Talent Management is a strategic management approach that focuses on acquiring, developing and retaining best fit talent for gaining competitive advantage and sustainability of the business. It is an integrated set of processes, programs, and cultural norms in an organisation designed and implemented to attract, develop, deploy, and retain talent to achieve strategic objectives and meet future business needs” (Silzer &Dowel 2010 p. 18)
There are at least three different ways of interpreting Talent Management in practice: (1) Talent Management is often used simply as a new term for common Human Resource practices (old wine in new bottles), (2) it can allude to succession-planning practices, or (3) it can refer more generically to the management of talented employees. There are, for example, ongoing controversies about whether Talent Management is about managing the talent of all employees (inclusive or strengths-based approach to Talent Management), or whether it is about the talents of high-potential or high- performing employees only (exclusive approach to Talent Management).
Because of popularity and undisputed strategic importance for the corporate world, research on talent management (TALENT MANAGEMENT) is still lacking in its theoretical foundation and the clarity and uniformity of definitions with regard to what talent really constitutes, as well as with respect to how to manage it effectively. Furthermore, talented individuals are presented as subjects that need to be managed, while their preferences, needs, and expectations are under researched.
The literature on Talent Management suggests that it is valuable to focus on the individual level in Talent Management research by applying the social-exchange theory of the psychological contract to explore the explicit an individual perspective in Talent Management research. The moderating role of generations enriches the study. The importance of retaining a talent is undisputed. One way to achieve talent retention is by investing in highly engaged Talent Management. Therefore, an employer fulfills its obligations in the reciprocal relationship with the talent and uses Talent Management as a signaling device to demonstrate the importance of that talent. This again leads to a more fulfilled, relational psychological contract for the designated talent, a precondition to reaching suggested outcomes such as job satisfaction, loyalty, and performance, and a reduction in the intention to quit. Bearing in mind that workforces and even respective talent pools are heterogeneous, one way to embrace and address this diversity is to adopt a generational lens and try to understand that the impact of Talent Management on the psychological contract of talent can be different for different generations. Integrating knowledge from social-exchange theory, in particular, on the psychological contract helps to enrich the research domain and establishes an innovative and valuable link between TALENT MANAGEMENT and psychology.
WHY TALENT MANAGEMENT:
Indeed, a large number of human resource management (HRM) practitioners, globally, have reported, across various reports and policy studies, that they believe talent management is one of the most vital human capital challenges faced by the organizations of twenty-first century. Despite over a decade of debate and hype about the ‘war for talent’ as a high concern, we observe very little theory development which explain Talent anagement.
Businesses and consulting firms have been driving the practice and discourse on talent management (TALENT MANAGEMENT). In contrast, the academic field of TALENT MANAGEMENT is characterized by a lack of theoretical frameworks. Research on TALENT MANAGEMENT has been lagging behind businesses in offering vision and leadership in this field.
Despite the global financial crisis, many regions still face a shortage of skilled labor. In addition, some Western industrialized countries especially suffer from declining population growth rates although, simultaneously, employment rates remain stable or even are rising (European Commission, 2012; Ward, 2011; World Economic Forum, 2011). This development is accompanied by an increasingly aging population and dramatically higher older-worker employment rates (e.g. above 50) compared to those up to 30 years of age. This phenomenon that is sometimes referred to as the demographic scissor. Examples of these developments include Japan, the U.S.A., and Germany, whereas in developing economies the skilled workforce is still behind the demand because of allocation of limited resources to Human resource development
Talent includes not only young university graduates, but also older workers, women, and ethnic minorities. Understanding and managing the possible resulting generational differences in Talent Management (e.g. becoming an employer of choice for younger talent, as well as retaining the knowledge and competencies of older workers) have been cited as major challenges in recent Talent Management research. Overall, research that systematically addresses generation-specific issues in TALENT MANAGEMENT, including an exploratory dimension that considers the individual perspective of talent belonging to various generations, is scarce.
Talent Management is still lacking theoretical foundations, and although many academics have contributed to the various publications on Talent Management in the last decade, the research field still offers fruitful avenues for future research. If we apply various theoretical perspectives to the field and conduct empirical studies, we will be able to advance our knowledge step by step and develop increasingly more solid frameworks.
Talent management and talent
Stahl et al. (2007), broadly defined Talent Management as an organization’s ability to attract, select, develop, and retain key employees. Therefore, it is acknowledged that Talent Management is part of the broader field of human resource management (HRM), being defined as all ‘‘policies, practices, and systems that influence employees’ behavior, attitudes, and performance’’. It involves a set of selected Human Resource Management practices focusing on attraction and retention for a smaller target group of particularly talented individuals (identified by the company), compared to various Human Resource Management stakeholders (all employees, unions, customers, suppliers, investors, etc.) Highly talented individuals can be characterized through a variety of characteristics, such as competencies, skills, abilities, experience, knowledge, intelligence, character, and drive, or the ability to learn and grow within an organization. Compared to other human resources, they are supposed to be key strategic resources because they have a most important impact on organizational performance and on creating competitive advantages for a firm. They are valuable, rare, and difficult to imitate. They are also referred to as ‘‘pivotal talent’’. The same is true for TALENT MANAGEMENT systems, which can be understood as bundles of strategically aligned TALENT MANAGEMENT practices. These have also proven to have a positive impact on financial, organizational, and human resource outcomes (e.g. employee engagement, improved quality and skills, higher job satisfaction). To sum up, talent includes persons (subject approach) who represent those high performers who are pivotal for the organization. Their pivotalness for the company explains a differential investment on them.
An individual perspective on talent management
Research is scarce on the individual TALENT MANAGEMENT perspective their research investigating the impact of talent strategies on organizational outcomes, showed that TALENT MANAGEMENT has a positive impact, not only on organizational performance, but also on individual outcome variables. They found that no matter what content focus the talent strategy included (e.g. corporate strategy alignment, succession planning, attraction and retention, development), all talent strategies had a direct positive effect on talent motivation. Chami Malaeb (2012) provided findings showing that not all talent investments were equally effective, but in her research, she never the less confirmed that talent development and retention practices had the highest impact on employee commitment and contribution. Researchers explained in their findings by arguing that being part of a talent pool (a privileged group of high-potential employees) and receiving attention and appreciation positively impacted the performance motivation of talent, a phenomenon that is consistent with the findings of very early research in organizational behavior, such as the Hawthorne experiments. These researchers reasoned that talented employees wanted to stay with their companies and try to give something in return for the investment made in them, as well as the trust provided by their organizations. Despite a lack of encompassing research on the effects of TALENT MANAGEMENT on the individual, these very recent studies indicate the relevance and importance TALENT MANAGEMENT can play in shaping employees’ behavior and influencing organizational outcomes and performance. With respect to whether TALENT MANAGEMENT needs to be communicated and whether there are differences in attitudinal or organizational differences, As per a recent study by researchers, who investigated differences in attitudinal outcomes in both employee groups. Those who perceived they were identified as ‘‘talent’’ were more likely to be associated with positive effects (increased performance, support of strategic priorities, identification with the company) than those who did not know their talent status (except for the variable turnover intention). A study concluded: ‘‘these findings suggest that informing talented individuals of their status has a motivational effect in line with the predictions of social-exchange theory, and thus support the general logic of talent management.’’ Based on these findings, we argue that in order to have a (positive) impact on the psychological contract of the talent, employees should know that they have been identified by their companies as ‘‘talent.’’ In summary, there are indicators that TALENT MANAGEMENT can especially help in retaining talented employees (talent retention) and motivating them to stay with their organizations, and thus reduce staff turnover rates. Accordingly, researching talented employees and their expectations can be beneficial for understanding and managing multigenerational workforces.