Recent decisions by the current White House administration have cast uncertainty on the future of diversity, equity, and inclusion (DEI) programs and practices, as explained in a previous Employers Council article. The purpose of this article is to address one of the outcomes of the changing landscape: a renewed emphasis on a merit-based approach to the workplace. Specifically, how can a merit-based approach enhance performance, fairness, and growth?
What Is a Merit-Based Approach?
A merit-based approach to talent management is a strategy where decisions about hiring, promotion, compensation, and development are based on an individual’s skills, performance, qualifications, and achievements, instead of factors such as tenure, relationships, or subjective opinions. For example, a candidate for a sales position with an organization is hired because she was in the top 5% of salespeople at her previous company, has vast sales experience, and made the President’s Club five years in a row. Factors such as personal connections at the company or other non-skills-related aspects were not part of the hiring process.
Organizations utilizing a merit-based approach to talent management tend to prioritize each employee’s demonstrable skills, capabilities, and contributions. This approach provides a clearer pathway for future-focused employee development and allows an organization to recognize and reward employees based on impact rather than length of service.
Key Benefits of a Merit-Based Strategy
A well-crafted and carefully implemented merit-based approach can help many organizations achieve their strategic goals. The following are a few key benefits of such a strategy:
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Performance and Productivity: When following a merit-based approach in the workplace, employees should be more productive in their positions. For example, a software engineer trained and experienced in the platforms and processes of the organization will be more productive than an employee without this background. This employee will be in the right place, with the right skills and experience.
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Engagement and Motivation: Organizations with a merit-based approach often have motivated and engaged employees. When employees do what they are skilled at, they enjoy their work more, are more engaged, and are more motivated. Gallup research shows that when employees know and use their strengths, they are nearly six times more engaged.
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Recruitment and Retention: A by-product of having highly engaged employees is that organizations can often retain their top performers. Employees who feel they are putting their skills to good use report higher job satisfaction and are less likely to leave their employers, according to this article by Leadr, a software and professional services company. Employers with a brand incorporating a merit-based talent strategy will be able to attract top talent because they will know that their skills, abilities, and experience will be fully utilized.
How to Implement a Strategy
Implementing a merit-based talent management strategy involves a lot of work, structure, and intentionality. Here are some key steps to get started:
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Define Clear Performance Metrics: Develop specific, measurable goals tied to business objectives. Take as much time as necessary to develop key performance indicators (KPIs), objectives and key results (OKRs), etc., so everyone is aligned with goals and how they will be measured. Nothing will derail a merit-based approach to talent management faster than disagreement regarding objectives.
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Establish Competency Frameworks: Identify key skills and behaviors for an organization’s different roles. Job descriptions and other evaluation tools should reflect the competencies for each position. Again, take as much time as necessary to ensure a job description is accurate, clear, and representative of the job itself. Learn more about creating effective job descriptions in this Employers Council whitepaper.
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Offer Transparent Growth Paths: Lay out clear career progression criteria. Communicate what it takes to get promoted or take on new responsibilities. When employees can see future growth within the organization, it will not only engage and motivate them, but it will also give credibility to the merit-based talent management process.
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Invest in Learning and Development: Provide training to employees for development in their current roles and for promotional opportunities. For example, providing a leadership development course to a high-performing single contributor will prepare the employee for a future leadership opportunity and build the organization’s leadership pipeline. Employers Council offers training courses to help develop your employees’ skills. Review our training catalog to learn more.
A Word of Caution
Studies have shown that organizations often struggle with their efforts to meet their meritocratic objectives due to diverging ideas among managers of what merit means. An article titled How Managers Understand and Apply Merit in the Workplace by MIT Sloan Professor Emilio J. Castilla found that this variation is dependent on the “organizational context they work in as well as the characteristics of the individuals they evaluate.”
As a result, organizations should use care in implementing practices that are not only effective but also compliant with applicable regulations and free from illegal bias. Training and communication are vital to accomplishing this.
At Employers Council, our mission is to help member organizations create exceptional workplaces. For many, a merit-based talent management approach can help create such an environment. If you would like more information on how to do this, please contact us at info@employerscouncil.org.