Novartis International AG-- a Swiss multinational pharmaceutical company based in Basel, Switzerland, was created in 1996 through the merger of Ciba-Geigy and Sandoz, two companies with a rich and diverse corporate history. In 2010, it ranked No.2 in sales (46.806 billion US$) among the world-wide industry. (Wiki, Novartis) With mission to discover, develop and market innovative products, provide a shareholder return that reflects outstanding performance and adequately reward people who invest ideas and work in the company (The Novartis Mission), Novartis under the direction of its CEO Daniel Vasella, M.D., built its own highly efficient global talent management system to facilitate reaching its goals.
1. The GTM system at Novartis
Companies all around the world are facing the challenge of managing talent pipeline. (Günter K. Stahl, 2012) The GTM system at Novartis is built based on three central tasks and responsibilities for the company and every manager: talent identification, the use of systematic talent development, and strong pay for performance principle. (Jordan Siegel, 2008) For “talent identification”, Novartis prefers development talent for leadership positions from within and insists moving individuals to their desired positions before they were solicited from the outside; for “systematic talent development”, CEO Vasella implemented a far-reaching and globally standardized incentive system with two branches: one is for rating performance system and another is for assessing human potential. For “pay-for-performance”, Novartis adopted a compensation system paying mix with market-level base pay and large proportion of incentive pay which is highly associated with their performance. Over the years, the company had instilled a culture in which employees had no sense of entitlement, and were motivated to work hard for large gains in compensation contingent on high performance, aligning with company’s talent management strategy. (Jordan Siegel, 2008) The following is a detailed analysis about Novartis GTM system. One of the goals of any talent management system was to develop talent for leadership positions from within. (Jordan Siegel, 2008) This idea has several advantages: it helps the company know more about their people by growing them over time; it accelerates culture building because employees come up with shared values and experiences; it is less expensive compared to outbid someone from outside; it also contributes to motivate employees to offer more promotion opportunities. The company also implements talent ratings for manages, aims in part to identify internal “bench strength” for the corporate executive group and other top positions in the company. Novartis not only insists on promoting from within (not all but a large proportion of), it also tries its best to move talented individuals to their desired positions before they were solicited from the outside. Vasella explained that people come to work primarily because they believe in the purpose of company and they feel engaged in its success. He noted: “The money has to be all right; but you encourage commitment and excellence through other things.” The pay-for-performance model is the core of the global talent management system at Novartis (Jordan Siegel, 2008). The incentive pay of total compensation in Novartis highly links to employees’ performance, values and behaviors. It is based on employees’ contribution and results for the whole company and offers employees a direct opportunity to see their performance during their work. Some high performers may get nearly double their base salary in the form of annual bonuses while lower performers may get no salary increase or bonus. This huge comparison of compensation aims to motivate people and avoid mediocrity. Actually, high bonus for top performers reflects on of the mission of Novartis: adequately reward people who invest ideas and work in the company. Over the years, Novartis...
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