Performance Reviews

Why Talent Reviews Are Important (And How to Run a Successful One)

April 9, 2024
April 17, 2024
Sarah Lindenfeld Hall
Lattice Team

In today’s fast-moving markets and turbulent times, resilience and adaptability are required for long-term success. Organizations must build nimble workforces prepared to address the challenges of the day with the right skills and expertise. 

Human resources leaders and managers must take a holistic approach to talent management to build that kind of versatile workforce. Evaluating the performance of single employees or individual teams is no longer enough; leaders must consider their workforce's abilities as a whole. Talent reviews provide that comprehensive view that can make all the difference.

Here’s why talent reviews are critical, how they complement performance reviews, and how to run a successful one to ensure your workforce is poised for what’s ahead.

What is a talent review? 

A talent review pinpoints the skills and competencies of an organization's employees. These reviews can identify skills gaps across a workforce and provide the foundation for upskilling and reskilling programs to ensure organizations have the capabilities required to remain relevant in the market.

“When you’re looking at talent reviews, you’re looking at your ability as an organization to move people, to retain people, to keep them, to develop them, to motivate them…and to keep that institutional knowledge,” said Jana Tulloch, principal consultant for Tulloch Consulting, an HR strategy consultancy. 

Talent reviews also help HR business partners and department leaders identify high-potential employees poised to become future leaders and build the policies and practices that will both train and retain them.

Why Talent Reviews Are Important

For people management, talent reviews come with three primary benefits.

1. Talent reviews identify high-potential employees.

Top talent brings the motivation and ambition that can keep your business competitive over the long haul. According to the Harvard Business Review, high-potential employees are poised to make a big impact on your organization with the right ability, social skills, and drive. In highly complex roles, for example, “superior talent” can be up to eight times more productive than their colleagues, according to McKinsey & Company.

Talent reviews can uncover the employees poised for big things within the workforce. Identifying them can net positives for both organizations and the people who manage them, said Kelly Robinson, CEO and founder of PKRecruiting, a talent acquisition firm.

“A leader’s job is to help their team grow so that they look better,” Robinson said. “I know it sounds selfish, but that is the point. If you can understand that person and where they want to go to and what kind of opportunities and help them get there, it only helps you.” 

2. Talent reviews guide succession planning.

Succession planning is the process of identifying prospective leaders who have the hard and soft skills required to step into management roles in the future. But organizations often don’t get it right. 

According to a Deloitte survey, 86% of leaders said succession planning was an “urgent” or “important” priority, but just 14% said they did it well. And when potential leaders are identified, organizations often don’t take the time to prepare them for the next opportunity. Some 81% of HR leaders said a “lack of readiness” is a primary reason why high-potential candidates aren’t chosen to fill leadership roles, according to a Gartner survey.

Talent reviews provide an opportunity for organizations to dive into their talent pool, identify those high-potential employees with the desire to lead, and uncover the skills and training they may need to prepare them for that next step.

Too often, with nobody in line to take over, companies are forced to be reactive when a leader steps down, Tulloch said. “A lot of times, it’s like a fire, ‘Oh my gosh, we’ve got this gap; who do we have internally?’” she explained. “It’s never well-thought out or well-planned. Doing talent reviews requires talking about who you have internally, who has potential, and how do we get them ready so that they can step in [when a leader steps down].”

3. Talent reviews help with the retention of top talent.

Workers, especially those from younger generations, have made it clear that they expect more from their employer than a paycheck. Career development is high on their priority list. In a 2022 Workplace Intelligence survey of 3,000 US employees, 74% of millennial and Gen Z employees reported they were likely to quit in the next year because of a lack of development opportunities. Moreover, 89% of all employees surveyed said they were “extremely” or “somewhat” motivated to bolster their skills in 2023.

Providing on-the-job training can assuage an employee’s fear of stagnating skills and keep them on board. A fundamental purpose of talent reviews is identifying skills gaps and career development needs.

“If employees, in general, are not seeing growth in the company, not just on an individual level, but on an organizational level, they will lose faith in the company,” said Marianne Tadros, director of human resources and organizational development with DM Clinical Research, a national network of clinical research sites. “The workforce we have right now is just one that looks for growth, so much more than any other workforce.”

Talent Reviews vs. Performance Reviews

Talent reviews don’t replace the need for performance reviews or other one-on-one conversations between managers and direct reports; they complement those annual check-ins and continuous feedback opportunities. 

In performance reviews, managers talk about performance directly with an employee. They discuss the employee’s successes, pinpoint areas for improvement, and set goals for the coming quarter or year.

During talent reviews, managers and business leaders — often including the HR team — discretely evaluate performance, growth potential, goal attainment, and more. The outcome of the talent review assessment provides a natural transition for leaders to take more direct action, including conversations about development, future career possibilities, and promotion readiness.

“Performance reviews are tactical and static in a way. They're measuring the same thing in a job,” Tulloch said. “Talent reviews are really more strategic. They’re about looking at the bench strength that a company has, and planning how to leverage those resources, the people, in terms of succession planning and growing the organization.”

The Talent Review Process

Talent reviews can be implemented at different times in your performance cycle, depending on your organization’s needs: 

  • Before performance reviews as a pre-alignment exercise.
  • After performance reviews to evaluate potential with an already calibrated performance rating.
  • Completely decoupled from performance reviews, for core HR needs, including succession planning, department reorganizations, or other organizational changes.

In any case, managers typically meet with the HR team running the talent review to identify high-potential employees and candidates for promotion. The conversation should include “people who know the people,” Tulloch recommended. “There has to be some level of knowledge of the individual and what they see potential-wise in them.”

The deliberations will highlight employees’ performance — how well-versed they are in the technical aspects of their jobs — and can uncover talent gaps that might make it difficult for the organization to meet its goals. For example, a company planning to harness artificial intelligence in a future project may determine during a talent review that not enough employees have expertise in the technology, so they’ll either need to invest in AI training for their current employees or recruit new talent with AI experience.

But talent reviews should go deeper than evaluating the hard skills employees offer. “When you’re looking at moving around and promoting and developing [employees] and planning for them to stay in the organization, you have to look at their values and behaviors,” Tulloch said. 

To determine an employee’s values, behaviors, and potential, consider using these talent review questions:

  • Performance: How consistently has this person demonstrated outsized impact and exemplified our values compared to their current level?
  • Potential: How consistently has this person demonstrated above-average aptitude and aspiration for the next level?
  • Impact of Loss: How detrimental would this person’s departure be for the company?
  • Risk of Loss: How likely is this person to leave the company in the next assessment period?
  • Promotion Eligibility: When should this person be considered for promotion? 

To chart both hard and soft skills, the 9-box talent review grid can be a helpful tool in assessing an employee’s current performance and what they need to achieve their full potential. Three vertical columns rate the employee based on their growth potential: high potential, medium potential, or low potential. Three horizontal columns pinpoint the quality of their performance: underperformance, effective performance, or outstanding performance. 

a user's view of the 9-box calibration during a talent review
The 9 box grid can help reviewers analyze and act on employee performance and potential.

For example, a high-potential employee with outstanding performance would be in the top right box, and rated a “superstar employee” who is nearly ready to lead. At the other end of the scale, an employee in the bottom left box might be ready for reassignment or even exit

Employees naturally have varying degrees of need. On the lower end of the grid, for example, employees may benefit from more stretch goals and coaching to improve their skills. On the other hand, those moving upward could simply use some stretch assignments to fine-tune their capabilities.

At DM Clinical Research, managers use the assessment tool to measure the potential of their direct reports, Tadros said. “It helps them think outside of the technical skills of their employees, looking at the whole picture — their leadership skills, management skills, or personality.”

Finally, once the talent review process is complete, take the time to document and assess the outcomes. Look for successes, such as a number of newly identified future leaders, and missteps, such as not identifying all talent gaps, so you can improve your talent review process for next time. 

What’s next? 

To fully capitalize on the benefits of talent reviews, once they’re complete, organizations must act. Timelines for promotions and merit raise decisions for high-potential employees should be documented and followed. Managers must reach out to employees who need coaching and mentoring.

“Acting on it is crucial,” Tadros said. “That will give confidence to the employee that you are invested in their development.” 

  • Stay flexible. There’s no one-size-fits-all approach to developing and retaining employees. For some, membership in a professional organization or tuition to attend a few webinars will suffice, Robinson said. For others, hands-on mentoring and shadowing might be needed. “Each person is individually motivated by different things,” she added.
  • Be ready to listen. Just because a high-potential employee has every skill required to lead others successfully doesn’t mean they want to move into management. Remember that there are other ways for top talent to lead, including becoming a subject matter expert or a mentor to junior employees. 

“Some people are just very happy with what they're doing,” Robinson explained. “They don't want to be an executive, they're not looking to move into some director-level position.” Managers should honor that, she said. But they also should help employees uncover what they want to do and how they can grow in other ways. Direct questions about their goals and what challenges they currently face on the job can help reveal the answer, Robinson shared.

Focus on the Future

Conducting talent reviews is an investment of time and energy, but Tadros said the talent strategy is a worthy one. “Bottom line, if you want your company to grow, you have to grow your people. If they’re not growing, the company is just going to be stagnant,” she said. 

To help with talent management, Tadros said her organization has also deployed Lattice to track workforce data, including performance feedback, key performance indicators (KPIs), and one-on-ones.

With the launch of Lattice’s Talent Reviews tool, managers and HR professionals can efficiently conduct talent assessments to identify high-performers, assess employee potential, and make more informed business decisions. By using Lattice’s holistic performance management platform for talent assessments, companies can have access to unified and comprehensive employee data – such as past performance, feedback, goals, growth plans, and more. 

The all-in-one platform makes the entire process more equitable for employees thanks to its built-in reviews calibration. The result? More impactful talent reviews, easier succession planning, and quicker turnaround for promotion decisions and follow-up development conversations. 

Visit Lattice’s Talent Management page and schedule a demo to see it in action.