The York University Magazine

YorkU Fall 2012

The alumni magazine of York University

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YorkU_October 2012 FINAL_YorkU_Oct10_FINAL 12-10-30 3:14 PM Page 8 Talent Search How do organizations choose successful leaders? Not very successfully… C ompanies spend a lot of money and time to find and cultivate the next generation of "rising stars". But, according to a recent York study, there's little evidence the process really works. If you've been in the workforce for a few years, you've likely encountered the employee who's designated a "rising star" – a person deemed to have the most potential for leading the company successfully. Call her "Employee X". Companies usually spend a lot of money grooming and promoting people like X in order to broaden their experience as potential leaders. But often that promise never materializes as hoped, according to research by Professor Len Karakowsky, School of Human Resource Management in the Faculty of Liberal Arts & Professional Studies. The question is why? "The popularity of high-potential – aka HIPO – employee programs has grown over the last 15 years," says Karakowsky, who, along with colleague Igor Kotlyar, faculty member at the University of Ontario Institute of Technology, has been studying the process of how companies try to identify emerging talent. Usually the process involves giving rising stars enriched and accelerated development opportunities, but there is scant evidence such HR programs accurately identify next-generation leaders, he says. Karakowsky and Kotlyar recently conducted an online survey of HR professionals to see how Canadian companies were doing Label at your Peril Why a "brilliant" work reputation could backfire with Kotlyar, have conducted other studies related to the "rising star" phenomenon. In one, they looked at the impact of labelling individuals in terms of 8 YorkU Fall 2012 potential performance capabilities. "We know that the practice of labelling employees as "high potentials" can create differentiated expectations of capability and future performance," says Karakowsky. "It's likely to impact people's attitudes and behaviours, but the research has largely ignored the consequences of identifying people with this label." Karakowsky recruited 477 undergraduate business students in order to assess the impact of being labelled a high potential on subsequent task commitment and performance satisfaction following both positive and negative feedback. He and Kotlyar found status labels can prime individuals to react more aversely to negative feedback and so have unintentional negative effects on commitment and satisfaction levels. "It's the double-edged sword of being labelled a star." Y illustration by katy ha K arakowsky, along in identifying talent. The results were not encouraging. Twothirds of the 220 respondents said senior managers are only "somewhat effective" at identifying HIPO employees, and an additional 22 per cent feel senior managers are either "not very effective" or "very ineffective" in doing so. Only 10 per cent believed senior managers are "highly effective" at spotting talent. While 85 per cent of respondents said their organizations did have some form of HIPO program in place, only a handful (seven per cent) identified future leaders in a systematic manner. Nearly half of the respondents rated their organizations as either "highly ineffective" or "somewhat ineffective" at accurately identifying HIPO employees. Only 17 per cent said they were satisfied with their company's practices. Karakowsky says the process of identifying future leaders is a formidable task, whether in the corporate context, political sphere or elsewhere. He says our choices can be influenced by a range of relevant – as well as equally irrelevant – criteria. "Much research has revealed that we often harbour completely distorted notions about the characteristics of effective leaders. It seems like everything from charisma to gender can seep into judgment about 'who makes a good leader'. This raises the question – how often are hidden gems (i.e. truly talented employees) never uncovered in many organizations due to the limitations of high potential programs?" The value of his research? "The current system of scouting corporate talent needs a major overhaul," says Karakowsky. He stresses the need for organizations to move beyond a reliance on performance appraisals as a proxy for leadership potential. Instead, Karakowsky urges organizations to get creative in seeking out additional measures of leadership potential. Y

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