Scenario
You are the HR Manager of a large bank. You have some concerns that you are not prepared for a large number of people that are between the ages of 55 and 65 and will be retiring in the next decade. Your CEO says that you need to get ahead of this problem and asks you to prepare a policy document that outlines three possible approaches to resolving this problem. PART A – POLICY OPTIONS Policy Option 1 – Identify high performing older employees to retain or “role change” to prevent knowledge loss and use external recruitment to replace business critical roles.
Advantages:
• There are a number of older employees who do not want to retire at 65 (Stone et al 2021).
• Allows for older employees in job sharing roles, part-time roles, or other flexible working arrangements to retain knowledge.
• Use older experienced employees to take on mentoring, coaching, and training roles to build knowledge with less experienced employees (Seymour 2008)
• Recruitment can be used to bring in specialised skills and new ideas (Hills 2009)
Disadvantages:
• Younger employees may see little room for promotion, lose patience and leave.
• There is a risk that employees will be trained and mentored in a way that does not align with the bank’s strategic direction
• Knowledge may not be completely shared to protect the individual’s position in the bank.
• External recruitment can be expensive and sends a negative message to employees that the bank is not committed to training and career development (Farndale and Nikandrou and Panayotopoulou 2018). Policy Option 2 – Identify younger potential top performers and build specific learning and development, performance management programs, so they can take roles as they become available.
Advantages:
• Employees already have some of the requisite knowledge, skills, abilities, and other characteristics (KSAOs) to perform the roles.
• Can assess gaps in knowledge and tailor specific training and development and embed this in their performance management plan.
• Use job rotation throughout various departments to improve knowledge and working relationships with senior management.
• Can be used to address diversity issues at management level (Greer and Virick 2008).
Disadvantages:
• Managers may be reluctant to nominate top performers for fear of disruption to their department.
• Candidates are nominated because of personal relationships rather than competency (Huang 2001).
• Nominating an unsuitable candidate may set that employee up to fail and adversely affect their employment.
• Requires high commitment from all levels of staff to ensure that the training and development plans fit and work with the performance management plans.
Policy Option 3 – Identify future service needs, key positions and competencies at risk, develop learning and development programs to fill gaps and develop existing performance management plans into talent development plans.
Advantages:
• Learning and development is open to all employees, and previous hidden talent can be discovered and developed to fill departing roles.
• Experienced employees can provide some training and coaching to ensure operational knowledge is not lost.
• Learning and development can keep employees engaged in their career and improve performance (Gruman and Saks 2011).
A performance management plan that focuses on how to develop talent and focuses less on assessing talent can bring positive benefits to employees and the Bank (Stone and Cox and Gavin 2021).
Disadvantages:
• Managers may lack the skills and training to implement the policies (Townsend and Wilkinson and Bamber and Allan 2012).
• Employees may not want to participate in training outside of their current role without financial reward.
• The time and money spent upskilling staff does not guarantee that high performing staff will not take external opportunities.
• Requires a cultural shift (with potential resistance) in the organisation and commitment from CEO down to entry level employees of participating in a new style of performance management.
