Talent management- Compensation Management Flashcards
Areas of talent management
Phases: Employee Development / Talent Management
Targets: Provision of a sufficient number of talents for actual and future open positions
KIPs:
* Number of Managers in HiPo Programs
* Number of former talents within firm
Phases: Management Development / Succession Planning
Targets: Definition of future job and function sequences of an employee
KIPs:
* Proportion of externally hired positions
* Proportion of internally hired positions
* Program participants
Definition and scope of talent management
Talent management “refers to those organizational concepts and measures that are specifically aimed at attracting, retaining and developing current or future employees who are referred to as talents because of their comparatively scarce, highly sought- after key competencies that are central to the organization.”
The components of talent management
HR strategy / strategic positioning
Architecture
HCP (human capital portfolio)
SPL (succession planning)
Paths& IDP (individual development plans)
talent architecture (talent identification framework)
«Differentiated» vs.«Inclusive» Approach
Top Management: Sucession Planning
Key Talents: Pull principle
High Potential: Push principle
Remaining Population
BCG Matrix
9 Box Model in HR
page 18
Criteria for the allocation of potential
Drive and Engagement
Self-Consciousness and Empathy
Learning Agility
Management of Change and Complex Situations
Resilience and Stress Management
Cooperation Abilities (across functions for example)
For each criterion there should be concrete descriptions for 3 levels of potential: «low», «medium» and «high»
Talent management process
page 22
Talent development
on the job: learning while doing your job
–> Exchange of experience, deputization, project work
–> learning partnership: mentoring, coaching,feedback
–> qualifying Working Space design: Job enlargement, Job enrichment, Job rotation, International assignment
off job: outside of the company
—> Near the job: Quality circles, Development Job, committee Menderships
–> off the job: conferences, professional Courses, Seminars
Career: vertical or horizontal
Leadership Career:
- Role changes within hierarchy with vertical trend
- Advancement is connected with an increase in competences, responsibilities, status, power and reward
- Question marks in relation to dynamic economic environment and social value changes
Expert Career:
- Idea of vertical role changes too
- Positions with high portion of functional knowledge and experience
- Interesting for individuals who cannot or do not want to take over management positions
- Promotion, recognition and reward professional performance of specialists
- Reduction of fluctuation
Project Career:
- Assignment of employees to project groups with temporary tasks
- Advantages: higher flexibility re cooperation, flatter organisational structures, creation of new leadership positions, increase of development options, potential to recognise leadership potential
Individual development plan (IDP) discussion
- What is the biggest advantage to have an IDP discussion between manager and employee?
- Who is responsible for the IDP development?
- Who should have/be given an IDP?
- What time horizon is sensible to be covered (with concrete action points) by an IDP?
- What kind of measures or actions do make most sense in an IDP?
- What consequences in reference to an IDP do you draw in a VUCA world?
Different phases in the individual «career lifecycle»
page 27
Digitalisation and talent management
Digital Learning 1.0
Learning through the unlimited availability of learning content and knowledge via web-based tools (MOOCs): Coursera, Udemy, Udacity.
Digital Learning 2.0
Learning through digital connections and collaboration with other employees based on evolving web technology (MPPG: Mobile Micro Learning in participatory and personalized ways in groups)
Digital Learning 3.0
Fully integrating social media, games, real-time feedback, and simulations into the learning environment based on comprehensive web technology
Succession planning: A few recommendations for your own development
Career choice and first job selection requires more thinking than expected
Functional further education provides the necessary thrust
At least one substantial professional further education must be envisaged during one’s professional career
Career cuts and set-backs are opportunities not disasters
Strategic, structural and other changes lead to the biggest opportunities
A certain willingness to take risks is needed
Ego, business and social environment must be in balance
Personal positionings must be done on a regular basis
External networks must always be cultivated
Compensation structure
page 38
Core drivers for compensation decisions
-Fairness
-Compliance / Regulations
-Motivation
Equity Theory (Adams): the link of fairness with motivation
6 choices to react to inequity
1. change inputs
2. change outcomes
3. distort perception of self
4. distort perception of others
5. choose different referent
6. leave the field
–> perceived inequity due to being under rewarded
–> perceived inequity due to being over rewarded
Strategic use of compensation: key areas and questions
page 42
Function salary
page 43
fairness
Individual salary
page 44
fairness and motivation
Individual salary components
* Age
* Experience / Seniority
* Additional Education or Qualification
* Market (1. supply and demand / 2. geographical)
* Performance / Grades
Short term incentives
page 45
fairness and motivation
Requirements for a short term incentive system
* Congruence with corporate goals
* Differentiation between employees
* Transparency and comprehensibility
* Fairness and balance
* Credibility
* Significance
What does a short term incentive depend on?
Results
–> Quantity and quality of performance in all BSC categories (products, client satisfaction, productivity, cost
management, client acquisition, fluctuation, etc. etc.)
Behavior
–> Labor engagement and efforts independent of results
–> Behavior and leadership in all dimension and area of responsibilites (employees, managers, clients,
shareholders, etc.)
Personality:
–> Features of the mental, character related and physical sphere which have a significance far beyond the professional activity
Potential:
–> Capabilities and competencies which go beyond the requirements of the respective function
Some terms (dimensions) of variable compensation
Paymix Ratio: Percentage of variable to fix
Eligibility: Executives, Management, Employees
Performance Reference: Company, Division, Team, Employee
Time: Immediate, short term, long term
Payout Vehicles: Cash, Shares, Options, etc.
Performance evaluation and compensation
An impactful performance bonus makes sense in areas, where:
- there is a strong material and monetary orientation of employees
- the intrinsic motivation is rather low
- a focus on bonus-relevant work targets is likely to be unproblematic
- performance targets can be determined and measured without the shadow of a doubt
- the individual performance is measurable and independent of any cooperation within a team or a larger group (alternative: group bonus)
Problematics with bonuses
- Performance Bonus does not do justice to the complexity of many jobs and functions
- One-sided performance is encouraged (focus on compensation relevant activities)
- Individual performance is emphasised at the expense of the group performance
- The result can be an unhealthy internal competition
- The cooperation between employees is impaired
- There is a necessity for transparency in order to get evident fairness
Long term incentives (LTI)
page 51: motivation
Characteristics
* Profit sharing of management
* Consideration of longterm perspective
* Harmonisation of interests between management and shareholders
* Attraction and retention of executives
Statutory benefits (example)
Examples of statuory benefits
* Employer contributions to old age or unemployment insurance
* Employer contributions to pension funds
* Accident Insurance
* Sick pay and sick pay insurance
* Maternity leave
Fringe benefits (example)
Examples of fringe benefits
* Company Car
* Additional Payments into pension funds
* Mobile phone for private use
* Company products and services free of charge or cheapened
* Travel-checks
* Train tickets
* Preferential interest rates or cost reductions for financial transactions
* Sports facilities, fitness subscriptions
* Health promotion or leisure programs
* (Good quality) canteen
* Free coffee, beverages, fruit
* Childcare
* Life and / or health insurance
* Regular health checks (frequent flyers)
* Employee apartments
* General expenses
* Education and language studies
* Sabbaticals
* Paternity leave
Non-financial rewards (example)
- Flexible work arrangements
- Job rotations / development opportunities
- Recognition / Awards
- Mentorship
- Extra time off (e.g. to work on own projects)
