Category Archives: corporate culture

Changing Culture, Improving Performance

New research from the Hay Group division of Korn Ferry describes culture as “the invisible glue that holds an organization together.”

HR leaders have been singing a similar tune for years, but the Los Angeles-based executive recruitment firm’s Real World Leadership study seems to suggest that the rest of the C-suite is joining the chorus.

In polling more than 7,500 executives representing organizations in 107 countries, the survey found that “driving culture change” ranks among the top three global leadership development priorities among respondents.

Culture “is no longer an afterthought when considering the business focus of an organization,” says Noah Rabinowitz, senior partner and global head of Hay Group’s leadership development practice, in a press release highlighting a few of the findings.

Culture, says Rabinowitz, “is the X-factor … and ultimately makes the difference between whether an organization is able to succeed in the market or not.”

The survey also “affirms the critical role that leaders play in steering culture,” according to Korn Ferry, with executives citing “communications” as the most widely used strategy to improve culture, as well as “leadership development” and “embedding culture change in management objectives.”

And why are executives focused on improving their organizations’ culture? Primarily to “improv[e] organizational alignment and collaboration,” followed by “improving organizational performance,” the poll finds.

That said, organizations that are able to align strategy and culture are “more often the exception than the rule,” according to Korn Ferry. The firm cites its own 2014 research that found 72 percent of more than 500 executives saying that culture is “extremely important” to organizational performance. Just 32 percent of those same respondents, however, said their culture aligns with their business strategy.

Culture doesn’t necessarily align with strategy, per se, but “with the identity of the firm in the minds of key customers,” says David Ulrich, the Rensis Likert professor of business at the University of Michigan and a partner at the RBL Group.

In turn, “the firm’s brand with customers becomes the culture identity among employees,” he says. “As such, culture is a major form of competitive advantage, beyond talent.”

To gain such an advantage, Rabinowitz suggests that more organizations make culture change a bigger part of their leadership programs and overall leadership agendas.

“Culture change occurs, ultimately, when a critical mass of individuals adopt new behaviors consistent with their organization’s strategic direction,” he says. “Leadership development can be the most effective tool to change behaviors. And when leaders change their behaviors, others do so, too.”

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Maersk Goes Global with New Maternity Benefits

You might say the parental-benefits bandwagon has just charged into the world arena. Copenhagen, Denmark-based Maersk Group 505017852--pregnancyannounced recently that, starting April 4, it will be implementing a new global guaranteed 18-weeks-minimum, fully paid maternity leave  for all its female employees.

Worldwide, the maternity policy would affect more than 23,000 employees. Once implemented in the United States, it will boost the current six-weeks leave to 18 for more than 1,200 women. It will also improve terms for women working for Maersk in at least 51 countries.

In addition, it will include a return-to-work program, giving onshore employees the opportunity to work 20 percent fewer hours at full contractual pay within the first year of birth or adoption.

“This new policy supports our aim to retain our talents and attract even more in the future — this way, strengthening our business results,” says Michael White, president and CEO of Maersk Line North America.

Maersk Line’s Asia Pacific Chief Robbert Van Trooijen, in a recent story on Seanews.com, says the new policy “supports our aim to retain the talented women working in the group and attract even more to gain access to future and wider talent pools … .”

The move was predicated on research conducted for Maersk by New York-based KPMG suggesting maternity-leave policies have an influence on the labor-market participation by contributing to higher employement rates of women.

The move doesn’t mark a first in the recent march by large, big-name companies to enhance parental-leave benefits in an effort to boost retention, reputation and employer brand. A search of this HRE Daily site yields numerous posts about this march, some might say race, to board the parental-leave bandwagon. So too does a search of HRE‘s website, HREOnline.com.

So will there be more bandwagon jumpers globally, what with Maersk leading the charge? I put this question to Kenneth Matos, senior director of research for the New York-based Families and Work Institute. What he had to say is worth sharing, particularly as it applies to HR leaders:

“I do believe that more multinationals will be pursuing improved maternity-leave and other benefits policies. One, because centralized and standardized benefits programs are easier to manage than a grab bag of varied policies impacted by an array of international legal frameworks. Offering everyone a high-end multinational program is easier to manage, avoids lawsuits from accidentally violating a country’s laws with a policy legal in another country, and avoids organizational culture clashes as employees around the world compare their benefits.”

He goes on:

“I believe that a single, affordable, multinational benefits program is the holy grail of the benefits industry. Second, there has been a recent wave of organizations attempting to outdo each other on employee benefits. The battle for talent is reigniting as the predicted retirement boom begins to pick up steam — reducing the size of the workforce –and more jobs require uncommon skills that take years of education or experience to cultivate — a major problem for a shrinking labor force.

“Organizations will want to be seen as leaders and many HR executives and benefits teams should prepare for calls from senior executives to benchmark their benefits programs against their competitors.  It is essential for HR executives to keep cool heads and examine their benefits in terms of what their people want and need rather than offering extensive benefits just to make a social or political statement. Especially if the organizational or local  cultures will suppress the usage of these elaborate offerings or interest will wane over time and leaders might call for a reversal if the benefits structure doesn’t work for their organization and staff.”

Sounds like advice worth heeding, or at least considering.

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A Word of Caution This Election Year

In case you didn’t notice, the 2016 presidential election season officially kicks off next Tuesday, when Iowa caucus-goers cast their votes for their favorite Democrat or Republican.

ThinkstockPhotos-476244660At this point, it’s anyone’s guess who will eventually win their party’s nominations. But this much is for sure: Contentious debate about the upcoming election around the workplace watercooler (and a host of issues associated with it) is only going to intensify in the coming months.

If the back-and-forth on social media today is any indication, HR leaders will want to brace for the worse. (In today’s environment, that means civil political discussions among employees escalating into heated discussions about issues involving race and religion.) But as Cozen O’Connor attorney Michael C. Schmidt recently reminded me, employers need to be careful not to overreact when things seem to be getting out of hand.

Just as employers have the right to ensure that the workplace is safe and productive, Schmidt said, employees similarly have certain rights that need to be appropriately balanced.

Schmidt, vice chair of Cozen O’Connor’s Labor and Employment Department, points out that “many states have some form of a ‘legal activities law,’ which prohibits employers from taking adverse action against an employee because he or she engages in certain types of political-related activities off premises and outside of working time.”

At the same time, he said, employers need to be “mindful of not imposing the company’s particular political views (and, especially, those of the company’s principals) on employees, and suggesting any link—positive or negative—between an employee’s expressed political views and compensation.”

Schmidt added that HR professionals need to “communicate to all employees that company policies prohibiting discrimination, harassment and violence in the workplace also extend to political discussion in the workplace.”

The bottom line: Employers would be well advised to tread carefully as they navigate what’s increasingly looking like one of the more volatile election seasons in recent memories.

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Change Brings Unclear Expectations

When it comes to change in the workplace, employees aren’t as worried about workload as one might think, according to a new  poll from ComPsych Corp.

It finds 31 percent of more than 2,000 surveyed employees are most troubled by unclear expectations from supervisors, while 20 percent are most worried about people issues around change.

“Change has become a constant for many workplaces, whether in the U.S. or globally,” said Dr. Richard A. Chaifetz, Founder, Chairman and CEO of ComPsych. ”Employees are telling us that much of the disequilibrium around change is coming from managers. These challenges have resulted in our training topics of ‘resiliency’ and ‘coping with change’ being by far the most popular,” he added.

When you experience change at work, what is most stressful for you?

31 percent said “unclear expectations from supervisors”

20 percent said “confusion / conflict between coworkers / departments”

18 percent said “belief that workload will increase or become more difficult”

15 percent said “uncertainty about future / questions about stability of company”

13 percent said “new processes / operating rules / skills needed”

3 percent said “other”

It’s interesting to note that employees cite their managers as the primary source of disequilibrium, which makes me think there is an opportunity for HR here to better train managers to be clear with their expectations of their workers.

As for the 20 percent who are most concerned about the
“people issues around change,” it seems that communication efforts could be well-utilized to allay such workers’ concerns about their roles in a changing workplace landscape.

And, while wonky words such as disequilibrium and resiliency may not have been in the workplace lexicon for very long, as the pace of business continues to accelerate, it seems certain that we will be seeing much more of them in the future. I suggest you start building up your resiliency to them now.

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The Perils of Anonymous Feedback

A number of firms have reached out to us recently about their internal feedback tools, which they say can increase engagement and improve performance by letting employees send their colleagues kudos or offer constructive criticism. Now that “continuous performance management” is officially a thing, it would seem that the time is ripe for HR leaders to push for rolling out these tools within their organizations.

They might want to proceed cautiously, however, after reading Quantum Workplace’s Natalie Hackbarth, who reminds her readers that the New York Times’ less-than-flattering expose on Amazon’s workplace culture last August included details of how employees used the company’s Anytime Feedback Tool to slam and criticize each other, leading to what sources described as a “bruising workplace” and “purposeful Darwinism.”

Now if “purposeful Darwinism” is the sort of workplace culture that you and your CEO are aiming for, then have at it. For everyone else, Hackbarth included some advice and perspective from industry thought leaders on the lessons learned from Amazon’s experience.

Here’s Bersin by Deloitte’s Josh Bersin on the matter:

“Our research shows that companies that value open feedback and communication outperform their peers. This does not mean, however, that an anonymous feedback tool should let employees do away with respect, honesty, confidentiality, and fairness. We urge companies that use these tools to set guidelines in place, and communicate that nobody should say anything online that they would not say in person.”

And here’s Paul Hebert, an engagement and recognition consultant:

No one ever erred by underestimating human behavior. I’m sure that when Amazon did this some guru said it was the future of employee reviews—transparent and real time. This is why we shouldn’t blindly follow outliers and try to emulate who we ‘think’ is doing it right. Yes, even Amazon can make big mistakes. Transparency without accountability is a cesspool.”

And finally, here’s John Whitaker, of HR Hardball, whose last line I find especially memorable:

“Many business leaders will see this as a justification for not employing feedback tools that offer a wonderful way to build engagement. This story only justifies the paranoia many already feel about an open forum for employees to vocalize. Don’t bury the lead, though—the real story is the reflection on Amazon’s culture. When you create a culture of fear, don’t hand the inmates a shiv.”

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A Few Lessons from a Few HR-Related Fiascos

I thought this might be a good post the day before New Year’s Eve. Consider these Key Lessons from Recent HR Fiascos that O.C. Tanner’s 499235312 -- fiascosDavid Sturt and Todd Nordstrom posted on their company blog a while back some good reminders heading into the new year that what you think might work in the world of management and HR can easily backfire. So tread and think carefully before implementing your wonderful 2016 workforce-management ideas.

In all fairness and full disclosure, Sturt’s and Nordstrom’s first lesson isn’t really a fiasco unleashed by human resource professionals, but it does speak to HR’s compensation oversight and what can go very wrong with a good idea.

Remember Dan Price, the CEO of Gravity Payments, who announced his plan to raise the company’s minimum wage to $70,000 in order to do his part to lessen the pay gap between CEOs and the average worker? I spoke with Sturt about this. It seems Price had gotten hold of a Princeton University study back in 2010 indicating that, “when people were trying to meet their needs and they made generally less than $75,000, there was less contentment, happiness and a sense of well-being,” Sturt says.

But when you go over that amount, “the happiness quotient doesn’t rise in accordance and in step with raised increments,” he says. So Price brought top salaries — including his own — down while raising the minimum to a happy $70,000. Problem was, he didn’t run it by the other principles, including his own co-founder brother, who filed a lawsuit against Price that is now pending.

Sturt and Nordstrom write:

“As one disgruntled ex-employee of the company told the New York Times, it isn’t exactly fair for top performers to be compensated the same as slackers. That undermines motivation for people to go above and beyond. Whether you agree with this assessment or not is neither here nor there. At the end of the day, Dan’s good intentions brought him negative publicity, and he had to suffer the consequences.”

Then there’s the Amazon fiasco. We’ve all probably read the criticisms published in the New York Times of its hard/harsh-driving culture. What was behind it were all the metrics and measurements that were simply established to raise performance and productivity. Problem was, as the two write, “numbers don’t reveal the whole picture: not for employee engagement, not for performance, and not for [the] ability to lead and execute.”

The other culprit at Amazon, Sturt tells me, was HR itself. In his words, “Seems like HR got overrun there.” Amazon’s HR leaders did not have the self-confidence and guts, he says, to march into the offices of the CEO and other top leaders and voice their concerns — and they had to have had some, given their skills in people perceptions. “If HR isn’t stepping up,” he says, “then who is? Of course they’re taking their cues from the top, but it’s an important role for HR to be a company-culture fiduciary, if you will.”

Granted, he does see boldness growing among top HR leaders in general: “I do see it in personally strong chief human resource officers. You bump into them and you know their CEOs look at them as partners. You know they’re co-creating a culture that is both human and performance-driven.” Problem is, there still aren’t enough of them out there.

Sturt says he is seeing a fundamental shift among all top leaders, many of whom are now questioning, ” ‘What kind of place are we promoting as a place to work?’ ” And that, he says, “is creating an opportunity for HR leaders to really speak to that, and talk about principles and purpose; things that weren’t necessarily on the discussion board” a short while ago.

And No. 3 on this list of HR fiascos to mull? The fact that unlimited paid vacation and unlimited parental leave — and who hasn’t heard about this lately? (think Netflix, GE and, once again, Amazon) — come with strings attached. As Sturt and Nordstrom write,

“Offering all the paid-time-off in the world won’t fix your overworked employee problem unless the rest of your culture supports employees who take time off instead of punishing them.”

Sturt actually came back from a worldwide business tour and “saw the same kinds of things being played out in Bangalore, for instance,” he tells me. “They have the same problem we have in the states: If you really take that time, offered though it may be, you really aren’t a team player. [Those left holding the new parent’s bag, for example], are also left questioning why ‘I have to do your work.’ ”

His recommendation to HR?

“Just be mindful of the broader cultural norm you’re trying to set and weigh the initiative against it. You might make lots of changes without fitting them into the ultimate corporate goal.

“You may end up ‘Frankensteining’ it, with a bolt here and a stitch there, and you end up with a monster.

“Think before you say, ‘We gotta do this or we won’t compete’ [with all the bandwagon-hoppers].”

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Corporate Culture: Seven Critical Factors

The Wharton School’s Adam Grant has written an interesting new piece for the New York Times on what job candidates should look for when trying to determine the values of their prospective employers.

SevenWe’ve written extensively about corporate culture here at HRE, and there are many factors that separate one organization’s culture from others. But Grant argues — citing research conducted three decades earlier by a team led by Stanford’s Joanne Martin — that culture is typically defined by seven stories which can tell candidates all they really need to know in terms of whether they’d like to work there or not.

The first story is “whether the big boss is human,” Grant writes. In other words, is the CEO someone who takes the time to show that she appreciates the work being done by the folks in the trenches by, say, working a shift taking customer calls? Or, is she the sort of person whose air of superiority extends to , say, never letting employees use her parking spot even when she’s on vacation?

The second story is “can the little person rise to the top?” Have employees who started at entry-level positions been able to rise to the top management ranks, or is the organization the sort of place where low-status employees who achieve great things go unrewarded?

The third story, writes Grant, is what happens when the organization must conduct layoffs: Do the leaders show solidarity by cutting their own pay and bonuses during the difficult times, or do they (as has happened far too often at too many companies) grant themselves even bigger bonuses while slashing the rank-and-file?

Story # 4 describes how bosses at the organization tend to react when employees make mistakes. Grant cites a story from IBM, when an employee whose error cost the company $10 million walked into CEO Tom Watson’s office expecting to get the axe. Instead, Watson said: “Fire you? I just spent $10 million educating you.”

These four stories deal with three common themes, Grant writes: Is this a fair place, is it safe to work here, and can I shape my destiny and have influence on this organization?

The remaining three stories are “Will the organization help me when I have to move?” “What happens when a boss is caught breaking a rule?” and “How will the organization deal with obstacles?” As Grant notes, “they’re all concerned with the same three issues. If people are supported when they relocate, leaders follow the same rules as everyone else, and everyone takes the initiative to solve problems quickly, we don’t worry as much that the organization is unfair, that we’ll lose our jobs for blowing the whistle, or that no one will join us if we try to change the culture.”

An organization’s values are the principles that people there not only say are important, he writes, but the ones they show are important through their actions. And that, far more than free sushi at lunch or Ping-Pong tables in the break room, is really what matters when it comes to corporate culture.

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Billionaire Busts Out Big Bonuses (Again)

When your company — the largest privately held oil and gas producer in the country — also makes frequent appearances on Fortune’s 100 Best Companies to Work For list, chances are good that you’re doing something right when it comes to keeping your workers happy.

So maybe it shouldn’t have come as a surprise when, late last week, news broke that  billionaire Jeffery Hildebrand, owner of Hilcorp Energy, just blew the curve on holiday bonuses this year with a staggering, six-figure sum for each employee.

According to this post from Forbes’ site, Hildebrand’s year-end generosity has already been well-documented:

Five years ago, when Hilcorp achieved its goal of doubling its oil and gas production, Hildebrand gave every employee the choice of $35,000 cash or $50,000 towards a new car. This year, despite the downturn, Hilcorp doubled its output again, to more than 150,000 barrels per day. So Hildebrand doubled the bonus — to $100,000.

With about 1,400 employees, Forbes notes, “Hildebrand’s largesse will total more than $100 million (amounts are said to be prorated depending on how much of the past five years a worker was with the company).”

But no matter what the ultimate amount on the check actually is, Hildebrand’s bonuses have a tremendous effect on how employees view their work, as evidenced by this quote from Amanda Thompson, a Hilcorp receptionist (provided to Fox 4 News in Houston):

“It’s just a true gift, and I think myself, along with everyone, is not going to give less than 100 percent each day,” she said.

In this age of constant self-promotion and 24/7 branding, it’s especially refreshing to read that “Hildebrand has declined all of [Forbes’] interview requests over the years; a spokesperson did not return calls for comment about the bonuses.”

Indeed, holiday season or not, money always talks louder than words.

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Retailers: ‘No Thanks’ to Thanksgiving Hours

ClosedREI made news recently with its announcement that its stores will be closed on Black Friday this year. “Instead of reporting to work, we’re paying our employees to do what we love most — be outside,” said REI’s CEO, Jerry Stritzke. The outdoor-apparel retailer’s website won’t be processing customer orders that day, either — instead, the day will be a paid holiday for all of its 12,000 employees, it said.

Seems like a bold move — although retail analysts note that Black Friday isn’t quite the sales juggernaut it used to be, what with the rise of online shopping and deals that are spread throughout November and December. Still, REI’s announcement resonates with a significant portion of the public who’ve expressed outrage at the recent trend among retailers to open early on the evening of, or stay open throughout, Thanksgiving Day itself, requiring employees to work instead of spending time with their families.

Although REI appears to be the only national chain so far that will be closed on Black Friday, at least 24 national retailers have announced they will remain closed on Thanksgiving Day. These stores include GameStop, T.J. Maxx, Marshalls, Sam’s Club, Home Depot, Burlington Coat Factory, Jo-Ann Stores, BJ’s, Costco and Nordstrom.

Could REI be shooting itself in its (Teva hiking sandal-clad) foot? Black Friday is still very important for retailers, even for REI — spokeswoman Stephanie Hettick told The Oregonian that it’s one of the top sales days for the company. But REI is also making sure it’s getting massive publicity for its decision: It’s created a website, optoutside.rei.com, as well as hashtags on Twitter to encourage shoppers to be outside on Black Friday (did I note that REI sells outdoor merchandise?) rather than clogging store aisles.

“Black Friday is the perfect time to remind ourselves of the essential truth that life is richer, more connected and complete when you choose to spend it outside,” said Stritzke in a press release. Hmmm, maybe he’s on to something.

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Das Deception: VW Probe Deepens

When a corporate scandal hits, it typically takes a while to identify all the key players.

So, it probably shouldn’t be shocking to learn that the ongoing investigation involving Volkswagen is now expanding to include managers who may have looked the other way as engineers installed software designed to manipulate emissions controls during laboratory tests in roughly 11 million Volkswagen diesel vehicles since 2009.

As the New York Times reports, “a person briefed on the inquiry” says the probe—being conducted by law firm Jones Day, at the behest of the Volkswagen supervisory board—could soon see as many as 10 Volkswagen employees being suspended.

While some of these individuals were engineers “directly involved in programming cars to cheat on emissions tests,” the Jones Day investigation is now taking a closer look at “managers [who] may have learned of the deception and failed to take appropriate action,” according to the Times.

So, it seems the seat could start to get pretty hot for some Volkswagen managers in the days and weeks to come. But the organization’s leadership is already under heavy fire for the part it played—or didn’t play, as it were—in gaming the emissions testing process for more than five years, and its top executive has already toppled from his perch.

On Sept. 3, Volkswagen opted to explain to federal regulators why many of its diesel automobiles were emitting more toxic emissions on the road than they did in the test lab. (The automaker’s alternative was losing Environmental Protection Agency certification for all of its 2016 diesel models.)

Michael Horn, CEO of Volkswagen’s U.S. business, appeared before Congress earlier this month. Horn testified that he was aware of potential issues as far back as spring 2014, but claimed he didn’t know for sure until this past September that the company had been using illegal software to deceive emissions testers.

At least three members of Volkswagen’s supervisory board “have said they learned of the illegal software from media reports on Sept. 18,” the Times reports. Now-former Volkswagen chairman Martin Winterkorn claims to have been in the dark all along, however. In a Sept. 23 statement announcing his resignation, Winterkorn said he was “ ‘shocked’ to learn of the deception and had committed no wrongdoing,” according to the Times, which notes that shareholder representatives have criticized Winterkorn’s failure to keep them informed as the controversy unfolded.

Former employees have joined the chorus as well, condemning “what they said was a culture inside Volkswagen that centralized decision making at company headquarters in Wolfsburg, Germany, and discouraged open discussion of problems, creating a climate in which people may have been fearful of speaking up,” the Times reports.

It may be months before this web is untangled, and we have a better sense of who knew what and when they knew it. But it’s probably safe to go ahead and classify the Volkswagen emissions saga as yet another reminder of just how wrong things can go in organizations that don’t effectively communicate with their people, and in cultures where employees are afraid to blow the whistle on unethical behavior.

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