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Tough times or times of opportunity?


Hold onto high performersIn these challenging and uncertain times, it is imperative to hold on to your key people. Erik Berggren explains how to implement effective talent and performance management techniques, to ensure you retain your most valuable assets.

Confusion, frustration, paralysis – these are all symptoms of uncertainty. Whether the cause is mixed signals from managers, or pressures of a changing business environment, uncertainty affects both individuals and the organisation. Empowerment is the cornerstone of effectiveness in modern businesses. Strong talent management is imperative to managing this uncertainty, and we are in uncertain times.

Of course, organisations need their best people the most during times of uncertainty. The cost of a highly-trained individual voluntarily walking away is huge. The company loses all of the investment and suffers loss of productivity.

“Strong talent management is imperative to managing this uncertainty, and we are in uncertain times.”

In fact, in a recent survey by SuccessFactors Research, 65% of respondents noted confusion around expectation and execution as the primary result of mixed messages from management. Companies simply cannot afford the frustration and confusion caused by mixed signals.

As expected, the survey also revealed that under-performers are less likely to leave in times of uncertainty. Uncertain times will keep company payrolls fat with low performers, who tend to stick around. Opportunities are scarcer in an uncertain environment – a high performer may be able to walk, but underperformers know that their options are more limited.

Overcome hurdles

This, of course, compounds a company’s challenges. Not only are they carrying the ‘dead weight’ of these low performers but they must depend on them to carry the company through the time of uncertainty. To overcome these hurdles, companies must manage smartly, and consider strategies to retain top talent.

Maintaining a compensation plan that rewards performance, even in tough times, is critical to keeping high performers. Without bonus or extra recognition for superior effort, 80% of our survey respondents said that they would be more willing to consider external opportunities.

Unfortunately, many companies aren’t doing this – 57% of the respondents also said that top and bottom performers get about the same bonus, a sure-fire recipe for turnover of your best performers. This is where a talent management system can have a tremendous impact in creating the transparency, objective measurement, and commensurate reward that will reduce the turnover of your rock stars.

As employees become more empowered to tackle increasingly technical and knowledge-based jobs, managers must follow a new paradigm – ‘direct, don’t manage’. Of course managers will always be responsible for managing budget, team building, and monitoring individual responsibilities, but managers today are principally providers of direction.

In times of change, this is doubly important. Only 65% of our respondents said that 75% of their employees or less knew what was expected of them in times of change, meaning at least 25% of people lack direction. Great execution of the wrong strategy, or poor execution of a great strategy, gets a company nowhere.

Goal alignment

A goal management system is one way to bring direction to all of an organisation. Goals motivate people, direct their energy, and enable them to act when needed. It is better to set goals first, so managers and employees can work on, well, work. This is why goal alignment is so important – it ensures that all the energy of your employees is focused in the right direction, and the decisions they make are guided by the strategy of the company.

“High performers are up and walking to winning organisations, while the slackers stay put.”

A changing environment isn’t just confusing for workers. Just as workers will be paralysed by mixed signals and uncertain direction, an entire organisation becomes paralysed without clear goals and strong management. Times of change are when companies need agility, the ability to quickly respond and react to the environment, the most.

We asked survey respondents how rapidly they could commit people resources to new courses of action. The answer reveals a potentially crippling lag between decision and action. The majority (54%) stated that it would take one to three months to re-align their talent to respond to changes in their environment. The housing market has been changing every week. In a fast moving, global economy, one month could mean the difference between sinking or swimming.

Times are indeed uncertain and more companies than ever are struggling with people-related issues. High performers are up and walking to winning organisations, while the slackers stay put. Paralysis grips both employees, from mixed messages and lack of direction, and entire businesses from lack of agility and insight.

Comprehensive talent management can neutralize some of these problems, and even create an advantage for companies struggling in trying times by holding onto high performers, providing strong direction for workers, and allowing the organisations to respond with greater agility than their competitors. Tough times can be times of opportunity with the right tools for companies willing to invest the time and effort of setting up a strong talent management system.

Erik Berggren is director of research at SuccessFactors, providers of on-demand performance and talent management software.

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