Ingresos

As noted above, the topic of talent management was brought to the fore when a group of McKinsey consultants coined the term ‘the war for talent’ to capture the challenges which United States (US) organisations were facing in terms of attracting and retaining key employees in the context of the tightening labour market conditions within which they were operating at that time (Michaels et al., 2001). Given their relatively simple and intuitive message and the poten- tial which the war for talent had to reinvigorate the human resource (HR) function and bring HR issues to the fore for corporate execu- tives, it is not surprising that the original McKinsey ideas quickly gained traction and infl uenced debates around the role of people management in organisations. High-profi le executives such as General Electric’s Jack Welch reinforced the message, through their public pronouncements, in regular newspaper columns and other outlets, of the centrality of talent to their organisation’s success.

However, as the academic community became interested in the topic a counterbalance to the practitioner hype quickly emerged. Academic commentators were quick to point to the potential draw- back of overly focusing on individual talent (see Pfeffer, 2001) and the ambiguity around the conceptual and intellectual boundaries of talent management became a key point of criticism (see Lewis and Heckman, 2006; Scullion et al., 2010). Indeed, over recent years signifi cant effort has been devoted to unpacking these boundaries and establishing a working defi nition of talent management.

A key point of departure in this regard was Lewis and Heck- man’s (2006) review of the fi eld, which identifi ed three key streams of thinking or approaches to talent management within the litera- ture. The fi rst key body of literature placed a signifi cant emphasis on the management of star or ‘A’ employees. This literature argued for top-grading and posited that all roles in the organisation should be fi lled by ‘A’ players and that ‘C’ players should be managed out of the organisation. The second stream represented little more than a rebranding of HR. Functions and roles that were previously titled ‘HR’ were now titled ‘talent’. Indeed, there remains a tendency for this to happen in both research and practice and one needs to be cautious of the contribution of such rebranding exercises. The third stream focused on the development of talent pools, which empha- sised ‘projecting employee/staffi ng needs and managing the progression of employees through positions’ (Lewis and Heckman,

2006: 140). Building on traditional succession literatures, this stream represents an important reframing of the succession issues (see, for example, Cappelli, 2008). Collings and Mellahi (2009) subsequently identifi ed a fourth stream of literature which placed the identifi - cation of key roles or pivotal positions at the centre of the talent debate (see, for example, Becker and Huselid, 2010; Boudreau and Ramstad, 2007; Huselid et al., 2005). This approach argues that not all roles require ‘A’ players and that such talent can often be underutilised if deployed in non-strategic roles and represents an important change in emphasis in thinking on talent management.

More recently, a fi fth stream of literature which focuses on the use of data and analytics to inform decisions around talent and talent deployment has advanced our understanding of the potential of talent management. Data analytics applied to talent facilitates more strategic decisions around talent and moves talent decisions beyond the more subjective decision-making, which has arguably had a disproportionate impact on talent decisions hereto- fore (Cascio and Boudreau, 2010; Vaiman et al., 2012) (see Box 3.1).

Box 3.1: Resolving High Turnover in Pivotal Organisati onal Teams

PHARMA is a large multi nati onal in the pharmaceuti cal sector. As part of a large organisati onal eff ort to transform the organisati on into a globally effi - cient and eff ecti ve operati on, informati on technology was viewed as a key enabler (potenti al savings: US$60 million). Thus a number of highly compe- tent IT teams were established to put the IT framework and infrastructure in place. However, these teams were not delivering at the levels expected. Employee turnover was one of the key issues. Exit interviews confi rmed salary was a key issue as employees were earning salaries $5,000–$9,000 below what competi tors were willing to pay. However, historically generous stock opti ons had represented a key retenti on mechanism. Given the impor- tance of the project the chief executi ve offi cer wished to raise the pay of all IT people to resolve the issue. The HR Department resisted and requested fi ve weeks to fully unpack and understand the issue before acti ng.

While the detail of the process undertaken is beyond the scope of this case vignett e, the applicati on of eff ecti ve data analyti cs to the turnover data unearthed a far more nuanced understanding of the underlying issues which were leading to the turnover. Specifi cally, key drivers of turnover included inadequate career paths for company employees. This was ampli- fi ed as employees hired as the company ramped up for the major project generally came in on higher salaries and to higher positi ons than extant employees, further reducing potenti al for advancement amongst extant

Indeed, Michael Lewis’ (2003) analysis of how data analytics trans- formed how players are valued, and indeed infl uenced playing tactics, in professional baseball in the US provides an excellent illustration of how data analytics can transform talent systems. In this context, Lewis showed how traditional assessments of player potential were over-reliant on scouts who based their assessments on gut instinct and outdated data points. Data analysis provided a much stronger grounding for teams to base their talent decisions upon and early adopters of this technique enjoyed signifi cant suc- cesses (see Wolfe et al., 2006). Overall, this stream is important in helping decision-makers make more informed decisions around talent and in framing talent issues in language that senior organisa- tion leaders are more comfortable with.

The preceding review points to the diversity of opinion on what precisely talent management means; while we remain some way from a consensus on defi nitions of talent management, one of the more infl uential defi nitions is Collings and Mellahi’s (2009: 304). They defi ne strategic talent management as:

… activities and processes that involve the systematic iden- tifi cation of key positions which differentially contribute to the organisation’s sustainable competitive advantage, the development of a talent pool of high potential and high per- forming incumbents to fi ll these roles, and the development of a differentiated human resource architecture to facilitate fi lling these positions with competent incumbents and to ensure their continued commitment to the organisation.

In line with the pivotal position approach outlined above, Collings and Mellahi (2009) argue that talent systems should begin by iden- tifying the roles that have the greatest potential to contribute to the sustainable competitive advantage of the organisation. Such roles

employees. Similarly, the vesti ng periods for stock opti ons provided were correlated with turnover. The analysis provided management with clear fl ags for the issues to watch out for in proacti vely managing retenti on and in building a retenti on interventi on. It turned out that salary was only a small part of the equati on, with career progression (or lack thereof) a far more signifi cant predictor of turnover.

tend to be highly dependent on human capital and there tends to be signifi cant potential for variability in performance within the role (Becker and Huselid, 2010). For example, the potential for dif- ferential performance between an average and a superstar software designer may be signifi cant (see Oldroyd and Morris, 2012). In con- trast, there are some roles where performance is tightly defi ned by procedure or legislation and there is very little room for a top per- former to perform better than an average employee. An example might be an airline pilot whose role is very tightly prescribed by procedure, schedule (such as air traffi c control) and legislation. Thus organisations should begin by focusing on those positions that have the greatest potential to differentially impact on the per- formance of the organisation.

Thereafter, they advocate the development of talent pools of high performing and high potential employees to fi ll those pivotal positions when they become available. While recognising that there may be situations where recruitment from the external labour market is appropriate, in general organisations should prioritise the development of internal talent wherever possible. Indeed, there is a large body of research which confi rms the challenges of orien- tating and socialising key talents, often referred to as ‘on-boarding’, when they join organisations from the external labour market and the performance challenges which these talents face in maintaining performance levels when they do transfer (Groysberg, 2010). The development of talent pools facilitates a more fl exible approach to leadership succession than more traditional methods which identifi ed particular individuals as successors for specifi c roles. In contrast, Collings and Mellahi (2009) advocate the development of talent in the generic context of the organisation rather than specifi c roles. This facilitates the development of high performing and high potential leadership talent who fi t well with company culture and values, and who can be deployed to a particular role, with their skill set tweaked appropriately, as required. Many organisations also have multiple talent pools representing both technical and leadership employees (see Box 3.2).

Box 3.2: Talent Pools at Computerco

Computerco is a large US headquartered, Fortune 500 organisati on oper- ati ng in the informati on and communicati ons technology sector. It employs

Finally, the strategic TM approach recognises the potential differen- tial contribution of different employee groups (see Lepak and Snell, 1999; Hornung et al., 2010) and argues that given their centrality to organisational success, talent pools should be managed differen- tially. This is not to suggest that others are treated poorly, in HR terms – indeed on balance one would expect that the baseline level of HR in many high performing fi rms would be relatively competi- tive – but rather that the talent pool has a HR system adapted to refl ect their centrality to the organisation. Specifi cally, Collings and Mellahi (2009) advocate the deployment of commitment-orientated HR practices for this cohort of employees.

Having considered the broad debates around the nature of talent management, we now turn to unpacking the empirical research on talent management in the Irish context.