Reward: Attraction vs Retention

Reward definitely is one of the most fascinating HR topics destined to top and firmly remain high on the business leaders’ agenda, especially on that of financial institutions boards.

The growing interest in reward management, however, is not purely scientific or rhetoric-based; employers are habitually extremely pragmatic and what interest them the most is their organization gaining competitive edge and being successful in the market they compete in. Reward is presently regarded as an essential aspect of modern management in that it is believed that appropriate reward management practices can effectually help employers to attain their intended objectives and ultimately pursue their intended strategies.
 

One of the main reasons, arguably the main reason, employers are increasingly directing their attention to reward is associated with its alleged motivating effect. Nonetheless, it can be hardly contended that the motivational aspect may be considered as a distinctive reward feature. This subject has indeed caused controversy over time and the findings of the numerous investigations conducted over the years do not sustain this theory either.

Individuals are different one another; yet, individual preference and wants are also highly likely to change with the passing of time. The exogenous environment and the constant technological advances clearly play a fundamental role in this sense as well as the national and global economic and financial circumstances. A growing significant role is also played by the demographic aspect by reason of the ageing population phenomenon.

Individual wants and expectations are indeed influenced by several factors and can thus be considered as ever-changing and in many respects as increasingly dynamic; notwithstanding, the value proposition offered by employers must invariably aim at meeting as far as possible these needs. To this extent it should be essentially adopted the same approach and mechanism used in marketing according to which businesses should introduce in the market the goods and services which consumers want to buy and not those which the firm can more easily offer. Similarly, employers should offer their employees not the reward packages they prefer to offer or are most comfortable to offer, but rather the reward packages their employees would like and are thus expected to receive.

Financial rewards are, by common consent, considered more effective to attract talents and more in general individuals from the external environment, rather than to motivate and engage individuals. Nonetheless, it is also fairly widespread the conviction that this magnetic effect is due to vanish into thin air fairly soon. This essentially means that whether an employer needs to recruit individuals from the external environment to fill some new or vacant roles, this can successfully have recourse to financial reward as an appropriate leverage to attract and lure quality people, safe in the knowledge that this will not be enough to retain these hereinafter. To avert the occurrence of such a situation, HR and reward specialists before recruiting a talented individual from the exogenous environment, in addition to the identification of the most appropriate reward package that should be offered to the most suitable candidate, should also develop a clear plan of action enabling the organization to retain this.

Employers necessarily have to be far-sighted. These are indeed aware that to attract skilled individuals they should offer these appealing financial reward packages, which they are habitually willing to offer, but it also needs to be clear from the outset the plan of action aiming at retaining these and receiving their best contribution over time to the pursuance of the business strategy.

This is clearly not an exclusive reward matter. Whether, for instance, the person does not fit the organization’s culture or has misunderstood the content of his/her role, there will not be reward package worth to retain the individual. Under such circumstances, it would be better to recognize the recruitment error, bear the waste of money associated with it and with the induction process and start back seeking for the genuinely perfect match for the company and the position.

The circumstance employers should develop for high-flyers an appropriate reward package enabling them to both attract and retain these, does not entail that reward specialists should prepare for each of these individuals a precise progressive salary increase plan. The effect of money would not in any case be long-lasting and, unless there would not be the employer willingness to cover individuals with cash, which sooner or later would prove to be in any case insufficient, the retention objective has to be clearly pursued having recourse to other means. Inasmuch as there is a wider consent amongst reward practitioners and academics upon the effectiveness of financial reward to attract individuals from the exogenous environment, there also is a rather widespread agreement on considering non-financial rewards effective and, in any case, much more effective than financial rewards to motivate and engage people. Engaged and motivated people are clearly more likely to genuinely and spontaneously go the extra mile, exhibit discretionary behaviour and contribute to organizational success.

Employers and reward professionals in order to retain quality individuals should not therefore insist on the financial components of reward, but should rather identify and develop appropriate and sound non-financial, intrinsic forms of reward and recognition. Are indeed these components of the overall reward package which influence in practice individual behaviour and prompt employees to work with dedication. Non-financial rewards also contribute to induce individuals to develop a feeling of involvement and participation on the organizational success and to increase in turn their sense of citizenship.

All in all, it clearly emerges that total reward approaches are the most, or rather, the only suitable approaches employers and reward managers can have recourse to in order to retain and keep employees motivated. Albeit the role of money may become of secondary importance in order to motivate people during the employment relationship, money will invariably continue to talk. The importance of financial reward, by extension, needs to never be neglected or overlooked by employers. Individuals will invariably associate with money a relevant degree of importance and, even though they might not constantly think about financial rewards when performing their day-to-day activities, they could anyway perceive a pay increase as something they deserve or need. To this extent two elements play a particularly remarkable role: the fairness of pay decisions and the individual general financial circumstances.

Despite employers may be happy with their financial reward package and their daily activities, these could feel to be treated unfairly by their employer whether this should grant unjustified and unsustainable pay increases to some individuals. The knock-on effect produced by such circumstance can be extremely detrimental for the business and risks seriously and irreversibly jeopardising the relationship of trust established between the employer and its employees.

Internal fairness clearly represents a critical factor, but the external labour market and the pressure coming from it have to be duly taken into consideration, too.

It is important to clearly communicate and explain employees the worth of their overall reward package composition taking also into consideration, for instance, benefits and deferred benefits. Some employers may offer more generous pay, whereas offering very poor benefits and pension contributions. It is crucially important that these aspects are constantly and clearly communicated to staff and to external candidates when offering a job.

Financial rewards are also destined to invariably represent a reason for individual concern as long as these have not reached somewhat of a financial comfort zone. As long as individuals will be struggling to pay their monthly bills (utilities, mortgage instalments, children school fees, public transport season tickets, etc.) it is hardly imaginable that these may ever pay lip service to the importance of their financial reward package. This circumstance can at times also give rise to undesirable family tensions, which can in turn unconsciously affect employee performance and behaviour at work. 

Despite money may not act as a powerful motivator, its hygiene effect definitely still counts and has to be properly and constantly taken into consideration by employers and reward managers.

Considering financial and non-financial rewards separately, it could be concluded that financial rewards would be the winners of the attraction contest, whereas non-financial rewards would be the winners of the retention tournament. However, both of them clearly play a significant role in both competitions. The synergetic, multiplicative effect produced by financial and non-financial rewards used in combination can effectually enable employers to attain in practice their intended objectives, namely to attract and retain quality individuals. Total rewards approaches are key in this sense. This does not clearly mean that attracting and retaining quality individuals is a straightforward task. People wants and preferences are subject to change over time. Yet, many other employers strive to recruit high-flyers and quality individuals.

Using fairness, consistency and integrity definitely is of paramount importance, but genuinely considering and taking heed of the employees’ wants and expectations assumes a greater significance, too. First and foremost, employers need to know their employees and their needs; this clearly represents the starting point, but whether neglected any employer action and initiative risk proving to be a massive waste of energies and resources. It would be like filling stores shelves with products that the manufacturers considers outstanding, but which customers do not like so that these remains and are destined to remain unsold in the shelves.

Extract from:

Longo, R., (2014), Rhetoric and Practice of Strategic Reward Management; Milan: HR Professionals.

Sometimes employees leave their employers not their managers

The development of effectual employee retention and most of all of talent retention practices definitely represents one of the subjects firmly high at the top of business leaders’ and HR directors’ agenda. The process is virtually invariably the same: individuals very keenly and enthusiastically join the new employer and later on disillusioned leave this.

Employees leave their employers for a whole range of reasons which can be broadly grouped into two different categories: endogenous-environment- and exogenous-environment-related.

Internal-environment-related reasons

One of the reasons, arguably the most recurring reason, for employees leaving their organization is the business management, more specifically their line manager.

The role played by managers

Once candidates have been identified as the best fit for the role and officially appointed to the job, the employer representative with whom these establish the stronger and most frequent contact within the organization unquestionably is their line manager. The establishment of a good relationship between managers and employees, however, does not invariably prove to be smooth sailing. Whenever managers do not succeed in building and developing good relationships with their direct reports in fact the latter tend to become the more and more ill at ease with the former in particular and in the workplace in general. Disappointed employees start consequently making plans to leave the organization as soon as they can. This circumstance has been properly summarized by Buckingham and Coffman (2005): “Employees leave their managers and not their employers”, and rephrased by MacLeod and Clarke (2009) who suggested that in actual fact individuals join organisations, but leave later on their managers.

It doesn’t go unnoticed that all of that clearly occurs at the expenses of employers and to the detriment of the regular unfolding of their business activity. It is likely that employers have carefully and arguably not effortlessly put in place all the resources deemed necessary to attract and recruit the right individuals. Albeit different from employer to employer, it is an axiomatic fact that the cost of the recruitment and selection process is invariably high.

The sub-factors accounting for individuals deciding to leave their employer by reason of their manager may be in turn associated with different circumstances. Also in this case these may be grouped into two main different categories: on the one hand can be included the causes associated with managers’ leadership style; whereas on the other hand those linked to managers’ inability to improve job design and “give individual a good job.”

Leadership style

Increasingly, individuals pay attention to the way they are treated by their managers and tend to associate with this aspect a growing importance. The leadership style adopted by managers needs hence to be appropriate and has to fit both the circumstances and the business culture. The most undesirable situation however occurs when managers adopt no leadership style whatsoever and, even worse, when these totally lack of style when interacting with their direct reports.

Employee involvement and participation

With some exceptions, employees at large aim at performing interesting and fulfilling jobs. It is unlikely that individuals may decide to leave an organization whether their managers organize and design their staff work in a way that makes it significant, compelling and varied and involve employees in this process stimulating and favouring their active participation. As Herzberg (1987) used to say: “if you want people motivated to do a good job, give them a good job to do.”

Not really an easy task

The role of managers however is everything but straightforward. Constantly finding new and more effective ways to improve processes and the way the job can be performed is clearly easier to say than to achieve in practice. Even more so when as it usually occurs managers also strongly contribute with their practical work to the final outcome produced by their unit.

Individual involvement can indeed prove to be the ultimate means to an end. Whether employees are involved and made aware of the overall process which leads to the production of the final outcome, these can actually help managers to identify effectual options and sounder and more appropriate solutions.

Forced to move out of their comfort zone

Albeit managers represent the most common cause for employees leaving an organization, this is not clearly the only one motive for employees making such a decision.

Individuals may also decide to leave their employer by reason of some undesired changes which they perceive as forcing them to leave their comfort zone or, more in general, because they feel that organizational climate has drastically changed, or rather, worsened insofar as to perceive as irreversibly altered their appreciation of the working environment. Such new circumstances may actually sometimes be the fruit of line managers’ initiative, but most of the times these changes are introduced on request of the company top-management and board.

Under such circumstances individuals perceive the workplace somewhat of hostile and no longer enjoyable as it was previously used to be perceived. The detrimental impact caused by this change is at this stage considered as remarkable insofar as to be considered irreversible and the action of leaving the organization hence necessary.

Lack of opportunities for growth and development

The content of the unwritten psychological contract has changed over time; nowadays, individuals want to perform significant and fulfilling jobs and are hence thirsty for growth and development. Whether an individual should realize that s/he is performing a dead-end job and that s/he will never be offered opportunities for growth or development it is very likely that this decides to leave.

External-environment-related reasons

Albeit more often than not the main reasons for employees deciding to leave their current employer are associated with the endogenous context, there are indeed some other additional causes prompting individuals to leave a company.

In some cases, employees can be lured by the objectively captivating and challenging employment offers coming from the external environment, which can actually provide these real opportunities for development and growth that could not even potentially be offered by the current employer.

Especially in the case of a tight labour market, it should not really come as a surprise learning that a talented employee has received an irresistible offer from a different employer. What worse, under such circumstances individuals may also decide to leave very quickly the organization in order to avert missing the boat.

It is not a matter, or rather, not exclusively a matter of value proposition, that is, of the worthiness of the reward package offered; the chance to take a genuine new challenge up, usually associated with a growing level of responsibility and autonomy or with the immediate involvement in a prestigious or ambitious project, can definitely and objectively justify an individual decision to leave an organization; albeit not triggered by any endogenous-related reason.

The international perspective

Sometimes the decision to leave an employer can also be based on the employee desire to move and work abroad. Individuals are the more and more willing and even eager to relocate in a foreign country and experience new lifestyles. Furthermore, whereas for centuries the only attractive places where to move internationally were mainly located in North-America, Australia and Europe, nowadays the appeal and seduction of other areas, especially of those located in South-East Asia, are remarkably helping big corporations to expand their “offering” and contributing to make it more attractive relocating abroad to a constantly increasing number of people.

Also in this case an individual decision to leave his/her current employer is not triggered by any bad feeling toward this. It goes without saying that whether an employer should be aware that some of their staff would be eager to relocate and work in a different country where the employer has a branch, should an opportunity arise, this should be better previously discussed and eventually offered to an internal employee, rather than being offered directly to an external applicant.

Finally

It can be concluded that when an individual leaves his/her employer for internal-environment-related reasons this is due to causes which are actually under the employer direct or indirect control.  This clearly entails that the employer could have averted this type of undesirable event to occur.

It is however hardly believable that once an individual has decided to leave the employer might actually persuade this to stay. In order to prevent unwanted occurrences to happen organizational climate, and in some cases individual attitude toward the employer, should be regularly investigated and monitored as a matter of course: prevention is invariably better than cure.

By contrast, whenever individuals, for talented and significant these may be for the organization, decide to leave the business by reason of objectively justified grounds, that is, a genuine challenging opportunity coming from the external environment, the employer has nothing to regret and to reproach itself. The only exception being whether this was actually in a position to offer a new challenging role to the individual but didn’t.

When reward comes to play

In some instances the worthiness of the reward package received by an individual can cause, reinforce or support his/her decision to leave an organization. Also in this case the drastic employee decision can be justified or be based on endogenous-context-related or exogenous-context-related grounds.

The internal context

As the equity theory teaches us (Adams, 1963 – 1965), individuals build and develop expectations in terms of reward in the workplace. These expectations are essentially based on the assumption that reward is commensurate with the output yielded by each individual and as such equitable. The tenets at the basis of the equity theory are in turn reinforced by the “distributive justice” theory (Leventhal, 1980), which lays great emphasis on the role of managers and more particularly on the fairness they should use when making decisions about their direct reports pay.

Endogenous-environment-related pay issues are typically directly or indirectly linked to bias and unfairness. Individuals are usually unwilling to accept discrepancies in pay levels whenever these are not justified by any means; whereas employees are habitually absolutely willing to accept these whether the individuals receiving higher levels of pay objectively contribute more to the organizational success and yield better tangible results.

Employers and managers should hence pay particular attention to this aspect. These theories clearly apply not only to talents, but also and to some extent mostly to the overall organization human capital. Whether employees are performing and behaving as expected by the employer, losing them would just represent a waste of time to replace these and of money to select and train the newcomers.

The external context

Ensuring internal equity, and hence not equality, can help employers to retain the existing staff, but can hardly help these to contrast the pressure eventually coming from the exogenous environment.

Whether in fact the internal pay rates would not be in line with the rates characterizing the relevant labour market, retaining current employees could just prove to be a sorely tricky feat to attain, never mind attracting new quality individuals.

Market pricing and, where applicable, market forces have to be hence invariably kept into due consideration. Whether individuals should realize that, irrespective of the fairness applied internally, their pay levels are sensibly lower than those offered in the market, is it is very likely that, especially whether the labour market is tight, these will leave the organization.

In order to avert this undesired event to occur employers, by means of reward professionals, should constantly monitor the external labour market and the trends characterizing it. Whether during this activity a gap should be identified, this should be properly investigated and the reward package of the people filling the relevant positions eventually revised.

To identify what the real reasons for employees leaving an organization actually are is paramount to gather and collect the necessary data. Exit interviews are definitely the best tool to gather this information and help employers to identify appropriate and effective solutions to contrast the phenomenon.

Longo, R., (2014), Sometimes employees leave their employers not their managers; HR Professionals, Milan [online].

Talent Management and Employee Retention, why you need them both

It is an axiomatic fact that human capital represents the real distinctive organizational component genuinely and effectually enabling employers to attain competitive edge. Beyond the rhetoric which may at times surround this principle, it can be definitely averred that whether an organization attains determined objectives this is thanks to the contribution of its people.

Unquestionably, employers can imitate, on occasions even promptly, every move made by their most successful competitors in the market but their people. Whether an employer has been successful in attracting the best talents existing in a determined area, this could practically boast the achievement of two simultaneous important feats: employing the best people and averting these to be hired by its competitors.

 

Despite talent can be defined in many ways, in the business field every definition associates with it particularly significant features and characteristics essentially enabling individuals to yield remarkable results and reach outstanding, above-than-average performances.

Talents could be thus defined as those individuals who possess distinguishing skills and capabilities enabling them to effortlessly perform at well-above-the-standard and who can effectually support the employer in the pursuit of its strategy and in the attainment of its intended objectives. Yet, these individuals can be considered as talent-dynamic, that is, people whose current capabilities and skills are predisposed to further grow and develop over time and who can consequently help the organization to sustain its growth and ultimately gain and preserve competitive advantage.

With particular reference to the business world, it can be averred that talent is not as widespread and promptly available as employers desire it to be. By contrast, the number of individuals who can actually make a difference and effectually help organizations to yield the desired results is relatively small. This has triggered and exacerbated over time a borderless competition amongst organizations, which have ever since devoted a growing attention to the design and development of practices aiming at attracting this significant category of individuals. So harsh has become the competition for talented people over time as in 1998 the consulting firm McKinsey formulated the self-explanatory expression “war for talent” to label this new phenomenon.

With the passing of the years, employers realized that attracting particularly talented individuals is not enough, it is in fact also crucially important for organizations to retain and further develop these. The need for the adoption of a structured and clear approach specifically aiming at investigating new and effective ways of attracting and retaining talents gave later birth to a new specialism widely known as “talent management.”

Talent can be intended not only as a current state, but also as a prospective state. Individuals can already possess the sought-after qualities or show to have the potential to develop these in the incoming future. Some employers have hence reconsidered the meaning of talent accordingly and expanded the extent of their search of potential talents to the organization current staff.

Businesses can thus opt for an inclusive or exclusive approach to talent management. The talent management strategy adopted by an organization can be deemed as exclusive whether employers restrict their attention and efforts to a limited number of high-fliers; by contrast, whether the activities and initiatives aiming at identifying and developing talent are extended to the overall employee population the approach to talent management is deemed inclusive.

Irrespective of the approach considered as the most appropriate and hence adopted in practice by employers, talent management can be divided into two main stages: the first stage is concerned with the search of talented people, either in the exogenous or endogenous context, whereas during the second phase employers efforts focus on the development and retention of the pre-identified individuals.

The common denominator of the inclusive and exclusive approaches to talent management is invariably represented by the employer dedication of resources and efforts to a limited number of individuals. Despite the inclusive approach entails the extension of the quest for talented people to the organization overall employee population in fact once the talented people and potential talents have been identified the initiatives included in the business’ talent management programmes will be offered only to the individuals qualifying for the scheme.

All in all, it can be therefore concluded that talent management programmes and initiatives are invariably dedicated to an elite of employees. Despite the presence within a business of a number of particularly talented individuals definitely represents a great asset to the business, it can be hardly assumed that employers may ever attain their objectives and successfully pursue their strategies without the active and effective contribution of the entire workforce. The considerable importance for employers of developing sound and effectual employee retention practices seems hence to be self-evident.

 

Talent management and employee retention practices are by no means mutually exclusive; on the contrary, the simultaneous introduction and implementation of such practices can certainly contribute to improve the worth of the employer value proposition and hence its employer branding. These programmes added to the other financial and non-financial initiatives implemented by employers can undeniably help these to attract and retain quality individuals. Once again, the synergic multiplicative effect produced by bundling reveals to be significant for the attainment of the organizational objectives.

Employers must be aware of the circumstance that the implementation of talent management practices does not entail having in place employee retention practices. Even though talent management and employee retention could be deemed as the two sides of the same coin, these actually represent two different approaches aiming at achieving two different aims. Whether an organization should, for instance, experience serious hardships in terms of attrition, the development and introduction of talent management programmes would not enable this to overcome the problem. Similarly, organizations will never be able to address the problems associated with skills shortage and succession planning by introducing employee retention practices.

Design, develop and implement effectual talent management and employee retention practices is everything but straightforward; however, since talent management initiatives are introduced to the benefit of a limited number of people, whose wants and aspiration can be thus more easily investigated and met, these programmes should reveal to be relatively easier to execute. Employee retention practices, by contrast, being basically directed at the entire workforce, can prove to be much more challenging and problematic for the HR specialists involved in their development and demanding for line managers and HR during the implementation phase. Whereas offering to talented individuals genuine opportunities for professional growth and autonomy, which could be in detail identified also on the basis of the current and prospective business wants and necessities, may reveal to be relatively, but not in absolute terms, straightforward, regularly coming up with brand new initiatives aiming at retaining the overall employee population is very likely to reveal a sorely difficult feat to perform. Some remarkable differences are indeed likely to emerge also in terms of budgetary issues and constraints.

Inasmuch as employers need talented and smart people to help them to identify the most appropriate strategies and the most effective ways to pursue these, organizations could never ever be able to yield results without the contribution of capable and proficient individuals properly and effectively performing the activities indispensable for the regular unfolding of the business day-to-day core operations. The tasks, activities and chores performed by the people within a business are indeed all equally necessary to produce the final outcome. It can be hardly imagined that employers would recruit and reward individuals whether the activities these perform would not add any value to, or would not anyway be significant for, the overall production process. 

It is widely recognized that individuals derive most of their motivation from the job and the activities they perform, provided that these are perceived as fulfilling and generate as such a sense of accomplishment, pride and ultimately of belonging. Whereas the activities performed by talented people imply a high degree of autonomy and responsibility, which can definitely provide these individuals a considerable return in terms of intangible and intrinsic reward, it can hardly be assumed that people executing more repetitive and not captivating tasks may derive the same sense of fulfilment as the former from the act of performing their job. Yet, it is widely recognized that employees derive most of their motivation from the awareness that the activities they execute are significant and valuable for the attainment of the organizational objectives and hence for the employer. Whereas talented people may hardly lose sight of the strong link existing between the activities they preform and the way these fit with the organizational strategy, this line of sight habitually results to be much more blurred for the shop floor.

The development of both talent management and employee retention practices definitely represents a sorely difficult task for HR managers and specialists but, as we have seen, the development of sound and effective employee retention practices typically presents even more difficulties. Furthermore, whereas talented people once the employer has decided to invest in them are likely to start and walk a path entailing a constant development, growing levels of responsibility and possibly a change of role over time, the largest part of employees are likely to continue to perform the same tasks and activities for a very long period of time at best and till retirement at worst.  In these cases it is glaringly obvious that people with a certain level of Growth Need Strength (GNS) will feel uncomfortable continuing to perform the same activities for a very long period of time. Under such circumstances, especially whether individuals should perceive their current job as a dead-end one, there are good chances that these people will try and seek for new opportunities either internally or externally.

Managers’ mission is therefore very important and at the same time definitely challenging. In every organization there are people performing repetitive tasks which are in any case vital for the attainment of the organizational objectives and that, for repetitive and mundane these might be, require to be executed by experienced, accurate and professional workers. Yet, more often than not these people perform such type of tasks from a long period of time and at a more-than-satisfactory level. In terms of quality and quantity there is a world of difference between the final outcome yielded in the same length of time by an experienced and loyal employee and that produced by a newcomer; especially whether this does not fully fit the business culture. Whether some of these experienced and productive individuals should leave the business, the employer would be prompted to activate a costly chain process formed by: recruitment and selection, induction and training. At the end of the process it is very unlikely that the new hires may attain the same level of professionalism and performance as that achieved by the employees who have resigned. The incumbents will be able to attain the same level of contribution after a number of years at best, which does not clearly represent an ideal situation for an employer.

All in all, it emerges that retaining good workers and best performers is of paramount importance for employers, irrespective of the complexity of their roles. Employers should hence definitely continue to pursue their interest in talent management, preferably in its inclusive rather than exclusive form, but not to the detriment and overlooking the importance of the rest of the company employee population. Every good employee is important, the definition of human capital is not casual and it is not indeed limited to part of an organization workforce. Retaining good employees is invariably important and can enable employers to practically attain competitive advantage and avert the costs associated with employee turnover. On the other hand it cannot be denied that a too stagnant workforce is not positive for employers too. Newcomers, especially whether these have had previous work experiences in different businesses, can clearly contribute to an organization a breath of fresh air which is habitually beneficial to employers and employees as well. This objective can, however, be met when replacing retired people, when expanding the size of the workforce or as a consequence of a deliberately activated sorting effect plan.

People at all levels are important for organizations so that in order to avoid undesirable additional costs and possible disruptions employers should devote to all of them the right attention and resources and strive to make each individual feel valued and respected in the workplace.

Longo, R., (2014), Talent Management and Employee Retention, why you need them both; Milan: HR Professionals, Milan [online].

How to develop career planning programmes

People development and growth is as important for individuals as it is for businesses. Some individuals have an inborn talent, whereas some others do not. Notwithstanding, also innate talent to be transformed in expertise, competence and professionalism, needs to be nurtured and further developed.

The harsh competition nowadays characterizing every market and the frequency employers are confronted with financial downturn and slowdown periods have given employers to understand that the qualities of their human capital are crucial in order for these to gain competitive edge. To meet their ambitions and expectations on the other hand individuals look for jobs enabling them to fully express and use their capabilities, qualities and skills.

 

 

 

Especially when the labour market circumstances are particularly adverse, individuals in general and young generations in particular to dramatically increase their chances to find a job enabling them to express their personal capabilities and meet their ambitions should seriously consider expanding their knowledge and competency.

All in all, it can be argued that talent, expertise, skills, capabilities and excellence are and should indeed nowadays be regarded as extremely important qualities by both individuals and employers; albeit more often than not the latter seem to be more genuinely sensitive to the development of people filling management and executive positions, rather than to the growth of the individuals filling other types of roles.

What career planning is

The idea of career can effectively be expressed by means of the metaphor of career as a ladder. The concept can be associated with the process of progressively and constantly enhance and improve personal and professional abilities, skills and capabilities in order to attain a pre-identified objective, which can be broadly identified with self-advancement. Career planning can be defined as the systematic and structured approach enabling individuals to accurately and craftily plan, by their own initiative or by mutual agreement with their employer, their professional progression, development and growth.

 

 

 

Individuals who have identified clear personal career objectives, regardless of their current role but preferably in line with it, are in a position to develop a specific plan of action enabling them to attain or facilitate the attainment of their purpose. These initiatives clearly need to be both consistent with and supportive of the career path an individual aims at pursuing. A person aiming at embracing the HR profession, for instance, should in the first instance try to gain the relevant qualification and join the local accredited professional body.

In some instances, this choice can prove to be rather challenging, but needs to be invariably far-sighted. A doctor of medicine, for example, might aim at becoming a paediatrician or an orthopaedic, a dentist or a cardiologist; whereas a lawyer may orientate towards a specialization, for instance, in criminal, civil, international, tax or employment law. Yet, a doctor of medicine still needs to decide whether s/he wants to be a surgeon or a generalist, whereas a lawyer needs to decide whether to point towards a barrister or a solicitor career. An attorney in the US does not need to make such a decision, but still needs to determine whether s/he wants to become, for instance, a judge or a district attorney.

Individuals who have decided to pursue a career in HR may aim at specializing, for example, in reward, learning and development, employee relations, talent management or change management. In the event these should also aim at filling a management or business partner role, these should also seriously consider investing in, for instance, project or risk management and gaining a relevant qualification. Negotiations and communication abilities and the art of being persuasive can be nowadays regarded as particularly important qualities of modern managers and HR specialists; gaining or enhancing these personal qualities may hence prove to be extremely significant. Regrettably, not many people are approaching their career planning in such a structured fashion, but doing it may prove to be particularly productive.

 

When making such decisions, notwithstanding, individuals should not only consider their ambitions and preferences, but should also try to objectively pinpoint whether they genuinely have the potential, strength and features necessary to attain their desired career objectives.

In those cases in which career planning is activated on an employer initiative, this should be developed so as to balance individual aspirations and career objectives with organizational needs. This clearly entails an employer investment so that organizations should take extra care when assessing and identifying the people on which focusing their resources and efforts. To assess individual potential and aptitudes employers habitually seek external professional advice; internal managers’ and colleagues’ feedback, however, may also help them to make accurate predictions as to the likeliness that an individual may succeed.

Individuals usually aim at filling management or highly specialized positions; notwithstanding, people are genuinely satisfied when performing compelling jobs giving them the opportunity to express their ability and the required latitude to make decisions.

Career planning developed within organizations is not necessarily, and let alone exclusively, intended to develop individuals already holding management positions. It is, more in general, aiming at identifying, according to individuals aptitudes, aspirations and disposition, the most suitable initiatives enabling them to meet their desired career objectives.

Individuals are no more longing for just a job, but rather for compelling, absorbing and interesting roles, whereas employers are growingly interested in accomplished and assertive people capable to properly and effectively fill a whole range of positions considered of paramount importance for the success of their business. Career planning essentially enable both employers and employees to fulfil their expectations. Irrespective of the circumstance that plans may lead or otherwise to a management position, career planning unquestionably is a process providing individuals practical opportunities to higher levels of responsibility.

Career planning can indeed prove to also be a powerful means to an end, namely that of retaining and engaging individuals. In fact, in addition to its contribution to employer branding, by contributing to provide individual intrinsic benefits from the job itself it also proves to be an effective component of non-financial reward. The plan of action developed by employers and individuals, to ensure that the latter attains the desired objectives, should imply a series of practical activities, aiming at reinforcing individual sense of belonging, participation and ultimately loyalty.

Career planning can be in many respects regarded as a pre-stage of succession planning. Despite it is not necessarily intended to nurture managerial capabilities and help employer to fill future executive positions, its early implementation could reveal tremendously important also to this extent.

Organizational approach to career planning design and development

Career planning can and has to be essentially intended as a systematic and structured approach to people development. Without an accurate and meticulous preparation, it is highly unlikely that the intended objectives might be attained in practice. Yet, since the process typically unfolds over a great length of time, it can be said that career planning can be in many respects tantamount to business strategy.

Direction

The first stage of the process is in fact concerned with the direction the individual and the employer are expected to go to. Both organizations and individuals need to have crystal clear ideas as to their expectations and of how these will be met, whereas it is a precise employer responsibility to ensure that the identified final goal is consistent with the business aim and that the organizational context can actually enable the individual to develop and attain the objective agreed.

Timescale

Once the direction has been identified it is crucially important to determine the timescale, that is to say the different stages of the path and the deadline by which each stage of the programme should be completed.

Assessment and check

The assessment and check activity is basically concerned with ensuring that throughout the process the barriers eventually arising are timely removed. This activity is extremely significant in that it is aimed at averting later disappointment. In the event, for instance, some barriers should actually require additional efforts, resources and time to be removed, this may imply the initial schedule to be modified or the overall process to be reviewed and amended accordingly. This phase is also particularly beneficial in that it practically enables employers and individuals to regularly assess the technical and behavioural improvements made by the employees concerned.

Evaluation of final result

The final stage of the process is represented by the assessment of the final results achieved. Albeit the necessary adjustments have been timely introduced and implemented throughout the process, it might still be possible that the final result does not exactly coincide with that initially planned. This stage enables thus employers and individuals to identify what eventually went wrong and what should have been done to avert the identified problems to arise. A typical side-activity of the final stage is represented by the compilation of a lessons learned log and of a final report.

Assign each individual a mentor

Each development programme should be supervised by one or more individuals appointed by the employer. The individual identified to closely look after the employee should act as a mentor and coach and should hence be able, also from the technical viewpoint, to understand whether the employee actually points in the right direction. This role is particularly important to secure the successful outcome of the overall process. In addition to provide support throughout the programme and constantly assess individual achievements, the person in charge of coaching employees also needs to provide employees feedback and identify the most suitable opportunities available within the firm for the individuals’ development.

Does career planning pay off?

Carefully prepared career planning definitely enables employers to gain a whole range of advantages. One of them is definitely represented by the massive savings employers attain in terms of sourcing talents.

Once the need for some positions emerges, employers can post jobs internally and reach with the interested individuals, according to their personal aspirations, goals and interests, a win-win agreement enabling employees to pursue meaningful career objectives, whilst ensuring employers to properly fill key positions. Employers would also derive a considerable benefit sensibly enhancing their attraction and retention practices.

Leibowitz et al (1986) identified seven different categories of mutual benefits for employees and employers: improved skills in career management, retention of quality staff, enhancement of communication between managers and direct reports, increased effectiveness of performance appraisal meetings, deepened individual understanding of the business and enhanced employer branding.

Introducing these programmes within organizations can help employers to foster a culture based on excellence and self-advancement and to convey the message that employers identify and offer individuals opportunities for development and growth by virtue of their qualities, commitment and behaviour, that is to say whether and only whether these have showed to have what it takes to deserve the employer’ trust and confidence.

Employers should clearly get the message across that this opportunity can only be offered to individuals really keen to grow and ready to take responsibility. Developing and sustaining a corporate culture endorsing these values may also enable employers to establish an even clearer and more transparent psychological contract: we promote and favour personal and professional growth but you have to show that you deserve it, have what it takes and are ready to make the extra efforts this requires.

What employers need to do for the process to be flawless

The successful outcome of career planning is essentially based on the mutual efforts of employees and employers. Notwithstanding, there are a number of activities that employers can perform to favour the positive outcome of the process.

First and foremost, organizations should put individuals in a position to cover demanding jobs and experience different types of situations and challenges; to this extent job rotation can absolutely help. This will clearly contribute to expand, in a relatively short period of time, individuals experience and help them to develop a better understanding of how complex a role can prove to be and of how important is for people holding responsibility within an organization frequently and promptly trying to come up with different, new and sometime even original solutions.

The business management clearly also plays a particularly significant role. Individuals, especially in their first work experience, tend to model themselves on their managers so that the circumstance these need to have good leadership skills and abilities can be taken as axiomatic. Managers also need to have excellent communication skills and be able and willing to provide constant feedback, counsel and positively influence individuals’ career.

By contrast, employers should utterly avert making to employees promises they will not be able to keep. The downsides this irresponsible behaviour is likely to cause may prove to be severe and irreversible.

Posting jobs internally definitely represents a practice enabling individuals to pinpoint the types of roles, requirements and qualifications the employer is interested in.

Is career planning worth the efforts?

Career planning clearly represents for employers a demanding activity. The involvement of managers and specialists and, before that, ensuring that these have all of the skills and abilities necessary to effectively contribute to the growth of other individuals clearly represent a daunting feat for employers. Analysing the return obtained by the execution of such a process is hence particularly important.

The reporting activity carried out at the end of each process can actually enable employers to assess the value of the final results obtained, also against the direct and indirect costs incurred to implement it.

Individuals approach to career planning development

Individuals aiming at developing a career planning by themselves need a fortiori to scrupulously follow a methodical and systematic approach. To this extent, these can have recourse to a series of online services, self-assessment exercises and tools, or benefit of the careers advice service offered by local universities.

As suggested by Merrison (2012), the process of planning for self-development and advancement should be mainly based on three crucial tenets, which need to be considered throughout the process: informed, systematic and realistic. The approach proposed by the Open University to career planning is based on the DOTS model developed by Law and Watts (1977) and is composed of four stages: know yourself, explore opportunities, decide what to do and take action. All of these activities need to be carefully and accurately performed.

Know yourself

Once again, the metaphor of career planning as business strategy can help to explain the correct approach to it. The first stage consists in determining and hence comparing where you are now with where you would like to be. As for business strategy, everything starts with this type of gap analysis. This is clearly also the time when individuals have to define how to get where they would like to go.

This phase of the process is essentially concerned with the definition of what individuals like and enjoy, what skills these would like to use and what type of employer may be interested, insofar as paying them, in all of that. It is crucially important being both realistic and focused on the identified goal and objective.

At this stage, individuals also need to objectively take heed of the constraints which may prevent them attaining their desired goal, such as the impossibility to: relocate, travel too far or work during unsocial hours (Merrison, 2012).

Explore opportunities

This phase basically requires individuals to match their interests and wants with those of a potential employer. Safe in the knowledge that their skills and expectations should be regarded as useful by an employer and help this to achieve its intended objectives. Professional bodies, job centres and job sites can definitely help in the process.

Decide what to do

When deciding what really an individual would like to do, this should take into consideration that Rome was not built in a day. Should hence be adopted the jigsaw approach; before hopefully having the full picture every piece is added at a different time. This clearly requires efforts and sacrifices, such as working on a voluntary basis, filling entry level positions in different environments and under different circumstances.

 

Take action

This stage is directly linked to the previous one in that it aims at underscoring the importance of work experience, which in some cases is considered as a mandatory prerequisite, whereas in some others as a distinct advantage. Working experiences also enable individuals to find out whether they are comfortable in a given working environment and whether the real reality matches their plans on paper. Work experiences are indeed also important, for instance, to build up contacts and receive advice, reference letters and information about different opportunities.

Career planning developed on individual initiative is not that different in scope from that agreed between an employer and an employee. The main difference being that what an individual plans by him/herself may not necessarily meet employers demand. That is why individuals aiming at planning for their future career and development need to be focused and concentrated on their objective and gather as much information as they can.

 

Could not be more appropriate what Alessandro Manzoni (1806) wrote in the poem In morte di Carlo Imbonati: “from your final aim never turn your eyes.”

Longo, R., (2012), How to develop career planning programmes; Milan: HR Professionals [online].

Useful links for self-assessment

Windmills Life Fitness Check - http://www.windmillsonline.co.uk/interactive/

National Career Service - https://nationalcareersservice.direct.gov.uk/tools/Pages/default.aspx

Prospects planner (for graduate) - http://www.prospects.ac.uk/links/Pplanner