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31 March 2009 8:28am

As talent-sourcing gets easier, employers should consider breathing new life into their organisations by “top grading” their workforce and shedding poor performers, says Taleo senior vice president Al Campa.

Over the past few years, he says, employers perceived “it was better to have poor performers than no performers”, but there are now opportunities to bring in better talent to replace under-performing staff, often without paying a higher salary.

“There’s more managing out now than there was in the past because people aren’t as hard to replace,” he says, and it’s happening at all levels of organisations, “executive levels, all the way down the line”.

Campa says top grading must be handled with sensitivity if an organisation has recently announced redundancies, and it must be clear that replaced staff are being managed out for performance reasons.

While some organisations, such as GE, have a policy of top grading a set proportion of their staff every year, Campa doesn’t advocate such an approach. “Most companies don’t have that… it can lead to less loyalty from the workforce because you’re wondering when your number’s going to come up.

“So that’s not something we would encourage, unless a new leader comes in and wants to re-make the company by, for example, letting the bottom 10 per cent go, and bringing in fresh blood. It can be difficult for an ongoing company.”

Redundancies poorly handled
The majority of employers handle the redundancy process poorly, Campa told HR Daily.

They don’t leave themselves enough time to figure out who to cut – “they do it very quickly, for example, ‘we’re firing 10 per cent on Friday’ and that leaves you two days” – and they don’t have a strong process to ensure those let go are the poorest-performers, he says.

Many companies simply look at who got the worst reviews in the last review cycle, but without thinking about why, he notes.

“Sometimes it might be because the person just got promoted and they’re in a new position where they haven’t figured it out yet, so you’ve just let go one of your top performers who’s just in a new job and is getting their feet wet. Maybe they’ve had a series of good years and just had a bad year for a variety of reasons… or maybe they’ve got personal issues that are going to go away in a few months.”

Employers must look further than the last performance review, he says. If an employee has performed strongly over a number of years before having a poor review, that should be “a red flag”.

Skill sets are also an important consideration, because the people in a department that is the focus of downsizing might have valuable skills that will help the company through the downturn.

“Very few companies put enough work into looking at the details to figure out, ‘if we have to cut 10 per cent, who are they going to be?'”

Clients to share talent pools
Campa told HR Daily that Taleo is currently developing the technology to allow its clients to be part of a global HR community.

Using “cloud computing”, it plans to launch three exchanges within the next three-to-six months: the “knowledge exchange” will provide a forum for HR professionals to share their ideas and experiences; the “solution exchange” will allow third party software providers to promote their solutions, with members able to rate and review them, similar to the way iPhone applications are shared; and the “talent exchange” will take the form of a shared talent pool containing the details of candidates who have applied for jobs with Taleo’s clients (dependent on the consent of both jobseekers and employers).

Campa says about 10 million jobseekers apply for jobs through Taleo every quarter, so sharing them is a “more efficient way to match candidates looking for jobs with the jobs that are available”. Employers will be able to specify the amount of time they “own” a candidate – for example, 90 days from receiving a job application – before releasing them into the pool.

He says the feedback from clients so far is overwhelmingly positive, as “people always want talent”.


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