Best Practice Series

Guidelines for Best Practice in

Integrated Talent Management

Foreword

This Best Practice Guide has been written to address the needs of organisations that are seeking to
implement or refine their talent management approaches. The business significance of talent
management highlights some distinctive issues that are not generally concerns in more peripheral HR
applications. These include: careful alignment with the business strategy, reliable measurement and,
increasingly, the effective use of IT. The aim of this guide is to highlight a range of best practice principles
and lessons learned in the implementation of talent management processes. This guide has been written
to complement rather than duplicate the rest of the SHL Best Practice Guidelines series. These can be
accessed from the SHL website at www.shl.com or from your local SHL office.

Best Practice Series > 1

Contents
Foreword

Introduction

1.

What is Talent?

2. What is Talent Management?

3.

Why has Talent Management become so important?

4. Why is Talent Management important for Human Resource practitioners?

5. A variety of approaches to Talent Management

6. The benefits of an integrated architecture

6.1 Talent management activities should be truly integrated

6.2 Talent management needs to be flexible

7.

9
10

6.3 Talent management needs to be future proof

11

6.4 Talent management needs to be scalable

12

6.5 Talent management should be quick to implement

13

6.6 Talent management should be backed up by fair and robust measurement to make the
process equitable, defensible and allow for evidence based management

13

The SHL Approach to Integrated Talent Management

14

7.1 DEFINE - The importance of competency management for an integrated talent architecture

14

7.1.1 What is a competency?

15

7.1.2 The competency framework should make sense across levels and applications

16

7.1.3 Summary of the DEFINE process

18

7.2 MEASURE Getting robust data to populate your talent initiatives and HR processes

18

7.2.1 The importance of measurement integration and capability analysis

22

7.2.2 Summary of the MEASURE process

22

7.3 REALISE Ensuring you reap the organisational rewards of good talent

23

8. Making it a practical proposition: Talent Management Technology

24

9.

Conclusion

26

Further Information

27

References

27

Appendix

28

2 > Best Practice Series

Introduction

In organisations, talent is important. It frequently features on lists of what keeps senior management awake
at night, it is heavily linked with the success of high performing organisations (Huselid, 1995) and it is one of
the few sources of competitive advantage that is difficult to replicate (SHL, 2007). However, many
organisations struggle to make talent management a practical proposition. This guide is designed to promote
best practice advice to help organisations to clarify their approach to talent management. It contains a
rationale for why organisations should manage their talent in an integrated fashion, explains what integration
can look like and has helpful tips and self reflection questions to aid organisations who are reviewing their
talent management processes.
Ultimately, however, the message of this guide is one of clear definition, consistent measurement and
ongoing review (shortened to define, measure and realise). Only by following these key steps can
organisations pose, and then answer, the really hard questions that are raised by corporates seeking to be
successful through difficult and changing times.

Best Practice Series > 3

What is Talent?

Talent is only talent if you can use it. This implies that talent has a direct relationship to business
performance which makes it a strategic asset for future success.
Organisations struggle to crystallise in a meaningful way what they mean by talent. According to
classical management theory, in order to make something a strategic asset, it must be:
> Valuable
> Differentiating
> Hard to imitate.
The move from personnel to human resources was part of a struggle by organisations to make their
human capital a strategic asset. Most modern western organisations have a number of intangible asset
classes that they deliberately try to grow into strategic assets, including intellectual property, brands and,
of course, their human resources. Most corporate reports thank and extol the virtues of their employees,
but in practice the old claim that people are our most important asset is wrong. According to Collins
(2001), people are not your most important asset: The right people are.
There is no doubt that Human Capital has the potential to act as a strategic asset. Many organisations are
famous for their ability to identify and grow people to become great assets for the organisation. The
importance of good people has been recognised for many years. It is a feature of many top
organisations such as GE and others (Drotter et al., 2000) and it features in many other analyses of
organisational success. But this itself is problematic. Surely not every organisation can have an approach
to their human assets that is differentiated, valuable and hard to imitate? The very nature of books such
as Good to Great and surveys such as Bersin (2008) makes organisations seek to mimic what other
great organisations have done with their people. There is inherently no advantage in this. Most
organisations define their strategy to ensure competitive advantage. To ensure that Human Capital
remains a competive advantage, it needs to be clearly linked to a unique business strategy.
talent management cannot be isolated from business strategyThose that rely solely on the
HR department to drive their strategy for talent are missing an opportunity to align the behavior and
capabilities of the workforce with the priorities of the business
Guthridge, Komm & Lawson, The McKinsey Quarterly, 2006
Those organisations that are able to clearly define Human Capital requirements and then measure and
engage these effectively, will unlock more strategic value from their people.
What this means in practice is that organisations need to plough their own furrow they need to have
the confidence to identify the groups of skills and employees that they need to manage, and then focus,
unapologetically, on this group. For some organisations this may mean an inclusive approach (they define
talent in such a way that it includes everyone), but others may legitimately identify key positions and key
groups of people in a more exclusive approach (IDS, 2008).

4 > Best Practice Series

What is Talent Management?

Talent management can be defined as an integrated, dynamic process, which enables organisations to
define, acquire and develop the talent that it needs to meet its strategic objectives. Bersin (2008)
defines talent management as a set of organisational processes designed to attract, develop, motivate
and retain key people. Most definitions emphasise the following:
> There is a clear link with performance management;
> There is a coherent approach to succession planning and development;
> There is an integrated philosophy that incorporates all HR practices across the whole employee
lifecycle (see Fig 1).

ITMENT
CRU
RE

SE
LE
C

ON
SI
SU
CC
ES

Fig 1. Integrated talent management

across the whole lifecycle

FLEXIBLE CAPABILITY
ARCHITECTURE

HIGH
PERFORMING
TALENT

BUSINESS
RESULTS

MENT
LOP
VE
DE

TALENT
STRATEGY

PERFORM
AN
CE

TRANSITIO
N

ON
TI

BUSINESS
STRATEGY

COMPETENCY
MANAGEMENT

What is clear however is that the way that this integration is operationalised can vary dramatically. Key
stages (SHL, 2007) include:
>
>
>
>
>

Business strategy: which skills, competencies and roles are required to deliver the strategy?
Organising framework: who to target and how?
Capability framework: the skills, tools and techniques to define talent requirements.
Leadership involvement: creating a Talent Mindset in senior managers.
Development of high performance talent: filling gaps through targeted development interventions
and recruitment initiatives.
> Build fluid talent pools: keeping it tied into the strategy.
> Rigorous assessment of potential across the organisation.

Where these stages are carried out effectively, business results can usually be assured.

Best Practice Series > 5

Why has Talent Management become so important?

Although organisations sometimes struggle to determine what talent means in a proactive way, they
recognise the symptoms that they have to deal with if they are not managing it well. The following list
comes from a survey of typical organisational problems that get reported if it is being done badly, or not
at all:
Checklist - Top problems that happen when talent is not managed:
> Gaps in leadership pipeline
> Difficulties due to impending retirement of key workers
> Difficulty filling key employee positions
> Failure to create a performance driven culture
> Problems developing new skills to meet new business conditions
Bersin & Associates (2008)
There is no doubt that the ability to fill these talent gaps in times of transition and demographic change
very quickly becomes business critical. Without it, it is impossible to meet the emerging needs of modern
organisations.
The question that follows is, how to do it? Here the casual reader becomes simply swamped with
alternative ideas.

Why is Talent Management important for Human Resource practitioners?

Talent management sits in a difficult organisational position. It is a set of tools that are typically owned
by HR, but that clearly need to be aligned with the business. This paradox comes at a time that sees HR
at a cross roads over a decade of trying to become strategic partners in the manner of Ulrich (1996)
has left many HR functions trying to grapple with what this means in practice. How can one become a
strategic partner, while also giving away so many of the tools and specialisms of the function? The key
thing that talent management does, perhaps more than any other movement in HR, is to enforce business
alignment. The act of defining talent may sit with the HR Partners. The act of measuring and tracking it
may sit within Shared Services. However, there is a third critical role that must ensure these activities are
integrated in line with business needs on an ongoing basis. If HR is going to get a place at the main Board
table, the ability to answer questions about the feasibilty of a future strategy is surely the way to do it.
HR must be able to answer these questions:
> Can our people execute the organisational strategy?
> If not, how do we acquire or grow this capability?
> How long will this take and at what cost (given current market factors)?

6 > Best Practice Series

A variety of approaches to Talent Management

One of the problems with talent management is that many very different approaches have been
developed from a number of alternative angles, and many organisations may have several of these being
used simultaneously within the business:
>
>
>
>
>

Single High Potential schemes.

Executive talent and succession schemes/leadership pipelines.
Large scale Enterprise Resource Planning (ERP) system based approaches.
Graduate and experienced hire programs.
Risk Management approaches (aimed at technical or functional specialists).

Clearly the issues involved in identifying, developing and tracking a small number of top executives are
very different from those of an international skills audit implemented using a sophisticated, electronic
talent management system. However all these approaches can raise as many problems as they solve.
Typical problems include:
> C-level understanding and buy-in.
> Change of organisational strategy rendering the whole talent framework out of date. Or not having a
link to organisational strategy in the first place.
> Multiple, conflicting models of what good looks like in different areas of the business.
> Over-complex competency frameworks that are hard to measure and harder still to use.
> Time-consuming and painful ERP implementations rendering the results out of date before they can
be used.
> A lack of integration between different talent management activities, making disparate activities fail
to link up.
So talent management risks becoming another management fad (like Knowledge Management or
Management by Objectives [MBO]) that falls apart under its own weight.

Checklist - How accepted is your Talent Management Approach?

> How is your nominated pool of talent seen within the business?
> To what extent does action flow from your reviews and audits of talent?
> How open and defensible are your talent reviews?
> What biases and short cuts have crept into your talent reviews?
> To what extent have you used multiple systems, processes and providers a la carte
> How easy do you find it to keep your current talent
> How divisive have you found your process?
> How much strain has your talent management process put upon your performance management
system?

Best Practice Series > 7

The benefits of an integrated architecture

The value of an integrated HCM solution to our organisation was incredible. It provided a single source of
truth that was leveraged throughout the organisation.
Charles Dennis, Former Director of Enterprise Applications, Investors Bank & Trust Co.
An integrated architecture for the management of talent has a large number of significant benefits.
These include:
>
>
>
>
>
>
>

The opportunity to work with an evidence based people management process.

Achieves greater synergy across the employee life cycle.
Saves time and effort by removing duplication of process.
Future proofs your competency framework and measurement tools.
Builds a strong culture and platform for sharing knowledge and talent information.
Develops a shared language of performance.
Responds more quickly to changing business needs.

These benefits, however, will only be realised if the typical problems associated with talent management
are addressed. The dream for talent management processes is that they should have a number of
properties. These properties are described below, each with a checklist of questions that can be used to
evaluate your talent management approach:
Properties of an integrated architecture
> Truly integrated a single approach that can be used across different departments, specialisms and
applications.
> Flexible can be applied in different ways for different applications and business needs.
> Future proof - can be updated easily as business strategy and needs change.
> Scalable can be implemented in a large ERP system, a medium sized talent management system, or
for smaller projects in Excel and still deliver real results.
> Easy to implement - quick.
> Backed up by fair and robust measurement to make the process equitable, defensible and allow for
evidence based management.

8 > Best Practice Series

6.1

Talent Management activities should be truly integrated

Organisations need a single approach that can be used to link talent to their business strategy across
different departments, specialisms and applications, or the process risks becoming so complex, hard to
explain and opaque that it falls into disuse. This single integrated approach is achieved by using a
coherent, meaningful operating language that ensures the consistent and relevant measurement of talent
requirements. Figure 2 provides an outline of what an integrated framework might look like. Clearly if the
strategy changes, then the talent management strategy needs to be re-evaluated to ensure it stays relevant.

Talent Strategy
Analysis of Talent Requirements
Integrated and flexible capability architecture

Attraction and
Selection

Development

Performance

Succession

Validation and Change

Fig 2. Integrated talent management framework

Checklist - Key questions for your integrated talent strategy

> What is your business strategy?
> To what extent has it been articulated where your organisation is going in the next few years?
> How explicit can you be about your notion of talent within this strategy? Is it defined as certain key
personnel, or is it a broader statement of skills that need to be managed effectively?
> What skills does your business require for you to be successful in the future?
> To what extent do your current HR strategies reflect external realities?
> How certain are you that your nominated talent pool will differentiate you from your competitors, be
valuable, and difficult to mimic?
> How joined-up are the activities that you use to develop this talent across the employee lifecycle?
> Where are the pot holes in your integration where things dont quite join up?
> To what extent does your approach to talent management ask really hard questions about the
capability of your organisation to deliver on its strategic promises? Can you answer them?

Best Practice Series > 9

6.2 Talent Management needs to be flexible

Organisations need an integrated architecture that is sufficiently flexible that it can be applied in different
ways for different applications and business needs. Many models that describe talent requirements are
built for a particular purpose (like leadership development or selection). These models often lack
sufficient depth to become truly useful in other HR applications. Different HR applications require
different levels of detail to ensure that the talent data collected through these applications integrate and
add value. During selection processes, organisations often use broader sets of criteria, while performance
management and development interventions require very specific behavioural descriptors. In an
integrated process, it would not be uncommon for organisations to use data collected during the selection
phase of the employee lifecycle as part of development or performance management processes.

Checklist How flexible is your approach?

> Do you have a single unifying language of performance underlying all your talent management
processes?
> Do different parts of the business use the same process for identifying talent?
> Does the information gleaned at recruitment stage feed into onboarding discussions, individual
development plans and functional capability analyses?
> Does performance data easily feed into promotion decisions?
> Can you easily compare an external applicant with an internal candidate?

10 > Best Practice Series

6.3 Talent Management needs to be future proof

Organisations need an approach to talent management that can respond swiftly to changes in business
needs. Many have found to their cost that nothing will kill a sophisticated talent management system
faster that a change or alteration in business strategy.
Case study
Organisation X was a large financial services firm. Its growth policy over the last few years had been to
develop hunters within its sales force. Top sales people were easy to identify within the business and
they were rewarded well. Changes in the external regulation environment made this policy hard to
maintain. These hunters now needed to be joined and supplanted by more farmers, but the
Performance Management and ERP system had been loaded with metrics from the old business strategy.
It took 6 months of restructuring to identify and grow the next generation of farmers, during which
time the new strategy stagnated.

This tardiness is particularly problematic in organisations that frequently adjust their business strategy
as new C level managers come and go. A new executive can not help but define a new commercial
strategy after their arrival and inflexible systems take too long to re-orientate.

Checklist - How future proof is your talent strategy?

> How much of a history does your organisation have of frequent changes of business direction?
> Do you operate in a heavily regulated or dynamic and evolving industry sector?
> How much movement is there at C level?
> To what extent is your organisation delivering its promises to its stakeholders in terms of growth,
customers, market share, quality and innovation?
> How well do you stack up against your benchmarked competitors?
> How much buy in is there within the rest of the organisation to the current business vision?
> How often have there been past attempts to buy, merge or fragment your organisation?
> What does your share price and p/e (price to earnings) ratio look like? What do external professional
analysts think about you as an organisation?
> How quickly could you react to a new call for different skills?

Best Practice Series > 11

6.4 Talent Management needs to be scalable

An ideal talent management process should be capable of being implemented at a variety of different
scales. This may mean that it is capable of being delivered via a large ERP system, a medium sized or
smaller talent management system and yet still produce real results.
In practice, talent management is all about person-job match. Most HR processes are about matching
smaller volumes of people to single roles. However, more strategic added value accrues where multiple
roles are considered (see Fig 3). Integrated talent management, where you are required to match many
people and roles, is where you get the greatest payback, but it is also where you have the greatest
complexity. You need to be very clear which of these levels of talent matching your business strategy
requires you to implement so that you can pick a vocabulary, measurement system, IT platform and
business metrics that make sense.

Talent Pools

Talent Pipeline

Integrated Talent Management

Added Value to Achieve Strategy

Complexity of Decision Making

Person-Job Match

Fig 3. Scale of talent management

Checklist How scalable is your approach to talent?

> How many employees are implicated by your organisations notion of talent?
> How similar are these in terms of level, longevity, geography and aspiration?
> What speed of turnaround does your business need when adapting its business strategy?
> How technologically savvy is your organisation? How net aware?
> What barriers will you face to implementing a new IT system for this application?
> How embracing are your IT specialists of software as a service solutions?
> What capability do you have to build your own applicant tracking system?
> Do your processes and language differ substantially depending on the level and size of group you
are working with?
> Do you have a common underlying framework for application regardless of the volume going
through a talent management initiative?

12 > Best Practice Series

6.5 Talent Management should be quick to implement

Organisations are frequently criticised for being slow to adapt. In ultra competitive market places, the
time it takes to define, communicate and refine a new or adapted business strategy is all dead time while
competitors are taking market share. Your talent management system thus needs to be up and running
quickly from its inception so that the activities that depend on it can take place reward, development,
recruitment and so on.

Checklist How quick to implement is your talent management process?

> How easy do you find it to identify and source your talented employees? How attractive are these
employees to your competitors?
> How quickly can you inform senior management about impending gaps in supply?
> If the strategy changed as a result of changes in the economic cycle, how much reworking would you
need to do to reassess your talent needs?
> How speedily does your organisation make decisions? How many meetings, sign off groups,
stakeholder communication forums do you have to go through?
> What other tangible actions are there that you can piggy back on to make the strategy come together?
> What blockages have stopped this kind of project in the past?
> How can works councils and trade unions be encouraged to back the scheme?

6.6 Talent Management should be backed up by fair and robust measurement

to make the process equitable, defensible and allow for evidence based
management
Most talent management processes involve combining measures of performance (from some form of
appraisal) and potential (from some form of assessment). It is well known that ratings by managers of
employees contain a number of flaws (bias, halo, central tendency) and the more important the purpose,
the larger is the problem that these pose. In talent management where you are making judgements about
current employees, the stakes involved for the employees become high or even ultra high (Bywater,
2007) and so it is vital that the process is fair, equitable and even handed. This is why many organisations
use expensive and resource hungry assessment processes to make these judgements. In truth, it is likely
that managers are or should be capable of making these judgements, but they need to be aided by firm
ground rules, senior level support and a clear competency framework.
The strategic management of Human Capital places a great demand on the accuracy and relevance of the
information that is collected about people. Evidence based management becomes impossible if fair and
robust measurement of the critical success factors is not available.

Checklist - How equitable is your talent process?

> How much acceptance is there of the talent management process?
> How much collateral damage is there of your non talent populations?
> How much faith do you have in the data you are using in your talent management system in terms of
its reliability and freedom from bias?
> What are the war stories and urban myths about your talent management nomination processes?
How much truth is there in these?
> How much incentive is there for managers to skew their ratings. What safety net is in place to manage
this?

Best Practice Series > 13

The SHL Approach to Integrated Talent Management

So it is clear that the way to approach talent management depends significantly upon the organisation
that is doing it. It may be a full scale ERP implementation for some; it may legitimately have a narrower
focus for others. The key thing is for it to be able to pose, and then answer, the really hard questions
about a proposed business strategy.
In order for it to do this, SHL has developed the following three stage process to help our clients to
anticipate what this means for their organisation. This process is described below:

DEFINE

Understanding your strategic talent management requirements

Develop an Integration Framework
Map role and competency requirements to the Integration Framework

MEASURE Develop an assessment strategy and approach

Measure individual strengths and determine gaps
Assess individual, group and organisational implications through
analysis of data

REALISE

Closing the talent gap through improved attraction, retention,

development and engagement
Identify and validate key business success metrics to review and
maintain commitment

7.1

DEFINE - The importance of competency management for an integrated

talent architecture

Competency management is the process through which the strategic talent requirements of the
organisation are defined in behavioural terms and then integrated into the full employee lifecycle to
create a talent architecture. Figure 4 shows the components of this stage of the process.

Define Strategy and Competency Framework

Do analysis of critical success factors for roles/job families
Develop an integrated competency map and models
Behavioural Descriptions, Drivers of Engagement, Human Attribute Profiles
Fig 4. Competency management

14 > Best Practice Series

7.1.1 What is a competency?

We define competencies as sets of behaviours that are instrumental in the delivery of desired results.
(SHL, 2006).
In the business environment, these are behaviours that support the attainment of organisational objectives.
It is important to note the focus here is on behaviours and not on the results or consequences of those
behaviours, or on personal attributes that have no behavioural relevance within the work environment.
Competency management touches almost every other part of your talent management strategy. This is
the number two opportunity to add business value to your organisation and it is ranked as the clear
number one business process in facilitating an organisations ability to respond to change.
Competency management establishes your organisations strategic framework for people processes it facilitates:
> Recruiting;
> Performance management;
> Leadership development;
> Succession planning;
> Career planning;
> Compensation;
> Learning and development.
It establishes the firm platform for all other talent processes. Organisations with a world-class focus on
competency management greatly improve their talent and, therefore, business results. Many
organisations still do not realise this.
Bersin and Associates, May 2007

Figure 5 shows how the business environment provides the context within which an organisation decides
what results it needs to achieve. The decisions made about the success criteria in turn have implications
for the behaviours it is necessary to encourage if those results are to be achieved. Having identified the
behaviours, it is then necessary to see whether the people in the organisation have these competencies
or whether they need to be developed.
Performance:
Performance metrics
Track record

Performance

Behaviour
B
eh
haviour

Potential
otentiial
Business
Strategy
gy
y

Potential:
Motives
Personality traits
Values
Cognitive abilities

Market
Context

Behaviour:
Behaviour ratings

Fig 5. The SHL performance at work model

Best Practice Series > 15

In general, competencies are based on observable, behavioural language from some form of competency
model. These behaviours make assessment and evaluation easy. Organisations that have their own
competency framework need to be clear with themselves about the potential pitfalls of their competency
framework (see below).
Generations of Competency Models
> First generation
- Generated for jobs or job families and heavily influenced by the status quo.
- Results in multiple, duplicate, competing models of good behaviours.
- Typically hard to measure well.
- Quickly gets out of date.
> Second generation
- Generated for job or job families with some degree of future focus using visionary interviews/
strategic job analysis principles.
- Gets out of date when the strategic vision changes.
> Third generation
- Generated for job families with some degree of future focus.
- Clear links between different job families.
- Clear link to business strategy but uses amino acid principles to ensure that if the vision changes
the people skills can be reworked to ensure they continue to be relevant.
- An example of a third generation model is the SHL Universal Competency Framework (UCF).

It is essential to have a meaningful operating language across the key talent management processes.
Third generation competency frameworks such as the SHL UCF can provide a clear set of dimensions
against which people performance can be described and measured. They are the vital link between the
behaviours, skills and attributes required by an individual and the tasks required to do the job well. For
more on this topic, refer to the SHL White Paper on the Universal Competency Framework (2006)
available at www.shl.com.

7.1.2 The competency framework should make sense across levels and
applications
The competency model is critical as it sits at the heart of all other assessments. This importance is not
unusual competency models have sat at the heart of HR applications for a number of years.
Competency management in talent management is more complex as it is applied in many areas. At a
minimum, competencies are used in:
> Recruiting: To assess candidates against known competencies for open positions;
> Performance management: To assess employees, how employees deliver results and their potential
to grow, or areas of needed development;
> Learning and development: To develop the right learning programs and curricula paths to support and
improve performance within different job functions;
> Leadership development: To define the desired qualities of leaders, assess leaders, and build the
leadership development curricula and programs.

16 > Best Practice Series

The fact that the competency framework links talent strategy to Human Resource Applications, and facilitates
accurate, relevant and meaningful measurement of talent requirements, necessitates that organisations pay
particular attention to how competencies are defined and ultimately measured. The definition of talent
requirements without the capability to measure them effectively has very little value.
Commonly the behaviours that sit within a competency model are derived from an analysis of the skills,
attributes and behaviours within the target jobs and roles, usually derived from some form of job
analysis. Traditionally these models need to conform to a number of requirements (measurable, up to
date, independent see SHL Job Analysis Best Practice Guidelines for more information). However,
increasingly over the past ten years levelled competency models have been used to try and knit
applications together across departmental and organisational hierarchies. These levelled models do not
always link up in a psychologically sensible fashion and there is considerable scope for them to create
blind alleys where skills at one level do not lead into linked skills at the next. In badly integrated talent
management this results in talented employees getting stuck at the transition point in a way that can
be painful for both them and the organisation.

Case Study Organisation Y

Organisation Y had a competency model that had been in use, with some minor changes, for a number of
years. It was levelled to attempt to identify the different skills needed at different stages in the hierarchy.
It had worked well as an assessment framework for recruitment but started to give problems when it was
used for talent management. One of the problems was the competency Teamwork. It had been scaled to
measure Teamwork in different ways for different levels. However in order to scale it to the highest level,
it started to morph into Leadership rather than Teamwork. Research has shown that quite different
elements of personality and competency are needed for Leadership than for Teamwork. Sure enough the
talent pipeline was throwing up talented aspiring leaders who were not entirely suitable for the next
role. Other problems were noted elsewhere in the model at similar transition points.

Checklist - How well does your competency model stack up?

> How manageable is it? How easy to explain? How behavioural?
> How sensible are the levels? Are they aligned with operational, professional and management levels in
the organisation?
> How up to date? How strategically aligned?
> How many other competing models are there in the business?
> Is it up to date with your business needs?
> Is it easy to use for all your applications across the employee lifecycle?
> Does the model deliver the skills you need?
> Does it load easily into your monitoring systems?
> How well does it cope at the transition points between levels and grades. What blind alleys does it
have?
> To what extent does it make psychological sense in the way that it relates to well known taxonomies
(Big 5, Great 8 etc.)?

Best Practice Series > 17

7.1.3 Summary of the DEFINE process

Typical implementation process:

Strategic
Alignment:
Benchmarking,
Analyse business
needs, Policy
review

Research
Benchmark
Industry
Trends

Initiate:

Engage:

Analysis:

Models:

Links:

Develop project
plans, Identify job
analysis methods,
Data sources,
Clustering of
job criteria

Stakeholder
workshops,
Review data,
Refine and
finalise

Work and
worker
requirements

Build maps

Develop links Training,

Development,
Selection,
Assessments

Project
Planning

Workshops
Discussions

Job Analysis
Focus
Groups

Competency
Maps

HR
Processes

Fig 6. Typical process to define talent requirements

7.2

MEASURE Getting robust data to populate your talent initiatives and

HR processes

But when it comes to specific measures concerning employee skills, strategic information availability,
and organisational alignment, companies have devoted virtually no effort for measuring either the
outcomes or the drivers of these capabilities.
Strategies for superior performance will generally require significant investments in people, systems,
and processes that build organisational capabilities. Consequently, objectives and measures for these
enablers of superior performance in the future should be an integral part of any organisations Balance
Scorecard.
The Balanced Scorecard, Kaplan & Norton, 1996
The definition stage is vital. However, definition without measurement is futile - defining talent
requirements is of little value if the organisation is not able to consistently obtain accurate and relevant
information on the state of talent in the business.

18 > Best Practice Series

In our definition of talent earlier in this guide, talent was directly linked to performance (business and
individual). The SHL Performance at Work model (Fig 5) shows the link between results and behaviour. In
general, most organisations agree that a good rating (and therefore the value of the talent) is made up of
two components:
> Performance: The employees attainment of results (or the what); and
> Capabilities: The employees level of competency or capability to show the behaviours required to
deliver results (the how). The Performance at Work model defines capability as both the ability to
show desired behaviour and the potential to do so in the future (competency potential).
Many organisations use a Performance vs Potential matrix to express this notion of talent.
This model classically comes from the work of Drotter et al. (2000) in GE where these two metrics were
combined into a 3x3 matrix of their top talent (Fig 7).

Leadership
Issues

Meets
expectations

Does not meet

expectations

Person
A

Performance Results

Exceeds
expectations

Key Talent

Person
B

Person
C

Person
D

Performance
Issues

Leadership Behaviours
Does not meet
expectations

Meets
expectations

Exceeds
expectations

Fig 7. Performance/Potential Matrix

The measure of results (performance) is usually drawn from the Performance Management system. Whilst
Performance Management results are not without their own inherent issues, sourcing quality Potential
assessments can be problematic, and can be obtained from self rating, manager rating, 360 degree
feedback, Development Centres and other sources. This competency assessment is essential in order to
understand how individuals achieve results, fit with the company and job requirements, and have the
potential to be promoted to more demanding roles. Figure 8 illustrates this process and the possible
measurement tools during each stage of the employee lifecycle.

Best Practice Series > 19

Define Strategy and Competency Framework

Do analysis of critical success factors for roles/job families
Develop an integrated competency map and models
Behavioural Descriptions, Drivers of Engagement, Human Attribute Profiles

Attraction and
Selection

Development

Performance

Online Screening and

Occupational Testing,
Competency based
interviews,
Simulation Exercises

Development Centres,
360 Assessment,
Personal Development
Plan

Review Key Outcomes,

Development Planning,
Matching against future/
other competencies

Succession

Assessment of readiness
to progress,
Determine best fit

Validation and Change

Fig 8. Measurement throughout the employee lifecycle

Individual data can come from a number of sources and tools. In truth a combination of the following may
be used for different populations and applications:

Sample Assessment
Results: Competency based interview,
Leadership Experiences tool,
Performance Management data
Behaviours: Assessment Centres - Role play,
Group exercise, Presentation, 360
Potential: Personality, Motivation,
Values, Ability Tests
Fig 9. Combinations of assessments

20 > Best Practice Series

Results (Lag)

Potential
ential (Lea
(Lead)
ad))

Behaviour
B
Beh
Be
eha
havi
havi
vio
our (Now
(Now)

Types of tools available:

> Performance Management data: An internal data source from the company appraisal/performance
management scheme.
> 360: A tool that asks managers, peers and team members to assess their perceptions of an
individuals performance in their current role.
> Assessment Centre/Development Centre simulations: There are many different exercises that you can
use in Assessment Centres including case studies, presentations, group exercises, in-trays, and roleplays. They can be off the shelf or bespoke to your organisation, with choice of exercise dependent
upon time, seniority and what an organisation is trying to measure.
> Personality and work style questionnaires that measure the extent of an individuals preferences to
act in a certain way.
> Other assessments that cover Motivation, Values, Ability, Situational Judgement, leadership
experiences, technical skills, derailers.
These assessments need to be integrated together to give judgements that are reliable, timely and valid.
This is a skilled task frequently undertaken by a psychologist or assessment specialist with suitable
training.

Checklist Questions to answer about your measurement processes

> Is the assessment timely, manageable and easy to use?
> Is it multilingual, multicultural and acceptable?
> Is it fair, objective and free from bias?
> Is it acceptable to employees, work councils/ unions?
> Is it reliable and valid?
> How open are you about your measurement mechanisms?
> How secure are your measurement approaches?
> Can it be reconfigured in response to changes in business strategy?
> Can the data be aggregated together to provide group analysis?

Best Practice Series > 21

7.2.1 The importance of Measurement Integration and Capability Analysis

A key activity in the role of talent management is to periodically review the measurement results by
auditing the talent group(s). This allows for the anticipation and identification of future capability gaps in
good time so they can be managed. The strategic value of talent management lies in its ability to
challenge future assumptions based upon aggregate data.
Within the talent management process, this aggregate data provides significant value in:
> Determining gap in talent supply vs. strategic requirements.
> Determining talent bench strength.
> Evaluating the health of the Leadership Pipeline.
> Informing training needs analysis.
> Measuring individual engagement and drivers of engagement.
> Providing input to team building and team development plans.
However, the ability to aggregate data is only possible if talent requirements and measurement have been
standardised across the organisation.

Checklist Questions to answer about Measurement:

> Whose job is it to challenge senior management thinking using the talent data?
> How easy do you find it to aggregate the data?
> How much faith is there in the business that the data is relevant, reliable and useful?
> What surprises has this form of analysis presented recently?
> What actions have come from this analysis?
> How can this form of talent management be used to provide continuing competitive advantage?
> Do you have an assessment policy in place?
> Can you explain to the board where the current talent capability is misaligned with current
organisational strategy?

7.2.2 Summary of the MEASURE process:

Map:

Design:

Train:

Assess:

Match:

Apply:

Map competencies
to measurement
instruments, Develop
matrix and policy

Design
measurement
practices
(simulations,
CBI Guides)

Train assessors
in using processes
and instruments

Conduct
assessments

Job and
organisation fit,
Individual, Group,
Organisational
gaps and
strengths

Make strategic
selection,
Development,
Performance &
Succession
planning
decisions

Assessment
Policy and
Matrix

Instruments
Processes
Practices

Fig 10. Measurement integration process

22 > Best Practice Series

Training

Measure

Person Job match,

Merit list,
Aggregate
data

Attract,
Develop,
Promote,
Retain

7.3

REALISE Ensuring you reap the organisational rewards of good talent

There should be no doubt that organisations implementing an Integrated talent management process
have unlocked significant value. A range of industry leading benchmark reports bear testimony to the
gains organisations receive from Integrated talent management processes:
> Organisations with excellent leadership competencies [behavioural competencies] showed 29 percent
higher business results than average.
> Organisations with good or excellent leadership competencies show a 40 percent higher ability to
rapidly respond to business changes than those with no or poor leadership competencies.
> The business impact of career planning is 45 percent higher for organisations with good or excellent
leadership competencies.
> The impact of new manager training is 52 percent higher for organisations with good or excellent
leadership competencies.
> Organisations that rate themselves excellent in the use of competencies for recruiting rate
themselves as having 56 percent higher impact in hiring the best people.
> Organisations with excellent use of competencies are 4 times more likely to have a performance
driven culture.
From: High Impact talent management: Trends, Best Practices and Industry Solutions, Bersin and
Associates, May 2007
> 75% of Best-in-Class organisations indicate that their competency management strategy is part of
their organisational human capital management strategy.
> 52% of Best-in-Class increased organisational revenue more than 10% (73% more than Laggards)
> Best-in-Class is 89% more likely than Laggards to increase organisational profit more than 10%.
From: Competency Management: The Link Between talent management and Optimum Business Results.
Aberdeen Group, August 2007
Bersin and Associates (May 2007) describe the three levels of value by which these benefits accrue (Fig 11).

Improve business results

through goal alignment
Drive performance culture
through pay for performance
Improve leadership pipeline
through succession planning

Increase engagement and retention

through feedback and coaching
Increasing performance through screening,
selection and development

Developing standard
Measurement model
Developing standard
competency framework
Automating process

}
}
}

Business
Executive
Driver

Organizational
Development
Driver

HR
Driver

Fig 11: Business Drivers for Performance Management Systems (Bersin and Associates, May 2007)
[adapted for talent management]

Best Practice Series > 23

Making it a practical proposition: Talent Management Technology

Integrated talent management has at its heart the matching of people and job data to meet strategic
needs. It very quickly grows beyond manual filing systems. Spreadsheet technologies can provide an
interim solution, but increasingly more elegant systems are used for managing this asset.
The importance of technology:
> Talent management without definition and measurement is blindness.
> Measurement without technology is administration.
> Administration without value is pointless.
The larger HR systems have operated talent management solutions for a number of years. Their initial
take up has been sparse.
Very few companies have implemented talent management Suites (less than 5%) and these are mostly
small companies (Bersin and Associates 2008)
Their infrastructure usually comprises some form of skills catalogue, a notion of the organisational chart
and matching/interrogation facilities to link the two. The power of these systems depends on the
measurement. There is little point getting a short list of Talent for a new role, only to find that it bears
no resemblance to reality. There are many systems out there, and many organisations also end up
building their own.
A good platform carries a number of benefits:
Seamless system enhances user experience.
Data storage and transfer for decision making.
Standard, repeatable integration to other systems.
Management Information (MI) and reporting for deep workforce insight.
Perhaps most importantly it allows organisations to unify their recruitment and their performance
management on an organisation wide basis (see Fig 12).

The Power of Unifying Recruiting and Performance Management

Recruiting

Performance Management

Sourcing

External
Candidates

Tracking

Prioritised
Recruiting

Profiles

Pre-hire History
and Skills

Mobility

Job Opportunity
Visibility

Fig 12. The power of a unified technology process

24 > Best Practice Series

Pre-defined
Candidate List

Succession
Planning

Crucial Hire
Visibility

Goals
Management

Top Performer
Modeling

Performance
Reviews

Self-directed
Candidate Pools

Goals
Management

Source: Taleo Research

Checklists for a good Talent Management Systems vendor

Key things to ask (and verify) that your HR applications provider has.
> Consolidated Data Model - e.g. employee performance data in the performance management system
should be shared with the succession planning system to identify and evaluate potential successors
> Consistent Security Model.
> Flexible employee Profile - e.g. capturing data on employees for networking, knowledge sharing and
talent decisions.
> Shared Competencies e.g. Competencies should be shared across all modules to help in identifying
and assessing external and internal talent.
> Unified User Interface e.g. HR, line and self-service.
> Configurable Process Management.
> Shared Workflow.
> Flexible reporting and analytics - e.g. employee data can be searched on and reported against
throughout the entire employee lifecycle.
> A track record in delivery systems to the scale you require with references and case studies.
> Accreditation.
> Skill catalogue needs to cover results, behaviours and potential.
> International coverage.
> Third party integration capabilities.
> Capability to aggregate measurement data from various sources against role profiles.
Bersin (2008).

Best Practice Series > 25

Conclusion

So in essence, talent management is about being able to answer hard questions about the people aspects
of a business. In order to do this it needs to:
>
>
>
>
>
>
>

Be clearly aligned with a clearly articulated, rational business strategy.

Have clear definition of the skills that need nurturing followed by reliable measurement of these skills.
Follow with analytical review of group data to anticipate problems.
Result in targeted actions to buy in or build these skills in a systematic fashion.
Be integrated into HR systems and processes across the employee lifecycle.
Be supported by an administratively efficient and flexible IT architecture.
Regularly review and re-engineer in response to business changes.

26 > Best Practice Series

Further Information
These Guidelines were written by James Bywater, Fred Guest and Michele Guarini.

References
Aberdeen Group. (2007). Competency Management: The Link Between Talent Management and Optimum
Business Results.
Bersin Associates. (2008). Talent Management Factbook.
Bersin and Associates. (2007). High Impact Talent Management: Trends, Best Practices and Industry Solutions
Bywater, J. (2007) Ultra High Stakes. Selection and Assessment Review. BPS.
Collins, J. (2001) Good to Great. Random House
Drotter S. Charan, R. Noel, J. (2000). The Leadership Pipeline: How to Build the Leadership Powered
Company. Jossey Bass
Huselid, M.A. (1995). The Impact of Human Resource Practices on Turnover, Productivity and Corporate
Financial Performance. Academy of Management Journal. Vol. 38 (3).
IDS. (2008). IDS Study on Talent Management. No. 869 May
Kaplan, R.S & Norton, D.P. (1996). The Balanced Scorecard. Harvard Business
SHL. (2007). Talent Management Issues and Observations. SHL Whitepaper Series
SHL Guidelines for Best Practice in the Use of Job Analysis Techniques
SHL Guidelines for Best Practice in the use of Assessment & Development Centres
SHL (2006) Universal Competency Framework Whitepaper. SHL.
Ulrich, D. (1996). Human Resource Champions: The Next Agenda for Adding Value and Delivery Results.
Harvard Business School.

Best Practice Series > 27

Appendix
Benefits of talent management:
In Selection
> Defines attraction models that align to real world performance requirements
> Aligns recruitment and selection with strategic talent needs
> Aligns focus to most crucial job requirements before, during and after recruitment / selection
> Forces stakeholders to shed misperceptions about what constitutes good performance
> Ensures common understanding of job requirements
> Makes selection data available for other processes resulting in less duplication of assessment
> Provides a language that is easily understood due to behavioural nature
In Development
> Allows more proactive coaching of what matters most for the business
> Helps organisations spend training money in alignment with business strategy and individual needs
> Facilitates pro-active gap-analysis through the use of selection data
> Facilitates role integrated leadership development
> Prevents wasted effort and assessment in training needs analysis
> Aligns focus to the most crucial training outcomes throughout the training and development cycle
In Performance Management
> Improves performance though targeted development of critical behaviours/skills/competencies
> Integrated language allows better validation of critical success factors
> Supports legally defensible performance measures based on inherent job requirements
> Allows consistent behavioural evaluation of performance within Performance Management phases
> Enables participants to measure performance against common framework
> Allows for integration with development
In Succession Planning
> Guides the attraction of internal talent
> Facilitates career pathing
> Facilitates better leadership pipeline analysis
> Early identification of leadership potential
> Clearly defines the success factors for the next level
> Helps you to build talent programmes that are aligned with business strategy
> Ensures common understanding of job requirements
> Provides a common language for integration with other measurements
In Change Management
> Aligns competency requirements across profiles with change management requirements
> Provides data to analyse potential organisation gaps in change management situations
> Assists the organisation in determining if talent gaps are trainable or if it should have an impact on
recruitment and selection

28 > Best Practice Series

Guidelines for Best Practice in

Integrated Talent Management
Whilst SHL has used every effort to ensure that
these guidelines reflect best practice, SHL does
not accept liability for any loss of whatsoever
nature suffered by any person or entity as a
result of placing reliance on these guidelines.
Users who have concerns are urged to seek
professional advice before implementing tests.
The reproduction of these guidelines by
duplicating machine, photocopying process
or any other method, including computer
installations, is breaking the copyright law.
SHL OPQ and UCF are registered trademarks of
SHL Group Limited, which is registered in the
United Kingdom and other countries
SHL Group Limited, 2008

United Kingdom &

Group Headquarters
SHL UK
The Pavilion
1 Atwell Place
Thames Ditton
Surrey, KT7 0NE
Tel: +44 (0) 870 070 8000
Fax: +44 (0) 870 070 7000
info.uk@shlgroup.com
Americas
New York Metro
100 Canal Pointe Boulevard, Suite 110
Princeton, NJ 08540
USA
Tel: +1 800 899 7451
Client.Support@shlgroup.com
Asia-Pacific
SHL Australia
Client Support
Level 14, 77 Pacific Highway
North Sydney, NSW 2060
Tel: 1800 252 733
Fax: 02 9460 1236
client.support@shl.com.au
www.shl.com