Integrated Talent Management Scorecards: Insights From World-Class Organizations on Demonstrating Value

INTRODUCTION

The term integrated talent management has been in vogue for about eight years, yet organizations are still trying to understand how to best integrate talent management functions to achieve business results. This book provides insights on integration techniques as well as ideas for designing and implementing talent management initiatives that affect the business. Even more importantly, the book provides techniques for measuring, evaluating, and demonstrating the impact of talent management initiatives at program, functional, and organizational levels.

There is increasing pressure from stakeholders on talent management functions to demonstrate their value to the business. Many organizations struggle to align their talent management initiatives with business strategies. It can be difficult to measure, evaluate, and demonstrate results. This collection of case studies demonstrates how talent management initiatives affect business results and contribute to organizational success. The case study authors, who represent various industries, all used scorecards as a framework for demonstrating the results of their talent management initiatives at the micro- and macro-levels. These cases are a rich source of information about the strategies, methods, and techniques of some of the best practitioners and consultants in the field. However, no case study necessarily represents the ideal textbook approach to talent management. In every case study it’s possible to identify areas that could be improved upon. This is part of the learning experience—to build on the work of other people.

Table 1 contains an overview of the case studies by industry, type of talent management initiative, type of scorecard, and focus areas. It can serve as a quick reference for readers who want to examine the cases by particular audiences, industries, and program types.

It would be difficult to find a more impressive group of contributors to a publication of this nature than those included here. The case study authors are experienced professionals on the leading edge of talent management. Most are experts on the topic, and some are well known in their fields. A few are high-profile authors who have made tremendous contributions to their fields and have taken this opportunity to provide examples of their top-quality work. All have made significant contributions to the success of organizations and have shared examples of their work that can be implemented elsewhere.

As you review the cases, remember that each organization and its program are unique. What works well for one may not work for another without some modifications, even if both are in similar settings. The book offers various approaches and tools that you can adapt or build on to effectively demonstrate the value of talent management initiatives, functions, and organizations.

1

INTEGRATED TALENT MANAGEMENT:A BUSINESS IMPERATIVE

Lynn Schmidt, PhD

Integrated talent management (ITM) builds business capability by aligning the various talent management (TM) functions, so that they have a stronger impact on business results—the whole becomes greater than the individual parts. Alignment can lead to a stronger people strategy, eliminate redundancy, and create higher-performing individuals and businesses through increased efficiency and effectiveness. According to the Institute for Corporate Productivity (i4cp), high-performing businesses are twice as likely to have ITM strategies (2013).

But what is meant by the term integrated talent management? Although the term is used frequently, we seem to lack a common definition and agreement about what it means. According to the Merriam-Webster Dictionary (2013):

Integrate can be defined as to form, coordinate, or blend into a functioning or unified whole: unite.

A definition of talent is a person of talent or a group of persons of talent in a field or activity.

Management can be defined as judicious use of means to accomplish an end.

With those definitions in mind, the definition of integrated talent management, for the purposes of this book, is United functions with a common goal of building employee capabilities to increase business performance. This may be easier said than done. A report from The Conference Board (Morton, 2004) states that while ITM in many businesses is aligned with strategic objectives, it is not often measured in terms that link to business results.

According to i4cp (2013), there are four characteristics related to ITM that separate high-performing businesses from those that are lower-performing:

Leaders see ITM as vital to business success.

Processes are in place to align ITM with business goals.

Processes and policies support ITM.

The components of TM are effectively integrated.

These requirements for successful ITM can be achieved through the use of scorecards, which will be explored later on in this chapter.

INTEGRATED TALENT MANAGEMENT FUNCTIONS

ITM functions are often referred to using different terminology. For the purposes of this book, the following six TM functions are considered the core functions within the ITM model, as illustrated in Figure 1-1. These six TM functions are found in the ITM organization and would drive its strategic TM initiatives.

Workforce Planning: This refers to the process of forecasting the talent needs of the business and creating plans that will ensure high performance. Strategic workforce planning (SWP) includes assessing the business direction, determining talent implications, identifying segmented roles, and defining the build or buy actions to be taken. The output of SWP assessments will influence the goals of the other TM functions.

Talent Acquisition: This involves attracting and selecting the talent that the business needs to accomplish its goals. The talent needs to be acquired at the right time, in the right place, and for the right price.

Performance Management: This includes how the business and individuals set goals, and how they manage and measure the performance required to achieve individual and business success. The business goals cascade downward to achieve performance alignment.

Learning and Development: This is responsible for supplying the training and professional development opportunities required by individuals to successfully do their jobs. Other initiatives within this TM function are onboarding and mentoring.

Succession Management: This involves identifying high-potential employees, developing them, and transitioning them into key roles to ensure continued business success. Defining leadership competencies, executive development and coaching, 360-degree feedback, and job rotations are also within this TM function.

Engagement and Retention: This focuses on the TM activities that influence employee engagement and retention, such as employee surveys and related action planning. It also develops and implements tools and programs that reward and motivate individuals, such as diversity initiatives, employee resource groups, and recognition programs.

INTEGRATED TALENT MANAGEMENT SCORECARDS

Even when TM functions are integrated and aligned with strategic priorities, they often aren’t able to demonstrate their contributions to business results. Yet the purpose of integrating TM functions is to achieve business results. In a study conducted by The Conference Board (Morton, 2005) it was found that mature ITM organizations collect and report on numerous metrics that are incorporated into their balanced scorecards. They collect activity, efficiency, and effectiveness metrics for TM initiatives and share results with their boards of directors. Integrated talent management scorecards enable ITM organizations to align TM initiatives with business goals, and collect data and report the business impact of those initiatives. As shown in Figure 1-2, there are three levels of integrated talent management scorecards:

TM Organizational Macro Scorecard: This scorecard is created at the ITM organization level and is directly aligned with business goals and measures, such as revenue, operational costs, customer satisfaction, product or service quality, employee engagement, and turnover. It contains a roll-up of the metrics for all TM functions within the ITM organization. This roll-up shows the overall ITM contribution to each business goal.

TM Functional Macro Scorecard: This scorecard is created at the TM functional level; the functions may include talent acquisition, learning and development, and succession management. The scorecard is aligned with the TM organizational macro scorecard, but would include additional activity, efficiency, and effectiveness measures specific to the TM function. It is a roll-up of measures from the TM initiative micro scorecards.

TM Initiative Micro Scorecard: This scorecard is aligned with the TM functional macro scorecard measures and may include additional activity, efficiency, and effectiveness measures of the initiative. Below are examples for TM initiatives that would each have their own micro scorecards with metrics including satisfaction, learning, application, and business impact and ROI data:

Workforce Planning: identification of strategic, key, core, and transitional roles and implementation of the action plans associated with each role

Talent Acquisition: executive recruiting, recruiting for strategic or key roles, internships, and college recruiting

Performance Management: annual performance review process, quarterly performance review process, individual development plans, and performance improvement plans

Learning and Development: onboarding program, sales training, mentoring programs, career development initiatives, and management development

Succession Management: succession plans, 360-degree feedback, executive coaching, high-potential development program, and job rotations

Engagement and Retention: employee engagement survey, employee resource groups, recognition program, and a diversity initiative.

The case studies in this book (found in chapters 3 through 20) present all three types of scorecards, with detailed descriptions of TM initiatives and scorecard implementation. Chapter 2 will provide more explanation on how to create these scorecards.

STRATEGIC WORKFORCE PLANNING

SWP helps to integrate the TM functions by providing the goals and metrics for the TM organizational and functional macro scorecards. SWP plays a critical role in assessing the current and future talent needs of the business and partnering with other TM functions to create action plans for addressing those needs. This section provides an overview of the SWP function and process. While SWP plays an important role in ITM, a study conducted by The Conference Board (Young, 2006) found that SWP was a new practice in many businesses; many were still in the process of realizing its potential. The majority of companies that participated in the study were either just getting started or had not fully implemented SWP. The six steps of the SWP process are outlined below.

The first step in SWP involves understanding the business strategy. Often the SWP process will begin shortly after the annual business strategy is finalized. Business leaders are interviewed to gather data and to ensure that the SWP team fully understands the business strategy for the next three to five years. Once that data is collected, it is analyzed in step two to determine the current and future talent needs. The talent needs are then segmented into four specific roles:

Strategic Roles: critical to creating a long-term advantage for the business

Key Roles: critical to delivering results related to the current business strategy

Core Roles: foundational roles that support and run the day-to- day business

Transitional Roles: not critical to business strategies; have a transactional focus.

The third step is to assess the current workforce capability as compared to the roles identified. Do the roles and skills that were identified exist? Following this assessment, workforce modeling may be conducted to further assess the future talent needs and answer the question How many individuals do we need in that role in one, two, three, four, and five years? Once those analytics are complete, step four involves analyzing and validating the talent gaps that have been identified. There may not be enough individuals in the roles identified to meet current or future needs, or the skills may not currently exist in the business.

The fifth step is to build the strategic workforce plan based on the data gathered and the analysis conducted. These strategic workforce plans include buy, build, and transition action plans and influence the goals of the ITM organization and other TM functions. Buy plans—recruiting goals—would need to be incorporated into talent acquisition initiatives; build plans—plans to develop employees’ skills—could be incorporated into performance management, learning and development, and succession management initiatives; and transition plans may call for a re-skilling initiative in the learning and development function. All of these initiatives combined may require new engagement and retention strategies. And they would all lead to the creation of new TM macro and micro scorecards. The sixth step of the SWP process is to monitor and adjust the plans on an annual basis to reflect changes to the strategic business plan.

As demonstrated, SWP drives the TM initiatives that are the focus of the other TM functions. SWP aligns ITM to the business goals and provides an avenue for ITM to demonstrate its value to the business. It’s the glue that can hold the ITM functions together. For that reason, it’s an important function to include in the ITM organization.

CONCLUSION

ITM can improve both individual and business performance and it is critical to the success of a business. An ITM organization aligns its TM function and initiatives with the business goals and demonstrates their value through TM macro- and micro-level scorecards. TM functions operating in silos will have difficulty with integration, which will affect the degree to which they can affect the business metrics.

As Figure 1-4 illustrates, creating a viable TM organization requires the integration of the TM functions, alignment with the business strategy, and the implementation of TM macro and micro scorecards. The following chapters in the book will provide specific examples of how organizational, functional, and initiative TM scorecards have been created and implemented in businesses.

REFERENCES

i4cp. (2013). Integrated Talent Management Strategies of High-Performance Organizations. Talent Management Knowledge Center. Retrieved January 5, 2013 from http://i4cp.com/talent/talent-management.

Merriam-Webster. (2013). Merriam-Webster’s Dictionary. Retrieved January 6, 2013 from www.merriam-webster.com.

Morton, L. (2004). Integrated and Integrative Talent Management: A Strategic HR Framework. Research Report R-1345-04. New York: The Conference Board.

Morton, L. (2005). Talent Management Value Imperatives: Strategies for Execution. Research Report R-1360-05-RR. New York: The Conference Board.

Young, M.B. (2006). Strategic Workforce Planning: Forecasting Human Capital Needs to Execute Business Strategy. Research Report R-1391-06-WG. New York: The Conference Board.

2

IMPLEMENTING INTEGRATED TALENT MANAGEMENT SCORECARDS

Toni DeTuncq

Many organizations use a balanced scorecard to track how they are progressing, as measured by key business success indicators such as revenue, customer satisfaction, employee satisfaction, and other organizational areas of desired success. Organizations providing TM initiatives would be wise to design separate TM scorecards to demonstrate the impact those initiatives are having on key business indicators. In order to do this, they must determine each program’s objectives and how to measure the extent to which those objectives are being met. This chapter will provide the framework for evaluation and a look at the goals and methodologies for both micro and macro scorecards. It will describe the ITM scorecards model introduced in chapter 1, and the different components of TM initiative scorecards. Finally, a tool is offered for developing and linking the business, performance, and learning objectives needed for the TM initiative scorecards.

MEASUREMENT AND EVALUATION FRAMEWORK

Donald Kirkpatrick defined a framework for evaluation (Kirkpatrick, 1975) that was expanded by Jack Phillips (Phillips, 1997). This framework has proven helpful to the evaluation community because it provides a common language for us to use when we are determining and describing how to measure the extent to which program objectives have been met.

Briefly, the framework is as follows:

Level 1—the reaction and perhaps planned actions, gathered from the participants at the completion of the initiative

Level 2—the learning that took place as a result of the initiative

Level 3—the performance improvement realized as a result of the initiative

Level 4—the impact the initiative had on the business

Level 5—the return-on-investment (ROI) realized as a result of the initiative.

The micro and macro scorecards described in this book utilize this framework in their evaluation processes.

TALENT MANAGEMENT SCORECARDS

We developed macro- and micro-learning scorecards to capture and display learning program results (Schmidt, 2003). We’ve presented these scorecards at presentations at several ASTD conferences. Both the macro- and micro-learning scorecards received praise at these sessions, with participants commenting that they could immediately be used back on the job. The learning scorecards have been used successfully in our own organizations and with clients. We have expanded our learning scorecards to TM initiative scorecards, to capture the services that the entire performance improvement community is providing in addition to learning programs. The value of scorecards is that they:

Provide a macro- and micro-level perspective of progress.

Serve as a brief at-a-glance report, versus more detailed studies.

Show the TM contribution to business objectives.

Integrate various types of data.

Demonstrate alignment between programs, strategic objectives, and operating goals.

Organizations can review their TM progress using the ITM scorecards model described in chapter 1.

TM Macro Scorecard

A macro scorecard tracks TM data throughout an organization, whether it is all of the TM initiatives the organization offers, or within one functional area of the organization. It can use the database software already used by the organization, or another kind of software. Organizations using macro scorecards often begin with an Excel spreadsheet and then advance to a more robust database software package, as more data is collected and more interaction with other organizational programs is required. An example of how one organization conceptualized and developed a TM organizational macro scorecard is included in chapter 20 of this book. The format of the TM organizational macro scorecard can be customized for each organization, but we suggest that it contains data aligned with the company’s business goals.

The TM functional macro scorecard is also an overall look at how the organization is doing, but for only one particular TM function. It can be organized into two tiers. Tier 1 is the portion in which the data elements for that function are rolled up for the entire business; across business units, regions, or divisions. Tier 2 houses the data elements for that function, broken up across different lines of business, different regions, or other individual business units. Let’s look at these different tiers of the TM functional macro scorecards.

TM Functional Macro Scorecard – Tier 1

Tier 1 data can be broken into three types of data elements:

Investment/efficiency data, which indicates how much of the initiative has taken place and its value to the organization.

Activity data, which indicates how often the initiative is taking place and its value to the organization.

Impact data, which indicates how effective the initiatives are in meeting their intended objectives. These can be broken down into the levels of evaluation discussed above.

Table 2-1 provides examples of data elements that could be included in Tier 1 of a macro scorecard.

TM Functional Macro Scorecard – Tier 2

Tier 2 of the TM functional macro scorecard provides the same investment/efficiency, activity, and impact data as the Tier 1 portion, but the data is provided for each individual part of the business, such as lines of business or regions. Also, for the impact data in Tier 2, each specific TM initiative is listed and its business objectives along with its alignment with the organizational strategy are documented. Then the results are expressed using the levels of evaluation. Table 2-2 provides an example of how this would look.

This is a suggested format for a TM functional macro scorecard. But no matter the format, important principles should always be considered to enhance its value to the organization:

The organization must be able to demonstrate how its programs are aligned with organizational strategy.

Each program must have business objectives.

Investment/efficiency and activity data will vary by organization but should be used to tell a story, and could be used to benchmark.

The Level 1 instrument used must be standardized so the impact result scores can be compared.

Level 2 instruments must be designed, validated, and scored consistently.

Levels 3, 4, and 5 data must be collected using industry- accepted standards.

Chapter 19 provides an example of an organization’s TM functional macro scorecard and illustrates these components and their value.

TM Initiative Micro Scorecards

The TM initiative micro scorecard provides detailed impact data for each TM initiative. This micro scorecard can provide, in a single table, all the data resulting from an impact study of a TM initiative (Schmidt, 2003). Figure 2-1 provides a template for a micro scorecard.

The section under Satisfaction would include the extent to which the participants were satisfied with the initiative. These would be the results of a Level 1 analysis. Examples of what to include in this section would be

relevance of the TM initiative to the job

likelihood of recommending the initiative to others

importance of the information received

intention to use the initiative’s offerings

an overall rating from a satisfaction questionnaire.

The section under Learning would include the extent to which the learning objectives have been met. These would be the results of a Level 2 analysis. Examples of what to include in this section would be

the participants’ assessments of the initiative

scores from any learning assessment that may have been conducted

third-party observations.

The section under Application would include the extent to which the performance objectives were met. These would be the results of a Level 3 analysis. Examples of what to include in this section would be

the importance of using the content from the initiative in the work environment

the level of initiative adoption

behavioral change or improvements in performance.

The section under Tangible Benefits would include the extent to which the impact objectives have been met. These would be impact data (Level 4 analysis) and possibly ROI data (Level 5 analysis) Examples of what to include in this section would include improvements in

productivity and efficiency

quality

cost control

customer satisfaction.

The section under Intangible Benefits would include those benefits discovered in the Level 4 analysis that could not be converted into a business measure, but are seen by the organization as providing value. The benefits might include

improved customer satisfaction

increased job satisfaction

reduced conflicts

reduced stress

increased teamwork.

If performance and business impact were measured, the method used to isolate the impact of the TM initiative would be provided in the next section, such as a control group arrangement or participant or executive perceptions. If an ROI or benefit-cost ratio (BCR) analysis was conducted, the technique used to convert the impact data would be listed, as well as the fully loaded program costs. Barriers that impeded the success of the initiative would also be listed, as well as any recommendations that were made as a result of evaluating the TM initiative.

This book has 16 examples of TM micro scorecards from various organizations, presented in chapters 3 through 18. The TM initiative micro-scorecard format may vary by program or may have some elements missing if all levels of evaluation for that initiative were not conducted. Our chapters show examples in which not all levels of evaluation were conducted, but you will see that the scorecards still tell a story at a glance. No matter the format used or the levels of evaluation conducted, there are principles that should always be considered when building a TM initiative micro scorecard:

Start building your TM initiative micro scorecards today—don’t wait for someone to request it. They might request the data in a different format that would not be nearly as meaningful or concise (this is true for the macro scorecards as well).

Begin with the end in mind—plan in advance so your method of evaluation will allow you to successfully complete a comprehensive scorecard.

Always account for the influence of other factors.

Be conservative when converting and isolating—consult the resources provided at the