Category Archives: corporate culture

The High Cost of Warm Fuzzies

I admit the following with a recently delivered dash of remorse: I am an avowed Amazon Prime customer and I always get a “warm fuzzy” when a product I ordered in the morning arrives on my front porch before I even get home from work.

With that said, reading the New York Timesrecent in-depth look at Amazon’s corporate culture definitely left me with a “cold prickly,” or what the company calls the feeling customers get when they are informed their packages will not arrive as scheduled.

In case you haven’t read the piece yet — and I highly recommend you do — the Times “interviewed more than 100 current and former Amazon employees, including many who spoke on the record and some who requested anonymity because they had signed agreements saying they would not speak to the press.”

One of the few employees Amazon allowed to speak on the record (via email) for the piece was its vice president of HR, who defended the company’s attitude toward open confrontation in the workplace:

“We always want to arrive at the right answer,” said Tony Galbato, vice president for human resources, in an email statement. “It would certainly be much easier and socially cohesive to just compromise and not debate, but that may lead to the wrong decision.”

The story about the company that has just been valued at $250 billion has generated enough controversy that founder and CEO Jeff Bezos, who declined to be interviewed for the original story, nonetheless felt compelled to push back against some of the more damaging claims made in it, according to a follow-up piece by the Times:

In a letter to employees, Mr. Bezos said Amazon would not tolerate the “shockingly callous management practices” described in the article. He urged any employees who knew of “stories like those reported” to contact him directly.

“Even if it’s rare or isolated, our tolerance for any such lack of empathy needs to be zero,” Mr. Bezos said.

The NYT piece quotes Jason Merkoski, a 42-year-old engineer, who worked on the team developing the first Kindle e-reader and served as a technology evangelist for Amazon, who left the company in 2010 and then returned briefly in 2014.

Among the many disheartening stories of uncaring — or even malicious — co-workers, Merkoski’s quote perhaps best sums up the queasy essence of how work gets done there:

“The sheer number of innovations means things go wrong, you need to rectify, and then explain, and heaven help you if you got an email from Jeff,” he said. “It’s as if you’ve got the CEO of the company in bed with you at 3 a.m. breathing down your neck.”

Jason Averbook, CEO of The Marcus Buckingham Co., and one of the top thought leaders in the space of HR, workforce and enterprise technology — as well as being named as one of the 10 Most Powerful HR Technology experts by HRE — says the Amazon story offers a few powerful lessons for HR leaders everywhere.

“We need to be able to understand the pulse of employees much better than we do today,” he says. “It should never get to the point where employees see news media or social media as the only resort.

“And for a metrics-driven organization such as Amazon, it’s a shame and a shock that neither Bezos nor team leaders across the organization have quality people data that shows what’s at work in their teams. Because of this dearth of people data, we cannot truly know what their culture is like, and this situation emphasizes the need for reliable, real-time measures of team-level data for companies of all sizes.”

Averbook adds that companies need to “be doing a much better job of putting tools into the hands of team leaders themselves to empower them to take action.”

With the volume of millennials entering the workplace — even in managerial roles — “we need to provide both the training and tools to allow them to lead effectively,” he says. “It’s a reminder for companies to take a look at their current processes and identify how they need to improve now.

“This is the kick in the pants HR and companies need,” he adds. “If there was ever a question about the return on investment of HR tools and processes, the Amazon debacle should resolve those concerns as long as they are the right tools and processes.”

But, despite the public-relations black eye the story has caused Amazon, it certainly appears the company will continue to grow toward being the first trillion-dollar retailer in history, regardless of how we feel about the way our packages and products ultimately get to us.

Indeed, in Seattle alone, according to the piece, “more than 4,500 jobs are open, including one for an analyst specializing in ‘high-volume hiring.’ “

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The Paradox of Unlimited Paid Leave

Paid leave is in the news lots these days: President Obama has just drafted an executive order requiring federal contractors to provide paid leave for medical or health reasons or to care for a sick relative. Employers who fall under the order’s purview would be expected to provide a minimum of about seven days of paid leave per year and to allow the leave to accrue year after year. The executive order — which is expected to go into effect within a couple of months – would not only affect hundreds of thousands of employees, but may have an effect that extends beyond federal contractors: “You can build an expectation that paid sick leave comes with a job,” Elise Gould, a senior economist at the Economic Policy Institute, told the New York Times. “Changes in cultural norms matter.”

rbrs_0240Over in Silicon Valley, meanwhile, the cultural norm is plush benefits for the employees of the area’s tech behemoths – and now Netflix has raised the bar: Earlier this week it announced it would offer unlimited paid maternity and paternity leave. Employees can stay out as long as they like to care for their newborn or newly adopted children while still receiving full pay and benefits, said Netflix Chief Talent Officer Tawni Cranz.

Netflix’s announcement makes the generous leave policies offered by Facebook, Google, Accenture and Johnson & Johnson – which offer paid leave for up to four or five months – pale in comparison. However, the longstanding question about unlimited time-off policies – whether they’re for vacation, health reasons or the birth or adoption of a child – is that if you leave it to the discretion of employees as to how much time to take, won’t they actually end up taking less time (or none at all) than if they were given a set amount?

“An unlimited policy sounds great in theory,” writes Jena McGregor, the On Leadership columnist for the Washington Post. “Unless the culture really supports it, however, employees won’t know how to react and may even end up taking off less time than they otherwise would.”

When tech firm Evernote began offering unlimited vacation time to its employees back in 2011, it noticed some employees were actually taking less vacation in order to look better to their bosses, writes MarketWatch’s Catey Hill. The company then actually began paying people $1,000 to actually take a vacation, she writes.

The culprit may be “work martyr syndrome,” Hill writes: Employees – especially those in highly competitive workplaces – are looking for any advantage they can, and by deciding to take less (or even no) time off, they believe they’re looking better in the eyes of their bosses. “You’re trying to show you’re a harder worker,” executive coach Marc Dorio told Hill.

In other words, unless Netflix and other companies offering unlimited time off actually build support for extensive parental or medical leave time into their culture (with leaders setting the example), it will probably be a perk in name only.

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CEO Generously Delivers to Workers

Why not end the week with a brief but upbeat story about a CEO who isn’t reluctant to share …

ThinkstockPhotos-480903116Stories appearing on CNN Money and Entrepreneur websites this week reported that Nevzat Aydin, co-founder and CEO of Yemeksepeti, a Turkish food delivery company he helped launch 15 years ago, recently decided to share a huge chunk of the proceeds generated from his company’s $589 million sale to Germany’s Delivery Hero with 114 of his employees. (The firm employs a total 370 employees.)

CNN Money reported the employees received an impressive $237 million from the sale. According to the story, “Aydin’s employees are paid between $1,000 and $2,000 a month. That means the average payout is worth roughly 150 times their monthly wage, and tops the average Wall Street bonus for 2014 by $65,000.”

Aydin told CNN Money that “Yemeksepeti’s success story did not happen overnight and many people participated in this journey with their hard work and talent. I believe in teamwork and I believe success is much more enjoyable and glorious when shared with the rest of the team.”

In deciding how to allocate the bonuses,” the Entreprenuer website reported, “Aydin factored in how long they’d worked for the company (requiring two years, minimum) along with the individual’s job performance and their ‘future potential in the company.’ ”

The story was first reported by Turkish newspaper Hurriet.

CNN Money noted that the bonus plan was decided upon prior to the sale, but that the acquirer, Delivery Hero, supported the move.

 

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Catching (and Spreading) the Rudeness Bug

It’s said that laughter is contagious, right? Well, apparently, the same is the case for rudeness.

ThinkstockPhotos-476962485According to a study out of the University of Florida, titled Catching Rudeness Is Like Catching a Cold: The Contagion Effects of Low-Intensity Negative Behaviors, “encountering rude behavior at work makes people more likely to perceive rudeness in later interactions. … That perception makes them more likely to be impolite in return, spreading rudeness like a virus.”

Trevor Foulk, a doctoral student in management at UF’s Warrington College of Business Administration and the lead author of the study, puts it this way: “When you experience rudeness, it makes rudeness more noticeable. You’ll see more rudeness even if it’s not there.

“Part of the problem is that we are generally tolerant of these behaviors, but they’re actually really harmful,” he continued. “Rudeness has an incredibly powerful negative effect on the workplace.”

Tracking 90 graduate students who practiced negotiation with classmates, the researchers found that those who rated their initial negotiation partner as rude were more likely to be rated as rude by a subsequent partner. In other words, they ended up passing along the first partner’s rudeness. The study found the effect continued even when a week elapsed between the first and second negotiations.

In a separate test, the researchers also found that people who witnessed rudeness were more likely to be rude to others. “When study participants watched a video of a rude workplace interaction, then answered a fictitious customer email that was neutral in tone, they were more likely to be hostile in their responses than those who viewed a polite interaction before responding,” a press release on the research explained.

So what do these findings (published in the Journal of Applied Psychology) mean for employers? Foulks points to the need to take incivility more seriously.

“You might go your whole career and not experience abuse or aggression in the workplace, but rudeness also has a negative effect on performance,” he pointed out. “It isn’t something you can just turn your back on. It matters.”

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Towers Watson and Willis Announce Merger

According to this press release sent out early this morning, Willis Group Holdings and Towers Watson just announced the signing of a definitive merger agreement under which the companies will combine in an all-stock merger of equals transaction.

According to the release, the implied equity value of the transaction is approximately $18 billion. The transaction has been unanimously approved by the Board of Directors of each company. The combined company will be named Willis Towers Watson.

John Haley, Chairman and Chief Executive Officer of Towers Watson, said, “This is a tremendous combination of two highly compatible companies with complementary strategic priorities, product and service offerings, and geographies that we expect to deliver significant value for both sets of shareholders.”

Haley says he also expects to “realize substantial efficiencies by bringing our two organizations together, and have a well-defined integration roadmap to capitalize on identified savings, ensure the strongest combination of talent and practices, and realize the full benefits of the merger for all of our stakeholders.”

There’s no word yet on how — or even if — the two organizations will combine their robust human-capital management practices, but we’ll keep you posted here  when we learn the answer to that one. (Calls to both sides for comment have yet to be returned.)

Mark Stelzner, founder and managing principal of Inflexion Advisors in San Francisco, shared his thoughts on the merger with HRE Daily earlier today.

Towers Watson and Willis, he said, complement each other in many ways, creating potential for stronger offerings for the newly combined organization and, by extension, its clientele.

“Like any merger of this size and complexity,” he said, “clarity of purpose, organizational restructuring, operational rationalization and cohesive external messaging are going to materially impact the success or failure of the newly combined entity.”

Stelzner’s advice to existing clients of both organizations: Take the time to weigh whether the emerging philosophy, strategy, services and product offerings are strategically aligned with their current and future needs.

Meanwhile, Liz DeVito, an associate director at Kennedy Consulting Research & Advisory in Keene, N.H., who specializes in HR consulting and covers the benefits, human capital, outsourcing and investments markets, says the merger’s timing may put TW in a precarious position from a talent perspective.

“TW is now vulnerable to client and talent poaching,” she says. “The deal has six months to close, which is a long time, and I’m sure the competition is drawing up campaigns to poach consulting clients from TW, especially in the areas of rewards, talent management and HR transformation.”

DeVito says she was at Mercer when Aon bought Hewitt and Towers Perrin & Watson Wyatt merged, “so I speak from experience. The competition will be able to exploit client anxiety over the next few months.”

She says the same goes for consulting talent as well.

“I’m sure Willis-TW leadership will come up with an attractive stock options program to retain key talent, but there will be some leakage,” she says.

What I have noticed in my research over the past six months is that the HR consultancies are poaching talent right and left. I’ve never seen it so active in my three years of covering this market.

They’re poaching from the Big Four human capital consulting practices and strategy firms, as well as each other, she says.

“They’re looking for consultants with very specific capabilities as they build out next generation service offerings in talent management,  HR technology advisory, HR analytics (particularly strategic workforce planning), HR transformation, organization design, and change management.  And these are all areas where TW has very strong capabilities and talent.

“I’m sure there were a lot of phone calls today from TW consultants to the competition,” DeVito says.

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Dealing With The Cultural Fit Conundrum

fitting in 2Anyone familiar with the Beatles backstory knows the role Pete Best plays in it.

Best, of course, was the drummer famously replaced by Ringo Starr in August 1962, just weeks before the band recorded “Love Me Do,” exploded upon popular culture and began its climb to the toppermost of the poppermost.

In the 50-plus years since that fateful personnel move, many close to the group have said the decision to boot Best maybe wasn’t as much about Starr being the better technical drummer as it was about Ringo being “the better Beatle.”

In other words, Starr had the type of personality, sense of humor, interests and values that better meshed with the rest of the boys in the band, and helped give the group a certain indefinable chemistry. Ringo, you could say, was the better cultural fit for the Beatles.

The term “cultural fit” didn’t really exist in 1962, in the workplace or anywhere else. But, over time, employers everywhere have certainly cottoned on to the idea that it takes more than just technical proficiency to truly excel in a particular organization or outfit.

The notion first gained a toehold in the corporate world in the 1980s, Lauren Rivera recently wrote in a New York Times opinion piece, in which she says the “cultural fit” concept has sort of run amok in the three decades since.

“In many organizations, fit has gone rogue,” noted Rivera, an associate professor of management and organizations at Northwestern University’s Kellogg School of Management.

When done right, taking cultural fit into consideration can greatly boost productivity and profitability, she said. The problem today, is that “cultural fit has morphed into a far more nebulous and potentially dangerous concept.”

The effort to determine cultural fit has moved from “systemic analysis of who will thrive in a given workplace to snap judgments by managers about who they’d rather hang out with,” she says. “In the process, fit has become a catchall used to justify hiring people who are similar to decision makers and rejecting people who are not.”

Rivera should know a thing or two about this issue, having once spent nine months researching recruiting and hiring practices at a handful of top U.S. investment banks, management consultancies and law firms, conducting interviews with 120 decision makers at the aforementioned organizations.

She found that interviewers commonly relied on the sense of empathy they felt with job candidates in order to judge potential fit for the firm. While discovering shared experiences helped those doing the hiring form bonds with applicants, many decision makers were “primarily interested in new hires whose hobbies, hometowns and biographies matched their own,” she recounted in the Times.

Conversely, candidates’ backgrounds, personal interests and even sports allegiances could occasionally work against them. For instance, Rivera recalled attending a hiring committee meeting at one firm, where she witnessed a partner and “avid Red Sox fan” advocate the rejection of an applicant and self-avowed Yankees supporter “on the grounds of misfit.”

Even putting such extreme examples aside, Rivera concludes that hiring too many employees who reflect those already in the organization is a dangerous idea, for a lot of reasons.

“Some may wonder, ‘Don’t similar people work better together?’ Yes and no. For jobs involving complex decisions and creativity, more diverse teams outperform less diverse ones,” according to Rivera.

“Too much similarity can lead to teams that are overconfident, ignore vital information and make poor (or even unethical) decisions.”

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The Biggest Lie Employers Tell Employees

That’s quite the headline, no?

But it’s also one of the most interesting nuggets to be unearthed in LinkedIn Co-founder and Executive Chairman Reid Hoffman’s book, The Alliance, according to Erza Klein’s post on Vox Technology this morning. (Before you read on, it should be noted that Hoffman co-authored the book with Ben Casnocha and Chris Yeh.)

So just what is that untruth companies tell employees? Klein quotes Hoffman directly from the book:

“The biggest lie is that the employment relationship is like family,” Hoffman says.

Klein’s piece (which is well worth a read on its own) then goes on to quote Hoffman’s description of the two versions of the lie employers tell:

“One is where the employer is actually deluding themselves.” Employers may want to believe their workplace really is like a family, and, in that moment, they may convince themselves it actually is like a family.

The other version of the lie comes because the employer wants the employee to believe it. “They really want the employee to be loyal to the company,” Hoffman writes. “That’s when it gets deceptive.”

Indeed, the misplaced concept of family is central to the book, according to an interview the author Daniel Pink held on Amazon with the Hoffman and the co-authors Casnocha and Yeh.

When prompted by Pink to talk about the “notion” that successful companies are “families,” the authors responded:

Some CEOs like to refer to their companies as families. The concept of family is a powerful one, and describes how the best companies treat their people: with compassion and respect.

Yet we believe that using family language is a big mistake. The problem is that families are permanent–you can’t fire your kids, no matter how many times they may forget to take out the trash.

Companies are not permanent. The instant you lay off an underperforming employee, or someone leaves to pursue a better opportunity, the illusion of family is shattered. The only way to maintain the fiction is for people to lie to themselves and each other. This underlying dishonesty is corrosive, and prevents the kind of trust that is necessary for a close, high-performance relationship.

Both sides need to be honest with each other about the fact that the employment might not be permanent.

The authors definitely have an interesting take on the fallacy of the “company=family” dynamic.

It’s one that may be even worth pondering as you spend some real “family” time during the Memorial Day holiday weekend. (Just be prepared for an encounter with a family member you may wish to “fire.”)

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Doing Good Through Better HR

doing goodChristine Bader, a former corporate social responsibility executive at BP, has an interesting piece up today at The Atlantic on the importance of a good HR department for companies that want to be better corporate citizens.

Bader, author of the 2014 book The Evolution of a Corporate Idealist: When Girl Meets Oil (judging from the title, I assume it touches at least partly on her BP experience), cites companies such as auto-parts manufacturer Lear, Google and clothing company Eileen Fisher that take innovative approaches to HR to unleash their employees’ resourcefulness and creativity.

At Lear, Bader writes, CHRO Tom DiDonato did away with basing compensation on performance reviews, “realizing that the emphasis on pay created stress and stifled the candor that people need to improve and innovate.” Instead, the company now bases compensation on market conditions and awards equity and promotions for good performance.

Bader describes Google’s efforts to do away with unconscious bias through training that not only helps its employees recognize their own biases, but encourages them to step in and intervene when they see biased behavior toward others, Head of People Operations Laszlo Bock told her. The training isn’t being done entirely out of altruism, he said: People perform better when they feel more safe at work. However, Bader writes, if people are treating others more fairly at work, one hopes that will spill over into their lives outside the office.

At Eileen Fisher, the company’s long-term plan to improve the environmental and social sustainability of its supply chain depends on an intense spirit of collaboration within the organization — one that is carefully nurtured by HR, Bader writes. Eileen Fisher’s sustainability efforts are overseen by a team of leaders from different departments within the company who meet weekly by phone and monthly in person. “Traditionally, work evolves into buckets or silos; we help connect people so they can break down the silos,” Director of Leadership, Learning and Development Yvette Jarreau told Bader.

HR still has a reputation among too many people as a bureaucratic rut — a dark hole of stifling paperwork and mindless processes, writes Bader. But for companies that are trying to change for the better, she writes, a smart and flexible HR department is crucial.

 

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Watching Unconscious Bias at Work

watching workThere’s a theory that says men who assert themselves on the job gain respect for their take-charge attitudes, while women who do the same gain a reputation for being surly, difficult … or worse.

There’s also data supporting the existence of this phenomenon in the workplace, commonly referred to as unconscious bias.

A team of researchers expected to find more evidence of this type of bias in a recent study, working on the hypothesis that male employees who speak up regularly with suggestions or solutions would be viewed more positively by their managers than women who frequently offer input.

In evaluating 693 employees from 89 different credit union units, the study authors certainly found unconscious bias at work, in more ways than one.

For example, they determined that supervisors were “more likely to credit those reporting the same amount of voice if the employees have higher ascribed or assigned (by the organization) status-cued by demographic variables such as majority ethnicity and full-time work hours,” according to the study, recently published in the Journal of Applied Psychology.

The authors also found that, when certain groups of lower-status employees speak up more, “they cannot compensate for the negative effect of their demographic membership on voice recognition by their boss.”

This is all a very academic way of saying that input from full-time, non-minority employees with higher ranks and longer tenures seemed to carry more weight with supervisors in this particular study.

Gender was a factor as well, just not in the way the researchers anticipated.

In fact, the authors found that female employees’ contributions were valued as much as those of their male counterparts, if not more so.

They were careful to point out, however, that demographics may be at least partly responsible for this result. In a recent Washington Post article, the researchers note that women made up 80 percent of the employee base and more than 70 percent of the managerial ranks at the credit unions they evaluated.

“It was very dominantly female,” Taeya Howell, research scholar at New York University and study co-author, told the paper.

“It was just what we were able to get access to,” added Howell. “In a perfect world, we would hope gender would have no effect, but women were heard more than men [in this case], and it was because they were in the majority.”

But, putting the aforementioned percentages aside, this research seems to offer evidence that a greater number of women in leadership positions could help eliminate the idea that assertiveness and outspokenness are only positive traits when found in male employees.

“What this finding sort of says is, look, when you’re in an environment where the people above you are more like you, suddenly all those problems disappear,” James Detert, co-author of the study and a professor at Cornell University’s Samuel Curtis Johnson Graduate School of Management, told the Post.

“It’s not causal proof,” continued Detert. “But isn’t that suggestive that, in fact, all this focus on how women are behaving is nonsense? When you put them in a situation where they’re in the majority, suddenly the focus on their behavior—Is it too meek? Is it inappropriate, too assertive?—seems unnecessary.”

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Working Hard, or Hardly Working?

feet upIt’s a scene that’s been played out in countless movies and television shows, and, for better or worse, in real corporate offices everywhere.

A determined go-getter logs punishing hours—days, nights, weekends—on a tireless quest to earn that big promotion, missing wedding anniversaries, kids’ soccer games and other important personal stuff along the way.

In the movies, the ultra-ambitious workaholic eventually has some kind of epiphany, learns to slow down, stops doggedly pursuing the corner office, and starts spending more time actually living life.

In the real world, however, there’s a nagging perception that the “all work, all the time” approach is still the surest way to the top.

Some interesting new research, however, suggests that simply giving the appearance of a slavish dedication to your work may be enough to get there—especially if you’re a man.

That’s what Boston University’s Erin Reid found in a study of one global consulting firm’s American offices, the findings of which were recently published in Organization Science.

Reid, an assistant professor of organizational behavior at BU’s Questrom School of Business, interviewed more than 100 employees at said consultancy. She also had access to performance reviews as well as internal HR documents within the firm, which has “a strong culture around long hours and responding to clients promptly,” according to a New York Times piece highlighting some of Reid’s findings.

Her research found that those who embraced this culture tended to be top performers, while those who resisted it—insisting upon more flexible work schedules or less travel, for instance—were “punished in their performance reviews,” according to the Times.

Overall, Reid found that both men and women were likely to have trouble with “always on” expectations within the firm. It was how men coped with these demands “that differed strikingly,” Reid wrote in a recent Harvard Business Review summary of her findings.

For instance, women who struggled with work hours tended to take formal accommodations, reducing their work hours but also “revealing their inability to be true ideal workers,” wrote Reid, noting that these female employees “were consequently marginalized within the firm.”

Men, meanwhile, often found unobtrusive, discreet ways to alter the structure of their work—such as seeking mostly local clients or building alliances with other colleagues, for example—that allowed them to work more predictable schedules in the range of 50-to-60 hours per week.

“In doing so,” wrote Reid, “they were able to work far less than those who fully devoted themselves to work, and had greater control over when and where those hours were worked, yet were able to ‘pass’ as ideal workers, evading penalties for their noncompliance.”

Take Lloyd (not his real name), a senior manager at the firm. Lloyd was “deeply skeptical about the necessity of being an ideal worker, and was unwilling to fully comply” with steep expectations, according to Reid.

“He described to me how, by using local clients, telecommuting and controlling information about his whereabouts, he found ways to work and travel less without being found out,” wrote Reid, noting that “Lloyd” even went skiing during the day five times in the week prior to their interview.

“He clarified,” added Reid, “that these were work days, not vacation days.”

Reid is careful to point out that the lessons learned from this unidentified firm can’t necessarily be applied to other organizations. And she acknowledges that men experience difficulties meeting job demands just like women do, noting that men also “face resistance and penalties” for expressing reservations about working more hours, being available on nights and weekends and so on.

What seems to vary, she says, “is that many men are able to stray while passing as fully devoted.”

Reid’s findings underscore yet another example of the disparities that still exist between how men and women are viewed in the workplace. But the notion of “passing” also highlights the flaws in how and why some organizations reward employees, she concludes.

“Passing is not a good strategy for the organization as a whole,” according to Reid. “Not only does it involve an element of deception between colleagues, bosses and subordinates, it also perpetuates the myth that those who are successful are also all wholly devoted to work.”

 

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