Global Talent Management at Novartis 1.

Is there one best way to motivate knowledge workers, sales force, and management alike? Is there one best way in the U.S., China and other markets? I dont think there is one single best method to motivate knowledge workers, sales force, and management alike. Besides competitive pay, knowledge workers are particularly motivated by challenging and meaningful work and an environment that supports innovation. They prefer to stay with companies that provide them with networking, mentoring, career development opportunities, and recognition for their contributions. The highly-skilled workers want companies to provide them with continuous learning opportunities as it is very important for them to update their knowledge to stay marketable. Sales people are not necessarily motivated by just performance based compensation and incentives. It is important for companies to provide them with the right tools to succeed and foster a team environment based on trust, shared sales goals and peer recognition. Sales people tend to stick with companies whose management understands their pain points and provide them with necessary coaching and mentoring to succeed. Managers are particularly motivated by opportunities to advance to senior leadership positions within the company. They tend to stay with companies that provide them with managerial training and development, leadership development and global leadership opportunities to reach their goals. Similarly, there is no one best way for a global company to motivate its talent around the world. According to the framework for attracting and retaining talent [1], the factors that motivate employees in any talent market are brand image of the company, the career opportunities it provides, its guiding missions and values, and the company culture. But these four factors play out in very different and particular ways in emerging markets like China, India as compared to

developed markets like US and EU. In most emerging markets the pool of qualified talent is shallow. With strong demand and weak supply, recruitment and retention is a battle that global companies face especially in the early stages of their entry into a new market. Also, in emerging markets, turnover is higher than companies may be used to as poaching is not uncommon, and pay packages are somewhat inflated. As a part of their emerging markets strategy, global companies focus on hiring local talent because they are the ones who will best be able to establish personal relationships with customers, partners, and government officials. But the workers in these markets are not just looking for jobs but are ambitious and looking to build careers. In order to motivate these workers to join their company, companies need to project a brand that is known for excellence in their field and promise them career advancement through opportunities and inspirational leadership. Besides promising challenging work, stretch assignments, competitive pays and accelerated career paths to local talent, companies also need to provide them with a sense of purpose and belonging. But in order to retain talent in competitive emerging markets, it is extremely important for companies to deliver on the promises made to their local employees. For this, companies need to create a culture that stays true to its brand promise and supports employee development and employee empowerment through commitment to meritocracy, payfor-performance, organizational transparency and custom career planning. Thus, global companies need to tailor their talent management strategy specific to individual regions in order to build a competitive and loyal workforce. It requires getting to know the region, country, labor conditions and cultural nuances, and leveraging their global talent expertise in a constructive way.

2. Does Novartis have the right performance measurement system? Novartis views performance management as central to their global talent management activities for innovation. Their performance measurement system grades employees and matches their compensation to business objectives and values and behaviors which results in a nine-box performance rating grid. The performance rating has a large impact on an employees compensation and thus, Novartiss performance management system is very effective in instilling a culture in which employees are motivated to work hard for large gains in compensation based on high performance. The system also fosters trust in the organization by being open about employees performance. It also fosters and facilitates innovation by the combination of performance management and compensation. In most cases, the system is also effective in providing unbiased performance review as the manager uses inputs from an employees peers and other functional managers for assigning a performance rating. The talent ratings for managers are also very effective in devising employee action plans and identifying potential candidates for top executive positions. Although the performance measurement system is largely successful, there are areas where improvements or changes could be made to make it more effective worldwide. Even though there are biannual reviews to set personal objectives and check interim progress, there should be flexibility to modify employee goals in accordance with any changes in business objectives. The normal distribution curve suggested to differentiate employee performance should be used differently across global sites as international markets especially emerging markets have a different set of challenges related to employee attraction and retention. In emerging markets, performance management is a critical component of employee retention strategy. It is used to encourage open and tough feedback to local employees to create an authentic and trust-based

culture based on meritocracy. Thus, emerging markets should be able to adjust skew in the distribution in order to encourage the development of local talent. The uniformity of the system worldwide could be a deterrent in employee development because of different cultures perceiving performance ratings in different ways. Novartis can adapt their standardized performance system to the local culture in order to encourage employee acceptance thereby leading to better results in terms of employee performance. 3. If you were put in charge of the China operation, what changes would you make to deal with the turnover problem? According to the framework for attracting and retaining talent [1], a companys culture plays a central role in employee retention especially in emerging markets like China. In order to deal with the turnover problem, I would focus on creating a culture within China operations that would support employee development and empowerment through accelerated career growth opportunities, a commitment to meritocracy, and custom career planning. We would provide accelerated development opportunities for employees by implementing several different career paths and offering development goals and training opportunities in concert with these. Different career paths such as scientific research, sales, marketing and management would fulfill the goals of the Chinese workforce and would also meet the gaps in the talent pool in the region. These career paths would help address the issues that Novartis has with getting and retaining local talent for scientific research positions. They would also address the needs of the employees for leadership development starting with the basic management skills. As these employees realize the potential of growing from entry-level to management to leadership, they will be less likely to leave the organization in 12-18 months.

Next, we would continue to develop internal talent in the region through existing talent development programs such as Corporate MBA program offered in collaboration with Beijing University business school and Marketing Development program. In addition to these programs, we would also offer tailored, localized corporate programs to develop leadership, marketing excellence, leadership of global projects and frontline management skills. The entry-level employees would be provided a variety of professional development opportunities such as intensive training in English language, communication and listening skills, and business etiquette. They would be provided career guidance and access to networking sessions, enabling them to explore different paths at Novartis. Another change that we would implement is to make sure that employees in China are kept up-to-date on the latest business developments through company intranet as well as meetings with senior level global executives. This will ensure transparency and make Chinese employees feel more engaged in the success of the company. Novartis would also take steps to ensure that Chinese employees take business trips to other global sites of the company. This will help them connect with their peers, expand their network and integrate more completely into the corporate culture. In addition to the aforementioned changes, we would motivate employees by deploying them in stretch assignments and rewarding them with opportunities around the world for performing well. This way employee will know that we are a straight meritocracy and we can also ensure that our Chinese leaders become more effective in the global Novartis organization and not just in China. By taking these steps, we would be able to positively influence retention by creating an environment for employees where they can have an impact, feel a part of Novartis and can grow professionally and personally.

References [1] Douglas A. Ready, Linda A. Hill, and Jay A. Conger, Winning the Race for Talent in Emerging Markets