Getting Transparent: Make Every Deal a Fair Deal

Guest
post by Marc Effron:
Many
companies still refuse to be transparent with their employees about their
potential to advance.
Those companies
often say they’re concerned that if
some employees are told they have high
potential to advance, it will disengage employees who learn they’re not in that category. That’s true only if being a high potential is seen as the only “fair deal” at your company. We
believe that it’s beneficial
to be transparent with every employee about their potential, and that these
conversations will be far easier if every
deal is seen as a fair deal
.
By “fair
deal,” we mean the investment that you make in an employee based on their
performance and potential to advance.
While
being assessed as a high potential
leader brings you one type of investment, everyone should get the deal that
reflects their expected contribution to the company.

How Fair is the Deal?

Before we differentiate, let’s ensure
that every employee has a great baseline experience that includes working for
an organization they can be proud of, having a quality manager and the
opportunity to develop. That baseline ensures that everyone is working in an environment
that supports their performance and engagement.
Above that baseline, every employee
should get a deal that’s based on their current and likely future contribution.
It should include their compensation
and, more importantly, their fair share of the other development resources the
company offers. This may include
critical experiences, exposure to key
leaders, internal and external development courses, highly visible projects and
high potential programs, among other investments.
The different deals should clearly
differentiate your investment in leaders, with higher performing and higher
potential leaders receiving disproportionately more investment.
How
disproportionate depends on your Talent Philosophy.
We find a simple way to determine the deal is to use our Talent Investment Grid (TIG). The
Talent
Investment Grid is a performance and potential grid that details how you plan to invest in leaders in each
box. It’s a simple tool but it
requires that you have either an
executive Talent Philosophy or a very
clear understanding of how your senior leaders want to differentiate people investments.
With that Talent Philosophy guidance in
hand, gather a small number of senior HR leaders for a 90 minute, highly focused
exercise to fill in your TIG. The
process is as simple as:
Step 1: List all of the major development and
reward elements that an employee might receive in a differentiated way.
That includes the items listed above and
any other performance-related benefit. This excludes any reward based on tenure
and any benefits available to everyone.
Step 2: Identify how you want to allocate each
element.
Classify each
element as Yes, No, Consider (i.e.
expatriate assignments may be Yes for Hi Po’s and Consider for those in the center box) or Preferred
Access.
Step 3: Get input from the important
stakeholders in your organization and revise the grid accordingly.
Your goal is a practical tool that helps
managers better align the company’s investment with an individual’s performance
and potential. A finished grid should look something like Figure 1 on the next
page.
Talent Investment Grid Example:

Using the TIG to Support Transparency

After you’ve
developed the TIG, educate managers about the tool and how to use it. They should understand that the TIG provides guidelines, not rules, but that
similarly placed people should have relatively similar investments. Your high potential
leader should have a meaningfully different investment than your average
performing, well-placed leader. Ask managers to use the grid as a guide when
considering assignments, experiences, projects, bonuses, etc.
This next step is optional but, if you want
to be transparent, strongly recommended. Communicate
the TIG to your employees. Transparency
about the fair deal means that they should understand their deal and the other
possible deals as well. This will
lead to a few uncomfortable conversations but many more productive ones. Employees will know
their deal and will understand what to do in order to get a different deal
(increase their performance, demonstrate more potential, or both).
We understand that it’s not easy to decide how transparent to be with your company’s employees. We believe there are a few good reasons to
not communicate potential ratings (they’re not
accurate, there’s no differentiated
investment associated with them) but many more reasons to share them (reaffirm
to your best talent that they’re your best, create a culture of transparency, help managers to make
smarter and more consistent talent decisions).
Transparency isn’t easy but, if we shift
our mindset away from high potential being the only fair deal, it makes if far
easier to be honest with everyone about where they stand.
Marc Effron, top 100 Influencer in HR and
founder and President of the Talent Strategy Group and Talent Quarterly
magazine. Marc helps the world’s largest and most successful companies
improve the quality and depth of their talent. In his latest book8 STEPS TO HIGH PERFROMANCE: Focus on What
You Can Change (Ignore the Rest)
, he separates the behaviors
you can control from the traits you cannot so you can deliver your highest
potential performance at maximum efficiency.