Many firms today are busy redesigning their performance and talent management systems. What trends and developments in the market should they follow, and which can they safely ignore? spoke to hkp/// group experts Leon Jacob and Laura Hohmann.
Experts say that the era of "best practices" is over in performance and talent management. How come?
Leon Jacob: Trends such as globalization and digitization are changing the world of private enterprise. The variety of influences and current market dynamics are forcing businesses to become more innovative, more digital, more agile. Off-the-peg solutions are no longer enough – what works well in one firm may not work in another.
So, best practices are a thing of the past?
Laura Hohmann: No, best practices are still useful, both as a benchmark and as a source of inspiration. They also allow companies to learn from others’ successes and failures. However, when it comes to performance and talent management, other factors are much more critical than conforming to the market.
Which factors would they be?
Leon Jacob: Above all, how welll performance and talent management are adapted to the company’s context – and, in the final analysis, the contribution to company performance, of course. First and foremost, the company needs to define the point and purpose of its performance and talent management system. This can differ widely between companies.
Does that mean that, in the past, companies redesigned their performance and talent management systems “blindly”, so to speak?
Laura Hohmann: The problem is that the adjustments they made were often patchy. Rather than reorganizing their entire performance and talent management system, they looked at individual processes and tools in an isolated approach.
Many firms are afraid of the cost and impact of carrying out a systematic overhaul…
Laura Hohmann: Yes, because it may mean that familiar, longstanding practices need to go.
Leon Jacob: From our work with clients we know that making isolated changes without an overall guiding idea to base your actions on ultimately leads to less effective performance and talent management. Companies start chasing their own tail, running round and round, faster and faster, without ever reaching their goal. The reason is that their efforts are not directed towards the right goal.
What is the alternative then: How can firms create an effective performance and talent management system?
Leon Jacob: We recommend a "fit for purpose" approach, one in which all processes and instruments are adapted for the company in question and oriented toward the purpose of their performance and talent management system. The first step is to analyze the internal and external factors influencing the company, factors such as the prevalent labor market or the company's business strategy. Taking these factors into account, the company should then define the purpose of its performance and talent management, working together with staff and managers from the core business.
Laura Hohmann: Next, they should carry out a stocktaking exercise of their existing performance and talent management landscape. The objective of this exercise is to prioritize all the existing processes and instruments in light of the purpose, and redirect them toward it.
What is the experience of companies that have redesigned their performance and talent management system along the lines of the "fit for purpose" principle?
Laura Hohmann: A lot of companies are surprised to discover how many legacy issues still affect their performance and talent management systems. The "fit for purpose" approach also reveals any blind spots or gaps, which the company can close with new processes or instruments. This is worth the effort because, at the end of the day, the result is a targeted performance and talent management system in which the company can use its resources efficiently.
How much time and energy do companies need to spend on redesigning their performance and talent management system using the "fit for purpose" approach?
Leon Jacob: With the help of the hkp/// group Talent Management Check-up, companies can review their performance and talent management system in a timeframe of between one and six weeks. The exact amount of time needed generally depends on the company’s size and the scope and complexity of the processes and instruments already in place.
Laura Hohmann: The amount of time and effort needed after that to implement the new system depends on how far the current system already covers the identified purpose. Our Talent Management Check-up reveals which processes and instruments within the performance and talent management system the company should tackle, in what manner, and at what point in time.

Ms Hohmann, Mr Jacob, thank you very much!
Author Leon Jacob

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