Your business has a business strategy, a marketing strategy and a financial strategy. You have goals and metrics around everything—everything, that is but talent. In fact, you haven’t considered a talent management strategy at all.

If this describes your organization, you’ve put yourself at a disadvantage. Talent is the engine for achieving growth and profitability goals. Talent management is all about maximizing employee value. You are losing money and losing out to the competition by not having a talent management strategy.

According to research by the Hackett Group, companies can see a 15 percent increase in earnings when they improve their talent management approach. And a Harvard Business School study says that over eleven years, organizations with a “performance management culture” increased their net income by 765 percent while those with performance management as a standalone process, not connected to training and development or the culture, increased their net income by only 1 percent over the same time period.

How could this happen? The first issue is that high performers—typically 5 percent of the workforce—provide 26 percent of your company’s output, and they also provide higher-quality job candidate referrals (birds of a feather . . . ).  If your company is not identifying top performers and developing them, you are probably losing them at an unacceptable rate—leaving you the mediocre and poor performers.

These poor performers are a drain on your business. Each of your managers spends 13 percent of his or her time managing the poor performers and 14 percent of his or her time correcting errors caused by them. That is 27 percent of each manager’s business life or up to 34 days each year! The performance of employees affects the performance of managers—and vice versa. Managers drowning in rework do not have time to coach and develop their talented staff, much less produce quality work themselves.

How can you turn around this downward spiral? Start with your business strategy to develop your talent management strategy:

Align division and department goals to support the business strategy, then align individual goals to support the division and department’s goals. Eliminate as much activity as possible that is not relevant to the business strategy. Stop gathering information, producing reports and having meetings about things from the past that no longer positively impact the bottom line. With new strategies for new sales channels, new markets and new products, there will be new information to gather, new reports to produce and so on.

Develop core competencies (skills and behaviors) that everyone in the organization must develop and implement in order to achieve the new strategic goals. Be very clear that the new direction requires new skills and behaviors. For example, competencies for every employee might include resilience in the face of change, integrity/accountability, inclusive behaviors, internal and external customer service, strategic thinking and more.

Develop competencies (skills and behaviors) for every level (executive, management, non-management and some specialty positions such as call center employees or sales staff) and integrate competencies into all talent management processes. Include competency questions in behavioral interviews so that all new hires already have at least the core competencies and preferably a good foundation in more job-specific competencies. Reinforce core competencies during onboarding. Provide more job-specific training in job-specific competencies. Tie competencies to performance management. Because “how” work is completed can impact the bottom line long-term, many organizations give competencies fifty percent of the final weight of performance management scores.

Increase the frequency of performance reviews and make them more meaningful. We have heard that Gen Xers want fast feedback, Millennials want frequent feedback while Gen Zs (new graduates) want continual feedback. Regular feedback reinforces great performance and enables employees to make “course corrections” before matters get more serious. Regular weekly meetings are well worth the time—because otherwise managers spend too much time on rework. By the time quarterly (much less midyear and annual) reviews are scheduled, employees should be well down the right track to top performance.

Celebrate and reward top performers. It doesn’t have to be expensive: a sincere “thank you” is what everyone wants most. But something fun is also appreciated. The worst thing that demotivates top performers is that their efforts go unrecognized. If no one is going to notice, why should they take those few extra minutes to review their work before sending it? Why should they take that last phone call that comes in when they already have their coat on? Why should they be willing to train new hires and up-and-comers?

Developing and implementing a talent management strategy is the only way to achieve strategic goals. In an organization with a talent management strategy, every employee and manager understands that the definition of “excellence” centers not just on what you do but how you do it. Excellence becomes an expectation because the strategic goals have been spelled out, the tools to achieve them have been provided and appreciation will be shown for accomplishment. Expectations have a way of coming true.

Nancy S. Ahlrichs, SPHR, SHRM-SCP, is an author, columnist and business development consultant for FlashPoint, a global talent management consulting firm.

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