October '21
Talent Management and Its Impact on Organizational Commitment and Turnover Intention: A Literature Review
Suman Dahiya
Associate Professor, Panipat Institute of Engineering and Technology, Haryana, India.
E-mail: suman1984dahiya@gmail.com
Rupa Rath
Research Scholar, GD Goenka University, Gurugram, India; and is the corresponding author.
E-mail: r.ruparath@rediffmail.com
To attain competitive advantage and achieve business growth, organizations have realized that a highly engaged, and motivated workforce is the key. Retention of talent is an important agenda of every organization in the competitive world of business. Organizations are required therefore to be more innovative and dynamic in their Talent Management (TM) approach. However, academic research in the field of TM does not provide any specific conclusions for a right TM explanation. In fact, research on TM has been assumed to be not offering right talent management solutions to organizations to accomplish its effective talent management practices. This review of literature includes a detailed study of different interpretations of talent management as a concept, it also studies different factors of talent management. The study defines different components of commitment and the concept of turnover intention of employees in organizations. A theoretical framework is proposed to study the causal relationship between different factors of talent management and organizational commitment and also the causal relationship between organizational commitment and turnover intention of employees in organizations. Further research in establishing and analyzing the relationships will support effective implementation of different talent management policies, practices and their influence in addressing retention challenges in organizations.
Talent Management (TM) is an important and critical aspect for senior managers (Skuza
et al., 2013). Organizations have realized that a highly engaged and motivated workforce
is the key to achieving business growth and attaining competitive advantage.
Organizations are required therefore to be more pioneering and active in their TM approach.
Research works in the field of TM do not provide any specific inferences for a right TM
description. In fact, research on TM has been alleged to not offering a right TM solution
to organizations to achieve its effective TM practices (Collings et al., 2011). There has been a lot of focus on the academic work on TM (Thunnissen et al., 2013), still there
is no conclusive statement over its definition, theoretical basis and scope. It is also
observed that the research work on TM was conducted in a specific group of organizations,
i.e., organizations in the US and multinational (MNCs) and private organizations (Collings
et al., 2011; and Powell et al., 2013). This demands more research on TM in various
contexts and TM in theoretical framework as well as in research design (e.g., Collings
et al., 2011).
Talent Management
"Talent" can be theorized in two broad ways-object and subject approach. In object
approach, talent is the personal abilities exhibited in a particular area, whereas in the
subject approach, talent refers to people who possess special skills or abilities, or
expertise. Even though the object approach has a good fit with the real meaning of talent
(Tansley et al., 2007), the subject approach appears to be more appealing in organizational
practice and TM literature (Gallardo-Gallardo et al., 2013). During the 2000s, recruitment,
selection, learning and development and career management of employees would fall
under the banner of Human Resource Management (HRM) and TM framework would
include terms such as "succession management" or "workforce planning" to be used for
creating practices such as "talent pipelines" and "talent pools" (Tansley et al., 2007; and
Sparrow and Makram, 2015). HRM practitioners were concerned that it represented a
repackaging of HR practices as "old wine in new bottle" (Chuai et al., 2008). Lewis and
Heckman (2006) viewed talent more broadly but with two possibilities: first, talent has
to be managed only against the levels required for performance and specific to those
who are high performing and have high potential. This might require employees to be
distinguished or graded at particular levels (A, B or C players, etc.) with those at lower
grades at risk of termination (Axelrod et al., 2002). Second, talent could be seen as a
way to high performance based on the work of everyone (Walker and Larocco, 2002),
"the job of HRM is to bring out the talent intrinsic in each person, one individual at a
time" (Buckingham and Vosburgh, 2001, p. 18). TM is applicable to all employees, giving
scope of career development for everyone. This can also allow more attention to team
working in organizations (Cerdin and Brewster, 2014). Knowledge workers such as IT
professionals are considered to be a part of the smart version of TM (Whelan and Carcary,
2011). Another view on TM was stated by Collings and Mellahi (2009, pp. 306-307) that
the TM strategy needs to start with identifying the "key strategic positions" providing high
impact in an organization. Filling up of these positions can be possible by developing
right talent consisting of high potential and high performing employees. Huselid et al.
(2005, p. 1) also stated that the identification of "A" positions, that is, the critical jobs,
is the first move towards TM. The purpose of TM is to identify and select what Huselid
et al. (2005) called the "very best employees". Based on such various views, meaning
and definitions of talent have been adopted at the workplace (Gallardo-Gallardo et al.,
2013, p. 293). TM is often designated as the efficient way of attracting, identifying, developing, engaging, retaining and deploying talent in an organization (e.g., Farndale,
et al. (2010)). The difference between HRM and TM is that HRM includes many employeerelated
practices, but TM is more strategic and focuses more on strategic issues of the
business and aims at high potential employees or talented employees. Two major
approaches which define TM are 'exclusive' approach and 'inclusive' approach. The
exclusive approach of "workforce differentiation' views talent as a select subset of the
employees in the organization who can influence and improve the performance of the
organization (CIPD, 2006). The inclusive approach is more from a 'humanistic'
consideration and proposes the provision of all of the organizational resources equally
among the employees, with the consideration that every employee in the organization
has potential 'talent' (Iles et al., 2010). Lewis and Heckman (2006) identified three
separate schools of thought on the concept of TM, viz., redefining human resource
management in the context of talent management, designing and development of talent
pool, and focusing on talent broadly irrespective of its organizational boundaries or specific
positions. Different factors of TM are talent acquisition, mentoring, performance
management, leadership development, resource planning, career management,
recognition and reward (Heinen and O'Neill, 2004; and Scheweyer, 2004). TM is a mutually
beneficial relationship between the organization and employees, where employees are
furthered with career development and organizations with higher performance.
Requirement of highly talented and skilled employees and retaining these talented
employees are the current challenges organizations have to overcome (Fegley, 2006).
Researchers have identified that when the level of TM practices rises, turnover intentions
of talent decreases (Oehley and Theron, 2010). TM plays a key role in creating employer
brand also. Organizations with strong employer brand can attract and retain the best talent
(Brewster et al., 2005). Research indicated that TM plays a critical role in creating positive
employer brand, therefore it was in the agenda for HR executives in 2007 and beyond
(Focus-HR, 2006). For competitive advantage of the organizations, talent plays an
important strategic role. The management of talent, considered to be one of the key
functions of HRM, contributes towards the strategic goals of the organization (Bhatnagar,
2004). Different authors have stated that though the war for talent is strong, yet very
few research works have been started on competitive TM strategies. Khatri et al. (2010)
mentioned TM as a framework of strongly cohesive human resource processes that
assist in making informed decisions to support the strategic objectives of the
organization, which has evolved into an emphasis on 'talent'. Many studies in the US
and UK concluded that TM and human resource practices had a positive effect on labor
turnover, productivity, financial performance trust, job satisfaction, commitment, product
and service quality, and organization business performance (Huselid, 1995; and CIPD,
2008). Today, organizations are evolving and necessitate lifelong learning, employability,
and TM for sustainability (Nilsson and Ellstrom, 2012). Despite the diversity of TM
definitions and perspectives, relative convergence exists with regard to the purpose and
desired outcomes of TM. As reflected by the results of a comprehensive literature review by Thunnissen et al. (2013), several authors agreed that the main purpose of TM is
to 'attract, develop, motivate, and retain talent'. Others believed that the aim of TM is
to contribute to organizational performance or competitiveness. Hence, regardless of
the perspective followed, TM is generally observed as an 'input-process-output'
transformation process with the primary purpose of attracting, developing, encouraging,
and retaining talent in order to enhance organizational performance and competitiveness.
The various structures of TM are talent acquisition, mentoring, performance
management, leadership development, career management, recognition and reward
(Figure 1) (Heinen and O'Neill, 2004; and Scheweyer, 2004).
Research Gap
Talent Management and Human Resource Management
HRM practices include recruitment, selection, learning and development, career
management, performance management and reward (Lewis and Heckman, 2006).
Researchers/practitioners have moved from traditional HRM practices to TM, which is
united with strategic HRM or modern HRM practices that focus on high potential
employees (Lewis and Heckman, 2006; Collings and Mellahi, 2009; Areiqat et al., 2010;
and Jyoti and Rani, 2014). Further, TM builds significant competencies by developing
individuals. The terms human resource and human capital are found to be often used
interchangeably, there is a slight difference between the two terms. Human capital is more
considered as human resources which add quantifiable value to the growth of the
organization. Valuing human for the value of human talent as opposed to treating them
as capital resources has become the trend in human resource practices in organizations
(Armstrong and Taylor, 2014). This change shows an important change in the way
organizations assess its employees and potential employees. TM affects all the areas
related to people, ranging from employing, developing, positioning, evaluating, and of
course, retaining employees.
Organizational Commitment (OC)
Psychological state with respect to employees' connection with the organization is known
as OC. This connection determines the employees' desire to stay in the organization.
Robbins (2005) defined OC as "the level of identification of an employee with a particular
organization and its goals, and wishes to continue membership in the organization". Meyer
and Allen (1997) stated that a committed employee continues to stay in the organization
under all the satisfactory or unsatisfactory circumstances, and highly attached to the
organization. Allen and Meyer (1990) had proposed the three-component model of
commitment that provides three concepts of OC: affective, normative and continuance
commitment. Affective commitment is "an employee's emotional attachment to and
involving in a particular organization." (Allen and Meyer, 1990) stated that employees who
are affectively committed to the organization have established strong personal bond and
want to continue to be a part of it. Allen and Meyer (1990) also stated that continuance
commitment refers to "commitment based on the costs that the employee associates with leaving the organization." Employees with continuance commitment cannot exit from
the organization, may be due to family responsibilities, convenience or they are not able
to find anything better. Normative commitment is "the employee's feelings of obligation
to stay with the organization" (Allen and Meyer, 1990). Employees with normative
commitment think that they 'owe it to the organization' as the organization has given
jobs to them so that they can take care of themselves and their families. Numerous
studies have concluded that high OC leads to various individual and organizational
consequences like increased job performance (Hunter and Thatcher, 2007), higher
motivation (Mathieu and Zajac, 1990), more job satisfaction (Cooper-Hakim and
Viswesvaran, 2005), improved organizational citizenship behaviors (Riketta, 2002),
reduced absenteeism and turnover (Cooper-Hakim and Viswesvaran, 2005; and Lee
et al., 2008). Thus, ensuring a highly committed workforce is a critical requirement in
today's organizational world managing new employment trends like gig workers, flexible
work policies, redefined career expectations etc. (Benkhoff, 1997). Scholl (1981) opined
that the way OC is defined depends on the specific approach to commitment that one
is following. Suliman and Iles (2000) stated that there are four main approaches to
theorizing and exploring OC: attitudinal approach, behavioral approach, normative
approach and multidimensional approach. The most general approach to OC is the
multidimensional model of Meyer and his team. Meyer and Allen (1984), based on "Side
Bets" theory (Becker, 1960), announced the dimension of continuance commitment to
the already present dimension of affective commitment. Therefore, OC was considered
as a bi-dimensional concept that comprised an attitudinal aspect as well as a behavioral
aspect. Later, Allen and Meyer (1990) further added a third component of normative
commitment to the existing two dimensions of OC. In behavioral sciences research, OC
is found to be different from other commitment constructs (Meyer et al., 1993), such as
job satisfaction, job involvement, turnover intention, (Meyer and Allen, 1997). For prediction
of turnover, OC has been shown to be uniquely contributing (Meyer et al., 1993; and Tett
and Meyer, 1993). Traditionally, commitment research has focused on commitment to
the organization as a whole (Mowday et al., 1979), and emphasized the relationship
between the affective component of commitment and turnover. In recent years, the concept
of OC has been studied in relationship with both the outcomes of commitment, such
as retention, job performance, turnover and other job-related constructs, as well as
possible antecedents to commitment (Price et al, 1986; Meyer and Allen, 1997; and
DeLoria, 2001).
Talent Management and Organizational Commitment
Researchers have not focused much on the results of the impact of TM practices on
non-financial, such as motivational, career interests of the organization's employees
(Gallardo-Gallardo and Thunnissen, 2016). Organizations taking care of employees' career
aspirations will find employees to be more motivated and will contribute to the organization
(Collings, 2014). Employees' talent and skill, if utilized and recognized well, will feel better and they will deliver improved performance (Bjorkman et al., 2013). Employees are more
attached to the organization, if they receive different financial and non-financial recognition
(Boxall, 2013). High potential employees who have extra talent are more employable and
are therefore most likely to leave the organization and get better jobs. Therefore, OC plays
an important role in the retention plan and becomes a key variable in TM. Retention of
high performers is critical to achieve higher business performance (Sturman, 2003). Kumar
and Raghavendran (2013) stated that employees are highly committed when they see
the value of their work and the effect it has on customers. Therefore, the company should
demonstrate responsiveness in knowing what employees like to do, what is their
capability, what are the strengths they have, and how they are contributing towards the
achievement of the goals of the company. Talented employees, but who are not
committed, will not bring much value towards achievement of the goals of the company.
Similarly, companies with low-value and high-commitment personnel will obtain average
results (Luna-Arocas and Morley, 2015). It is observed that recognized high potential
employees will be hesitant to leave the organization.
If the employees are aware that they are recognized as a talent in the organization,
greater commitment is found compared to those who do not see that (Bjorkman et al.,
2013). TM practices and activities are aimed at attracting, selecting, hiring, developing,
and retaining talent (Thunnissen et al., 2013; and Oladapo, 2014). For higher growth and
to achieve better results, organizations must emphasize not only on recruitment, selection
and hiring, but also on developing and retaining talent (Oladapo, 2014). Globalization,
competition, fast changing technology, continuous upgradation of skill and knowledge
handling business dynamics have generated a demand for talented professionals, who
in turn expect autonomy, a sense of meaning in their work and recognition (Kumar and
Raghavendran, 2013).
Research Gap
- The above literature provides scope to understand and do a study of the
perception of employees on the TM practices, and it also provides scope to
study the relationship between different TM practices and their impact on
commitment of employees in the organization (Figure 2).
- It also provides scope to examine an industry-specific study on TM practices
and their impact on commitment of employees.
Therefore, the following hypotheses are formulated to be examined further.
H1: TM is positively related with OC.
H2: Competency development as a TM practice is positively related with
OC.
H3: Managing performance as a TM practice is positively related to organizational
commitment.
H4: Potential management as TM practice is positively related to organizational
commitment.
H5: Career growth as TM practice is positively related to OC.
H6: Reward and recognition is positively related with OC.
Turnover Intention
Turnover intention is the reflection of "the (subjective) likelihood that an individual will
change his or her job within a certain time period" (Sousa-Poza and Henneberger, 2002).
Turnover intention is the phase ahead of actual turnover. It is the development of
cognitively thinking, suitably planning and then keen to leave a job (Shahnawaz and
Goswami, 2011). Knowing the intention is important as once the motives for increasing
intention to leave the organization are known, some remedial measures could be
implemented. Organizations are affected by increased cost of recruitment, selection
and training for the replacements. If organizations address the issues of turnover, it
induces the employees' loyalty and commitment to the organization, and hence, leads
to improved organizational performance (Abbasi and Hollman, 2000; and Foon et al.,
2010). Intention to leave can be reduced by objective management policies and practices
such as fair employment opportunities, harmonious labor- management relations, timely
payments, effective leadership (Mcnall et al., 2009) and satisfactory work attitudes like
job satisfaction and OC (Vander et al., 2009). Turnover intention rises with stress, workfamily
balance, inflexible work policies, etc.(Figure 2) (Fakunmoju et al., 2010; and Haar
et al., 2012). Takawira et al. (2014) stated that turnover intention is a model of an
employee leaving the current organization and seeking employment in another
organization. Perryer et al., (2010) opined that turnover intention is the immediate
behavior or attitude before actual turnover.
Organizational Commitment and Turnover Intention
According to researchers Ajzen and Fishbein (1980) and Igbaria and Greenhaus (1992),
intentions are the most immediate cause of actual behavior. Bluedorn's (1982) research
on 23 studies found that individuals' turnover intentions matched their actual turnover
actions. Absence of commitment affects the intention to quit. Thus, managers need to
focus on increasing the commitment of employees. Parasuraman (1982) stated that OC
can be used to foresee turnover intentions. Igbaria et al. (1994) found the positioning of
OC as the most direct predictors of intention to stay. According to Ingram and Lee (1990),
the intention to stay, the quality of job training and the quality of organization discipline
are associated predictors of commitment. Different studies that examined the factors
influencing turnover intention showed that OC is one of the influences that contribute
to employees' intentions to leave an organization (Carmeli and Weisberg, 2006). There
is ample evidence in the literature that supports the significant relationship between
HR practices and turnover intention (Ferris and Aranya, 1983; and Caldwell et al.,
1990). Various research studies have indicated that there is a significant relationship
between OC and turnover. Ferris and Aranya (1983) suggested a significant positive
correlation between intent to leave and job commitment, with commitment falling as
employees decided to leave. The thought of quitting and intent to search for alternative
employment are the outcomes of the relationship between OC and turnover (Tett and
Meyer, 1993). Tett and Meyer (1993) also stated that various aspects of the work
environment may activate withdrawal thoughts (i.e., thoughts of leaving, intent to
search, intent to quit) and the result processes that may be linked to the employee's
possibility of turnover. According to Adenguga (2013), there is a significant relationship
between each factor of OC and turnover intentions. They reported that OC had a
significant and a relatively strong relationship to employees' intention to quit. Empirical
results suggest that OC has statistically significant and negative relationship, such
as intent to quit (e.g., Jaros, 1997). Peters et al. (1981) studied the independent and
joint contributions of OC and job-facet satisfaction made on a person's intention to
quit. They said that OC had an important and a relatively strong relationship to
employees' intention to quit.
Research Gap
In view of the above literature, it can be concluded that OC can influence the intention
to stay in an organization. Therefore, it is important to examine the relationship between
OC and turnover intention focusing on a particular sector.
H7: OC has significant relationship with turnover intention of employees.
TM, OC and Turnover Intention
TM is very critical to every organization, and it is a part of companies' strategy to
continue to be competitive with the best resources to achieve organizational
productivity. The risk of losing finest employees will be always there by getting
attracted to various improved openings given by the competitors. To overcome the
challenges of the loss of talented and skilled workers, employers are initiating TM
programs that might be helpful in identifying potential talents and most prominently,
retaining employees. Retaining employees who are well-trained and highly skilled is
always a task for organizations. The investment in training and developing human
resources would not be justified if the employees leave and other organizations get
benefited by their skills and abilities. Losing good employees would lead to decrease
in productivity and quality can negatively affect an organization's competitive
advantage. Different literatures support the significant connection between HR
practices and turnover intention (e.g., Caldwell et al., 1990; Chew and Chan, 2008;
Lam et al., 2009; and Gould-Williams and Mohamed 2010). Employees would always
like to stay with good employers as they perceive that their employer will take care
of their employment benefits, welfare, and believe in good people management (Buck
and Watson, 2002).
The relationship between HR practices and OC could lead to high degree of OC
which could reduce the inclination to leave the organization amongst the employees.
Studies have been conducted to measure the degree of direct effect of HR practices
and OC on turnover intention but such studies are still inadequate. A study done by
Eisenberger et al. (1990) showed that HR practices that are well deliberated and
executed are able to increase OC and decrease the intention of quitting among
employees. Additionally, Pare and Tremblay (2007) studied the role of OC in the
relationship between HR practices and turnover intention among IT professionals, and
the outcome detailed that OC acted as a partial mediator. However, the studies carried
out in the area are insufficient, thus further studies are required to understand the role
of OC. The focus of different HR practices in managing the human capital that can
increase OC, thus reducing the intention to quit by employees, can be projected, as
OC is the factor that mediates the relationship between HR practices and turnover
intention. Researchers have studied different aspects influencing turnover intention,
specified several key variables such as demographics, job satisfaction, OC,
Organizational Engagement (OE) and HRM practices such as training and development,
performance management and compensation. HRM practices like ensuring skill
development, providing career growth to unleash the potential, recognizing employees'
efforts, pay for performance and ensuring high engagement of talent are a few important
and critical steps for retention of talent in organizations.
The Theoretical Framework
It appears that to foresee turnover, OC must be a part of the model. However, there are
inadequate studies to understand the impact of TM practices on turnover intention.
Therefore, there is a need to study the factors that influence turnover intention especially
empirically. It is important to conduct the study because the results would give stronger
understanding on how companies can retain their employees. An industry-specific
empirical study can give a clear understanding. The study aims to examine the causal
relationship of TM practices on OC, and also to determine whether OC mediated the
relationship between TM practices and turnover intention.
Discussion
Sustainability is the major focus of every organization in this Volatile, Uncertainty,
Complexity and Ambiguity (VUCA) world. Talent plays a key role in achieving business
goals and to sustain in a competitive environment. Retention of talent is the success
factor to accomplish outstanding organizational performance. The proposed model further
studies intend to focus broadly on the role of various factors of TM and their impact on
employee commitment, and on the mediating role of organizational commitment and its
impact on turnover intention of employees. The intervention of OC as a mediator between
OC and turnover intentions results in OC to restrain employees from actual turnover by
developing positive feelings among employees toward their organizations. The
assessment of causal relationship between the constructs will lead to proactive evaluation
of employee turnover and retaining high potential employees in the organizations.
Conclusion
This study reveals that TM plays a very significant role in engaging and retaining employees
in an organization. TM includes various HR practices such as competency development,
reward and recognition, performance management, high potential management and career
growth of employees. Employees' behavior or intention to stay in an organization can be
studied further by the mediating factor of commitment to the organization and the relationship
of various TM practices with the commitment factor in an organization.
Limitations and Future Scope: Further research on finding the relationship between
different factors of TM practices such as competency development, talent management,
career growth, reward and recognition and managing employee performance with the
commitment aspect of employees can be studied, and further relationship between
commitment of employees and their intention to stay can be reviewed by the management
periodically. Managers provide feedback with respect to their team on the impact of each
factor of TM and will ensure high commitment for implementation of different TM policies
and practices in the organization. This will help the top management immensely in
formulating the right approach and policies on TM. The challenges of attrition and retaining
the right talent in the organization can be addressed to a great extent.
In the proposed model, only a few factors are considered to be the components of
TM practices in organizations. Future studies may add additional factors to the scope
of TM practices and study their relationship with commitment factor in organization.
Further, for the purpose of this study, the authors assumed that OC is the only predictor
of employee's intention to stay in the organization. However, there are many other potential
factors worth studying that demand due consideration. Future research in this context
should be continued not only in a specific sector or industry but also in other sectors
in India. The study offers direction regarding the challenges to the human resource
practitioners on how to minimize attrition and retain talent in the organization.
References