See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/329642507

The Impact of Talent Management on Employee Engagement, Retention and

Value Addition in achieving Organizational Performance

Article · March 2015

CITATIONS READS

24 7,971

1 author:

Abdulquddus Mohammed
Higher Colleges of Technology
30 PUBLICATIONS   62 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Innovation Barriers and Enablers in UAE View project

2017 ACBSP Region 8 Marrakech, Morocco, November 1-4, Transforming Student Success through Recruitment, Retention, and Reentry View project

All content following this page was uploaded by Abdulquddus Mohammed on 24 May 2019.

The user has requested enhancement of the downloaded file.

 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015

The Impact of Talent Management on Employee

Engagement, Retention and Value Addition in achieving
Organizational Performance
AbdulQuddus Mohammed
Research Scholar, INEPAN, Warsaw, Poland
[email protected]

ABSTRACT
Talent management deal with the attracting, developing and retaining the key organizational
talent, this paper tries to present the association between talent management and employee
engagement, retention, value addition and improved organizational performance. It’s based
on available empirical evidence. The literature review is organized by reviewing the research
papers that are published in popular research journals. The impact of talent management on
employee engagement, retention, value addition and improved organizational performance
has been thoroughly studied. The study reveals that there is positive association between these
variables. This paper also substantiates the previous researchers in understanding the positive
impacts of talent management. These findings are valuable to researchers, HR professionals
and academicians.
Key Words- Talent, Talent Management, Employee Engagement, Employee Retention,
Employee Value addition and Organizational Performance.

I. INTRODUCTION
Organizations are made-up of people; these people can make or mar an organization. Every
organization is striving to find an answer to how to persuade people to make the organization,
not to mar it. It‟s important to not only finding the people who can contribute to make an
organization, but also making them acquire the required competencies and motivating them to
add value continuously for the success of the organization. The function in the organization that
takes care of managing people is called Human Resources Management. It basically deals with
employing the right people, developing their competencies as per the demands of the
organization, compensating, utilizing, maintaining them to meet the organizational goals.People
with diverse competencies and backgrounds need to be managed effectively by the organization.
To enable this modern organizations are required to implant integrated talent management
system.

142
 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015

Talent is an instinctive quality possessed by few people, who have the capability to make a
significant difference to current and future company performance, which is equal to
competencies of a person that needs to be explored for the competitive advantage of the
organization. The modern organizations realized that their success is dependent on how they are
able to attract, develop and retain the right talent for the organization that enable them to be
successful in the competitive business environment. It‟s very much required to proactively
anticipate and meet the demands of talent to meet the goals of the organization.

The strategic importance of talent was appreciated after the study of McKinsey & Co found that
the most important corporate resource over the next 20 years will be talent: smart, sophisticated
businesspeople who are technologically literate, globally astute, and operationally agile. And
even as the demand for talent goes up, the supply of it will be going down. The war for the
shortage of talent between companies is the biggest human resources concern (Makela et al.,
2010). The organizations that are interested in achieving its strategic goals must adopt unique
approaches for attracting, developing and retention of talented employees (Huselid et al., 2005).
Thus, talent is the core competency of the organization and its management will definitely enable
organizations to be competitive.

Talent Management is a set of strategies and systems to increase productivity by developing

improved processes for attracting, developing, retaining and utilizing people with the required
skills and aptitude to meet current and future business needs. Talent management ensures
organizations that right people with fit skills located at right place to access business strategy. In
fact, talent management include complete set of process for recognize, managing people for
successful of business strategy that organization used it. (Ballesteros, 2010)

Stockley (2007) states that the talent management is a very conscious, deliberate approach
adopted by the organization to attract develop and retain people who possess right competencies,
attitude and aptitudes to meet the strategic objectives of the organization. It focuses on people
who got the right potential for achieving high performance levels.

This paper attempts to explain the relationship between employee engagement, employee
retention, value addition and the success of the organization.. When organizations able to attract,
develop and retain talented employees then organization will be able to achieve employee
engagement, retention and value addition for the success of the organization.

143
 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015

II. LITRATURE REVIEW ON THE ASSOCIATION BETWEEN TALENT

MANAGEMENT, EMPLOYEE ENGAGEMENT, RETENTION, VALUE
ADDITION AND ORGANIZATIONAL PERFORMANCE

Employee
Engagement

Talent Organizational
Management Employee Performance
Retention
(Profit, Growth)

Value Addition

Association between Talent Management and Employee Engagement:

Employee engagement is all about how an employee is emotionally and intellectually

committed to an organizational group. An engaged employee is always fully participative and
enthusiastic about the assigned job responsibilities (Falcone, 2006). When talented people feel
important then their contributions will make difference to organizational goals and objectives. It
enable them feel recognized, appreciated and valued, motivated and aligned to the organization‟s
goals and objectives (Davies & Davies, 2010).

Society of Human Resources Management (2012) survey reveals that talent management enables
all the levels of employees focused on driving revenue that will result in employee engagement,
performance improvement, customer satisfaction and reduced turnover and absenteeism- all of
these will have impact on the bottom-line of the organization.

Corporate Leadership Council study (2011) found that the companies using talent management
strategies help in driving employee engagement, which resulted in 23% of increased performance

144
 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015
against revenue expectations. Engaged employees within an organization provide a competitive
advantage to organizations, as explained by the resource-based view (RBV) of the firm (Joo and
Mclean, 2006).

It‟s commonly understood that engaged employees are motivated to contribute for the success of
the organization, literature also reveals that work engagement which came from job satisfaction is
derived from effective talent management practices, which results in lower employee turnover
and productivity of the organization. CIPD (2008) report reveals that now organizations are
placing more importance in talent management which results in more job satisfaction and
engagement. Hewitt survey revealed that almost half of the companies studied planned to increase
or sustain employee learning, engagement and development budgets through management of its
talent during the economic slowdown (Beechler and Woodward, 2009).

Important element of talent management is total reward management which enables employees to
be contented and satisfied at workplace four times leading to employee engagement and
organizational success, furthermore 82% claims that employee recognition enhanced their job
performance. According to the Corporate Leadership Council (2004), “when done well, practices
that support talent management also support employee engagement”.

Association between Talent Management and Employee Retention:

Retaining talented employees is the priority of many organizations and it is the key differentiator
of human capital management .Major companies today are facing the challenge of retaining their
talent competes in the global markets (Schuler et al., 2011; Scullion et al., 2010; Tarique
&Schuler, 2010).75% of Chief Executive Officers agree that managing the organizational talent is
their key priority (CIPD, 2010). People, intellectual capital and talent are ever more critical to
organizational strategic success (Frank & Taylor, 2002). Talent management is a tool to
strengthen organizational capability through performance management, talent development and
succession planning and career planning which eventually lead to organizational success (Iles,
2007).

Talented employees leave the organization if they are not satisfied with the total rewards,
leadership and organizational policies etc., These problems occur when proper talent management
practices are not in place (Griffeth and Hom, 2001).

In the current competitive business environment, retention of highly talented employees is very
important (Smith, 2009) as they contribute positively in improving the organizational
productivity. Turnover reduction of these positions is important for organizational success, there
is also view that improving employee turnover reduction beyond certain point will lead to

145
 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015
diminishing marginal returns (Boudreau & Ramstad, 2007) Dissatisfaction with the job is the
main reason for the individuals turnover decision.

In spite of many endeavors by the organization to retain its talent, many employees leave their
jobs. Some turnovers are unavoidable. Organizations always try to manage low job satisfaction,
poor supervision or pay issues to make sure there are no avoidable turnovers. Research also
revealed that decline in employee turnover rates are related to sales growth and improved
employee morale. High standard HR practices contribute to company‟s profitability and market
value and decreasing employee turnover rates (Batt, 2002). Organizational performance has
negative impact on employee turnover (Shaw et al., 2005). Pay levels and employee satisfaction
are important predictors of individual turnovers (Griffeth et al., 2000).

Association between Talent Management and Employee Value Addition:

Employee skills and capabilities that adds varying degrees of value to the organization, hence the
“everybody counts mantra” is an overly simplified view of organizational talent. Ultimately, this
is where talent management differs from other human resource approaches. Talent management is
concerned with identifying the core designation arrangements which have the prospective to
differentially effects on the organizational competitive advantage and consecutively, fill these
with “A performers” (Huselid et al. 2005).

Talent management deals with identifying the right people for the organizational vacancy
positions which are prospective towards providing competitive advantage and fill with the people
who deliver results (Huselid et al. 2005). Employee skills and competencies add different value to
organization, hense every employee counts (Lepak and Snell, 2002) in contribution of
organizational results.

Project Management Institute Report (2013) reveals that organizational strategy aligned talent
management system have 72 percent success rate. Moreover, effective talent management makes
the company more competitive in the market and increases the efficiency and effectiveness of the
organization. For example, Apple, Google would not have been successful without the efforts of
its talented software engineers. Talent management process retains its most valuable employees
through good total rewards practices which makes them feel recognized and eventually willing to
make positive contribution and long-term commitment to organization. And talent management
increases the revenue of the organization by helping the organization in achieving better results
than its competitors in tern gaining higher market share which means increase in the revenue of
the organization.

146
 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015
Talent management practice involves identifying right people who can help the organization in
achieving its strategic goals and highlighting what competencies are required for the success of
organization. Some researchers (Collings and Mellahi, 2009) found that focus on specific
talented employees will give an organization the required competitive advantage. This is similar
to the Exclusive Positions perspective of talent management which seeks to fill “A positions”
with “A players”, fill support positions with “B players”, and outsource “C players” (Iles et al,
2010).

Talent management adds value to the organization by filling the vacancy positions with suitable
talented employee, which provide above average effect on organizational performance Boudreau
and Ramstad, 2007). It also claimed that knowledge management in combination with the talent
management will add competitive edge and positive implications for modern organizations in
terms of revenue increase (Vance and Vaiman, 2008). There is evidence available that the
knowledge workers solve complex problems of the organization and makes strategic decisions
(Cross and Prusak, 2002).

Association between Talent Management and Organizational Performance:

Companies recognized that strategically aligned talent management practices will help the
organization in achieving its goals. This is the reason 73% of the executives in United States of
America agree on the positive relationship between talent management process and business
strategy to obtain the success of the organizations. (Boudreau & Ramstad, 2007)

Talent management can provide competitive advantage to organizations, organization‟s talent

injects capabilities that are very difficult for competitorsto benchmark and replicate. More than
any other asset, talent provides the potential for long-term competitiveadvantage (Lawler, 2008).
73% 0f Executives in USA agrees on the positive relationship between talent management and
business strategy to obtain the success of the organizations (Ballesteros et al, 2010).It means that
companies recognize the importance of talent management integration with business strategy to
get organization excellence.

Talent management is important when the firms would like to build winning teams which will be
formed by talented people (Davis et al,2007).They can use this teams to solve problems or
weaknesses in their organization because they have competent and experienced people in this
fields. If a firm wants to be successful, it must invest in talent management of their workers to
obtain some conditions in the company like good business environment (Snell,2005)

147
 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015
III. DISCUSSION AND CONCLUSION

Above literature review provide the required empirical evidence that talent management helps the
organization in achieving employee engagement, retention, value addition and organizational
performance. Consequently, every organization must adopt talent management strategy of
optimizing talent attraction, retention, and development. Other than recruiting talents that fit the
required skills, it is of high importance to build goals that are based on strategy, conduct
performance against these goals, and provide feedback to the performer to give a sense of
common direction (Lawler, 2008). Talent management initiatives will make employees more
committed and engaged with their job to produce maximum returns. All the levels of management
must be involved in the management of talent which will motivate employees and encourage them
further if the total rewards are attractive and social recognitions and self-development
opportunities. Thus, talent management enables employees to be motivated consistently and keep
their morale upbeat.

Employee turnover is very dangerous for the organizations as there won‟t be consistency in the
people contribution to organization if they leave the organization frequently. In refraining
turnovers organizations need to understand different types, the nature of employee turnover, costs
and its effects on the organization. Sometimes turnover is beneficial to organization by
eliminating wrong employees and reducing the cost of the organization. It‟s important for the HR
managers to implement proper systems in managing employee turnover and retaining its best
talent (Ringo et al., 2010).

Employees are excellent source of value addition to organization by means of providing

competitive advantage in today‟s knowledge based economy (Barlett and Goshal, 2002), most
researchers agree that the knowledge workers are skilled and able to adapt to the changes in the
business environment to solve day to day problems. Thus, adding value to the organizational
productivity and performance (Davenport et al., 2002). It‟s important to provide talent
development opportunities based on the competency and business requirements. High quality
talent management enables the employees to develop their competencies, attitudes and improve
organizational performance (Abel, 2008).

In conclusion, all modern organizations have realized the importance of attracting, developing and
retaining their talent to survive in the competitive market. Companies have talent war to grab the
attention of talented workforce. It is talent management that enables the organization in improving
employee engagement, commitment, retention, value addition that is leading to improved
organizational performance.Talent Management is the rare capacity of organization to
continuously generate and optimize talent resources needed to for the successful achievement of
strategic goals and performance.The main focus of modern organizations is talent management

148
 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015
and talent development in the area of technical and managerial abilities can make difference to
organizations in gaining competitive advantage. HR departments first must focus on assessing the
skills the organization requires to implement the recruitment and training strategies. Secondly
talent management strategy must be aligned with the organizational strategic choice. It is the big
challenge of talent management is not to give importance to talent, but it is to link talent
management practices with the business strategy.

REFERENCES
 Abel, M.H. (2008). Competencies management and learning organizational
memory.Journal of Knowledge Management. 12, (6), 12-30.

 Ballesteros Rodriguez S. 2010. Talents: the Key for Successful Organizations

 Bartlett, A.C., and S. Ghoshal. 2002. Building competitive advantage through people.
MIT Sloan Management Review 43, no. 2: 34–41.

 Batt, R. (2002). Managing customer services: Human resource practices, quit rates, and
sales growth. Academy of Management Journal, 45, 587–597.

 Beechler, S. and Woodward, I.C. (2009).The global “war for talent”.Journal of

International Management. 15, 273-285.

 Boudreau, J. W., & Ramstad, P. (2007). Beyond HUMAN RESOURCE: The new
science of human capital. Boston: Harvard Business School Press.
.

 Cappelli, P. (2008) Talent management for the twenty-first century. Harvard Business
Review, March, 74-81.CIPD (2010).The war on talent?Talent management under
thumanresourceeat in uncertain times.Available from Internet http://www.cipd.co.uk/.

 Charles Fishman, "The War for Talent," Fast Company (August, 1998); Elizabeth G.
Chambers, Mark Foulon, Helen Hanfield¯Jones, Steven M. Hankin and Edward G.
Michaels III, "The War for Talent," McKinsey Quarterly (1998);

149
 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015
 CIPD (2010). Annual survey report: learning and talent development. Retrieved 25th
May 2013Fromhttp://www.cipd.co.uk/NR/rdonlyres/BC060DD1-EEA7-4929-
91421AD733F95E7/5215Learningtalentdevelopmentsurveyreport.pdf-annual

 Collings, D. and Mellahi, K. (2009). Strategic talent management: a review and research
agenda. Human Resource Management Review. 19, 304-313.

 Corporate Leadership Council. (2004). Driving performance and retention human

resource through employee engagement. Retrieved January 27, 2006, from
www.executiveboard.com.

 Cross, R. &Prusak, L. (2002) The people that make organizations stop or go. Harvard
Business Review, 80, 104-112.

 Davenport, T.H., R.J. Thomas, and S. Cantrell. 2002. The mysterious art and science of
knowledge-worker performance. MIT Sloan Management Review 44, no. 1: 23–30.

 Davis et al. 2007. Talent assessment: a new strategy for talent management, Gower,
United States of America

 Falcone, P. (2006), “Preserving restless top performers: keep your top performers
engaged so theydon‟t jump ship once job opportunities arise”, HR Magazine, March.

 Fegley, S. (2006).2006 talent management survey report. Alexandria, VA: Society for
Human Resource Management.

 Frank, F.D. and Taylor, C.R. (2004). Talent Management: Trends that will shape the
future. Human Resource Planning. 27, (1), 33-41.

 Griffeth, R. W., &Hom, P. W. (2001). Retaining valued employees. Thousand Oaks, CA:
Sage.

 Griffeth, R. W., Hom, P. W., &Gaertner, S. (2000). A meta-analysis of antecedents and

correlates of employee turnover: Update, moderator tests, and research implications for
the next millennium. Journal of Management, 26, 463–488.

150
 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015

 Huselid, M. A., Beatty, R. W. & Becker, B. E. (2005) 'A Player' or 'A Positions'?The
strategic logic of workforce management. Harvard Business Review, December, 110 117.

 Iles, P., Chuai, X. and Preece, D. (2010) Talent Management and HUMAN
RESOURCEM in Multinational companies in Beijing: Definitions, Differences and
Drivers.Journal of World Business. 45, (2), 179-189.

 Joo, B.-K. (Brian) and Mclean, G.N. (2006), “Best employer studies: a conceptual model
from a literature review and a case study”, Human Resource Development Review, Vol.
5 No. 2,pp. 228-57.

 Lawler, E.E. 2008. Talent.Making people your competitive advantage. San Francisco:
Jossey-Bass.

 Lepak, D.P. and Snell, S.A. (2002).Examining the human resource architecture: the
relationship among human capital, employment and human resource
configurations.Journal of Management. 28, (4), 517-543.

 Makela, K., Bjorkman, I. &Ehumanresourcenrooth, M. (2010) How do MNCs establish

their talent pools? Infuences on individuals' likeihood of being labeled as talent. Journal
of World Business, 45, 134-142.

 Project Management Institute Report (2013), Competitive Advantage of Effective Talent

Management, retrieved on 2nd March 2015 from
http://www.pmi.org/~/media/PDF/Business-
Solutions/PMExecutiveSummaryTalentMgmt.ashx

 Ringo, T., Schweyer, A., DeMarco, M., Jones, R. and Lesser, E. (2010).Integrated talent
management – Turning talent management into a competitive advantage – an industry
view.IBM Global Business Services.

 Scullion, H. & Collings, D. G. (2010) Global talent management. Journal of World

Business, 45, 105-108.

151
 ISSN: 2348 9510
International Journal Of Core Engineering & Management (IJCEM)
Volume 1, Issue 12, March 2015
 Shaw, J. D., Gupta, N., &Delery, J. E. (2005).Alternative conceptualizations of the
relationship between voluntary turnover and organizational performance. Academy of
Management Journal, 48, 50–68.

 Smith, R. C. (2009). Greed is good. Wall Street Journal, p. W1.

 Snell A. (2007). „Strategic talent management, Human Resource Management: The

relationship of mentoring and network resources with career success in the Chinese
organizational environment‟, Int. J. of Human Resource Management 17:9 September
1531–1546

 Stockley D. 2007.Talent management concept - definition and explanation

[Online].Available from http://derekstockley.com.au/newsletters-05/020-
talentmanagement. Html

 Society for Human Resource Management (SHRM), 2012 Employee Job Satisfaction and
Engagement: How Employees are Dealing with Uncertainty, October 2012, 41.

 Tarique, I. & Schuler, R. (2010) Global talent management: Literature review, integrative
framework, and suggestions for further research. Journal of World Business, 45, 122-133.

152

View publication stats