AMINA H RAZIC - MASTER THESIS - FINAL - MAY 2016

AMERICAN UNIVERSITY IN BOSNIA AND HERZEGOVINA
AMERICAN SCHOOL OF ECONOMICS
AMINA HALILOVIĆ RAZIĆ
TALENT MANAGEMENT AND ITS EFFECTS ON CAREER
DEVELOPMENT IN TOP BH COMPANIES
MASTER THESIS
MAY, 2016

Talent management and its effects on career development in BH companies
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AUBIH Mentor ……………………………...………………………………… Vladimir Simović
Master Thesis Project has …………………………………………………………….. 92 pages
Master Thesis Project number ……………………………………………… ________________

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Table of Contents
LIST OF TABLES........................................................................................................................................4
LIST OF FIGURES ......................................................................................................................................4
ABSTRACT..................................................................................................................................................6
1. Introduction to the study of talent management and career development and their implementation
within BH companies....................................................................................................................................7
1.1. Research purpose and significance ....................................................................................................7
1.2. Research objective .............................................................................................................................8
1.3. Hypotheses.........................................................................................................................................8
1.4. Research methodology.......................................................................................................................9
1.5. Structure of the study.......................................................................................................................11
2. Literature review – theoretical basis of the master thesis ...................................................................12
2.1. Overview..........................................................................................................................................12
2.2. Integrated talent management ..........................................................................................................13
2.2.1. Organizational changes.............................................................................................................14
2.2.2. Contemporary workforce ..........................................................................................................15
2.3. Talent management process.............................................................................................................16
2.3.1. Talent attraction ........................................................................................................................16
2.3.1.1. Recruitment and selection..................................................................................................21

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2.3.2. Talent development...................................................................................................................23
2.3.2.1. Action learning: work based learning ................................................................................24
2.3.2.3. External learning: training programs and courses..............................................................28
2.3.2.4. Succession planning and career management ....................................................................31
2.3.3. Talent retention .........................................................................................................................32
2.3.4. Performance management.........................................................................................................35
2.4. The necessity and benefits of talent management............................................................................38
2.5. Talent management’s challenges .....................................................................................................39
2.6. Career development .........................................................................................................................40
2.6.1. Roles in the career development process ..................................................................................44
3. Results of the research and data analysis............................................................................................48
3.1. Questionnaire ...................................................................................................................................48
3.1.1. Talent management...................................................................................................................50
3.1.2. Career management ..................................................................................................................59
4. Conclusion ..........................................................................................................................................71
4.1. Limitations of the research...............................................................................................................74
4.2. Suggestions for further studies.........................................................................................................74
APPENDIX 1 – QUESTIONAIRE.............................................................................................................75
BIBLIOGRAPHY.......................................................................................................................................82

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LIST OF TABLES
Table 1 Talent attraction techniques ...........................................................................................................20
Table 2 Talent development techniques......................................................................................................24
Table 3 Talent retention techniques............................................................................................................32
Table 4 Career development roles ..............................................................................................................47
Table 5 Additional factors affecting promotions ........................................................................................65
Table 6 Additional development methods used by companies...................................................................70
LIST OF FIGURES
Figure 1 - Talent management ....................................................................................................................16
Figure 2 Performance management criteria................................................................................................37
Figure 3 Participants in the survey..............................................................................................................48
Figure 4 Responses to question 1................................................................................................................49
Figure 10 Responses to question 7..............................................................................................................57
Figure 13 Responses to question 10............................................................................................................60

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ABSTRACT
In business, there is only one reason for a company to exist: to make a profit. The only way to
survive and make a profit is to have a competitive advantage that gives the company edge over
its competitors. Human resources are the only source of sustainable competitive advantage.
Attracting, developing and retaining the most talented employees is therefore one of the most
important tasks undertaken by the human resources managers. This process when aligned with
the vision, mission and strategy of the company is called integrated talent management. The
purpose of this paper is to present this process in detail and see how it affects career
development, which is one of the most important concerns of modern professionals, that is
talents, who are the object of talent management process. Results of the survey conducted during
this research show that most of the top Bosnian companies implement talent management and
offer career development programs to their employees.
Key words: human resources management, talent, talent management, talent attraction, talent
development, talent retention, career, career development

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1. Introduction to the study of talent management and career development
and their implementation within BH companies
1.1. Research purpose and significance
The purpose of this thesis is to explore implementation of talent management practices in BH
companies and to find out whether these have any effect on career advancement of employees in
those companies.
Given that human resources are the only source of sustainable competitive advantage, companies
are focused on careful selection of new employees and investment in their development with the
purpose of using their knowledge and skills to achieve superior results. On the other side of that
relationship are professionals who are fully focused on taking advantage of all opportunities
given to them in the job market and maximizing return on their talent, knowledge, skills and
capabilities.
The best way for companies to optimize management of their human resources is to apply
techniques of integrated talent management. This is a system of process and techniques whose
aim is to fully apply and reflect company mission, vision and strategy in the management of
human resources and to assure that the right people are always in the right positon, equipped
with the right knowledge and resources ready to provide their best performance and give optimal
results.
This thesis will explain definition, purpose and significance of talent management. It will also
give full and complete presentation of talent management techniques, through its lifecycles
composed of talent attraction, talent development and talent retention. Furthermore,
performance management, selection and recruitment will be explained, which are topics closely

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related to talent management. Finally, career development will be explained, along with roles
played in it by managers and employees.
1.2. Research objective
The objectives of this research are:
- to find out whether talent management techniques are applied in BH companies,
- whether and how BH companies deal with career development and
- whether there is any connection between talent management and career development in
BH companies.
Answers to these questions will be achieved through analysis of results of survey conducted
among top BH companies, which was carefully designed to focus on each of these topics.
1.3. Hypotheses
This thesis focuses on application of talent management techniques, career development
techniques and whether application of talent management in the workplace has an effect on
career development. There are four hypotheses which will be explored and analyzed through the
survey:
Hypothesis 1: Top BH companies are familiar with the concept of talent management and apply
talent management techniques in the management of their human resources.
Hypothesis 2: Top BH companies recognize that investing in development of employees’
capabilities and their careers is important and yields positive results.
Hypothesis 3: Top BH companies offer career management to their employees.

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Hypothesis 4: Investing in and applying talent development techniques have a positive effect on
career development and help employees advance in their careers.
1.4. Research methodology
In order to test the hypotheses, research methodology used to collect primary data for this thesis
was a survey. The survey was done by distributing a questionnaire (Appendix 1) to chosen
companies through email. It was sent to primary addresses of the companies and/or to CEO or
HRM. Introductory letter contained a link to questionnaire online, with a version in PDF and MS
Word also being available upon request. Four companies requested, received and filled out a
questionnaire in MS Word. The questionnaire was provided in both Bosnian and English
languages in order to minimize the possibility of misunderstanding or misinterpretation.
The questionnaire was divided into three sections where a passage into the next section was
conditioned by the response to the last question of the previous section. The reason for such
setup was to eliminate possibility of contaminating answers and receiving illogical answers,
which could happen due to lack of attention or understanding.
The questionnaire contained 22 questions about talent management, talent development and
career management. Questions were designed so as to provide data on companies’ general
knowledge about and interest in themes of this thesis, as well as specific techniques of talent
management and development that are researched here. Questionnaire also provides data about
companies’ attitudes towards career development, strategies that are used and opportunities
available in those companies. Questions were close ended yes/no and multiple choice questions,
with five of them having an option to write the answer if the available choices were not
indicative of the situation in the company.

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Questionnaire was carefully designed in order to enable researcher to collect enough relevant
data to be able to carry out quantitative, as well as qualitative and casual analyses and come to
supported results that would lead to confirmation or disproval of the hypotheses.
Companies chosen for this survey are the top 100 companies in Bosnia and Herzegovina,
selected as employers of choice for the year 2014, by web portals posao.ba and poslodavac.ba.
This is an annual competition, that in the chosen year, had over 15.000 responses and these 100
companies were chosen from a total of 650 companies that were nominated (posao.ba). The
reason for choosing these companies for the survey is the following: being employer of choice
signifies high interest for the company among the available talents in the workforce market. One
of the main criteria for attractiveness of a company are the opportunities it offers to its
employees to develop and advance, which is the main focus of this thesis. Answers provided by
these companies don’t show only their specific situations, but reflect practices present in most of
the companies currently active in Bosnia and Herzegovina, striving to attract most talented
employees and thus gain competitive advantage in the market.
The survey is preceded by an extensive and very detailed overview of literature available on
topics of talent management and career development. Aiming to find a connection between the
academic approach to talent management and career development and their practical application
in BH companies, many scientific articles, professional journals and expert interviews were
reviewed and specific and detailed descriptions of different techniques found and presented
through text, lists and figures.

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1.5. Structure of the study
This thesis is structured of three main chapters, preceded by an abstract and followed by a
conclusion with the results of the survey, limitations of the research and suggestions for further
studies. The three main chapters are introduction to the topic (which contains purpose,
significance, objective of the study, methodology of the research and structure of the paper),
literature review (which presents current views on talent management and career development)
and presentation of results of the survey.
Literature review analyzes over 100 scientific papers, peer reviewed articles and expert
interviews on the topics of talent management and career development, and gives detailed
descriptions of techniques used in these processes. Explanations and lists are often presented
visually through figures in order to make the thesis clearer and easy to follow. The third chapter
explains the process of setting up the survey, collecting results and the analysis. All results are
clearly presented in figures, followed by an analytical discussion of each answer. Final chapter
gives the summary and a critical view of the thesis.

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2. Literature review – theoretical basis of the master thesis
2.1. Overview
Literature review will cover three main elements that comprise the theoretical basis of this paper:
integrated talent management, specific talent development techniques and career management.
The concept of integrated talent management was recently introduced, after a need for more
wholesome approach to management of human resources was identified. Even though there are
many ways talent management is defined, three clear phases can be identified: talent attraction
(acquisition), talent development and talent retention (Berger and Berger, 2011), as well as one
additional process that is the main building block supporting talent management: performance
management (Farley, 2005).
Since the main focus of this paper is the connection between talent development and career
advancement, special attention is paid to different, specific techniques of talent development that
are currently being used and recommended to human resources managers. Specific techniques
collected from many sources are divided into 3 separate groups, based on the method of their
application in the organization. These three groups are: training and seminars, work based
learning and relationships and networking.
Finally, the concept of career management is explained, as well as specific roles of management
and employees in that process. Whereas once employees had little interest or power over their
career development, the new era is marked by their high involvement in decision making
regarding their careers, leaving human resources and middle management to constantly strive to
keep their best employees and offer them best career opportunities they can (Becker et al., 2009).

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Clear comprehension of these concepts is very important for proper understanding of this
research, results of the survey and their potential application in an organization.
2.2. Integrated talent management
During late 90s workforce came into focus as one of the most important resources companies can
use to build sustainable competitive advantage. McKinsey & Company were the first to use the
term “war for talent” which referred to the ever increasing competition among companies to
recruit and keep the most talented professionals available (Beechler and Woodward, 2009). This
lead to human resources managers paying ever more attention to the less technical and
bureaucratic side of human resources management and focusing more attention to the processes
of attracting, acquiring, educating and retaining highly talented individuals, whose special and
enhanced knowledge and skills would benefit their companies.
When these separate processes are designed, coordinated and organized so that they satisfy
previously defined vision, mission and strategy of the company, we come to the concept of
integrated talent management (Boudreau and Ramstad,2005). These activities also need to be
tightly supported by performance management which not only gives the proper basis for making
decisions regarding talent management activities, but also enables companies to measure
employees’ performance as well as effectiveness of efforts invested in management of human
resources (Farley, 2005).
Many authors have made an effort to define talent management and for the purposes of this
paper, four definitions are chosen with an intention to fully describe and enable understanding of
this rather complex process:

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1. “Talent management is simply a matter of anticipating the need for human capital and
then setting out a plan to meet it.” (Cappelli, 2008)
2. “We define talent management as the identification, development, and management of
the talent portfolio—i.e., the number, type, and quality of employees that will most
effectively fulfill the company’s strategic and operating objectives. (Berger and Berger,
2011)
3. “Talent management is a set of organization's activities whose task is to acquire, develop,
motivate and retain talented employees needed for the fulfillment of both current and
future business objectives. “ (Horvathova, 2011)
4. “Talent management are all activities and processes that involve the systematic
identification of key positions which differentially contribute to the organization’s
sustainable competitive advantage, the development of talent pool of high potential and
high performing incumbents to fill these roles and the development of a differentiated
human resources architecture to facilitate filling these positions with competent
incumbents and to ensure their continues commitment to the organization.” (Collins and
Mellahi, 2009)
2.2.1. Organizational changes
One of the most important factors affecting the human resources process is the ever changing
organizational environment Lewis and Heckman, 2006). The tall organizational structures of 90s
afforded many managerial positions and levels that could be used as an incentive and clear career
paths for motivated and talented employees. Technological changes, globalization and always
changing business models have all resulted in organizational structures becoming more flat,
omitting middle managerial positions used as guidelines for careers (Clarke, 2013).. Rather we

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now have “strategic” positions, whose importance for success and competitive advantage of the
company are supposed to indicate to employees, importance and prestige they would have by
occupying those positions instead of following the traditional “ladder-climbing” approach to
career advancement (Clarke, 2013).
2.2.2. Contemporary workforce
As the era where baby boomers comprised most of the workforce is coming to an end, human
resources managers are confronted with a new type of workers who are much more involved and
demanding in regards to the work life. Whereas workforce of the later part of the 20th
century
was quite content with life-long job security and steady pay, newly emerged workforce craves
not only personal fulfillment but also social and professional recognition and advancement.
Success is defined on a different level and those individual who possess special talents can set
their own conditions and search among different employers for better opportunities. As much as
that’s a threat for employers, it is also an opportunity to find and attract the best professionals
who with their talent and work will enable the company to profit significantly from their
investment (Clarke, 2013).
Demographic changes are only part of the reason for the change in workforce, while the
advancing technology is another factor that most influences requirements and capabilities of
modern professionals. In the digital age, Drucker’s “knowledge worker” (Drucker, 1985) is
highly sought after, being the ultimate source of competitive advantage for any company
interested to compete in the global market (Davenport, 2005). Thus, individuals with most to
offer, the most “talented”, are able to set their own conditions and have an advantage in
negotiating with employers and managing their careers.

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2.3. Talent management process
In spite of there being no standardized definition of talent management, most of the authors agree
that this process is composed of three main stages, namely: talent attraction, talent development
and talent retention. Proper conduct of these activities is dependent upon the company also
having an established performance management system which is used as a source of information
in each of the stages.
Figure 1 - Talent management; Source: Author
2.3.1. Talent attraction
Talent attraction refers to the beginning of the process, when the company is trying to attract and
recruit most talented professionals from the workforce market. Traditionally most important
elements for attracting new talent have been good salary and proper treatment of employees, but
new studies are finding that employees pay as much, if not more, attention to other factors like
organizational culture, company values, development and career opportunities, sense of
belonging, pride and loyalty towards the company. As a result, many companies are paying more
and more attention to building employer brand (Berger and Berger, 2011).
TALENT MANAGEMENT
TALENT ATTRACTION
TALENT
DEVELOPMENT
TALENT RETENTION
PERFORMANCE MANAGEMENT

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Employer branding is the process of establishing an identity for the company which defines
value system of the company, policies and accepted behaviors, as well as long term strategies for
attraction, motivation and retention of current and future employees (Backhaus and Tikoo,
2004).
Specific techniques used for attraction of talent are:
- Competitive salary; Salary and benefits package should reflect the company’s desire to
attract, motivate and retain the most talented and valuable employees. It should also be
connected with performance management and adjusted according to performance.
Performance based salaries are one of the most effective ways to motivate employees and
have them fully engaged in work process (Schlechter et al., 2014).
- Additional bonuses and non-financial benefits and incentives; one of the most frequently
used incentives are different scales of additional bonuses and different types of benefits.
Different types of bonuses and benefits are: bonuses which are based on performance,
commissions, profit sharing, annual monetary bonuses, paid holidays, health and life
insurance, company car, subsidizes travel, ability to work from home, flexible working
hours, child day care, offering food and drink at the workplace, casual dress code. All of
these can highly influence and enhance the working environment in the company and add
value that is very important to employees (Schlechter et al., 2014).
- Career development opportunities (promotions); one of the most important parts of talent
management is investing in career and professional development of employees. Specifically
these are comprised of offering ample learning opportunities which will be explained in
detail in the next part, coaching the employees and offering career path advice and guidance.

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Offering promotions, that is, advancement through the company structure which is
appropriately followed by more responsibility, better pay and benefits (Kraimer et al., 2011).
- Work life balance; employers should encourage their employees and make it possible for
them to achieve a balanced relationship between their professional obligations and personal
life that includes family and leisure time. Many studies show that employees with better
work life balance are more motivated and more productive so achieving this balance is a win
win for both sides. Many technology advancements have recently enabled employees to be
more available and engaged in their work even outside of their working hours. Employers
should not take advantage of this and disallow their employees to achieve fulfillment and
enjoyment in both their professional and personal lives (Richmond and Rohlfing, 2013).
- Flexibility; company should be willing to arrange with their employees flexible working
hours, locations and work methods in order to achieve fulfillment of both company needs as
well as the needs of employees. Having such atmosphere in the company is beneficial
because if has motivating effects on employees who are willing to give more simply because
they see their company willing to accommodate them. Although, managers should be careful
when setting up such arrangements because some employees might be inclined to misuse
their employers’ generosity (Stahl et al., 2012).
- Employer branding; this is the process during which the company creates a certain image
that leads to it becoming an employer of choice. This is becoming the preferred method of
attracting new talent because having a good and recognizable brand helps the company
attract the best candidates. Employer brand is affected by the values promoted by the
company, behavioral policies and the long term strategy of attracting, motivating and
retaining talented employees. Employer branding is done through the following steps:

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o developing company values that will always be reflected in organizational culture,
management styles, quality of current employees, impressions of products and
services company provides and the current general image of the company,
o external marketing of the company as the employer of choice, done primarily to
attract new talent,
o internal marketing of the company brand, conditioned so it would develop brand
loyalty and motivate current employees to be loyal and uphold company values,
stay with the company and offer they best performance (Botha et al., 2011).
- Organizational culture; values, beliefs, expectations and the way organization interacts with
its environment as well as its employees are elements that define company culture. Human
resources managers and company leaders are very focused on defining this culture and
through it attracting top talents from their industry because people who fit well with the
company culture will thrive in it and bring the best results without running into conflicts with
management or coworkers. One of the best ways to strengthen the company culture is to have
employees deeply involved into defining and upholding it (Vaiman et al., 2012).
- Job safety; employees must have safe and healthful working conditions, as well as be
protected from harassment and mobbing. It is necessary for every company to ensure their
human resources are protected and have suitable working conditions. Having effective job
safety and investing in employees’ health adds significant value to the workplace (Vaiman et
al., 2012).
- Social responsibility; this term refers to all the voluntary activities undertaken by the
company that are aimed at optimizing all economic, social and environmental impacts that
their business activities have on the society where they operate. Having a developed and

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active social responsibility strategy is beneficial for the company because it allows it to
attract new talent as well as motivating current employees and strengthening the company
culture, all the while affecting positively the environment and the society (Vaiman et al.,
2012).
Table 1 Talent attraction techniques; Source: Author
Whereas once high salaries and job safety were the primary factors companies used to attract and
keep employees, these two basic factors of the employer-employee relationship do not have that
much influence any more over the employees’ decisions to work for the company. Even though
Baby Boomer generation’s needs could be satisfied with competitive salary, benefits and a
promise of life-long job security, professional from the Generation X and Y require more than
that. They require recognition, educational and career development opportunities, as well as
balance between work and home life.
Another very important element is the organizational culture. Employees need to be able to
identify with the values of the company, have pleasant working environment and enjoy good
relationships with their colleagues and bosses.
TALENT ATTRACTION
• Competitive salary
• Additional bonuses and non-financial benefits
• Career development opportunities
• Work life balance
• Flexibility
• Employer branding
• Organizational culture
• Job safety
• Social responsibility

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As part of the efforts to build their employer brand, companies are now paying more attention to
social responsibility assuring that they not only don’t pollute and harm the environment, but also
contribute to society where they operate.
2.3.1.1. Recruitment and selection
An important part of talent attraction is the process of recruitment and selection of new
employees. In the context of talent management there are two basic approaches to recruitment
and selection. One approach is matching people to specific roles required in the company and the
other approach is designing roles according to talents of employees (Cunningham, 2007).
One of the basic tasks of human resources management is definition of roles in the company and
specific competencies needed for fulfilling those roles. The first approach is focused on finding,
selecting and recruiting employees that match the required competencies and can fulfill designed
roles. Some companies consider that it is better to hire new talent from outside to fill out
managerial and strategic positions. This approach is an attempt to quickly and at less cost acquire
needed knowledge and skills, but it is a risqué approach since often the employees find it
difficult to fit in with the organizational culture (Vickers et al.2014). Application of this method
in a company must be closely followed by a well-established and fully supported strategy of
talent development that will give a chance to selected candidates to learn and develop their
knowledge and skills.
This approach is tightly connected to succession planning during which selected successors are
groomed and educated for specific, defines managerial or strategic roles. It is extremely
important for every company to have ready replacement for all its important positions. Being
unprepared or hiring an inadequate replacement can be very costly for the company, disrupt the

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working process, disturb the company culture, teamwork and even affect future hiring processes
(Rothwell, 2011).
The second approach is matching and designing roles to fit people and their competencies. This
approach is only possible in highly developed and specially designed company structures which
are accompanied by very flexible and stable company culture. The essence of this approach is
that the company is highly interested in keeping its highly talented employees so everything from
the design on specific roles, that is job description, assignments and responsibilities, to
relationship among colleagues, working environment, compensation, including all different kinds
of benefits (financial or non-financial), are set to fit the needs and preferences of those highly
talented employees (Berger and Berger, 2011). This also includes different working methods
where employees are involved in the whole process and not divided and separated into
departments and sections which lack effective communication.
As part of the recruitment process, selection methods are very important. Mostly used methods
are interviews (structured interviews, as well as those focused on competencies) and tests
(personal, intelligence or tests for discovering particular talents or competencies like leadership)
(Werner et al., 2011). Newly emerging method, proving to be very effective, informative and
interesting, is the method of, so called, assignment centers. This method of selection is a
combination of tests, group workshops and interviews where candidates are given an assignment
or a problem that needs to be resolved within limited amount of time. Candidates are reviewed
and judged by a team of managers who are taught and coached to recognize specific required
skills and talents. This method is very effective because it gives an opportunity to managers to
observe behaviors and collect a lot of information about different candidates that they can use for
hiring for different, presently open or future, positions, depending on specific qualities of each

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candidate. It is also beneficial for candidates, because it gives them a chance to show their best
capabilities over a longer period of time and takes off the pressure of intense interview with one
or more managers, giving the candidate a chance to show all their knowledge, skills, way of
thinking and their personality (Adobor, 2004).
Inefficient recruitment is very costly for the company, especially when it comes to strategic
positions, while at the same time having an effective recruitment strategy and process brings
huge benefits to the company and leads to superior performance. This is why companies should
always strive to hire the most talented and most promising candidates.
2.3.2. Talent development
Talent development refers to different activities company can organize in order to increase
knowledge, skills and abilities of their workforce. Company can chose to provide these activities
to all or only to particularly selected employees with the intent to make them more productive,
creative, better problem solvers and leaders (Berger and Berger, 2011). Decision on how much to
invest and who to include into developmental programs depends on the approach company takes
and expectations it has from its employees. If some individuals are identified as having high
potential, company can chose to invest more into education and training of such person because
they expect to build that individual into a future leader or high ranking manager. Developmental
programs can also be offered to all employees with the aim of raising the level of their
capabilities because the company is able to grow and succeed only if the learning processes in it
are at the same or higher level than the changes and challenges it is facing in its business
environment (Trehan and Pedler, 2011).

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For the purposes of this thesis several approaches to talent development have been collected and
organized according to the method of learning. All talent development technique can be divided
into 3 categories:
 Action learning: work based learning
 Relationships and networking based learning
 External learning: training programs and courses
Table 2 Talent development techniques; Source: Author
2.3.2.1. Action learning: work based learning
Studies have found that the best way for employees to acquire and retain knowledge is by
learning from working on real life assignments and projects while interacting with their
colleagues and learning from those with more experience (Athey, 2004). Organizing such
learning programs requires detailed action plans with specific goals and ways to measure
achievement of those goals.
Work based learning includes:
TALENT DEVELOPMENT
Action learning:
work based learning
• On-the-job training
• New projects
• Job rotation
• Job shadowing
Relationships and
networking based learning
• Mentoring
• Coaching
• Meetings
• Professional communities
of practice
External learning: training
programs and courses
• In-house seminars
• Externally organized
seminars
• E-learning
• Off-the-job training
programs
• Specializations

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- On-the-job training; also knows as direct instruction, this is the process where an
experienced employee is given the obligation to train someone and teach them the
knowledge, skills and competencies needed to perform a specific set of duties within the
work environment and the concrete workplace where the employee will be working. This
method is effective and very frequently used. It is very easy to arrange and manage, since it
doesn’t require any special place, equipment, documents, knowledge or skills other than what
is required and normally used for performing the duties in question. The clearest benefits of
this method are the immediate feedback and the opportunity to immediately learn the correct
way to do a job, while the disadvantage is that is slows down the work process while the
training is ongoing and disrupts the workflow (Garavan, 2012).
- New projects; involving employees in new projects is one of the best ways for them to learn
not only about business but also about company culture and their colleagues. Team work is
crucial for strengthening the company culture and is extremely beneficial in creating synergy
that will lead to best performance and bring the company to the best results. It is also
important to have experienced team leaders on these projects who are able to guide the
employees and bring out the best in themselves, help them be creative and also facilitate
learning and acquisition of new skills (Garavan, 2012).
- Job rotation; this is a process in which an employee changes his work duties, that is,
switches with another employee in order to acquire knowledge and skills required to perform
duties of their position. Job rotation can be within same department or between departments.
The purpose of this process is to achieve professional development of employee by exposing
them to new knowledge, skills and perspectives. It’s also beneficial because it helps
employees learn how the whole operational and business process works, while improving

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working environment and relationships between coworkers. For successful implementation
of job rotation, human resources managers need to clearly define goals of the learning
process, explicitly state performance expectations, define rotation timeline and designate a
mentor who will oversee the process and provide necessary feedback. Benefits of job rotation
are increased productivity, improved performance, higher innovativeness, higher knowledge
levels, less monotony and higher motivation of employees (Garavan, 2012).
- Job shadowing; this is a process where less experienced employees are given an opportunity
to work alongside and learn from an experienced colleague. Job shadowing has positive
impact on communication between departments, encourages continuous improvement,
sharing of best practices, facilitates networking, as well as allowing individuals to get a more
wholesome view of the business process he is involved in. There are several different types
of job shadowing, namely: observation (where the visitor simply observes his host without
participating), job sharing (where the visitor actively participates in some of the work
activities of the host, thus gaining actual work experience) and interval job shadowing (where
the visitor periodically observes his host, preceded and followed by meetings that focus and
explain observed activities) (Salas, 2012)..
2.3.2.2. Relationships and networking based learning
Relationship and networking based learning is the extension of the previously mentioned method
and it includes:
- Mentoring; the goal of mentoring is to increase effectiveness of interactive learning and
leadership. This process is aimed at developing professionalism by connecting a chosen
employee with a mentor whose job is to oversee a wholesome development of his protégée.

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Mentoring is about developing personal and professional relationships and not just
acquisition of new skills and knowledge. Mentoring is crucial in the process of succession
planning and development of future company executives and leaders (Meyers and van
Woerkom,2014).
- Coaching; the goal of coaching is to assign a coach with specific knowledge, skill or
expertise who is responsible to teach and guide an employee who needs to acquire those
specific capabilities. The main focus of coaching is on skills and knowledge acquiring and
this method is used for development of leadership skills in executive managers, professionals
and other employees deemed as promising future leaders, with a focus on teaching and
improving competencies, knowledge, skills, capabilities and problem solving techniques.
Coaching is a two-way process, highly based on feedback which the coach gives to the
coached employee in order to point out what the employee is lacking, what needs to be
improved or new skills that need to be developed. During the coaching process, coach
explains the expectations the company has from the employee, gives encouragement and
support, and finally demonstrates how certain things are done and how to behave in newly
faced situations. Coaches chosen for these duties are company’s highly skilled and
experienced managers, mentors, supervisors and sometimes even outside experts.
Implementing successfully the coaching process has multiple benefits for both employees as
well as the employer, namely higher achievement of company goals, increase of productivity,
development of employees’ skills, talent retention and higher satisfaction on the job (Meyers
and van Woerkom,2014).
- Meetings; by including employees in meetings focused on solving a particular problem,
company gives them a chance to observe and learn about management style and the way of

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thinking of those key persons whose support they will need in the future for development of
their knowledge and skills, as well as their position in the company and advancement of their
careers. Employees are also able to see and understand implementation of company strategies
in specific situations and learn how to behave in future situations that will require problem
solving skills. It also gives them a chance to show their own strengths and give input that will
signal to management their intent to get involved and advance in the company (Berger and
Berger, 2011).
- Professional communities of practice; these are communities of professionals who are
connected through a passion and concern for a particular professional area in which they
work. By interacting with each other they are able to develop and improve their skills as well
as come up with and share new ideas and problem solving techniques (Garavan, et al. 2012).
Communities of practice are also used for developing new strategies, generating new lines of
business, promoting best practices; developing new professional skills and help companies
find, develop and retain talented employees.
2.3.2.3. External learning: training programs and courses
Training programs and courses refer to learning that takes place off the job, in a classroom or
online where the employee learns about new subjects, process, methods of work and any other
skills that are new to him and would be useful in his work. These include:
- In-house seminars; provided by external organizations like consulting companies, or
organized in the company by the human resources department, these seminars are designed
for specific employees of the company (for example low level managers) or specific
departments (for example, marketing department or the sales team) and are usually centered

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around a specific subject. Seminars are usually held at the company and the providers of the
seminar supply attendees with training methods and materials which are usually developed
for that specific occasion, so as to fit the specific needs of the trainees (Berger and Berger,
2011).
- Externally organized seminars; these are seminars organized by relevant institutions (for
example chamber of commerce) or consulting/training centers on specific topics that are not
specified by the company but are the focus of the whole business community or industry.
These seminars are attended by employees from different companies. Human resources
managers should in consultation with line managers be updated about specific trainings and
seminars available in the business community and offer attendance to interested employees
(Berger and Berger, 2011)..
- E-learning; some of the companies chose to have their own learning centers that are based
online and to which all employees have access. This method of talent development is very
attractive to companies because it can provide high quality education, on demand (without
delay and waiting), at reasonable and acceptable cost. Successful implementation of e-
learning requires several careful and purposeful steps:
o development of e-learning system that is in line with the company’s mission,
strategy, values and organizational culture,
o development of e-learning system must have support from senior leadership of the
company,
o development of e-learning system include business units in the learning process,
o educational programs must be developed in accordance with the business strategy,
o educational programs must be cost effective,

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o selection of appropriate education technology must be done with consideration of
business processes,
o the goal of e-learning centers should be to create and maintain knowledge capital
within the company that will be shared with future generations (Schweitzer,
2004).
- Off-the-job training programs; these are trainings provided away from the workplace.
These can be specific trainings needed from performance of the work duties or trainings on
general skills and knowledge useful in specific profession. Different forms of off-the-job
training are: classroom lectures, audio-visual materials such as instructional videos,
simulations of specific situations employees can face at work, training on specific new
equipment, case studies, role-play and different types of games. Off-the-job training sessions
are also beneficial for improving bonding, organizational culture, motivation and
productivity. Some of the disadvantages of off-the-job training is that is costly, requires time
away from work, some employees might need some additional pre-training to be able to
participate (Berger and Berger, 2011).
- Specializations; this method is applied in companies where such programs are possible and
when employees chose a specific career path that requires them to specialize in a particular
area of their professional interests (Berger and Berger, 2011).
Some companies also provide financial assistance or completely finance further formal education
for their employees and managerial staff. This method is an extension of method used for
attraction of talent: reimbursement of educational expenditures that the employees had to
undertake to acquire knowledge and skills that the company can now benefit from. Such an offer

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can have a very motivational effect and build employer brand loyalty among employees who feel
taken care of and appreciated by their company.
2.3.2.4. Succession planning and career management
The process of talent development also includes two terms that are not specific techniques, but
are topics that need to be addressed by the managers within the talent management process.
These two issues are succession planning and career management.
In dynamic business environment every company is exposed to a risk of losing its key people,
those occupying strategic or leadership positions. In order to prevent company from going into
chaos or encountering any serious problems if something like that were to happen, it is very
important to seriously consider succession planning and have successors ready to take over at
any time for all strategically important positions in the company.
Succession planning is composed of 2 main steps: identifying key strategic positions in the
company and developing strategies to fill those positions by a combination of internal and
external recruiting. The level to which succession planning will be conducted depends on three
factors: how much the company is exposed to danger if the strategic positions become
unoccupied, how many talented people are available for filling out those positions and how much
time the company has to resolve the issue. Effective succession planning is important and very
beneficial for the company because it reduces risks to which the company is exposed and it can
also be used as a motivational tool since the employees considered for successors will feel
appreciated, taken care of and will in turn respond by being more productive and loyal to their
company (Rothwell, 2011).

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Career management is an extension of succession planning and it can also be done for non-
strategic positions in the company. This concept will be explained in more detail in the second
part of this thesis.
2.3.3. Talent retention
After the investments into acquisition and development of talents, another challenge is presented
to the companies: talent retention. Talent retention is important simply because if the company
chooses to conduct and invest into an integrated talent management process, this third step
becomes the crowning moment of their efforts when the rewards of these investments come to
light and company achieves higher level of success because it has superior workforce. Going
through the previous steps, calculated selection of employees and investing in their development
is pointless unless the company is able to retain them and benefit from their knowledge and
skills.
Table 3 Talent retention techniques; Source: Author
TALENT RETENTION
• Career advancement opportunities
• Corporate culture
• Training and development opportunities
• Performance evaluation
• Performance based payment system
• Employer branding
• Retirement provisions
• Work life balance
• Good working conditions
• Recognition for special achievements

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There are several methods companies use to retain their talents, among which these are the most
prominent:
- Career advancement opportunities; every company should have a defined system and
models of advancement that employees can expects to go through on their way of building a
career. Employers should be straightforward and open about what opportunities they can
offer and what criteria need to be satisfied in order to achieve career advancement. This will
have a motivational effect on employees who know that their hard work will pay off and they
will be rewarded for superior performance by being offered new opportunities (Kraimer et
al., 2011).
- Corporate culture; this element has been explained as one the methods used for talent
attraction. If the employees fit well in their company and feel that they are valued they are
more likely to stay and give their best performance (Berger and Berger, 2011).
- Training and development opportunities; having offered such programs to their
employees, organization will not only have more knowledgeable and more skilled workforce,
but it will also motivate their employees who will feel that their company is taking care of
them and giving them a chance not only to better their job performance, but also their
prospects in the future (Garavan, 2012).
- Performance evaluation and rewards for achieving more than is expected; as was explained
earlier, every company should have a standardized system of performance measuring and
based on that reward scales can be established to provide motivation to the employees. The
rewards can be financial as well as nonfinancial and the system should be perceived as fair in
order to be effective (Davenport, 2005).

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- Performance based payment system; again, based on data provided by the performance
management system, company can establish a system of payment that will motivate
employees to show their best and give superior performance with the aim of receiving
adequate, promised payment (Schlechter et al., 2014).
- Employer branding: again, one of the topics explained in talent attraction. A direct
consequence of building a strong employer brand and becoming an employer of choice is that
the current employees are more likely to stay with the company because they feel loyalty and
are themselves willing to promote their company to others (Botha, 2011).
- Retirement provisions; offering retirement plans and planning for the future with the
employees will have a motivating effect and employees will feel valued at the company
motivating them to stay (Bresser, 2015).
- Work life balance; another element explained in the talent attraction. Employees who feel
fulfilled and have rounded lives are more likely to stay with eh company. The effect of
financial reward is insufficient and those who have skills and talent desired with the market
will flow towards a place where they can find work life balance and a change foe a fulfilling
life (Richmond, 2013).
- Good working conditions; as one of the element considered in organizing company culture,
the working environment should be pleasant and encouraging. Some employers offer
refreshments and an area where employees can eat and socialize. Such provisions have a
positive, motivating effect and strengthen the organizational culture. Also, company should
always follow strictly guidelines regarding safety and health in the workplace (Richmond,
2013).

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- Recognition for special achievements; whether financial or not, recognition is always
appreciated and has motivational effect on those who are rewarded as well as the whole team
(Richmond, 2013).
Modern professionals are no longer satisfied, let alone impressed with monetary rewards, what
they crave is validation, sense of belonging and involvement. Some of the most important factors
employers can offer to entice employees to stay at their company are pleasant working
environment, flexibility and balance between work and home life and finally many opportunities
for personal and professional development and career advancement.
2.3.4. Performance management
The talent management’s process which goes through the natural life cycle of employment from
entry to exit is thoroughly supported by the mechanism knows as performance management.
Performance management is used in all stages of talent management, from the identification of
talented individuals and setting their goals, to recording individual performances and finally to
analyzing collected data (Aguinis, 2011). This is a very important and wide topic that has a very
important role and structure that can be explored at length. For the purposes of this thesis, it will
be explained only concisely in order to explain its role as a basis for quality integrated talent
management process and a source of useful information for human resources, as well as other,
managers interested in optimizing work processes and achieving superior organizational
performance.
The proper way to organize performance management requires these elements: clear definition of
performance goals for each employee, systems for development of skills and abilities that enable
employees to perform their duties, adequate motivation systems and an adequate human

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resources information system that facilitates collection and analysis of large amounts of data
Bartlett and Ghoshal, 2013). Data collected through the performance management are about
employees’ knowledge and skills, company needs and employees' goals and records of
individual performance history. Human resources information system should also have the
ability to analyze that data and produce reports.
Proper implementation of performance management is a key factor leading to successful talent
management, that is, to improving talent identification, recruitment strategy, development of
appropriate educational programs and creation of adequate reward system. It is also one of the
key elements whose functioning is necessary for retention of desired talents.
Performance management is based on several simple steps: measuring specified criteria,
providing feedback, performing corrective activities and measuring again.
There are four different sets of criteria that can be measured: (Berger and Berger, 2011)
 ACTIONS: performance management measures focused on deeds that reflect personal
characteristics,
 BEHAVIOR: performance management measures focused on typical behaviors, while
the assumption is that the behaviors affect success,
 KNOWLEDGE/SKILLS: performance management measures focused on skills and
knowledge assuming these two factors affect success of the performance,
 RESULTS: performance management measures achievement of specific pre-set targets.

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Figure 2 Performance management criteria; Source: Author
The companies will chose one of these based on the values and company culture which will
dictate what is perceived as successful and a relevant measure of success. Historically,
performance management was based on financial results, but the experience of most managers
was that this measure was ineffective, often being misleading as well as subject to manipulation.
The solution for this problem was found in organizing performance management as a balanced
scorecard with 4 different categories of topics: clients, internal organization, innovation and
learning and finances. (Kaplan and Norton, 1992) When all these elements are given scores and
analyzed, performance of an employee is measured; we can see what skills and improvements
they need and future goals can be set.
Feedback is the crucial element for success of performance management system. All the analysis
is pointless unless employees are informed about their performance and given instructions and
help to better their capabilities and achieve their goals (Aguinis et al., 2012).
PERFORMANCE
MANAGEMENT
CRITERIA
ACTIONS
BEHAVIOR SKILLS
RESULTS

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2.4. The necessity and benefits of talent management
The most important thing for any company is to make profit and survive, which can only be
achieved if the company has and keeps developing its competitive advantage. The only truly
sustainable competitive advantage is the workforce. It is absolutely necessary for a company to
successfully implement individual techniques of integrated talent management, if they want to
sustain their competitive advantage and get the best from their workforce (Bartlet, 2013). The
necessity of talent management implementation is the result of organizational and demographic
changes, as well as globalization, which all reflect significant changes in workforce, namely that
the individuals therein are more educated and more demanding than before, giving them higher
bargaining power, but also giving the companies more options and making the choices of human
resources manager harder and their correctness more important.
Conducting talent management techniques will directly influence building the employer brand
which will attract the most talented professional, putting the company in the best position for the
future. Investing into further development of those talents will result in many benefits for the
company including greater performance of the employees and superior business operational
results. Finally, by implementing talent retention techniques and making sure their best
employees stay with the company, they not only assure future superiors business performance,
but also keep their employees from joining their competitors.
By keeping the talented professionals that the company invested in, a base of knowledge is built
and those talents can act as mentors and coaches for new generations, sharing and transferring
their unique experiences to new employees. Higher retention directly means lower turnover and
much lower costs of the whole process of human resources management.

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Another benefit of implementing talent management is the reduction of risk with the proper
succession planning and smart investing into building knowledge and skills needed to keep up
with the ever changing business environment.
2.5. Talent management’s challenges
There are several challenges that face human resources managers trying to implement talent
management. The first challenge is how to convince top management into investing into talent
management (Garr,2012). Even though undoubtedly beneficial, talent management requires a lot
of investment and the benefits of these investments are sometimes hard to see clearly or right
away. To deal with this issue it is important to conduct performance management and to find
concrete, measurable results that can show that investing into talent management and specifically
into talent development is beneficial and worthwhile.
The second challenge is how to attract the best talents to the company, directly followed with
how best to spend scarce resources and organize the optimal developmental programs and of
course how to keep those talents who were chosen and developed.
Another challenge for human resources managers who are conducting talent management
techniques is integration of company goals and employees’ needs and goals into a fitting
arrangement that will result in best outcomes for the company while at the same time satisfying
the needs of individuals. For this to be achieved, it is very important that employees are
familiarized with the company mission, vision and values, but also that they know what the
company goals are and that they are committed to achieving them. At the same time, company
should make sure to take into consideration needs and wishes of individuals and provide them
with competitive salary and benefits, as well as ample opportunities for growth, professional
development and career advancement (Garr,2012).

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One of the more subtle challenges of talent management is placing the right people in the right
position. This decision is very important and much thought and analysis should be put into it
because the whole investment is wasted if this final choice is not right. By making sure that the
right person is doing the right job, the investment will have paid off and the company will be
able to get the most out of the employee while at the same time having a satisfied employee who
feels appreciated and worthy.
Finally, a challenge for human resources managers implementing talent management is to keep
up with the latest technology trends which can be very beneficial for the process and help reduce
costs, save time, improve analysis and provide better results. There are available different
software solutions that are intended to enable integration of company’s overall talent strategy. If
these programs are used only to automate and digitalize old, ineffective strategies then usage of
new technology will not yield any positive results. The decision which specific software to use is
an important one and management should take time needed to adequately analyze all available
options and determine the right combination of process steps in order to achieve superior results.
(Garr,2012). Besides the very choice of software, the decision of how to implement it in the
company is also important. The best approach is to apply technology in phases. This is important
not only to facilitate easier acceptance of change in process and work flow, but also to allow the
organization and employees using and implementing the technology to sufficiently develop their
skills and capabilities that will enable them to most fully utilize the technology.
2.6. Career development
The word career can refer to one’s professional occupation in general, but within the context of
an organization it denotes an employee’s movement from one position to another, usually

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accompanied with higher earnings, greater responsibilities, higher status and power. Building
one’s career is a lifelong process that professionals put on top of their priority list and take it as
one of the main measures of personal and professional success. Besides being important to
employees, career development is also an important issue for companies who aim to stay
competitive in the market. Because companies operate in turbulent environments always with
new challenges, developing technology and new opportunities, the focus of strategically
involved HR should be to always have workforce that will assure that company needs are met
and that the company can answer to and take advantage of new opportunities, keep developing
their competitive advantage and stay ahead of the competitors. By investing in their people and
development of their careers, the company will benefit in many ways: higher earnings, increased
productivity, higher commitment from employees and long term effectiveness (Baruch, 2006).
Career advancement within a company for an individual is most clearly seen as movement from
one position to another. These movements can be vertical, horizontal or lateral (Ishida et al.,
1995). Vertical movements refer to promotions or demotions along the line of hierarchical order.
Getting promoted upwards is the clearest sign on career advancement. Horizontal movement is
when an employee changes to a position on the same hierarchical level, but with more complex
and more important tasks. Lateral movement is when an employee changes to a position on the
same level but in a different department.
Promoting within the company is very beneficial both for the company and the employee. For
the employee such a move usually comes with increase in salary and/or other benefits and it has
a very positive effect on the employee giving him the sense of being recognized and appreciated,
the encouragement to keep working hard, to keep developing his abilities and stay loyal to the

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company. The benefits for the company are important as well: process of filling open positions is
faster, safer and less costly. By promoting within, the company is retaining the most productive
employees and encouraging them and their further development. To properly conduct this
process, HR department must do an analysis and an assessment of chosen candidates’
performances, abilities and potential for successfully performing new duties (Aguinis et al.,
2012). This is a crucial moment where all the useful information collected through the process of
talent management should be utilized. The openings must be advertised internally and HR must
provide adequate support to interested employees with their career planning and the overall
career development in the company.
Since there are two sides to the career development process: the employee and the employer, it is
of crucial importance that the needs of both these sides are met and matched if the career
development process is to have any substantial effect or positive result. Companies and their
employees are partners in this process of promotion and professional development where they
both have a role and specific correlated and integrated organizational and individual tasks. The
employee as an individual must have his own wishes and goals, as well as plans how to achieve
those, and the company must also know its own needs for certain specific skills, abilities,
knowledge, that are required from the employees. The role of HR manager is to find the best
match and always assure that the right people with the right skills are always placed on the right
positions, especially on strategically important positions, because that is the only way company
can achieve lasting success. Strategically important positions can be different for every company,
which should be decided by top management based on the business model, mission, vision and
strategy defined for the company. Without this foundation, none of the efforts of talent
management can be completed effectively. Strategic positions are the ones most attention should

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be paid to and for which clear succession plans should be made and implemented (Lewis and
Heckman, 2006).
The process of career development is composed of two separate but connected process that need
to be coordinated in order to achieve the best results: career planning which is in the realm of the
individual employee and career management which is the duty of the human resources
management (Wright et al., 2001). In the career planning process, an individual will chose an
occupation, chose an organization and then clearly state his career goals based on personal
preferences and make a plan on how to achieve those goals. On the other hand career
management process which develops within the company is comprised of the following steps:
analysis of company needs, selection and recruitment, allocation of human resources, evaluation
of employees and finally training and development of their abilities. In short, after identifying its
needs, the company needs to select, assign, measure, analyze and finally invest in development
of employees in order to create a base of highly qualified and capable individuals who will meet
future needs of the company.
The crucial point in career development is the matching of these two processes so that both sides
are satisfied and in order to achieve that, both sides should be open for an honest dialog and
presentation of what they bring to the table. Employees need to be clear and realistic about their
personal preferences and goals which they should decide after a deep and honest analysis of their
values, abilities, interests and opportunities that they have. The company on the other hand needs
to know what their future needs are, what their employees’ abilities are and then have prepared
career and skills development programs that can be presented to employees (Wright et al., 2001).
Employees should inform their managers or human resources department about their wishes and
intention and then it is the duty of HR manager to offer them the best options that will result in

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optimal combination and best balance between individual’s career goals and company workforce
requirements. Also, it is beneficial if both of the sides are more proactive which means that
individuals should always keep developing their skills on their own and searching for new
opportunities, while the company should keep their employees informed about changes taking
place in the organization, about new positions opening and different educational and
development programs that are available within or outside of the company.
Career development is very closely connected to socializing within the organization, building
one’s network and it must be based on development of knowledge and skills. It is an imperative
for an individual who wants to advance in their career to work on their own continuous
improvements, learning new skills and developing their own competitive advantage that will
give them a chance to stand out, advance and pass others in the ever more demanding business
conditions. On the other hand, the company also must take a proactive approach and develop
their workforce by providing them constantly with educational programs, trainings, coaching,
mentoring and other techniques, described earlier in more detail. Networking within the
organization and making oneself visible is important because those who have the power to make
decision about who will be promoted need to be able to notice and assess potentially interested
candidates.
2.6.1. Roles in the career development process
Career development process has three main parties involved: the employee, the middle manager
who is his/her direct supervisor and human resources manager. The best results are achieved
when all of them work together, openly communicating, setting realistic goals and each
performing his duties in the process (Ishida et al., 1995).

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Employees’ involvement in the process of career development has increased significantly over
the last few decades. Whereas before employees spent most or all of their work life cycle in one
company which directly controlled and dictated their career opportunities, highly educated and
experienced professional now have much more leverage and power in deciding where they work
and what jobs they have. If the employee wants to build his career within the organization, it is
very important that he informs his manager about that so that he can get proper information
about what he can expect in regards to career opportunities as well as development of his skills
and abilities. But even before that, the employee has to be clear about his own preferences and
wishes in order to be able to stick with the commitments he makes to the company. Employee
also needs to be realistic about his qualities, skills and abilities he can offer and get involved in
any educational programs or trainings offered by the company. If he wants to advance, the
employee should invest in his education and development of skills even if the company does not
offer any programs that support that. The role of the employee can be summed up in these few
tasks: make a self-evaluation of his own abilities, strengths and weaknesses, decide what his
preferences are, analyze possible opportunities for career advancement, set realistic goals, openly
communicate his intentions to his company, make plans of activities to be performed in order to
achieve his goals.
As the person who is in the situation to know the most about his subordinates’ abilities,
performance and presence or lack of skills, the middle manager is the one who is most likely to
recognize which employees match organizations’ requirements for future. He also knows which
of his subordinates have potential and are willing and able to develop their skills and which ones
would prefer to stay in current positions. In order to fulfill this part of his role, middle manager
must be well informed and he must have good communication with the human resources

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department who are responsible to educate middle managers how to evaluate and recognize
talents, as well as to communicate to middle managers career development opportunities
available in the company. The middle manager also must possess sufficient communication skills
because he is required to communicate with his subordinates about those development and
growth opportunities.
Middle manager’s role in the process of career development is interpersonal and it can be
summed up as a mix of education and communication tasks, including performance
management, evaluation of employees, encouragement and source of information to both human
resources department and the employees. He is the connecting tissue that makes this process run
smoothly.
As it has been established, human resources department plays a strategic role in the
organization’s effort to achieve sustainable competitive advantage, which ultimately must be
based on its workforce. As part of its overall strategy, in order to plan and sustain adequate level
of quality workforce, human resources department must design and implement an adequate
career development system that will fulfill future personnel needs. Success of this system is
greatly dependent on the support it has from top management, who must understand importance
of this process for the future success of the company. Once this support is assured, human
resources departments sets out to design a wholesome system that reflects the culture of the
organization, aiming to fulfill its long-term goals, stakeholders’ expectations and giving human
resources managers clear direction and point of reference. This process begins with identification
of future company needs which are directly influenced by company mission, vision, values and
long term goals. They are determined by detailed analysis of company competences, market
conditions, future growth, productivity, employee turnover and overall talent pool of the

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company. Human resources mangers duty is also to the employees. He should provide help with
the self-assessment and help employees develop realistic expectations, set smart goals and make
flexible and realistic career plans. Human resources manager must openly and honestly
communicate to the employees what the company can offer then and encourage them to develop
their abilities. Human resources manager also must provide support guidance and constructive
feedback to the middle managers who are his main allies in the career development process.
Table 4 Career development roles; Source: Author
For successful fulfillment of his role, human resources manager must be well trained in the
following areas: performance management, job design, career planning and career counseling.
He also must be an excellent communicator, able to prioritize and encourage learning and
development. It can be summed up that the role of human resources manager is in these tasks:
collecting and analyzing information about company needs and employees, designing a career
development system and matching the needs of the company with the preferences and goals of
employees, providing overall support and guidance to middle management and the employees,
navigating them to reach the best results.
CAREER DEVELOPMENT ROLES
EMPLOYEE
•Self evaluation
•Decide preferences
•Analzye opportunities
•Set realistic goals
•Open communication
•Make action plans
MIDDLE MANAGER
•Performance management
•Source of information
•Encouragement
•Periodic evaluations
HUMAN RESOURCES MANAGER
•Analyze company needs
•Analzye employees' wishes and
capabilities
•Design career management system
•Match company needs and employees'
wishes
•Provide support and guidance

48 | P a g e
3. Results of the research and data analysis
Third chapter of this thesis will contain results of the research conducted among 100 top BH
companies. Results will be presented in graphs and given a descriptive analysis and comment.
The aim of analyzing these findings is to either confirm or refute the hypotheses given at the
beginning of the thesis.
The questionnaire was sent to 100 companies that were chosen as employers of choice for the
year 2014 by internet portal posao.ba. 43 companies responded to the questionnaire, 4 companies
declined to participate in the survey due to company policy and 53 companies did not send any
response.
Before the first question companies were asked to provide name of the company and person
filling out the survey, as well as the position that person had at the company. This is a graphic
presentation of responses:
Figure 3 Participants in the survey
3.1. Questionnaire
The questionnaire contained 22 questions which were divided into 3 parts:
2%
9%
14%
74%
0% 10% 20% 30% 40% 50% 60% 70% 80%
HRM's assistant
CEO
CEO's assistant
HR Manager
Percentage value %
Questionaire was filled out by

49 | P a g e
- human resources and talent management,
- talent development and
- career management.
The first part contained only 2 questions. Responses to these questions gave us independent
variables that defined company’s basic positions in regards to management of human resources
and specifically talent. This is a graphic presentation of responses to the first question:
Figure 4 Responses to question 1.
Responses offered for the question were CEO, HRM, Middle management and outside
consultants, but after careful consideration and given the experience that human resources
function is still gaining its deserved status in BH companies, it was made available to
respondents to check more than one answer. Results show that the 42% percent of the companies
have an human resources manager and do place the responsibility of human resources
management to those educated and most experienced for that responsibility.
14% of the companies still chose to keep the responsibility of human resources management
solely at the CEO position. The 6 companies that gave this response are all completely different,
0%
5%
12%
14%
14%
14%
42%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Outside consultants
CEO & Middle managers
CEO & HRM
CEO
Middle managers
HRM & Middle managers
HR manager
Percentage value %
Who is responsible for management of human resources in your company

50 | P a g e
one having less than 50 employees and one having more than 500 employees; they are all in
different industries from banking to mass media and even public sector. This is important
because it would be justifiable if the responsibility of human resources was left to the CEO in a
small company that didn’t have a human resources manager, but these results show that in some
companies we still see resistance towards giving the human resources function its validity and
deserved place.
Still, most of the companies still chose to share responsibility for human resources management
among CEO, human resources and middle managers. This approach is the best because all of the
involved parties are equipped with knowledge and experience which results in synergy that
assures the company will manage its human resources so that it achieves superior results, which
is the ultimate goal of every business.
None of the companies reported using outside help, such as consultants or recruiting companies,
for management of their human resources.
3.1.1. Talent management
The second question was the eliminatory question that directed respondents to either second or
third part of the survey. This is a graphic presentation of responses to the second question:
37%
63%
0% 10% 20% 30% 40% 50% 60% 70%
NO
YES
Percentage value %
Do you practice talent management in your company

51 | P a g e
Along with the question, a definition of talent management was provided, so that respondents
would know exactly what was meant by the term “talent management”. Results indicate that a
majority of the companies do know what talent management is and are committed to actively
apply talent management techniques. This response gives us a confirmation of Hypothesis 1,
which states: Top BH companies are familiar with the concept of talent management and apply
talent management techniques in the management of their human resources.
Respondents who replies yes proceeded to the second part which contained questions related to
application of specific talent management techniques.
Respondents who replied no skipped the second part and proceeded to the third part which
contained questions related to career management. Having responses to this set of questions
provided data for the analysis and comparison of approaches to career management from 2
opposing angles.
The third question was designed to determine what the benefits are that the company receives as
a result of practicing talent management. There were 6 possible answers and respondents were
given the option to check more than one. This is a graphic presentation of responses to the third
question:

52 | P a g e
All of the companies that practice talent management have positive results in increasing
knowledge and skills of their employees. It is also highly beneficial for motivation and better
financial results, but it doesn’t have too much effect on decreasing costs since only 33% of
companies report that it affects their total cost and only 22% report that it affects their human
resources costs. Conclusion we can draw from this is that investing in talent management
certainly has costs and it doesn’t result in decreasing hiring and training costs which should be
expect, but the benefits of talent management justify those investments because it has huge effect
on increasing capabilities and motivation of employees resulting in better financial results, which
was experienced by 63% of the companies.
The fourth question lists talent attraction techniques and requires respondents to choose all which
are applied in their company. There were nine options and respondents were given the option to
check all that apply. This is a graphic presentation of responses to the fourth question:
22%
33%
56%
63%
70%
100%
0% 20% 40% 60% 80% 100% 120%
Decreased HR costs (hiring, training)
Decreased business costs
Better morale among employees
Better financial results
Increased motivation
Increased knowledge and skills
Percentage value %
How did implementation of talent management contribute to success of your
company

53 | P a g e
Results of this question show that most companies (89%) have recognized that offering career
development opportunities is hugely beneficial to attracting the best employees. Employer brand
and organizational culture are also very important with 74% and 70% or respondents choosing
these techniques as well. Fourth ranking answer was job safety (67% of companies) which is
very indicative of the preferences and cultural influences in the BH market. Many employees are
reluctant towards change, but also find few opportunities in the market; therefore job safety is
important to them which is recognized by the companies. Social responsibility is also high
ranking with 56% of companies applying this technique. Salary and benefits, be it financial and
non-financial, are less popular with only 30% choosing salary and 44% choosing non-financial
incentives. From this we could conclude that financial and non-financial factors are not driving
forces that help companies find talents. This is because those professionals who are superior can
get salaries and benefits that they want anywhere, but will be attracted to companies that offer
them career advancement and a pleasant and motivating environment to work in. Flexibility was
26%
30%
41%
44%
56%
67%
70%
74%
89%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Flexibility
Competitive salary
Additional bonuses and benefits
Non-financial incentives
Social responsibility
Job safety
Organizational culture
Employer brand
Career development opportunities (promotions)
Percentage value %
What methods does your company use to attract new talents

54 | P a g e
chosen by only 26% of the companies which indicates that in BH work environment, working
hours are strictly followed and employees are expect to be available and strictly adhere to the
rules of the company.
The fifth question lists talent development techniques and requires respondents to choose all that
they apply in their company. There were fifteen options and respondents were instructed to
check all that apply. This is a graphic presentation of responses to the fifth question:
The most popular talent development techniques are seminar, whether organized in-house or
outside the company, most companies choose to employ these two methods, 89% and 93%
respectively. They are closely followed by coaching and on-the-job-training, 78% and 74%
11%
11%
30%
33%
41%
44%
48%
52%
52%
52%
63%
74%
78%
89%
93%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Specializations
Financial support for further formal education
Professional communities of practice
Job rotation
Shadowing
Gatherings with exchange of experience
Mentoring
E-learning
Off-the-job training programs
Temporary posts
Action learning (inclusion in new projects)
On-the-job training
Coaching
In-house seminars
Externally organized seminars
Percentage value %
What methods of development does your company use to educate
employees and develop their talents, skills and capabilities

55 | P a g e
respectively, which indicates that most of the companies find that transfer of knowledge within
the company is a worthy endeavor and leads to improvements of employees productivity.
These two are followed by action learning, which is inclusion of employees in new projects
(63%) which is another method that allows employees to learn from their more experienced
colleagues. Just above half of the companies use temporary posts, off-the-job training and e-
learning. These techniques are more costly and require more organization, as well as conditions
that are not readily available, like specialized computer systems and experts who can run them,
or alternative locations where employees can be deplored for training.
Less than half (41% - 48%) of the companies chose mentoring, shadowing and professional
gatherings as learning techniques, which are more related to networking and exchange of
experiences between senior employees and new talents. Very few companies, about 30%, chose
to offer job rotation and membership in professional organizations as development techniques,
which is surprising since these methods, especially job rotation, are very low cost methods that
can yield big results, not only as a method of learning, but also as a method of motivating
employees and avoiding saturation and boredom. Only a few companies offer support for
additional education (about 10% of them), which can lead to a conclusion that these methods of
talent development are too costly and companies do not yield much advantage from investing in
their employees this way.
The sixth question lists talent retention techniques and requires respondents to choose all that
they apply in their company. There were eleven options and respondents were instructed to
check all that apply. This is a graphic presentation of responses to the sixth question:

AMINA H RAZIC - MASTER THESIS - FINAL - MAY 2016

AMINA H RAZIC - MASTER THESIS - FINAL - MAY 2016

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