Misplaced Talent: A Guide to Making Better People Decisions

Foreword

When Joe asked me to write a foreword for his book, Misplaced Talent, the request arrived on the very same day that I completed an article I was working on with a colleague from another university looking at the relationship between science and practice (the science-practice gap). We reported on some research we had been doing on the ways in which practitioners bring scientific evidence to bear in their practice within the field of occupational psychology, as we Brits call it, or, for those with a more European or North American background, work or industrial-organizational psychology.

Despite differences in name, what comes through from the wealth of international experience upon which this book is based is that there are many more commonalities than differences when we look at how psychology has been applied to the world of work across the globe, but yet practitioners can sometimes struggle in their attempts to translate and apply to their own practice the very rich body of scientific research and theory upon which the profession is based. This is why Misplaced Talent is such a useful book.

Recognizing that the fundamental drivers of performance in the workplace stem directly from the most basic and deeply held set of motivations and desires that we all share in common as members of the human race, Joe’s ability to see beyond the surface details, through to the very heart of what drives human beings in a work context, and then to use the insights thus gained to see the bigger organizational picture is what characterizes both his own work as a practitioner and this book.

I recall a time over a decade ago when I invited Joe to make a presentation at the university research centre I was running at the time. Duly armed with enough data to satisfy the hardest-nosed of empiricists, along with a PowerPoint presentation of accompanying statistical analyses that would leave even the most eager of statisticians similarly sated, he scrolled effortlessly through his slides, pointing out the key findings to the varied audience of economists, sociologists, psychologists, and other assorted disciplinary specialists that are to be found in most university-based business schools.

After the presentation, the usual round of questions and answers began, whereupon, of course, I expected the conventional criticisms to emerge—the sociologists taking one point of view, the economists another, and so forth. Instead, I was surprised that, although each group had a range of challenging and probing questions, they all seemed to agree on the main points that he had managed to distill from the data.

In Misplaced Talent, Joe achieves a similar effect—firmly evidence-based and drawing from well-established research findings while at the same time highlighting the key points that are most useful for practitioners when considering how to apply these ideas to the particular talent management issues they are facing. His book is very clearly a product of his own personal embodiment of the scientist-practitioner model to which all work and organizational psychologists aspire.

The scientist-practitioner model, which emphasizes both methodological rigor and also relevance to the reality of work organizations, on the other, reflects what has been termed the rigor-relevance debate. According to this debate, the research-practice gap arises through academics engaging too often in what has been termed pedantic science" (obsessed with meticulous theoretical and methodological precision, but of little practical value or relevance to those working in organizations) and practitioners sometimes resorting to popularist science, based more on commercial interests and client acceptability than sound scientific research.

A similar debate on the relationship between science and practice has taken place within the field of management more widely. Denise Rousseau, in her presidential address to the Academy of Management, called for practitioners to adopt an evidence-based approach, defining evidence-based management as translating principles based on best evidence into organizational practices and positioning the approach as a response to the research-practice gap that was bemoaned by both scholars and practitioners. Both seemed to acknowledge that management practice was often, if not usually, based on something other than the best available scientific evidence—a suspicion supported by research indicating that less 1 percent of HR managers regularly read the academic literature. It is for this reason that Misplaced Talent is such a timely and useful book.

Based on sound evidence, but at the same time questioning the suitability of some tried-and-tested approaches within their contexts of application, the book advances practice-based knowledge by drawing key lessons from the academic literature and scrutinizing the ways in which they have been applied or, on occasion, misapplied in practice. A key feature is how these have been summarized into practical, useful pointers for practitioners, illustrating relevant issues and dilemmas through copious examples from the author’s own practice that bring to life the challenges facing practitioners in the contemporary, fast-changing workplace.

The picture emerging from our work at the Centre for Progressive Leadership of the role that business leaders and top talent of the future will play in this changing landscape is very different from the one played out in organizations today. We live in exciting times, and the increasingly networked context in which organizations find themselves means that their scope will only become wider as complex networks of suppliers, partners, customers, and other stakeholders emerge and interact in increasingly sophisticated and unpredictable ways.

Those at the top of the organization will, as I have argued elsewhere, need to become both business model innovators and social facilitators, while the way in which roles are continually reconfigured will present a challenge to those lower down in the hierarchy, even as those hierarchies themselves shift their shapes.

Those charged with matching people to these new roles must align a more diverse set of people through networks of open innovation and, while we cannot predict exactly how the story will unfold, the only certainty is that the organizations of tomorrow will be radically different from those of today in ways that we have yet to imagine. Misplaced Talent provides a valuable resource for any practitioners faced with the immense challenge of responding to these trends as they negotiate their way through this rapidly changing backdrop to develop the dynamic capabilities upon which the organizations of the future will depend.

One of the central themes of the book is person-environment fit (P-E fit), which is often misunderstood as being concerned simply with the degree of match (or mismatch) between a person and his or her environment. This is structural and static, whereas a more transactional framework has the potential to be process-oriented, taking account of the dynamic nature of the relationship between the person and the environment as the individual engages in commerce with that environment.

Such a conceptualization engenders a systems view of people at work, with each component of the system being dependent upon the others. The adoption of a P-E fit perspective presents a challenge to both the practitioner and researcher. Compromises will have to be made in the short term, as currently available tools and techniques account for only a static perspective. While the profession of occupational psychology may be some way off from realizing the full potential of P-E fit, it does at least now have somewhere to begin in Misplaced Talent.

The book represents both a valuable resource for the practitioner and a forward-thinking contribution to the profession as a whole as it begins rising to the challenge of a greater understanding of how an individual’s personal values, goals, and commitments express what is important to him or her in particular transactions with the work environment and what this, in turn, means for him or her personally, in terms of their significance for the values and beliefs that are held dear.

In this sense, then, Joe offers the reader a chance to consider how people’s personal characteristics and belief systems act as a perceptual lens that enables them to create meaning out of their work lives. This focus on individual subjectivity and personal meaning goes some way toward providing a foundation for a fuller understanding of how people perform at their best at work, based on a genuinely cognitive-phenomenological account of human functioning.

The book provides readers with an opportunity to consider how well they understand the drives and desires of those around them, and also invites a critical evaluation of how work is designed and how they select and develop those who do it.

Professor Dean Bartlett, Ph.D., C.Psychol., FHEA, AFBPsS, HCPC, Registered Occupational Psychologist

London, April 2015

Preface

I spend the better part of my day helping organizations make better people decisions. From redesigning a recruitment process, to running focus groups with leaders to define what good talent looks like or facilitating individual and group development, I am on the front line, working directly with leaders and professional talent managers to improve how their organizations are attracting and retaining the best workers.

What has spurred me to write this book is a feeling that the tools and processes that I help set in motion swim against the tide of how organizations naturally operate. Tendencies like hiring the candidate who feels right or arguing that a department really is not like any other in the company (and, therefore, common job definitions don’t apply) undermine the architecture that I put in place.

This had led me to question the work that I do. Are the tools and techniques that I promote really cut out for the job? Are there better ways to manage talent than what is accepted as common practice? Is the support that I typically offer inadequate to ensure long-term change?

I have concluded that there is plenty of scope to improve how organizations make people decisions. I believe we are in a state of misplaced talent. At times, we park our best and brightest staff in the wrong places, where they are either not maximizing what they can do or become at risk of drifting away due to lack of interest in the job. At other times, we can forget what really matters to the organization, placing too much emphasis on jobs and functions that have minimal impact on what a company is tasked to do. And still other times, we bet on the wrong talent to lead and grow our businesses, overlooking employees or applicants who are more deserving and capable.

By taking a step back, questioning what works, and becoming better advocates, we can make headway against bad practice. This book will help us do that. It is intended for anyone responsible for making people decisions in the workplace. Whether you work in an advisory capacity or as a people leader with full responsibility for your staffing decisions, the topics discussed in this book will have relevance for you. I use the term practitioner liberally, to designate any individual who is involved in advising or making people decisions.

If, like me, you work in an advisory capacity, we have an obligation to promote the benefit of tools and techniques that are known to improve people decisions in the organizations we are servicing. Our job is to steer organizational leaders toward proven techniques and away from pseudo-science, while balancing needs for cost-effectiveness and efficiency.

Leaders, too, have an obligation to ensure that they are valuing people decisions as highly as the other decisions they make. If leaders uniformly spent the same amount of time and energy on people decisions as they do on strategy or finance, I believe that organizations would look and feel very different than they do today.

When it comes to the techniques that constitute good people practice, not much has changed in recent history. Competency design, assessment to inform hiring, and psychometric-led development are used as much today as they were five decades ago. Online technology may have increased tool accessibility and speed, but fundamentally, the job of a practitioner still involves conducting job analysis, recruiting talent, assessing capability and motivation, developing staff, and implementing change programs.

What has changed is the desire and ability for organizations to question the return on investment that their people practices have on improved business efficiency, staff engagement, and performance. Like never before, organizations have at their disposal vast amounts of data on employees, customers, and financial indicators that can and are being used to validate whether people practices are adding value to the business. Coupled with a continuing need to save cost following the recent recession, only those programs that are able to prove their value are spared.

A storm is brewing. On one hand, organizations are expecting more from us as practitioners, to demonstrate the value of what we bring to the business. Yet on the other hand, people decisions are routinely made without the rigor and discipline they deserve. I believe that now is the time to take a hard look at the tools and techniques we employ and determine which ones have the right to be widely adopted in our organizations. Only then can we engage businesses about the value we bring them through improved people decisions.

In this book, I will take us on a tour of current people practices. This book diverges from an academic discourse on talent management by focusing on what those of us on the front line witness and advise our clients to adopt. I will lay on the line the potential benefits and drawbacks of various approaches, sometimes arguing that specific tools and techniques do more harm than good and should therefore be abandoned. More often, I will demonstrate that the tools and techniques are sound, but the ways in which they are applied are in drastic need of improvement. I passionately believe that there is an incredible amount of potential to improve the lives of employees and the organizations they work for, if we can focus our efforts on the right set of practices.

We will know that we have succeeded as practitioners when the employment relationship leaders share with their employees has improved. Like any other social relationship, both parties need to feel fulfilled and trust that they are moving in a common direction. The decisions leaders make about recruitment, assignment of work responsibilities, staff recognition, and discipline (among others) act either toward or against a strong employment relationship. We as practitioners can ensure that the best decisions are made by putting in place structures and techniques that heighten the quality and transparency of the information guiding their judgment.

The term person-environment fit has been coined to express the quality of the employment relationship. The fit between an employee and his or her workplace is said to be high when three conditions are met. First, organizations effectively apply the knowledge, skills, and abilities of employees to accomplish job tasks. Second, organizations fulfill the tangible and intangible needs of their staff. Third, employees feel that their efforts are coordinated and contributing toward a common purpose. A fuller account of the person-environment model is presented later in the book. For now, these three tenets provide an underlying structure to the book that will aid us in evaluating the contribution different techniques make.

In Chapter 1, we will look at how organizations identify and structure their expectations of staff performance and the type of workplace they cultivate. The discussion begins by reviewing the origins of job analysis, as characterized by Taylorism and the Human Relations Movement, followed by the arrival of competencies as the primary vehicle organizations use to set a benchmark for people decisions. I will argue that frameworks often fall short in delivering useful guidance, with content that is heavily slanted toward behaviors (ignoring skills or experience) and too generic in terminology (glossing over functional differences), resulting in employees focusing energy in the wrong places.

With the criteria set for what type of talent organizations are looking for, attention turns toward finding the talent that will meet these needs. Chapter 2 explores what companies are doing to promote an appealing employer brand, how they define an employer value proposition, and source the best possible talent available. Although some companies have a clear and effective strategy about how to attain top talent, more common are haphazard campaigns based on limited insight about what an employer can bring its staff. Offering the wrong type of incentives or over-promising on commitments makes for an unstable employment relationship.

Chapter 3 unpacks the first tenet of person-environment fit, specifically that organizations effectively apply the knowledge, skills, and abilities of their employees. We will look at the tools and techniques practitioners employ to identify the capabilities of staff, including ability tests, interviews, and job simulations. By using the criteria of reliability and validity as our guide, I will argue that more can be done to correctly identify the best candidate for the job.

Focus turns to the fulfillment of employee needs (the second tenet of person-environment fit) in Chapter 4. Practitioners today use a variety of psychometrics to identify the personality characteristics, motivators, and values of current and future employees. However, the quality and relevance of these tools vary greatly and, therefore, have the potential to misrepresent what an employee desires from his or her workplace. Without validation and exploration of what could be reasonably accommodated, too much is assumed about what drives and engages talent.

The last tenet of person-environment fit, where both parties feel that they are moving in the same direction, will be discussed in Chapter 5. The chapter introduces the term psychological contract, which represents the glue that binds employees to their workplace. We will investigate the various ways practitioners attempt to invest in the psychological contract, including raising self-awareness, coaching and mentoring, skills training and certification, and job rotations. I will argue that so-called development programs are often assessments in disguise, whereby the information gained about employees’ weaknesses can be used against them in future promotion decisions or job reassignments. Moreover, development has a tendency to focus on a narrow set of organizational priorities, which effectively build skills, but do little to improve the psychological contract and keep employees engaged in the long term.

In Chapter 6, we will look at what practitioners do to repair a broken psychological contract. There are many causes for a breakdown. For example, economic challenges can make for a more stressful workplace environment. Alternatively, the favoritism shown to employees engaged in high potential programs can cause a rift with those not selected for the program. Employees, too, can be at fault in breaking the psychological contract by failing to perform well in their jobs. Practitioners attempt to remedy breakdowns in the psychological contract by redeploying staff, preparing for change through succession planning, and introducing performance management systems. Yet, many of these initiatives fundamentally change the psychological contract from a relational to a transactional type, which can snowball into further breakdown and only works to prolong the inevitable loss of talent from the organization.

Each of the chapters is written in a way that allows you to dip in and out of the book, depending on what types of people decisions are of most relevance and interest to you. A table of contents by topic is presented for quick reference. I hope that this book challenges you to consider for yourself which practices will make for better people decisions in your own workplace. With a little luck and diligence, we might be able to declare that we have successfully found the best talent for our organizations, deployed them in the right places, and kept them very happy and productive. At least, this should be our ambition.

Chapter 1

Frameworks

Without having job criteria in place, there is simply no way of predicting with any degree of confidence whether your people decisions are fair and rational. Practitioners rely on job descriptions and talent management frameworks to combat the risks of poor people decisions, because when you start racking up all the direct and indirect costs of an unfilled vacancy or a poorly placed new hire, the costs are striking, especially for roles that are core to the business.

One of my clients put its business analytics team to the task of figuring out how much it costs to replace a front-line employee. These are not high level positions, but rather staff working in retail branches and call centers. By the time the analyst calculated the cost of advertisement, the time spent by the recruitment team to screen and interview candidates, the loss of productivity because the role was vacant, and the cost to induct a new employee, the total figure was a staggering $57,000 per vacancy.

You might be skeptical and think this sounds too high, but even if you accept that the cost is only half as high, the damage of hiring the wrong people or failing to address engagement issues are substantial. When you consider that an annual turnover rate of 30 percent is the norm for certain industries, a modest improvement in retention (i.e., people staying on for a few extra months on average) can save a large organization millions of dollars and potentially gain a few customers along the way, through a more positive customer experience with an engaged