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Critical review of the peer literature in the field of talent management to
explore the relationship between talent management and Human Resource
Management to come up with an appropriate definition for the same and to
define what makes an individual more talented when compared to others.
Gagandeep Singh
September 2009, Lancaster University
Talent Management
Adding a New Dimension to Human Resource Management
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ABSTRACT .................................................................................................................................... 3
1 INTRODUCTION ...................................................................................................................... 5
1.1DESIGN FOR CHAPTER ONE ................................................................................................................. 5
1.2PURPOSE OF THE DISSERTATION........................................................................................................... 5
1.3DISSERTATION OUTLINE ...................................................................................................................... 5
2 RESEARCH METHODOLOGY .................................................................................................... 7
2.2RESEARCH METHODOLOGY.................................................................................................................. 7
2.3RESEARCH DESIGN ............................................................................................................................. 8
2.4LIMITATIONS................................................................................................................................... 10
3 DEFININGTALENT ................................................................................................................. 12
3.1CHAPTER OUTLINE ........................................................................................................................... 12
3.2DEFINING TALENT ............................................................................................................................ 12
3.3HUMAN CAPITAL ............................................................................................................................. 14
3.4SOCIAL CAPITAL............................................................................................................................... 15
3.5INTELLECTUAL CAPITAL ..................................................................................................................... 17
3.6DEFINING TALENT BASED ON THE ABOVE DISCUSSION ........................................................................... 17
3.7WHY TALENT MANAGEMENT? ........................................................................................................... 18
3.8AN OVERVIEW OF TALENT MANAGEMENT LITERATURE.......................................................................... 19
3.9CATEGORIZATION OF TALENT MANAGEMENT BASED ON LITERATURE REVIEW............................................ 21
4 EXPLORING LINK BETWEEN TALENT MANAGEMENT AND HRM .............................................. 22
4.1DESIGN OF CHAPTER FOUR................................................................................................................ 22
4.2LINK BETWEEN TALENT MANAGEMENT AND HRM ................................................................................ 22
4.4THE SECOND SUB-CATEGORY OF RESEARCHERS..................................................................................... 244.5THE THIRD SUB-CATEGORY OF RESEARCHERS ....................................................................................... 26
4.6TALENT MANAGEMENT:NEW MAKEOVER OF HRM .............................................................................. 26
5 TALENT MANAGEMENT: RESOLVING PEOPLE RELATED ISSUES WITHIN ORGANIZATION ARISING
DUE TO STRATEGIC FACTORS LIKE GLOBALIZATION AND CHANGE IN DEMOGRAPHICS. ................ 28
5.1DESIGN OF FIFTH CHAPTER ................................................................................................................ 28
5.2IMPORTANCE OF TALENT MANAGEMENT ............................................................................................. 28
5.3SHORTAGE OF SKILLS ........................................................................................................................ 29
5.4THE GENERATION GAP ..................................................................................................................... 30
5.5TARGETING TALENT AT VARIOUS LEVELS IN THE ORGANIZATION THEREBY CREATING A TALENT MANAGEMENT
PIPELINE .............................................................................................................................................. 31
5.6THE WAR FOR TALENT...................................................................................................................... 33
6 ANALYSIS ............................................................................................................................. 37
6.1DESIGN FOR CHAPTER SIX ................................................................................................................. 37
6.2GOOGLE......................................................................................................................................... 37
6.4SUMMARY OF THE CASE STUDIES PRESENTED ABOVE............................................................................. 41
6.5TALENT MANAGEMENT: A BRIDGE BETWEEN HRM AND STRATEGY ........................................................... 41
7 CONCLUSION ....................................................................................................................... 47
8 BIBLIOGRAPHY: ................................................................................................................... 48
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Abstract
The popularity of the term talent management is attracting lot of practitioners and
organizations that are resorting to talent management practices and restructuring of theirHRM systems to battle the strategic challenges faced by the organizations today in the form
of globalization, change in demographics and so on. One can find vast literature in the field
of talent management yet none of them have been able to define talent management
comprehensively. This paper has made an attempt to evaluate the existing literature in the
field of talent management to come up with the appropriate definition for talent management.
Further the dissertation attempts to define talent and answer the question about what makes
an individual to be considered as talented by the organization.
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1 Introduction1.1 Design for Chapter One
This chapter starts off by presenting the aims and objectives of writing this dissertation,
which is followed by the dissertation outline giving an overview of various topics that are
going to be discussed in different chapters of this dissertation.
1.2 Purpose of the Dissertation
This dissertation attempts to unravel the true definition of talent management by thoroughly
evaluating the peer literature. It initially discusses the literature on talent in order to find outwhat makes individuals high-value to the organization, thereby pointing out to the importance
of managing talent to the organizations.Itfurther attempts to come up with a definition for
talent management at the end which is complete in all aspects.As the overview suggests, there
are two categories the talent management literature can be divided into. The first category
suggests that both talent management and HRM are one and the same. Hence this dissertation
tries to explore the literature on talent management to find out the relationship between talent
management and HRM.
The next category points out to the factors like globalization and change in demographics and
the impact they have on the job markets. Thus this dissertation attempts to study talent
management literature by authors who have defined the same in context with the factors
mentioned above. The knowledge acquired through careful examination of work by authors
in this field would be used to come up with the definition for talent management which
satisfies all the perspectives presented in the literature review.
1.3 Dissertation Outline
The aim of this dissertation is to explore the already existing literature in the field of talent
management, based on which an appropriate definition for talent management could be
identified. In order to achieve the objectives and fulfil the purpose of writing this dissertation
both literature by academicians and practitioners would be made use of. Chapter two presents
the research methodology accompanied by various methods used to accomplish thisdissertation. In the third chapter, an introduction to the term talent is presented defining what
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it is all about. The importance of managing talent to the organizations is highlighted in this
chapter, which forms the foundation for exploring the literature on talent management.
In chapter four the term talent management has been introduced. Further by means of
definitions and literature review the talent management literature has been categorised into
two segments. The first is based on the viewpoint that both talent management and HRM are
one and the same. The new term has been coined to give HRM a refreshing touch and change
the mindset of completely or partially unaware executives within organizations to make them
realize the added advantage the people of the organization provide to the business. Chapter
four discusses in detail about the perspectives of authors belonging to the first category.
The second category presents the viewpoint of authors who have defined talent management
taking the factors like globalization and change in demographics into account. The
researchers from this category have further pointed to the change in work culture within the
organizations due to the generation gap in employees and the lack of skills in work forces
from different parts of the world. The viewpoint of researchers of this category has been
expanded in chapter five. It further discusses the phenomenon about building talent pipelines
as to how it can be achieved and what it takes to have efficient talent pipelines within
organizations.
Chapter 6 then presents few case studies on talent management practices being followed
within the organizations which points to the importance of employee engagement and
retention. Finally the chapter concludes by presenting my personal viewpoint on talent
management and attempts to come up with a definition for the same. Finally chapter 7 which
is the conclusion of this dissertation summarises all the arguments presented in the earlier
chapters.
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2 Research Methodology2.1 Research Objective
This paper starts off by attempting to define talent, thus portraying the importance of
management of talent to the organizations.It further attempts to find out what makes
individuals to be considered as high-value to the organization. This forms the main objective
of this paper which is to evaluate the current literature in talent management and find out the
various existing definitions for the same. Further by using these definitions this dissertation
would try to come up with a definition for talent management that is complete in all aspects.
This paper further tries to find out as to does there exist any sort of relationship between
talent management and human resource management? This chapter gives an account of the
kind of methodology and various methods and techniques used to achieve the research
objectives mentioned above. Attempts have been made to thoroughly evaluate peer literature
which is well supported by examples taken from the wide practitioners material in this field.
2.2 Research Methodology
In order to overcome the problem of explaining human behaviour in measurable terms
certain methods were used to identify as to why different individuals had different
behaviours (Hancock, 1998). According to Flick, Qualitative research is of specific
relevance to the study of social relations, owing to the fact of the pluralisation of life worlds.
(Flick, 2006, p. 13). The practice of using methods like interviews, observations, focus
groups, action research, and case studies and so on is known as qualitative research
methodology.
As the whole process of talent management involves people, their behavioural aspects like
qualities and competences that the organizations could use as an upper edge over their rivals
this research methodology seems to be the most appropriate one. In order to fulfil the purpose
of the research this paper has used qualitative research as a technique which comprises of
collection of material from the researches that have already been conducted, thereby
scrutinizing the information gathered thoroughly to arrive at conclusions. Further this paper
uses the case study approach to evaluate and support the work done so far in this field.
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All the articles that have been used to accomplish this dissertation are based on two main
theories and perspectives of researchers. First is the resource based view advocated by
Barney (1991, 2001) and the other is the integration of principles of strategy, economics,
and human resources popularized by Boudreau and Ramstad (2005) to develop a decision
science that can underpin talent management they call talentship (Lewis and Heckman,
2006). By going into depth of these theories the literature by various authors were studied to
understand the meaning of the term talent portraying the importance of management of talent
to the organizations. The resource based view also helped in identifying the definition for
talent and explanation for the terms human, social and intellectual capital.
2.3 Research Design
To collect the data from the literature existing in the field of talent management by various
authors databases like Google scholar, Google books, EBSCO, Science direct, Jistor,
SpringerLink and so on were used. The practitioner material was collected by close
examination of papers and journals published by companies like McKinsey, IBM, Accenture
and Harvard business review and so on. To start with articles related to the definition of
talent were found by entering the same termon metalib which is a collection of various
databases mentioned above, that generated 217 articles of which 90 were retrieved. Initiallythe articles were shortlisted by using their titles and abstracts. Further the journals given by
the supervisor were made use of to define the term talent and study about the importance of
management of talent to the organization. These articles also helped to find literature on
various types of capitals and competences required by individuals, to be considered as
talented by the organization.
In the next step the journals were searched for in the databases by entering the termtalent
management through metalib. This search generated 17458 results of which 112 were
retrieved that included lot of material which was not relevant. To further refine the search by
eradicating all the non relevant articles the term talent management literature review was
entered into metalib that generated 67 results of which 45 were retrieved from various data
bases. Thus giving the articles like the one by Lewis and Heckman, 2006 and the work of
Blackman and Kennedy, 2008 which gave a brief idea about what is talent management and
various authors that have done research in this field. This formed the starting point for the
collection of data regarding talent management literature.
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These articles helped in identifying work of authors like Redford, Creelman, Jackson and
Schuler, Olsen, Barney and so on which were read to get a hold on the subject of talent
management. Through further reading I understood that talent management and HR are
similar in their functions. This perspective was developed by reading work of authors like
Cohn, Khurana and Reeves, Kesler, Pascal, Lermusiaux and so on along with the authors
mentioned above. Hence data was searched by entering the terms like strategic HRM and
practices on the databases. This search generated 249 articles of which 42 were retrieved.
Thus by going through their abstracts important articles were shortlisted. As the reading
progressed so did my knowledge about talent management and its link with HRM and its
implications in an organizational change which revealed the connection between HRM and
practices like continuing leadership in organizations, succession planning and development of
employees to help the organizations in retaining them.
As the study progressed it helped to get to the bottom of the relation between talent
management and HRM and indeed helped in defining the competences that would help the
organizations to differentiate between ordinary and talented individuals. This study found the
basis for exploring the relationship between organizational performance and Human
Resource Management practices and how one factor drives the other. Various literatures on
strategic Human Resource Management were thus studied in connection with the above
argument. In order to achieve this, references used in the articles generated above were used.
To collect the material on war for literature, the work by McKinsey and IBM were studied
thoroughly along with the references from articles by Lewis and Heckman, 2006 and
Blackman and Kennedy, 2008.
Having collected data on existing peer review the next step was to search for various
practitioner material which was done by collecting data published by companies like
McKinsey, IBM, Harvard Business Review and others as stated above as the earlier literature
indicated the activeness of these companies in this field. Further research also showed the
consultancy work done by these companies in the field of talent management.
The literature by McKinsey particularly proved to be quite helpful to discover more about the
term talent management. The literature by McKinsey is quite important for any researcher in
this field as it was McKinsey that was instrumental in coining and popularising the term War
for Talent. The literature by McKinsey further pointed out the strategic challenges being
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faced by the organizations across the globe today. It also illustrated the increase in
competition and the fact that how difficult it is getting for the organizations to survive in the
market today without any competitive advantages and differentiating factors. Further the
importance of creating brand value and loyalty for the same in the job market has been
highlighted by the McKinseys literature on War for Talent. Thus by using qualitative
research methodology and digging deep into the literature to unearth certain important fact
about talent management has been the sole purpose of this dissertation. Attempts have been
made to analyze the existing literatures and case studies thoroughly to find enough evidence
to support the arguments presented in this dissertation.
2.4 Limitations
This research is based on qualitative research methodology, which does not involve any
numbers and formulae. To achieve the objectives of dissertation a vast pool of literature by
academicians and practitioners has been used. Hence there is a possibility of difference in
interpretation of facts. Further the surveys conducted by companies like Mckinsey and IBM
finally present the views which could be influenced by ideology of these companies to
support their business needs. In support of this LaRossahas stated that, there are also as with
any family research ethical hazards (LaRossa et al, 1981).
Another issue with this kind of research as pointed out by Pauline Boss is that the process is
too time consuming (Boss, 1993, p. 174). This results in reduction of the size of sample.
Though researchers have argued that thoroughly studying a small size of literature can help in
understanding the theories and questioning the models in the same way as one would do by
studying more amount of literature (Campbell, 1978; Rosenblatt, 1981), the small number of
cases raise questions for some people about the representativeness of findings and limit the
kinds of numerical analyses that can be done (Boss, 1993, p. 174). But one thing is for sure
as pointed out by Boss that qualitative research presents the true experiences, which they
have had in life with, related to the subject that adds to the richness in the findings and
conclusions of the research being conducted. Hence by taking careful measures the
qualitative research methodology can be used to unravel the mystery behind talent
management in this case.
This paper has attempted to define the term talent management and give an account of why is
it important in todays business world. If properly used, talent management can prove to be a
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powerful tool to overcome the challenges posed by the changing elements of the work place.
There have been lot of evidences presented by researchers demonstrating the relationship
between the wealth generated in the firms and the performance of the workforce (Huselid,
1995; Delaney &Huselid, 1996; Singh, 2004). The literature by Lewis and Heckman 2006
further points out to the work of authors that demonstrate this relationship being replicated
within industry (Delery& Doty, 1996), across industry (Guthrie, 2001), and at several
organizational level of analysis (MacDuffie, 1995; Youndt, Snell, Dean, &Lepak, 1996) as
cited in Lewis and Heckman, 2006 (p. 5). The research by Terpstra and Rozell (1993) has
further provided evidences in support of the above argument.
Besides the above mentioned authors there have been many more researchers who have
demonstrated the influence of HRM practices over the performance of organizations which
point out to the fact that this performance fluctuates based on the kind of policies
implemented by the organizations with respect to its work force (Lepak& Snell, 2002; Lepak,
Takeuchi, & Snell, 2003). It is the work of the authors in this field that have tried to study the
impact of organizational policies, people related practices and talent as a whole on the
working of organizations (Lepak, Marrone, & Takeuchi, 2004). The problem lies in the fact
that none of the researchers have been successful in finding out evidence that could help to
figure out questions pertaining to whether it is HR parameters that determine the success ofthe organizations or vice versa (Gerhart, 2005;Wright, Gardner, Moynihan, & Allen, 2005).
Thus the limitation with the research as pointed out by the literature of Lewis and Heckman
2006 is
Many of these studies are based on cross-sectional and retrospective designs and thus do not
address whether HR practices lead to organizational outcomes or organizational outcomes
provide the resources to invest in HR practices. (Gerhart, 2005;Wright, Gardner, Moynihan,
& Allen, 2005 as cited in Lewis and Heckman, 2006, p. 5).
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3 DefiningTalent3.1 Chapter Outline
This chapter starts off by giving an overview of what the term talent actually implies. Further
this part of the dissertation helps in identifying human, social and intellectual capital.
Thereafter this chapter attempts to define talent and importance of management of talent to
the organization. Finally this chapter concludes by introducing the term talent management
by presenting an overview of the same.
3.2 Defining Talent
An important issue the organizations today face is about finding the right people appropriate
for the right jobs. This gives rise to the question what makes an individual as being
considered high-value manager by the organizations. There have been various authors giving
the general characteristics and traits need to be possessed by the individuals for the
organizations to consider them as talented. These qualities as pointed out in the literature of
War for Talent are: skills, knowledge, experience, intelligence, judgement, attitude,
character and drive (Michaels, Jones and Axelrod, 2001, p. Xii-preface). It would be
interesting here to note that the above-mentioned characteristics are quite generalized and
hence one could find a lot of individuals in this world possessing them. Hence it would be
useful to find out as to whether, are there any other qualities that could be found out from
organizations point of view, which could help in differentiating better among individuals
considered as high-value by organizations compared to the rest of the work force.
In order to ensure the growth of organization in the right direction and battling the challenges
posed by the change in demographics and competition arising due to globalization requires
organizations to formulate strategies with respect to the people in the organization that are in
line with the business model of the organizations (Guthridge, Komm, Lawson, 2008). The
literature on talent management by McKinsey has further pointed out to the problem arising
due to the looming retirement of baby boomers in the developed world and dearth of young
people entering the work force in Western Europe that can be attributed to the vacuum
created by the people retiring from the work force (Michaels, Jones and Axelrod,
2001;Guthridge, Komm, Lawson, 2008).
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Further few of the researchers by means of their work have pointed out to the fact that if
talent management practices are put into use effectively can result in developing a smooth
flow of leadership within the organizations (Romans, Frost and Ford, 2006). The literature
on Talent Management: Developing or Preventing Knowledge and Capability? draws
attention to the fact that if talent management practices are used efficiently, it will help in
providing learning support and also in the development of organizational proficiency
(Bersin, 2007; Kates, 2006). In order to understand as to why the above mentioned factors are
important from an organizations point of view it would be interesting here to critically
examine the question about what makes an individual talented?
The war for talent literature describes Talent as the collective qualities of an individual
(Michaels, Jones and Axelrod, 2001). These competences and qualities are general traits with
in an individual that make them successful when compared to the ordinary ones. All the
above-mentioned characteristics can be attributed to human capital as they are traits and
characteristics of the individual, which are developed by the personal interest of the
individual. No doubt human capital is instrumental in making an individual to be considered
as high-value for the organization but in many cases the brand value of the individuals is
what helps them to earn projects and contracts for the organization. This is what can be
attributed to the social capital where in the individual results in gain to the organization dueto his/her position in the market through the relationships they have established both internal
and external to the organization.
Social capital is something that is constructed over time due to the performance of an
individual. Social capital can be attributed to the gain one gets in return of the work one has
done throughout ones career. When an individual works for a long time in the organization,
one tends to develop relations both internal and external to the organization, which contribute
towards acquiring and handling of the projects and also in the smooth running of the business
operations. Finally when the employee tends to develop a new product or a technology, this is
what benefits the organization the most as they not only get the rights for the new invention
but are the only ones dealing in the new product thereby attaining the monopoly. This can be
attributed to the knowledge or the intellectual capital, which is an important asset to the
organizations. To be able to understand these capitals in detail the next section depicts the
nature and kind of practices that exist in various organizations belonging to different sectors
and kinds of characteristics they require in their workforce.
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3.3 Human Capital
The HRM of a large number of organizations have worked towards defining personal skills
an individual needs to possess for qualifying for the job of managers (Boam and Sparrow,
1992; Dale and Iles, 1992; Fletcher, 1992; Iles, 1992; Salaman, 1992; Spencer & Spencer,
1993). According to Baron and Armstrong human capital is oriented around the competitive
advantage referring to the upper edge provided by the people to the organizations over their
rivals (Baron and Armstrong, 2007, p.5-7). Chatzkel, 2004 in an attempt to demonstrate the
importance of human capital described it as a differentiator, which is cited in the literature
of Baron and Armstrong, as it is human capital that is differentiator for organizations and
actual basis for competitive advantage. According to Scarborough and Elias, 2002 The
concept of human capital is most usefully viewed as a bridging concept- that is, it defines the
link between HR practices and business performance in terms of assets rather than business
processes. To understand the human capital better consider the following definition:
Human capital is defined by the OECD as the knowledge, skills, competences and attributes
embodied in individuals that facilitate the creation of personal, social and economic well
being. (Keeley, 2007, p. 29)
Sparrow, 1997 in his literature has identified and categorized various human traits essential
from organizations point of view under three broad categories (Anderson &Heriott (eds.),
1997, p. 345). The first category defines the skills required for general day-to-day activities
that resort to the management duties within the organization. The second category according
to Sparrow is the behavioural competences that portray the skills like ingenuity, creativity
and resourcefulness required to think beyond the general work circumstances (Sparrow,
1997; Kanungo and Mishra, 1992 as cited in Anderson &Heriott (eds.), 1997). Further these
skills help the managers to work in specific situations that are a deviation from the ordinary
ones and demand the characteristics to work under stress and think out of the way to inculcate
creativity and innovation in to their work thereby helping to succeed over their counter parts.
The final category consists of the skills that represent strategic competences needed to be
possessed by the workforce in totality to carry out the operations smoothly in line with the
business model of the organization by correctly interpreting the strategy of the organization
(Sparrow, 1997 as cited in Anderson &Heriott (eds.), 1997). These skills are very important
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as they help the work force to understand what is required by them and also work towards
achieving the specific objectives. Bontis et al (1999) defined human capital as follows:
Human Capital represents the human factor in the organization; the combined intelligence,
skills and expertise that gives the organization its distinctive character. The human elements
of the organization are those that are capable of learning, changing, innovating and providing
the creative thrust which if properly motivated can ensure the long term survival of the
organization. (Bontis et al, 1999 as cited in Baron and Armstrong, 2007)
Baron and Armstrong (2007) through their literature have illustrated the fact that human
capital is not something that is possessed by the company but is acquired through long lasting
relationships developed with the employees through employee engagement. Davenport
(1999) in support of the above argument has commented that
People possess innate abilities, behaviours and personal energy and these elements make up
the human capital they bring to their work. And it is they not their employers, who own this
capital and decide when how and where they will contribute it. In other words, they can make
choices. Work is a two way exchange value, not a one-way exploitation of an asset by its
owner. (Davenport, 1999 as cited in Baron and Armstrong, 2007)
The above argument clearly illustrates the need for organizations to identify human capital
and make an effort to manage it in a way contributing towards growth and success of the
organization. According to Lepak and Snell (1999) The value of human capital is inherently
dependent upon its potential to contribute to the competitive advantage or core competencies
of the firm. Barney (1991) architected the resource based view of the firm which in support
of the Lepak and Snells argument proposes that sustainable competitive advantage is
attained when the firm has a human resource pool that cannot be imitated or substituted by
the rivals (Baron and Armstrong, 2007, p. 10).
3.4 Social Capital
With the advent of internet and electronic connectivity, the work culture has changed
considerably. The number of interactions within the organization has increased owing to
the spread of business globally (Easton &Araujo, 1994 as cited in Holman, Wall, Clegg,
Sparrow and Howard (eds.), 2002). The literature by Sparrow further suggests that operation
of knowledge markets within the firm has become important in order to be able to utilize the
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talent of individuals in more efficient way (Holman, Wall, Clegg, Sparrow and Howard
(eds.), 2002, p. 381). Hence the development and management of contracts and relationships
within the organization has become very important. Butler further pointed out that this
interactive capability is to get better over the next decade (Butler et al., 1997 as cited in
Holman, Wall, Clegg, Sparrow and Howard (eds.), 2002). Researchers have also pointed out
to the fact that the organizations today have transformed into information pools that facilitate
exchange of information resulting in resolving issues in the best way possible (Hansen &
Haas, 2001, Hansen, Nohria& Tierney, 1999).
Sparrow through his literature points out that the interactions within organisations have the
same economic purpose, which is the exchange of goods, services or information (Holman,
Wall, Clegg, Sparrow and Howard (eds.), 2002, p. 381). This adds to the responsibility of
managers to make sure that the exchange process is carried out smoothly without any
hindrance to the business operations. This environment marked with globalization and
competition demands for the skills of managing relationships within the organization as a
prerequisite in the individuals, to be considered as high value managers by the organizations.
These skills represent the social capital. According to Kocharekar, managers act as a medium
of information exchange, by enhancing the rolling of information internally thereby
intensifying it through effective communication within the firm (Kocharekar, 2001). In orderto demonstrate the importance of social capital VanWijk&van den Bosch have proposed that
understanding the enabling and restricting factors of this knowledge sharing process is of
great importance (VanWijk&van den Bosch, 2000, p. 175).
The existing literature on social capital has given a lot of definitions for the social capital.
Adler and Kwon in an attempt to portray the generalized view of the researchers have defined
social capital as the good-will that is engendered by the fabric of social relations and that
can be mobilised to facilitate action (Adler and Kwon, 2002, p.17). To foster a level of
understanding and comfort is the prime requisite for development of good relations. This
breeding of relations and contracts is what is meant by good will, which helps in driving
projects and operations within the organizations. Bourdieu&Wacquant in an attempt to define
social capital pointed out that it is, the sum of the resources, actual or virtual, that accrue to
an individual or group by virtue of possessing a durable network of more or less
institutionalised relationships of mutual acceptance or recognition (Bourdieu&Wacquant,
1992, p. 119). Social capital is considered an important characteristic of high value individualas the absence of the former would make business processes unlikely in many situations.
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Burts view as pointed out in the literature by professor Sparrow illustrates the use of social
capital as a representation for terms like creativity, leadership and team work (Burt,
2000 as cited in Sparrow, 2002). In an attempt to distinguish Social capital from human
capital Sparrow points out that human capital represents personal traits and characteristics
while social capital is a measure of how well connected is the individual both internally and
externally (Holman, Wall, Clegg, Sparrow and Howard (eds.), 2002, p. 384).
3.5 Intellectual Capital
Baron and Armstrong through their work on human capital management have described
intellectual capital as the stocks and flow of knowledge available to the organization
(Baron and Armstrong, 2007, p. 6). These are considered as intangible assets that account
for total worth of the business in the form of patents. According to Bontis (1996; 1998),
intangible assets are the resources other than money and other physical possessions that help
in creation of wealth for the organizations (as cited in Baron and Armstrong, 2007). Edvison
and Malone (1997) depict intellectual skills as relationships inside and outside the
organization, including those with customers and suppliers (as cited in Baron and
Armstrong, 2007). The literature by Baron and Armstrong points out to goodwill, corporate
image, brands and patents as some of the key parameters constituting intellectual capital.
3.6 Defining Talent Based on the Above Discussion
Having discussed social capital, human capital and intellectual capital it is important here to
note that all are significant from organizational point of view and go hand in hand to
contribute towards the success of the individuals which is indicated by the work of Sparrow.
In words ofSparrow behaviour without intent is not a source of competency. (Anderson
&Heriott (eds.), 1997, p.348) .He further points out to the fact that talent is not just about
possessing few qualities in the form of human, social and intellectual capital as mentioned
above, instead it is the combination of a number of elements as specified below (Anderson
&Heriott (eds.), 1997, p.348):
Consortium of expertise and know-how: In order to be able to perform the task and achieve
the objectives set forth by the management of the organization, an individual needs to possess
the required pool of knowledge which would not only help him/her but also help in assisting
the fellow employees.
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Expertise of working in dynamic work environment: The work environment both internal and
external to the organization is constantly changing owing to globalization and innovations
which are resulting in great deal of competition by the rival organizations. Possessing skills
to combat challenging scenarios and being able to develop certain pattern of behaviours
which could be applied to similar situations in future could add to the knowledge pool of
organization.
Attitudes and values: The foremost requirement of successfully achieving the objective is
for an individual to possess the right kind of attitude, which could prove as a motivating
factor for others. In order to achieve success an individual needs to portray to fellow
employees that that the task could be accomplished. In order to lead successfully a manager
needs to earn the trust of the employees and make them believe that the task could be
successfully completed.
Human capital: as already stated earlier that human capital is a group of qualities or traits
that an individual needs to possess in order to be successful. Human capital refers to
characteristics of individuals like risk taking abilities, good leadership qualities, motivating
skills, team working and so on which would make him/her stand apart from the rest of the
employees.
Purpose: for a strategy to be triumphant it is important that the intent or the objective of the
goals is reflective of the purpose of the individual. The cause behind the individual joining
the company and the nature of the job should be complementary to each other. For example a
person wanting to learn more about the mechanisms of automotive should work in the
automotive sector than any other mechanical engineering related industry.
3.7 Why Talent Management?
Thus the various capitals together account for the establishment and development of talent
pools within the organization. Hence it is important to understand what these capitals are, to
achieve an even blend of these credentials and competences to make the organization a
successful unit generating loads of wealth. Through successful management of the above
mentioned talent, organizations could achieve a competitive advantage over its rivals which
is unique and difficult to be reproduced in the form of individuals thus qualifying them to be
considered as being of a high value by the organizations.
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Thus for an individual to be considered as high value when compared to his fellow
employees the knowledge about the various types of capital would play an important role.
The knowledge about the various capitals would help in identifying what sort of qualities are
required to perform particular jobs which is recognized by understanding the definition of the
various capitals. By defining various types of capitals we get an idea about what type of
capital would be important at various levels of management in the organization by equating
the definition of the capitals with the job requirements. It would not be possible to define
what makes an individual a high-value manager as different jobs have different requirements.
But by possessing the knowledge about various types of capitals one could know what kind
of qualities need to be possessed by the individuals for them to be considered as high-value.
The identification of the appropriate talent pertaining to specific job profiles poses a great
challenge to the organizations in the current world of business. Hence it is very important for
the organizations to figure out certain practices to manage and utilize the talent in the most
effective and efficient way possible. Thus talent management is gaining recognition at a fast
pace in the organizations to provide them with a competitive advantage that is unique and
rare and cannot be reproduced by the rival organizations.
3.8 An Overview of Talent Management Literature
Lot of articles by the consultants have described the process of talent management as a
mind set of the objectives and strategy planners of the organization (Creelman, 2004, p. 3,
cited in Lewis and Heckman, 2006). Studies by Mckinsey in 1997 showed that there was a
shortage of executives at that time and the problem exists even today, only becoming worse
due to the factors like globalization, change in demographics and increase in competition.
(Guthridge, Komm, Lawson, 2008). The same study by Mckinsey has further revealed the
problem of looming retirement of baby boomers in the developed world and by a dearth of
young people entering the work force in Western Europe. (Guthridge, Komm, Lawson,
2008).
The literature in the field of Talent management further suggests that there has been a
concern among larger organizations to establish themselves as a brand in the market of
human resources to be able to acquire the best talent. The literature by Lewis and Heckman,
2006 indicates that often the terms like talent management, talent strategy, succession
management, and human resource planning have been used as substitutes for one a nother.
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For instance consider the following definitions given below about handling operations related
to work force within the organizations:
-Ensure the right person is in the right job at the right time. (Jackson & Schuler, 1990, p.
235 as cited in Lewis and Heckman, 2006)
-A deliberate and systematic effort by an organization to ensure leadership continuity in key
positions retain and develop intellectual and knowledge capital for the future, and encourage
individual advancement (Rothwell, 1994, p. 6)
-A company's traditional department-oriented staffing and recruiting process needs to be
converted to an enterprise wide human talent attraction and retention effort. (Olsen, 2000, p.
24 as cited in Lewis and Heckman, 2006)
The first definition by Jackson and Schuler defines human resource planning while the one
by Rothwell defines the process of succession planning. Finally the definition by Olsen
pertains to talent management within the organizations (Lewis and Heckman, 2006).
Therefore the terms are different but all of them imply the same thing.
To understand talent management better consider the definition by Redford, which defines
talent management as a process of ensuring that everyone at all levels works to the top oftheir potential (Redford, 2005, p. 20). Hence the whole process of talent management is
about acquiring and managing talent in the form of the people that work towards the growth
of the organization keeping the factors like globalization and change in demographics in
mind. In support of this Helen Handfield-Jones defines talent management as quoted in the
literature by CIPD as Talent management is about programmes aimed at the people who fill,
or have the potential to fill, key positions. These programmes include talent reviews,
succession planning, and leadership development aimed at the wider employee population.
Further the literature by CIPD 2006 has defined talent management as the process involving,
The systematic attraction, identification, development, engagement/retention and
deployment of those individuals with high potential who are of particular value to an
organisation. (Talent Management: Understanding the dimensions by CIPD, 2006). Thus
there have been various researchers in this field who have attempted to portray the value of
appropriate talent in the form of work force and the benefits they result in, to the
organizations. The talent management literature can be classified into two major categories asdescribed below.
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3.9 Categorization of Talent Management Based on Literature Review
Various authors through their work have pointed out to the fact that talent management will
form a crucial part of the 21st century HRM (Ingham, 2006; Ashton and Moreton, 2005;
McGee, 2006; McCauley and Wakefield, 2006; Heinien and ONeill, 2004; Blackman and
Kennedy, 2008). The entire literature on talent management can be classified in to two broad
categories (Blackman and Kennedy, 2008). There is the first category that suggests that talent
management and HRM are one and the same. The term talent management is used only to
give a reviving touch to HRM to emphasize on the importance of people to the organizations.
Researchers like Hass 2006; Soliman and Spooner, 2002 through their work have illustrated
the fact that it is important for the organizations to understand the significance of the value,
the human factor adds to the organizations and consequently use it as a competitive
advantage over their rivals (Blackman and Kennedy, 2008).
Few authors have argued that certain HR functions aid in indentifying, retaining and
development of talent in the form of people, which would benefit the organizations through
their skills, and abilities to understand and resolve business related issues (Lopez, Peon and
Ordas, 2005, 2006; Haesli and Boxall, 2005). In support of this Blackman and Kennedy have
said that talent management can be seen as a specific way of attracting and retaining the key
knowledge and capabilities of the future (Blackman and Kennedy, 2008). Thus the authors
belonging to fist category present an argument saying that talent management is same as
HRM. The term talent management is used instead of HRM to give it a new and enhanced
identity, which helps in changing the mindset of the people that are completely or partially
unaware of the value, the peoples factor adds to the organizations. This is going to be
discussed in chapter four in detail.
The second category points out towards the role of factors like globalization and change in
demographics in influencing the business operations around the world. Various authors have
pointed out towards the problem of dearth in the competences, aptitude and talent in the work
force around the world that has become a cause of concern for the organizations (Green,
2000; Aiman-Smith, Bergey, Cantwell and Doran, 2006; Blackman and Kennedy, 2008).
There have been lot of researchers who have illustrated the problem about shortage of skills
needed in the work force coming from Asian countries like India and china along with thosecoming from Australia (Guthridge, Komm, Lawson, 2008; Michaels, Jones & Axelrod, 2001;
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Holland, Sheehan, Donohue and Pyman, 2007; Thomson, 2007; Blackman and Kennedy,
2008).
Another problem as pointed out by the literature review on talent management is due to the
change in demographics. The generation gap has resulted in a need for the organizations to
redesign their HR systems by aligning their policies with the demands and working culture of
the generation Y employees. The workforce of the modern day is not keen on establishing
long term relationships with any one particular organization. They are rather looking for
opportunities to switch jobs, make more money and advance at a faster pace within
organizations (Green, 2000; Eisner, 2005; Holland et al., 2007; Guthridge, Komm, Lawson,
2008; Michaels, Jones & Axelrod, 2001; Blackman and Kennedy, 2008). The viewpoints of
authors from this category will be expanded in chapter five.
4 Exploring link between talent management and HRM4.1 Design of Chapter Four
This particular chapter as pointed out before evaluates the part of talent management
literature, which suggests that both talent management and HRM are one and the same. The
new term is coined to give a refreshing touch to HRM, which would be discussed in detail inthis chapter. This chapter would start by giving an introduction to the claim by a category of
authors which say that both talent management and HRM are similar as they involve same
practices. The sections to follow have analysed the literature by the authors of this class by
dividing them into three sub-categories. Finally the relationship between talent management
and HRM is discussed.
4.2 Link between Talent Management and HRM
As described in the previous section the literature on talent management can be divided into
two categories. This section evaluates the work by authors belonging to the first category,
which illustrate that both talent management and HRM involve same practices. There is a lot
of literature in the field of talent management giving various definitions for the same. But
none have been able to define it appropriately owing to the fact that there has been a lot of
confusion about the terms and also different notions and perspectives of the authors who have
done work in this field so far. Further the peer review on the literature suggests that the major
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characteristics of talent management are recruiting, retaining and development of the
employees which are the aspects of HRM.
Lot of academicians have pointed out to the link between HRM and talent management
through their work (Barney and Wright, 1998; Brewster, Sparrow and Harris, 2005; Evans,
Novicevic and Davis, 2007; Ghanam and Cox, 2007; Hailey, Farndale and Truss, 2005;
Holland, Sheehan and De Cieri, 2007; Martell and Carroll, 1995; Michie and Sheehan, 2005).
Then why is there a need to use different terminology talent management? (Lewis &
Heckman, 2006). To answer this question this section evaluates the literature by studying the
three sub-categories of viewpoints highlighted by Lewis and Heckman, 2006 in their
literature as described below.
The first stream identified by Lewis and Heckman based on the studies of various other
scholars like: Byham, 2001; Chowanec&Newstrom, 1991; Heinen& O'Neill, 2004; Hilton,
2000; Mercer, 2005; Olsen, 2000; depicts the view of these authors who consider talent
management as a collection of various functions of HR like recruiting, selection,
development and career and selection management (Lewis & Heckman, 2006, p.2). The
literature by Lewis and Heckman further illustrates that these authors advocate talent
management being about performing the same traditional practices what HRM does but the
differentiating factor in both is the rate at which these functions are performed. Talent
management by using certain specific practices helps in cutting down on the time taken to
perform the HR functions. According to Olsen
A company's traditional department-oriented staffing and recruiting process needs to be
converted to an enterprise wide human talent attraction and retention effort. (Olsen, 2000, p.
24). Thus it can be found out that the authors possessing the first stream of thoughts more or
less tend to rely on using the basic functions of HR to extract the definition of talent
management. The work done by researchers belonging to this category tends to revolve
around the normal HR practices. Further the authors belonging to this stream point out to the
fact that, in the quest for finding the right kind of talent for the organizations, term talent
management has been used to zero in on the most important practices out of the basic HR
functions.
This approach towards talent management suggests that HR and talent management are one
and the same with the difference that talent management tends to focus only on the HRpractices that seem to be relevant from strategic point of view to the organization and
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performing the functions at a quick pace as stated above. Based on the general HR practices
this stream of researchers can be further sub categorized owing to the importance given by
them to a particular practice. For instance the literatures of Sullivan, 2005 and How a
Talent Management Plan, 2004 tend to advocate talent management in terms of the best
candidates possible (Lewis & Heckman, 2006, p.2).
On the other hand Cohn, Khurana and Greeves, 2005 have carried out research in the area of
development of employees in the organization through skill enhancement programs, thereby
coining the term growing talent in their literature (Cohn, Khurana&Greeves, 2005, p. 64).
Lewis and Heckman have thoroughly summarized the views of scholars belonging to this
category in their literature as:
Regardless of the breadth of their point of view, or lack thereof, these au thors replace the
traditional term Human Resources with Talent Management. (Lewis & Heckman, 2006,
p.2)
4.4 The Second Sub-category of Researchers
The second stream consists of researchers like: Kesler, 2002; Pascal, 2004; Jackson and
Schuler, 1990; Lermusiaux, 2005, The Changing Face of Talent Management, 2003; whoconsider talent management as offering adequate flow of employees into jobs throughout the
organization (Lewis & Heckman, 2006, p.2). This category of scholars preached talent
management as the promotion of employees within the organization. According to them
talent management is a process of constructing strong pipelines which have a continuous flow
of talent at any point of time in space, Thereby helping in resolving the problems arising due
to the vacancies being created within the companies.
Though the authors from this category advocate talent management as the shaping of basic
HR practices (Lermusiaux, 2005), the main idea advocated by them is that talent management
mainly revolves around planning the progression of talented individuals within the
organization (Jackson and Schuler, 1990; Rothwell, 1994). Schweyer in an attempt to present
the viewpoint of this category of researchers pointed out that The first step in talent
management is to gain a solid understanding of the internal workforce (Schweyer, 2004a, p.
20). The area concerning the man power and work force organization has been
intensifying, presenting a challenging task to both practitioners and managements of largebusiness entities (Pegels, 1981; Stahlman& Lewis, 1994; Wild &Schneeweiss, 1993).
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Further the problem of ensuring an adequate flow of talent into positions while optimizing
organizational resources has long been a topic of interest to researchers in industrial
engineering and industrial management(Lewis & Heckman, 2006, p.2). Hence talent
management is being used by the researchers belonging to this type as a means to highlight
and resolve the issues pertaining to organizational modelling and staffing/career flows by
coding levels of hierarchy, rules for entering and exiting a position, and parameters such as
costs, anticipated tenure, and supply and demand (Lewis & Heckman, 2006, p.2). Thus talent
management when studied from the point of view of scholars belonging to this group gives a
notion that talent management is more to do with the planning of internal issues related to the
HR within an organization.
Selection and recruiting are not an issue but development and promotion of individuals
within an organization is what would ultimately help in retaining talented individuals thus
helping in employee engagement. Based on the views of this class of scholars it can thus be
concluded that organizations invest heavily in development of individuals and moulding them
according to the needs of the business model of the organizations. This calls for
establishment of trust and belief between the individuals and organization and providing the
firms with an assurance that the individuals will stay for a long time and thus help towards
the growth of the organization. The formation of such contracts based on trust and belief isreferred to as employee engagement (Macey and Schneider, 2008).
The literature on talent management by McKinsey points out to the fact that one of the
important demographic challenges the organizations today face is due to the difference in
thoughts owing to the disparity in the needs and perspectives between workers based on age
groups (Guthridge, Komm, Lawson, 2008). The invention of internet made the world a global
village resulting in exchange of thoughts between groups from different parts of the world.
Thus affecting the culture, practices and thought process of the people born after 1980
representing the generation Y.
The whole idea of working today has changed. The McKinsey literature further points out to
the interesting change in needs of the work force which demand more flexibility, meaningful
jobs, professional freedom, higher rewards, and a better worklife balance than older
employees do. (Guthridge, Komm, Lawson, 2008). The so-called Generation Y no longer
aims for long career periods. They look for challenging opportunities to show their talent and
contribute towards the growth of organization through their creative and innovative ideas, in
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turn expecting and rather demanding high compensation packages. In such a scenario it has
become crucial for the organizations to promote and retain the right sort of talent within the
organizations and the cost of doing so has risen quite sharply. Hence talent management is
being viewed as a process to bring down the transaction costs associated with the work force
to lower levels. The organizations today are not shying away from providing the talented
individuals with huge amounts of pay packages and salaries, but in return expect the share
prices to increase considerably.
4.5 The Third Sub-category of Researchers
The third stream focuses on talent generically (Lewis & Heckman, 2006, p.2). The authors
belonging to this category, in order to define talent management, go beyond the limits ofgeneral HR functions in order to identify the talent that actually separates the successful
organization from its rivals. Identification of talent in this case refers to the few individuals
that are in some way or the other responsible for the growth of organizations as pointed out
by Buckingham and Vosburgh, 2001. According to them If we deal only with programs and
processes, then we never touch what is ultimately our greatest strategic differentiator: The
talent inherent in each person, one individual at a time (Buckingham&Vosburgh, 2001, p.
18). This also justifies the use of talent management as a separate field to attract, retain anddevelop talent that helps in expansion of business.
According to Lewis and Heckman 2006, the high performers would like to work with
associates who possess the same amount of wisdom and level of expertise. This would also
sound tempting from the point of view of the organizations to employ individuals belonging
to the creamy layer as this would help them gain more profits (Lewis & Heckman, 2006, p.3).
This is what presents the organization with a barrier and a task as pointed out by the authors
that employing all 90th percentile performers would not be feasible as this would result in
companies incurring high costs for the jobs, which could be done by the mediocre at a
minimal price.
4.6 Talent Management: New Makeover of HRM
If one pays close attention to the literature on talent management one would find that both
talent management and HRM practices are one and the same (Schweyer,2004; Vaiman&
Vance, 2008; Boudreau & Ramstad,2005; Wright and Haggerty, 2005; Lewis and Heckman,
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2006). Then the question arises about, why the use of a different term talent management?
Consider the definition for talent management given by Schweyer as Talent management is
a strategic approach to the optimization and alignment of human capital. It represents the next
step in the evolution of HR. With the advent of HR, we saw companies to take a more
professional approach to managing people, implementing recruitment and retention
programmes, looking at sourcing etc. Thus talent management is the modern day term used
for HRM to give it a revitalizing touch. Vaiman and Vance in support of this present the
viewpoint of scholars as certainly a new spin on an old concept can provide a refreshing
change, as well as an opportunity to renew and recommit efforts for organizational
improvement. They also point out to the fact that if talent management is to make a
significantly new contribution beyond simply providing a rather superficial new and
improved label to essentially the same HR practices, it must hold a more clear link with
strategic human resource management (Boudreau & Ramstad,2005; Wright and Haggerty,
2005 as cited in Vaiman& Vance, 2008).
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5 Talent management: resolving people related issues withinorganization arising due to strategic factors like globalization and
change in demographics.
5.1 Design of Fifth Chapter
This chapter starts off by illustrating the importance of talent management, which gives an
account of factors that have an impact on the job market today. Further up in the chapter the
problems pertaining to shortage of skills and the generation gap are discussed. The
importance of having strong talent pipelines and the challenge it poses to the organizations is
also discussed in detail. Finally the literature by McKinsey on War for Talent is given an
account of which illustrates the struggle of the organizations to keep pace with the changes
occurring due to the factors like globalization, change in demographics. Finally a case study
on allied signal is presented in support of the above argument. Henceforth the chapter is
concluded by portraying talent management as a tool to battle against the impact of the
factors changing the work environment.
5.2 Importance of Talent Management
Talent management as seen in the previous section is all about performing HRM functions in
line with the growing challenges in the form of demographic change, globalization, and
the rise of the knowledge worker as pointed out by the literature on making talent as the
strategic priority (Guthridge, Komm, Lawson, 2008). These challenges have pushed the
organizations to think beyond the limits of traditional HRM involving just the recruitment
and promotion of the employees. With the growth of organizations in terms of people and
business the need for the hour has become to synchronize the strategy of people with the
overall strategy of the organization. The literature points out to an interesting fact about theincrease in the young talent owing to the rise in the rate of education. Further the study by
Guthridge, Komm, Lawson, 2008 has revealed that the professional talent in the emerging
markets such as China, Hungary, India, and Malaysia lack certain factors necessary for
employment like Poor English skills, dubious educational qualifications, and cultural
issuessuch as a lack of experience on teams and a reluctance to take initiative or assume
leadership roles (Guthridge, Komm, Lawson, 2008). The emerging markets present the
organizations with the opportunity of cutting down the peoples cost as hiring labour in the
third world countries is not so expensive. The multinational corporations are thereby
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confronted with the task of penetrating the emerging markets and choosing the appropriate
candidates with the right skill sets.
Another important factor haunting the organizations today as mentioned above is that about
demographic change. The main challenge the organizations today face is due to the difference
in the age groups. The generation gap has resulted in different expectations among the work
force. As pointed out by the literature on making talent as the strategic priority, the workers
belonging to the present generation demand, flexibility, meaningful jobs, professional
freedom, higher rewards, and a better worklife balance than older employees did
(Guthridge, Komm, Lawson, 2008). Hence the demographic changes force the organizations
to keep pace with it by regularly reviewing and updating their peoples strategy.
The third important and daunting task for the organizations is the management of knowledge
workers within them. The workers belonging to this category account for the major part of
the talent consortium within organizations.Guthridge, Komm, Lawson point out to the fact
that it is the knowledge workers who are able to earn almost three times greater profits than
normal workers (Guthridge, Komm, Lawson, 2008). The identification, development and
management of these knowledge workers pose a herculean task for the organizations.
All the above-mentioned factors ultimately point out to the challenge faced by theorganizations today to form strong talent pipelines that cater to the business needs at any
point in time.
5.3 Shortage of Skills
Academicians suggest that in the current situation prevailing over the business world talent
management is seen as a resource for developing the appropriate competency levels within
the organizations (Aiman-Smith, Bergey, Cantwell and Doran, 2006; Bernhart, 2006;
Donaldson, 2006; Green, 2000; Holland, Sheehan, Donohue and Pyman, 2007; Thomson,
2007; Leape, 2006). The factors like globalization and change in demographics have made
the usual HRM practices of selection and recruitment even more complex than before.
Blackman and Kennedy through their literature present the viewpoint of Strack, Baier
andFahlander 2008 which portrays the problem of aging work population in the third world
countries owing to the current demographic set up existing in these countries (Blackman
and Kennedy, 2008). Research has further shown that the number of workers to retire is
expected to go up in the next few years (APSC, 2007; Patrickson and Hartmann, 1995).
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Baker, 2006 has pointed out to an interesting fact in his literature. Through his research he
found that the interest of people is continuously changing with respect to their choice of
subjects at various stages of their educational career as cited in (Blackman and Kennedy,
2008). The shift in trend towards a particular field results in shortage of people in the other
fields. Thus the shortage of skills poses a big threat to organizations, which could also result
in declining the growth rate of the organizations. Attempts are thus being made by the
academicians in the field of talent management to formulate specific strategies to overcome
this problem (Romans, Frost and Ford, 2006; Archer, 2007; Dewey, 2007; Baxter and
MacDonald, 2007).
5.4 The Generation Gap
As illustrated in the beginning of this chapter generation gap is seen as an influencing factor
in the job markets of today. The current generation of work force has different needs and
expectations from the job. Armour in support of the above argument has quoted that
Unlike the generations that have gone before them, Gen Y has been pampered, Nurtured and
programmed with a slew of activities since they were toddlers, Meaning they are both high-
performance and high-maintenance as said by TuglanThey also Believe in their own
worth. (Armour, 2005, np).
Organizations spend load of money in training and developing their employees hence
retention of employees is very important. The loss of work force would result in huge
amounts of capital losses in the form of both money and skills to the organization. Talent
retention thus forms an important aspect of talent management.
Initial indications for 2007 are that candidates continue to be bullish about how much they
are worth, and companies are trying hard to keep pace with t heir skills requirements
(CareerOne, 2006 as cited in Blackman and Kennedy, 2008). Thus companies need to figure
out about the expectations and requirements of the current generation of work force and thus
formulate their people related strategies aligning them with the same.
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5.5 Targeting Talent at Various Levels in the Organization Thereby Creating
a Talent Management Pipeline
The McKinsey literature on war for talent points out to the fact that the main problem faced
by organizations today is not just limited to attracting and retaining employees but to create
talent pipelines that caters to the needs for talented individuals within the organization at any
point of time (Michaels, Jones and Axelrod, 2001). The literature has quoted Kevin Sharers
view, the CEO of Amgen as He believes that building a strong talent pipeline is as critical to
his companys success as building a vibrant product pipeline (Michaels, Jones and Axelrod,
2001, p. 37). In support of the Sharers view Goldman and Bernshteyn, 2 007 have rightly
pointed out as talent pipeline being concerned with the bench strength owing to the fact that
The only way your organization can be firing on all cylinders is if no seat is left unfilled for
long.
They further point out that whenever a vacancy is created at executive levels within the
organization the HR departments start looking outside the organizations describing it as the
recruitment issue. According to the authors this should be the last option for the organizations
to look up to. There should be talent available within the organization that is by all means
ready to accept the position of responsibilities after the huge amounts of investment by the
firms in the development of individuals constituting the work force of the organization. It is
thus important from organizations point of view to create talent pipelines capable enough to
cater to the business needs of the organization.
The literature on building a talent pipeline further points out to the lack of employee
engagement amongst U.S. employees (Goldman &Bernshteyn, 2007). The literature reveals
that 70 percent of the work force in U.S. feel either not engaged or actively disengaged at
work, as pointed out by a recent survey by the Gallup Organization. The literature has identified few factors that would help in creating employee engagement and loyalty of
employees towards the organization thus helping to build strong and efficient talent pipelines
(Goldman &Bernshteyn, 2007). These factors are as given below:
Targets: The literature on building a talent pipeline indicates that targets and objectives set
forth by the organization not only assists in driving business models to success but also act as
a motivating factor for the employees (Goldman &Bernshteyn, 2007). The literature also
depicts the viewpoint of the authors David Sirota, Louis A. Mischkind and Michael Irwin
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Meltzer who by means of their article "Why Your Employees Are Losing Motivation,"
portray that it is the targets that keep the employees engaged to the organization apart from
money (Goldman &Bernshteyn, 2007). The targets should be difficult enough to act as a
motivating factor for the employees to use their creativity and efforts but at the same time
should be such that it is realistic and achievable. The literature further goes on to show that
Goals that are negotiated and mutually agreed on improve employee-manager relationships
and provide an important sense of ownership for employees (Goldman &Bernshteyn, 2007).
The authors by means of their literature revert to the fact that defining targets and objectives
helps both the organization and the employees. It enables the organizations to measure
performances of the individuals in turn motivating them with the rewards and feel good factor
they get on successful completion of the task.
Development: employees have huge expectation from companies with respect to their
personal development and skill enhancement as pointed out by Dr. Jac Fitz-enz through his
book "The ROI of Human Capital" which has been portrayed in the literature on building a
talent pipeline (Goldman &Bernshteyn, 2007). The literature further quoted Dr. Jac saying
"On the job, they are looking for development activities and training that will make their job
easier and their results better. They want their career objectives to be addressed by their
supervisors and by the organization. Opportunities to make adjustments that will increasetheir contributions to the company are critical." (The ROI of Human Capital as cited in
Goldman &Bernshteyn, 2007). Thus it is important for the organizations to make sure that the
targets they set for their employees give a chance to the later to develop along with the
organization. This will help the organization to retain the best of the talent.
Lucrative compensation: Enthusiastic, high-performing employees expect to receive good
remuneration and incentives in return of the work they do (Goldman &Bernshteyn, 2007).
The literature also points out to an interesting and important fact that the rewards should be in
line with the amount and quality of work done by individuals. This would not only help in
retaining the best of the talent but will also act as a motivating factor for the employees. This
would also help the companies to enhance their brand value to attract the creamiest layer of
talent owing to the importance of branding as rightly pointed out by the literature on war for
talent.
Career progression: Quite often the organizations develop succession plans only for the
executive levels in the organization (Goldman &Bernshteyn, 2007). If this is done at all the
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levels within organization, it will give the clear picture about the vacancies that would be
created in near future within the organizations and also help them to identify the profiles that
would best suit and rather that are willing up to fill in the void. Thus to establish an efficient
talent pipeline demands a sound succession planning system.
Recruitment: The factors listed so far assist in establishing employee engagement, thereby
helping in holding out on to the best of the talent available in the organization. Goldman
&Bernshteyn indicate that the retained profiles could be further used in identifying talent in
the external job market (Goldman &Bernshteyn, 2007). This would help in maintaining the
continuous flow of talent through the pipelines created by organizations to cater to the
business needs at any point in time.
Hence talent management practices if suitably employed can help the HR executives in the
organizations to battle the challenge of building up strong talent pipelines to ensure a talent
pipeline within a firm which could cater to business needs arising at any point in time thereby
making the organizations self sufficient. Having efficient talent pipelines prevents the
organizations from going to the external job markets for filling in the positions at executive
levels as people would be available in the organization itself to take up responsibilities. By
having strong talent pipelines would ensure a smooth inflow and outflow of the employees
thus having someone always available to have a continuous flow of leadership within the
organization. Thus building up strong talent pipelines forms as important part of talent
management systems.
5.6 The War for Talent
Mckinsey in 2001 released the war for talent literature, which was based on data collected
from more than 6000 companies (Michaels, Jones & Axelrod, 2001). The term War for
Talent was first coined by McKinsey &Company in 1997. The studies were conducted to find
out about the situation of the 1990s which had seen events like dot-com burst, the
crumbling of Nasdaq and the fears regarding the spreading of recession (Michaels, Jones &
Axelrod, 2001, p. 1). The findings from the study indicated that the War for talent was not
something to get over quickly. It was expected to last for two decades as we see even today.
The literature further indicates that the increase in number of graduates both in technical and
managerial degrees have intensified the competition in the job market.
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All the companies look towards attracting recruiting and retaining the best of the talent
available in the market. The literature based on the studies conducted expressed the concern
of the organizations with respect to the growing demands for talent at executive levels. The
authors have written that In addition to this broad demand for talent, the demand for high-
calibre-managerial talent is growing (Michaels, Jones & Axelrod, 2001, p. 3). The managers
today are expected to respond to the challenges of globalization, change in demographics as
mentioned above. The literature has further quoted the stats from US bureau of labour
statistics, which indicated a growth in the total work force in US by 12 percent from 1998 to
2008 but at the same time pointed out to a 6 percent decrease in the supply of talented
managers for future. The study also indicated that the work force would mostly be constituted
of 25 to 44 years old workers (Labor Force 2008 as cited in Michaels, Jones & Axelrod,
2001).
On close scrutiny of figures one can easily see that the percentage of individuals who would
actually contribute to the growth of the company is found to decline by 6 percent. The
literature on war for talent also reveals the increase in the switching of companies by the
employees owing to the advantages they enjoy by doing so. Today the whole scenario has
changed. Employers no more have the control and authority over the employees in terms of
retention of the employees. Globalization and increased competition has resulted in the rise ofnumber of players existing in the market. The literature on war for talent poses the question
that most organizations face today, that is what are the employers suppose to do to gain the
control over the employees back? (Michaels, Jones & Axelrod, 2001, p. 6). Further
organizations need to figure out ways for employee engagement and gaining the trust and
loyalty of the employees. Finding answers to these questions and resolving such issues form
one of the most important functions of talent management.
The existing literature in the field of talent management suggests that most of the companies
today have realized the importance of adjusting their business strategies and making use of
opportunities due to factors like globalization and change in demographics and so on. But
most of the organizations lack the appropriate mindset needed to take bold decisions by
making adjustments to their existing HR systems that would result in the success of the
organization as a whole. The literature on War for talent in an attempt to portray the
importance of talent mindset has the authors saying that A talent mindset is the deep -seated
belief that having better talent at all levels is how you outperform your competitors
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