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Cover Page. SHRM Splash Screen. Investing in Your Future as an HR Leader. Research Publications Education. Copyright 2005 by the SHRM Foundation All rights reserved. No part of this production may be reproduced or transmitted without permission from the SHRM Foundation. Title Page.
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SHRM Splash Screen Investing in Your Future as an HR Leader Research Publications Education Copyright 2005 by the SHRM Foundation All rights reserved. No part of this production may be reproduced or transmitted without permission from the SHRM Foundation.
Title Page Featuring WAYNE CASCIO, PH.D.
SHRM Introduction The SHRM Foundation is pleased to present Fueling the Talent Engine – Finding and Keeping High Performers, a DVD case study and discussion guide about how an integrated talent-management strategy helps to provide a competitive edge in today’s business environment. The focus of this case study is Yahoo! Inc., a leading provider of Internet tools, services, and marketing solutions for businesses in the United States and internationally. Fueling the Talent Engine – Finding and Keeping High Performers builds on the SHRM Foundation’s critically acclaimed HR Role Models and HR in Alignment videos about what it means for HR to be a strategic business leader, and how HR strategy can be aligned with general business strategy. More than 150 colleges and universities are now using these videos in their undergraduate, graduate and executive education programs. In addition, hundreds of SHRM chapters and companies are successfully using them to share the wisdom, insights, and examples of outstanding HR leaders and their practices in organizations today.
SHRM Introduction The SHRM Foundation deeply appreciates the support of Yahoo! Inc. executives and staff who gave so generously of their time to take part in this educational DVD. We extend special thanks to Heidi Burgett and Libby Sartain from Yahoo!, to Joe Coppoletta and Carlo Gustaff, whose outstanding direction and film editing brought this DVD to life, and to Myles Throop, who prepared this discussion guide. Finally Fueling the Talent Engine - Finding and Keeping High Performers would not have happened without the inspiration, creativity and hands-on leadership of Wayne Cascio, Ph.D.
TABLE OF CONTENTS OVERVIEW……………………………………………………………………………. 7 UNDERSTANDING THE TALENT- STRATEGY FRAMEWORK……………… 12 YAHOO! CASE STUDY………………………………………………………………. 16 DISCUSSION QUESTIONS…………………………………………………………... 21 FIVE LESSONS FOR ANY ORGANIZATION……………………………………... 44 SNAPSHOT PROFILES OF PARTICIPANTS……………………………………... 50 HRCI CERTIFICATION: YOUR PROFESSIONAL EDGE……………………… 64 SOCIETY FOR HUMAN RESOURCES MANAGEMENT………………………... 67 SHRM FOUNDATION………………………………………………………………... 70
Introduction Fueling the Talent Engine – Finding and Keeping High Performers examines how an integrated approach to talent management helps drive business results at Yahoo! Inc. Yahoo has shown its business acumen by becoming a leader in the online-content market. It has been the focus of numerous articles and reviews because of its dynamic management and its corporate culture, which the company actively promotes to attract the best talent. This video shows what Yahoo! does to become an employer of choice, and what it does to select, orient, develop, reward, and manage top talent. It shows how senior executives use the concept of managing talent as a central hub in the firm’s strategy
Profile of Yahoo! Inc. Yahoo! Inc. provides Internet services to users and businesses through the Yahoo! Network, and a range of tools and marketing solutions for businesses in the Unites States and internationally. It offers an array of communications services, including mail, messenger, calendar, chat, greetings, clubs, and photos; and various commerce services, such as shopping, auctions, finance, and travel; as well as content and media-programming services in various areas, including sports, music, movies, news, and games through partnerships with various content providers. In addition, the company provides a range of personalized information on wireless devices, including wireless phones, two-way pagers, and personal digital assistants. Yahoo! also offers a range of services for businesses and enterprises, including Corporate Yahoo!, an information- portal solution that enables companies to communicate and interact directly with their employees, customers, and shareholders; Yahoo! Broadcast Services provides Internet audio and video streaming solutions for corporate and consumer communications; and Yahoo!'s Small Business services enable small businesses and professionals to establish and grow a business presence
Profile of Yahoo! Inc. with various Yahoo! services, as well as Yahoo! Fusion Marketing that unites its media, e-commerce, direct marketing, broadcast, and communication tools. Yahoo! also has strategic alliances with SBC Communications, Inc.; BT Group plc; Rogers Cable, Inc.; and Verizon Communications, Inc. The company was founded by David Filo and Jerry Yang in 1994, and it is headquartered in Sunnyvale, California. Yahoo! has approximately 8,700 employees worldwide, and earned revenues of $3.6 Billion in 2004, up from $1.6 Billion in 2003. During the same period, net income rose from $238 Million to $840 Million. Additionally, Yahoo!’s balance sheet grew from $5.9 Billion to $9.2 Billion.
Discussion Guide Wayne Cascio has written an informative list of discussion questions that can be used with the Yahoo! case study. The questions follow the topics of the DVD presentation and should provoke discussion as well as reinforce key insights into how Yahoo!’s strategy works and why HR is such an important partner in its strategic development and success. The discussion questions are intended as a starting point from which you can develop a dialog about the effectiveness of talent-management practices in your own organization. Wayne Cascio, Ph.D., is recognized as one of the foremost experts in the field of human resource management. He recently became the first HR leader to receive an honorary doctorate degree from the University of Geneva, Switzerland for his teaching and research in the HR field. Wayne has consulted with more than 150 organizations on six continents, and has written 21 books, including best-selling texts on HR management. Currently he serves on the the Boards of Directors of CPP, Inc., the Academy of Management, and the SHRM Foundation.
The Talent-Strategy Framework Source: Global Learning Resources
The Talent-Strategy Framework The Fueling the Talent Engine – Finding and Keeping High Performers video is based on understanding how strategic planning and execution work within an organization. Without this fundamental understanding, it will be very difficult to appreciate how HR strategy is tied to the overall organizational strategy. The case study uses the Talent-Strategy Framework model on the previous slide to explain how strategy works in an organization. Note how the talent-strategy is a circular process that aggregates six distinct pieces into an overall strategy framework. • PLAN who and how many: An organization must have a plan about where its HR strategy is going to be leading the company. The HR department must have clear and measurable goals that are aligned with the overall corporate strategy. • ATTRACT those you want: Once a plan has been determined the HR department must develop methods to attract the necessary quality and quantity of new hires. The strategies should highlight the benefits of being an employee at the company.
The Talent-Strategy Framework • RECRUIT the right people: In addition to attracting talent, it is often necessary for an organization to actively recruit new talent. Many highly qualified individuals, which an organization seeks, may not be looking for a new job, or be otherwise attracted to apply for a position at you company. These people must be actively and directly recruited. • ASSESS them correctly: Once interest has been generated and there is a steady stream of applicants, the company’s HR department must differentiate between unqualified candidates, and those who can provide value to the company while being able mesh with the company’s corporate culture. • DEVELOP them carefully: Simply finding talented individuals, and hiring them, is not sufficient to have highly effective HR tactics. It is rare that an individual, no matter how qualified, is a perfect fit for a given position. New-hire training is an essential part a talent strategy. Additionally, as time passes, talent needs of a company will change and the skill sets of its employees must be updated and developed appropriately. • RETAIN only those you want: Even with extensive selection practices coupled with training and development programs, HR mistakes happen. It is necessary to continuously evaluate employees and their motivations. Highly effective employees should be rewarded while the lowest performers should be removed from the organization.
Yahoo! Case Study • The Yahoo! Case Study features the following participants: • Wayne Cascio, Ph.D. • Lloyd Braun, Senior Vice President Media • Heidi Burgett, Corporate Communications • Susan Decker, Chief Financial Officer • Loree Farrar, Vice President of Global Rewards • David Filo, Founder • Phu Hoang, Vice President of Engineering • Carol Mahoney, Senior Director of Talent • Ken Perluss, Director of Technical Talent Acquisition • Libby Sartain, Chief People Officer • Stephanie Tate, Senior Talent Acquisition Manager • Cheryl Van, Vice President of Talent Acquisition • Jerry Yang, Founder
Summary The Yahoo! video case study is an ideal educational resource for an undergraduate, graduate, or executive education program, for HR staff training within companies, and for HR professional educational seminars and programs. You have several options available for presenting the Yahoo! case study. Besides the DVD video, we have provided many different slides from which you can tailor you presentation, if you desire. One option is to show the DVD first, followed by the PowerPoint slides, included in this discussion guide, to provide a more in-depth understanding of the company and its business. After reviewing the profile of Yahoo!, Inc. and discussing the key points of the Talent-Strategy Framework, consider discussing the question slides with students or HR professionals. We have used this approach successfully with graduate business students. A second option might be more appropriate in an undergraduate HR course. For students with little work experience, strategic HR alignment in the recruitment and retention of talent is a difficult concept to grasp. Some students are not exactly sure which elements of strategy and HR talent initiatives must be in aligned. Students probably understand that aligning HR strategy with
Summary corporate strategy is a good thing, but they may be uncertain of the payback potential that effective talent management will provide. The Yahoo! case study provides an excellent example of a high-performing company where a focus on talent management pays off in results. As a way to set the stage for the DVD case study, you may want to start with a few PowerPoint slides to introduce the company, what it does, and to provide a quick overview of what talent management means. It would be helpful to walk through the Talent-Strategy Framework slide. After this brief introduction, show the DVD. Then engage the class in a discussion of what Yahoo! did that they thought contributed to effective talent management and what more they could do in the future. You can select from the questions that follow to clarify what Yahoo! does. You may want to discuss how recruiting, selection, training and individual performance management contribute to talent management and alignment. These are all important issues in an HR course.
Summary You might want to ask other questions such as: How does the company gain from achieving strategic HR alignment through its talent management practices? What are the obstacles that make the achievement of effective talent management practices difficult? What must HR measure to achieve effective talent management practices? How would students like to work for Yahoo!? Why don’t more companies have the types of talent management strategies that Yahoo! has? The Yahoo! case study will certainly stimulate discussion and challenge students whether they are in an HR or business program, as well as HR professionals, to think through the benefits of HR talent strategies being aligned with the overall organizational strategy, and how to achieve effective talent management strategies.
What does talent management mean, and how is it viewed at Yahoo!? Q. A. Talent management means considering an employee’s talents during hiring, as well as that employee’s career development; and analyzing why people leave a company. Yahoo considers talent management to be central to its corporate strategy.
How is talent incorporated into the Yahoo! business model? Q. A. Yahoo!’s business model is one in which constant innovation is necessary. The philosophy of the company is around great products, ultimately equaling great business. Yahoo! promotes a culture where emphasis is placed on high performance, and high performance is actively rewarded.
How does Lloyd Braun, SVP of Media, describe outsiders’ reactions to Yahoo!’s corporate culture? Q. Lloyd explains that when talking to his friends in the traditional media business, within two or three minutes they are saying “I’ve never heard you like this, I’ve never seen you like this.” Like they’re ready to join right then and there. Even people who are not employees of Yahoo! are easily affected by the energy that they see and feel in the culture of Yahoo!; it is this energy that helps the company to attract and retain highly qualified individuals. A.
How does Lloyd Braun illustrate the statement, “It’s important to go to work at a place where you’re connected to a dream?” Q. A. Lloyd explains that it is the passion he feels for his job at Yahoo! that drives him to do his best every day. He says, “That’s very much what has always fueled my career.” At Yahoo! it is the collective passion that all of the employees feel that helps to motivate everyone, and that drives product development and improvement.
What does a systematic process of managing talent imply? Q. A. Managing talent doesn’t just happen, rather it’s a systematic process that includes targeted recruitment and retention programs, along with policies that encourage career growth and development opportunities, reward effective performance, and build a deep reservoir of successors at every level.
What are some of the premium services, for which Yahoo!’s customers pay? Q. A. Yahoo!’s business model provides services to most users at no fee; for example, Yahoo! Mail. But Yahoo’s profitability is based on its for-pay services, these include Yahoo! Personals, a dating-subscription service, Yahoo! Music, where people pay for music downloads, and a wide range of small-business hosting services.
In 2004 Yahoo!’s sales increased 120%, while its net profit increased 253%. How did Yahoo!’s business model provide for such dramatic growth? Q. A. Yahoo!’s business model is deceptively simple. The more time that users spend with Yahoo, the more advertising it can sell, and the greater the likelihood that someone will pay for premium service or content. Today Yahoo counts nearly half a billion users in twenty-five countries and thirteen languages.
How has Yahoo! managed talent during its high growth? Q. A. Sue Decker explains that many companies falter during a growth stage because they fail to manage talent properly; they fail to realize that they need to attract different kinds of people at different stages. Yahoo! recognized this from the very beginning, and has developed policies around identifying and nurturing current talent, as well as developing succession plans to maintain a high level of employee competency.
How does Yahoo! differentiate itself so that prospective employees will want to work there? Q. A. Libby Sartain, Chief People Officer, explains one way in which employees at Yahoo! find their work to be rewarding. At many companies an employee can work on a project but never see it through to fruition, nor ever see the results of their own actions. At Yahoo! the effects of a newly developed product can be seen immediately when the product is released on the Internet. “I can see that I’ve put it up on the site today, and 2 million people used it tonight.”
What does Carol Mahoney, Senior Director of Talent, mean when she refers to “talent magnets?” Q. A. In addition to job applicants that seek out Yahoo!, Yahoo! is always looking for passive candidates. The talent magnets help with this effort; they are employees who are very well known in their fields. These “magnets” contact individuals who could potentially provide value to Yahoo!, but who have not applied for a job. The “magnets” contact these people directly by email, or by hosting informal talks.
What does it mean to have an integrated talent management strategy? Q. A. An integrated talent management strategy begins by identifying workforce needs, attracting and recruiting the kinds of people who fit those needs, assessing their skills, knowledge, and values, developing them, managing their performance, and ultimately retaining those you want to keep.
How does Yahoo! Promote the idea that high performance is valued? Q. A. Ken Perluss, Director of Talent Programs, says that it is so important to Yahoo! to have a job done correctly, that the company would rather leave a position unfilled than hire someone who whose performance is not up to the standards that the company requires. This implies that Yahoo! employees belong to an elite club, a club of which they are proud to be members.
How do Yahoo!’s business model and corporate culture reward successful employees? Q. A. Yahoo’s structure is different from that of many global companies because its employees are able to see the effects of their efforts; they can see a directconnection between their hard work and the success of the company, and the furthering of Yahoo’s social goals. Phu Hoang, VP of Engineering, says, “it’s about getting close to fulfilling something wonderful for society that I think attracts a lot of people.”
How does Yahoo! instill its corporate culture in new hires? Q. Lloyd Braun says that on his first day he was taken under the wing of human resources, meeting with various people who taught him the business. “The order of the presentation was so smart … they were laying building blocks … both in terms of people to meet and what they did, and then in terms of what the company did.” By making a concerted effort to have a formal orientation for new hires, Yahoo! aides their ability to become productive employees quickly. A.
According to Phu Hoang, VP of Engineering, how is managing “brilliant people” different from managing others? Q. Yahoo!’s business model requires constant innovation. The people that Yahoo! hires have “immense talent to come up with that innovation; things that you can’t think of, that’s why you want them in here.” Phu explains that the types of people that drive Yahoo! would not perform well if the company did not give them enough freedom. At Yahoo!, “brilliant” employees are guided toward the corporate vision, then given free reign to find the best path to that goal. A.
How has the scope of the jobs of Yahoo!’s employees changed as the company has grown? Q. Early in an entrepreneurial situation there are few employees who must perform many varied job functions. As Yahoo! grew, jobs became more specialized and the company transitioned to employees with more vertical expertise. Today Yahoo! employs many very specialized and highly regarded people. Sue Decker says, “people are getting to work with stars in their areas … we have some of the nation’s leaders in all [functional] areas.” A.
Aside from a healthy corporate culture, how does Yahoo! reward its employees? Q. A. Yahoo has developed a benefits package that includes equity ownership of the company. Employees are given stock options, and, in addition, they can participate in an employee stock-purchase plan. This allows employees to share in the success of the company, and it provides a real sense of ownership.
How does the Yahoo! “Superstar” program reward employees and show that they are valued? Q. A. Loree Farrar, VP of Global Rewards, says that the Yahoo! “Superstar” program allows employees to nominate each other for an award when they do something exceptional. “A small number of employees win every year, and they’re all flown to the United States to have dinner with the executives.” Each of the winners is also given a significant cash prize.
What does Yahoo! do to address the future talent needs of the company? Q. A. Studies have shown that it is not enough for a company to simply find the right talent. Even after being hired, talent management is still necessary. At Yahoo!, post-hiring talent management takes the form of a performance management system that gives each employee a career-development plan that tells them what they specifically need to work on.
How does Libby Sartain, Chief People Officer, view turnover? Q. Every company has turnover, but not all companies effectively analyze and manage their turnover. Libby Sartain segments the turnover at Yahoo! into voluntary, regrettable turnover, and involuntary or unregrettable turnover. By having a regrettable-turnover goal of less than 5% annually, Yahoo has created a program that anticipates, manages and reduces the loss of essential talent. A.
How does Yahoo!’s corporate culture reduce turnover? Q. By giving employees freedom in their work activities, Yahoo! has created a situation where employees are able continuously to create new challenges for themselves. This reduces repetitiveness and increases job satisfaction. Lloyd Braun says, “they don’t have to leave in order to get challenges and opportunities.” Yahoo!’s managers excite employees with the corporate vision, but individual employees are able to redirect their own energies and to work on new challenges in reaching that vision. A.
With the increasing competitiveness in business today, what are the implications for talent management in the near future? Q. A. Wayne Cascio explains that “in today’s global, fast-moving business environment, the only way to outrun the competition is through innovation, and that means having people who make things happen.” What this implies is that the wise management of talent is no longer just a competitive advantage, it’s a competitive necessity.
Lesson 1 Make talent management a top priority in your organization. Recognize that you can have a brilliant strategy, but without the talent to execute it, it will never materialize.
Lesson 2 Develop a comprehensive approach, as well as a commitment to track, develop, reward, and keep top talent.
Lesson 3 Ensure that HR plays a strategic role. HR should be anticipating trends in the outside environment that affect the management of talent in your company, such as demographic, labor market, or social trends, and it should be identifying their implications with respect to the ability of your company to execute its strategy.
Lesson 4 Develop a well-crafted story that describes your company’s mission and values. Your employees must have a clear idea of what your company stands for. You must live those values every day, and make sure that everyone from the mail-room to the board-room does too. Does your story get people excited to come to work each day?
Lesson 5 Understand why people join your company, why they stay, and why some of them leave. Develop an action plan to accentuate the positives and minimize the negatives.
SNAPSHOT PROFILES OF PARTICIPANTS IN“FUELING THE TALENT ENGINE: FINDING AND KEEPING HIGH PERFORMERS”
