In traditional organisations back from the 1950s, talent was developed from within an organisation, as senior employees were availed the opportunity to apply for highly ranked positions. Only those individuals who could not advance to the higher hierarchies of an organisation because of a glass ceiling could be interested leaving and joining other organisations. Further in the 1990s, organisations realised that, for then to remain competitive within the labour market, more talented employees were to be sought from outside the organisation, until recently, because of the retention problem, organisations seek to develop talent from within the organisation (Cappelli, 2008). What is different from the 1950s and organisations today, is the business environment , where the environment of the 1950s was more predictable, and today’s environment is unpredictable.
The old traditional organisation, where seniority and organisational commitment and loyalty brought benefits to the employees, has been entirely transformed in to one where demographically, employees have diverse and advanced skills, consequently changing the bargaining power and psychological contract in the employment relationship. Employees are on move from organisation to organisation, in the quest for enhancing their skills and knowledge.
Therefore organisations have resorted to efforts that aim to understand and manage the emerging psychological contract (Blass and April, 2008). In addition Finegold, Benson, & Mohrman (2002), term the emerging form of psychological contract as a “learning contract”.
According to Finegold, Benson, & Mohrman (2002), a learning contract refers to reciprocal efforts by both the organisation and the employee, where an organisation would continuously develop employees in keeping them marketable in the changing labour market, and on the other hand an employee would concentrate on ensuring a continuous upgrade in his or her skills, while transferring his experiences to other employees and thereby contributing to a learning organisation. The willingness of an employee to transfer his skills will depend on psychological aspects such as job satisfaction, work climate satisfaction and organisational commitment, which will be displayed in an employee’s organisational citizenship behaviour accordingly.
In addition Hitrop (1995) points out the new psychological contract meant that the employee was to be dedicated to his or her own career development rather than the organisation. This points out to the generation Y, who want flexibility in their work and do not see the point of working for long hours like their parents (who were loyal and committed to their organisations). As a result of the new psychological contract which requires flexibility and dedication to career, organisations are moving towards retaining strategies that are in line with developing career paths, providing training and development opportunities for employees, and an over all attention on the skill needs of the employees (Hiltrop, 1995).
Talent helps in driving the strategy of an organisation. Because organisations state their strategies differently given their mission or purpose, in that way, they seek to attract skills and competencies that will drive the strategy. ” Gratton and Ulrich (2009) adds that talent management “recognises that what happens inside to employees affects customers and investors outside the organisation” In addition, Gratton and Ulrich(2009) asserts that talent management is a continuous process of measuring employees competencies, their behaviours and their outcomes. In this way this ensures an accountable staff in making the strategy happen. Measurement instruments that may be used in assessing employees are; psychometric tests, interviews 360 performance assessments and through stay interviews.
Wakefield (2006 in Van Dijk, 2008: 391) outlines eight HR best practices, which could bear the fruits of talent management, as bulleted below;
• defining talent management broadly;
• integrating the various elements of talent management into a comprehensive system;
• focusing talent management on their most highly-valued talent;
• getting senior management committed to talent management work;
•building competency models to create a shared understanding of the skills and behaviours needed and valued by the organisation;
• Monitoring talent system-wide to identify potential talent gaps;
•excelling at recruiting identifying and developing talent as well as performance management and retention; and
• evaluating the results of their talent management system