While performance rating systems are still the norm at many organizations, it’s not really that surprising to hear that a company has abandoned the concept.
But it’s a little more noteworthy when that company is General Electric, an organization that helped pioneer the practice.
Yesterday, GE informed its workforce that 200,000 salaried employees will no longer be given one of five labels—ranging from “role model” to “unsatisfactory”—as part of their annual performance reviews, the Wall Street Journal reports.
This farewell to performance ratings has been in the making for at least the past decade, during which time the Fairfield, Conn.-based conglomerate has eliminated the famous (infamous?) forced-ranking system championed by former CEO Jack Welch.
Still, the new rating-free approach—which GE previously piloted with roughly 30,000 employees—marks a departure from a practice the “longtime standard-bearer for corporate management” has relied on “in some form or another for the last 40 years,” the Journal notes.
In its place will be a performance-management system that asks employees and managers to exchange feedback via a mobile app known as PD@GE, which compiles messages and forms a performance summary that’s delivered at the end of the year.
According to the Journal, the company is hopeful that the new approach fosters more nuanced pay and bonus decisions. High performers, for example, can still receive annual raises and bonuses, while managers are able to make “finer distinctions” with respect to middling employees, for whom more detailed feedback may serve as inspiration to improve.
The organization is also training managers to improve regular feedback conversations, the Journal reports.
At least one of those managers, Brian Finken, is confident that doing away with employee ratings will enable employees to focus more on review discussions—what they’re doing well and where they can improve—and less on scores that don’t really paint a complete picture of their performance.
Finken, a Florence, Italy-based operations leader in GE’s oil and gas business, also looks forward to implementing the new dialogue-driven approach to performance reviews, telling the Journal that he’s “glad I don’t have to spend time codifying feedback into one score. I can focus on the conversation instead.”
The maker of the Post-it Note has displaced the world’s best-known technology company atop the list of organizations that millennials most want to work for. 3M, which in addition to the aforementioned product makes Scotch tape, packaging products, laminating systems and a whole host of other things you can actually touch or hold in your hand, has displaced Google for the No. 1 place in this year’s 2016 Millennial Career Survey, conducted by the National Society of High School Scholars. Google was the top choice in the 2015 survey.
3M CEO Inge Thulin was so delighted when he heard the news that he walked over to CHRO Marlene McGrath’s office and gave her a hug, he told the Minneapolis Star Tribune. “This is a big, big statement,” Thulin told the paper. “This is incredible. It’s fantastic. When you look at Google and Apple and the others, we left them in the dust.”
Google didn’t do so shabbily, actually: It ranks No. 2 on this year’s list, followed by St. Jude Children’s Research Hospital at No. 3, Walt Disney Co. at No. 4 and “local hospitals” at fifth place. The FBI, Buzzfeed, Apple, Amazon and the Central Intelligence Agency also made the top 10.
3M appeals to young people because of its sustainability projects and its three-to-12-month leadership development program, Thulin told the Star Tribune. Its commitment to diversity is another big attractor for millennials, he said. Indeed, research has confirmed that young people are very interested in leadership development, as well as diversity, and that they’ll look for the exit signs if they find the development opportunities at their current employer lacking.
The NHSS survey results are based on responses from a big and diverse group: 13,000 high schoolers, college students and young professionals ages 15 to 32, 48 percent of whom are African-American, Hispanic or Asian, 23 percent first-generation college students and 39 percent multilingual.
“Currently, the top career interests of this group are STEM, business and arts, and entertainment and media,” says NHSS president James W. Lewis. “Millennials hope to find in the workplace fair treatment, corporate social responsibility and strong company benefits, which include flexible work schedules.”
As might be expected, the Society for Human Resource Management made sure its HR-certification effort, announced roughly two years ago, received a healthy dose of air time this week at its SHRM 2016 conference in Washington.
At a press briefing on the opening day of the event, for example, Alexander Alonso, senior vice president for knowledge development and head of examination development and operations for SHRM’s professional certifications, reported that the society’s CP and SCP certifications are being well-adopted across key industries.
“Key metrics,” he said, “now include the 92,000 SHRM certificates that exist today [as well as] tremendous growth in the [number of] SHRM exam applications from spring 2015 all the way through to spring 2016, with roughly 9,800 people sitting for the exam in this window.” (Some of these figures were previously reported in a story we posted in April.)
In addition, he said that roughly 84,000 took part in the pathway certifications in 2015. (The pathway enables HR generalists who already have certain HR certifications to obtain SHRM’s certification by completing a brief online tutorial focusing on HR competencies.)
Alonso also reported that about 5,000 HR job postings per month refer to SHRM’s CP or SCP certifications and said that SHRM will be piloting a Spanish-language version of the exam in the winter.
What impact these numbers will have on the HR Certification Institute and its Professional in Human Resources and Senior Professional in Human Resources certifications isn’t entirely clear, but one thing is certain: HRCI isn’t sitting still.
In addition to holding a 40th Anniversary Celebration at Smithsonian American Art Museum (between hors-d’oeuvres and cocktails, participants were able to stroll the gallery and take in some great works of art), HRCI announced that, beginning on Nov. 1, it would offer year-round testing—essentially throwing testing windows “out the window” (HRCI’s words, not mine). Prior to this change, exams were available to practitioners twice a year.
As HRCI Chief Marketing Officer Kerry Morgan explained, HRCI is putting HR on the short list of professions that make certification exams available to their practitioners whenever they are ready and wherever it’s most convenient.
(SHRM currently has testing windows in the spring and winter.)
HRCI CEO Amy Schabacker Dufrane noted that HRCI partner organizations were especially excited about the move because it allows them to support the process year-round.
Asked about the impact of SHRM’s entrance in the field, Dufrane admitted that exam applications were down. But she pointed out that, during the group’s 40-year history, it wasn’t unusual for these numbers to decline during periods of low unemployment (currently at 4.7 percent), being that people may be less motivated to invest in their careers when the job market is more stable.
What’s more, she said, the number of recertifications was very encouraging, climbing from percentages in the mid-80s to around 91 percent.
Of course, as we’ve noted in the past, time will tell as to how this battle over HR certifications plays out. But for now, anyway, HRCI, as moves like this suggest, seems intent on keeping SHRM at bay and remaining a major force in the HR-certification world.
As its name suggested, HireVue’s Digital Disruption 2016 in Park City, Utah was, for the most part, all about distrupting HR through technology. More precisely, the vast majority of the content surrounded hiring, HireVue’s roots. But as CEO Mark Newman made quite clear during an opening general session titled “New Wave of Disruption,” the South Jordan, Utah-based firm is no longer just about talent acquisition. It’s now about coaching and developing talent, too.
Though still a small portion of its business, with around 30 clients, Newman noted that HireVue Coach, a recent addition to the firm’s Team Acceleration Software Platform, is already growing at a fairly fast clip. He predicted that it soon will become a substantial piece of HireVue’s overall business. To date, he noted, training has been ineffective; it doesn’t stick. But by leveraging the power of video, he said, employers can now change employee behavior (primarily for those in customer-facing positions) in a fundamental way.
Of course, as you might expect, Digital Disruption (now in its third year), like most user events, was chock full of client success stories. Hilton. United Airlines. Vodafone. Netflix. But it also featured a number of speakers who looked at bigger-picture issues impacting HR.
One who personally stood out for me was Rusty Rueff, a former recruiting executive at PepsiCo and Electronic Arts who now sits on a number of boards and is an investor in several Silicon Valley start-ups. (I personally had an opportunity to meet Rusty a number of years ago at a much smaller gathering of CHROs.)
Rueff, in a general session titled “Craft(ing) of the Future,” suggested that those in recruiting need to stop thinking of recruitment as a profession and begin to think of it as a craft.
“A profession is defined as an occupation requiring prolonged training and a formal qualification,” he said. “Doctors and lawyers are a profession. But a crafts person [exercises a skill] in making something. We make something of people. We make something of organizations. We make something of cultures.”
To illustrate his point, Rueff recounted his days running recruiting at Frito Lay, where he was charged with interviewing candidates all day long, week in and week out.
“One day, I said to myself, ‘I’m the most powerful guy in the company?’ he recalled. “My other voice said, ‘What are you talking about?’ And I said, ‘No, I’m the most powerful guy in the company! because if I wanted everyone to have green eyes, I could do that. I could screen out everyone who didn’t have green eyes.’ That’s pretty scary, because I’m out there deciding what the organization’s culture is going to be by who I let in and who I screen out.”
Rueff recalled that he believed at the time that the HR function at Frito Lay needed change leaders—so that’s who he brought into the organization.
“I was a lowly little guy [at Frito Lay],” he said, “but I got to change the culture.”
Rueff told those attending that a crafts person needs to be, among other things, agile—someone who is able to adopt new ways of thinking. He added that such a person is like “an actor who can play many different kinds of roles on many different kinds of stages.”
To be successful, Rueff said, those in HR and recruiting are going to need to begin thinking like data scientists. “You don’t have to have a degree [as] a data scientist,” he said. “If you’re good with numbers, you can be one.” In other words, it’s a skill people can learn.
In addition, he said, they have to “think like the software-design architects of today, not yesterday. [People] who are fast and nimble.”
And they need to think like personal trainers, he said. “One size fits one when it comes to talent in the future.”
Speaking to this notion of one size fits one, another presenter, Molly Weaver, offered up a great example during a session titled “Stop Screening Out Great Talent.”
As director of talent acquisition at Children’s Mercy, Weaver said she was saddled by a hiring process that was way “too long” and “cumbersome” for applicants. So about a year ago, Weaver and her team unveiled a unique program called “Interview First.”
Instead of encouraging job candidates to apply for a specific job, “Interview First” enables them to submit a video via the company’s website in which they share something about their background and what they would like to do at Children’s Mercy. (Yes, you guessed it: Children’s Mercy, headquartered in Kansas City, uses the HireVue platform.)
Each day, two recruiters are assigned to review the videos that come in and parse them out to the appropriate recruiters (Children’s Mercy currently has 10 recruiters and jobs are divided into clinical and nonclinical). The idea behind the initiative, Weaver said, was to just give people a chance to tell their stories. By putting these videos at the front end of the process, she said, Children’s Mercy is able to quickly capture a lot of great talent, people who otherwise might have left the process.
Just because they aren’t the right candidate for one particular job, she said, doesn’t mean they aren’t right for something else at the company or an opening down the road.
Once the videos are evaluated, potential candidates are told they should consider applying for a particular position right away, there may be something for them down the pike or they’re not really a good fit.
Weaver pointed out that affirmative-action laws aren’t a concern for Children’s Mercy (a government contractor) here, since these individuals aren’t applying for a specific job.
So how is it working out for Children’s Mercy? To date, 120 positions have filled through “Interview First,” including nine individuals who were rehires. Interestingly, the new hires, on average, had applied seven times before.
Certainly, a pretty good start in disrupting a process that is clearly in need of some serious disruption, I think.
Counterintuitive does seem to be the operative word here, when you consider all that’s been said about retention and turnover, and the especially egregious part managers play. As Hogan puts it,
“Retention issues? It’s the manager’s fault.
Productivity problems? Blame the manager.
Engagement dipping? Someone get management in here!
Can this really be true? After all, many of these problems have roots in giant, macro issues. The economy, changing workforce dynamics, an always-on mentality spurred on by technology advances. It’s sort of simplistic to blame the manager, isn’t it?”
I especially like what she says about this mega-trend, if you will, of citing management as the reason people leave work, hate work, aren’t engaged and aren’t productive. She thinks this trend “could be part of a blame culture that has slowly seeped into our workforce over the past couple of decades.” In her words,
“Whether we’re blaming millennials for the faster pace and fancy [results-only-work-environment] perks, or blaming executives for the glaring inequality between them and us, or blaming managers for every issue in the workforce, very few seem to be stepping up to take personal accountability.”
She’s got some helpful suggestions for employees who might be prone to disparaging their managers, such as considering how they, themselves, might change the situation before blaming their direct supervisor; doing better and faster work if they don’t like what’s been assigned to them so they can prove they’re capable of taking on something more interesting; taking self-assessments of their most-productive times during the workday and building their reputations as team players; and even getting better at confronting difficult and destructive employees themselves, so managers aren’t blamed for failing to take action.
So why am I sharing this with you? Well, first, I kind of agree with Hogan that managers have taken a bad rap for far too long for the ills of corporate culture. More importantly, though, I believe employers and their HR leaders could go a long way toward curing some of those ills by paying more attention to the workloads and expectations placed on their managers.
They might also consider committing serious capital to training all employees in personal accountability, starting with Hogan’s list above.
As a good HR leader, you no doubt spend a lot of time creating opportunities for everyday employees to gain the skills and experience they need to continue their professional growth.
But what are you doing to help those at the highest levels reach their career goals?
The answer, according to many senior executives taking part in a recent Egon Zehnder survey, seems to be “not quite enough.”
As part of its “Leadership Identity—What Makes You Thrive” study, global executive search and talent advisory firm Egon Zehnder recently polled 1,275 senior execs from Asia, Australia, Europe, and North and South America.
When asked if they felt their organization helps them unlock their professional potential, 40 percent replied in the affirmative, while 31 percent said “no” and another 27 percent reported feeling neutral. In addition, 72 percent said they would welcome more help from their company to “pinpoint and pursue [their] personal motivations and goals.”
These figures “suggest that a great many executives see an opportunity for a closer alignment of their job and their essential identity and priorities,” according to an Egon Zehnder summary of the findings. “Some might even feel a clear disconnect.”
Egon Zehnder study authors Andrew Roscoe and Wolfhart Pentz also note observing what they call “an interesting paradox,” saying that few executives who feel that disconnect take steps to address the situation by working to articulate their personal goals in a way that aligns with company objectives or “by fully exploring the potential of their current role,” for example.
“Instead,” the summary adds, “they often feel that their only option is to search for an opportunity elsewhere.”
It doesn’t have to come to that, of course, and Roscoe and Pentz offer ways in which employers and executives can close this communication gap.
For instance, the authors urge executives to do their part by taking more ownership of their own growth and trajectory, and being more forthright in discussing their goals with the organization.
Executives could also stand to improve their awareness and understanding of their own personal priorities—and how they intersect with those of the company, say the authors.
Organizations, meanwhile, must find additional means of developing executives who decline traditional promotion tracks and establish metrics of success that look beyond the “traditional quantitative measures,” the authors note, adding that companies’ rationale behind proposed moves could be better communicated in some cases.
“Too often, professional development is a monologue given by the organization to the executive. It needs to evolve to a true dialogue,” says Roscoe, who leads Egon Zehnder’s executive assessment and development practice.
“But that isn’t only the responsibility of the organization. Executives need to take ownership of their own growth trajectory and be active partners in that dialogue, rather than assume the only options are ‘take it or leave it.’ ”
Interesting, somewhat divergent reports on CEO longevity appeared recently from some big-name research consultancies. One, a study from Equilar compiled for CNNMoney, shows tenure for S&P 500 CEOs has increased nearly a full year since 2005. As the CNN report states,
A decade ago, CEOs typically spent five years at the helm of one of America’s top 500 publicly traded companies. It might seem like a small increase, but it’s a notable shift from the Great Recession and financial crisis when a lot of executives got fired. Those who survived — or came on board in the new wave — are keeping their posts.
In fact, more specifically, according to Equilar’s report on the study it performed, “in 2014, the average S&P 500 CEO had served an average of 7.4 years, and 6.0 at the median. Ten years ago, those figures were 6.6 and 5.2, respectively.”
Equilar claims there’s “one simple explanation” for the rising average: a collection of long-standing CEOs at the top of the list, people like Berkshire Hathaway’s Warren Buffett, who’s held his post for 45 years, and L Brands’ Leslie Wexner, who sits at the top of the list with 52 years at his company. As soon as these top guns start to retire, you’ll see the average tenures start to fall, says Equilar.
But for now, they’re a full year higher than they were a decade ago.
Juxtapose that with the latest report from Challenger Gray & Christmas, as reported in the Center Valley Business Times — showing a jump in CEO departures toward the end of 2015. Specifically, December CEO exits were 33 percent higher than the 86 changes in November and 7 percent higher than the 107 CEO departures in December 2014.
(Despite the December surge, though, the yearly total of 1,221 CEO departures in 2015 was 9 percent lower than the 1,341 departures in 2014, according to the Challenger report.)
So are CEOs staying or going? Hard to say.
But whatever the numbers tell us, this post can also serve as a reminder that it’s never too early to put your best foot forward in devising the best CEO-succession plan for your organization. This post by me almost two years ago suggested then there was still much improvement needed in this area. (That March 2014 post also shows a decline in CEO turnover at the start of that year.)
At least we can say, with CEO turnover holding fairly steady and tenure on the rise, there’s some time, at least, to get succession at the top post right.
By the time any new generation enters the workforce, employers and experts have already twisted themselves into knots trying to figure out what makes these young workers tick, and what makes them happy.
Perhaps no cohort has been dissected more thoroughly than millennials, a group that many estimates predict will comprise as much as 75 percent of the workforce by the year 2025.
For example, we’ve heard (ad nauseam) about Gen Y workers’ nomadic tendencies, their preference to converse via email, IM, text message or just about any means other than face-to-face communication, and the underdeveloped people skills they possess as a result of this reliance on technology.
Naturally, such broad characterizations can’t be applied to every employee in a given generation, but, for better or worse, these are some of the common perceptions surrounding millennial-age workers.
And it’s those perceptions that make some of the data found in a new Institute for Corporate Productivity white paper focusing on Generation Z—defined by i4cp as those born between 1995 and 2012—all the more interesting.
(Click here for more background on the white paper, which is available for download to i4cp members.)
It’s easy—especially for a cynical, closing-in-fast-on-middle-age Gen Xer like me—to assume that each successive generation of workers will have a lesser sense of loyalty to their employers, or will become that much more dependent on technology at the expense of actual, personal interaction, for example.
But, judging from the input i4cp gathered from a focus group of 600 high school seniors, making such assumptions about Gen Z would be way off the mark.
For instance, 60 percent of the aforementioned students said they would like to stay with one company for more than 10 years, with another 31 percent saying they’d like to stick with the same organization for 20-plus years.
Or, consider that eight in 10 of these youngsters indicated that they prefer in-person communication (!), and 37 percent said they believe technology has a negative impact on people skills.
These same respondents seem to suggest an independent streak runs through Gen Z as well, with half saying they would prefer to have their own private work area as opposed to an “open concept” office or shared workspace. In fact—and I’m not sure how or why this very specific scenario was presented to participants—35 percent of the high school seniors surveyed said they would sooner share socks than an office space.
Organizational leaders such as those in HR are “at a critical crossroads” with respect to the multiple generations that make up their workforces, including Generation Z, the white paper notes.
Indeed, employers are already faced with trying to capture the knowledge of the millions of baby boomers creeping up on retirement age, and grooming Gen X- and Gen Y-age workers to fill the leadership void that will be created when those boomers leave, as the paper points out.
In addition, “employers are still grappling with millennials’ perceived sense of entitlement and knowing that they still always have one foot out the door,” according to the white paper authors. “Reacting to these gaps will be paramount to the success of businesses large and small.”
Organizations cannot shift into “reactive mode,” the authors continue, “lest a whole new set of gaps will develop and perhaps push them to the breaking point. But the reality is that Gen Z is already showing up, and leaders need to decide if they want to be prepared to welcome them (and [whether] they want to be ahead of the curve or not).”
There has certainly been no dearth of studies and stories, both here at HRE and beyond, on the challenges and failings of leadership-development programs. Here, for instance, is our last look at this problem that Staff Writer Mark McGraw wrote about on Nov. 30.
In that piece, sources told McGraw a major stumbling block keeping most leadership-development initiatives from succeeding is the tendency for line leaders to hand the LD reins over to human resources without taking responsibility for the huge role they, themselves, play in steering those initiatives.
As Debbie Lovich, head of the Boston Consulting Group’s Leadership and Talent Enablement Center in Boston, says in that story:
“As soon as [those reins are handed over, talent issues are] disconnected from the business. You see it happen when line leaders are developing plans for their businesses, and ownership for anything to do with talent goes to HR. … [T]he best-in-class companies don’t just throw it over the fence to HR.”
The study, Real World Leadership, which polled more than 7,500 executives from 107 countries, found a “lack of executive sponsorship” to be the chief barrier. Survey respondents not only indicated there was a general lack of active sponsorship, buy-in and support from the top, but they expressed disappointment in the programs altogether, with 55 percent of respondents ranking their return on such efforts as only “fair” to “very poor.”
“Executives have identified the crux of the problem,” says Noah Rabinowitz, a Korn Ferry senior partner and global head of leadership development. “The next step is to identify practical steps to create a solution.
“Given the central role leadership plays in the success of any organization,” he adds, “the view of leadership development has to shift from a ‘nice-to-have’ to a ‘must-have’ business process, as integral as the supply chain, marketing or IT.”
Dési Kimmins, Korn Ferry’s principal consultant, had some very specific and practical advice for HR leaders seeking executive buy-in for leadership development:
“The first step … is to start with strategic business needs. Executives must examine what challenges the organization currently faces, where the business is going and the leadership profile that will help the company get where it needs to go. This process starts with the C-suite, and must sustain that level of endorsement and sponsorship to be successful. The most senior leaders need to engage in the development strategy and insist the impact is regularly measured and reported.
“People assume that development happens naturally, but that’s not necessarily the case. A CEO, for example, not only has to run a business but also [has to] deal with a large number of external stakeholders, such as shareholders, the board of directors, business partners and even the media … . That’s why stepping into the CEO role is sometimes described as a career change, not just another step on the career ladder. Development and feedback even at this level are essential when so much is at stake.”
Even more specifically, the report lists tips for increasing the effectiveness of leadership development and creating a robust and sustainable leadership pipeline:
Embed leadership development in the culture and strategy, ensuring it is consistently sponsored by top executives.
Embrace the idea that leadership development is a continuous process and not just made up of one-time classes or one-off events.
Make leadership development more relevant and engaging by focusing programs on the organization’s current strategies and business issues.
Roll out relevant and appropriate development for all levels in the organization, including senior-most executives and the C-suite.
Don’t cut back on investing in leadership development when times get tough. That is the time to double down on efforts.
In late June of this year, I was dispatched to General Electric’s famed Crotonville campus in Ossining, N.Y., to attend Aon Hewitt’s Top Companies For Leaders Think Tank.
My main objective there was to meet one-on-one with representatives from some of the 25 companies that were on hand to be recognized as one of Aon Hewitt’s “Top Companies for Leaders.”
(Click here to find out who these organizations are, and how they landed on the most recent list, the first iteration of which appeared in 2001).
In these conversations, I was struck by how often HR executives returned to the idea of helping managers adopt a “coaching mind-set” as a key component of their companies’ leadership development strategies.
I was so struck, in fact, that I wound up writing a 2,300-or-so-word feature story on this topic for our September print issue, in which “Top Companies for Leaders” such as Procter & Gamble and Singtel Communications discussed how they’ve made it a priority to impart coaching skills to supervisors as part of their managerial training.
Some new data, however, suggests that most organizations haven’t warmed to the concept of making coaches out of managers in the way that “Top Companies” have.
In a survey of 117 vice presidents of talent management, vice presidents and directors of HR, directors of personnel and CHROs, talent-management software provider SilkRoad found 45 percent of these respondents saying their managers lack the skills to coach and develop employees.
Maybe finding out that nearly half of managers are coming up short in terms of coaching and fostering the professional growth of their people isn’t that shocking.
Heck, a 2015 Right Management poll found 68 percent of 616 North American workers saying their managers weren’t actively engaged in the career development of their employees.
Bruce Tulgan, founder of New Haven, Conn.-based management training and consulting company Rainmaker Thinking Inc., certainly isn’t surprised by such statistics.
I had a few conversations with Tulgan in the course of writing the aforementioned HRE feature. Not all of his thoughts found their way into print at the time, of course. But he had plenty to say on the subject, and his take in September seems just as relevant to this HRE Daily installment.
He described Right Management’s findings, for instance, as “very much in alignment” with what he and Rainmaker have uncovered in 20-plus years of research based on interviews with more than 200,000 managers.
In studying “undermanagement” and its root causes, he says, Rainmaker has frequently found that many managers and leaders don’t spend enough time interacting with their reports, spelling out their expectations and coaching employees on their career development.
“Managers, of course, are under pressure to have regular conversations with their teams about the actual work,” he says. “But providing this sort of career guidance is also part of the manager’s job.”
For their part, HR leaders can help managers set the parameters for these career-development chats, says Tulgan.
“For example, how often should [managers] be meeting with their people? How long should those conversations be, what should they be talking about and what are managers doing to prepare for those conversations? And what are they asking direct reports to do to prepare for those conversations?”
As is ultimately the case with the employees they’re charged with nurturing, he says, “you can’t hold managers accountable if you don’t tell them exactly what’s expected of them.”
News, Strategies and Resources for Senior HR Executives (formerly The Leader Board)