Emerald Emerging Markets Case Studies

Talent management at Telekom Malaysia Berhad

Wardah Azimah Sumardi Rozhan Othman
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 Talent management at Telekom Malaysia
Berhad
Wardah Azimah Sumardi and Rozhan Othman

Wardah Azimah Sumardi ‘‘The most sophisticated systems will not succeed, however, if not matched by people with the
and Rozhan Othman are right skills, knowledge and competencies (Telekom Malaysia Berhad Annual Report, 2008)’’.
Lecturers in the Faculty of
Business, Economics and
Policy Studies at Universiti Organizational context
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Brunei Darussalam.
Talent management is not a new practice in Telekom Malaysia Berhad. ‘‘It has been around a
few years down the road’’, Harizal Halim, Manager of Leadership and Talent Management,
adds. However, having only joined the Leadership and Talent Management unit for the past
twelve months, Harizal Halim was not directly involved in its first development. In spite of this,
the level of awareness on talent management in the company only started to pick up in the
last two years. Harizal Halim adds ‘‘In the past commitment from the management was a bit
hard; now they are really playing their role seriously’’. He explained that several
developments prompted Telekom Malaysia Berhad to initiate a talent management
program. First, business landscape is tough. Previously, the company was at the forefront,
dominating the market. But recently due to the emergence of many competitors, the
company started to feel the heat of the competitors. This has led to many initiatives
introduced by the company as to sustain the business. One of the key initiatives highlighted is
the need to manage its talents better.
Apart from business requirement, the second development prompting Telekom Malaysia
Berhad to focus more on talent management is the GLC Transformation Programme. Among
other things, this program place particular emphasis on leadership development. Khazanah
Nasional has been assigned to lead the GLC Transformation Programme. As a GLC, Telekom
Malaysia Berhad often looked into best practices introduced by Khazanah Nasional. To ensure
its key assets, i.e. people remain competitive in the future, Telekom Malaysia Berhad has made
great efforts to realign its existing human resources policies and procedures according to
initiatives developed by the Government under the GLC Transformation Programme.

History
Telekom Malaysia Berhad was formerly a government agency, the Telecom Department of
This case was written with the
Malaysia. It was corporatized in 12 October 1984 and renamed Syarikat Telekom Malaysia
collaboration and consent of Berhad (STMB)[1]. It is the largest telecommunication company in Malaysia. It has a
Telekom Malaysia Berhad. monopoly on the fixed line network and has a considerable market share of the mobile
Disclaimer. This case is written communications market after its acquisition of Celcom, a cellular phone company and
solely for educational purposes
and is not intended to represent
merging with its own mobile operation arm, TMTouch.
successful or unsuccessful
managerial decision making. With its extensive global connectivity, TM is poised to position Malaysia as a regional internet
The author/s may have hub and digital gateway for Southeast Asia. In 2007, to ensure focus and enhance
disguised names; financial and
other recognizable information
shareholder value, Telekom Malaysia Berhad began the process of separating its mobile and
to protect confidentiality. fixed services into two distinct entities. Completed in April 2008, it resulted in two leading

DOI 10.1108/20450621111110645 VOL. 1 NO. 1 2011, pp. 1-6, Q Emerald Group Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1
 communications companies, each focused on its own core business: TM, in national fixed
line services and championing broadband; and TM International Berhad (TMI), in regional
mobile services, now known as AXIATA.
In 2009, Telekom Malaysia Berhad recorded a net profit which stood at RM211.7 m which
came in within its expectation. However, looking ahead, earnings will come under pressure
as the company pursues its ambition of high-speed broadband project, increasing financing
costs and reducing profit.

Talent management in Telekom Malaysia Berhad

Twelve months ago, HR was the champion in talent management program in Telekom
Malaysia Berhad with little support from line management. As the manager of Leadership
and Talent Management Unit, this concerned Harizal Halim, ‘‘We had a tough time
convincing line managers on the importance of the program’’. However, in the last few
months, with increasing realization of the importance of talent management, HR is changing
its position from leader to facilitator of the whole process. This change was primarily
prompted by the new leadership under Mohd Khalis Abdul Rahim. He was appointed as the
new Chief Human Capital Officer of Telekom Malaysia Berhad in August 2009. Prior to joining
Telekom Malaysia Berhad, Mohd Khalis Abdul Rahim was the Regional HR Director of
Freescale and HR Director of Colgate Palmolive (Malaysia).
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Leading HR since then, Mohd Khalis has displayed enthusiasm and interest on talent
management and this has significantly sparked the increasing realization of the importance
of talent management. Under his new leadership, several changes were evident. Even the
CEO is now taking the lead in most of the important talent management initiatives such as the
spotting and endorsement of the high potentials. He further added, ‘‘This is a good sign.
Things are starting to look better especially when there is a buy-in from the line management.
We now have their support.’’
The talent management process at Telekom Malaysia Berhad involves four key stages.
These are:
1. talent spotting;
2. talent assessment and endorsement;
3. formulation of individual development plan; and
4. readiness level assessment.
Each of these stages is implemented using a well defined set of standards and activities.

(i) Talent spotting

With the aid of an external consultant, Telekom Malaysia Berhad came up with two central
criteria to identify high-potential staff. This includes:
1. performance; and
2. potential.
Harizal Halim described that the primary filtering criteria centers on staff performance. He
went on to explain that once staff meet the performance criteria, then they will be assessed
by multi-raters on potential indicators. ‘‘To us what is important is to have high potential with
good performance’’, he added.
To assess performance, Harizal Halim explains that the company uses a performance
management system similar to those implemented elsewhere. The performance management
cycle starts off with performance contracting, performance tracking, performance evaluation
and performance moderation and final rating. Performance evaluation is conducted at the end
of a review period and should reflect a period of 12 months of achievements. This performance
evaluation comprised of 80 percent KPI-based activity and 20 percent based on behavioral
competency.

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PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 1 2011
 Unlike behavioral competency, the KPI are measures of process outcomes which informs
employee what is important in working towards the goals and gently points them towards
achieving those goals. This helps to provide staff with more visible and measurable targets.
The company uses ‘‘Maps System’’ (MAPS2) to manage and assess performance. MAPS2 is
an online assessment system which productively helps managers to measure employees
KPIs. This system provides an online questionnaire that is filled by the candidate’s immediate
superior. This assessment system offers a motivating climate to develop employees towards
achieving peak performance[2].
The element of behavioral competencies is also taken into account in determining overall
performance of the employee. The assessment of this competency is based on subjective
judgment and observation through the use of 3608 evaluation tool. This involves observing
whether candidates have displayed or demonstrated certain behaviors which centers on
several focus areas. These include:
B people focus;
B change focus;
B business strategic focus;
B future focus; and
B customer focus.
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All of these focus areas are assessed using online questionnaires which is specific to the
different level. Staff are also assessed by multi-raters with feedbacks being gathered from
subordinates, supervisors and customers.
Harizal Halim further explains that Telekom Malaysia Berhad has five distinct bands
which range from Bands 1-5. Bands 1-3 comprise of the junior executives, managers
and senior managers, respectively, whereas Bands 4 and 5 include top management
such as General Manager (GM), etc. The questionnaires are thus customized to accurately
reflect the responsibility of the different level. This is to ensure a fair and equitable review
process that allows the employees to reflect how individual contribution impacts the business
goals.

(ii) Talent assessment

The assessment of candidates nominated for inclusion in Telekom Malaysia Berhad’s talent
pool uses an instrument called the leadership potential inventory (LPI). The LPI is used to
assess each candidate’s leadership potential. The LPI examines ten attributes that are
categorized into four dimensions, i.e. leadership promise, balance between values and
result, personal development orientation and mastery of complexity. The below list ‘‘LPI
dimensions and leadership potential attributes’’ shows a description of the attributes of these
four dimensions. This assessment involves the use of web-based potential assessment
system. This system provides an online questionnaire that is filled by the candidate’s
immediate superior and complemented with two other counterparts of the superior. This is a
distinct policy set by the company whereby multi assessors must be appointed to assess a
candidate. When asked whether the practice of favoritism among superiors is a significant
issue in Telekom Malaysia Berhad, Harizal Halim paused briefly. He admitted that subjective
assessment may lead to favouritism but since the raters are compelled to provide evidences
to support any ratings given by them, this therefore serves as deterrence for raters to behave
unfairly.
LPI dimensions and leadership potential attributes.
Leadership promise:
B propensity to lead;
B brings out the best in people; and
B authenticity.

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VOL. 1 NO. 1 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3
 Balance of values and result:
B cultural fit; and
B passion for result.
Personal development orientation:
B receptivity to feedback; and
B learning agility.
Master of complexity:
B adaptability;
B conceptual thinking; and
B ability to navigate ambiguity.
Source: www.ddiworld.com/pdf/ddi_identifyingpotentials_fs.pdf

(iii) Formulation of individual development plan

In the past, the common practice in Telekom Malaysia Berhad was to send high potentials for
formal classroom training. However, in light of the best practices around the globe, the
company proposed to change and align its development strategy in accordance with the
70:20:10 model. This approach provides a framework for effective learning and development
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in the ratio 70:20:10. It advocates that 70 percent of development comes from on job
experience, 20 percent comes from working through others, e.g. coaching and working
alongside good leaders in the company and 10 percent comes from classroom trainings.
This breakdown has shaped the company’s current development program which puts more
emphasis on on-the-job experience. ‘‘We now realize that the effectiveness of classroom
training is not as high as learning on the job [. . .] This is primarily why we are shifting our focus
towards this guideline’’, Harizal Halim adds. He further explains that such changes will
involve rotating people across jobs more often than before.
Despite the shift, the use of structured training programs such as functional courses is still
being carried out in Telekom Malaysia Berhad. The company also offers its own Senior
Management Development Program (SMDP). It particularly caters for high potentials from
Band 3 who has demonstrated leadership qualities. In the past, 20 senior managers were
sent off to University of Starchlyde, Scotland. At the end of this certification program, all of
them were awarded with MBAs. Since then, a majority of them have been promoted to GM.
Now, the SMDP is done locally at Universiti Teknologi Malaysia located in Kuala Lumpur
(UTMKL) which is the local partner of Warwick University. Other training bodies of the
company’s development program include renowned business schools such as INSEAD, IMD
and Harvard. According to Harizal Halim, these public programs serve as an excellent
platform for high potentials to acquire new knowledge as well as high-level networking.
Other development program includes the GLC cross assignment exchange program. This is
an initiative introduced by Khazanah Nasional which allows managers from GLCs to be
posted to other GLCs for a period of one to two years. The company has previously sent their
high potentials to Maybank and Malaysia Airlines (MAS). This program is carried out once a
year. This also makes up the 70 percent on-the-job experience as advocated by Telekom
Malaysia Berhad.

(iv) Readiness level assessment

Upon completion of the three levels, i.e. Bands 1-3, the high potentials are said to have
graduated from the talent management program. At the end of this program, if high potentials
received good evaluation or feedbacks from managers in all the various areas they have been
posted to, they are considered as ready for promotion to the next level, i.e. Bands 4 and 5.
Harizal Halim believes that succession planning is the main objective for having a talent
management program in the company. Given the unpredictability of event, the company
believes that it must start to identify candidates from the early stage and develop them until

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PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 1 2011
 they are ready to assume the position. Telekom Malaysia’s approach to talent management is
centered on ensuring that there will always be people ready to succeed in what the firm terms
as ‘‘key positions’’. These are positions that the firm has identified as critical to its
performance and cannot be left vacant.
Previously, Telekom Malaysia Berhad used to ensure that there are three potential
successors for each key position. However, at present the company prefers to develop a pool
of people so that whenever a member of top management retires, the company has a group
of talented employees who are ready to move up. This will ensure that the company will have
an effective leadership pipeline. Currently, Telekom Malaysia Berhad has 370 managers in
the talent pool out of its total population of over 20,000 employees.

Downsizing and talent retention

The changing nature of employment relationship today creates a certain paradox. The pressure
to be competitive and efficient has forced many employers to resort to downsizing as a measure
to cut cost. This is evident in the company’s voluntary separation scheme (VSS) which was
introduced in 2005 as part of the company’s efforts to cut costs in an increasingly competitive
business environment in the telecommunications industry. The fear of being laid off will clearly
affect the sense of loyalty among employees particularly the talented ones. Hence, this
contradicts with the company’s need to attract, develop and retain talents which are the main
goals of an effective talent management program. In an effort to retain talent given its bitter past,
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Harizal Halim highlighted two significant measures taken by the company.

First, as part of its retention tool, the company has introduced ‘‘Broadbanding’’ which
replaces the former hierarchical position grades. This broadbanding was introduced
18 months ago which involves ‘‘delayering’’ of the grades into one broad grade comprising of
five bands ranging from Bands 1-5. Previously, the company has a total of eight grades
before junior executives are able to reach the GM level which often frustrates capable
employees and resulting in their turnover. The good thing about this new broadband is the
fact that junior executives have to go through only three bands to be promoted to a GM
position. With this broadband, junior executives are able to reach GM level in 13-15 years
upon joining the company. This offers a faster path in comparison to the previous hierarchical
position grade. The introduction of this band also meant an adjustment to the salary ceiling.
This means that not only are employees provided with a clearer and realistic path, employees
can also enjoy quicker salary increase.
Second, recognizing that some employees are driven by the financial aspect, the company
has implemented a case by case salary review. The company is constantly monitoring the
salary market and at the same time reviewing the current salary earning of the talent pool
members. Those identified as having a salary earning that is below market salary will be
eligible for this salary adjustment in the form of pay rise. Harizal Halim explains that retention
in the company is currently not a major issue which is reflected in its low attrition rate. ‘‘It’s only
around 5 percent and below,’’ he adds.

Looking ahead
Harizal Halim believes that more improvements are yet to come in the future. He seems
satisfied with the achievements the program has accomplished so far especially in terms of
succession planning. ‘‘For every pivotal or key position, we have identified who has the
potential to succeed the current incumbent,’’ he adds. Looking optimistic, he also applauded
the enthusiasm and interest on talent management displayed by Mohd Khalis, the new Chief
Human Capital Officer. Under Mohd Khalis new leadership, Harizal Halim believes there is
good prospect for the company’s talent management program. This is especially evident in
the number of good ideas and initiatives that have been brought in by Mohd Khalis in the past
few months since he joined the group.
Being a large company with more than 20,000 employees, managing its people is not an
easy task. Harizal Halim highlighted that although it is difficult to listen to every voices in the

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VOL. 1 NO. 1 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5
 organization, he strongly believes that organization should consider input and information
from their subordinates including the lowest level members of the organization. Such
approach will allow organizations to recognize and tap on the strength each members of the
organization has to offer thus enabling organization to move forward.

Discussion questions
Question 1. In the case of Telekom Malaysia Berhad, assess the possible underlying
reasons for the lack of support from line management to the Talent
management Program.
Question 2. Assess the role of leadership in the implementation of the Talent
Management Program at Telekom Malaysia Berhad.
Question 3. Assess the effectiveness of the 70:20:10 model used in Telekom Malaysia
Berhad in equipping talents to be future leaders.
Question 4. The retention of key talent becomes an organizational imperative.
Traditionally, employers tend to rely on compensation-based strategies
such as bonuses; however, such tactics suffer from several weaknesses.
What other strategies should companies provide to support retention?
Keywords:
Human resource Notes
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management,
1. www.tm.com.my/about-tm/investor-relations/annual-reports/Documents/TMAR05.pdf
Competences,
Line managers 2. www.slideshare.net/./performance-measurement-system-of-telekom-malaysia

Corresponding author
Wardah Azimah Sumardi can be contacted at: [email protected]

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PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 1 2011