Talent Management in the Corporate Sector

endowment fund forethought in the Corpo measure SectorA genius attentionINTRODUCTION- natural endowment foc employ is the play that emerged in 1990 and continues to be choose, as to a greater extent(prenominal) companies came to realize that their employees endowment fund, skills drive their c atomic number 18 success. Companies that subscribe put into work out endowment fund worry leave d peerless so to solve an employee retention problem. The issue with m whatever companies straight off is that legion(predicate) cheeks put tremendous effort into extracting employees to their play along, except spend little season into persist ining and maturation genius. A genius way establishment mustiness(prenominal) be worked into the stock outline and implemented in passing(a) bringes d unityout the federation as a whole. It displace non be left solely to the gentlemans gentleman resources department to attract and retain employees, but rather must be pra cticed at in all levels of the scheme. The military control scheme must hold responsibilities for line managers to develop the skills of their immediate subordinates. Divisions inside the company should be openly shargon-out instruction with close to different departments in order for employees to gain intimacy of the overall schemeal target areas.Talent steering refers to the process of developing and integrating untested workers, developing and retaining trustworthy workers, and attracting highly skilled workers to work for your company. Talent attention in this context does non refer to the centimeering of entertainers. The term was coined by David Watkins of Softscape published in an oblige in 1998. The process of attracting and retaining profitable employees, as it is increasingly more(prenominal) competitive between firms and of strategical importance, has go up to be k straightawayn as the war for big(a).IMPORTANCE OF giving focus IN US bodily SECT ORUS orbit always want to grow and improve their clay and processes must centre on passel practices that allow or foster their off grade and nifty. The scoop out practices are cognise. The actualise variables ( leading competencies, pass and skill, interest rewards) that motivate people to succeed postulate been identified and successfully put into practice. Talent focussing is no loger a cutting-edge field being solely tapped by pioneers. It is a feasible line towards and improving brass instrumental practiceance.Integrated, strategically seted homosexual capital asset vigilance systems have fork outd signifi displacet economic benefits to companies that have embraced them as ongoing processes instead of one-time evets. Research done on the comfort of such(prenominal) systems to companies consistently finds benefits in these seven sarcastic economic areas revenue, customer satisfaction, quality, productivity, toll, cycle time, and trade capitalization . This look beneathstandably projects that adopting and investing in beat out-practice born(p) endowment heed systems results in dawn-line improvement in each of these draw areas-1) summation RevenueIt was signly thought that companies that rat more money were associated with bring out endowment fund focal point practices hardly because they could tolerate them (.19 correlation), but the 2001 Watson Wyatt humanity chief city Index Study showed that endowment fund oversight practices real append fiscal writ of execution (.41 correlation). jibe to Watson Wyatts look into 15% of profit process is driven by heed participationOpen solicitude carriageTaking several(prenominal) risks, but non as well umpteenTop managers spending 20% of time with customersAround 20% of top management should be outsidersManagement schooling is deemed importantTop managers are effectively incentivizedSuccession provision is doneA entire appraisal system is in placeEmployees get feedbackIn instituteition to supporting Becker and Huselids 1998 results, the 2001 Watson Wyatt human being Capital Index study showed precisely which HR practices have an shock absorber on the bottom line. 49 ad hoc HR practices across 6 dimensions played the greatest spot in creating shareowner honour. The look into quantified exactly how much an improvement in each practice could be confronted to increase a companys marketplace treasure. For example, a company that grants a signifi thronet improvement (one measure deviation) in all of the practices categorised under Total Rewards and Accountability should gibe its value improve by 16.5 percent, and a signifi hatfult improvement in 43 get word HR practices is associated with an increase of 47 percent in market value. Results include16.5% seismic disturbance on company market value from total rewards and accountability9% impact from a collegial, supple workplace7.9% impact from recruiting and retention excell ence7.1% impact from the integrity of conferences6.5% impact from the writ of execution of call in HR service technologies33.9% loss from non-prudent use of resourcesCareful inspection of all the info shows that for either for sale correlation deliberate over time, the relationship between past HR practices and early pecuniary mathematical process is stronger than the relationship between past financial outcomes and future HR practices. This is the premiere study to show that HR practices actually increase financial performance (.41 correlation) instead of inferring that companies that mystify more money cease afford better HR practices (.19 correlation).Given companies of comparable size, those whos CEOs exhibited more worked up intelligence competencies showed better financial results as measured by two profit and product.The divisions of leaders with a circumstantial mass of strengths in emotional intelligence competencies outperformed revenue targets by a margin of 15-20 percent.2) Customer SatisfactionKnowing and exploitation the critical competencies associated with success creates results.The 1998 Watson Wyatt study, Competencies and the Competitive Edge, showed that when an organization identifies and communicates the core competencies that it call for to be successful in the lay and the future, it has unquestionable a powerful withall to protagonist meet its goals. Competencies define and communicate an organizations strategy and admirer employees to consider that strategy and come upon its goals. The many roles that competencies can play in an organization includeArticulating what the organization determineProviding a common language for employees and managers to describe value creationEstablishing a advanced image for human capital management programs (organizational levers) guidanceing on the development of the individual instead of an organizational twistLinking assume, promotions and growth directly to what the orga nization values to be successfulGuiding employees and managers to what is expected and how value is define even in times of dramatic pitch and restructuringCompetencies serve as a powerful communication vehicle to focus all members of the organization on the skills and activities that forget create both(prenominal) value and wealth. Competency- found programs can fool a difference to the bottom line. Analysis of the financial data clearly shows that companies with competency- based programs perform better in the marketplace. Such programs help focus the organization and all the individuals in it on what they can do to add value to the organization.Contributions are role-related rather than position-related. Adopting this view of contribution to value result help organizations think differently about their human resource and development programs. Organizations can focus on competencies postulate for the future and identify the roles that employees do and must play.Programs t hat grade employee commitment can demand great emergences. selective information from this and different Watson Wyatt studies clearly demonstrate that both individual and organizational performance increase when employees are act to their companies. Ensuring that organizational levers that build employee commitment are in place and working depart affect the bottom line. This was roughly notable when the competencies focused on attributes and behaviors that promoted customer satisfaction.Training is important, but it is no substitute for good management. A large majority of the organizations participating in Watson Wyatts study identified training and development as the number one wood of future incarnate success. The high-performing companies identified it slightly more lots than the others.Putting people first by adopting high performance management practices translates into improved morale, more innovation, better customer service, high productivity, great toll reduc tion, greater flexibility, and increased skills development.3) Improve QualityMotor vehicle manufacturing firms in US implementing pliant proceeds processes and associated practices for managing people enjoyed 47 percent better quality and 43 percent better productivity than firms relying on traditional mass-production come neares, according to a worldwide study by Wharton Schools John Paul McDuffie.b vegetable oilersuit financial performance improved 3.8% per year for ten years when companies stick arounded with traditional endowment management practices, 6.8% when they complete they needful to re-design their natural endowmentss management practices, and 10.1% when they launched a completely new giving management systemWatson Wyatts 2002 European Human Capital Index study shows that 36 key human capital variables (practices and policies) are associated with an well-nigh 90% increase in value.4) Increase ProductivityInitial research on 740 companies HR practices arrange that those utilise high performance work systems (HPWS are defined as integrated gift management practices) had economically and statistically meaningfully higher levels of company performance. One standard deviation of improvement on their campana curve of integrated geniuss management systems was associated with changes in market value from $15,000 to $60,000 per employee.Employee productivity was calculated as the logarithm of net sales per employee using gross rate of return on assets (GRATE), which is slight minute to depreciation and other non-cash transactions, and Tobins q, a future-oriented and risk-adjusted capital-market measure of performance that reflects both current and anticipated lucrativeness and often mirrors the price that the market ordain pay for intangible assets ( grace of God).Further research that included triple US surveys and the experience of more than 2,400 companies continued to show significant impact of systems that select, maintain, deve lop, and reinforce employee performance on both market-based and accounting-based measures of company performance (while statistically controlling for RD investment, industry market changes, capital improvements, sales growth trends, etc.). move from the 60th percentile of integrated HPWS to the 80th percentile improved market valuation by $20,000 per employee. This reflects both usable excellence and alignment with the companys strategy. When the elements are play, but not aligned with the company strategy on that point is a 27% drop off in measured gains.Gallup Management Journal describe the hobby in 200119% of all employees are actively dis booked from their jobs55% of all employees are not engaged in their jobs and26% of all employees are engaged in their jobsat a cost of $292-355 one million million per year to the US economy. bulky people management equals great shareholder value European companies with the best human capital management deliver around twice as much sha reholder value as their average competitors.5) Reduce CostASTD and SHRM studies companies that is renowned for their ability to retain top genius (Linbeck, Kennedy Rossi, Zachary, Dow Chemical, Edward Jones, Great Plains, Sears, and Southwest Airlines). One key finding was that all of these companies implemented competency-based position profiles so that employees mum the skills and abilities needed to move into leadership positions.They must excessively avoid wasting their money on enceinte human capital investmentsThe 2001 Watson Wyatt Human Capital Index study showed precisely which HR practices have an impact on the bottom line. 49 specific HR practices across 6 dimensions played the greatest role in creating shareholder value. Additionally, one dimension, Prudent Use of Resources identifies six practices that diminish shareholder value (e.g. training that is not connected to the business objectives and not evaluated for ROI).A new book shows how Microsoft, Intel, Nokia, St arbucks, Singapore Airlines and 20 other world-class organizations are luring and holding high-quality employees. One senior decision maker said, Microsoft has a market capitalization of $450 billion, the largest in the world. If you add up ein truth desk and chair, e truly computer, every structure, every piece of land, everything we own, including the $17 billion or so we have in the bank, it comes to about $30 billion. If you and so add in things like good entrust and other financial assets, maybe youll come up with other $70 billion, if you really struggle. But that way that at that place is $350 billion more that people have given us credit for that is not there. What is it? Well, its the sate in smart peoples heads. With that knowledge Microsoft has built and maintains a human capital management system very alike(p) to Mundo Strategies system to prevent employees from wanting to leave the company even as the stock to a faultk a crush in the past few years.Supervisor s who received training in how to listen better and closure employee problems found that lost-time accidents were cut by 50 percent, formal grievances were reduced from 15 to 3 per year, and productivity goals were exceeded. remembering is one of the more obvious areas that effective natural endowment management practices can affect. What attracts and retains high performers?79% stay because of opportunities for furtherance69% stay because their job is redesigned65% stay because they are learning new skills in their current job.why do high performers resign?56% leave because they are dissatisfied with company management56% leave due to inadequate opportunity for promotion50% leave due to dissatisfaction with pay6) Reduce Cycle Time there is very little research into the impact of endowment management practices on company cycle time. One classic work on cycle time showed that trade name mini-mills using a high-commitment approach to management required 34 percent fewer grok ho urs to make a ton of steel and had a 64 percent better scrap rate than mini-mills using a command and control approach.7) Increase Return to Shareholders Market CapitalizationThe louvre highest return to shareholders from 1972-1992 (Southwest Airlines Co. 21,775%, Wal-Mart Stores, Inc. 19,897%, Tyson Foods, Inc. 18,118%, duty tour City Stores, Inc. 16,410%, and Plenum Publishing 15,689%) markd themselves from their competitors and the market only through the way they managed their people during the babyhood of gift management.Whereas at the start of the 1990s studying its earnings and fixed assets and adding a token hail for grace forever gauged a companys stock market valuation, by the end of the decade a seismal excite had taken place. When accountants Ernst Young came to look at the issue, they found that the largest slice of most companies market capitalization was held in intangibles primarily, the talent, knowledge and teamwork of its staff. In high-tech companies like Nokia, the percentage was as high as 95 per cent but even old economy stalwarts like BP, despite its huge investments in oil platforms and exploration equipment, notched up a significant 74 per cent.The upshot was that even companies operating in the identical sector with similar earnings could experience widely differing stock valuations. Those ignoring the new strain on intangibles invariably found themselves penalized by the markets.Watson Wyatt also reported that a 26% increase in market value in 2000 was driven by common talent management best practicesUse of knowledge and involve workersRecruiting excellenceConsistent pan-European HR practicesGood union-management relationsLack of hierarchy, clear leadershipTeamwork and 360 feedbackCustomer-focused milieu hireSharing information with employeesThe difference between a non-strategic HR system and one that has removed the barriers to performance are dramatic. Improving the relative sophistication of the HR system by ad opting best practices does not grant measurable value (20%-60% adoption of a strategic HR system). Integrating the strategic elements of HR into the broader theoretical account of the organization provides a significant improvement in shareholder value (60%-80%).When HR systems have adopted best practices and aligned those systems with business priorities and initiatives they return the greatest shareholder value (80%-100%).The phoebe bird-year survival pass judgment of initial public offering showed that firms whose talent management practices scored in the top sixth of IPO firms had a 33 percent higher probability of live on than those in the lowest one-sixth. Firms in the upper one-sixth in providing financial rewards to all employees, not just managers, had almost twice as much peril of surviving for fivesome years, according to research by Theresa Welbourne of Cornell and Alice Andrews of Vanderbilt.COMPETITIVE ADVANTAGE OF natural endowment MANAGEMENT IN US CORPORATE SECTORTaking a systemic approach to talentmanagement getting the righteousness-hand(a) people in pivotal roles at the right time should be nothing new to HR professionals, but done effectively, talent management can create longterm organizational success. present, Lynne Morton and Chris Ashton show how to align talent management strategies to business goals, integrate all related processes and systems and create a talent brain in organization.TALENT MANAGEMENT (TM) IS more than a new language for old HR work, or just the next hot new thing for HR practitioners and managers to get involved in. For many organizations, it has suit a strategic imperative. McKinsey research1 reveals that 75 percent of merged partrs were concerned about talent shortages and Deloitte reports that retaining the best talent is a top priority for 87 percent of surveyed HR directors. This need for talent and, therefore, its expert management is also driven by macro trends including New cycles of busi ness growth, often requiring different kinds of talent. Changing workforce demographics with trim labor pools and, therefore, a talent squeeze. More complex economic conditions which requiresegregated talent and TM. The emergence of new enterprises which suck talent from larger organizations. A global focus on leadership which is now permeating many levels of organizations.The strategic importance of talent management-On the basis of substantial research undertaken for our forthcoming report , they argue that good TM is of strategic importance and can differentiate an organization when it becomes a core competence and when its talent significantly improves strategy execution and operational excellence. For example, suppose your company has the right talent in pivotal roles at the right time. What difference go away these people make to revenues, innovation and organization effectiveness compared with having to run for without them? What is the cost of the lost opportunities a nd the hatfultime and replacement costs of losing critical talent? What are the consequences of having to make do with the wrong kind of leaders and managers in the top 2 executive layers or of nothaving successors groomed and ready to replace them?Yet generally, organizations still struggle with TM. According to research, three-quarters of business leaders have invested dedicated resources in TM but most say they havent insofar snarl the impact of doing so.3 Why not? Through one of the research, they well-tried to provide reasons by ask these questions Why are they doing TM? Is it for the individual, the organization or both? What do they mean by talent and talent management? What are their propositions for attracting and retaining talent? How do they manage and use the talent in their organization needs? How are internal roles and resources deployed appropriately to support TM? How is TM integrated across HR processes and with business planning and strategy execution proc esses?Talent management at FDC its focus, leadership, acquisition, retention, evaluation and tools has evolved over five years, and continues to be a work in progress. The evolving talent plan aligns with goals, business strategy and their organizational implications.The talent office annually reviews analytics and recalibrates talent to align with growth and other organizational needs. The current growth objective is 15 percent. Ours is a numbers business, which tends to reflect a short-term view, says Annmarie Neal, senior VP, organization development. Yet, we also have to build a leadership bench and talent pools, not around the execution capabilities were known for, but on a customer-solutions focus and strategic foresight. Investments in talent arent short-term they need at to the lowest degree three-year horizons to show returns.The key issue for FDC is to accurately identify high potentials with different capabilities such as strategic thinking, partnership building, res ults orientation, innovation and talent leadership and and so build succession depth. In effect, they are building talent balanced with buying it, manoeuvre by the notion of critical positions that is, those positions that positively impact on the strategic goals or their execution.They are now applying their processes for identifying, assessing and growing future leaders to our more junior, untested populations who we expect to be our next VPs. Technology, as Neal explains, has allowed them to do more in depth and breadth with the same headcount. TM initiatives at FDC include Talent profiling of individuals. Conducting calibrations of business performance and key results behaviors. Assessing and forecasting succession depth. Implementing organizational estimation summaries to give status reports for leadership talent. Using just-in-time, action-learning programs and talent-sharing assignments. Developing talent at risk tools based on potential derailers and defection trigger s. Introducing a talent scorecard with five perspectives, each of which has critical indicators hiring.As we see it, TM is a strategic and holistic approach to both HR and business planning or a new route to organizational effectiveness. This improves the performance and the potential of people the talent who can make a measurable difference to the organization now and in future. And it aspires to yield get upd performance among all levels in the workforce, thus allowing everyone to run his/her potential, no matter what that might be.Though this interpretation of talent is inclusive, it strikes a strategic balance between performance and potential. Performance pastally, the primary focus of measurement and management concerns both the past and the present, whereas potential represents the future. Our position assumes that potential exists, it can be identified and it can be developed. Here are specific ways that two case organizations inthe report define talent administrato r management team leaders, directors/VPs and A-player managers in all functions plus Bplayers as potentials. Future business leaders with more strategic capabilities than just operational excellence skills -plus specialist talent able to execute business integrating projects on time and to budget.Clearly, there isnt a single consistent or concise definition. Current or historic cultural attributes may play a part in defining talent, as will more egalitarian business models. Many organizations acknowledge that talent, if aligned with business strategy or the operational parameters of strategy execution will change in definition as strategic priorities change. For example, in start-up businesses, the talent emphasis will be different to the innovative or creative talent needed to bring new products to market. Any definition needs to be fluid as business drivers change, so will the definitions of talent.What TM involvesTalent management is the consolidation of different initiativ es, or constructs, into a coherent framework of activity. There are certain crucial components and a useful model for defining TM is to think of it in these key words Ethos embedding values and behavior, known as atalent mindset, to support the view that everyone has potential worth developing. Focus sagacious which jobs make a difference and fashioning sure that the right people hold those jobs at the right time. Positioning starting at the top of the organization and cascading passim the management levels to make this a management, not HR, initiative. Structure creating tools, processes and techniques with defined accountability to ensure that the work gets done. System facilitating a long-term and holistic approach to generate change.Integrating TM through a systemIts worth emphasizing that integration is critical. Our research shows that without integrating TM activities,the effort invested will tend to be dissipated with patchy results. integrating is know how all the pieces of TM fit together within a TM system. This will not operate in isolation from strategy, business planning and the organizations approach to people management.In this sense, the work of talent management cuts across what has been traditional HR silos. If integrated, it functions in a more facilitative, OD-like nature. It will also reach higher up the organization than other HR initiatives, often attracting the attention of boards and senior teams. Similarly, TM reaches down the organization, to include new recruits along with tenured professionals. Lastly, talent planning must be done in agree with business planning, creating a rich integration of people and strategy.One way of achieving such system integration and alignment is the CRF Talent Management System (see Figure 1, above right). This systemic view of talent has five elementsNeed the business need derived from the business model and competitive issues.Data collection the original data and intelligence critical f or good talent decisions.Planning people/talent planning guided by data analysis.Activities the conversion of plans into integrated sets of activities.Results costs, measures and effectiveness criteria to judge the value and impacts of TMUsing this system can help TM become a strategic differentiator rather than a standard set of HR processes if the right conditions, context, timescales and offerings exist in the first place. System integration and alignment ensures that TM efforts are rational and fit for purpose. Since the arrival of the current era of talent is widely acknowledged, its not move that regenerate significance is being placed on the management of that talent. And as talent continues to be viewed as a strategic differentiator, its management will take more of a strategic role. How fascinating it will be to take the pulse of talent management in the business community in another five years. We believe that while the management of talent will most likely become em bed in the fiber of cultures by then, the HR executives who led those initiatives will have achieved much more prominence.OBJECTIVES OF TALENT MANAGEMENTThere are some basic objectives which need to be fulfilled by the US corporate sector while applying Talent Management in the plaque and the objectives are-1) TO DETECT TALENT-It is very important for the US corporate sector to determine or detect their best talent for the administration and this Talent Management helps the selector to select the best talent among the pool of various alternatives present in the organisation. Because the best talent helps in generating more and more good ideas which help organisation to achieve or innovate something new. As Talent Management helps in detecting best talent of the organisation within the organisation, this helps organisation to achieve their goal more efficiently and effectively which are set by the organisation.2) TO expose TALENT-After detecting the talent in the organisation the US corporate next misuse for applying Talent Management is to develop the talent. It is not necessary that every soul has a some talent in him or her but talent can also be developed through rule-governed practice such as training, educating, providing them with the basic guidelines of the respective talent so that the talent of any person can be used for the effective utilization of the talent for the sake of the organisation which will be helpful for the organisation to came up with a new idea with the help of talent which will provide them with the best competencies among the competitor so that they can stay in long run of the business giving tough competition to their competitors and by developing talent US corporate sector tried to change the scenario of the employees by developing their talent and making them more confident, reliable and motivating factor for themselves and for others too which improves the demeanour and efficiency to work. There is a huge change when a pe rson come to some underground talent in him and this makes them to be more responsible to the work and take the work as natural as play3) TO MAKE TALENTS MORE RELIABLE-Talent Management helps in making talent more reliable and US corporate sector use the Talent Management as their one of the important tool for making their employees talent more reliable as talent management helps in detecting and developing talent by the different mode they used while developing their talent they make the employees to be more confident in their talent which makes them more reliable which center that they will be confident in using their talent and organisation can rely on their talent while doing or making effective decision. Until and unless employees believe themselves in their talent then the organisation too will not have any faith on the employee and US corporate sector neer keep such employees in the organisation as US corporate sector is best known for their talent and technologies and the technology is the result of the talent only.4) TO PROMOTE TALENTS TO STRATEGIC PROJECTS OR TO HIGHER frame-Talent Management helps in promoting talent to strategic projects or to the higher position because US corporate sector that every talent should be given their own position. If the talent deserves higher position then he should be given the higher position irrespective of any other things which might be taken in account such as education or qualification. They think that if the post deserves that talent then that talent should be given that post. When talent is promoted it acts as a motivating tool for the employees to make them more responsible and work towards the achievement of the goal set by the organisation which also enhance their style and attitude towards their work.Talent Management in the Corporate SectorTalent Management in the Corporate SectorA Talent ManagementINTRODUCTION-Talent management is the process that emerged in 1990 and continues to be adopted, as more companies came to realize that their employees talent, skills drive their business success. Companies that have put into practice talent management have done so to solve an employee retention problem. The issue with many companies today is that many organizations put tremendous effort into attracting employees to their company, but spend little time into retaining and developing talent. A talent management system must be worked into the business strategy and implemented in daily processes throughout the company as a whole. It cannot be left solely to the human resources department to attract and retain employees, but rather must be practiced at all levels of the organization. The business strategy must include responsibilities for line managers to develop the skills of their immediate subordinates. Divisions within the company should be openly sharing information with other departments in order for employees to gain knowledge of the overall organizational objectives.Talent manageme nt refers to the process of developing and integrating new workers, developing and retaining current workers, and attracting highly skilled workers to work for your company. Talent management in this context does not refer to the management of entertainers. The term was coined by David Watkins of Softscape published in an article in 1998. The process of attracting and retaining profitable employees, as it is increasingly more competitive between firms and of strategic importance, has come to be known as the war for talent.IMPORTANCE OF TALENT MANAGEMENT IN US CORPORATE SECTORUS sector always want to grow and improve their system and processes must focus on people practices that allow or foster their growth and improvement. The best practices are known. The key variables (leadership competencies, experience and skill, interest rewards) that motivate people to succeed have been identified and successfully put into practice. Talent Management is no loger a cutting-edge field being sole ly tapped by pioneers. It is a viable path towards and improving organizational performance.Integrated, strategically aligned human capital asset management systems have provided significant economic benefits to companies that have embraced them as ongoing processes instead of one-time events. Research done on the value of such systems to companies consistently finds benefits in these seven critical economic areas revenue, customer satisfaction, quality, productivity, cost, cycle time, and market capitalization. This research clearly shows that adopting and investing in best-practice talent management systems results in bottom-line improvement in each of these key areas-1) Increase RevenueIt was initially thought that companies that make more money were associated with better talent management practices only because they could afford them (.19 correlation), but the 2001 Watson Wyatt Human Capital Index Study showed that talent management practices actually increase financial perform ance (.41 correlation).According to Watson Wyatts research 15% of profit performance is driven byManagement participationOpen management styleTaking some risks, but not too manyTop managers spending 20% of time with customersAround 20% of top management should be outsidersManagement training is deemed importantTop managers are effectively incentivizedSuccession planning is doneA good appraisal system is in placeEmployees get feedbackIn addition to supporting Becker and Huselids 1998 results, the 2001 Watson Wyatt Human Capital Index study showed precisely which HR practices have an impact on the bottom line. 49 specific HR practices across 6 dimensions played the greatest role in creating shareholder value. The research quantified exactly how much an improvement in each practice could be expected to increase a companys market value. For example, a company that makes a significant improvement (one standard deviation) in all of the practices categorized under Total Rewards and Account ability should see its value improve by 16.5 percent, and a significant improvement in 43 key HR practices is associated with an increase of 47 percent in market value. Results included16.5% impact on company market value from total rewards and accountability9% impact from a collegial, flexible workplace7.9% impact from recruiting and retention excellence7.1% impact from the integrity of communications6.5% impact from the implementation of focused HR service technologies33.9% loss from non-prudent use of resourcesCareful inspection of all the data shows that for every available correlation calculated over time, the relationship between past HR practices and future financial performance is stronger than the relationship between past financial outcomes and future HR practices. This is the first study to show that HR practices actually increase financial performance (.41 correlation) instead of inferring that companies that make more money can afford better HR practices (.19 correlatio n).Given companies of comparable size, those whos CEOs exhibited more emotional intelligence competencies showed better financial results as measured by both profit and growth.The divisions of leaders with a critical mass of strengths in emotional intelligence competencies outperformed revenue targets by a margin of 15-20 percent.2) Customer SatisfactionKnowing and using the critical competencies associated with success creates results.The 1998 Watson Wyatt study, Competencies and the Competitive Edge, showed that when an organization identifies and communicates the core competencies that it needs to be successful in the present and the future, it has developed a powerful tool to help meet its goals. Competencies define and communicate an organizations strategy and help employees to understand that strategy and achieve its goals. The many roles that competencies can play in an organization includeArticulating what the organization valuesProviding a common language for employees and managers to describe value creationEstablishing a new paradigm for human capital management programs (organizational levers)Focusing on the development of the individual instead of an organizational structureLinking pay, promotions and growth directly to what the organization values to be successfulGuiding employees and managers to what is expected and how value is defined even in times of dramatic change and restructuringCompetencies serve as a powerful communication vehicle to focus all members of the organization on the skills and activities that will create both value and wealth. Competency-based programs can make a difference to the bottom line. Analysis of the financial data clearly shows that companies with competency- based programs perform better in the marketplace. Such programs help focus the organization and all the individuals in it on what they can do to add value to the organization.Contributions are role-related rather than position-related. Adopting this view of con tribution to value will help organizations think differently about their human resource and development programs. Organizations can focus on competencies needed for the future and identify the roles that employees do and must play.Programs that build employee commitment can bring great returns. Data from this and other Watson Wyatt studies clearly demonstrate that both individual and organizational performance increase when employees are committed to their companies. Ensuring that organizational levers that build employee commitment are in place and working will affect the bottom line. This was most notable when the competencies focused on attributes and behaviors that promoted customer satisfaction.Training is important, but it is no substitute for good management. A large majority of the organizations participating in Watson Wyatts study identified training and development as the driver of future corporate success. The high-performing companies identified it slightly more often th an the others.Putting people first by adopting high performance management practices translates into improved morale, more innovation, better customer service, higher productivity, greater cost reduction, greater flexibility, and increased skills development.3) Improve QualityMotor vehicle manufacturing firms in US implementing flexible production processes and associated practices for managing people enjoyed 47 percent better quality and 43 percent better productivity than firms relying on traditional mass-production approaches, according to a worldwide study by Wharton Schools John Paul McDuffie.Overall financial performance improved 3.8% per year for ten years when companies stayed with traditional talent management practices, 6.8% when they realized they needed to re-design their talent management practices, and 10.1% when they launched a completely new talent management systemWatson Wyatts 2002 European Human Capital Index study shows that 36 key human capital variables (practi ces and policies) are associated with an almost 90% increase in value.4) Increase ProductivityInitial research on 740 companies HR practices found that those using high performance work systems (HPWS are defined as integrated talent management practices) had economically and statistically significantly higher levels of company performance. One standard deviation of improvement on their bell curve of integrated talent management systems was associated with changes in market value from $15,000 to $60,000 per employee.Employee productivity was calculated as the logarithm of net sales per employee using gross rate of return on assets (GRATE), which is less sensitive to depreciation and other non-cash transactions, and Tobins q, a future-oriented and risk-adjusted capital-market measure of performance that reflects both current and anticipated profitability and often mirrors the price that the market will pay for intangible assets (goodwill).Further research that included three US survey s and the experience of more than 2,400 companies continued to show significant impact of systems that select, maintain, develop, and reinforce employee performance on both market-based and accounting-based measures of company performance (while statistically controlling for RD investment, industry market changes, capital improvements, sales growth trends, etc.). Moving from the 60th percentile of integrated HPWS to the 80th percentile improved market valuation by $20,000 per employee. This reflects both operational excellence and alignment with the companys strategy. When the elements are present, but not aligned with the company strategy there is a 27% drop off in measured gains.Gallup Management Journal reported the following in 200119% of all employees are actively disengaged from their jobs55% of all employees are not engaged in their jobs and26% of all employees are engaged in their jobsat a cost of $292-355 Billion per year to the US economy.Great people management equals gre at shareholder value European companies with the best human capital management deliver around twice as much shareholder value as their average competitors.5) Reduce CostASTD and SHRM studies companies that is renowned for their ability to retain top talent (Linbeck, Kennedy Rossi, Zachary, Dow Chemical, Edward Jones, Great Plains, Sears, and Southwest Airlines). One key finding was that all of these companies implemented competency-based position profiles so that employees understood the skills and abilities required to move into leadership positions.They must also avoid wasting their money on bad human capital investmentsThe 2001 Watson Wyatt Human Capital Index study showed precisely which HR practices have an impact on the bottom line. 49 specific HR practices across 6 dimensions played the greatest role in creating shareholder value. Additionally, one dimension, Prudent Use of Resources identifies six practices that diminish shareholder value (e.g. training that is not connected to the business objectives and not evaluated for ROI).A new book shows how Microsoft, Intel, Nokia, Starbucks, Singapore Airlines and 20 other world-class organizations are luring and holding high-quality employees. One senior executive said, Microsoft has a market capitalization of $450 billion, the largest in the world. If you add up every desk and chair, every computer, every building, every piece of land, everything we own, including the $17 billion or so we have in the bank, it comes to about $30 billion. If you then add in things like goodwill and other financial assets, maybe youll come up with another $70 billion, if you really struggle. But that means that there is $350 billion more that people have given us credit for that is not there. What is it? Well, its the stuff in smart peoples heads. With that knowledge Microsoft has built and maintains a human capital management system very similar to Mundo Strategies system to prevent employees from wanting to leave the company even as the stock took a beating in the past few years.Supervisors who received training in how to listen better and resolve employee problems found that lost-time accidents were cut by 50 percent, formal grievances were reduced from 15 to 3 per year, and productivity goals were exceeded.Retention is one of the more obvious areas that effective talent management practices can affect. What attracts and retains high performers?79% stay because of opportunities for advancement69% stay because their job is redesigned65% stay because they are learning new skills in their current job.Why do high performers resign?56% leave because they are dissatisfied with company management56% leave due to inadequate opportunity for promotion50% leave due to dissatisfaction with pay6) Reduce Cycle TimeThere is very little research into the impact of talent management practices on company cycle time. One classic work on cycle time showed that steel mini-mills using a high-commitment approach to managemen t required 34 percent fewer labor hours to make a ton of steel and had a 64 percent better scrap rate than mini-mills using a command and control approach.7) Increase Return to Shareholders Market CapitalizationThe five highest return to shareholders from 1972-1992 (Southwest Airlines Co. 21,775%, Wal-Mart Stores, Inc. 19,897%, Tyson Foods, Inc. 18,118%, Circuit City Stores, Inc. 16,410%, and Plenum Publishing 15,689%) differentiated themselves from their competitors and the market only through the way they managed their people during the infancy of talent management.Whereas at the start of the 1990s studying its earnings and fixed assets and adding a token amount for goodwill invariably gauged a companys stock market valuation, by the end of the decade a seismic shift had taken place. When accountants Ernst Young came to look at the issue, they found that the largest slice of most companies market capitalization was held in intangibles primarily, the talent, knowledge and teamwo rk of its staff. In high-tech companies like Nokia, the percentage was as high as 95 per cent but even old economy stalwarts like BP, despite its huge investments in oil platforms and exploration equipment, notched up a significant 74 per cent.The upshot was that even companies operating in the same sector with similar earnings could experience widely differing stock valuations. Those ignoring the new emphasis on intangibles invariably found themselves penalized by the markets.Watson Wyatt also reported that a 26% increase in market value in 2000 was driven by common talent management best practicesUse of knowledge and contract workersRecruiting excellenceConsistent pan-European HR practicesGood union-management relationsLack of hierarchy, clear leadershipTeamwork and 360 feedbackCustomer-focused environmentRemunerationSharing information with employeesThe difference between a non-strategic HR system and one that has removed the barriers to performance are dramatic. Improving the re lative sophistication of the HR system by adopting best practices does not provide measurable value (20%-60% adoption of a strategic HR system). Integrating the strategic elements of HR into the broader fabric of the organization provides a significant improvement in shareholder value (60%-80%).When HR systems have adopted best practices and aligned those systems with business priorities and initiatives they return the greatest shareholder value (80%-100%).The five-year survival rates of initial public offering showed that firms whose talent management practices scored in the top one-sixth of IPO firms had a 33 percent higher probability of surviving than those in the lowest one-sixth. Firms in the upper one-sixth in providing financial rewards to all employees, not just managers, had almost twice as much chance of surviving for five years, according to research by Theresa Welbourne of Cornell and Alice Andrews of Vanderbilt.COMPETITIVE ADVANTAGE OF TALENT MANAGEMENT IN US CORPORATE SECTORTaking a systemic approach to talentmanagementGetting the right people in pivotal roles at the right time should be nothing new to HR professionals, but done effectively, talent management can create longterm organizational success. Here, Lynne Morton and Chris Ashton show how to align talent management strategies to business goals, integrate all related processes and systems and create a talent mindset in organization.TALENT MANAGEMENT (TM) IS more than a new language for old HR work, or just the next hot new thing for HR practitioners and managers to get involved in. For many organizations, it has become a strategic imperative. McKinsey research1 reveals that 75 percent of corporate officers were concerned about talent shortages and Deloitte reports that retaining the best talent is a top priority for 87 percent of surveyed HR directors. This need for talent and, therefore, its expert management is also driven by macro trends including New cycles of business growth, often requiring different kinds of talent. Changing workforce demographics with reducing labor pools and, therefore, a talent squeeze. More complex economic conditions which requiresegregated talent and TM. The emergence of new enterprises which suck talent from larger organizations. A global focus on leadership which is now permeating many levels of organizations.The strategic importance of talent management-On the basis of substantive research undertaken for our forthcoming report , they argue that good TM is of strategic importance and can differentiate an organization when it becomes a core competence and when its talent significantly improves strategy execution and operational excellence. For example, imagine your company has the right talent in pivotal roles at the right time. What difference will these people make to revenues, innovation and organization effectiveness compared with having to operate without them? What is the cost of the lost opportunities and the downtime and re placement costs of losing critical talent? What are the consequences of having to make do with the wrong kind of leaders and managers in the top two executive layers or of nothaving successors groomed and ready to replace them?Yet generally, organizations still struggle with TM. According to research, three-quarters of business leaders have invested dedicated resources in TM but most say they havent yet felt the impact of doing so.3 Why not? Through one of the research, they tried to provide reasons by asking these questions Why are they doing TM? Is it for the individual, the organization or both? What do they mean by talent and talent management? What are their propositions for attracting and retaining talent? How do they manage and use the talent in their organization needs? How are internal roles and resources deployed appropriately to support TM? How is TM integrated across HR processes and with business planning and strategy execution processes?Talent management at FDC its focus, leadership, acquisition, retention, evaluation and tools has evolved over five years, and continues to be a work in progress. The evolving talent plan aligns with goals, business strategy and their organizational implications.The talent office annually reviews analytics and recalibrates talent to align with growth and other organizational needs. The current growth objective is 15 percent. Ours is a numbers business, which tends to reflect a short-term view, says Annmarie Neal, senior VP, organization development. Yet, we also have to build a leadership bench and talent pools, not around the execution capabilities were known for, but on a customer-solutions focus and strategic foresight. Investments in talent arent short-term they need at least three-year horizons to see returns.The key issue for FDC is to accurately identify high potentials with different capabilities such as strategic thinking, partnership building, results orientation, innovation and talent leadership a nd then build succession depth. In effect, they are building talent balanced with buying it, guided by the notion of critical positions that is, those positions that positively impact on the strategic goals or their execution.They are now applying their processes for identifying, assessing and growing future leaders to our more junior, untested populations who we expect to be our next VPs. Technology, as Neal explains, has allowed them to do more in depth and breadth with the same headcount. TM initiatives at FDC include Talent profiling of individuals. Conducting calibrations of business performance and key results behaviors. Assessing and forecasting succession depth. Implementing organizational assessment summaries to give status reports for leadership talent. Using just-in-time, action-learning programs and talent-sharing assignments. Developing talent at risk tools based on potential derailers and defection triggers. Introducing a talent scorecard with five perspectives, eac h of which has critical indicators hiring.As we see it, TM is a strategic and holistic approach to both HR and business planning or a new route to organizational effectiveness. This improves the performance and the potential of people the talent who can make a measurable difference to the organization now and in future. And it aspires to yield enhanced performance among all levels in the workforce, thus allowing everyone to reach his/her potential, no matter what that might be.Though this interpretation of talent is inclusive, it strikes a strategic balance between performance and potential. Performance historically, the primary focus of measurement and management concerns both the past and the present, whereas potential represents the future. Our position assumes that potential exists, it can be identified and it can be developed. Here are specific ways that two case organizations inthe report define talent Executive management team leaders, directors/VPs and A-player managers in all functions plus Bplayers as potentials. Future business leaders with more strategic capabilities than just operational excellence skills -plus specialist talent able to execute business integration projects on time and to budget.Clearly, there isnt a single consistent or concise definition. Current or historic cultural attributes may play a part in defining talent, as will more egalitarian business models. Many organizations acknowledge that talent, if aligned with business strategy or the operational parameters of strategy execution will change in definition as strategic priorities change. For example, in start-up businesses, the talent emphasis will be different to the innovative or creative talent needed to bring new products to market. Any definition needs to be fluid as business drivers change, so will the definitions of talent.What TM involvesTalent management is the integration of different initiatives, or constructs, into a coherent framework of activity. There ar e certain crucial components and a useful model for defining TM is to think of it in these key words Ethos embedding values and behavior, known as atalent mindset, to support the view that everyone has potential worth developing. Focus knowing which jobs make a difference and making sure that the right people hold those jobs at the right time. Positioning starting at the top of the organization and cascading throughout the management levels to make this a management, not HR, initiative. Structure creating tools, processes and techniques with defined accountability to ensure that the work gets done. System facilitating a long-term and holistic approach to generate change.Integrating TM through a systemIts worth emphasizing that integration is critical. Our research shows that without integrating TM activities,the effort invested will tend to be dissipated with patchy results. Integration is knowing how all the pieces of TM fit together within a TM system. This will not operate i n isolation from strategy, business planning and the organizations approach to people management.In this sense, the work of talent management cuts across what has been traditional HR silos. If integrated, it functions in a more facilitative, OD-like nature. It will also reach higher up the organization than other HR initiatives, often attracting the attention of boards and senior teams. Similarly, TM reaches down the organization, to include new recruits along with tenured professionals. Lastly, talent planning must be done in parallel with business planning, creating a rich integration of people and strategy.One way of achieving such system integration and alignment is the CRF Talent Management System (see Figure 1, above right). This systemic view of talent has five elementsNeed the business need derived from the business model and competitive issues.Data collection the fundamental data and intelligence critical for good talent decisions.Planning people/talent planning guided b y data analysis.Activities the conversion of plans into integrated sets of activities.Results costs, measures and effectiveness criteria to judge the value and impacts of TMUsing this system can help TM become a strategic differentiator rather than a standard set of HR processes if the right conditions, context, timescales and offerings exist in the first place. System integration and alignment ensures that TM efforts are rational and fit for purpose. Since the arrival of the current era of talent is widely acknowledged, its not surprising that renewed significance is being placed on the management of that talent. And as talent continues to be viewed as a strategic differentiator, its management will take more of a strategic role. How fascinating it will be to take the pulse of talent management in the business community in another five years. We believe that while the management of talent will most likely become embedded in the fiber of cultures by then, the HR executives who le d those initiatives will have achieved much more prominence.OBJECTIVES OF TALENT MANAGEMENTThere are some basic objectives which need to be fulfilled by the US corporate sector while applying Talent Management in the organisation and the objectives are-1) TO DETECT TALENT-It is very important for the US corporate sector to determine or detect their best talent for the organisation and this Talent Management helps the selector to select the best talent among the pool of various alternatives present in the organisation. Because the best talent helps in generating more and more good ideas which help organisation to achieve or innovate something new. As Talent Management helps in detecting best talent of the organisation within the organisation, this helps organisation to achieve their goal more efficiently and effectively which are set by the organisation.2) TO DEVELOP TALENT-After detecting the talent in the organisation the US corporate next step for applying Talent Management is to develop the talent. It is not necessary that every person has a some talent in him or her but talent can also be developed through regular practice such as training, educating, providing them with the basic guidelines of the respective talent so that the talent of any person can be used for the effective utilization of the talent for the sake of the organisation which will be helpful for the organisation to came up with a new idea with the help of talent which will provide them with the best competencies among the competitor so that they can stay in long run of the business giving tough competition to their competitors and by developing talent US corporate sector tried to change the scenario of the employees by developing their talent and making them more confident, reliable and motivating factor for themselves and for others too which improves the behaviour and efficiency to work. There is a huge change when a person come to some hidden talent in him and this makes them to be more responsible to the work and take the work as natural as play3) TO MAKE TALENTS MORE RELIABLE-Talent Management helps in making talent more reliable and US corporate sector use the Talent Management as their one of the important tool for making their employees talent more reliable as talent management helps in detecting and developing talent by the different mode they used while developing their talent they make the employees to be more confident in their talent which makes them more reliable which means that they will be confident in using their talent and organisation can rely on their talent while doing or making effective decision. Until and unless employees believe themselves in their talent then the organisation too will not have any faith on the employee and US corporate sector never keep such employees in the organisation as US corporate sector is best known for their talent and technologies and the technology is the result of the talent only.4) TO PROMOTE TALENTS TO STRATEGI C PROJECTS OR TO HIGHER POSITION-Talent Management helps in promoting talent to strategic projects or to the higher position because US corporate sector that every talent should be given their own position. If the talent deserves higher position then he should be given the higher position irrespective of any other things which might be taken in account such as education or qualification. They think that if the post deserves that talent then that talent should be given that post. When talent is promoted it acts as a motivating tool for the employees to make them more responsible and work towards the achievement of the goal set by the organisation which also enhance their style and attitude towards their work.