CHAPTER 1

1.1 INTRODUCTION.

With businesses going global and competition becoming intense, there is

mounting pressure on organizations to deliver more and better than before.
Organizations therefore need to be able to develop and deploy people who can
articulate the passion and vision of the organization and make teams with the
energy to perform at much higher levels.

These people build and drive the knowledge assets of a corporation, the value of
which has been established to be many times more than the tangibles. The
capacity of an organization to hire, develop and retain talent is therefore the most
crucial business process and priority on the CEO’s agenda.

The 1990’s ended with a call-to-arms to fight “the war for talent”. While the war
for talent clearly has cooled in the early stages of the 21st century, dampened by
economic doldrums & concerns with global security; the rear battle to attract,
motivate, development & retain talent is going to heat up considerably. A looming
demographic time-bomb will make Talent Management a priority for
organizations.

A host of issues like: loss of human capital, talent shortages, ageism, and cultural
clash has made acquiring & managing talent difficult.

Talent Management describes the process through which employers of all kinds
-Firms, Govt., and Non-profit organizations – anticipate their human capital needs

1
& set about meeting them. Thus Talent Management refers to: getting the RIGHT
PEOPLE with the RIGHT SKILLS into the RIGHT JOBS.

It is a professional term, also known as “Human Capital Management” that refers

to the process of developing & fostering new workers through on boarding,
developing & keeping current workers & attracting highly skilled workers to
work for your company. Companies that are engaged in Talent Management are
strategic & deliberate in how they recruit, manage asses, develop & maintain an
organization’s most important resource – its PEOPLE. This term also incorporates
how companies drive performance at the individual level.

Decisions about Talent Management shape the competencies that organizations

have & their ultimate success; & from the perspectives of individuals, these
decisions determine the path & pace of careers. We may thus understand that this
term is usually associated with competency based HRM practices. Talent
Management decisions are often driven by a set of organizational core
competencies as well as position specific competencies.

The competency set may include knowledge, skills, experience & personal
traits.Companies that engage in talent management (Human Capital Management)
are strategic and deliberate in how they source, attract, select, train, develop,
retain, promote, and move employees through the organization. Research done on
the value of such systems implemented within companies consistently uncovers
benefits in these critical economic areas: revenue, customer satisfaction, quality,
productivity, cost, cycle time, and market capitalization. The mindset of this more
personal human resources approach seeks not only to hire the most qualified and
valuable employees but also to put a strong emphasis on retention. Since the

2
initial hiring process is so expensive to a company, it is important to place the
individual in a position where his skills are being extensively utilized.

The term talent management means different things to different organizations. To

some it is about the management of high-worth individuals or "the talented"
whilst to others it is about how talent is managed generally - i.e. on the
assumption that all people have talent which should be identified and liberated.

From a talent management standpoint, employee evaluations concern two major

areas of measurement: performance and potential. Current employee performance
within a specific job has always been a standard evaluation measurement tool of
the profitability of an employee. However, talent management also seeks to focus
on an employee’s potential, meaning an employee’s future performance, if given
the proper development of skills. The major aspects of talent management
practiced within an organization must consistently include.

Performance management leadership development workforce

planning/identifying talent gaps recruiting. This term of talent management is
usually associated with competency-based human resource management practices.
Talent management decisions are often driven by a set of organizational core
competencies as well as position-specific competencies. The competency set may
include knowledge, skills, experience, and personal traits (demonstrated through
defined behaviors). Older competency models might also contain attributes that
rarely predict success (e.g. education, tenure, and diversity factors that are illegal
to consider in relation to job performance in many countries, and unethical within
organizations).

3
1.2 BACKGROUND OF STUDY.

Trafco Logistics (pvt) ltd. is Pakistan's premium Logistic, Freight Management

and Commercial Shipping Services Company with an incompatible network
throughout the country and associates in more than 270 destinations
internationally.

Since 1985 Trafco Logistics (pvt) ltd., has been the most vigorous, integrated and
innovative Logistic full-end service providers. Serving at the forefront of logistic
companies, Trafco started with inbound and outbound services through various
shipment means and is carrying the tradition of Imports and Exports to door-to-
door service through an ever expanse mode.

Talent management implies recognizing a person's inherent skills, traits,

personality and offering him a matching job. Every person has a unique talent that
suits a particular job profile and any other position will cause discomfort. It is the
job of the Management, particularly the HR Department, to place candidates with
prudence and caution. A wrong fit will result in further hiring, re-training and
other wasteful activities. Talent Management is beneficial to both the organization
and the employees.

The organization benefits from: Increased productivity and capability; a better

linkage between individuals' efforts and business goals; commitment of valued
employees; reduced turnover; increased bench strength and a better fit between
people's jobs and skills. Employees benefit from: Higher motivation and
commitment; career development; increased knowledge about and contribution to
company goals; sustained motivation and job satisfaction.

4
In these days of highly competitive world, where change is the only constant
factor, it is important for an organization to develop the most important resource
of all - the Human Resource. In this globalize world, it is only the Human
Resource that can provide an organization the competitive edge because under the
new trade agreements, technology can be easily transferred from one country to
another and there is no dearth for sources of cheap finance. But it is the talented
workforce that is very hard to find.

Talent signals an ability to learn and develop in the face of new challenges. Talent
is about future potential rather than past track record. So talent tends to be
measured in terms of having certain attributes, such as a willingness to take risks
and learn from mistakes, a reasonable (but not too high) level of ambition and
competitiveness, the ability to focus on ‘big picture’ issues, and an awareness of
their own strengths, limitations and impact on others.

Several talent management processes need to be in place on a strategic level in

order ensure its success. Such processes/strategies include talent identification,
recruitment & assessment, competency management, performance management,
career development, teaching management, compensation, succession planning
etc.

Talent management has a number of benefits to offer such as employee

engagement, retention, aligning to strategic goals in order to identify the future
leadership of the organization, increase productivity, culture of excellence and
much more.

5
1.3 STATEMENT OF PROBLEM.

The purpose of the study is to find out:

 Why the talented employees are leaving the company?
 Ways by which the company could retain talented employees with them?
 How company develops shining employs to talented employees?
 How management system is affecting talented employees?
 This study will investigate why talented employs leave Trafco Logistics
Pvt Ltd.

1.4 OBJECTIVES.

The purpose of this research is to elaborate the reasons that why talented employ
are leaving the company. Also to conducts a survey whose aim is to analyze
employee satisfaction and get a broader view on leaving of talented employee.
Identify the things to improve the employee satisfaction, inherent, nature of the
job causing attrition, also to find the steps/strategy should be done by the
company to reduce dissatisfaction and issues related to compensational and non-
compensational factors.

In the current scenario of cutthroat competition, every company has to survive to

satisfy its customers by providing them quality products and services. The object
of the study is also to involve the study of the following:
 To understand the entire procedure of Talent management
 To understand the need of Talent Management
 To study the accuracy and quality of work of employees by talent
management procedure.

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 To suggest possible improvement in Talent Management process.
1.5 SIGNIFICANCE OF RESEARCH.

Talent management is a key succession planning tool that provides an integrated

means of identifying, selecting, developing and retaining top talent within our
organization which is required for long term planning.

Talent management provides a means of

 accelerating the development of employees by identifying opportunities for
career growth & development within the organization
 identifying internal talent pools and transferring knowledge to others within
the organization
 evaluating and planning for the projected departure of positions identified as
critical for reasons of retirement or otherwise

1.6 RESEARCH QUESTIONS

 What are different approaches for talent management system in Trafco?

 Talent Management System is effective in retention of employees in previous
years?
 Does this system have any effect on performance of employee?
 What are the best ways to motivate and create committed employees?
 What is the statistically significant correlation between job tenure and
turnover intentions?
 Is HR or Personnel Department organized and staffed for efficiency and
effectiveness.

7
 “Trafco” using competency-based recruitment practices (competency
identification and behavioral assessment) to hire the right staff or not?
 Do “Trafco” have organization-wide and individualized employee
development plans?
 Have a system in place to identify and groom high potential employees for
higher future roles in the organization

CHAPTER 2

8
2.1 LITERATURE REVIEW

Meaning and definition

Talent management implies recognizing a person's inherent skills, traits,

personality and offering him a matching job. Every person has a unique talent that
suits a particular job profile and any other position will cause discomfort. It is the
job of the Management, particularly the HR Department, to place candidates with
prudence and caution. A wrong fit will result in further hiring, re-training and
other wasteful activities.

Talent Management is beneficial to both the organization and the employees. The
organization benefits from: Increased productivity and capability; a better linkage
between individuals' efforts and business goals; commitment of valued
employees; reduced turnover; increased bench strength and a better fit between
people's jobs and skills. Employees benefit from: Higher motivation and
commitment; career development; increased knowledge about and contribution to
company goals; sustained motivation and job satisfaction.

In these days of highly competitive world, where change is the only constant
factor, it is important for an organization to develop the most important resource
of all - the Human Resource. In this globalize world, it is only the Human
Resource that can provide an organization the competitive edge because under the
new trade agreements, technology can be easily transferred from one country to
another and there is no dearth for sources of cheap finance. But it is the talented
workforce that is very hard to find. The biggest problem is how to retain the
present workforce and stop them from quitting

 Importance:
First, let us look at some of the reasons for the importance of talent management.

9
 Globalization:
Now for any jobseeker the whole world is the potential place to find employment.
One can know the opportunities available in any part of the world easily and the
number of talent seekers has also increased.

 Increased Competition:
Increased competition in the market place has necessitated the need for
consistently good performance on the side of organizations. These have made the
companies to put in all efforts to hire and retain the best talent in the respective
field of operation.

 Increasing Knowledge:
The knowledge era has necessitated the retaining of those talents which have the
ability to assimilate new technologies and knowledge, which are growing at a
pace never seen before.

How Talent Management important for an Organization:

Cost cutting:
One experienced & skilled employee can replace instead of two or more
employees. Organization can save hundreds of thousands.
Maximum Output
Organization can make maximum output in minimum resources.

Time saving technique

It is a time saving technique. Because for every job a skilled person can place. It’s
helpful to complete job in minimum time

Perfection increase
Due to skilled employee Perfection in work is increase. There is low probability
of mistakes.

 How Talent Management important for an Employee:

Recruitment

10
It’s ensuring that right people are attracted to the organization, due to providing
exposure for their skills.

Retention
Developing and implementing practices that reward and support employees.

Employee development.
Ensuring continuous informal and formal learning and development.

Leadership and "high potential employee" development

Specific development programs for existing and future leaders.

Performance management

Specific processes that nurture and support performance, including

feedback/measurement.

Workforce planning

Planning for business and general changes, including the older workforce and
Current future Skill shortages.

Culture
Development of a positive, progressive and high performance "way of operating"

The Challenge of talent management has two faces. First is how to find new
people and second is how to retain the present workforce. Each of the challenges
has to be tackled in the most efficient way possible so that the organization can
achieve its objectives.

The First Challenge - Where to find new talent?

All the organizations are finding loads of business opportunities and consequently,
their revenues are growing at a rapid pace. The increasing business opportunities

11
has necessitated that these organizations go in for massive recruitment. But, the
question is where to find the best talent which is able to fit the job description and
also adjust to the organization’s values and norms. If we scan the environment, we
find there is a shortage of skilled workforce that can be employed.
Some of the possible reasons that have led to the shortage are: -

Demographic Constraints:

This is a common problem faced by many of the developed countries, where a

large chunk of its population is nearing the age of retirement or is over 50 years.
USA, Germany and Japan are facing the same problem. All these countries will
see a decline in their workforce and talent. In the coming years, they will see a
great shortage in their skilled professionals.

Existing Educational System:

The graduates and the postgraduates that are being churned out of the universities
are found to be ill-equipped to handle the challenges of the workplace. They are
mostly equipped with only the theoretical aspects of the issues and lack the
application part. The educational system is faulty and does not take industry needs
into consideration, resulting in a mismatch between industry requirements and
educational preparation.

Cost Factor:
Recruiting new employees is becoming tougher and tougher in the developing
countries, where the HR department has to sort out thousands of applications for a
handful of jobs. Finding right person for the right job becomes a very difficult
process. It also involves very high cost to conduct the recruitment and selection
process for such a large population of applicants.

Attracting the Best Talent:

This is another challenge. As was the case in the past, the best available talent is
not just motivated by the name and fame of the organization. Not anymore. They

12
have a new set of motivators like - challenging work, conducive work
environment and freedom from bureaucratic structure.
The Second Challenge - How to retain the existing employees?

Gone are the days when a person would join an organization in his mid-20s and
would work till his retirement in the late-50s. Today the young professionals hop
jobs, especially during the first 4-5 years of their work life. Though the Indian
service industry is basking in the light of outsourced jobs from the developed
countries, they also cannot ignore the fact that the BPO industry is also facing one
of the highest attrition rates, in fact never heard before in India, of around 35%.
It is a fact that it’s the people that add value to organizations. It is also a fact that
humans are a restless species who, unlike the immovable Tree, cannot stay rooted
in one place. People need to move on for one reason or another, and the
organization stands to lose.

Let us look at some of the reasons behind the massive attrition rates: -

 Gap between organizational values and goals and the personal values and
goals is one of the major reasons of the attrition rates. If they go parallel, there
is no way both would be satisfied and inevitably, the organization would lose
out on a talented employee.

 Working environment is another major factor. Employees in the knowledge

era demand creative and a democratic work environment. Failure on the part
of the management to provide such an environment will result in a talented
employee leaving the organization.

 The competitive world has made sure that there is high work pressure on the
employees of any organization. This has led to psychological problems like
stress, and in extreme situations, total burnouts. It also leads to other health
related problems.

13
 Movement for higher salary is also common among the younger professionals.
There is no shortage for organizations who are looking for talented employees
and who are ready to shell out a hefty salary for a talented person. Other lures
like better job opportunities, higher posts and overseas assignments are also
major factors in the attrition rates.

 Not taking proper care during the recruitment and selection process and not
taking proper care to fit the right person to the right job also breeds
dissatisfaction among the employees.

 Bad or opaque policies from management on issues of succession planning

and promotion, appointments for senior positions also is a major factor which
makes the organization lose out on the talented employees.

 The professionals have different aspirations at different times of their career.

During the initial years, they have good salary and foreign assignments. Next
on the list is working on cutting edge technology. More seasoned
professionals look for learning opportunities. So employees tend to move to
those organizations which provide them with means to fulfill their aspirations.

Retaining the present employees is of the foremost importance to the

organizations because; the company would have already incurred heavy costs in
the form of training and development. Now if the organization has to look for a
replacement for the employee who has left, it involves a lot of costs like - hiring
costs, training costs and the induction costs.
Also it takes some time for the new employee to adjust to the new work
environment. During this time the productivity of the employee will be low. The
HR department will have to fit the new employee into a proper role in the
organization. Apart from causing the company a monetary loss and breaks in their

14
day-to-day operations, attrition contributes to knowledge transfer, which is a great
loss and adversely affects business.

2.2 THEORETICAL FRAMEWORK.

In this chapter we will present the theoretical foundation for our thesis. Talent
management policies and practices of Trafco Logistics (Pvt) Ltd will be studied in
order to answer the question, how to motivate and retain employees. It will be
analyzed in detail by identification of independent, dependent, and moderating
variables. Then it will be continued by the theories discussing strategic
approaches to talent development, which concern our second research question:
“How to develop employees? The chapter will end with a synthesis that sums up
the essentials of our theoretical foundation.

Talent retention and development

On the process perspective, talent management includes recruiting, developing

and retaining people within the organization (Alice Snell, 2007). In the whole
process, Echols (2007) claims the retention as the final struggle of the talent war,
aiming to take measures to encourage employees to retain in the organization for
the maximum period of time. Talent leaving is harmful to a company's
productivity because costs of attrition are high. Direct cost refers to leaving costs,
replacement costs and transitions costs, and indirect costs relate to the loss of
production, reduced performance levels, unnecessary overtime and low morale
(Schlesinger and Heskett, 1991). Talent Development is the process of changing

15
an organization, its employees, its stakeholders, and groups of people within it,
using planned and unplanned learning, in order to achieve and maintain a
competitive advantage for the organization (Rothwell and Kazanas,2004). As
businesses continually apply new technologies, new business growth models, and
new market strategies, the workforce‘s up skilling becomes constant and
continuous.

Following is the diagrammatic representation of our research problem i.e. Talent

Management.

Independent Mediating Dependent

Organizations
Performance
Organization
Goals & Vision Job Performance
Remuneration
Talent Management
Job Commitment
Training &
Development
This model is the basis of my research keeping in view of this model dependent &
Career
independent variables for Talent Management are extracted.
Opportunities
For this research, according to the model given above for talent management
following variables are taken into account

Dependent Variable

 Talent Management

Independent Variables

 Organizations Performance

16
  Organization Goals
 Vision
 Remuneration and other benefits
 Training Development
 Career Opportunities

Mediating Variables

 Job Commitment
 Job Performance

Supporting Models for Theoretical Framework

Hierarchy of needs
One of the most recognized motivation theories in the Western world is Abraham
Maslow‘s Hierarchy of Needs. It is depicted as a pyramid consisting of five
levels, which signifies needs are predetermined in order of importance. While
after the satisfaction of the basic needs in lower level, people are seeking
physiological needs, they need to feel safety, need to be loved, to be respected and
they want to achieve some sort of reputations or social class. The theory argues
that employees must be fully satisfied by lower-level needs before they can move
to high-order ones. An employee on a higher level will exert more efforts and will
be more efficient comparatively. Focusing on the needs of its workforce, an
organization can better attract and retain talent. In this way it can achieve a higher
level of Talent Management.

17
Equity theory

Adam‘s Equity Theory asserted that employees seek to maintain equity between
the inputs that they bring to a job and the outcomes that they receive from it
against the perceived inputs and Wenzhu Cai and Ulyana Klyushina outcomes of
others. People value fair treatment which causes them to be motivated to keep the
fairness maintained within the relationships of their co-workers and the
organization. A more satisfied employee will have higher organization loyalty, job
performance, and job commitment. By providing better returns to workforce an
organization can attract and retain more and more talented employees.

18
Acquired Needs Theory

In David McClelland‘s Acquired Needs Theory, individual‘s higher order needs

are divided into three categories: achievement, affiliation, or power. He argues
that people are not born with, but acquire these three reasons for working.
According to this theory employees strive to achieve and fulfill these needs. They

19
are affiliated with their job and organization and strive for achievements in order
to gain power. Achievements motivate an employee and in turn his job
commitment and performance increases.

2.3 HYPOTHESIS
Hypotheses are the essential assumptions which the researcher formulates about
the possible causes, findings and ultimate output of the issue in under research.
Under hypotheses mere assumptions or suppositions are made which are to be
proved or disproved. For researcher it is a formal question that he intends to
resolve. A hypotheses consist either of a suggested explanation for a phenomenon
or of a reasoned proposal suggesting a possible correlation between multiple
phenomenon. The assumptions be true or false are to be proved through the
completion of project.

Null Hypothesis:
Employee taking benefits from Talent Management System
Employee can retain successfully for the benefit of organization

20
Employee’s performance increased by talent management
Employee turnover of organization affected by Talent Management Procedure

Alternate Hypothesis:
Employees are not able to take benefits from Talent Management System
Employee cannot retain successfully for the benefit of organization
Employee’s performance cannot increase by talent management.
Talent Management is not affecting on employee turnover of organization

CHAPTER 3

RESEARCH METHODOLOGY

21
Research Methodology is a way to systematically solve the research problems. It
may be understand as a science of studying how research is done scientifically. In
it we are studying research problems along with the logic behind them. It is
necessary the researcher to know not only the research method techniques but also
the methodology.

3.1 RESEARCH DESIGN

The design of research is descriptive as it is addressing prevailing situation.

To conduct the study the instruments/techniques will be prepared. The nature
of the study is both quantitative and qualitative.

3.2 POPULATION.
Employees of entire organization under study pertaining to different
functional segments.

3.3 SAMPLING TECHNIQUE.

Probability sampling method i.e. random sampling used for this study.
3.4 SAMPLING SIZE
The sample size will be consisted of 50 working employees based on
following criteria

 Qualification.
 Experience specific with the organization under study.
 Professional qualification / Certifications
 Trainings given to individuals.

22
 Major achievements with the Particular organization in last three years.

3.5 RESEARCH INSTRUMENTS/TOOLS.

The questionnaire of 30 items is developed on 5 point Linker scale and

Cranach alpha values are incorporated to check reliability and validity. The
options are Strongly Disagree, Disagree, Average, and Strongly Agree in this
scale. The rating scale is administrated to the respondent and is scored to the
following scheme.

Response Rate Cronbach Alpha

Strongly Disagree 1 α < 0.5

Disagree 2 0.5 ≤ α < 0.6

Average 3 0.6 ≤ α < 0.7

Agree 4 0.7 ≤ α < 0.9

Strongly Agree 5 α ≥ 0.9

3.6 DATA COLLECTION.
The researcher will personally conduct the survey; distribute the
questionnaire to the respondents and later on collect. It is anticipated that the
response rate will be maximum due to personal administration of the
questionnaire.
QUESTIONNAIRE

Dear Colleagues.
I, student of Master of Business Administration MBA, Allama Iqbal Open
University I am conducting research on the topic

23
“A Study of Talent Management System and its Implications in Trafco
Logistics Pvt. Ltd.”. You are requested to provide your opinion on this
questionnaire which would be kept strictly confidential. Select the appropriate
box. I shall be thankful to you for your cooperation in the completion of this
study.
Thanking you.
Sayyed Ali Adnan

Instruction:
Keeping in view your work situation, please tick the most appropriate response
option in front of every given below where
1= Strongly disagree, 2= Disagree, 3= Average, 4= Agree & 5= Strongly agree

RESPONDENT PROFILE:
Qualification: _____________________
Designation: ______________________
Working Experience: _______________
Gender: _________________________

24
Department______________________
Certification_____________________
Major Achievements______________

1= Strongly disagree, 2= Disagree, 3= Average, 4= Agree & 5= Strongly agree

1 2 3 4 5
I prioritize time to interview potential candidate when a vacancy arise
I consistently appoint high caliber employees.
I devote time and energy to attend the filling of a vacancy.
I ensure that vacancies do not remain open for a long period of time.
I possess a good overall knowledge of HR recruitment process and policies.
Management views faculty effectiveness as important in
achieving institutional effectiveness.
Management knows what critical positions/roles help to
differentiate itself in the market place.
The Organization has a faculty management strategy that is explicitly linked
to the overall performance of the Organization.
The Organization accurately forecasts the demand for faculty (size and skills)
over various time horizons.
The Organization accurately forecasts the demand for faculty
(size and skills) over various time horizons.
The Organization is able to bring new recruits on board effectively.
The Organization attracts, retains values and fully utilizes a diverse
workforce.
The Organization is able to recruit desired employees in a timely and
consistent manner.
The Organization identifies high potential and key employees and has
programs to retain them.
Faculty understand their job responsibilities and how roles and contribute to
the goals of the Organization.
Management identifies and uses competencies of faculty members.
The Organization is able to recruit desired employees in a timely and
consistent manner.

25
The Organization identifies high potential and key employees and has
programs to retain them.
There is proper co-operation and co-ordination among faculty members.
Faculty members collaborate and share knowledge with others in a way that
contributes to the company success
Tools and resources exists to foster collaboration and knowledge sharing
across the organization.
Faculty members are able to identify relevant skills in the organization in a
timely manner.
Management provides virtual/remote working to improve flexibility and/or
reduce costs.
Organizational communications are aligned with leadership actions and
behaviors.
Communication ways is effective in our Organization.
Employees are satisfied with welfare in the Company.
There is enough reward and recognition given in our organization for doing
good work.
I am very satisfied with my job and therefore I do not see any other company.
Staff commitment is an asset.
HR policies are clear for all the employees working in the company.
I am very satisfied with Training to develop myself professional
Employee’s needs are well met by the company.

Thank you Very Much for showing your valuable interest

26
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