Our best practices webinar saw four experts come together to share their experience and perspectives on leadership, talent selection and retention:
- Shanaaz Parker, Psychologist and Head of HR MEA for the Apex Group
- Manoko Ratala, Psychologist, Coach and President of the Forum of African Psychology
- Benjamin Buckingham, Managing Director of Lumenii
- Jaintheran Naidoo, Delivery Director of Lumenii
See the key outcomes from the panel discussion.
Standout Themes from the Leadership, Talent Selection and Retention Webinar:
- The biggest leadership mistake is promoting people based on performance alone
- Objective data is the antidote to the Peter Principle
- HR, leaders and employees need to co-create a new future in the post-COVID workplace
- Retention strategies need to be multi-faceted and start during selection
- In the new world of work, Learning Agility plays a central role
- Culture is set by leaders, whether they like it or not
- The future of HR needs to balance automation and technology with human connection
- Poll 1: Knowledge and support from leadership maximises the value of objective data
- Poll 2: Organisations rely on culture and values to drive retention
Click here to watch the webinar recording.
The Biggest Leadership Mistake is Promoting People Based on Performance Alone
Benjamin Buckingham kicked off the webinar by reflecting on the biggest leadership mistake: overly relying on subjective performance data in a current or past role to promote someone into a future role.
This mistake is commonly referred to as the Peter Principle (Peter, 1969). As Benjamin noted, “The Peter Principle says that, if you make decisions based on past performance alone, you're going to inevitably promote somebody to the point of failure. The reason for this is that past performance alone is not an effective predictor of future performance in a new role.”
It's quite natural for line managers to rely on performance metrics to make decisions; its readily available and provides a lot of insight into an employee's work style. However, the danger lies in focusing exclusively on performance, which is not reflective of the requirements of the future role, and omitting other objective metrics in the decision making process.
The Peter Principle can have significant cost, time, and productivity implications if the wrong decision is made. Not only do you lose your top-performing employee in their current role, but you also promote someone into a more senior role who does not have the innate characteristics to become an excellent leader.
“Line managers want to appoint people that they like and they get on with. That is not a good success factor. All that does for your organisation is perpetuate a stereotype of the Peter principle and perpetuate problems with your culture. A combination of a variety of aspects in selection is critical."
- Shanaaz Parker
Objective Data is the Antidote to the Peter Principle
Why do so many organisations fall prey to the Peter Principle?Organisations tend to over-rely on sources of information that don’t have a strong predictive relationship with future performance. In the past, these were the most easily accessible metrics for decision-making.
With advancements in technology, Benjamin highlighted that future-focused organisations are embracing data-driven talent management, with highly predictive objective measurements as the foundation for decision-making.
Benjamin shared the results of two large studies on selection criteria and job performance (Schmidt & Hunter, 1998; De Meuse, 2019). He said, “The things we tend to focus on, like years of education, experience, reference checks, have a smaller relationship with long-term success. Performance correlations show that the relationship between these items and success is below 0.26, which is very small.”
When we look at psychological qualities and how they line up with long-term success, we see much higher, significant correlations. Psychological measurements of underlying potential predict the ability to acquire skill, to acquire knowledge and to be able to perform long-term in a role.”
"What about the Peter Principle? If we’re bringing people into leadership, what do we do? We bring in objective measurements as part of the puzzle to decide who should filter into promotion and succession programs. To do this, we measure elements such as agility and future potential for a role.”
- Benjamin Buckingham
HR, Leaders and Employees Need to Co-Create a New Future in the Post-Covid Workplace
Manoko Ratala, psychologist and coach, shared some of her experiences in consulting with organisations in the post-COVID workplace.She noted that employees, teams and the organisation are in survival mode: “The mindset is ‘how do we survive, how do we regain market share, how do we rebuild?’ In all that frenzy, we're missing out on building the culture and values of the organisation. We are missing the building blocks for creating an environment where employees can feel engaged and have a sense of meaning.”
With so many questions from the audience about how to build retention post-COVID, Manoko recommended that HR, line managers and employees use this moment as an opportunity to co-create new ways of working.
According to Manoko, “we are given an opportunity now to define what our organisations should look like, using objective data, science, and our lived experiences to co-create. It's an exciting challenge that calls for us to rewrite the world of work and make it more meaningful for everyone.
"One of the ways that I facilitate co-creation conversations is to use Theory You (Scharmer, 2007) which is a new way of thinking. It uses a five-step process that requires you to have an open mind, open heart, open will and get into a space where you co-create something new that works for an organisation.”
- Manoko Ratala
Retention strategies need to be multi-faceted and start during selection
In the panel debate about how to maxmise talent retention, its multi-faceted nature became clear. There is no silver bullet for engagement and retention.As Jaintheran Naidoo said, “retention actually starts with selection, so you need to ask questions at this phase about what people want from the work environment. This can be objectively measured and included in the decision-making process.”
If we consider retention in terms of Maslow’s hierarchy, at the simplest level people need their basic needs to be addressed, such as a salary that meets their monthly costs. Self-realisation is at the top of Maslow’s hierarchy and is also the pinnacle of retention. According to Jaintheran, “self-realisation means something different for different people. We need to listen to what people are saying they want from the workplace.”
In the New World of Work, Learning Agility Plays a Central Role
Manoko highlighted the unique challenge in the post-COVID workplace: “There are no theories; no one has come up with a framework about how to navigate the new working environment.”
In this challenging workplace, the ability to deal with the unknown and react quickly to change becomes even more critical. This is directly linked to the construct of Learning Agility, which is defined as the ability to develop new, effective behaviour in the face of new experiences.
Shanaaz Parker shared that Learning Agility has become a central part of selection in her organisation, due to the amount of uncertainty and change in the environment. She said, “Learning Agility is a very good predictor for us in terms of how successful someone can be. In our world there is a lot of change continually thrown at people, so you need to have a level of agility where people can learn and figure things out with the tools you give them. That inherent Learning Agility helps push them to do that.
Benjamin added that, in his experience, senior selection decisions are rarely made without insight into Agility. He noted that “more and more, leaders encounter new experiences. Somebody with higher Learning Agility is equipped to let go of old ways of doing things and engage with new methods. Strategies and technologies are changing; this ability to learn from new experiences sets apart high potential leaders.”
Culture is Set by Leaders, Whether they Like it or Not
With organisations focusing so much on culture and values, the important question is whether they are actively or passively shaping their culture.
The panelists shared one of the most critical elements of driving an effective culture: the day-to-day behaviour and priorities of leadership. While culture is multi-faceted, and made up of actions, policies, processes, and more, leaders ultimately need to model the ideal culture they wish to see in the organisation.
"An organisation will have a culture whether it is conscious of it or not. The culture is largely determined by leadership behavior, and leaders need to be aware of this."
- Jaintheran Naidoo
According to Shanaaz, “leaders need to set the tone from the top, set an example and actually do what they say they're going to do. Coherence is critical. A leadership team must move together as one and demonstrate a way of being to the rest of the organisation.”
Many organisations look to HR to set the culture. HR can put policies and frameworks into place, but this isn’t enough. As Shanaaz says, “HR can help with some guiding principles, but it’s actually about behaviour – not only HR’s but everyone’s behaviour.”
The Future of HR needs to Balance Automation and Technology with Human Connection
With a focus on objective data, does that mean the death of subjective insights? Benjamin emphasises that objective data is not the be-all and end-all. According to him, “it's important to balance both the objective perspective and the subjective perspective, starting with the objective perspective because that is the highly predictive data.”
Manoko reflected on the role of HR in the context of the data pyramid (Rowley, 2007). This model looks at data and how it is applied in organisations, with the theory being that data should transform into information, and in turn, into knowledge and wisdom.
In many countries, HR needs to collect quality data due to legislative requirements. As Manoko says, “we collect data very well and turn it into information for reporting processes, moving up the pyramid, but what is the end goal of this information? Are we reaching the knowledge and wisdom stages, where the data can translate into strategic decision-making?”
She notes that HR needs to move away from the transactional and step into transformational outputs to create the future we want to work in and move away from survivalist mode. This focus on data needs to be balanced with an emphasis on the human touch.
– Manoko Ratala
Poll 1: Knowledge, and Support from Leadership Maximises the Value of Objective Data
In a poll, delegates were asked to share their perspectives on which obstacles prevent organisations from getting the most from objective data.
Out of 248 respondents, knowledge and understanding came up as the biggest obstacle (21%), followed by support from leadership (18%) and budget (15%).
Organisations that want to make a shift towards data-driven talent management need to start by creating a foundation of knowledge and understanding about the science of data, why it creates value and its business ROI. Based on these insights, HR can work towards getting support and buy-in from leaders, which is a critical first step towards making a significant shift in the organisation’s talent processes.
Poll 2: Organisations Rely on Culture and Values to Drive Retention
In the second poll, audience members were asked: “What strategies does your organisation use to drive retention?”
The majority of respondents shared that they are focused on building retention strategies based on company values and culture (22%), followed by learning and development (20%) and, to a lesser extent, flexibility (15%).
Interestingly, measuring motivation and engagement was at the bottom of the list, as well as perks and incentives (both 10%).
Learn more about Lumenii's Fixed-Cost Technology Solutions
In the webinar, Benjamin stated that "a lot about the underlying psychology of people can be measured. When we speak about data-driven talent management, by using data to support individual decisions, we start doing it at a strategic level. When we do that consistently and effectively in an organisation, what we're actually doing is moving the needle on the talent speedometer, to an overall improvement in the quality of talent."
Data-driven talent management is about providing objective data and insights, using automated technology at a fixed-cost to ensure maximum value. An unlimited usage model enables organisations to leverage data in all talent processes, saving time and eliminating a per-person cost.
Lumenii offers fixed-cost talent assessment technology and solutions for organisations of all sizes. Download our product summary to learn more or book a no-strings-attached meeting with an HR expert.
Watch the Webinar Recording
References
- The Peter Principle. Book by Laurence J Peter, 1969
- The Data Pyramid/DIKW Pyramid. Rowley, Jennifer (2007). "The wisdom hierarchy: representations of the DIKW hierarchy". Journal of Information and Communication Science. 33 (2): 163–180.
- Meta-analysis of selection criteria and performance. Schmidt, F. L., & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological bulletin, 124(2), 262.
- Learning Agility meta-analysis. De Meuse, Kenneth P. "A meta-analysis of the relationship between learning agility and leader success." Journal of Organizational Psychology 19.1 (2019): 25-34.
- Theory You. Book by Otto Scharmer, 2007
Author
Lumenii's team of expert psychologists regularly collaborate to share their ideas and knowledge. The latest case studies, thought leadership, and research.