Strategic Staffing Chapter 10 – Assessing Internal Candidates Jean Phillips & Stanley Gully (mostly) Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Learning Objectives After studying this chapter, you should be able to: Identify the goals of internal assessment. Discuss how internal assessment can enhance a firm’s strategic capabilities. Describe different internal assessment methods. Discuss the importance of integrating succession management and career development. Describe two models of internal assessment. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Internal Assessment The evaluation of a firm’s current employees for training, reassignment, promotion, or dismissal purposes Evaluates employees’ fit with other jobs Assesses employees to enhance the firm’s strategic capabilities by aligning a firm’s talent with its vision, goals, and business strategy Informs downsizing decisions Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

The „Peter Principle” Laurence J. Peter and Raymond Hull in their 1969 book: "in a hierarchy every employee tends to rise to his level of incompetence" The first corollary is that employees who are dedicated to their current jobs should not be promoted for their efforts, and instead should be rewarded with, say, a pay raise, while remaining in their current position. The second corollary is that employees might be promoted only after being sufficiently trained to the new position. This places the burden of discovering individuals with poor managerial capabilities before (as opposed to after) they are promoted.

Internal Assessment Goals Maximize fit Accurate assessment Maximize return on investment Positive stakeholder reactions Support talent philosophy and HR strategy Establish and reinforce HR strategy and employer image Identify employees’ development needs Assessing ethically Legal compliance Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Internal Assessment Methods Skills inventories Mentoring programs Performance reviews of task and interpersonal behaviors Multi-source (360-degree) assessments Job knowledge tests Assessment center methods Clinical assessments Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Multisource Assessment Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Who Best Rates Which Behaviors? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Nine Box Matrix Nine box matrix: a combined assessment of an employee’s performance and potential. Is a method for displaying judgments made about employees, not for making those judgments. Its value depends on the quality of the assessment methodology that determines the box each individual is placed in. It can help companies understand the overall strength of their workforce, but only if the employees were accurately evaluated in the first place. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Nine Box Matrix Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Definition of career a person's progress through different positions, jobs and roles in the firm

Career Crossroads Model Different leadership levels requires different sets of characteristics → managerial career needs changes. Focuses on managerial and leadership positions rather than technical or professional work. The natural hierarchy of work that exists in most large, decentralized business organizations consists of six career passages from the entry level to the top job, with each passage representing increased complexity. The six passages are: Starting Point: Managing yourself Passage 1: Managing others Passage 2: Managing managers Passage 3: Managing a function Passage 4: Managing a business Passage 5: Managing multiple businesses Passage 6: Managing the enterprise Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Succession Management Succession management: an ongoing process of systematically identifying, assessing, and developing an organization’s leadership capabilities to enhance its performance Succession management plans: written policies that guide the succession management process Replacement planning: the process of creating back-up candidates for specific senior management positions Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Succession Management Database Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Steps in Developing a Succession Management System Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

What Makes Succession Management Effective? Understanding the nature of talent gaps with enough time before the talent is needed can allow the organization to: Plan for and remedy any workforce talent deficiencies Develop an external recruiting strategy to bring in external talent Redesign the work to reduce the need for the talent expected to be in short supply Plan alternate career paths for surplus talent Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Effective Succession Management Systems The succession management process needs to make sense to and be usable by different business units. A standardized process can help to focus and guide the development of employees to meet the strategic needs of the organization, and increase employee perceptions of the program’s fairness by reducing opportunities for favoritism. The process should also align with other human resource processes including recruitment, selection, rewards, training, and performance management. Continually evaluate and improve the system. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Succession Management Tips Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Career Planning Career planning: a continuous process of self- assessment and goal setting. To be strategic, career planning needs to complement the expected future talent needs of the organization. When integrated with the organization’s succession management and labor forecasting processes, career planning and succession management can help give any organization a snapshot of available talent for meeting current and future needs. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Career Development Tools Assessment centers simulate the position an employee is interested in pursuing and whether or not they are a good fit for the job. Career counseling and career development workshops help individuals understand the jobs that best match their motivations and talents, and help them develop the skills they need to successfully compete for these opportunities. Training and continuing education – skills in training in a more formalized educational setting. Job rotation, challenging assignments and mentoring Sabbaticals (rest from work) – used to reenergize employees Challenging and developmental job assignments can enhance key competencies and build experience in important job tasks before the individual assumes the position. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Making a Career Development Plan Assess yourself Set goals Develop an action plan Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Evaluating Internal Assessment Validity—whether the assessment method predicts relevant components of job performance Return on investment—whether the assessment method generates a financial return that exceeds the cost associated with using it Applicant reactions—including the perceived job relatedness and fairness of the assessment method Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 10-22

Evaluating Internal Assessment Selection ratio—having a low selection ratio means hiring only a few applicants, which allows an assessment method to have maximal impact in improving the performance of the people hired Usability—people in the organization must be willing and able to use the method consistently and correctly Adverse impact—an assessment method is more effective if it predicts job performance and other important hiring outcomes without discriminating against members of a protected class. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Discussion Questions How is internal assessment useful for more than just evaluating employees for other positions in the company? Do you feel that multi-source feedback is appropriate? Why or why not? Using the nine box matrix, an employee doing a good job might actually be rated lower than a mediocre employee who has been working in a developmental stretch assignment. Do you feel that this is fair? Why or why not? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 10-24

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Discussion Questions Given how important succession management programs are, how can companies persuade their managers to support and commit to their succession management activities? Why is it important to integrate succession management with career planning? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Strategy Exercise Working in groups of 3-5 students, read the following vignette and develop some suggestions for the company based on the material you read in this chapter. Be prepared to share your ideas with the class. Twisted is a small company with big dreams. The shopping-mall oriented hot pretzel company has successfully grown its revenues by a rate of 10% annually over the last 10 years. Twisted wants to sustain its growth rate in the years ahead. The company has traditionally hired new store managers from outside of the company. However, in the last few years, it has had a difficult time recruiting enough of these people. The CEO feels that there are probably a large number of employees who might make good managers. However, the company has no good internal assessment systems in place to identify them. The CEO asks your group to help the firm identify internal managerial talent so it can continue to pursue its growth strategy. What methods would you suggest for doing so? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Opening Vignette Exercise In this chapter’s opening vignette, you learned how WellPoint combines succession management and performance appraisals into one annual process that allows it to quickly identify and assess internal candidates for managerial positions. Working in a group of 3-5 students, reread the vignette. Be prepared to share with your class your answers to the following questions: Why do you think that WellPoint’s internal assessment and development system is so successful? What additional ideas do you have that could help WellPoint fill as many managerial positions as possible with its current employees? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall