Category Archives: HR profession

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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A Shake-Up at Zenefits

The news broke earlier this morning that Zenefits CEO Parker Conrad has exited the web-based benefits and payroll provider, and COO David Sacks is taking over his role. Conrad is also stepping down as a director of the company, according to a news release by the company.

(The company also named three new directors to its board this morning: Valor Equity Partners managing partner Antonio Gracias; TPG managing partner Bill McGlashan; and PayPal co-founder Peter Thiel.)

Compliance issues that have plagued the company apparently contributed to Conrad’s exit. Zenefits has also hit significant snags, including missing revenue targets and also in its dealings with regulators, according to numerous reports.

One of the most-often quoted lines of the day came directly from a memo by Sacks that was sent to all Zenefits employees, explaining the reasons for the change in leadership:

The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned.

The company has been on HRE‘s radar for a few years now, starting with our HR Technology Columnist Bill Kutik, who first wrote about Zenefits back in November 2014, and included this interesting quote from the now-sacked Conrad:

[Conrad] Parker started Zenefits with one purpose in mind: “solving all the little headaches and annoyances that sucked up time for me at my last start-up; I get a perverse pleasure from stamping out each of these problems, one by one, for the next guy.”

Another HRE columnist, Steve Boese, wrote a short profile of the company and included Zenefits in the “Awesome New Technology”  session at the  2014 HR Technology®  Conference and Exposition:

Zenefits has the potential, in many ways, to significantly alter the way in which enterprise HR software is purchased and implemented.

Only time will tell whether today’s shake-up will help Zenefits unlock that potential that many industry experts — including ours — saw in them when they first launched.

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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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Pay for Performance is Given a Poor Grade

Money on hand.

Money on hand.

Employers have long embraced the notion of paying for performance. But are these programs really making a difference? Are they really leading to better employee performance?

If we’re to believe the latest survey of 150 companies coming out of Willis Towers Watson, the impact these efforts are having on organizations leaves something to be desired.

According to the Arlington, Va.-based consultancy, the vast majority of North American employers say their pay-for-performance programs are falling short when it comes to driving individual performance.

Moreover, the survey finds that only one in five companies (20 percent) find merit pay to be effective at driving higher levels of individual performance at their organizations. Further, just under one-third (32 percent) report their merit-pay programs are effective at differentiating pay based on individual performance.

Nor are employers the only ones giving these programs low marks. Only about half of employees say these programs are effective at boosting individual performance levels; and even fewer (47 percent) believe annual incentives effectively differentiate pay based on how well employees perform.

Why the low marks?

Part of the reason is employers are either trapped in a business-as-usual approach or suffering from a me-too mentality when it comes to their programs, according to Laura Sejen, global practice leader for rewards at Willis Towers Watson.

Sejen elaborates …

“Pay-for-performance programs, when designed and implemented effectively, are great tools to drive performance, and recognize and reward employees. However, conventional thinking on pay for performance is no longer appropriate. Companies need to define what performance means for their organization[s] and how managers can ensure they are driving the right performance, and re-evaluate the objectives of their reward programs to ensure they are aligned with that definition.”

Nearly two-thirds (64 percent) of those surveyed say managers at their organization consider the knowledge and skills required in an employee’s current role when making merit-increase decisions, according to the study. That compares to fewer than half (46 percent) who say their programs are designed to take these performance indicators into consideration.

The Willis Towers Watson findings probably shouldn’t come as a huge surprise to those in HR, since they echo the findings of other studies we’ve reported on in the past.

Roughly a year ago, for instance, we reported on research by Organizational Capital Partners and the Investor Responsibility Research Center Institute that found 80 percent of S&P 1500 companies are not measuring the right metrics, over the right period of time, for performance-based executive compensation.

So what’s the key takeaway here? Well, if we’re to believe the research, it’s the fact that employers clearly have a lot more work to do when it comes to pay for performance—and no one knows this better than the companies themselves.

But, of course, knowing and doing something about it are two entirely different things.

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The Ramifications of Stacked Rankings

It’s fair to say that employee-ranking systems are controversial and pretty unpopular. But illegal?

A former Yahoo! Inc. employee contends the Sunnyvale, Calif.-based technology company’s quarterly performance reviews violate state and federal laws, and claims as much in a lawsuit filed Monday in San Jose, Calif.

The reviews, which rate every Yahoo! employee on a scale of 1 to 5, have been one of Marissa Mayer’s “signature policies” since taking over as CEO in 2012, according to the New York Times.

Earlier this week, the Times summed up the suit filed by Gregory Anderson, in which he challenges Yahoo!’s performance review system as “discriminatory and a violation of federal and California laws governing mass layoffs,” according to the paper.

Anderson, an editor who supervised a handful of Yahoo! sites before his November 2014 firing, charges that the company’s senior managers “routinely manipulated the rating system to fire hundreds of people without just cause to achieve the company’s financial goals,” notes the Times.

Such cuts, Anderson claims, amounted to “illegal mass layoffs.”

As the paper points out, California law mandates that employers making layoffs that involve more than 50 employees, and take place within 30 days at a single location, must provide workers 60 days advance notice. On the federal level, the Worker Adjustment and Retraining Notification Act obliges employers to offer advance notice for a layoff of 500 or more employees.

According to the Times, Yahoo! never provided such notices when it let go of 1,100 employees between late 2014 and early 2015, “ostensibly for performance reasons.” The company is now faced with the prospect of paying each affected employee $500 a day in addition to back pay and benefits for each day of advance notice it failed to provide, the Times reports.

For its part, Yahoo! maintains that its rating system is sound. In a statement, the company says its performance review process “also allows for high performers to engage in increasingly larger opportunities at our company, as well as for low performers to be transitioned out.” In regard to Anderson’s legal complaint, the company says his specific allegations are groundless, and claims that Anderson unsuccessfully sought a $5 million settlement before filing the suit.

It could be a while before this case winds its way through the legal system. And we’ll certainly be following it here. (In fact, come back to HREOnline early next week for a more in-depth analysis of Anderson’s claims, including some expert insight into the nuances of the lawsuit and its chances of succeeding.)

In the meantime, the stacked rankings that have been a hallmark of Mayer’s tenure at Yahoo! will likely remain a polarizing concept. Although the stacked ranking system has never had a shortage of detractors, a claim that such rankings are actually illegal seems unique. It will be interesting to see how this one plays out.

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Getting Agile in an On-Demand World

It’s not often you read a Harvard Business Review article and stumble across a quote from a famous Hollywood actor within the text, but this is the Internet, after all…

Perhaps some context is in order:

The aforementioned article — “Managing On-Demand Talent” — was written by John Younger and Norm Smallwood and focuses on companies that are experimenting with new ways of filling critical skill gaps while staying lean. It’s a phenomenon they call “agile talent.” (Coincidentally, it’s also the name of their new book.)

In researching their book, they found that over half executives report increasing their use of outside expertise and sourcing talent from the cloud:

While cost is clearly a consideration, managers describe the primary benefits of agile talent as increasing flexibility, speed, and innovation. In short: it’s better, not cheaper.

It is the job of middle managers to roll out effective implementation of any agile talent program, the authors say, and to that end, they have uncovered seven things managers do that set up their external experts for success.

The first thing, “building a talent network,” is where we have our in-print celebrity encounter:

The actor Rob Lowe once said it straight: “Ninety percent of moviemaking is casting.” Mid-level managers depending on Procurement or Human Resources to find agile talent are behind the curve; smart middle managers tend to their network as a means of ensuring the right agile talent — with the right technical skill and way of working — is hired.

The other six “things” are well worth the time to read for yourself. But read quickly, because, as the authors note:

While the transformation of today’s workforce to a mostly agile one will take time, many more organizations are ramping up their use of “expertise on tap” in order to acquire and master the capabilities they need to perform and grow.

 

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Xerox’s Move to Split Into Two

The spin-offs keep spinning.

Friday’s announcement by Xerox that it will separate into two entities caps a lot of spin-off activity of late. This latest, as announced here on USA Today‘s website, will 504855042--splitseparate the office-equipment giant into two companies, an $11-billion document-technology company and a $7 billion business-services company.

The company says the transaction into two independent publicly-traded companies is expected to be completed by the end of the year.

These “significant actions … define the next chapter of our company,” Chairman and CEO Ursula Burns told the paper in a conference call Friday morning.

This certainly underscores the spin-off mania that Will Bunch’s September cover story in HRE, “Split Decision,” alluded to. His focus, of course, was on the impact these mega-transactions are having on human resource departments and their leaders. As his piece puts it:

“Most of the headlines over the big, high-profile spin-offs — the Hewlett-Packard split, eBay and PayPal, General Electric and its credit-card unit Synchrony Financial, Time-Warner and its publishing unit Time, Sears and Land’s End — have focused on what the moves could mean for investors. But when they say — as in the words of the old Neil Sedaka song — that “breaking up is hard to do,” in the business world they’re probably talking about the HR department.

“Indeed, much of the heavy lifting for these spin-offs — deciding who stays with the old company and who goes, filling vacancies and new positions, making critical decisions about pay and benefits, and fostering employee enthusiasm and answering anxious questions while developing a new, unique culture at the spin-off — falls upon HR executives.”

Although early reports don’t include specifics about the impact this division will have on Xerox’s HR function — now functions, no doubt — Burns did tell the paper that the two post-split companies will be “more flexible, more responsive and essentially more fit and focused for the market that we are attacking.”

The report also notes Xerox’s 140,000 employees worldwide will be divided up thusly: About 104,000 will be part of the business-services outsourcing company and the other 40,000 will make up the document-technology company.

It will be interesting to see how this latest in the spin-off string plays out, especially as it relates to HR. As Bunch notes in his story:

“HR executives who’ve worked through the spin-off process say the biggest personnel changes don’t usually affect the operating infrastructure of two companies — manufacturing and sales, for example — because those functions tend to stay largely intact. It’s a different story, they say, with shared services and in the corporate offices.”

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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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What’s Digital Media Doing For Your Workforce?

I’m going to go far out on a limb and say that digital media has drastically changed the way we work.

The ways in which technology has transformed and benefitted the workforce are too many to mention here, and are fairly self-evident anyway.

Participants in a recent Willis Towers Watson and World Economic Forum study acknowledge as much.

In Shaping the Future Implications of Digital Media for Society, the organizations polled more than 5,000 employers and individuals between the ages of 18 and 69. Overall, 56 percent of these respondents said that digital media has indeed altered the way they work.

At least to me, the only somewhat surprising thing about that figure is that it’s not higher. Really, whose job hasn’t been affected in some way by digital media?

In my mind, the more interesting finding from this study was how individuals’ view of digital media’s impact on their jobs varied greatly based on where they live.

For example, roughly two-thirds of respondents in Brazil and China said they think digital media has improved the quality of their professional lives. Just over half of the participants from South Africa (52 percent) felt the same way, while just 24 percent of those from Germany and 23 percent of respondents from the United States reported feeling that digital media has enriched them in a professional sense.

(About 1,000 digital media users from each of these five markets were polled, according to the report.)

A Willis Towers Watson summary of the findings doesn’t delve into why these U.S. and German respondents may feel this way. But Ravin Jesuthasan, a managing director of the organization’s talent management practice and co-author of the study, offers some insight into how technology may actually be limiting some workers’ opportunities, particularly those in low-skill positions.

“Despite the productivity gains and opportunities of digital media to actually bridge economic gaps and reduce inequality, potential downsides still exist,” says Jesuthasan.

For example, he says, digital media and related technology may drive near-term inequality as innovations such as talent platforms “increase the productivity and rewards of highly skilled workers while simultaneously cutting the cost of low-skilled work.”

In addition, digital media “has the potential to diminish work effectiveness and productivity,” continues Jesuthasan.

The multiple platforms and vast qualities of information and content at employees’ disposal “may distract workers and disrupt work,” he says. “In addition, as more people work remotely, valuable face-to-face time is reduced, which can weaken understanding and collaboration, and potentially hinder innovation.”

Considering that digital media’s role in the workplace is only going to expand—seven out of 10 respondents agree on this point—Jesuthasan urges employers to consider initiatives using technology to “more accurately match an individual’s skills to a specific business need.”

Rather than thinking solely in terms of “traditional jobs,” he says, companies should take a “more nuanced approach to how work should be conducted; using social media tools to build communication and engagement within the organization; sourcing and building digital skills; and developing digital leadership.”

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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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