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Southern Company Case Study

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Assignment #4
Southern Company Case Study
June 5, 2013

1. Evaluate the effectiveness of the roles that the strategic leaders played in the formation of the performance management strategy.
Southern Company is an electric utility company headquartered in Atlanta, GA. The company owns electric utilities in Alabama, Florida, Georgia, and Mississippi and services roughly 4.4 million customers. Southern Company also provides fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and retail electric prices that are below the national average. Historically, Southern Company hired at the entry level and promoted individuals internally to fill leadership positions. The company typically had a very low turnover rate which resulted in an older and more tenured workforce. Over the years, Southern Company developed a group of leaders that possessed a profound level of business knowledge and aligned with the organization and culture. Southern Company hired a large number of people in the late 1970s and 1980s, so by 2003, most of those individuals that had remained with the company were beginning to retire.
At Southern Company employees are eligible to retire at 50 years old, so many executives began to retire in large numbers, and their successors would also leave shortly after. Southern Company decided that it was time to review and revamp their succession planning and leadership development efforts to guarantee that they had a sustainable source of effective leaders to meet future business needs.
According to Tucker, Kao and Verma (2005), Talent Management is defined as “an integrated set of processes, programs, and cultural norms in an organization designed and implemented to attract, develop, deploy, and retain talent to achieve strategic objectives and meet future business needs” Although Southern Company has demonstrated a strong formation in succession planning and leadership development systems, they lacked the focus on developing critical talent. Southern Company’s cross system calibration of talent was difficult to manage because there was not a standard set of information available for comparing employee performance.
Southern Company saw an opportunity, took the initiative to improve their leadership development system by adopting the leadership framework by Ram Charan, Stephen Drotter, and James Noel in their book “The Leadership Pipeline: How to Build the Leadership-Powered Company (Goldsmith & Carter 2010).
Southern Company’s leadership teams played a significant role in the formation of their performance management strategy. Once performance standards were identified, leaders were able to better understand what was expected of them at each leadership level as well as across the entire company. Managers were reporting that their evaluations were better geared towards common company goals. This cultivated development of high potential individuals. This initial response to the implementation of this new strategy was clustered and it needed to become more streamlined throughout the entire company. This strategy was looked at as an HR initiative when it needed to be driven by managers in order to flood Southern completely.
A leadership committee was created in order to implement the strategy throughout every part of the company. In order for this to be successful all parties needed to be represented and therefore senior line executives were involved representing each business unit as well as HR served as a support advocate. Once this team was developed then Southern Company saw major collaboration on the execution of this leadership development strategy.

2. Develop a five point criteria for evaluating the effectiveness of the talent management strategy and how the data could be collected.
Talent management metrics link human capital investment to financial performance. According to management gurus Huselid, Becker and Beatty 2005, there are critical challenges to successful workforce measurement and management. Talent management metrics are evolving. As organizations increasingly focus on talent management strategies, they seek ways to validate these initiatives and measure their business impact. Many firms are beginning to include talent management in their dashboards or scorecards. Scorecards provide a clear “line of sight” to organizational strategic goals by linking talent management to objectives and performance appraisals. Measures may include factors such as employee survey results and turnover. Companies also create their own measurements to fit their organizational cultures. Increasingly, talent management technology to house and track talent management strategies is becoming available. Databases with all relevant data in one location can result in significant time savings for staffing, such as the ability to quickly identify talent for open positions. Some vendors include talent management solutions in their HR suites. Strategic talent management software may help manage workforce skills and capabilities (hourly, salaried and contingent), demographics, career planning, employee retention initiatives, workforce and succession planning, and performance and learning management.
Our five point criteria for evaluating the effectiveness of the talent management strategy includes: A. Overall talent retention rate B. Cost to hire talent C. Average tenure of new hires D. Number of senior positions and the depth of bench strength E. Number of promotions made from within the organization

3. Critique the components of your talent management strategy and suggest alternative ways to achieve effective results.
An alternative process for a new talent management strategy can focus more on pools of talent than on specific individuals. It takes a broad view of satisfying the need for the right mix of talent to implement today’s and tomorrow’s strategies. It is no longer about hiring the best person for a position now, but about hiring people who may qualify for key positions in the future. Such a broad focus necessitates a change in how data is collected and analyzed. Traditionally, companies have managed employee in formation in different departments using function-specific software. This new talent management process, however, requires the integration of all HR information to permit the development of initiatives to help achieve business objectives. (Morton, 2004) The benefits of combining all talent-related information in a single database are numerous.
They can include:
•Eliminating duplication of data and effort.
•Providing a more complete picture of the company workforce.
•Determining where the current gaps are, whom to recruit, how to develop the existing workforce and how to compensate employees with those competencies.
•Quantifying how much HR is spending on recruiting and to compare it to how much they could save by upgrading the skills of current employees.

4. Outline the functional expertise component of this strategy and how it optimizes the company’s ability to identify highly qualified individuals.
By having a means to manage and analyze talent by looking at the data, it will allow predictions such as the success of employees in certain areas. A fully integrated talent management system helps answer many questions concerning development needs. (Cohn, Khurana & Reeves 2005) A CEO may ask, “Do I have the executive talent to lead an initiative?” or “How long before we have enough knowledge and skills within the organization for the initiative to take hold?” HR can then respond, “One quarter of the employees have participated in quality circles at some time in their careers.” HR can also point out the high-performing professionals already inside the organization. It is, however, still up to the people in key leadership roles to evaluate this information and make implementation decisions accordingly.

References:

Goldsmith, M., & Carter, L. (2011). Best practices in talent management, how the world\'s leading corporations manage, develop, and retain top talent. San Francisco: Pfeiffer.
Huselid, M. A., Becker, B.E., & Beatty, R. W. (2005). The workforce scorecard: Managing human capital to execute strategy. Boston: Harvard Business School Press

Morton, L. (2004). Integrated and integrative talent management: A strategic HR framework. New York: The Conference Board

Tucker, E., Kao, T., & Verma, N. (2005). Next-generation talent management: Insights on how workforce trends are changing the face of talent management. Retrieved June 1, 2013 from www.hewitt.com

Cohn, J. M., Khurana, R., & Reeves, L. (2005). Growing talent as if your business depended on it. Harvard Business Review, 83, 10, 62-70.

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