A recent Harvard Business Review article ‘How to Keep Your Top Talent’ warns that 25% of your top talent plans to jump ship in the next year.
The results for engagement and effort are even more alarming, since about a third of employees surveyed admit to phoning it in at work. That’s bad news if you believe that staying competitive relies on the passion, drive and creative energy of talented people. But perhaps these people have tuned out because one in five believe their personal goals are completely different from the company’s plans for them.
Even more discouraging is the fact that an estimated 70% of ‘high potentials’ are false positives, for one of three reasons:
1) They aren’t committed to the organization;
2) They aren’t willing to do what it takes to succeed at the next level; or
3) The organization doesn’t have what it takes to help them be successful at the next level.
If this is true, much of the activity companies are currently engaged in to prepare for the future is largely focused on the wrong people.
Let’s take a look at your workforce, which is made up of a lot of different groups. From a performance perspective, we might refer to these groups as high performers, solid performers and underperformers. Within each performance category, we have high, medium and low potentials. And within all of these performance and potential categories we have levels of engagement and personal ambition.
Next, plot these people on a 3-dimensional cube in your head - which helps stave off Alzheimer’s even better than Sodoku puzzles - and look for the people who combine ability with engagement and ambition.
Just kidding, you don't have to do the cube thing.
But do ask yourself this: When it comes to allocating scarce rewards, who do you love? Do you love your disengaged high potentials, your highly engaged and ambitious solid performers, your high performers with low personal ambition...?
Once you've answered this question, you might want to take another look at how you’re paying for performance and/or potential to see if your practices support your stated goals.
Because you probably make some implicit assumptions, such as:
- High performance and high potential are directly correlated;
- High potentials are by definition engaged and/or ambitious;
- High potential means management material.
- Making solid performers feel like second class citizens;
- Looking at today’s performance rather than tomorrow’s needs when selecting high potentials;
- Not considering engagement or personal career goals in conjunction with potential;
- Offering a single type of career path rather than individual development plans;
- Not giving engaged, ambitious people development opportunities;
- Putting people in leadership roles based on performance in a non-leadership role and trusting them to develop your organization;
- Relying too heavily on monetary rewards because it’s the easiest thing to understand and measure.
I think of these as the Seven Habits of Highly Ineffective Companies.
A good rewards strategy recognizes top performers and high potential employees. A better rewards strategy does so without making sold performers feel left out in the cold with recognition, coaching, and career development.
In other words, spread the love.
Picture courtesy of mastitree.com.
Laura Schroeder is a Compensation Strategist at Workday, headquartered in Pleasanton, CA. She has nearly fifteen years of experience designing, developing, implementing and evangelizing global Human Capital Management (HCM) solutions and is currently pursuing a certificate in Strategic Human Resources Practices at Cornell University. Her articles and interviews on HCM topics have been published in the US, Europe and Asia. She lives in Munich, Germany and enjoys cooking, reading, writing and spending time with friends and family. You can follow her on Twitter @WorkGal.
Great post and insights, Laura. We forget our solid middle tier of employees (70-80% of the workforce) at our own peril. As I wrote last month in my blog:
All the buzz seems to be around “what to do about retaining your top performers.” Have you been concerned about these second-tier employees? They have just as much knowledge about your workplace and competitive differentiators, just as much desire to work hard, and have likely been a powerful force behind the success of your top performers.
So why would they consider leaving? For the same reasons as any others in your workforce – overworked and underappreciated. It’s just these employees who can do something about it. Deloitte’s research says up to 44% of employees actively looking will take action on their turnover intentions. Can your workforce handle that large of a shake-up – especially in your top two tiers of performers?
(research citations in the original post at: http://bit.ly/cI6raT)
Posted by: Derek Irvine, Globoforce | 07/14/2010 at 01:07 PM
I couldn't agree more, Derek. There's buzz around getting the most bang for your talent investment buck and this 'tier 2' group is the exactly where a little love can pay back in spades! I'll bet half of them are top performers in disguise, just waiting for a chance to shine!
Posted by: Laura Schroeder | 07/17/2010 at 04:51 AM