Všeobecný encyklopedický slovník A-F. Ottovo nakladatelství Cesty, Praha ISBN [16] VODÁK, J.: An Anpoach to Measuring the Return on Investment in the Area of Human resources, Ekonómie a Management. TU Liberec 1/2006. ISSN