Category Archives: talent management

A Goodbye to Bosses at Zappos

manager exitIn a matter of days, Zappos will officially say so long to hierarchy, and say hello to Holacracy.

As of April 30, “people managers” will be a thing of the past for the Las Vegas-based online shoe and clothing retailer, according to a recent memo sent from CEO Tony Hsieh to all Zappos employees.

In that same memo, Hsieh outlines the Holacracy system, which he says removes traditional managerial pecking orders, allowing employees to self-organize “to complete work in a way that increases productivity, fosters innovation and empowers anyone in the company with the ability to make decisions that push the company forward.”

Hsieh also lamented not making “fast enough progress toward self-management, self-organization and more efficient structures to run our business,” announcing that Zappos would be taking a “rip the Band-Aid approach” to accelerating the full implementation of Holacracy, a concept the company first adopted in 2013.

Over the next few months, Hsieh plans to minimize service provider groups and lean more toward creating “self-organizing and self-managing business-centric groups,” and will begin the process of breaking down the organization’s silo-like structure of merchandising, finance, marketing and other functions.

All that said, the company will still have room for those who are giving up their manager positions, says Hsieh, who acknowledged the “absolutely necessary and valuable” role these leaders have played in aiding Zappos’ growth to this point.

He also expressed his eagerness to see “what new exciting contributions will come from the employees who were previously managers,” noting that these soon-to-be former supervisors will have opportunities to find new roles within Zappos “that might be a good match for their passions, skills and experience.”

In addition, all former managers who remain in good standing will keep their salaries through the end of 2015, “even though their day-to-day work that formerly involved more traditional management will need to change,” according to the memo.

It’s fair to say that adopting this kind of model is unorthodox. But it becomes a much less unusual move when you consider who’s making it.

This is, after all, the same organization that eliminated traditional online job postings and created Zappos Insiders, a social network where job seekers can sign up to schmooze with the company’s employees, participate in contests and chat directly with recruiters.

And, Zappos has famously offered workers financial incentives to leave the company, as a way to ferret out those who were sticking around strictly for the paycheck.

While Hsieh and Zappos have often been lauded for flouting the conventional, other firms have largely avoided following the company out on such limbs.

The Holacracy concept does have its proponents, however, with Twitter co-founder Evan Williams implementing the system at his new company, Medium, for instance. Whole Foods CEO John Mackey did the same at non-profit Conscious Capitalism Inc.

It’s not easy to envision that list getting significantly longer anytime soon. But, as was the case with telecommuting, dress-down Fridays and every other workplace development that once seemed like a radical idea, someone had to be the first to try it.

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Moving in the Right Direction

Yesterday, I was able to get an early look at the findings of The Hackett Group’s latest study on HR budgets and trends.

ThinkstockPhotos-166114849While there weren’t many huge surprises in the report, titled “The HR Agenda for 2015: Major Transformation Efforts Are Planned to Close the Gaps in HR Capabilities,” there definitely were a few data points to reflect on. (The study can be downloaded today with registration.)

As far as budgets are concerned, the study—based on research involving executives from more than 170 large companies in the United States and abroad—found that HR organizations, for the first time in a while, should experience marginal increases in both staff levels and budgets in 2015. Specifically, budgets are expected to rise 1.4 percent and staff grow by 1.5 percent—no doubt a reflection of a relatively healthy economy and the growing awareness among business leaders of the importance of talent strategies and practices.

The report, however, also points out that the increases are far from universal. Only 40 percent of the companies in the study actually expect to see budget increases, with just under 30 percent saying the same for staff levels. Further, just over 30 percent still expect to see declines in budgets and full-time employees, with the remainder expecting no change.

Of course, it’s good to see things move in the right direction, but as the Hackett report suggests, even more important will be what HR organizations do with the extra dollars and staff. In their report, the experts at Hackett suggest many HR organizations are largely unprepared to help improve enterprise agility and address those issues most relevant to achieving business objectives, including workforce strategy, innovation and talent management.

When I asked Hackett’s Global HR Practice Leader Harry Osle to elaborate on how world-class organizations differ from others when it comes to addressing these issues, he said, “they’re continually looking for ways to optimize their HR organizations.”

More specifically, he said, three characteristics come to mind when you look at world-class organizations. “First, these companies continue to look at process optimization … and look for ways to [eliminate] slack in the system.”

Next, he explained, they have a sharp focus on talent management and a hunger for finding and keeping the best talent, and making that talent more productive.

And finally, they have a strong commitment to digitization and technology. “That means,” Osle said, “having the right data at the right time to make the critical analytical decisions that organizations have to make today.”

The study found that the best-prepared HR organizations are clearly committed to making digital transformation and the utilization of cloud-based technologies a reality. Roughly 70 percent of the best-prepared HR organizations view the development of an HR digital-transformation strategy a high priority, compared to 25 percent of typical HR organizations. For cloud-based HR solutions, the gap is smaller, but still significant, with 50 percent of the best-prepared HR organizations considering it a high priority, compared to 40 percent of typical HR organizations.

As Osle explained, investing in technology in the cloud and SaaS is an easy decision to make when you consider the cost savings—and efficiency and effectiveness improvements—it can result in.

Osle predicted a substantial amount of the budget increases will likely be targeted to HR technologies. (Assuming he’s right, I would have to think this fall’s HR Technology Conference and Exposition® in Las Vegas will be a pretty lively event.)

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Starbucks Doubles Down on College

Starbucks, the Seattle-based coffee giant, announced yesterday it was doubling its free college tuition plan for employees to cover a full four years of college instead of two. Starbucks will offer employees faster tuition reimbursement–after every semester instead of after completing 21 class credits.

The program, in partnership with Arizona State University, offers all eligible full-time and part-time employees full tuition coverage for a four-year bachelor’s degree though ASU’s online degree program. Starbucks says it will invest up to $250 million or more to help at least 25,000 employees graduate by 2025.

Nearly 2,000 Starbucks employees have already enrolled in the program, which offers 49 undergraduate degree programs through ASU Online.

“By giving our partners access to four years of full tuition coverage, we provide them with a critical tool for a lifelong opportunity,” says Starbucks CEO Howard Schultz, in a statement. “We’re stronger as a nation when everyone is afforded a pathway to success.”

And in a LinkedIn piece announcing the move, CEO Schultz talks in a video interview about the importance of education and his company’s role in making the American workforce a more robust and agile one within the next 10 years.

“We have a long history of under-promising and over-delivering,” he says. “We think we’ll do the same there.”

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Diversity, Leadership and Performance: i4cp Report

In HRE’s most-recent annual “What Keeps HR Executives Up at Night” survey, HR leaders ranked attracting and retaining diverse talent sixth on their list of top concerns, just below driving culture change and aligning people practices to business.

185905158Of course, it’s hardly a surprise attracting and retaining diverse talent would be a significant concern, considering the obvious benefits of employing a diverse workforce. But that said, there’s also little question employers have a lot more work to do on this front.

The link between diversity and business performance was one of many topics address during the i4cp 2015 Conference, held this week at the Fairmont Princess in Scottsdale, Ariz.

In his opening remarks, Kevin Oakes, CEO of i4cp, referenced a recent research report produced by the institute titled Diversity & Inclusion Practices that Promote Market Performance.

The research found high-performance organizations shared the following characteristics as far as D&I is concerned, including:

  • They make D&I part of the organization’s DNA;
  • They ground their D&I efforts in metrics, thereby spurring greater leadership buy-in;
  • They place greater emphasis on inclusion;
  • They have leaders who “seek awareness of differences” and “take action to establish relationships” that bridge gaps and build an understanding of differences.

Later in the morning, a panel featuring diversity leaders from CVS Health, W.W. Grainger and Lincoln Financial participated on a panel titled “Business Impact Diversity & Inclusion.”

Jacqui Roberson, senior director of inclusion and diversity for Grainger, noted that far too many organizations still operate in silos. In order for D&I initiatives to succeed, she said, employers need to get people to “cross over the lines.”

David Green, vice president of diversity at CVS Health, noted that having a CEO who gets it certainly doesn’t hurt.  Referring to CVS Health’s recent decision to remove tobacco from its store shelves, Green recalled how, soon after the decision was announced, his CEO came to him and said, “ ‘Just so you know, we need to make sure we’re thinking about what this means in helping [employees] quit tobacco. We need to be focused on multicultural communities, youth communities and lower-income communities.’ … I didn’t have to go knocking on his door to say, ‘What do you think about all those diverse communities.’ ”

At CVS Health, Green said, diversity operates as a separate function, but works closely with HR to ensure shared goals are in place and each group knows what the other is doing.

Altimeter Group Founder and Principal Analyst Charlene Li also explored some  key themes from her new book (released Tuesday, the day of her talk) during a session titled “The Engaged Leader: A Strategy for Digital Transformation.” (Her book shares the same title as the session.)

Technologies are changing the nature of relationships, Li said. Yet many leaders, she added, continue to be stuck in the old ways of doing things.

If organizations are going to thrive in the new digital era, she said, that’s going to need to change.

“Technologies come and go,” she said, “but leadership is [always going to be around] and something you need to have a long-term strategy about.”

In her talk, Li shared several examples involving companies that are using technologies to strengthen the link between leaders and employees.

One story she told involved the introduction of a new burger at restaurant chain Red Robin.  Soon after the launch, she said, leaders at Red Robin learned through the company’s internal social network that the burger wasn’t very good. Employees were saying on the site that “people were complaining about it” and “the burger was falling apart,” she said.

Listening to that feedback, Li said, the organization quickly realized it had a problem and leaders went back to employees for more details. “They then took [that feedback] back to corporate headquarters, cooked up a new recipe and brought it back to the restaurants in 30 days.”

To put this in context, Li said, “it usually takes 12 to 18 months to change a recipe and get it back to the restaurants, but they did it [in this case] in 30 days!”

As a result, she said, Red Robin didn’t just change the recipe. By recognizing the value these employees were delivering to the organization, she said, “they were able to change [the company’s] relationship with those employees.”

Value—or more precisely the “lack of it”—was one of the reasons behind Sears Holdings Corp.’s decision to begin to seriously revamp its performance-management system last year.

During a session titled “The Rise of the Crowd: How Social Platforms Can Drive Performance and Democratize Performance Management,” two Sears Holdings Corp. HR leaders detailed the retailer’s efforts to transform the way it does performance management.

Aimed at salaried workers, the new initiative is based on the work of Neuroleadership Institute Director David Rock and others.

“The old process was cumbersome and annual reviews were happening three or four months after the year had ended—so by the time we were having the conversation, things were stale,” recalled Phil Menzel, vice president of HR for SHC.

In contrast, Menzel said, the new system is much more agile and responsive.

Using a tool developed internally called GameOn, associates every quarter now sit down to identify up to five objectives for themselves.

The new system also features an online feedback tool called Soundboard, which is accessible to associates. “People can go on the tool and request feedback from anyone in the company or provide feedback,” said Chris Mason, head of strategic talent solutions at SHC. “It gives people something they can take action on right away.”

The final part of the new process is a quarterly “check-in” component aimed at facilitating a more meaningful dialogue between associates and managers.

Martin noted that associates now have to prepare as much for the check-ins (which includes a one-page worksheet) as their managers.

Though still very much a work in progress, the new system has already shown some good traction, according to Menzel and Mason.

Introduced last August, the Soundboard tool already has 10,000 active users and has resulted in 40,000 pieces of feedback. “When we surveyed people, 75 percent said they took the information and actually made a change in [their] behavior,” Mason said.

The new system officially launched in February.

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Is One and Done Finally Done?

The annual performance review — a joyous occasion for all involved (sarcasm) — is on its way out. That’s according to Bersin by Deloitte, which has summarized the findings of its recent study on performance management software (which evaluated 120 performance-management features from 46 software providers) in a new “WhatWorks Brief.”

Organizations are increasingly viewing performance management not as an annual assessment but as a series of ongoing activities that include goal-setting and revising, managing and coaching, development planning, and rewarding and recognizing, according to the study. However, HR will need to evaluate new performance-management software carefully, as not all will offer the same level of support for these activities, the study’s authors warn.

Continuous coaching, in particular, is becoming a bigger priority for many companies — yet only a subset of software applications support coaching management and tracking today, according to Bersin.

“There are many factors contributing to this focus on continuous coaching,” says Stacia Sherman Garr, Bersin’s vice president of talent and HR research. “Work is becoming more dynamic and fast-paced. We see the rise of a large, young generation of employees, along with a skills gap in both developed and emerging markets.”

Coaching, she says, is becoming a bigger part of the “employment value proposition,” where employees want individual feedback and to feel valued for their unique contributions.

 

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Obama’s New TechHire Initiative

President Obama has announced the Department of Labor’s  TechHire initiative as part a new campaign to work with communities to get more Americans rapidly trained for well-paying technology jobs.

According to the White House, TechHire is “a multi-sector initiative and call to action to empower Americans with the skills they need, through universities and community colleges” but also nontraditional approaches such as “coding boot camps,” and high-quality online courses that can rapidly train workers for a well-paying job, often in just a few months.

According to the White House memo:

Employers across the United States are in critical need of talent with these skills. Many of these roles do not require a four-year computer science degree. To give Americans the opportunity they deserve, and the skills they need to be competitive in a global economy, we are highlighting TechHire partnerships.

The initiative includes:

  • A $100 million H-1B grant competition by the Department of Labor to support innovative approaches to training and successfully employing low-skill individuals with barriers to training and employment including those with child care responsibilities, people with disabilities, disconnected youth, and limited English proficient workers, among others. This grant competition will support the scaling up of evidence-based strategies such as accelerated learning, work-based learning, and Registered Apprenticeships.
  • Expanded regional employer hiring and paid internships for IT jobs (e.g., coding, web development, project management, cybersecurity) sourced from accelerated training programs based on demonstrated competencies instead of only selecting candidate using standard HR ‘markers’;
  • Expand slots, upgrade quality, and diversify participants in accelerated training pipeline – expand local programs like coding boot camps, the best of which have 90 percent job placement rates – to enable more Americans to master the skills required to fill technology jobs and create a strong pipeline of technology talent that local employers demand and will hire that can be ready in months not years; and
  • Support from locally intermediaries – municipal leadership, workforce development programs and other local resources – that help connect people to jobs based on their skills and job readiness and help employers engage local talent trained in both alternative and traditional programs.

To kick off TechHire, 21 regions, with more than 120,000 open technology jobs and more than 300 employer partners in need of this workforce, are announcing plans to work together to new ways to recruit and place applicants based on their actual skills and to create more fast track tech training opportunities.

Examples of TechHire Community commitments include:

  • St. Louis, MO. A network of over 150 employers in St. Louis’ rapidly expanding innovation ecosystem will build on a successful Mastercard pilot to partner with local non-profit Launchcode, to build the skills of women and underrepresented minorities for tech jobs, and will also place 250 apprentices in jobs in 2015 at employers like Monsanto, CitiBank, Enterprise Rent-a-Car, and Anheuser Busch.
  • New York City, NY. With employers including Microsoft, Verizon, Goldman Sachs, Google, and Facebook, the Tech Talent Pipeline is announcing new commitments to prepare college students in the City University of New York (CUNY) system for and connect them to paid internship opportunities at local tech companies. NYC will also expand successful models like the NYC Web Development Fellowship serving 18-26 year olds without a college degree in partnership with the Flatiron School.
  • State of Delaware. The new Delaware TechHire initiative is committing to training entry-level developers in a new accelerated coding bootcamp and Java and .Net accelerated community college programs giving financial institutions and healthcare employers, throughout the state, access to a new cohort of skilled software talent in a matter of months. Capital One, Bank of America, Christiana Care and others are committing to placing people trained in these programs this year.
  • Louisville, KY. Louisville has convened over 20 IT employers as part of the Code Louisville initiative to train and place new software developers, including Glowtouch, Appriss, Humana, ZirMed, and Indatus. Louisville will build on this work in support of the TechHire Initiative: the city will recruit a high-quality coding bootcamp to Louisville and establish a new partnership between Code Louisville and local degree granting institutions to further standardize employer recognition of software development skillsets.

With more than half a million unfilled jobs in information technology across all sectors of the economy, the initiative could be poised to help employers fill their high-tech talent gaps.

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Rethinking a Few of the Millennial Myths

At the risk of exceeding our quota for stories about millennials (both our Jan./Feb. and upcoming April issues explore different aspects of this workforce demographic), here’s some new research coming out of IBM yesterday that’s worth a closer look.

485373695Not surprisingly, the study titled “Myths, Exaggerations and Uncomfortable Truths” identified the difference between millennials and older employers when it comes to things like digital proficiency. But on issues such as career goals, employee engagement, preferred leadership styles and recognition, the study shows that Gen Yers share many of the same attitudes as their Gen X and baby boomer counterparts.

More precisely, the IBM research took aim at the following five myths:

Myth 1: Millennials’ career goals and expectations are different from their elders (i.e., unrealistic).

Rather, millennials want financial security and a diverse workplace just as much as their older colleagues.

Myth 2: Millennials need endless praise and think everyone should get a trophy.

For Gen Yers, the idea of a perfect boss isn’t someone who pats them on the back, but someone who is ethical and fair, and shares information. Thirty-five percent of boomers and millennials listed this as the top quality they seek in a boss. (Someone who asks for their input is last on their list of priorities.)

Myth 3: Millennials are digital addicts with no boundaries between work and play.

Not really. The research reveals that they are less likely than older generations to use their personal social-media accounts for business purposes. Twenty-seven percent of millennials said they never do so—compared to only 7 percent of baby boomers.

Myth 4: Millennials can’t make a decision without crowdsourcing.

Millennials value others’ input, but the research suggests they are no more likely to seek advice when making work decisions than Gen Xers. (Even though they think gaining consensus is important, more than 50 percent of Gen Yers believe that their leaders are most qualified to make business decisions.)

Myth 5: Millennials are more likely to jump ship if a job doesn’t fulfill their passions.

The IBM research suggests that millennials change jobs for the same reasons other generations do and are no more likely than older colleagues to leave a job to follow their passions. In fact, millennials, Gen Xers and baby boomers are all two times more likely to leave a job to enter the “fast lane”—i.e., to make more money and work in a more innovative environment—than for any other reason, including saving the world.

In light of these findings, IBM’s advice to employers is to stop relying on generational stereotypes when planning and serving their workforce. Instead, they should be pursuing more robust, nuanced talent strategies and analytics to better understand employees as individuals to make the most of their skills.

Considering the source, it’s no surprise IBM might offer up such advice. But that said, there’s no denying that placing entire generations in single buckets is never a good practice and treading carefully as you formulate strategies like this usually is a sound idea. (As most of us know only too well, there’s often another study lurking just around the corner that could turn the latest one on its head.)

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Promotions on the Rise

If this isn’t a sure sign of an ascendant economy, then I’m not sure what one is: The percentage of employees receiving a promotion on an annual basis has increased from 7 percent to 9 percent since 2010.

This is according to a new survey titled “Promotional Guidelines” conducted by WorldatWork, a nonprofit human resources association and leading compensation authority based in Scottsdale, Ariz.

The association conducted the 2014 survey — its fourth such survey — of its membership to better understand the trends in promotional guidelines.

The survey focuses on a variety of practices and policies including what employers consider to be a promotion as well as the standard pay increases that often accompany promotions. WorldatWork conducted similar compensation practices surveys in 2012, 2010 and 2006.

“The steady upward trend of employee promotions mirroring the economic recovery is further evidence that organizations are relaxing their budget purse strings,” says Kerry Chou, WorldatWork senior practice leader. “While the gradual trend is good news, the data also suggests that employee vacancies are helping employers foot the bill for these promotions.”

Additional highlights from the 2014 survey include:

  • Less than half (42 percent) of responding organizations budget separately for promotional activity.
  • In order to define employee movement as a “promotion,” 77 percent of responding organizations require higher-level responsibilities and 75% require an increase in pay grade, band or level.
  • 63 percent of respondents said their organization does not feature or market promotional opportunities or activities as a key employee benefit when attempting to attract new employees.
  • More than 60 percent of workforces consider their organization’s promotional opportunities to have a positive effect on employee engagement and employee motivation.
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A Low Bar for Re-entry?

Most organizations are going to want to avoid bringing back former employees with performance and behavioral issues, right?  I think we can all pretty well agree. But according to a just-released government report, the Internal Revenue Service isn’t one of them.

153475640According to the latest Treasury Inspector General for Tax Administration report, released yesterday, the IRS rehired hundreds of former employees who had substantiated conduct or performance issues. In fact, the report said the agency brought back 141 former employees with prior substantiated tax issues, including five who the IRS found had willfully failed to file their federal tax returns.

The report noted that …

 “Problem behaviors have included employees who willfully failed to file their taxes, gained unauthorized access to taxpayer information, abused the agency’s leave policy, misused IRS property, falsified official forms, did a bad job or had behavioral or legal problems off-duty, such as alcoholism or bankruptcy.”

TIGTA found that the IRS met the Office of Personnel Management’s suitability standards (e.g., determining whether applicants had prior criminal activity or engaged in drug use), but still rehired many former employees with prior conduct or performance issues.

In a press release on the report, Treasury Inspector General for Tax Administration J. Russell George said these rehires put both the agency and taxpayers at risk.

During the audit, the report said, IRS officials acknowledged that prior conduct and performance issues do not play a significant role in deciding the candidates who are best qualified for hiring.

The audit—which reviewed a random sample of more than 300 employees with significant prior performance or conduct issues who were hired between January 2010 and July 2013—cited one case in which a former employee was rehired despite a note from a division head saying “ ‘do not rehire’ because the individual had been absent without leave for a total of 312 hours.”

The IRS said it believes its current process is adequate to mitigate any risks to American taxpayers, though TIGTA said it isn’t so sure.

As a next step, the IRS, at TIGTA’s suggestion, is now working with the General Legal Services and the Office of Personnel Management to figure out what changes might be warranted.

For now, though, I think we’ll probably skip calling the IRS the next time we do a story on best rehiring practices, since, at least on the surface, it would seem the agency could be adding special meaning to the term “boomerang employee.”

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When It’s OK to Fake It

grin“Be authentic!” today’s leaders are urged. But what if they don’t know how? Worse yet, what if — in being authentic — they bare their soul to their direct reports in a way that causes them to lose confidence in said leader?

Herminia Ibarra, a professor of organizational behavior at INSEAD, tackles this subject in the cover story of the Jan/Feb Harvard Business Review, “The Authenticity Paradox.” Today’s leaders are under pressure to be “their true selves” as an antidote to the record-low levels of trust and engagement among employees today, she writes. However, new leaders also have a relatively short time frame in which to gain the trust and confidence of their direct reports — should they unwittingly alienate or lose the confidence of those employees within that time by failing to adapt their leadership style to the situational demands, then their goals will be that much harder to achieve.

Ibarra cites the examples of “Cynthia” and “George.” Promoted into a high-visibility role that included a 10-fold increase in the number of her direct reports, Cynthia sought to establish her role as a leader who valued transparency and collaboration by sharing with them her trepidation and need for their help.  But her candor backfired when she lost credibility with people who were looking for a strong leader. George, an executive at an auto-parts company where chain-of-command and consensus were paramount, felt conflicted when the company was acquired by a firm with a much more freewheeling culture: Urged by his supervisor to sell himself and his ideas more aggressively, George felt he was being pressured to be a “fake” by subsuming his modest nature.

Career advancement requires most of us to move beyond our comfort zones at some point, writes Ibarra. Yet, because going against our true inclinations can make us feel like impostors, “we tend to latch on to authenticity as an excuse for sticking with what’s comfortable,” she writes.

However, moments like these can help us grow into better leaders — if we take advantage of them, writes Ibarra:

The moments that most challenge our sense of self are the ones that can teach us the most about leading effectively. By viewing ourselves as works in progress and evolving our professional identities through trial and error, we can develop a personal style that feels right to us and suits our organizations’ changing needs.

Learning often begins with behaviors that may feel unnatural and fake to us, says Ibarra. But the only way to avoid being pigeonholed and to ultimately become better leaders “is to do the things that a rigidly authentic sense of self would keep us from doing.”

 

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