Differentiation for Talent Management

An HR recipe for dramatic productivity improvement

There surely has never been a better time for human resources to excel. With tighter fiscal control and a business drive for more efficiency it is providing human resources with the perfect set of circumstances to introduce measures that will have a significant impact on the business bottom line. In this article we will be looking at talent management, and how, coupled with a differentiation policy it provides an unrivalled tool for turning the business into a performance powerhouse.

However talent management on its own will never provide us with the real performance benefits that are needed in today’s unparalleled business environment.

If we look at talent management first, what is it that we’re absolutely certain of? Firstly that serious research carried out in 2007 and 2008 has shown that talented people are a considerable asset. Secondly the productivity figure that seems to be commonly agreed is that talented people are at least 40% – 50% more productive than average employees and finally, there seems universal agreement that talented people are found at every level in an organisation. All of this is fact and provides concrete evidence for adopting talent management policies. Companies that have adopted talent management and its policies and put them into practice cover a wide spectrum of industries as diverse as Google to the Container Store. Both of these companies go to extraordinary lengths to advertise and recruit talented people. The enormous amount of time spent in the recruitment and selection process is repaid by the quality of staff they are able to attract and more importantly retain. Talented people have another unique quality; they actually have a measurable impact on the bottom line. Jim Collins in his book “Good to great” gave numerous examples of individuals who were talented and who made a substantial impact on the organisation. What the studies also showed was the impact on bottom line results and in the end share value.

As all of this is true, why is every HR function in the public and private sector not actively pursuing talent management policies? A cynical view would be that most HR functions are too involved in day-to-day matters and therefore are not able to take a wider and more long-term view. Managers are also very wary of HR and the latest fad that they keep coming out with; but although they might smile and agree that its a good idea, that’s as much commitment as they are likely to make. The real issue is that talent management will not work as a separate entity. There needs to be a number of other actions that are essential to make talent management work effectively. This is where the second part of the equation comes into play – differentiation.

The concept of is not new. Differentiation was introduced into General Electric by Jack Welch, it was first explained in detail in his best selling book “Winning”. Jack Welch achieved much of his success at General Electric in America, not just by using talent management techniques, but by combining them with a strong and enforced differentiation policy.

In summary if you want to attract and retain talented people you need to pay them and treat them differently to other employees – it makes sense.

We have a tool to make differentiation work right up to how bonus is apportioned.

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