In today’s dynamic business environment, effective talent management is more critical than ever. Yet, too many organizations are undermining their efforts by focusing on the wrong things. All too often, leaders and HR professionals dive straight into tactical processes like end-of-year reviews and 9-box talent grids, while neglecting the foundational practices that truly drive talent success.
This “upside-down” approach prioritizes the output (ratings, rankings) over the input (quality data, consistent development). It’s ripe for favoritism, bias and missed opportunities.
But getting talent management right pays off big for companies and the people that work in them. According to a 2018 McKinsey survey, 99 percent of respondents who reported their company’s talent management was very effective said they outperform their competitors, compared with 56 percent of all other respondents.
What’s the Purpose of Your Talent Management Process?
Before implementing any talent management initiative, it’s essential to ask: What are we trying to achieve? Is your process primarily tactical, focused on administrative tasks? Or is it human-centric, designed to empower employees and foster growth? Are you oriented towards simply executing an annual event or creating a process for continuous improvement? Finally, is the focus on ensuring employees do the best work and have the performance they need for success?
However, only one in four companies say their performance management systems are effective and according to recent Gallup research, only 2% of CHROs from Fortune 500 companies strongly agree that their performance management process inspires employees to improve. An effective talent management system should be all about building a high-performance culture, and that starts with prioritizing foundational elements:
Pyramid Flip Rule #1: Prioritize the Work of Managing Performance – Data is only as good as the process used to generate it and the context in which it’s generated within. It’s easy to have year-end 9-box discussion. But easy may not reap quality results. However, ensuring that year-round discussions, check-ins and performance tracking are happening consistently and objectively across the organization is where the real work and heavy lifting is.
Pyramid Flip Rule #2: Prioritize Goals, Experience and Impact – Focus on goals, experience and impact of your employees. Too often managers and employees, alike, become obsessed about ratings and completely neglect setting meaningful goals. The ratings are a great way to check on alignment but meaningful goals are what set individuals up to build their experience and deliver quality impact on the job.
Pyramid Flip Rule #3: Focus on the Work vs. the Person – Too often talent planning and performance management gets focused on words like ‘high performer’ or ‘high potential.’ But that sets up fertile ground for biases, discrimination and again, missed opportunities. It’s not about assessing the individual and their potential. Besides, what are you saying to the rest of your workforce when they don’t get the coveted label? Instead, it should be on high levels of performance, capabilities and impact within their role and beyond.
Pyramid Flip Rule #4: Year-Round Dialogue is Key
Annual reviews alone are not enough to drive performance. They are not enough to improve and motivate the employee. Instead, emphasize ongoing conversations between managers and employees. Implement a structured approach to regular check-ins focused on progress, challenges and development. This not only provides valuable real-time feedback but also ensures that performance data is based on consistent observations and documented discussions, not just a snapshot at year-end.
Pyramid Flip Rule #5: Calibrate throughout the Year – Another mistake is only calibrating across functions and teams during succession and talent planning events that are usually held at the end of the year. But leaders should be calibrating on goals and performance expectations, ratings, rating differentiations and job mobility or promotion criteria.
Why This Approach Matters
When organizations prioritize foundational talent management practices, they create a more equitable, transparent, and effective system. This leads to:
- More Accurate Data: Regular feedback and documented discussions provide a richer, more reliable picture of employee performance.
- Improved Employee Engagement: Ongoing conversations foster a sense of connection and support.
- Better Development Decisions: Development investments are aligned with individual needs and career aspirations.
- Stronger Performance: Employees are empowered to take ownership of their growth and contribute their best work.
Achieving talent management success requires a fundamental shift in mindset. Stop turning the pyramid upside down and start building a solid foundation based on ongoing dialogue, equitable development and consistent performance management practices. While this approach is simple, it may not be easy, but “event-based” talent management is merely a band-aid on gangrene. It’s time to invest in building a talent strategy that truly empowers employees and drives organizational success.