I've recently done an informal survey of some corporate executives (generally CFO and top HR officer). Their opinion (more than two-thirds of a relatively small sample) is that poor talent management is a bigger problem. Here are some things that they cited:
- Senior people often have significant customer/client contact. Often, losing those people through reductions-in-force or unwanted termination costs customer relationships.
- Goals that are too objective cause undesirable behaviors, most frequently a lack of teamwork
- Goals that are too subjective often result in low morale as too many people think that their incentive payments do not properly reflect their contributions
- Continuity is undervalued
- Replacing senior people who leave (unwanted) often costs more than 150% of their annual compensation
- The half-life of sometimes full-life of bad will (both on remaining employees and former employees) created through involuntary termination is immeasurable
I have no particular expertise in this area, but the people that I surveyed do. Caveat employer.