Over the course of the last decade, academics and practitioners seem to have become increasingly convinced that talent management (hereafter, TM) is a top priority issue for organizations worldwide. Why? Because TM can represent a source of sustained competitive advantage in the turbulent current market environment that makes it crucial for organizational success and imperative for the livelihood and sustainability of organizations (cf. Gallardo-Gallardo, Dries & González-Cruz, 2013; Meyers & van Woerkom, 2014; Thunnissen, Boselie & Fruytier, 2013). Indeed, TM is a hot topic. However, it is also a controversial one.
Since 1998, when a group of McKinsey consultants coined the expression ‘war for talent’ and posited that a fundamental belief in the importance of talent is needed to achieve organizational excellence (Michaels, Handfield-Jones, & Axelrod, 2001), the topic of TM has received a remarkable degree of attention by practitioners (first) and academics (from 2008 onward). Such a degree of attention has resulted in a huge amount of TM literature in which: (1) TM can mean whatever the writer wants it to mean since everyone has his or her own idea of what the topic does and does not encompass – which mainly happens within the practitioner literature and during the first decade after TM conception; or (2), even more surprising, TM can be not explicitly defined due to the fact that the authors are taking it for granted. Indeed, TM scholars have rarely been precise about what exactly they mean by talent and TM, probably because there are widely-held implicit theories about what these constructs are. In fact, TM has been accused of suffering from conceptual confusion, i.e., a lack of clarity regarding its definition, scope and overall goals (Lewis & Heckman, 2006; Tansley et al., 2007). That is why clarifying its boundaries have been central to the academic debate of TM during the last eight years.
After a cursory review of the TM literature, four key streams of thought about the concept have been identified (cf. Lewis and Heckman, 2006; Collings and Mellahi, 2009):
TM as a new label for Human Resource Management (HRM). It is understood as a rebranding of HRM. Within this perspective TM consists in doing what HR has always done, but doing it faster (via the internet or outsourcing) or across the enterprise (rather than within a department or function). It argues that all employees have talent that should be harnessed for the organizational good by means of a range of HRM practices. It is also known as an inclusive approach to TM since all employees of the organization are taken into account. Here we found strength-based approaches to TM, i.e., the art of recognizing where each employee’s areas of natural talent lie, and figuring out how to help each employee develop the job-specific skills and knowledge to turn those talents into real performance. This kind of approach is believed to benefit from the “Mark Effect”, i.e., by treating everyone in the organization as equals, a more pleasant and motivating work climate is created (Bothner, Podolny & Smith, 2011). Likewise, this inclusive approach guarantees an egalitarian distribution of resources across all employees in an organization. However, it has been criticized not only for creating unnecessarily high costs in terms of HR investments (Lin, 2006), but also, for being undifferentiated from SHRM (e.g., Iles, Chuai & Preece, 2010).
TM as succession planning. It is understood as a set of processes designed to ensure the current and future supply of employees into top management positions, and focuses primarily on the concept of ‘talent pools’. This view is closely related to what is known as ‘workforce planning’. It involves a long-term and static view of what roles (and persons for them) the organization will require in the future. Cappelli (2008) has criticized it for not being able to take into account business and labor market uncertainties. According to him, a more effective way of minimizing the effect of uncertainty is developing a talent pool with broad and generic competencies that can fill a wide range of roles, which is seen as an important argument for fast-growing economies like India (Cooke, Saini & Wang, 2014).
TM as the management of talented people. It focuses on high-performing or high-potential employees without regard for organizational boundaries or specific positions. It is an exclusive and elitist approach to TM based on the notion of segmentation of the workforce. Only these employees (best of class) matter since they are considered the single most important driver of organizational performance. That is why Smart (2005) encourage organizations to fill 75% (and preferably 90%) of all positions with top performers (i.e., topgrading) and to get rid of those poor performers (C players). In fact, the allocation of resources according to merit (i.e., high performers get better assignments and more privileges) may encourage low performers to quit or to do better (Netessine & Yakubovich, 2012) and may create a ‘continuous tournament’ in which employees are motivated to develop and apply the skills and qualities the organization requires (Höglund, 2012). Indeed, this exclusive approach to TM is said to benefit from what is called the ‘Matthew Effect’, i.e., the effect whereby the allocation of more resources to the better performers in the organization leads to higher return on investment, since more resources are allocated there, where more returns can be expected. Swailes (2013), who is an advocate of the inclusive approach to TM, explains that it could be argued that differentiation on the basis of contribution cannot be considered unethical since failing to differentiate employees on this basis could be seen as failing to give different groups the attention and resources that their contributions would suggest they deserve. No matter how appealing the inclusive approach to TM may sound, more arguments are found in the literature in favor of the exclusive approach which is also the most prevalent approach to TM found in practice (Gallardo-Gallardo et al., forthcoming; Sparrow et al., 2011). However, it has been criticized for (cf. Gallardo-Gallardo et al., 2013): (a) relying on subjective evaluations of performance and potential; (b) considering that past performance can predict future performance; (c) considering that being a high performer is a stable and enduring trait; (d) being affected by the Pygmalion effect, i.e., the effect whereby expectations of performance (high and low) determine actual performance (in a positive or negative way) in that they impact on motivation and self-esteem; and (e) creating an atmosphere of destructive internal competition that retards learning and the spread of best practices across the organization due to the over-emphasis on individual star performers. At present, there is still a lack of attention given to the impact of workforce differentiation on employees, i.e., what are the effects on the included or excluded people.
TM as the management of ‘key positions’, rather than ‘key people’. It highlights the strategic side of TM. According to Jones et al. (2012) this approach to TM is position-oriented and has a macro focus on systems, rather than individuals. So, the starting point here is the identification of key positions, i.e., those that have the potential to differentially impact the competitive advantage of the firm (Boudreau & Ramstad, 2005; Collings & Mellahi, 2009). It should be said that these key positions are not limited to managerial roles. In fact, they are those jobs that contribute most to the organization’s strategic goals. After having identified those key positions, organizations need to identify their best performers and/or those with the highest potential, in order to match them (positions and talented employees) on what we call ‘differentiated human resource architecture’. So, within this approach, TM refers to: “activities and processes that involve the systematic identification of key positions which differentially contribute to the organization’s sustainable competitive advantage, the development of a talent pool of high potential and high performing incumbents to fill these roles, and the development of a differentiated human resource architecture to facilitate filling these positions with competent incumbents and to ensure their continued commitment to the organization.” (Collings and Mellahi, 2009; p. 305)
It is an integrated and strategic approach, consistent with the differentiation of key roles and key people. But, in the end, it is also an exclusive approach.
Which one of these four key streams of thought about TM is the valid one? This is a complex issue with no simple answer. TM is considered to add value over other strategic human resource management (SHRM) practices, but the ongoing confusion about the meaning of crucial concepts (such as ‘talent ) is hindering the adoption of a widely-acknowledged approach, not to mention the establishment of a widely-accepted TM definition. Dries (2013) identified five tensions regarding the nature of talent that directly affect the TM approach adopted, and that are not completely independent among them. The most salient tension concerns the exclusiveness or inclusiveness of talent (and so, of TM). An inclusive perspective on talent considers that all people are talented, but in a different way. Hence, organizations adopting inclusive TM are going to equally distribute their resources among employees; which is believed to lead to a more pleasant working environment. On the other hand, an exclusive perspective on talent, is based on the premise that some people are inherently more talented (and thus more valuable) than others, at least, within the organizational context. Here, we might find organizations that invest disproportionate resources in an elite subset of employees (those that occupied strategic jobs and that are high performers and/or high potentials), since this is assumed to generate higher return on investment. This underlying trade-off between the equality and exclusivity of treatment explains the current different approaches to TM.
So, where does that leave us? It can be argued that in practice the majority of organizations adopt an exclusive and strategic approach to TM, and that the above-mentioned definition from Collings and Mellahi (2009) is the most commonly used in the academic literature (Gallardo-Gallardo & Thunnissen, 2014). Recent research, also confirms this elitist perception of TM in India. Indeed, Indian organizations focus on those “who are highly educated and (have the ability to be) high achievers/ performers in the organization”, which reveals the talent-hungry labor market conditions, the competitive nature of firms and their practical and pragmatic approach to TM that focuses on present needs more than future demands (Cooke et al., 2014, p. 234). So, it seems that, at present, in this country the best way to outperform competitors is to allocate key talent in strategic positions. Nevertheless, the debate is still alive. TM research has been criticized (cf. Thunnissen et al., 2013) for being biased due to the dominant influence of the US context on the debate, the strong focus on private and multinational companies and, also, due to the unified lens used to study the topic (i.e., the organization is usually presented as a unified actor in which all actors share mutual goals and interests; when conflicting goals can be shared by different stakeholders). Indeed, most of the studies on TM have been conducted in the context of developed economies. Specifically, Anglo-Saxon countries lead the ranking of the most ‘productive’ countries in terms of TM research, followed by European non-English speaking countries (cf. Gallardo-Gallardo et al., forthcoming). So, more cross-cultural studies that take into account explicitly the role of context (national institutions and culture, stakeholders, etc.) are needed to get a complete picture.
To sum up, in organizations we can find two main approaches to TM: the inclusive and the exclusive one; both with their pros and cons. From the literature on TM we can argue that the exclusive approach is the most commonly used, but this conclusion is based on the research that has been done up until this moment (that some argue is biased). Indeed, the approach adopted depends on the conceptualization of talent the organization has. Hence, if you are going to implement any TM system or program, please, be sure to have clear what you understand by ‘talent’.
Author: Dr. Eva Gallardo-Gallardo
Author Information:
Dr. Eva Gallardo-Gallardo, Assistant Professor of Management, School of Industrial Engineering of Barcelona (ETSEIB), Universitat Politècnica de Catalunya (Barcelona, Spain)
