Cost cutting measures implemented in 2009 have left many organizations lean and mean. Non-farm labor productivity is up in the United States. Organizations are focusing on improving engagement, innovation and productivity.

Smaller numbers of employees and fierce competition for individuals with the right skills means that organizations must place employees in positions where they can have the greatest business impact. This, however, takes effective leadership. Research by the Hay Group with over 1,000,000 global employees shows “that while many organizations are focused on employee engagement with good reason, leaders must also enable employees to channel their extra efforts productively to deliver superior results.”  Worrisome though, are findings by Bersin and Associates that, “The leadership gap in organizations has actually become wider – driven largely by organizations’ tendency to lay off older, more senior workers.” (Enterprise Learning and Talent Management 2010, p. 5).

Of course, the first step towards effective leadership development is being crystal clear about who the top performers are.  Management development expert Gareth Jones evaluates methods used in the past to identify high potential employees and he concludes that they were not as effective as looking at a person’s “track record.”  Much of the information about an individual’s record of accomplishment should be found in our performance management systems.

Retaining and supporting top performing individuals is linked to effective leadership, learning opportunities, and a clear organizational strategy and direction. In other words, the ability to retain leading employees and nurture new ones depends upon the skill level of those currently in leadership positions. According to a survey of over 2,000 leaders by the Center for Creative Leadership, the most critical skills for leaders of the future will be “leading people, strategic planning, inspiring commitment, and managing change,” yet, ominously the survey also found these skills were areas of weakness for many leaders.

The question then becomes; are we devoting enough attention to these four areas in our performance management processes?

References:

Bersin, Josh. “Discussion with our Research Members: Five Topics to Watch for 2010” Bersin and Associates: The Business of Talent. [www.bersin.com]. December 1, 2009.

Bersin, Josh. “Enterprise Learning and Talent Management 2010” Bersin and Associates [www.bersin.com]. December 2009.

Birchall-Spencer, Meredith. “Clever people can make or break your organization, says management development expert Gareth Jones” HR Professional December 2009.

Bureau of Labor Statistics. “Productivity and Costs, Third Quarter 2009, Revised.” Press release [www.bls.gov]. December 3, 2009.