Integrated Performance and Talent Process

Part 2. Talent and Succession Management

Note: Local co-determination rights to be considered.

Standard
Area of Application
x Corporate applicable for the whole Merck Group

Author

01 July 2013
Corporate HR (P. Bednarczuk)
CoE Strategic Talent & Performance
CoE Strategic Talent & Performance

Reviewed by

Perf & Talent Relaunch Extended Project Team

Version

2.0

Date/Valid from
Approved by
Owner

Pre-version
Document Code

Rationale and Objective

The main objective of Talent and Succession Management is to ensure the sufficient
supply of talents required to successfully deliver on Mercks business strategy and
priorities. Talents in Merck are defined as employees who meet or exceed performance
expectations in their current position and have the potential to grow into enlarged
responsibilities. Effective Talent and Succession Management mitigates succession
risks by matching talents to potential positions and developing the Merck Capabilities of
talents according to position requirements. Benefits include the timely selection and
preparation of the best candidates for vacancies from across all divisions and regions.
In addition to this, there are tailored development opportunities which increase the
employability of talents and help to engage and retain them.
Scope
This standard describes the process to create transparency regarding all relevant
information required to understand Merck Capabilities and employability of a talent. It
also provides guidance on how to identify Business Critical Positions and define
requirements of these positions. In a next step, the standard defines the Merck
approach to Succession Management including the process to nominate and validate
possible successors. Furthermore, the standard provides an overview of the Merck
approach to talent development. This standard is applicable for all employees identified
as talents during the Calibration and Alignment Meetings for the Merck Group
worldwide.
Executive Summary
This standard is a leading reference document on how to identify possible successors
for positions or a pool of similar positions and for the development of possible
successors. This standard provides detailed information on:
Definitions & guidelines
Process steps & timelines
Roles & responsibilities (RACI)
IT-tool implications

Integrated Performance and Talent Process

Part 2. Talent and Succession Management

Standard

Table of Contents
Definitions and Glossary ..................................................................3
1 Why do we need Talent and Succession Management? ...........6
2 How is Talent and Succession Management done? ..................6
2.1
Overview..............................................................................6
2.2
Creating the Talent Profile ...................................................7
(Talent) Appraisal Tools .......................................................8
2.3
2.4
Succession Management.....................................................9
2.4.1
2.4.2

Person-to-Pool Approach ........................................................ 9

Person-to-Position Approach ................................................... 9

2.5
Talent Development...........................................................11
3 Links to other Guidelines, Policies and Standards ...................11
4 Roles and Responsibilities ......................................................12
5 Timelines .................................................................................14
6 Documentation and IT-tool implications ...................................14
7 Metrics ....................................................................................14
8 Appendix .................................................................................14

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Integrated Performance and Talent Process

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Definitions and Glossary

Terminology /
Abbreviation
Talent

Functional Area

Talent Pool

Merck Group
Talents

Talent Profile

Definition
Talents are employees who meet or exceed performance expectations (rating A,
AA or AAA) while role-modeling Merck Values and have the confirmed potential to
grow 1 or 2 steps into higher Global Grades (GG).
(See the Standard Performance and Potential Management for the process of
performance and potential evaluation).
A Functional Area is a group of job families which belong to a similar field of
activity, performing related work, sharing a common professional development and
career structure e. g., Marketing, Sales, R&D, etc. A list of all Functional Areas as
defined in the Global Job Catalog can be found in the Appendix # 7.
At Merck, there are six Talent Pools which are related to Global Grades. Each
Talent Pool consists of talents with the identified potential to grow into the
respective grades within five years. Combining Global Grades and Functional
Areas leads to more specific and granular sub-Talent pools.
Top Talent Pool

All talents at GG 18 and above with potential to

grow into higher Global Grades

Talent Pool 18+

All talents at GG 16/17 with 1 step potential and

All talents at GG 14/15 with 2 step potential.

Talent Pool 16-17

All talents at GG 14/15 with 1 step potential and

All talents at GG 12/13 with 2 step potential

Talent Pool 14-15

All talents at GG 12/13 with 1 step potential and

All talents at GG 10/11 with 2 step potential.

Talent Pool 12-13

All Talents at GG 10/11 with 1 step potential and

All Talents at GG 9 and below with 2 step potential.

Talent Pool 10-11

Employees at GG 9 and below with 1 step potential

could be nominated to Talent Pool 10-11.

.
Merck Group Talents are all talents with potential for GG 18+. For these talents,
the CoE Strategic Talent & Performance and Talent Consultants in the CoE will
take primary responsibility, as mandated by the Executive Board. They will work
together with Global HR BPs and line managers, to drive key activities such as
identification of potential, Succession Management and development.
In addition all talents with a 2 step potential and performance AA-AAA starting
from GG 10 are also considered Merck Group Talents (Top Talents). For these
talents, Talent & Performance Consultants and Global HRBPs need to be involved
in Development Planning activities.
The Talent Profile provides all relevant information required to understand Merck
Capabilities and employability of a talent (sample Talent Profile see Appendix # 9).
The Talent Profile is fed from different sources including Employee Self Service
(ESS) and Manager Self Service (MSS).
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Integrated Performance and Talent Process

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Terminology /
Abbreviation
Position Profile

Merck
Capabilities
Business
Critical
Positions

Definition
The Position Profile provides all relevant information required to understand which
Merck Capabilities are required to be successful in this position. Position profiles
are reflected within the IT-tool as ideal candidates.
Merck Capabilities are composed of competencies and experiences. Possible
experience categories and levels (what one has done) are outlined in Appendix #
2.
The following factors are used to determine whether a position is business critical:
how a position impacts the strategy
how a position contributes to revenue, costs, or budget
how a position impact on key business processes
ease or difficulty of sourcing incumbents for this position
For a detailed description see Appendix # 6

Merck Group
Positions

Possible
Successors
Development
Plan
Talent &
Performance
Consultants
(TC)

Line manager
GG
HR
HR CoE
HR BP
LB
MCC

All Merck Group Positions are identified as business critical by default.

Merck Group Positions include all positions on GG 18+, and MD positions in
strategic countries.
Successors are nominated for all Merck Group Positions.
The CoE Strategic Talent & Performance drives the process of nominating
successors and development planning in collaboration with the business and HR
Business Partners.
Employees nominated as successors for Merck Group Positions and other
Business Critical Positions (includes horizontal moves) and talents assigned to a
talent pool.
The description of development needs, objectives and opportunities; available for
all employees, mandatory for talents.
Talent & Performance Consultants are experts in the CoE Strategic Talent &
Performance, who support and drive the Talent & Succession Management and
placement processes for Merck Group Talents and Merck Group Positions. This
includes potential identification as well as succession, Development Planning, and
placement. In cooperation with HR Business Partners and the business, Talent
&Performance Consultants ensure a cross divisional, cross regional perspective,
the application of highest standards, and the quality of data used.
The manager, the employee is reporting to; by default the Global Manager
Global Grade
Human Resources
Human Resources Center of Expertise
Human Resources Business Partner
Leadership Behaviors
Merck Competency Compass
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Terminology /
Abbreviation
RACI
ESS
MSS

Definition
Responsible, Accountable, Consulting, and Informed.
Employee Self Service
Manager Self Service

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Integrated Performance and Talent Process

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1 Why do we need Talent and Succession Management?

Talent and Succession Management will provide a high quality successor pipeline
which allows filling of future vacancies with the best candidates. It is a business tool
that helps to mitigate the typical succession risks:
Manage vacancy risks by providing candidates for open positions.
Manage quality risks by developing Merck Capabilities and preparing
candidates.
Manage placement risks by creating better insights into the Merck Capabilities
of candidates.
Furthermore, Talent and Succession Management increases the efficiency of
processes. It reduces the time and resources required to find the best candidate for
vacancies, it avoids external search costs and it focuses talent development activities
on areas in demand. The investment in Talent and Succession Management pays off in
retention of talents at Merck.
Last but not least, Talent and Succession Management supports Mercks positioning
as employer of choice as it improves the employability and career perspectives of
talents and offers demand-driven individual development possibilities.
Tangible outcomes on the way to achieve these objectives are:
Talent Profiles
Position / Pool Profiles
Possible Successors
Development Plans

2 How is Talent and Succession Management done?

2.1 Overview
The Talent and Succession Management Process is an annual business process
starting from the identification of talents to succession management and development.
The Talent Profile, an integral part of the process will be automatically filled with results
of the Performance and Potential Process. This information will be further
complemented (e.g. via ESS and MSS) to allow for assigning talents to Talent Pools
(Person-to-Pool approach) and nominating talents as possible successors for Merck
Group Positions or other (Business Critical) Positions (Person-to-Position approach).
Individuals not identified as talents can be nominated for horizontal moves. For vertical
moves, employees should be identified as talents - nevertheless exceptions are
possible. Development activities should be planned for all talents to prepare them for
specified possible future roles.
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Talent Profiles

Talent Pools
Top Talent
R&D

Sales

Talent Pool 18 +

GET

R&D

Sales

R&D

SUCCESSORS

Sales

Merck Group / Critical

Positions

Performance

NOMINATE

DEVELOP

Information within the

Talent Profile allows
the automatic
assignment of talents
to a pool.
For concrete one to
one succession, a
talent needs to be
nominated for
succession to a
position.

2.2 Creating the Talent Profile

For every talent, a Talent Profile should be created (mandatory for Merck Group
Talents; sample Talent Profile see Appendix # 8).
Overall, the Talent Profile is filled by the employee and manager via self-service,
additionally data obtained from other processes (e.g. Potential Rating) are reflected as
well. For a complete overview about where data comes from, please see Appendix # 9.
Employees are responsible for completing / updating relevant personal information e.g.
education, languages, CV-data, overall career interests and experience (for experience
categories and levels see Appendix # 4). Once the talent has completed the form, the
line manager is required to evaluate the employees experience with regard to
readiness for a position on the next higher level. Additionally the manager should
validate the self-evaluation the talent has given regarding his/her experience levels.
Line managers are responsible for completing / updating relevant talent data preferably
after Calibration (e.g. Potential for Functional Areas, leadership potential, readiness for
next step, availability, retention risk).
The completion of the Talent Profile also contains results from the Appraisal Tools.
These tools evaluate employees (talents) on the respective Merck Competency Model.
While all available evaluations will be stored on the IT-tool, only the latest is stored in
the Talent Profile.

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Integrated Performance and Talent Process

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2.3 (Talent) Appraisal Tools

The preferred methodology of competency evaluation varies depending on Talent Pool.
It is the managers responsibility to prioritize when an individual should participate in
one of the beneath mentioned appraisal tools.
Overall the Multi Rater Feedback (MRF) and Manager-Employee-Feedback (MEF)
are available as Appraisal Tools for all Merck employees. Within Mercks Talent
Management Process, these two are the selected tools for specific talent target groups
(see table below). The tools are based on the respective Merck competency model
(please have a look in Appendix 3 for the correct application of competency models in
2013).
There should always be a clear (developmental) objective when starting a development
appraisal.

All Appraisal Tools do not evaluate general potential or evaluate candidate readiness
for a concrete position, but these tools gather data on the focus persons behaviors.
This data is used to identify strengths and development opportunities. All Appraisal
Tools conclude with a feedback meeting which is a meaningful discussion of the
appraisal results between line manager and talent to discuss and decide on areas for
development and commitment to the development process. The result of this meeting
is an updated development plan. For further information about Talent Development,
please refer to chapter 2.5.

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Integrated Performance and Talent Process

Part 2. Talent and Succession Management

Standard

2.4 Succession Management

There are two approaches to Succession Management at Merck. The Person-to-Pool
Approach automatically includes all talents. The Person-to-Position Approach will be
valid for Merck Group Positions and for identified other (Business Critical) Positions.

2.4.1 Person-to-Pool Approach

During the Performance and Potential Management Process, potential (1-step or 2step) is defined. The combination of actual GG and Potential Evaluation automatically
assigns an employee to a GG related Talent Pool. In addition, Functional Areas in
which the employee could be successful are defined by the line manager.
With this information, talents are automatically placed within one or more functional
sub-talent pools. During Succession Planning these Talent Pools can provide an
important overview about coverage of succession through available talents.
EXAMPLE
Talent Pools

Talent Profile

Top Talent
GG 18+

Actual GG: 14
Potential: 1 step

GG 16-17
Sales

Possible Functional Areas

Sales

R&D

R&D

GG 14-15

Sales

R&D

GG 12-13

Sales

R&D

The CoE Strategic Talent & Performance will conduct an analysis on the Talent Pools
and determine actions to ensure data quality if necessary.

2.4.2 Person-to-Position Approach

The objective of the person to position approach is to nominate potential short-, midand long-term successors for all Merck Group Positions and desirably for all other
Business Critical Positions.

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2.4.2.1 Define Business Critical Positions

All Merck Group Positions are automatically considered Business Critical Positions.
Based on pre-defined criteria (see Appendix #6), the manager can define other
Business Critical. If required, HRBP can assist with further information. For all Business
Critical Positions a Personto-Position approach should be applied in Succession
Management.

2.4.2.2 Creating Position Profiles

While the Talent Profile details the Merck Capabilities (experiences and competencies)
of individual talents, the Position Profiles defines the Merck Capabilities that need to be
acquired by an employee in order to be successful in a position. All Merck Group
Positions require a Position Profile and it is recommended for all other (Business
Critical) Positions as well.
HR initiates the creation of Position Profiles, specifically, the Talent & Performance
Consultants for Merck Group Positions and the manager in collaboration with the HR
BPs for identified other (Business Critical) Positions. Input is collected from the position
incumbent and then confirmed with the incumbents manager.

2.4.2.3 Nominate Possible Successors

The CoE Strategic Talent and Performance will drive the Succession Management for
Merck Group Positions in collaboration with the Business and the HR BPs.
For identified other (Business Critical) Positions, the line manager nominates possible
successors for positions reporting into him/her. When nominating successors,
succession readiness is also evaluated and these are defined as follows:
short-term (0 to 1 year),
mid-term (1 to 3 years),
long-term (3 to 5 years).
The lists of successors for Merck Group Positions will be validated by the Talent
Consultant together with the Global HR BP and the line manager the position is
reporting to. Validated successors for Merck Group Positions need to be confirmed by
the Executive Board Members during the Corporate Conference in November.
It is a business decision if validation steps with upper management will be conducted
for other (Business Critical) Positions (e.g. to conduct a Business Sector Conference).
If Merck Group Talents are nominated as successors, the HR Business Partner needs
to inform the CoE Strategic Talent & Performance to enable alignment of talent
development approaches. To ensure a comprehensive data set, all nominations and
development considerations need to be finalized four weeks prior to the Corporate
Conference.
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Integrated Performance and Talent Process

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2.5 Talent Development

Talent Development aims at developing the Merck Capabilities of identified talents in
order to prepare them for future business challenges. Succession Planning is a good
point in time to review and update the talents development plan.
Talent Development needs to be demand-driven based on two perspectives:
The Talent Profile
The profiles of positions for which the talent is nominated as successor
Line managers of talents will create for each talent a Development Plan which helps
the employee to prepare for positions according to his / her potential (Grade and
Functional Area). HR BPs track and align Development Plans of talents in their area of
responsibility considering also succession scenarios especially outside of own function.
For talents nominated for positions outside own area of responsibility, the HR BP
contacts the position owning HR BP to get recommendations for the Development
Plan.
Talent Consultants will track and align Development Plans of Merck Group Talents and
talents nominated for Merck Group Positions in co-operation with the respective
position owning line manager and HR BP.
The Development Plan should contain a majority of on-the job activities like projects or
rotational assignments (~70%). It is expected that rotational assignments and projects
will broaden the experience and knowledge of talents and therefore increase their
employability.
Besides on-the-job development, Merck also offers off-the-job development
opportunities (~10%) e.g. talent programs.
Continuous mentoring and feedback (~20%) will complete the development portfolio.
The agreed development steps for Merck Group Talents and possible successors of
Merck Group will be validated and approved during the Corporate Conference.

3 Links to other Guidelines, Policies and Standards

This standard is linked to the following:
Standard for Performance and Potential Management
The Performance Management Process is the foundation for the identification of
talents. Within the process, performance and potential are measured and calibrated,
and development activities for all employees are defined.

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Integrated Performance and Talent Process

Part 2. Talent and Succession Management

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Creating Talent Profiles

Further data to be completed / updated by employee:
e.g. personal / position information, education,
languages, CV-data
Further data to be completed / updated by manager: e.g.
evaluation of experience, retention risk, potential for
functional area
Appraisal of Talent Competencies
Conduct Employee-Self-Assessment (Feedback)
Conduct Manager Feedback
Initiate Multi Rater Feedback
Initiate Behavioral Interview
Data quality assurance of all entries in Talent Profile
including experience and competency profile
Merck Group Talents
Other Talents
Succession Management: Person-to-Pool Approach
Validate Talent Pools
Data quality check for all Talent Pools
Succession Management: Person-to-Position Approach
Merck Group Positions
Define position requirements
Propose potential successors
Discuss and validate successors
Confirm successors
Other (Business Critical) Positions
Define position requirements
Propose potential successors
Talent Development
Merck Group Talents and nominated successors for
Merck Group Positions
Propose development activities
Discuss and align
Confirm development activities
Track development activities
Other talents

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Corporate Conference

Conference

Business Sector

Incumbent

Manager of Incumbent

HR BP

Performance

CoE Strategic Talent &

Key Activities

Talent

Line manager of Talent

4 Roles and Responsibilities

R
A
A
A

A
R
R
R

I
C

I
I
C
I

R
R

R
R

A
C

C
A

C
A

A
C

C
R
A
R

C
R
R
I

A
A
R
I

C
R

A
A

R
A
R
A

R
C
I
I

A
R

Integrated Performance and Talent Process

Part 2. Talent and Succession Management

Propose development activities

Discuss and align
Track development activities

A
R
R

R
I

I
A
A

R = Responsible; (person(s) responsible need to provide input / need to act)

A = Accountable; (person accountable needs to ensure all required input is available,
requests consulting support as appropriate, needs to provide final input / approval)
C = Consulting; (person(s) consulting provide input as requested based on subject
matter expertise)
I = Informed; (person(s) informed need to be informed about result of activity)

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Corporate Conference

Conference

Business Sector

Incumbent

Manager of Incumbent

HR BP

Performance

CoE Strategic Talent &

Key Activities

Talent

Line manager of Talent

Standard

Integrated Performance and Talent Process

Part 2. Talent and Succession Management

Standard

5 Timelines

6 Documentation and IT-tool implications

The IT-tool provided by Group Human Resources, is the single source for
documentation. Documentation includes but is not limited to:
1. Talent Profile
2. Position Profile
3. Business Critical Positions
4. Nominated Successors

7 Metrics
To ensure a sustainable and successful Talent and Succession Management Process,
it is essential to measure the strength of the talent pipeline and the staffing process,
e.g.:

Talents as % of Workforce
Talent Retention Rate
Key Position Rate
Succession Pipeline Depth

A detailed description of these metrics is available at the CoE Strategic Talent &
Performance.

8 Appendix
Appendix
#1: Merck Competency Compass
#2: Merck Leadership Behaviors
#3:Methodologies to assess competencies /
behaviors in 2013
#4: Experience Categories and Levels
#5: Retention Risk Matrix
#6: Key Position Criteria
#7: Functional Areas
#8: Talent Profile
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Version No. / Update

December 2012
February 2013
May 2012
May 2012
May 2012
August 2012
February 2013

Integrated Performance and Talent Process

Part 2. Talent and Succession Management

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#9: Overview Talent Profile Information

#11: Sample agenda Business Sector Conferences

Appendix # 1: Merck Competency Compass

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February 2013
February 2013

Integrated Performance and Talent Process

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Appendix # 2: Merck Leadership Behaviors

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Appendix # 3: Methodologies to assess competencies / behaviors in 2013

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Appendix # 4: Experience Categories and Levels

Copies can be requested from the CoE Strategic Talent and Performance

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Appendix # 5: Retention Risk Matrix

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Appendix # 6: Criteria to evaluate business criticality of a position

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Appendix # 7: Functional Areas

Based on Global Job Catalogue

Administration - Secretarial

Corporate Affairs - Communication

Corporate Development - Strategic Planning
Development (clinical)
Engineering
Finance
General Management
Human Resources
Information Technology
Infrastructure - Health, Safety & Environment
Legal
Manufacturing - Production
Marketing
Procurement
Quality
Regulatory Affairs
Research & Development
Sales
Supply Chain - Logistics
Technical Specialty - Skilled Trade

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Appendix # 8: Talent Profile

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Appendix 9: Overview Talent Profile Information

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