Companies Fail To 'Walk The Talk' In Leadership Development

By Deborah Austin When developing leadership, many companies don't practice what they preach, suggests a new study by outsourcing and consulting firm Hewitt Associates, Lincolnshire, Ill. The survey of CEOs and human-resources executives -- representing 240 major U.S.-based global firms -- found that while 68% have defined qualities for hiring leadership talent, only 43% of those consistently use them when hiring leadership from outside the company. When hiring from within, 86% use the criteria. Seventy-seven percent of the survey respondents say they have formal processes or programs to develop leaders; only 32% of respondents believe their organizations are effective in such development. Another dichotomy: While 87% of the companies have policies linking their leaders' pay to individual performance, only 55% of respondents see a significant or noticeable pay differential between high and average performers in similar roles. It's crucial to define and require leadership competencies that meet an organization's business strategy, says Hewitt's Marc Effron, practice leader, leadership consulting services. But executives also must realize pay and opportunity are the two biggest factors in motivating and keeping quality leadership.

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