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Mediocre people occupying senior leadership positions is one of the chief reasons for the fiasco and humiliation that organizations like Enron and WorldCom faced. The practice of recruiting average people at the top is omnipresent and often goes unnoticed until the results begin to surface, which is typically too late for any intervention.
Smart people decisions matter a lot in achieving profitability. Research indicates that a return on average human asset of 5% is typical in many industries. However, a senior executive selection of 2 standard deviations below the average yields -15% return on asset. An executive selection with 2 standard deviations above average causes +25% return, which is 5 times the average. Increased investment in finding and hiring the best senior executives fetches returns to the magnitude of 1000%.
Attracting and selecting the best people for senior leadership positions isn’t a small feat. The future of organizations depend on it. However, the Human Resource Management function at most organizations fail in getting the right people at the top. The decision to hire at the senior positions necessitates deliberate effort and commitment. Identification and onboarding of right people at these levels can create a substantial competitive advantage and profitability for the organizations. Leading companies invest a lot of time in these decisions and conduct careful assessment of a pool of candidates. They evaluate the opportunity costs associated with onboarding wrong people at critical senior positions and those associated with performance that could not get delivered due to selection of incompetent individual(s).
To prevent the disasters caused by psychological barriers and biases and to onboard competent executives, organizations need to religiously follow these 8 guiding principles:
- Outline requirements
- Prepare a large candidate pool
- Benchmark rationally
- Appraise systematically
- Overcome resistance in decision making
- Keep the evaluation team small
- Finalize the deal in time
- Support assimilation of new hires
Let’s discuss the 4 guiding principles in detail, for now.
Outline requirements
Defining the job requirements clearly before initiating the executive search process is an imperative for finding and appointing the right persons at senior positions. The board should take out time to hold meetings to sift through the organizational strategic objectives and prioritized initiatives. The outcome of these sessions help the recruiters develop a list of critical skills and behavioral competencies.
Prepare a large candidate pool
Restricting executive search to specific geographies or industries limits the chances of finding the most suitable candidate(s). For instance, to hire the country head for a computer hardware firm in Asia, a company may identify all C-level executives at specific large hardware and software providers in the region; target former top executives of all relevant companies; consider senior executives outside the hardware sector; and shortlist about 10-12 top candidates to be interviewed.
Benchmark rationally
Having a fair comparison of shortlisted candidates is possible by creating consistent benchmarks. This helps all the appraisers to follow a defined approach and rating criteria. External and internal candidates should be assessed without any biasness. Likewise, comparison of soft skills—which are obvious to internal candidates but unknown to outsiders—should be done on equal footing.
Appraise systematically
After shortlisting potential candidates, it’s time to evaluate their suitability on the required competencies through rigorous interviews using behavioral-based questions. The evaluation should constitute in-depth reference checking—through the nominees as well as those who have worked with the candidates in the past—internally or through executive search firms.
For more information on selection and hiring “the best of the best,” take a look at the Fiaccabrino Selection Process (FSP). Download a free primer on FSP here.
Interested in learning more about the other guiding principles critical for selection of competent senior executives? You can download an editable PowerPoint presentation on Executive Selection here on the Flevy documents marketplace.
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A job consists of various critical elements that are essential to achieve enterprise outcomes—i.e., talent and behavioral requirements, role, and responsibilities. Jobs that are configured inadequately bread disputes, negative perceptions, inequality, and frustration. On the other hand, structured jobs, appropriate distribution of work, justified authority levels, and correct estimation of value of individual jobs are the signs of effective Human Capital Management function.
The lack of a structured job design—or ill-defined jobs—renders the organizations ineffective and burdened with excessive staffing and payroll costs. This warrants from the leadership to plan and undertake a Job Leveling initiative. Job Leveling is a disciplined approach to gauge the value of work for individual positions across the organization. It entails ascertaining the nature of work done by each position, authority levels, and the effect of each job on business results. The initiative is critical in administering rewards structures.
However, Job Leveling is a concern at most organizations—not many people are satisfied with the value assigned to their roles. The absence of proper—or inadequate—job levels yields grave consequences for the entire organization. Jobs valued higher than their actual value lead to wastage of resources, whereas low valued jobs are perceived as offensive and inculcate demotivation.
Job Design and Job Leveling is essential when organizations consistently encounter these issues:
- Constant employees complaints and demands to reclassify jobs
- Excessive job titles
- Widespread dissatisfaction with remuneration
- Task / processes redundancy
- Financial outflow
- Staffing imbalances and top heavy structure
Workforce planners should use a Job Leveling Framework to methodically benchmark the value of jobs at their organizations. To accomplish this, they need to first analyze all the activities required under each position, the professional competences and demeanor essential to perform those activities, and gauging the effect each position has on business results.
Implementing a Job Leveling Framework simplifies the allocation of jobs in a harmonized job hierarchy, establishes consistency across the HR Initiatives, develops clear paths for growth, and improves decision making.
Human Resources practitioners need to follow these 5 key phases to implement a Job Leveling Framework and structure job levels at their organizations:
- Ensure Readiness of Pre-Implementation Groundwork
- Engage Business Leaders in Implementation
- Set up Clear Governance Structures
- Employ User-friendly Job Evaluation Management Tools
- Establish Clear Communication Mechanisms
Let’s dive deeper into the first 3 phases of the Job Leveling Framework Implementation, for now.
Ensure Readiness of Pre-Implementation Groundwork
Human Resource practitioners should first analyze their existing job architecture, job natures, roles and responsibilities, and Organizational Culture to initiate the Job Leveling process. Specifically, they have to answer these queries to identify the right Job Levelling method:
- What is the key objective to be achieved by implementing the Job Leveling initiative? Is it to improve compensation, shape career paths, or alleviate pay equity concerns?
- Who will be the users of the Job Leveling system? Will it be managed by Human Resources experts or business leaders?
- The Job Leveling exercise will impact which employees? How many roles, their nature of jobs, locations?
- Define the organizational culture and values. Is it hierarchical, centralized, or cost-focused?
Engage Business Leaders in Implementation
Effective Job Levelling Implementation necessitates involvement of business leaders from the onset of the exercise. Engaging business managers and employees can hold back the pace of implementation because of conflicting views and ideas, but this is essential for the success of Job Leveling. The right engagement involves:
- Getting agreement and support from senior business leaders.
- Including business leaders in calibration of key roles for support later during execution phase.
- Coaching key line managers and including them in job evaluation sessions to ensure adequate understanding of the roles and to develop program sponsors during implementation.
- Including key employees during the design phase of Job Leveling to remove any suspicion and win their agreement.
Set up Clear Governance Structures
Establishing effective control mechanisms is essential to avoid any glitches in implementing coherent job levels. Job Leveling initiatives in large multinational corporations fail because of dearth of appropriate governance mechanisms in place. A few organizations adopt centralized controls whereas others employ decentralized, locally-driven governance protocols. To execute clear yet robust governance mechanisms, organizations should follow these key tenets:
- Governance principles should correspond to the organizational culture.
- Stakeholders should be held accountable with clear roles.
- Authorities should be assigned to ensure proper control mechanisms.
- All concerned people should be engaged in the initiative.
- Decision making authorities should be clearly defined.
- Resources should be effectively deployed.
- Promote fairness by applying rules equally, or if not, rationale is clearly explained.
Interested in learning more about the other phases of Job Leveling Implementation and Job Leveling methods? You can download an editable PowerPoint on HR Strategy: Job Leveling Framework Implementation here on the Flevy documents marketplace.
Are you a Management Consultant?
You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.
Inadequately structured jobs create disputes, negative perceptions, inequality, and frustration among employees. On the other hand, well-articulated jobs, appropriate distribution of work, justified authority levels, and correct estimation of value of individual jobs elevate employee engagement levels, productivity, and job satisfaction. Organized job levels are a sign of effective Human Resources Management function.
The lack of a structured job design—and ill-defined jobs—renders the organizations ineffective and burdened with excessive staffing and payroll costs. This warrants from the leadership to plan and undertake a Job Leveling initiative. Job Leveling is a disciplined approach to gauge the value of work for individual positions across the organization. It entails ascertaining the nature of work done by each position, authority levels, and the effect of each job on business results. The initiative is critical in administering rewards structures.
However, Job Leveling is a concern at most organizations—not many people are satisfied with the value assigned to their roles. The absence of proper—or inadequate—job levels yields grave consequences for the entire organization. Jobs valued higher than their actual value lead to wastage of resources, whereas low valued jobs are perceived as offensive and inculcate demotivation.
Job Design and Job Leveling is essential when organizations consistently encounter issues, such as:
- Constant employees complaints and demands to reclassify jobs
- Excessive job titles
- Widespread dissatisfaction with remuneration
- Task / processes redundancy
- Financial outflow
- Staffing imbalances and top heavy structure
Workforce planners should lay out a clearly-defined Job Leveling Framework to tackle these issues and methodically benchmark the value of jobs at their organizations. To accomplish this, they need to first analyze all the activities required under each position, the professional competences and demeanor essential to perform those activities, and gauging the effect each position has on business results.
The 4 core benefits to developing and executing an efficient Job Leveling Framework include:
- Establish Consistency across the Human Resource Initiatives
- Develop Clear Paths for Career Growth
- Improve Ease of Administration
- Increase Flexibility for M&A
Let’s delve deeper into 3 of these benefits, for now.
Establish Consistency Across the HR Initiatives
A standardized job evaluation approach enables a consistent job structure terminology. It makes communication and Job Leveling related decisions easier. A Job Leveling Framework aids in defining relative placement of various jobs, using elements, such as, knowledge, problem solving, interaction, impact, and accountabilities. Alignment of jobs through a Job Leveling Framework helps in developing consistency across other HR initiatives and make better talent related decisions.
Develop Clear Paths for Career Growth
Organizations use clear career pathways to enhance employee engagement, meet employee expectations, and provide opportunities for their development. A Job Leveling Framework provide clear-cut job structure to inspire the employees. Career pathways developed through Job Leveling Framework helps the leaders as they strive to improve the amount of mobility across teams, units, and divisions.
Improve Ease of Administration
A Job Leveling Framework assists in developing efficient methods to administer HR initiatives. A Job Leveling Framework enables improved efficiencies and decisions related to key talent and their work. For instance, it streamlines pay grades and salary structures; standardizes job titles; simplifies short-term incentive criteria and objectives definition; and structures long-term reward eligibility criteria and nominations.
Interested in learning more about the Job Leveling Framework and benefits associated with its implementation? You can download an editable PowerPoint on HR Strategy: Job Leveling Framework here on the Flevy documents marketplace.
Are you a Management Consultant?
You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.
Enterprises worldwide face problems selecting, staffing, developing, compensating, motivating, and sustaining their key talent. Building a sustainable Talent pipeline is quite strenuous even for large multinationals.
Replicating best practices from somewhere and applying them alone isn’t sufficient for organizations to build a Talent pipeline and achieve Competitive Advantage. This warrants overcoming arduous challenges associated with this digital age, including:
- Adjusting to varying dynamics in global markets
- Handling the expectations of varied customer segments in different geographies
- Managing the preferences of key Talent
- Acquiring new technologies
- Building novel capabilities
- Achieving Operational Excellence by streamlining operations and improving processes
- Exploring new markets
- Devising strategies to attract, select, develop, assess, and reward top Talent.
Developing Talent Management practices helps the organizations build and retain talented people available in the job market. The term was first used by McKinsey & Company in 1997, and it pertains to planning and managing strategic Human Capital through activities, i.e. attracting, selecting, developing, evaluating, rewarding, and retaining key people.
Executives use diverse Talent Management strategies and career pathways based on various departments, levels, and roles in their Talent pool. Multi-year research on Talent Management practices conducted by an international team of researchers from INSEAD, Cornell, Cambridge, and Tillburg universities studied 33 multi-national corporations, headquartered in 11 countries. The study revealed that successful Human Capital practitioners and workforce planners adopted 6 core principles. These principles act as the 6 pillars to effective Talent Management implementation:
- Alignment with Corporate Strategy
- Consistency of Talent Management Practices
- Integration with Corporate Culture
- Involvement of Leadership
- Global Strategy with Localization
- Branding and Differentiation
Let’s discuss the first 3 pillars in detail, for now.
Alignment with Corporate Strategy
Integrating Talent Management with Corporate Strategy is imperative as the need for future Talent depends on the company’s long-term strategy. Corporate Strategy should guide the identification of Talent required to accomplish organizational goals, since it’s the right Talent that drives the key strategic initiatives rather than strategic planning.
For example, GE’s Talent Management practices have been a great assistance in implementing their strategic initiatives. The organization regards its Talent Management system as their most potent execution tool and has integrated TM processes into their strategic planning process. To sustain its image as an innovation leader, GE targets technical skills as a priority in its annual Strategic Planning sessions. Individual business units lay out their business as well as the Human Capital objectives in GE’s annual strategic planning sessions. Significant time is spent on reviewing its Innovation pipeline, its engineering function’s structure, and Talent requirements. To achieve its vision, GE promotes more engineers in its senior management than its rivals.
Consistency of Talent Management Practices
Talent Management practices must be consistent and synchronous with each other. It is critical not only to invest in advancing the careers of key Talent but also to invest in processes to empower, compensate, and retain them. Human Capital practitioners utilize various tools to ensure consistency of Talent Management practices, including Human Resources satisfaction surveys and qualitative and quantitative data on TM practices implementation.
For example, the success of Siemens is based on consistent monitoring of its systems, processes, and key performance metrics across its subsidiaries. Every element of Human Capital Management is connected, continuously assessed, and linked to rewards. This goes from recruitment of graduates each year, to their orientation, to mentoring and development, to performance evaluation and management, and compensation and benefits.
Integration with Corporate Culture
Corporate culture is regarded as important as vision and mission by renowned global organizations. These companies hold their core values and behavioral standards very high and promote them among their employees through coaching and mentoring. They strive to embed this into their hiring, leadership development, performance management, remuneration, and reward processes / programs. So much so that they consider cultural adaptability a crucial element of their recruitment process—as personality traits and mindsets are hard to develop than technical skills—and evaluate applicants’ behaviors and values rigorously.
For example, among other leading companies, IBM has a special emphasis on values while selecting and promoting people. To ensure consistent values across the board, it organizes regular values jam sessions and employee health index surveys. These sessions encourage open communication and debate on values and organizational culture and their importance among employees.
Interested in learning more about the other pillars of Talent Management, the various approaches to TM? You can download an editable PowerPoint on 6 Pillars of Talent Management here on the Flevy documents marketplace.
Are you a Management Consultant?
You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.
