Talent management on wall street

The Wolf of Wall Street

1. Identify and briefly describe 5 concepts or ideas related to talent management (min 500 words).

With any Wall Street firm, employees must possess certain characteristics, behaviors and values that will allow them to be successful in highly competitive environment. As it relates to talent management, the firm must be able to evaluate these characteristics within individuals and determine if these skills can aid the overall business operations of the franchise. The first concept displayed in the firm is talent acquisition and retention. This talent management concept is directly related to the ability of Jordan Belfort to find and acquire like-minded individuals. In his case, these individuals must be very competitive and have an insatiable spirit for financial gain. These two concepts where reinforced by retention activities designed to keep employees engaged. This concept included very large sales bonuses to brokers who could get their clients to purchase certain stocks or lavish parties. In certain scenes of the movie, the management team even went so far as to entice men with sex as a means of encouraging, motivating and retaining them within the firm (Allen, 2010).

The second concept of the film relates to performance management. Here, management-based performance solely on sales, investment gains and transaction volume. Management would even use illegal means ensure that their performance was high. For example, the firm used illegal “pump and dump” schemes which where designed to artificially inflate the stock price in an effort to later sell the overvalued stock in the market. They even issued illegal guidance and performance expectations for stocks. This selling of securities to wealthy clients through a manipulative manner were the only criteria used to evaluate broker performance.

The third concept is that of strategic employee planning. Here, Jordan used this concept to mask the overall illegal activities of his firm. He named his company Stratton Oakmont to sound much more sophisticated while also masking his illegal activities. He also used a complicated network of banks to help obfuscate and hide the wealth of his firm in a strategic manner.

The fourth concept related to talent management is that of learning and motivating. Here again Belfort use a variety of tactics to motivate his employees such as prostitutes, drugs, lavish parties and bonuses throughout the film. This concept helped to incentivize adverse and often illegal behavior on the part of his associated and employees. This talent management concept also allowed many of his employees to become wealthy as they leveraged their competitive spirit to better engage in activities designed to increase their bonuses or lifestyle

The final talent management concept employed in the film was that of compensation. Throughout the film, Belfort rewarded his associates and employees handsomely. He did so as a means of retaining their services within the firm and preventing them from going to competitors. This ultimately help to further incentivize behaviors that enriched not only Belfort, but the firm overall (Schuler, 1987).

2. From a talent management perspective, what is the message of this movie? Do you agree or disagree with it? (min 500 words)

From a talent management perspective the message of the movie is that leadership will obtain behaviors that they reinforce and incentivize within their own organizations. The firm also bolsters the argument around servant leadership and its implications to talent management. Here, the behaviors that management does are often mimicked by lower level employees. From a talent management perspective, leadership is a critical element in the manner in which the organization operates (Huselid, 1997)

When reviewing the film, management heavily used incentives that catered the needs and well-being of its employees. This included large salaries, bonuses, lavish parties and overall aggressive sales environment. However, due in part to management greed, they ignored the overall damage being done to both clients and their overall brand image. From a talent management perspective, leaders in the organization blatantly disregarding the rules governing the securities markets and instead look to engage in behavior that improved their well-being at the expense of clients. This likewise, showed employees that illegal behavior within the organization would be tolerated so long as produced profits for the firm.

From the film, the firm did not engage in an inclusive environment, which is a critical component with the talent management doctrine. Here, having a diverse array of employees and individuals may have mitigated the excesses of the organization. Here, the organization was primarily dominated by young white males looking to scam their wealthy clients through pump and dump schemes. From a talent management perspective, this only harmed the firm as they engage in unchecked greed and ambition with no regard for the client results. This greed ultimately led to the downfall of the organization and its founders.

I personally do not agree with the talent management perspective. Here, the founders where heavily incentivizing illegal activities. Likewise, they where also hiring personnel that where engaging in activities that question prior to their hiring. As brokers, the company had a fiduciary duty to its clients and to the capital markets overall. The company, due its size, should have upheld the overall integrity of the capital markets. However, the company chose to ignore this concept in its talent management process and instead elected to harm its clients and customers through nefarious means. This is perspective of talent management, although profitable, does not align with the ideal of society or the world as a whole. Essentially Belfort scammed millions of dollars from wealthy client that could have otherwise been allocated to much more productive means.

From a talent management perspective, the entire firm should have acting with more integrity and conservativism as it relates to the operations of the business. Here, the company should have looked to hire brokers with a much higher quality value system. The company could have maintained its high sales standards, but instead eliminate the illegal and often nefarious activities. Likewise, the company could have also looked to engage with a much more diverse and inclusive employee base. These elements would have reduced profitability but improve operations in a much more sustainable manner, thus alleviating the legality of the firms operations. Likewise, they would have treated clients with more care as oppose to simply using their wealthy clients to extract millions of dollars from them. This is particularly egregious considering that many of these wealthy clients made their money through hard work. By engaging is such self-serving activities, the firm undermined the overall integrity of the capital markets.

3. From a talent management perspective, what part of the story told by the movie was the most powerful? Why? (min 500 words)

The most powerful portion of the movie is when the main protagonist gets caught for his misbehavior. This is a critical element as it shows the audience that illegal activities, no matter how sophisticated will get caught. From a talent management perspective there are a number of elements at play in this situation. First, it is important for employees to have the right incentives when hired. Having the right incentives allows the employees of the company to better identify what is valued within the organization and what behaviors will not be tolerated. In this case however, illegal and often illegitimate activates where allowed within the organization. Even more alarming was that many of those who conducted the most egregious acts where promoted and often held in higher regard than those who did not do so. This misalignment of incentives ultimately creates a conflict of interest between management, employees and the overall capital markets. In this case the capital markets are expected a product that can produce an adequate rate of return while also protecting the principle balance of their investment. Belfort’s company leveraged and took advantage of this trust to create products that where illegal through pump and dump schemes. Trusting investors saw this investment advice as a means to earn higher risk adjusted returns. However, they where not aware that the organization what using illegal tactics to sell them fraudulent investment advice. This ultimately would lead to large losses for unsuspected investors while the firm made large amounts of commissions. To further incentivize this behavior Belfort would leverage prostitutes, lavish parties, and even drugs as a means of promoting illegal behavior.

From a talent management perspective, management was unwilling to place checks and balances on individual employee behavior. Instead, they allowed greed to manifest itself throughout the organization, ultimately undermining the integrity of the capital markets. This was power as it let the audience know that incentives matter within a business organization, especially if it is related to talent management. The wrong incentives can not only harm the individual, but the entire organization through misalignment of behaviors. Furthermore, from a talent management perspective, it is important for employee to focus exclusively on the client oppose their own profit. This principle-agent problem is heavily depicted throughout the film as organization engaged in behavior that undermined the overall requests of the client. Finally, it is important attract, hire, and retain individuals with integrity that can oversee the entire talent management process within the organization. Here, there was no oversight of the operations thus allowing individuals to engage in activities that were outright fraudulent. These behaviors ultimately resulted in the loss of millions of dollars in client money, the destruction of the firm, and the tarnishing of the brokerage profession as a whole. Further, this created further governmental oversights of the industry which only increases the cost of doing business in the financial markets due to compliance with these initiatives. Essentially, from a talent management perspective, the organization essentially conducted its entire operation in an unethical manner, thus harming society overall.

4. Identify and briefly describe 3 managerial implications learned from this movie (min 500 words).

As noted above there are a litany of managerial implications from this movie. The first and most obvious is to act with integrity with all business dealings. The second is to align incentives with proper ethical behaviors. Finally, the third element is to have proper checks and balances within the organization to ensure the culture is one that is conducive to the values of the organization.

First, the ability to act with integrity is critical within the financial services industry. Clients are trusting their hard-earned money to brokerage, mutual fund, and other capital providers. Here, these clients are looking to earn a respectable rate of return, while limiting down side risk. Many of these individuals are not financial savvy and are turning to a professional to ensure the success of their financial future. Unfortunately, these service providers have incentives that don’t align with those of the client. In the case of the film, the business providers had an incentive to sell high commission stocks irrespective of their suitability for the client. This issue was exacerbated by the pump and dump schemes and other illegal transactions of the firm. These transactions not only earned the firm a large amount of money, they also incentivized low level employees to continue to conduct themselves in an irresponsible manner (Sharma, 2017).