Designing a transparent and fair promotion process

Diploma

Introduction

Tempo-Team, the second largest temporary work agency in the Netherlands currently (2008) experiences problems with attracting new employees and maintaining present staff. Moreover the organization struggles with a high rate of employee turnover, which is expensive. To overcome these problems the management whishes to introduce a ‘talent management strategy’. Tempo-Team’s human resource development (HRD) department is concerned with developing this strategy, which they call the talent development program (TDP). One of the objectives of the TDP is to improve the self motivation of (new) consultants to develop themselves within Tempo-Team. But in order to achieve this objective some problems have to be solved. By means of exit interview it was found out that the primary reason for employees to leave the company is the lack of clear career perspectives, which is mainly caused by the absenteeism of a clear promotion process for consultant to senior consultant. The function as staffing consultant can be considered as ‘the port of entry’ of Tempo-Team and the transfer to senior consultant must be made in order to become a manager. So to overcome the problems, a new promotion process for consultants must be introduced, as part of the TDP program. The objective of this research is focused on designing this new promotion process. The process must be transparent, fair and fit within the organization. Therefore the following central question is formulated and answered during the research:  

 

‘How can the promotion process from consultant to senior consultant at Tempo-Team become more transparent and fair?’  

 

In order to answer the central question, four manageable sub-questions are formulated and a designstrategy is applied. With use of this strategy, practical elements and decisions made by Tempo-Team and theoretical insights are integrated into a new promotion process, which is tested by means of a onegroup pretest-posttest. This resulted in a new promotion process. 

 

The new promotion process

The new promotion process includes three phases in which a consultant is selected, monitored and appraised. The indicative timeline of this procedure is 6 months. There are three criteria for becoming a senior consultant, which end-users perceived as more clear. The capabilities and performance of a consultant are monitored and appraised by means of a type of 360° feedback tool. The process is associated with a process manual which instructs managers and consultants how to use the process and helps to prevent fairness and fairness threats, which can occur at a local office. Furthermore a decision matrix is designed which instructs managers how to use the 360° feedback tool and prevents problems with monitoring the behavior of a consultant.

Introduction

Attracting new employees and maintaining a stable workforce is, according to a survey by the Boston Consulting Group among 1,355 HR executives from 27 countries, the main challenge for European companies in the next 15 years (appendix 1). In order to maintain a stable workforce and attract new employees, organizations must have a clear strategy. Talent management is the most recent strategy, which organizations adopt in order to reach this objective. Talent management gained popularity in the late 1990s after publication of a rapport by McKinsey & Company and it refers to the process of developing and fostering new workers through onboarding, developing and keeping current workers and attracting highly skilled workers to work for your company. Talent management’s focus on developing and fostering is not randomly chosen. In a survey by the Intelligence Group among 662 employees, 32% of the respondents indicated that adequate information about career development perspectives is the most important factor for switching-over (press release Intelligence Group, 7 February 2008). This survey shows how job seekers value career development perspectives, next to wages and other incentives.

 

Tempo-Team, the second largest temporary work agency in the Netherlands, is an organization, which decided in June 2007 to adopt a talent management strategy (this choice was not made as a fashion statement, but as a necessity). Tempo-Team, a HR-specialist in helping other companies with their staffing problems (appendix.2), experiences problems to attract new employees and maintain current staff for their internal organization. Tempo-Team struggles with a high rate of employee turnover among its permanent staff. This high turnover is caused by a high introduction employee turnover (49%). In case of Tempo-Team this concerns the function of staffing consultant, which can be considered as the “port of entry” (Doeringer & Piore, 1971) of the company. The high rate of employee turnover at consultant level has not only as consequence that the so-called “ports of entry” jobs remain vacant, but also the remainder of jobs within the internal labor market (Doeringer & Piore, 1971), cannot be filled-in by promotion. For Tempo-Team this high turnover rate among consultants is expensive, because a consultant who leaves the company after nine months is still in the learning phase and enrolled in an in-house training program, but is at this stage not yet fully profitable for the organization. Moreover this high turnover leads to a disruption of the supply of well-trained, ambitious candidates who can grow to managerial functions. As a consequence Tempo-Team has to deal with a lot of vacancies throughout the organization and must therefore try to attract managers from the external labor market. This is not in line with Tempo-Team’s internal policy, which states that 80 % of its managers should be recruited inside the company. Insiders tend to be less expensive, better skilled and experienced specifically to the company. 

Although the problem with the high employee turnover occurred during times of a tight labor market, the unusual high rate of employee turnover and especially the associated high costs made TempoTeam’s management realize that something had to be changed. To find out what caused the high turnover, exit-interviews were examined. This resulted in a top-ten list of departing reasons (appendix 3). The three main departing reasons are: lack of career development perspectives, the scarcity of education and training opportunities and absenteeism of support from the management. This research focuses on the primary departing reason: the problem with the lack of clear career development perspectives. 



[1] The function of staffing consultant will in this paper be referred to as consultant.

[2] “Rules and procedures characterize work practices that secure job rights, restrict hiring to particular jobs, classify job ladders and promotion paths, and affect wage structure” (Doeringer and Piore, 1971 pp1-2).

[3] The Dutch labor market counted 236.000 vacancies (CBS press report 12 February 2008) and an unemployment rate of 4% (336.000 unemployed, CBS press report 17 April 2008).