Human Capital Strategy

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2011-09-08T09:07:00.000+03:00

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Leading by Example

2011-05-18T22:25:00.000+03:00

by Sharon Daniels

Economic recovery is fragile, and the workplace psyche is just as delicate. As businesses start hiring again, many workers will begin weighing better offers, and top performers likely are already evaluating how well they were treated during the most rugged patches of the recession. Further, the changes wrought by the recession have created a new work and business environment, which means managers have to motivate employees through a new phase of anxiety as employees grapple with change.

Senior managers can lead by example to motivate the workforce. In companies of all sizes, employees at all levels seek cues and reassurance from their leaders. As the workforce churns and reshapes itself in the wake of retiree departures, temporary leaves of absence and layoffs, the need for management guidance is magnified.

Strategic initiatives around employee engagement often gain traction when senior leaders successfully align supervisors to key messages and programs. Think of an automobile with a broken drive-train. Someone could rev the engine forever, but if there's no connection to the wheels, the car won't go anywhere. In organizations, supervisors represent that linkage - they need to be credible with their direct reports. Employees need the right resources, and supervisors need commitment from their workgroups.

Senior executives who lead by example and cascade messages on corporate initiatives and priorities through supervisors extend their credibility, which is a necessary building block today as trust in management and overall job satisfaction waned during the recession.

In a 2010 Conference Board report on job satisfaction, only 45 percent of employees surveyed said they were satisfied with their jobs; this is down from 61.1 percent in 1987, the first year the survey was conducted.

"Widespread job dissatisfaction negatively affects employee behavior and retention, which can impact enterprise-level success," said John Gibbons, program director for employee engagement research and survey services at The Conference Board.

It also can impact retention. According to the report, 22 percent of respondents said they didn't expect to be in their current job in a year.

"This data throws up a big red flag because the increasing dissatisfaction is not just a 'survivor syndrome' artifact of having coworkers and neighbors laid off in the recession," Gibbons said.

Management has a duty to inspire its staff, starting with supervisors, but they may need development to figure out how. In many cases both first-time and experienced supervisors face a set of responsibilities that may be at odds with the abilities and attributes that got them promoted to a supervisory role in the first place. Thus, having models who can lead and teach by example can be beneficial.

Of course, supervisors demand strong leadership examples from management for many reasons. For instance, leaders can show other leaders how to increase diversity and how to mitigate the challenges and maximize the opportunities inherent when leading a more diverse workforce. They also can ease woes brought on by an uncertain economy and the changing relationship between organizations and employees as employees take on greater roles with fewer resources. The aforementioned reasons all have a big impact on today's frontline workers and individual contributors, creating a need for supervisors to have special skills such as the ability to communicate complex messages in a succinct way and a willingness to make tough decisions when necessary.

There are several relatively simple strategies supervisors can emulate or execute to inspire their direct reports.

1. Show respect.

Senior managers must convey to and through supervisors that every employee in the organization is respected. A 2009 AchieveGlobal study of 512 employees from the U.S., China, Singapore, Germany and U.K. revealed that respect is an attribute valued by all employees, no matter what generation. Showing respect and instilling respect for others also is a proven way to promote motivation throughout an organization.

Today's leaders would be wise to treat people like the individuals they are and use performance management tools to measure individual performances, goals and expectations. Leaders also should recognize that just because the economy is troubled doesn't mean there aren't jobs available for high performers elsewhere.

Treating each employee individually can help greatly to increase retention, which is a critical component for any organization trying to recover from the recession. Taking a person's skills, experience, drive, perspective, energy and even personality into account helps to communicate a supervisor's respect for an employee. There are numerous ways to show respect, such as:

a) Encouraging employees to share their ideas and perspectives.

b) Highlighting and utilizing employees' unique skills.

c) Focusing on being a professional coach as well as a manager.

2. Build personal credibility.

As organizations become less hierarchical, personal credibility represents a greater hallmark of leadership than positional authority. Personal credibility is neither an attitude nor a quality. It's a perception others form of supervisors, based on their actions over time. Everything supervisors do and say will be noted carefully by members of their workgroup and others in the organization. For instance, do their words match their actions? Do they keep their promises? Are they willing to take on the tough issues?

There are several ways to build personal credibility. These include:

a) Acknowledge mistakes.

Managers should admit when they don't have the answer and be willing to learn from others.

b) Follow through.

Ensure words match actions.

c) Give others credit.

Acknowledge and show appreciation for others' hard work; highlight examples of exemplary work.

d) Work hard to remove obstacles for workgroups and get them the resources they need.

Supervisors should position themselves as team champions, let team members know they are vested in their success, and prove it by ensuring they have the tools necessary to succeed.

Being known as personally credible helps supervisors achieve success by buying some slack when they don't know what to do or they do the wrong thing. It also becomes easier to convince others of new or unpopular ideas. If employees trust their supervisor, they'll be more likely to buy into what the supervisor says.

3. Activate workgroup commitment.

These days, organizations cannot succeed simply by maintaining business as usual. Creativity and extra effort are required from every employee from the president to the front-line workers. Successful supervisors and managers know how to activate their employees' energy and dedication. Creating commitment begins with helping employees see the connection between their daily activities and the organization's goals.

Of course, supervisors need to know the organization's goals and understand why they're important. If supervisors do not fully understand the organization's strategic or tactical rationales, they should seek clarity from senior leaders.

Successful supervisors gain workgroup commitment by:

a) Creating a sense that the workgroup is doing something worthwhile.

b) Showing how each employee's work fits into the bigger picture.

c) Making sure employees have clear directions and understand how they will be measured when they meet objectives.

d) Creating a sense of ownership for work.

Fully committed employees will use their own ingenuity and dedication to go the extra mile to help reach organizational goals. Then the supervisor can spend less time giving directions and making sure everyone is doing their jobs, and more time strategizing how to meet higher level priorities.

4. Create meaningful rewards.

All too often managers and supervisors see external rewards as the only or the best tools with which to drive motivation. While an intuitive reaction might be to focus on material rewards such as money or extra vacation days, research has demonstrated that these kinds of systems actually can depress internal motivation. Certainly, people want to be paid what they're worth, but they're motivated by far more than money. They want to grow and develop. They want to be valued. They want to be in control of their careers.

As senior managers work to encourage internal motivation in the workforce, it's critical that employees are rewarded in meaningful ways that contribute to their overall growth. One such reward is autonomy. It is important that employees be given boundaries that allow them autonomy within their given roles and responsibilities. Giving employee autonomy over how their work is completed shows confidence and empowers them to meet and exceed expectations while rewarding their past efforts.

Autonomy, competence and relatedness - the need for social connection and intimacy - are three core psychological needs at the root of human aspiration, according to Edward Deci and Richard Ryan of the University of Rochester. They have developed a motivational framework known as self-determination theory (SDT), which is "concerned with supporting our natural or intrinsic tendencies to behave in effective and healthy ways." The theory has been examined and confirmed by researchers around the world, including author Daniel Pink, who references SDT in Drive: The Surprising Truth About What Motivates Us.

Fulfilling all three of these core needs is crucial to drive motivation, and that's why compensation isn't a panacea; filling up these three buckets doesn't come solely from equitable pay. Workers must learn, have fun and grow - qualities not directly fed by a paycheck.

5. Create accessibility to senior leaders.

Successful supervisors know that without a solid relationship with the senior leaders they report to, they can't count on the support they need to achieve results. As supervisors work to motivate employees, they also must have a strong relationship with their own managers to ensure they are communicating the right priorities and messages to their direct reports.

Further, the best relationships focus not on pleasing the boss, but on establishing an alliance between partners. Supervisors can help develop a mutually supportive relationship with the organization's senior leaders by:

a) Knowing what's important to the leader and working to support it.

b) Offering the manager solutions, not just problems.

c) Keeping their manager up-to-date on any issues he or she is expected to own.

d) Asking directly for help when necessary, rather than waiting for the leader to offer it.

Supervisors who enjoy strong relationships with their senior leaders not only excel, but also set examples for other employees. Senior leaders will be more inclined to support these supervisors when they require extra resources or need obstacles removed.

In the future, organizations are going to need more employees at all levels who can work independently. As long as change continues to be a dominant theme, senior leaders should reinforce success strategies for their supervisors. These strategies will give supervisors and managers the traction they need to motivate their direct reports to achieve new successes.

[About the Author: Sharon Daniels is president and CEO of AchieveGlobal, an interpersonal business skills provider.]

Business Ethics 2.0

2011-03-27T19:54:00.000+02:00

by Paul Gorrell | Talent Management

Five weeks into the Deepwater Horizon oil spill, when there was no apparent solution to plugging the voluminous leak that was devastating the fishing industry and devaluing the tourist season across four states, BP CEO Tony Hayward said, "I would like my life back." These words dovetailed with a weak apology communicating indifference to thousands of workers in the Gulf Coast region who were losing personal wealth, livelihoods and family traditions.

Hayward's quote became symbolic of the public perception that BP's business practices contributed to the oil spill in the first place and that its priority after the spill was to defensively protect its own value and standing with shareholders. Along with negative public sentiment about bank bailouts, this type of public struggle in stating and delivering on corporate values provides fodder when considering business ethics today.

Business ethics inside organizations is typically focused on legal concerns in an attempt to lower a company's potential exposure. In business schools, case studies such as the Johnson & Johnson Tylenol scare in the 1980s are used to explore the principles behind an organization's mission statement, business policies and leadership decisions. It is time for a larger, more purposeful business ethics discussion focused on values-based leadership, a business ethics 2.0 approach that goes beyond compliance.

Ethics Lessons From Diversity

Today, companies celebrate diversity and inclusion within their organizations, touting these qualities as representative of their employer brand. However, diversity has not always been a promoted value in organizations. We have evolved to this positive perspective, which has become best practice.

The origins of diversity were less about building an employment brand and more about defending organizations from corporate exposure. Although large companies got used to absorbing sexual harassment lawsuits in the 1970s because of bad behavior from their executives, they felt more pressure from growing numbers of class action lawsuits, where groups of individuals from a protected class joined together seeking justice for inappropriate corporate actions.

These lawsuits were brutally expensive, and bad publicity prompted a wave of training to curb executives' bad behavior and ensure that systems were put into place to remove enterprisewide bias in hiring and promotion. This was the diversity compliance stage, where company protection was the foremost priority.

Over time, factors shifted businesses' approaches toward diversity and inclusion. First, the shortage associated with the talent war caused businesses to look to nontraditional sources for talent. By expanding the available pool, companies were able to source key roles and manage productivity pressures.

Second, companies saw the emerging global market as a growth opportunity, which increased the need to embrace different styles, worldviews and cultures. Global teams, often forced to work virtually, created opportunities to experience new ideologies, perspectives and ways of working.

Third, consumers demonstrated loyalty to companies and brands that included a diverse workforce and a diversity focus. Negatively, boycotts of brands from minority groups, such as when gay rights groups boycotted Coors in the 1970s, proved the need to adjust policies and create inclusive processes to adjust brand perception within key demographics. Positively, business opportunities were realized because of diversity and inclusion-related customer experiences. This is demonstrated by the recent involvement of women in car showrooms so that female customers can buy from salespeople who can better understand their needs.

Today, many organizations speak of diversity and inclusion as a core value. Some would argue that we are in the age of diversity in business, with additional focus on the different perspectives of individuals from different generations in the workplace and how they interact with each other. Diversity and inclusion is believed to have a demonstrable impact on the performance and retention of key employees. We have gone far beyond the compliance stage.

Ethics 1.0

A similar trend provides us with a glimmer of the future of business ethics. Given the early 2000s scandals of Enron, Tyco and WorldCom, businesses were placed in a defensive position where they were forced to comply with new expectations focused on protecting shareholders. The Sarbanes-Oxley Act of 2002 created standards for accounting and reporting, which enforced and inscribed new levels of transparency. Because of this legislation, organizations focused carefully on compliance to ensure they were managing risk exposure and the potential penalties involved.

This was a reactionary and protective approach to be aboveboard as an organization. This approach does not build public trust in brands or raise stock price or customer loyalty because the ethics focus has been more about limiting bad behavior than promoting good behavior.

Compliance approaches only go so far in risk management. John McCarthy, executive vice president of human resources at Guardian Life Insurance Co., said one cannot use compliance alone to govern or control employee behavior.

"Compliance should function as the guardrails for ethical and acceptable behavior. But if someone wants to do the wrong thing, compliance alone will not stop them," he explained. "We believe in emphasizing ethical behavior. Guardian employees - beginning with on-boarding on their very first day - learn the relevance of ethical behavior and its foundational importance to our culture and values."

Ethics 2.0

Despite the perceived ethical lapses of particular companies or industries, there are many indicators that ethics is evolving to provide exciting opportunities for organizations, leaders and talent managers. We are shifting to a stage where ethics is understood in a more holistic framework with an intersecting connection between the employee and consumer. This connection happens at the brand level - how that brand is perceived by those who purchase products and services and those who make up the organization's workforce.

We are moving toward an age of ethics in the way we do business and encourage behavior from our leaders. This is not because we want to be do-gooders, but because doing good is good business. Consider:

1. Ethical organizations build marketplace loyalty.

Consumers are more likely to buy products and services if they are provided by companies that also promote and commit to the social good - improving the circumstances of people, the earth and its resources.

2. Ethical organizations attract talent.

We may be in a state of high unemployment, but organizations still want the best of the best. And the best employees are still valuable in the marketplace. Social good acts as a magnet for many stars and emerging leaders from younger generations.

3. Ethical organizations engage employees, promoting retention and higher levels of productivity.

People feel proud when their brand stands for something beyond traditional ideas of profit and sales.

Craig Dinsell, senior vice president of human resources at OppenheimerFunds, agree that a commitment to ethics builds marketplace loyalty. "We have earned the trust of the millions of investors who have chosen us to protect and grow their wealth," he said. "Our corporate values are the foundation of our business, and they define and influence the behaviors, attitudes and philosophies that guide our company. We are deeply committed to our corporate and ethical values and believe that our success is measured not only by what we achieve - but how we achieve it."

Dinsell also can show the connection to OppenheimerFunds' brand as an employer. "Our employment brand is an extension of our company's brand - 'the right way to invest,'" he said. "Our ethics program, and the policies, procedures and behaviors that support our corporate values, are critical components of our business strategy. Because of this, employees view OppenheimerFunds as more than a workplace - it's a place where they feel comfortable investing their careers."

Two points of evidence of the move toward a commitment to ethics are the increasing numbers of companies that have corporate social responsibility programs and sustainability programs. Corporate social responsibility efforts incorporate ethics within organizations to create alignment between the public good and business operations. This often includes demonstrated commitment to social causes whereby the organization provides resources for specific events or opportunities.

But true corporate social responsibility involves a more integrated effort, where business operations, employee decisions and causes endorsed by the organization are part of an effort to drive a cultural vision. Sustainability is similar in that it attempts to bring together an integrated focus on planet, profit and performance. Here, organizations commit to green ways of working that are measured, rewarded and proven to drive profit.

Ethics and Talent Management

In the age of ethics, talent managers can provide significant value, deepening an organization's capability to commit to social responsibility and practice what it preaches. Some ideas include:

1. Incorporate ethics- and values-based leadership qualities within competency models.

One must be careful since many ethical notions, such as courage and integrity, are difficult to measure and validate. Competency models that include notions linked to social responsibility can provide significant value to every aspect of leadership and promote more effective teamwork.

2. Create development experiences that are embedded within the current work that leaders and employees undertake.

Ethics is typically taught through case studies, but employees' current working challenges provide incredible scenarios with which to learn how to operate in line with one's values while leveraging capabilities. While action learning can be effective for leadership development when offered in a programmatic manner, such as high-potential development, it is even more effective if presented within intact teams so they can wrestle with real challenges together in light of competing values, ideas and strategies.

3. Integrate social causes within the learning and development space.

We can teach great leadership behavior and commitment to values by using extra work-related activities as fodder for learning.

Building ethical organizations involves specific work with the leaders who represent the firm and act as champions of its culture. Because of this, focus on developing leaders' ethics is essential. "The way an organization embraces values is represented by the ethical behaviors of its leaders," said McCarthy. "We do this by building awareness, educating leaders on best practices and holding them accountable in a consistent way."

Oppenheimer devotes specific training experiences to ethics. "We work each day to build and maintain an organization that customers and shareholders trust and employees are proud to be a part of," Dinsell said. "We view our individual and shared ethical responsibilities as more than compliance and regulatory duties - they are foundational to our culture and our products."

[About the Author: Paul Gorrell is an executive coach for Partners in Human Resources International and the author of Contextual Coaching.]

The Morphing Face of Talent Acquisition

2011-02-17T00:03:00.000+02:00

by Brett Adis and Scott Scmidt

Jim Collins, author of Good to Great said, "The old adage 'People are your most important asset' is wrong. People are not your most important asset. The right people are."

Experts agree that having the right people in place directly translates into better business performance - from increased operational efficiency and productivity to higher revenue and profitability to improved customer satisfaction and industry leadership.

However, finding the right people in today's dynamic business environment is easier said than done. Recruiting is changing fast, with myriad challenges facing those responsible for attracting, hiring and retaining top talent.

The role of human resources has shifted within most leading organizations, and HR practitioners are now required to demonstrate value to the business. Talent acquisition helps organizations create and sustain a competitive advantage by deploying the talent required to achieve corporate objectives.

Challenge and Risks in Today's Economy

Perhaps more now than ever, HR organizations struggle with quality of hire - selecting not only the most suitable candidate for the job, but also one who can adapt and grow with business needs.

This is largely attributed to an influx of job applicants due to the high unemployment rate associated with current economic conditions. Corporate downsizing, layoffs, mergers and acquisitions, and other business reorganization efforts have left millions of people worldwide seeking new jobs, in many cases outside their core skill sets and competencies.

Moreover, in today's online world, job seekers can apply for several jobs in a short period of time, further diluting the pool of truly qualified candidates.

As a result, organizations are spending much more time and effort reviewing job applicants just to develop a manageable shortlist of candidates to interview. Faced with limited resources yet higher demand from internal customers across the business, HR leaders must become more efficient and accurate in the screening and selection process.

Poor selection processes and bad hires can adversely affect any organization through:

a) Dissatisfied employees, leading to both low individual and work group productivity.
b) Higher turnover, including termination of low-performing employees.
c) Increased cost and effort in attracting, selecting and training replacement hires.
d) Delayed productivity.
e) Lost productivity, along with stress and anxiety, among existing employees.
f) Decreased customer satisfaction and market share.

These and other potential consequences can create a negative perception of the employer's brand image and value proposition among customers, partners, investors, employees, job candidates and other key stakeholders.

Behold the Opportunity

It's not all doom and gloom, though. In fact, many organizations see talent acquisition as a tremendous opportunity to improve their processes and, ultimately, their business results.

These companies are taking advantage of the current job market and the availability of candidates to implement best practices and systems that yield a better return on their hiring decisions - not only securing talent for their immediate needs, but also creating a long-term, sustainable workforce.

Specific benefits tied to more efficient and effective talent acquisition include:

a) Accelerated recruitment and selection time.
b) Faster new-hire ramp-up with less interruption to existing workflow.
c) Reduced cost per hire.
d) Increased ability for new hire to meet job requirements and performance targets.
e) Better cultural fit and integration with other employees.
f) Higher individual and team productivity.
g) More positive impact on important business outcomes, such as sales, profitability, customer satisfaction, health and safety, and employee engagement.
h) Lower risk of employment-related legal issues.

The Key Enabler

Assessment technology has emerged as a key enabler, helping to accelerate the speed at which businesses can review and acquire talent. By automating and streamlining the applicant screening process, assessment technology enables businesses to better filter candidates and ensure they are fit - at a fraction of the time and cost associated with manual efforts.

For their part, talent management solution providers have evolved to meet the growing and changing requirements of HR organizations. In addition to existing technology vendors expanding their suites of applications, a new crop of best-in-class talent acquisition software players are entering the game. While this makes the technology evaluation and selection process a bit more challenging, the proliferation of talent acquisition systems enables organizations to implement a comprehensive solution to meet their unique needs.

Many vendors are addressing some of the key dynamics associated with today's talent acquisition process, including:

1. Paper resume replacement:
As more companies move to an electronic or online applicant tracking system, solution providers are incorporating job-matching tools to improve quality of hire. Some talent acquisition vendors partner with job application or resume-building tools, while others enable applicants to simply upload their resumes. Behind the scenes, technology works to review and filter best-match candidates.

2. Social media applications:
The use of social media in talent acquisition is no longer reserved for just the savvy companies. Every organization needs to consider how popular applications and sites - such as LinkedIn, Facebook andTwitter - can help them connect with prospective job candidates. As a result, most talent acquisition solutions incorporate Web 2.0 integration with various social media.

3. Human resource management systems (HRMSs) and third-party service integration:
Over the past several years, organizations have spent significant time and money implementing HRMSs and other complementary software and services. In order to preserve and extend that investment, any new talent acquisition solution should be able to share data and integrate with existing technology.

4. Contact management capabilities:
Today, applicants can come from a variety of sources - from external candidates with no prior relationship with the company to former employees or retirees seeking to rejoin the workforce. Regardless of their origin, it's important to keep track of all applicants. Capturing this data not only feeds the talent acquisition system with a pipeline of candidates, but also helps strengthen relationships with future talent. Most providers recognize the importance of contact management functionality and are incorporating it into their solutions.

5. Global support:
Companies with operations around the globe require talent acquisition systems that not only help centralize and streamline common functions globally, but also accommodate different languages, time zones, currencies, employment policies, government regulations and other location-specific items.

Combined with other methods and best practices for talent assessment - including job analysis, initial screening tools, skills and competency screening, online testing and assessment, interviewing, background and reference checking, and on-boarding - the aforementioned elements will help deliver a holistic talent acquisition solution that enables organizations to more effectively source, select and hire talent.

Assessing Existing Talent

While much of the discussion centers on recruitment and acquisition of new talent, it's equally - if not more - imperative to assess existing talent within the organization. Talented and ambitious people are more likely to stay with their current employer if they receive positive development, motivation and encouragement to reach their potential.

Assessment technology can help manage the needs of individual employees, in alignment with organizational objectives, while identifying and deploying top performers accordingly. Other benefits of internal talent assessment and review include:

a) For the individual: Coaching and mentoring based on discovered needs.
b) For the work team: Identifying top performers, or "stars," and capitalizing on their talent.
c) For the organization: Maximizing return on investment by putting the right person with the right skills in the right job at the right time.

Getting Started

Taking on a large talent management project, such as the development and implementation of a talent acquisition strategy, can be a daunting task.

To help organizations get started, below are some questions to consider. Generating answers to these questions, including input from HR's key stakeholders, will provide the foundation and desired outcomes for a sound talent acquisition strategy. Ask questions related to the following:

1. Finding, developing and retaining the right talent:

a) Are we understaffed? Overstaffed?
b) Do we have the right talent to build the right go-forward capabilities?
c) Do we have the required diversity to fuel international expansion?
d) Do we have the ability to reward our talent?

2. Workforce performance:

a) How do we measure productivity and performance?
b) Can we align our results with the organization's goals, objectives and outcomes?
c) What is the ROI on people?

3. The impact of HR and talent management practices:

a) What is turnover costing us?
b) How much does a vacant key position cost us?
c) How responsive is HR to managers' needs? How well are we serving them?

In addition, below are some objectives and recommendations for initiating a talent acquisition project:

1. Evaluate staffing processes:

a) Perform current-state process analysis.
b) Determine opportunities for improvement or standardization.
c) Leverage technology to help drive change.
d) Craft a vision for future state talent acquisition in alignment with new technology.

2. Evaluate staffing organization:

a) Review current staffing levels and recruitment models against needs.
b) Identify opportunities to better serve the needs of the organization.

It will take a comprehensive strategy and plan, along with disciplined project management, to ensure the right people, processes and technology are in place to drive successful implementation.

Investing in assessment technology represents a significant opportunity for HR organizations to increase and demonstrate their value to the business.

[About the Authors: Brett Addis is a senior consultant at Knowledge Infusion. Scott Schmidt is the director of advisory services for Knowledge Infusion's KI OnDemand Service.]

Facebook stress linked to number of friends

2011-02-16T23:59:00.002+02:00

The more Facebook ‘friends’ you have, the more likely you are to feel stressed out by the social networking site, according to a new study by Scottish researchers.

Psychologists from Edinburgh Napier University quizzed* around 200 students on their use of the phenomenally successful site, which now has more than 500 million users worldwide.

And they concluded that for a significant number of users the negative effects of Facebook outweighed the benefits of staying in touch with friends and family.

“The results threw up a number of paradoxes,” said Dr Kathy Charles, who led the study. “For instance, although there is great pressure to be on Facebook there is also considerable ambivalence amongst users about its benefits.

“Our data also suggests that there is a significant minority of users who experience considerable Facebook-related anxiety, with only very modest or tenuous rewards.

“And we found it was actually those with the most contacts, those who had invested the most time in the site, who were the ones most likely to be stressed.”

An online survey of students’ attitudes towards Facebook made up part of the study. Of those surveyed:

• 12 per cent of respondents said that Facebook made them feel anxious. Of these, respondents had an average of 117 'friends' each. The remaining 88% of respondents, who said that Facebook did not make them feel anxious, had an average of 75 'friends' each.

• 63 per cent delayed replying to friend requests
• 32 per cent said rejecting friend requests led to feelings of guilt and discomfort
• 10 per cent admitted disliking receiving friend requests

“An overwhelming majority of respondents reported that the best thing about Facebook was ‘keeping in touch’, often without any further explanation,” said Dr Charles.

“But many also told us they were anxious about withdrawing from the site for fear of missing important social information or offending contacts.

“Like gambling, Facebook keeps users in a neurotic limbo, not knowing whether they should hang on in there just in case they miss out on something good.”

She said other causes of tension included purging unwanted contacts, the pressure to be inventive and entertaining, and having to use appropriate etiquette for different types of ‘friends’.

Dr Charles added: “The other responses we got in focus groups and one-to-one interviews suggests that the survey figures actually under represent aspects of stress and anxiety felt by some Facebook users, whether it’s through feelings of exclusion, pressure to be entertaining, paranoia or envy of others’ lifestyles.”

FURTHER NOTES:

• Informal focus groups were conducted using opportunity sampling of third year psychology and social science students. The three groups comprised seven students.

• The online survey attracted 175 participants of which 127 (72.6%) were female and 48 (27.4%) male. The mean age of the sample was 30.4 years (SD = 10.3, range 18 to 62) with four participants not disclosing their age.

• Five participants (two male) participated in semi-structured interviews on their use of Facebook. They were drawn from a subset of the survey sample who indicated their willingness to be interviewed.

The Comeback of HR

2010-11-02T15:45:00.002+02:00

by Irving H. Buchen | Human Resource Executive Online

There are increasingly more signs of HR taking on additional responsibilities in advocacy and leadership. This territorial expansion signals the new emphasis on hiring HR professionals who are multi-talented and capable of growing. As one CEO I know whispered about HR, "The only other position I know that engages in cutting-edge work of the future is mine."

HR appears to be making a comeback. After many years of reduced budgets, internal downsizing, shifts of tasks to other divisions, and the outsourcing of many of its functions, there are increasingly more signs of an HR comeback. But it is not a return to the same old, same old.

Rather, it involves new directions of advocacy and roles of leadership focused on finding new grounds for performance. Increasingly, HR is being valued for its expertise on workforce futures.

What are the factors driving the return of HR to centrality? And equally as important, what do these forces, in turn, tell us about overall changes in 21st century corporate vision and workforce structures? Although not definitive, the five examined below are collectively sufficient in range and substance to outline the new landscape of HR professionals:

1. Add-Ons

The difference of HR from its earlier versions may be rapidly summed up by some of its own new names -- HRM or Human Resource Management.

Indeed, it can be argued that the name should be expanded to include Leadership or HRLM; and its new add-on partner technology and metrics or HRT. Then, too, because of its increasing role outsourcing, it has acquired a new specialization and even the creation of a professional society -- HRO.

Finally, as the initial European notion of Intellectual Capital found a home here, HR itself was frequently altered to IC or the compromise of HIC. If one puts all the above inputs together, what emerges is HICLMOST or Human Intellectual Capital Leadership and Management Outsourcing Technology.

Awkward, of course, but such an overloaded acronym is no mere alphabet soup. It reflects the general add-on nature of the workforce and, above all, the embracing of hybrids as the new way of stretching or extending organizational identity and performance.

In other words, the change in titles is not cosmetic but reflects comparable workforce territorial expansion. It signals the new emphasis on hiring professionals who are multi-talented and capable of growing.

2. Hard and Soft

The increasing focus on talent shortages -- as well as the steady decline of company loyalty, which hampers the retention of such expertise -- has reinvested the traditional HR role in both areas with greater urgency.

HR has had not only to acquire the aggressive hard hustle of an executive-search firm but also combined it with the softer caressing retention of mentoring and coaching. In the process, recruiting and retention have become one -- a continuum.

The net result is that HR not only has become increasingly the key resource for maintaining and retaining the competitive edge of personnel, but also their performance track record has become in turn the measure of a company's own comparative advantage. But all is not well.

The value of attending HR conferences is to listen to the hopes and worries of the profession. One of the worries HR leaders have vocalized at conferences is the issue of company loyalty. That evidently has become a hard sell and remains one of the most difficult challenges of all, especially if restoring internal credibility becomes an HR priority. As one HR vice president worried: "It is like going up a down escalator. Who is going to believe us [about company loyalty] after so many firings and outsourcing? Given a choice, I would not touch that assignment with a 10-foot pole!"

3. Cross-Overs

Although the empire of training was taken over or parceled out to corporate universities, and to chief learning officers and their respective LMSes, HR has re-entered and recovered its access to training through a number of cross-over areas.

First, HR has argued that talent retention is linked to talent development. And this double gain -- for employee and company -- requires the advocacy of HR and the integration of its agenda with that of LMSes.

Second, as team training and performance have become the norm, another bridge of integration has been forged. The training and nurturing of teams has been made part of the larger HR commitment to the care and feeding of work cultures because teams embody the ultimate cross-over.

No industry recognizes this more than the auto industry. Indeed, HR at Ford Motor Co. has taken the lead in designating teams as the ultimate cross-over goal and environment, and the pursuit of negotiating shared partnerships as its top priority.

Another cross-over area involves the induction of new hires. PR has been replaced by HR because onboarding is now a joint venture between the national and the global, between company mission and company vision and, above all, between talent acquisition and retention.

In short, HR has largely built its recovery on its newly acquired expertise of cross-overs.

4. Goal-Role Dynamics

As stretch goals dominated and the timetable of evaluations became compressed, HR had to address two inadequacies. First, workers were regularly exceeding their job descriptions. Second, downsizing and outsourcing, and greater pressure for productivity, were tampering with the traditional relationships and descriptors between job goals and job roles.

Initially, no one really cared. COOs and plant managers only cared about the results -- not how or why they came about. CFOs valued the bottom line of increased productivity and CEOs were happy with the quarterly reports they had to give their boards.

But HR was called in because job descriptions are the staples of HR and their fragmentation or buckling could not be ignored. The response at Blue Cross Jacksonville for example, was to alter the frequency and quality of evaluations.

Evaluations were scheduled more frequently and structured more collaboratively. Sessions were often monthly or on an as-needed bases. Supervisors were trained to be coaches and employees were empowered to be partners.

But important though such adjustments at Blue Cross were, they did not address what increasingly became an across-the-board major workforce mystery. Although there were fewer employees and fewer with the needed skill sets, the work got done, productivity targets were met and even, exceeded, and the bottom line posted gains.

What was going on? By all rights, the gains should have been losses.

In another example, a plant manager at Case Construction Equipment, based in Tomahawk, Wisc., discussed with the union pay raises tied to higher productivity levels. He claimed that higher productivity would preserve the American middle-class worker and increase wages.

But he was not interested in explaining what was going on, only in tapping it for his ends and assuming its automatic continuance. He was not alone. Hardly anyone was trying to explain what was defying logic. Why should they? It was like a gift from heaven.

HR was initially no different except for the fact that its precious job descriptions were a mess. At the outset, the focus was familiar: aligning goals and roles. But the problem was now a mismatch between those two across the board.

HR found that some goals were particularly mischievous and were dubbed morphing goals because they regularly exceeded prescribed roles; so much so that in order to do what it took to get the job done, workers and managers had to assume next-level roles.

And that happened across the board. And if the CEO wanted to know what was going on and whether it would continue, he could turn to his VP of HR who increasingly had the answers.

5. Bottoms Up: The New Organizational Chart

Perhaps, nothing dramatizes the new centrality of HR than the prospect of the organizational chart being turned on its head. Gradually, various forms of employee empowerment implemented by HR to increase productivity and to align work goals with company goals began to be cumulative:

a) Work knowledge has been supplemented by self-knowledge.

b) Managerial and leadership roles of those at the top were made available and distributed across the board.

c) The need for alignment led to employees crafting their own vision and mission statements.

d) The demands for interoperability led to the mutualizing of job satisfaction.

HR became an advocate of future needs being addressed directly by employees. They would identify not only the future versions of their current jobs, but also what training would be needed to get them from here to there, etc.

At the same time, HR leaders urged strategic planners to fold into the master plan the issue of the future organizational chart especially given the new dynamic between goals and roles.

The top had essentially remained intact and the same. The middle has been thinned out and given greater horizontal extent. It is still very busy supervising and coaching more employees, playing catch-up, planning ahead, urging innovation -- in short, not just running but leading the company.

But the busiest sector is the rank-and-file who are sharing with managers the same need for multi-task survival and growth of the company. Thus, managers have become leaders and employees have become managers. In other words, the organizational chart has changed both horizontally and vertically.

Not only has the middle of the pyramid been bulked out so that it now has more of a horizontal extent and shape, but more radically the bottom has moved up to emerge as a new top. The new hierarchy features rank-and-file first, followed by an extended set of middle-level managers and, finally, CEO and senior staff last.

As goals have changed, so have roles. Rank-and-file have not only to do, but to manage their work. Managers, in turn, have to not only supervise, but also to lead. To accomplish stretch goals, each group does whatever it takes to get the job done. In this case, that requires each group to move up in the feeding chain and assume the roles of the next level.

The HR version of the organizational chart thus may serve to mirror the reality of not only what really is now, but also what is to come. HR is presiding over the unique fusion of mission and vision.

In summary, then, two conclusions are clear. One relates to advocacy, the other to leadership.

Relegated to the sidelines for many years, HR not only has regained, but also expanded its position by being ahead of the game. It has led the charge of the hybrids transforming themselves just as HR itself has added on acronyms.

In the process, it has helped to develop and apply metrics of accountability and alignment. The current challenge of talent shortages and talent retention is ready made for HR, which now employs new software not only to track, but also manage the entire candidate process.

It has been tireless and focused in arguing for new cross-overs for training including sharing its traditional preserve of the orientation of new hires. It has been at the forefront of identifying, describing and addressing the new dynamics between goal and role change. Finally, it has led the charge to create a more operationally and honest version of the organizational chart to guide both current and projected versions of the reality of change and aspiration.

Now, it has to employ the above as a reality check internally to revise all job descriptions, including those of HR itself. In the process, room has to be provided for add-ons and cross-overs, and because all is being geared to the future, job descriptions should now be called job expectations.

But, alas, there is one important area beyond the reach of the new HR: current graduate academic programs preparing future HR professionals. Indeed, the curriculum of most graduate HR programs teaches the older rather than the newer version organizational chart and, if anything, needs to be drama radically redesigned. Who will do that? I hope current HR leaders and advocates.

[About the Author: Irving H. Buchen, PhD., is a member of the doctoral business faculty at Capella University. An active HR researcher and consultant, he is author of Partnership HR and the soon to be published The Hybrid Leader. He has served as a management consultant, trainer, and executive coach here and abroad for numerous corporations. He secured his doctorate from Johns Hopkins and has been a professor and an academic administrator at Cal State, University of Wisconsin and Penn State.]

Predict Performance, Improve Efficiency With Assessments for Selection

2010-11-02T15:44:00.000+02:00

by Paul M. Connolly

What if talent managers could hire or promote someone and predict whether or not the individual would work out?

Michael Blair said it's possible. Blair is strategic staffing leader for CenturyLink in Overland, Kan., which operates in 33 states and employs some 20,000 people. He said in his experience that those who do well on personality assessments tend to outperform those who don't.

Blair goes further: Within customer service and sales, he said he's documented that those who assess well generate more sales revenue and have less turnover. Tying assessment outcomes to potential interviews means hiring managers can do two interviews instead of five, which means across 10 hires, they can save 15 hours for other purposes.

"By using the assessment tools, we can help the business make better hiring decisions, improve performance and improve business outcome measures," Blair said.

This is the result of using high-quality assessments that are backed by research, closely tied to job requirements and done in conjunction with personal interviews and reference checking.

Don't Cut Corners Now

It's likely that cutbacks mean there is less talent in many organizations right now. At the same time, recovery has begun, and there are thousands of would-be applicants looming on the horizon, motivated in part by months of unemployment. Couple that with a continuing need to cut costs, and personality assessment tests might well be one of the first things to go.

Those in the trenches likely will say that would be a mistake.

"We have found that if we ignore [personality assessments], we ignore them to our peril," said Meredith Patterson, director of human resources of Logical Choice Technologies.

Using assessments as part of a process to choose finalists can mean that fewer candidates need to be interviewed, which translates into more time for talent managers to devote to higher-value activities, such as employee relations and rolling out policy changes within the organization.

Companies that use personality assessments as part of a well-planned and - implemented selection process can readily demonstrate their value and the value of HR as a whole to an organization's bottom line.

"We have hired, despite the results of the assessment, and it has always come back to bite us," Patterson said. "We religiously follow it because it has been successful."

Michael Spremulli, founder of The Chrysalis Corp. and a corporate personality profiler, said he has had large clients use thousands of personality assessments a year for labor-intensive positions, and smaller ones use a combination of assessment tools to identify higher-level positions.

Given that assessments have been validated by experience on the ground and proven by a century of scientific research, there shouldn't be a question of the usefulness of this particular tool. Spremulli said it is critical to look at the research for the specific tool an organization is considering.

What Could Go Wrong?

There are still those who doubt assessments' usefulness, especially in an economy where talent leaders are looking for places to cut expenses.

"'What's the point? Anybody can fake them.' We hear people ask that question," said test designer Robert Hogan, president of Hogan Assessment Systems.

Hogan said well-designed personality tests are quite difficult to fake. Such instruments are as good at screening out fakes as they are at illuminating the personality traits needed for a job.

Hogan described a "faking profile" that well-designed tests can generate to ensure no one games the system. "When you're doing a whole personality profile, they may be able to fake a whole scale [a single aspect of the measurement], but they won't fake a whole profile."

Ken Lahti, vice president of strategy and content for PreVisor, said the easiest questions to fake are those that require a response ranging from "strongly agree" to "strongly disagree" or those that ask for a ranking on a scale from 1 to 5.

Tests that use forced choices, or those that involve the tester issuing a warning about faking, tend to show less faking. Lahti also said faking can be minimized through the use of computer-adaptive testing, which automatically refines questions based on responses.

The nature of good assessment instruments is to extract a set of scientifically objective metrics that filter out most efforts to game the system. Anyone who has taken a personality test will relate to the seemingly repetitious questions. That's part of the filtering process, but there is a good deal more built into assessments that can assure an organization receives accurate and reliable information.

Lahti said the key to good assessment instruments is the word "good." It's best to ask first what kind of research is backing them up.

"There are good tests and bad tests out there and good and bad uses of them," Lahti said. "You can have a test that measures pretty well, [say] an entry-level customer service test, which may be effective for predicting performance and retention in those roles, but it might not be a good test for measuring leadership potential or predicting success in a director-level or manager-level role."

Get the Most From Assessments

Spremulli said that it's most important to use an assessment that has one or more validity indexes built in. A validity index is a scale that assesses how candid and honest a person is when he or she responds to the assessment, thus revealing whether he or she is attempting to manipulate the outcome.

"Every test you use needs to be reliable and needs to be valid," said Spremulli.

Reliability means the test yields consistent results over time, while validity means the test actually measures what it claims to measure.

The best ways to achieve accountability in establishing an assessment process include:

a) Make certain that all jobs have personality requirements. Set high accountability as one key requirement.

b) Monitor the process. Though it may be convenient to have applicants take online tests at home, this can invite outright cheating.

c) Use two tests. The chances of successfully deceiving two tests are considerably slimmer than those of deceiving one.

d) Tell participants they will be discussing their answers at a later date.

e) Conduct personal interviews at least partially based on the test results to reveal discomfort, hesitation or inconsistencies.

Lahti said to choose a test focused on the skills required by the job at hand, and then use it in a consistent, objective manner. Remember, too, that it won't be enough.

"These are great tools, but you never want to use just these tools," Lahti said. "Use personality tests with structured interviews and with ability and aptitude tests, with measures of skills and experience, and certainly with measures of past performance as you have those available."

Logical Choice Technologies uses a three-part test for selection. The first part assesses an individual's personality and cognitive skills. The second tests how an individual is likely to react in a given situation. The third determines what motivates an individual. Managers then use a comparison between the results of all three tests and the requirements of a particular job to make hiring decisions.

Spremulli also said that it's best to look not only at personality, but at a measure of cognitive abilities. Otherwise, personality assessments may not serve any useful purpose.

"You have to run some type of cognitive measure," Spremulli said. "How do you measure a person's horsepower mentally? You may have a perfect personality and everything is in place - everything's ideal, but [you] may be dumber than a bag of rocks. It is not just one factor; it's the whole person. That's how we operate."

The assessment outcome is then carefully matched with the job.

"If the assessment is way off, then it is a deal breaker," Patterson said.

Someone who is going to be an independent salesman working out of his home 3,000 miles away from the office likely will have a much different assessment than someone who will be working in the finance department, for example.

Assessments Improve Efficiency

Both Patterson and CenturyLink's Blair also see assessments as a way of cutting down on the number of resumes that must be reviewed, for different reasons.

Patterson said many applicants faced with an assessment will opt not to pursue an application any further. Blair said in a large company, which will often get 500 applications for a single position, tying an assessment to a position and using research to identify the top 30 percent reduces that number to 150 potential candidates, making it a more manageable group.

Blair said assessments are useful after the hire, when comparing later job performance to how an employee scored on a personality assessment for a given position. Successful employees who scored high and do well on the job mean that talent managers can predict similar success for those who score similarly in the future.

"One thing we try to do here is rather than talk about someone who performed better or didn't, or who stayed with the company longer or didn't, we turn it into a dollar figure," Blair said. "Those who do better mean better revenue and longevity as well, and we don't have to retrain them."

He acknowledged that large companies like his - that make more than 2,500 hires a year - often have their own in-house data to use. But there is enough similarity in jobs, such as retail sales, that talent managers can pull data from a variety of companies, organizations and industries to predict what kinds of personality attributes they need to look for.

Given the current state of assessment instruments, their demonstrated accuracy and their ability to help predict performance, talent managers are wise to continue to apply them in hiring. A disciplined process supported by scientifically valid instruments is time consuming and expensive, but the alternative is far more costly.

[About the Author: Paul M. Connolly is a licensed psychologist and founder of Performance Programs Inc.]

You Want Me To Go Where?

2010-10-20T13:47:00.000+03:00

by Siobhan Commins

Each international assignment represents an investment - a monetary and talent investment for the organization, and a career and family investment for the individual. Whether the organization is a large multinational with expatriates in multiple locations or a small firm just entering the global market, employers face complex decisions when staffing foreign operations.

Even though foreign assignments can have a large impact on corporate operations and budgets, some organizations continue to select the wrong candidates because of a lack of qualified candidates, no formal selection process or business decisions requiring fast action with no time for procedures. Pressed for fast action, some companies do not consider the big picture, goals and objectives, how the assignment fits the individual's career goals and the return on investment for the company.

Further, when selecting candidates for international assignments, talent leaders must consider suitability as well as family issues. Not every employee and accompanying family can successfully adapt to the stress of working in a different culture with colleagues who may have different views on job behavior.

The Expatriate's Decision

When employees are offered foreign postings, their decisions are typically not a simple yes or no. Job-related and personal considerations affect the decision and work performance overseas.

Uncertainty about the new job, responsibilities and work habits is frequently a cause of anxiety. Exacerbating this anxiety is the concern that assignees will be isolated from the corporate mainstream and their careers will suffer. These worries about future career opportunities can lead to further stress, as many companies do not, and sometimes cannot, guarantee a job either in the home office or elsewhere once the assignment is over.

The employee and family face an adjustment to different customs, laws, schools, living conditions and often a new language. Most multinationals provide some orientation or cross-cultural training for expatriates on long-term assignments - three to five years - through outside consultants, in-house personnel, employees who know the assignment country, or written, electronic or online materials.

This issue is a little different for short-term expatriates, whose assignments generally last from three months to a year. According to ORC's 2009 Survey of Short-Term and Commuter International Assignment Policies, only 37.3 percent of companies worldwide provide cross-cultural training; 38.3 percent provide destination orientation; and 43.4 percent provide language training.

Further complicating the situation, many assignees continue to own real estate in the home country or may worry about re-entering the real estate market if they sell their homes before going overseas.

Then there are spousal career issues, which can play a role in the decision to accept or reject an assignment. According to a December 2008 report, "International Survey of Expatriate Spouses and Partners," conducted by Industrial Relations Counselors and ORC on behalf of the Permits Foundation, almost 90 percent of expatriates' spouses or partners worked prior to the relocation. This figure dropped to 35 percent during the assignment. One participant said, "Both my partner and I have invested a lot in our education and career, and either one of use can be offered an international job. We would only accept if we were fairly sure that both of us could work. As an absolute minimum, we would need to know that whichever of us is "accompanying' could get a work permit. Then we would trust in our ability to compete for a job."

When asked to list the most common reasons that candidates turn down an opportunity, respondents to ORC's 2008 Worldwide Survey of International Assignment Policies and Practices ranked spousal or dual-career issues No. 1. Other reasons varied in importance, by nationality in some cases, as follows:

a) The compensation package was not a sufficient incentive, which ranked first for Asia-Pacific based organizations.

b) Expatriate career issues.

c) Concerns about children, such as education, which was the leading factor in Japanese companies.

d) Issues related to host location and conditions such as extreme climate, political instability, inadequate medical facilities, crime, remoteness, prevalence of disease and other factors.

e) Decreased contact with family, friends and the home community.

When selecting a candidate, offering solutions to career development, future repatriation and family issues can persuade the individual to accept the assignment. But the following will help the process run smoother:

a) Involve a representative from HR or the global mobility team to provide a practical perspective from professional staff familiar with administration, HR programs and relocation-related issues such as immigration, moving logistics, legal and destination services.

b) Determine the specific skills and competencies necessary for the position, which allows HR to match job requirements to the most qualified candidates and reduce on-the-job training time.

c) Prepare the employee thoroughly. Discuss the assignment, reviewing all details - responsibilities, reporting structure, pay and benefits package and other relevant information - to avoid misunderstandings during the assignment and upon repatriation. If possible, have an agreement in place that lays out the details as well as ongoing communication vehicles - newsletters, conference calls - to keep the employee in touch with the home office during the assignment. It is also advantageous if the individual can meet with the host-location manager ahead of time to resolve pending concerns.

d) Provide orientation, cross-cultural training and language lessons as necessary for the employee, spouse or partner and children. Although the amount and depth of training provided may vary and be limited, the employer should offer some orientation, even if the culture is similar to that at home, to ease the transition and make the unfamiliar more familiar.

e) Send candidates on a pre-assignment visit to find housing, make educational arrangements for children and visit local neighborhoods and expatriate communities, activities to help them acclimate more quickly. Destination services upon arrival also may help ease them into the new situation.

The Company's Selection Process

The aforementioned points focus on the employee. How do companies select the right candidate? Most companies base the decision on skills and competencies, job performance, job level and some combination of the following:

a) Some firms simply choose an excellent performer without regard to long-term career planning. This method assumes the individual will continue to perform well on assignment, but it does not consider the person's career goals and aspirations. If the employee feels coerced into accepting a position and new skills to be learned are not desirable, performance may drop. By implementing tools such as a skills inventory, a self-assessment vehicle and an ongoing mentor relationship, the company can minimize its risk.

b) Some companies ask technical, functional and operational managers to suggest candidates. Although these individuals are known for their technical skills, it may be erroneous to assume the person recommending them knows their full background, career objectives or what the host job requires. It may be helpful to query several parties who are familiar with the candidate's capabilities.

c) Sometimes the company may choose someone whose assignment costs will not be too high in order to save money, such as an early career, less senior employee or someone on a short-term assignment. This choice could result in assignment failure because the individual lacks either the proper experience or sufficient time to do the work before someone else takes over. Balancing the cost with the practical necessities of the assignment is key.

d) A manager may assign a poor performer elsewhere to avoid dealing with the individual. Rarely does this step improve performance unless the position and its responsibilities are desirable to the individual. In an encouraging scenario, previous performance may simply be the result of bad chemistry within the unit, and relocation may benefit all. However, if performance continues to suffer, ultimately the problem will not go away unless it is addressed.

Selection Should Be Common Sense

Balancing theory and practice to choose the best expatriate candidate depends on the company's philosophy, the size of the assignee population, the company's experience in expatriate administration and so on. But considering all factors - from the expatriate and employer points of view - and establishing clear selection criteria offer the best chance for a successful assignment.

Not all of ORC's 2008 survey participants reported being impressed with their companies existing international assignment selection process. Only 8 percent said that it was handled "very well." Forty-three percent cited the process as handled "well," with an equal percentage describing it as handled "somewhat well."

When selecting the right person for an international assignment, make the job appealing with appropriate financial incentives, consider the employee's career path, be sensitive to the family's situation, and be aware of the spouse's employment needs. Combine those facets with a skills inventory, assessment programs and mentoring, and talent leaders should be able to find the best person for the job, wherever it may be.

[About the Author: Siobhan Cummins is managing director of EMEA for ORC Worldwide's operations.]

Leadership Development Goes Organic

2010-09-01T23:09:00.000+03:00

by Stephen Parker and Mark Smith | Chief Learning Officer (Healthy Companies International Consultancy)

There is a new breed of leaders who can help their organizations achieve sustained, companywide growth. They're "growth leaders," and CLOs can lead the charge in identifying and developing them.

The business landscape has changed in ways no one fully understands. Credit remains tight. Confidence is fragile. The vitality of the recovery itself is uncertain. Growth in this new economic reality won't be about risky marketing plays or highly leveraged megadeals. What companies need now are solid organic growth strategies - ones that make the most of the resources already at their disposal. As chief learning officer, you can help shape such a strategy. You can lead the charge to accelerate organic growth.

Growing a business from within - rather than through mergers, acquisitions or takeovers - is a hallmark of a flourishing enterprise. Of course, even companies that grow through acquisition must consolidate and organically grow their acquired businesses. All companies want strong organic growth, yet as they get bigger, most struggle to sustain it. Why?

Part of the answer is simple mathematics. The larger a company's existing base of business, the more challenging it becomes to achieve double-digit organic growth. But there is also a significant cultural dimension. Big companies often work in ways that dampen big thinking. Forecasts. Quotas. Budgets. Policies. Procedures. Directives. Standards. The mechanisms that help corporate executives manage large spans of control can unintentionally suppress their company's innovation and growth initiative.

Impediments to Growth

Two decades of research by Healthy Companies International, a global management consulting firm, has found that within larger companies common impediments to organic growth include:

1. Placing too much faith in the power of data.

A slavish reliance on data can be self-defeating. Data from the past may be irrelevant for assessing new opportunities.

2. Allowing bureaucracy to smother entrepreneurship.

In big companies some bureaucracy is necessary, but when it stymies innovation, it kills growth.

3. Believing that only big is beautiful.

Big companies often put most of their resources behind a few big ideas, while neglecting the cumulative value of many smaller ideas.

4. Insisting that all projects be treated equally.

Putting every initiative through the same rigorous set of checks and balances kills out-of-the-box thinking.

Savvy Intrapreneurs

Intriguingly, some leaders manage to overcome such obstacles, consistently creating rapid organic growth inside large companies. An extensive study conducted by Healthy Companies International in partnership with the University of Virginia's Darden School of Business profiled a rare breed of leader working inside large organizations - most often as midlevel executives. These "growth leaders" operate much like entrepreneurs, leveraging the company's existing resources to drive double-digit organic growth. According to researchers Jeanne Liedtka, Robert Rosen and Robert Wiltbank in their book The Catalyst: How You Can Become an Extraordinary Growth Leader, this often entails working around the company's entrenched bureaucracy, control systems and inflexible work processes.

Where are these growth leaders in your organization? Most likely, they are working their magic far away from the limelight. This group of leaders rarely clamors for attention. In fact, many growth leaders will tell you: "The best thing the company can do for me is to stay out of my way." While this may sound like old-fashioned rugged individualism, it actually reflects growth leaders' frustration with systems built on assumptions they don't share.

Big companies tend to make big bets. And since big bets mean big risks, these organizations understandably want lots of assurance that their bets will pay off. Most, therefore, invest heavily in predictability and control mechanisms such as market research, sophisticated analyses, forecasts, project plans, standard operating procedures and approval systems.

In contrast, the growth leaders we found thriving inside big companies make small bets - lots of small bets. And while they cannot be certain their bets will pay off, it doesn't worry them. The potential losses are affordable. Growth leaders say: "Let's try this and see what happens." They test their ideas on a small scale to start, which makes it easy to pull the plug if an idea doesn't work. They learn from each experience, modify their ideas accordingly, or move on to experiment with the next innovation. In this way, growth leaders continually innovate in pursuit of organic growth at a low cost, while keeping risks under control.

Just as important, growth leaders are all about what their customers value. By viewing their own operations through the eyes of their customers, growth leaders spy opportunities traditional managers may miss. Many even enroll customers in shaping and carrying out their experiments. When the customer reports that an innovation does in fact add value, the growth leader scales it up. That is their formula for accelerating organic growth.

How Growth Leaders Are Different

The Healthy Companies study revealed that effective growth leaders are different from traditional managers in three fundamental ways:

1. They know differently.

They have an innate appetite for experimentation and so command fuller and more diverse bases of knowledge, skills and experience.

2. They see differently.

Growth leaders focus intently on customers and so see growth opportunities that internally focused, control-oriented managers miss.

3. They act differently.

Growth leaders continually tinker with the value proposition to the customer's benefit and build high-performing teams that share their own growth mindset.

Build Your Own Growth Leader Factory

What does all this mean for the CLO? In a word: opportunity. In an age when companies compulsively define their key processes, it is ironic that few have an explicit process for driving organic growth. You can apply what research tells us to identify high-potential growth leaders in your company, systematically develop the competencies that research shows ignite organic growth, and then unleash these growth catalysts across your company to build high-performing growth teams and growth organizations.

A case in point is DynCorp International (DI), a government services contractor based in Falls Church, Va. With 30,000 employees, DI has annual revenues in excess of $3 billion. DI teams work in support of U.S. national security and foreign policy objectives around the globe, often in hostile environments. The company erects and maintains military bases in Iraq and Afghanistan, provides security to U.S. diplomats, maintains U.S. military aircraft, trains civilian police forces, supports economic development initiatives, and takes on a wide range of law enforcement and peacekeeping missions worldwide.

When CEO Bill Ballhaus took the helm in 2008, DynCorp International was at a turning point. Revenues were flat, and attempts to reorganize the company hadn't yielded significant organic growth. Ballhaus recognized the need to inspire innovation and instill an organic growth mindset. With his senior team, he developed a shared vision of how the company would accelerate growth and then customized criteria to nominate candidates from within DI to take part in a program specifically designed to develop high-potential growth leaders. Dianne Walker, DI's senior vice president of human resources, led the team that shaped the solution.

"Our Growth Catalyst Leadership Development Program is an immersion and mentoring process that identifies and develops entrepreneurial leaders from across the company," Walker said.

Significantly, the leaders selected to participate in the program were viewed as likely successors to top posts. "Our program is instilling a growth mindset that will endure beyond our current group of top leaders," Walker said. "This program also gives managers who currently run diverse parts of the company a chance to experience interacting directly together, as a team."

In weeklong modules conducted quarterly over the course of a year, participants in the program receive classroom instruction specifically designed to develop the growth leadership competencies identified in Healthy Companies' research and engage in collaborative work sessions with their peers. Early in the program, participants select projects critical to fulfilling the company's growth vision, with input from the DI senior team. Continued mentoring, coaching and webinars between modules help these growth leaders stay connected with the program objectives while feeling supported in taking appropriate risks. Participants also have online access to a customized tool kit with hundreds of support tools and assessments.

"The venue for each module of the Growth Catalyst Leadership Development Program was chosen to emphasize important characteristics of growth," Walker said. "Our first session was held close to the company's headquarters, where the senior team could interact with participants and share their growth vision. The second module took place further off-site to help the growth leaders gel as a team. A later session was held in New York to emphasize the financial implications of growth. A visit to a major customer site helped emphasize that sustained organic growth is driven by what customers want and value."

DynCorp International's Growth Catalyst Leadership Development Program is still unfolding, but the impact is already apparent.

"We have definitely seen a shift in mindset," Walker said. "Sustaining strong organic growth is more of a clear priority across our enterprise, and we see a stronger bias for both innovation and action, which make growth possible."

Last year, DynCorp International grew at a pace well into the double digits - faster than any of its industry peers. That growth was nearly all organic. The company recently made its first two strategic acquisitions, which are expected to open new channels for organic growth. Looking ahead, DI's top leaders say that both organic growth and acquisitions will be keys to sustained growth.

A Differentiated Development Investment

Just one-third of the executives responding to a McKinsey study conducted in March believe that their companies' training programs build capabilities vital to improving business performance. We imagine senior executives often struggle to discern a clear link between customary, generic high-potential leadership development and the company's measured business success. In contrast, developing your high-potential growth leaders aims to build your company's capacity to drive top-line growth. That makes the business value unmistakable.

Additionally, tangible growth returns are realized quickly because participants execute growth projects while they are learning growth leadership skills and receiving coaching and mentoring. At the end of one year, high-potential growth leaders can look back not only on a period of tremendous personal development, but also on measured contributions to the organic growth of the business. Along the way, growth leaders become a more cohesive team, ready to work together at the next level and better prepared to mentor and encourage other growth leaders across the company.

In sum, your growth leadership development program can be the catalyst for a sustained, companywide organic growth success story.

Is Business a Foreign Language for HR?

2010-08-12T22:31:00.000+03:00

by Susan R. Meisinger

"Knowing the business" is not the same as understanding "the language of business," contends Meisinger in her latest column on whether the next generation of HR executives will have the skills needed to navigate tomorrow's business environment.

Every year, the National Academy of Human Resources (NAHR) holds a banquet to induct new Fellows, individuals who have been recognized by their peers for their contributions to the profession. While the black-tie affair in New York City is always memorable, the meeting of the Fellows prior to the dinner is even better. During the meeting, this group of respected, thoughtful and experienced HR executives engages in a frank and open discussion about the profession and issues that confront it.

One of the topics for discussion at the meeting in November was the next generation of HR executives - how to find the best and the brightest students today and introduce them to a challenging, exciting and rewarding profession in human resource management. While more and more entrants into the profession have a degree or concentration in HR management, there are many more HR professionals who "end up" in HR, and as a result, lack critical knowledge of the field. Another concern frequently raised by HR executives is the challenge of up-skilling their HR staff to better enable them to operate in a global environment of rapid change and constant ambiguity.

The challenge to HR leaders isn't new - it's just more pronounced because of the pending exit of the baby boomers and the recent economic downturn, which has forced most HR executives to assess, and reassess, their teams. Over the years there's been a great deal of research done on HR competencies at successful organizations. Doesn't every generation of leaders wonder if the next generation will be up to the task?

A theme that permeates any discussion of the future of the profession is the critical importance of an HR professional' s ability to speak "the language of business." Yet some of the competency research results seems confusing. According to Dave Ulrich, "we have consistently found that knowing business is not as highly ranked as a predictor of HR effectiveness. " Much more important in determining an HR executive's effectiveness is whether the individual is viewed as a "credible activist" - someone who offers a point of view, takes a position, and challenges assumptions. They practice HR with an attitude, and are able to influence others.

So why do HR executives and other business executives always zero in on the importance of business expertise? Ulrich's take, with which I agree, is that knowing business (finance, marketing, operations) is the ante, or ticket, of admission. Without this knowledge, HR won't be included in key business discussions where they could provide a point of view, take a position, or challenge an assumption. And, if invited, they won't be asked to stay. Unfortunately, many in HR limit their own opportunities because their expertise is too narrow.

Today, most HR professionals will take the time to understand why or how the business manufactures a product, or the nature and quality of a service that's being provided. But understanding the language of business, to me, includes understanding the financials of an organization. It's not just understanding the impact of a business decision on the budget, but understanding the impact of the decision on the very value of the enterprise.

If business knowledge is a ticket of admission, HR executives need to ensure that their HR leaders of the future are armed and ready and, at a minimum, have some background in finance and accounting. It's not an easy challenge, since so many in the profession have totally unrelated degrees, and most HR-degree programs focus on just HR coursework. Even the PHR and SPHR certification exams, while including some knowledge requirements pertaining to business, are exams designed to measure the grasp of a body of HR knowledge.

It will require that HR executives ask for more detailed information on the knowledge and background of candidates: Did they ever have an opportunity to focus on finance and accounting in their academic or professional careers? If not, HR executives need to be willing to provide the opportunity to do so. Without it, the HR professional will never be a credible activist in their organization.

This doesn't in any way diminish the importance of the HR knowledge required to be a successful HR executive. It, too, is a ticket of admission. It highlights the breadth of knowledge required for a career in HR management. It requires both HR and business expertise.

A grasp of the HR body of knowledge provides HR professionals with a road map for the direction they may need to take in their organization. But a grasp of finance and accounting provides them with knowledge of the topography underneath the road map. This combination ensures they will pick the best path forward for their organization.

About the Author: Susan R. Meisinger, former president and CEO of the Society for Human Resource Management, is an author, speaker and consultant on human resource management. She is on the board of directors of the National Academy of Human Resources.

Why Strategy Fails?

2010-07-31T00:39:00.000+03:00

by Benjamin Ola Akande and Chuck Feltz

When a core strategy fails, one of the most detrimental consequences is "strategic churn" - the all-too-frequent layering of one failed or incomplete strategy upon another. This saps energy and exhausts organizations, disenfranchising stakeholders and conditioning employees to await the next "grand vision" sent down by senior management.

While external factors certainly play a role in strategic failure, the most common are well within the control of executive leadership.

1. Not starting at the beginning
Flawless execution will not overcome flawed strategic assumptions. Underestimating market trends or customer needs, or overestimating the organization' s abilities to respond to them, dooms efforts from the start. Similarly, simply driving the "old way" harder despite clear evidence of a changing market is a key cause of strategic sub-optimization. Executives must close their planning process by honestly answering the question. What must we believe to make this strategy succeed?

2. Confusing planning with delivery
Anyone who has experienced the intensity of a strong strategic planning process has experienced relief at a successful rollout. However, in successful organizations, this relief is temporary, and management understands that the real work of delivery and execution has just begun. Many organizations mistakenly equate planning with execution and a goal with results. A process for execution and resource alignment must be the final element to close the loop on a successful strategic planning process. Anything less reduces accountability, focus and success.

3. Being disconnected from the vision
Well-developed strategy answers the question: How will we achieve and monetize our vision? It is the context for all decision making and resource allocation. The link between your vision and your strategy must be crystal clear. Don't have a clear and compelling vision? Get one. There is no more powerful engagement tool to help employees see how their everyday activities connect them to a grander purpose. Every employee should expect their leadership to know what success actually looks like.

4. Underestimating change management needs
Executives are responsible for thinking constantly about the "why" and "what" of strategy, whereas the rest of the organization is focused every day on the "how." As a result, executives are light-years ahead of their organizations in understanding what drives the need to change and why the change must occur to remain successful. Ignoring this foundational axiom of change management makes aligning employees and strategy nearly impossible.

5. Making the "why" implicit when it should be explicit
It's risky to assume employees clairvoyantly understand their leaders' intentions and interpret them clearly. As a result of the planning process, executives have hundreds of hours of data analysis and knowledge that employees who are removed from the process don't have. These workers crave their leaders' insight and confidence as to why the company will win.

6. Diluting the strategic message
No organization is more powerful than the one whose people are laser-focused on driving vision to reality. Unfortunately, leaders assume traditional communication channels are effective in disseminating this critical strategic information. However, our research has found that every organization has a "strategic dilution point" where there is degradation in the content and continuity of this message - typically three levels down from the CEO. The result? More than 80 percent of employees attempt to carry out strategy with reduced clarity and focus. Companies that avoid this pitfall excel at two things. First, they empathically engineer messages to assist managers in delivering communication in their own, authentic voices while maintaining content integrity and accountability. Second, they create effective channels and venues to deliver this critical communication.

7. Holding rare and ineffective progress reviews
Successful organizations perform routine strategy self-examinations, often in the implementation phase, to assess progress, diagnose issues and make timely adjustments. A strong, ongoing review process consists of a dialogue rather than an inquiry and determines whether accountability is in place; whether milestones and metrics are being met; whether original assumptions from planning are still accurate; what is going well - and what is going poorly - and why; and how competitors are reacting to the strategy.

The greatest strategy will fail if not implemented as planned or not given time to prove its effectiveness. Great leadership devises strategies that are grounded in fact and not opinions, make implementation a priority and inspire confidence in those who carry them out. They put no less emphasis on the execution and alignment than on the planning itself. They help the plan move from the theoretical to the practical and from an intensive and resource-consuming event to a reflexive and ongoing part of the organizational culture.

One Size Fits One

2010-07-29T16:07:00.000+03:00

by Owen J. Sullivan

Employees today want individualized career options. If management doesn't provide them, workers are going to take their knowledge and skills elsewhere.

Employees are taking more control over how, when and where they work. Consider the sizeable growth in virtual workplaces. Employees who have greater control over their work have higher levels of engagement. And higher employee engagement directly correlates to a positive improvement in the bottom line.

Yet employees are exhibiting signs of pent-up frustration about how they have been treated throughout the downturn. While employers may have taken necessary steps to streamline operations remain viable, it appears employees have felt sidelined in the process. The result is a disconnected and unhappy workforce.

In a recent study of 900 workers in North America, Right Management found that 60 percent were dissatisfied with their present jobs and seeking new opportunities, while 27 percent were networking and updating their resumes. These insights provide a barometer for employee engagement.

Meanwhile, recent research conducted by Manpower found that 76 percent of organizations say flexible work arrangements boost employee morale, and 64 percent believe these policies increase retention. The bottom line is that employees today want more options.

There are three main reasons for the increasing demand for more options:

1. Personal economic security:

Successful individuals have experienced sustained prosperity and have secured more affluent economic futures.

2. Dramatic changes in social norms:

In many societies, social norms have been altered to accommodate or even encourage individuals to expand their life priorities beyond their career.

3. Ubiquity of communication and information technologies:

New technologies are making it easy to accomplish the same work from anywhere at any time.

Further, employees indicate that they want:

a) Flexibility in how and where work gets done - meaning the ability to perform jobs where, when and how they want.

b) Flexibility in how work is compensated - meaning the organization takes a holistic approach to compensation, with valued compensation ranging from more money to more time off or more time to be innovative at work.

c) Diversity with career choices - meaning having accomplishments defined beyond the traditional measures of career success, with expectations of employers to accommodate and encourage life priorities outside of work.

d) More options to learn and grow - meaning continued and varied career development opportunities that help them contribute in ways that are meaningful to both the employer and the individuals.

Choices for the Knowledge Worker

The most highly skilled workers are mobile in any economy. People are attracted to career development opportunities, work-life balance and companies with perceived innovative cultures. If management doesn't provide employees with these opportunities, workers are going to take their knowledge and skills elsewhere. Employees today can change jobs because they can and want to, not because they have to.

The implications of not paying attention and not taking action now will cost businesses dearly. Not stemming the potential loss of high-value talent can result in:

a) Lower productivity as workers focus on job searches rather than on current performance.

b) Lost business opportunities, which result not only in lower profitability but also in negatively affected customer retention.

c) Unwanted turnover, which costs an average of 1.5 times the departing individual's salary, time applied to rehiring and on-boarding.

d) Loss of intellectual capital as it walks out the door, along with the irretrievable investments made while the individuals were employed.

e) Erosion of the workforce fabric impacting the dynamics of the organization' s culture: the loss of the unique personality, history and values the individual imparts.

And yet it doesn't have to be this way. Leaders of all levels: Be forewarned. The time is now to take action by building and implementing a talent strategy that is aligned with the business strategy.

Talent Strategy Best Practices

Lack of a formal talent strategy is the No. 1 impediment to executing business plans. Learning officers must apply the same rigor used to create an overall business strategy to develop a workforce strategy that:

1. Articulates a comprehensive vision of where the company wants to go, what unique value it delivers what it wants to accomplish.

2. Organizes work structures to unleash the knowledge, innovation and creativity of every employee in order to achieve that vision.

3. Examines, understands and delivers what employees want from their employers and work environments.

When designing a workforce strategy, you must first understand how complex trends and shifting business realities will impact your organization - now and in the future. This then allows you to identify the right people for the right jobs, build the necessary leadership competencies and skills, and develop and retain your best talent.

To do just that, CLOs should take the following five-step approach:

1. Inventory current talent and identify future needs.

Every organization has a strategy, but not all have people with the competencies to execute it. Create competency models and success profiles to align business goals with the talent needed to achieve them. Modeling identifies the knowledge, skills, abilities, experiences, motivations andpersonality traits on organization' s workforce must develop to realize present and future strategic goals and enhance company agility, innovation, engagement and retention.

2. Align the workforce strategy with the business.

A well-articulated strategy provides a sustainable, proactive process to execute strategic imperatives and build internal understanding. Identify employee and workforce issues impeding strategy implementation. Prioritize workforce management strategies and align them with broader strategic goals. Keep in mind that once the strategy is communicated, it will often necessitate change. To avoid a change in direction that results in going off in all directions, the organization must maintain its focus. Managing change in a volatile business environment that seems ever more volatile is an increasingly pressing leadership challenge - which leads us to step three.

3. Develop leaders and build a pipeline.

Investing in leadership development will ensure a steady flow of available talent to continue to grow the company over time. Build leadership capacity that is both deep and wide. Additionally, succession management can ensure a smooth, seamless transition from one leader to the next. A growing number of company boards and executives today are viewing succession management as a mandatory business process, encompassing all levels within the organization to ensure deep bench strength.

4. Further, make sure to develop leaders who understand the importance of ensuring all employees know what is expected of them.

Establish performance goals and guide leaders to provide continuous feedback and coaching to their direct reports. Employees perform best when their efforts are linked to the organization' s strategy. Ongoing performance management should include career discussions that ensure alignment of an individual's performance and goals with strategic objectives and measurable business results.

5. Focus on retention and engagement.

Leaders need to clearly and effectively articulate business strategy, vision, mission and purpose to the entire workforce. A workforce that understands the organization' s strategy is better able to execute it.

6. An engaged workforce is far more productive than a disengaged workforce and displays much higher retention rates.

Improve retention and engagement by helping employees understand the significance of their roles and how they directly participate in achieving the company's business objectives and performance goals.

7. Invest in career development.

Helping talented employees develop their careers offers forward-looking organizations a powerful engine for driving workforce engagement, retention and productivity. It also builds its reputation as an employer of choice and strengthens its ability to retain and attract top talent. Tap into employees to understand their individual motivators, skills and interests, and match these with business priorities.

How Are Companies Responding?

What are companies doing to address the rise of individual choice, and how are they building solutions into to their talent strategies? Let's consider the following example from Procter & Gamble (P&G).

P&G was experiencing growing retention issues, particularly for employees who had been in the same role for about two years. Employee engagement was trending downward for the second year in a row. Recently, there had been downsizing in the top and bottom levels of the organization, which meant that horizontal career growth opportunities had decreased significantly, resulting in an unprecedented increase in lateral movement across the company.

P&G learning leaders wanted to create an organizational shift so that employees could be more proactive and successful in managing their own careers. They implemented a career management program that included assessments, workshops and individual, one-on-one coaching. The program provided employees with career management tools to engage in self-discovery of their career-related issues and to translate data into pragmatic career plans.

To date, this program has been implemented divisionwide to several hundred employees in North America, the United Kingdom, Switzerland and China. P&G reports that the attrition rate of those who participated in the program is less than half the company average, yielding an ROI of more than 200 percent.

The Impact of Customization and Flexibility

Individuals have diverse work preferences, needs and expectations. Companies need work practices and employee experiences that will attract and engage the best talent - those who are loyal, committed and take pride in their work and the organization. Individuals want to take greater ownership of their careers and development. Investing in developing talent from within, rather than hiring from outside the organization, will achieve greater employee engagement by ensuring work remains challenging and meaningful. Aligning the skills and capabilities of individuals with the overarching business strategy satisfies employees' need to make a difference and contribute to the company's overall success.

Customization and flexibility are essential to attract and retain high-value talent. We need flexible developmental policies and processes that address the unique needs, preferences and expectations of individual workers. Employer brand and reputation will become increasingly important, as will demonstrating organizational values tied to broader social issues. The purpose of the organization and each employee's role within it needs to be meaningful.

To meet the demand of today's skilled workers, leaders need to:

1. Provide leadership and strategy.

They must clearly define and communicate the strategy, align it with the company's mission and illustrate its overall impact on society.

2. Create a collaborative, flexible and innovative work culture.

The work culture needs to leverage new technologies and move forward team-based and outcome-oriented processes.

3. Understand and utilize levers of engagement.

Each of your employees is unique. Understand what engages them, their life priorities and their challenges. Create work practices that meet them where they are in life.

Building the workforce that is needed both now and in the future will be a key success factor. And once you have the right people in the right roles, you must keep them engaged. One size does not fit all.

[About the Author: Owen J. Sullivan is executive vice president of Manpower Inc and CEO of Right Management, Jefferson Wells and Manpower Professional. ]

Succession Across the Generations

2010-07-21T13:09:00.000+03:00

by Stephen Xavier and Sharon Doyle

The media and some talent professionals have hyped the need for companies to adapt to younger employees. However, in the process of making concessions, some organizations have lost sight of fundamental talent management principles, particularly succession planning, which includes actual readiness, not just generational adaptability.

This oversight will spell disaster when baby boomers - temporarily halted by diminished retirement portfolios - finally depart the workplace. Companies revising proven systems and processes to provide special accommodations for young employees should not neglect high-potential leadership development, preparing for the next round of talent warfare by ensuring bench strength for today and tomorrow.

Baby boomers number 76 million, and millennials - also called Generation Y - 75 million, but there are only 41 million Gen Xers. Gen X eventually will have to replace retiring boomers, and there just aren't enough of them. When the recession ends and baby boomers retire, this demographic problem could turn into another economic disaster. Yet there are some boomers who failed to adequately save for retirement and will continue to work into their 70s and beyond. What should their contribution be, and are Generations X and Y prepared to learn from, and ultimately manage, this aging generation effectively?

"There is much talk about 'getting people back to work,'" said Devon Scheef, co-founder of The Learning Cafe, a California-based training company. "But hiring managers don't set out to hire 80 people. They want 80 people with specific skills. The questions are, what training do the millennials need, what leadership competencies does Generation X need so they can replace the boomers, and how can we retain both Generation X and the millennial generation to avoid wasting investments in training? Organizations are not paying enough attention to the middle of the talent pipeline."

Generation X: Ready or Not?

According to stereotypes, boomers think Generation X needs a stronger work ethic, and Gen Xers see the boomers as self-absorbed workaholics. The facts are less concrete, and ultimately generational diversity must be leveraged to enhance the leadership pool.

Gen Xers, born between 1965 and 1976, range in age from 34 to 45. Corporate America's C-suite is currently about 60 percent boomers and 40 percent Gen Xers. But there is a problem. "Some boomers are going to remain in the workforce a lot longer," said Jonathan Magid, co-author of Why Leaders Fail. "As a result, increasing numbers of high-potential Gen X executives may bail because they feel they have no place to go in their organizations. Talent management professionals need to be mindful of turnover among executives who have significant executive experience but perceive themselves to be blocked."

What could motivate and retain Generation X? "We look for opportunities to grow and achieve and to be rewarded for achievement," Magid said. "If opportunities, growth and rewards are not forthcoming, we conclude that we're expendable.

With regard to Generation X, the talent management challenge is twofold: motivating and retaining Xers who feel blocked by boomers who are not retiring and building Gen X bench strength so the boomers who are retiring can be replaced with effective leaders who can meet business demands. The solution is the same for both: Implement a range of strategies that will motivate and develop Generation X to promote growth, and ensure challenges as they prepare to move into more senior positions.

"We might be just a little too focused, at times, on the importance of generational differences, even while I recognize that they are notable," Magid said. "Instead of altering your philosophy to make accommodations for generational differences, help leaders understand what drives success in the organization, including being able to work effectively with divergent points of view, life experiences and expectations."

What's in It for Millennials?

Born between 1977 and 1998, millennials are now 12 to 33 years old and are known as the "what's in it for me" generation who will plan their exit strategy from day one if they don't get what they want. However, some older millennials have taken their place in organizations as first-line managers and supervisors. Although still a long way from the senior leadership ranks, millennials need to be motivated and retained so they can fit into the leadership pipeline.

Scheef said millennials want a structured, supportive work environment, personalized work and interactive relationships where they can make a difference and be recognized for their contributions. Further, when recruiting and managing younger millennials, it's important to be aware of the relationships they have with their parents.

"Two-thirds of millennials consider one or more of their parents to be their primary career coach," Scheef said. "When they come into organizations, they expect from their bosses what they got from their parents: little authority or hierarchy, but rather coaching or quasi-friendship. Organizations have responded by providing opportunities for millennials to participate in teams and rotate through various departments in the company. Another appropriate strategy has been to establish affinity groups to create a cohort for younger workers. Many of these groups welcome members of other generations and frequently invite boomers to speak to them about their experiences in the company."

However, sometimes millennials' parents take their involvement too far. Magid recalls one instance where an employee's mother called to complain about her daughter's performance review. "She really believed in her child's ability to be promoted, but the individual wasn't quite ready," Magid said. "Millennials have to understand it takes time to gain experience and develop leadership skills."

In any case, having mom or dad step up to the plate does not send the right message by any business standard. In fact, it sends a bad message and should not be tolerated. Home is home. Work is work. Younger employees should be expected to demonstrate some maturity.

Developing millennials is a matter of channeling what they bring to the table in a productive direction. For instance, their ability to multitask using technology equips them with extraordinary change acumen.

"The problem is that in meetings, they are texting, e-mailing and IMing while attempting to participate in discussions," Magid said. "Teach them about task sequencing rather than multitasking. Unfortunately, multitasking is often listed as a job requirement. That's incredibly dangerous and shortsighted. Companies need people who can manage multiple priorities."

Any concessions for millennials should be treated on a case-by-case basis and based on a company's needs. Accommodations should be made to motivate, not to be politically correct. Avoid generational stereotyping, and avoid assuming everyone is motivated only by financial gain. Leverage the millennials' desire to make a name for themselves with low-cost or no-cost reward and recognition options.

Use rational, logical processes to assess and develop talent all the way down the pipeline. Don't lose young diamonds in the rough by being too inflexible, but don't give away the store to them either. Assessment, development and advancement should fit the workforce, workplace and customer needs and account for individual differences, not just generational ones.

The millennials' desire to contribute presents opportunities to coach and mentor, and turn them into long-term, valuable contributors. Mature employees can help them see the big picture and how the organization's mission and goals are aligned with their individual goals.

"We have two ways to deal with the generation gap," Scheef said. "One is to say 'the [other] generation is wrong and needs to change.' A better way is to understand the gap and bridge it. Millennials may start job-hopping again when the economy improves. Now is the time to provide them with development that will also retain them."

Last But Not Least, the Boomers

Boomers have unkindly been called the gray ceiling because many have postponed their retirement and kept Generation X from moving up. But when they do leave, talent leaders don't want boomers to take their wisdom with them.

"Organizations that have not treated their boomers with respect and dignity will find them uninterested in sharing their accumulated experiences and expertise," Scheef said.

Talent leaders should implement strategies immediately to initiate knowledge transfer from boomers to Generation X. These programs also can evolve into strategies to accommodate boomers who are not going to retire soon. Magid said organizations will have to design roles for people in their 80s and possibly their 90s. He suggested creating a semi-retirement career track to allow older contributors at any level of the company to serve as distinguished advisers so Generation X and the millennials can learn what it takes to lead, including from people who are substantially older than they are.

In the recession, immediate needs and the bottom line have become all-consuming - doing more with less, efficiency, productivity, head count reduction and cost cutting. But recessions always end, and organizations will be compelled to drive renewal and growth. As soon as retirement portfolios recover, baby boomers will exit, perhaps abruptly. When that happens, organizations that are not prepared with a new generation of leadership will experience a brain drain like none before in history. It could lead to another economic disaster by destroying American companies' competitive edge in global markets.

Strategic talent management, particularly development of executive bench strength, deserves top-of-mind awareness and a concerted, hands-on effort right now. This is the time to identify, develop and retain talented people who are capable of stepping into leadership roles in the near future.

[About the Authors: Stephen Xavier is president and CEO, and Sharon Doyle is an associate of Cornerstone Executive Development Group Inc., an executive coaching and leadership development firm.]

Why Do You Work?

2010-07-16T22:33:00.000+03:00

by Jac Fitz-Enz

When you ask someone why he or she works, the typical first response is something like, "Because I have to if I want to eat." If you press the point, the person often replies, "To take care of my family." "I'd be bored if I had nothing to do every day." "I like my job." "I like to get out and be with people." And so on.

Recently, Dave and Wendy Ulrich published The Why of Work, which looks at work from an organizational and a personal standpoint. And it raises a fundamental question: What is the goal of life? When people survive as long as I have, they often ask these types of questions, perhaps to justify their approach to living or their level of accomplishment.

An adjunct to this question was laid out in in the film "The Bucket List" with Jack Nicholson and Morgan Freeman. The experiences Jack and Morgan go through are amusing and somewhat poignant. Only in the end do they discover the true happiness of life: It is love.

To me, the point of life is to learn and grow, to fulfill whatever latent capabilities I might have. I have the true happiness of life already, the love of my wife. Every day for the rest of my life is an extra dividend.

There is no question that I would like to have more money and more time for golf. But what keeps me going as I grow older is learning. I can't quit. I doubt I will ever fully retire so long as I have my mental and physical health.

Your Bucket

What do you want to accomplish before you kick? Is it what you set out to do when you were a naive, idealistic teenager? Maybe this is still the wrong question.

The social psychologist Abraham Maslow made the distinction between being and becoming. Many of us spend our lives trying to become something. For a young girl it might be a mother. For a boy it could be a star athlete. Later, it is often something more material: owner of a big house, fancy car, beautiful jewelry, country club membership. Maybe the goal is to become an executive or a great scientist.

I had the privilege of meeting with Maslow a couple of times, and I think he had achieved being. Another man who struck me that way was Joseph Campbell, whose advice for happiness was to "follow your bliss." Mother Teresa and Golda Meir are two of what Maslow might call "be-ers."

Think about it. What do you want to be? I hope it is more than a talent leader. That is what you have become. Now, with whatever time you have left, what do you want to be?

How to Be

Being is a state of attainment, not of material things but of yourself.

Self-actualization is a term that Maslow used. Have you ever had a moment - it could be for just a few seconds or it could last hours - when you felt transcendent? Everything suddenly clicked for you. It could come with the first look at your new baby. It could be something as mundane as hitting the perfect golf shot or preparing the perfect souffle. Whatever the source, at that moment you feel all-powerful, self-determined, unrestrained, independent, active, strong, a leader. To an observer, you look more decisive, sure of yourself, indomitable.

Can you think of what you can do to achieve that state of being in the midst of the pressures and expectations of everyday life?

I can tell you what will stop you from ever experiencing it: living other people's expectations of you. Your parents, spouse, children, boss, co-workers and many others all want you to play the role they have in mind for you. You have to decide how much of you is going to be their version and how much will be your version. In one sense, you have to be a bit selfish. You have to keep part of yourself for you or you can never be.

It is summer now, the time of year when nature is in its full glory. It's a good time to ask yourself. How important is your life to you?

Circuits of Cool

2010-07-11T19:30:00.000+03:00

I want to share the key findings of "Circuits of Cool" survey that is undertaken by Microsoft Digital Advertising Solutions and MTV Networks.

Research was conducted in sixteen markets across Europe, Asia, Latin America and North America, covering almost 10.000 youths globally aged between 14-24 years, the objectives were to shed light on issues such as how today’s youth differ from their predecessors; whether boys or girls use technology differently and why; understanding global differences across devices; and the role of entertainment media and brands in the future.

Although face to face communication is critically important for young people, they also value the rolemail plays in helping them stay in touch with their friendship group. 42% of females aged 14-24 think it's important that a friend is someone who they can contact via email, while the same is true for 38% of males in the same age group.
Youths describe their Instant Messenger conversations as funny, flirty and social (involving lots of people), with the majority of IM conversations centred on gossip (62%), making social arrangements (57%) and flirting (55%), with one youth revealing “Actually we talk about nothing. It’s all about flirting” (Female, 16, Netherlands).
However, entertainment is also fuelling IM conversations. Young people talk about and share content on films/music/TV (52%), links to websites (50%), clips and photos they have found (46%), and sport (37%).
The mobile phone is ingrained into young people’s everyday lives with 42% claiming it’s the first thing they look at in the morning and they last thing they do at night.
Watching content via a PC is now widespread, with two thirds of youths having watched film trailers, music videos and clips from YouTube. However 46% watch previews of TV shows from the Internet, 45% watch highlights of TV shows/sports and 43% watch fulllength TV shows. In addition, there was a significant increase amongst those interested in watching fulllength TV shows in the future (56%).

Further details are at advertising.microsoft.com/.../Circuits_of_Cool_Booklet_FINAL_1.PDF

On Mobility - 1

2010-07-11T19:18:00.000+03:00

We live in a world where, economy, knowledge, service, production, trade have become one. There are no barriers anymore. Cash moves from one way to another, people do also. The marketplace is one, and the employees in it are global. We are entering in an era of globally mobile workforce.

According to PWC estimation, international assignee levels have increased by 25% over the last decade, and will be increasing further by 50% till 2020. Considering the cost concerns of the Organizations, the types of assignments will not be limited to long-term but also, the number of extended business travels, commuters, short-term assignments will stick out. Localization will be one of the most used type of assignment.

Thus brings up the necessity for HR professionals, to adapt their international HR management strategies according to the new realities of the upcoming future. It is the best time to overview the expatriate assignment policies and strategies, to make these more sophisticated and more complex in order to meet the needs of the business. Not only the strategies, but also the methodology of calculating expatriate costs will also need a differentiation between the types of assignments.

On the other hand, according to the PWC Talent Mobility 2020 research, the ongoing war for talent and changing business needs will put pressure on the HR function to evolve its talent mobility strategy. Leaders clearly state that the economic crisis has highlighted flaws with existing people management practices and are looking to make changes as a result.

For further assessment of global mobility outlook, I would like to point out some key findings from 2010 Global Relocation Survey that Brookfield conducted. The survey covers 120 participants representing an expat population of nearly 6 million:

Assignment policies to be considered in the near future:

36% commuter, 35% localization, 28% extended business travel, 21% short-term assignments. Long-term assignments preference rate was 16%.

46% of responding companies required a cost-benefit analysis to provide justification for an assignment.
Although 75% of companies prepared cost estimates before initiating all assignments, only 64% actually tracked costs.
ROI of expat assignment is only measured by 8% of the respondents via;

expat compensation package
cost of relocation support
business revenue generated
completion of objectives

Assignment objectives;

filling skills gap, 43%
build management expertise, 17%
technology transfer, 16%
transfer corporate culture, 5%

65% of participants use a home-country approach for compensation.
Top destinations are US and China
The most challenging destinations are China, India and Russia.

For further details on the survey, please take a look at http://www.brookfieldgrs.com/insights_ideas/grts/

The Agile Organization

2010-07-10T00:32:00.000+03:00

by Cathy Farley and Walter Gossage

In the sporting domain, physiologists call it SAQ training: speed, agility, quickness. Essentially, world-class athletes use specialized sets of exercises to increase strength, flexibility and the ability to apply maximum force in sports requiring long-term activity and short-term bursts of energy.

In the business domain, more varied kinds of muscle movements are also becoming highly prized by executives as they seek to build the workforce and organizational capabilities that can best respond to continued economic uncertainty. In other words, companies want greater organizational agility.

The choice of words here is important. Agility is adaptability plus speed. Just as an effective triathlete must bring multiple kinds of athletic skills together in a single effort, agile organizations must excel across different kinds of activities. They must have the staying power to drive their core businesses over the long run and the ability to shift focus fast in multiple business portfolios and to execute quickly when the time is right to pull ahead of competitors.

So how does an organization imitate the multiskilled triathlete? There is no single training regimen. Improving a company's agility requires focused initiatives that cross multiple areas, including strategy, workforce capabilities and culture. Attention to these multiple organizational dimensions can help a company improve its responsiveness to market conditions, its ability to serve customers and its capacity to change, innovate and grow.

A Nimble Human Capital Strategy

Taking a global enterprise in a new direction is a bit like turning a large cargo vessel. Because of its size and momentum, the ship may be many miles downriver before it can be stopped and redirected.

With companies, that slow response is often caused by turning attention to the workforce too late in a strategic or technological change. Organizations set strategies in motion or implement new technologies, and only then do they establish programs to help the workforce execute in the new environment. An agile organization, by contrast, has more strategic insight into human capital strategy and the workforce capabilities needed to execute strategy rapidly and effectively. Here, talent leaders will proactively consider what capabilities they need - and in what workforce numbers - to execute business strategy.

For example, an effective human capital strategy has been critical to improve the efficiency and agility of Piramal Healthcare Ltd., a large, India-based pharmaceutical company. Piramal's growth strategy over the past decade has been largely based on acquisitions. Because business was booming and growth was robust, the company did not take the time to plan for an optimally sized and skilled workforce.

To change that, Piramal followed a comprehensive planning process that produced a blueprint for a phased sizing of staff according to performance and strategic fit. It also created more efficient and effective processes and structures to harmonize the way the newly reshaped staff would perform. The company carefully managed potentially negative effects on morale by redeploying employees to other areas of the company if their positions were eliminated during restructuring.

"By making staff decisions based on performance, we improved our employees' commitment to execution," said N. Santhanam, Piramal's chief operating officer. "All our employees now feel they are doing a job for which they are qualified, and that adds clear value to the company."

An Adaptive Workforce

If a company is to respond faster to market events, it must be able to create relevant sets of workforce capabilities when and where they are needed. That's a far cry from traditional thinking, where employees in certain roles perform fairly static jobs for long periods of time. An agile organization can assemble an appropriate combination of employees and capabilities for a particular need, then disband them and reassemble another set of skills for the next need.

Creating a more adaptive workforce can mean using appropriate collaboration technologies to bring people with the right skills together at the right time. It's also a matter of empowering every person to contribute to the overall knowledge of the organization and to find relevant information and experience whenever it's needed to meet a current challenge.

New social learning or learning 2.0 technologies and approaches support that kind of flexible empowerment, enabling workers to share their specialized knowledge and successes, and help them find and pull that information when they need it using advanced search functionality.

U.K. telecommunications giant BT's Dare2Share platform leverages Microsoft Sharepoint to enable employees to create, find and view learning segments, such as videos, podcasts, documents and links, and also discuss and debate the content being created. The free-form environment encourages people to experiment, innovate, collaborate, communicate and share their experiences and knowledge in engaging ways.

Through Dare2Share, employees can share their knowledge and experience or search for peer insights, all organized by user-generated tags and topics. People and their content are linked to one another through team sites, instant messaging, blogs and discussion threads. Material is also rated by peers during the sharing process according to quality and applicability.

A Change-Capable Culture

If talent leaders want an agile organization, they have to create a culture that embraces change and knows how to deal with it. That ability to anticipate economic, marketplace and competitive change, and to respond quickly, is now so central to any company's success that talent management leadership must work closely with the C-suite to establish a change capability within the organization. This requires focused initiatives along several critical dimensions.

1. Establish change expertise.

Change experts aren't created by sending employees to a two-day management program. An agile, change-capable company has to have centers and networks of expertise. A centralized center of excellence can house academically trained and deeply experienced resources, in whatever numbers are appropriate for a company's budget and needs. At the same time, change experts also are needed closer to where the action is. That requires a change network that uses internal and part-time external experts, as well as change champions or sponsors, to encourage major initiatives.

The network also should be supported by a shared set of consistent and comprehensive change management practices, tools and templates. These need to be adopted by and accessible to all employees and managers at all levels and used in every project and program in a consistent way.

Some companies find they need a dedicated learning approach to build change management competencies. For example, EDF Energy Networks in the United Kingdom established a dedicated change management academy to ensure the capability and delivery of change will support its business units' efforts.

2. Create effective change leaders.

Managing change effectively requires specific kinds of leadership attitudes and behaviors, and these are now understood much more precisely and even scientifically than they once were. Based in part on knowledge of the specific competencies needed to manage change, companies must have dedicated programs in place to develop the right leadership behaviors and then incentivize those accordingly.

Getting a handle on the current executive team's competency to manage change can be tough. Most executives would say they are effective change leaders, but are they really? Companies that are serious about understanding and encouraging the distinctive traits of good change leaders should perform assessments of their current executives and managers - perhaps the top 10 or 20 people on the leadership team who wield the most influence within an organization.

By combining a personality and leadership profile - which measures more than 40 different personality traits and states correlated with executive performance - with a traditional 360-degree feedback tool, companies can get a clearer assessment of their leadership teams. This assessment provides an objective understanding of each person's potential strengths and weaknesses that could influence their effectiveness as a leader, along with tangible suggestions to improve performance.

In addition to helping individuals improve their change management skills, this assessment also can help companies balance the mix of competencies needed in a good leadership team. A good team doesn't include people with all the same skills. Visionary evangelicals are needed, but so are good program managers and relationship builders. By understanding each person's particular aptitude in different areas, more diverse and effective teams can be assembled.

3. Track, measure and align change initiatives.

Effective change programs requires rigorous, ongoing processes and scorecards to define expected benefits, measure progress and hold leaders accountable for results. New measurement tools are being developed that improve a company's ability to measure the adoption of complex efforts such as the aforementioned large-scale change programs. With these tools, companies can be more scientific in their efforts to track progress toward developing an agile culture.

For example, the change acceptance predictive model assessment methodology enables companies to better predict how workforces in different geographies will embrace the kinds of changes needed to be more agile.

The model helped one public-sector organization - with more than 250 locations in over 150 countries - support a major IT implementation. The new system was not being embraced uniformly across all locations, so the predictive model helped the organization tailor its change acceptance work to different cultures and mindsets.

Given the new dynamics of a fast-changing and less predictable global economy, a number of competitive assumptions are changing. One of the most important changes is that the new business environment will favor those companies that have good ideas and sound strategies and can execute them faster.

The distinctive capabilities of agile organizations ultimately are rooted in their ability to manage strategy, technology and human capital in a way that helps them execute at speed.

[About the Authors: Cathy Farley is managing director of Accenture's talent and organization performance practice in North America. Walter Gossage is executive director of change management for Accenture's talent and organization performance practice.]

Aligning Four Forces That Shape HR Strategy

2010-06-27T23:03:00.000+03:00

In my previous article, I have cited four forces that have critical effect on shaping HR strategies were;

(http://humancapitalstrategy.blogspot.com/2009/12/four-forces-that-shape-hr-strategy.html)

Globalization
Technological Innovation
Managing Talent
Demographics Management

Today, I would like to discuss about how do these global challenges effecting HR ,and what possible actions can it be taken in order to minimize the distorting effects.

1- Globalization

We are living in a globalized environment, where market place became one. Labor market has no exception. International HR Management gained importance and has significant impact on sustainable competitiveness of the Organizations.

New labor market era forces us to have a global look for workforce deployment and planning. Finding the people at the right time, placing in the right place/location to the right job have become a priority for HR function.

On the other hand, although companies have long had international operations, they have only begun in the past decade to view globalization as a critical business challenge. "The real power will be in the recognition that we are one piece of the global market for talent and for products and services" says Jacqueline McCook, former strategy and marketing executive of PepsiCo.

For better management of globalization; HR should focus more on thinking globally rather than locally. Some key actions to be followed may be summarized as:

Moving from local HR Management to International HR Management.
Designing international compensation and benefits schemes in order to ease the global deployment of people.
Increasing the capabilities of the management team for managing more international teams, and for managing cultural diversity.
Providing opportunities and systems for short-term assignments, international rotations in order to gain international experience.
Investing in local management development
Establishment of global HR platforms

2- Technological Innovation

In a global world where cost efficiency is one of the key drivers of the long-term growth, rapid adaptation to technology advancements will bring the competitive advantage to the Organizations.

The world is re-defined as the "mobile globe". Internet is everywhere. Today, there are 1.8 billion internet users in the world, representing 25% of the total population.

Each and every day, a new social network site is going online.

HR people should be able to take the "mobile competitive advantage" and use it in a very efficient way that the applications add significant value to the company brand. In this regards, HRIS (HR Information Systems) plays a key role.

In today's HR function expense budgets, a significant portion must be allocated to IT investments, maintenance and update of softwares. In order to have reliable, on-time data people softwares must be used. These are valid for all HR systems: career management, performance management, compensation and benefits, expatriate management, relocation management, reporting, workforce planning, administrative issues...

All must go digital; a way to the "digital HR".

It is crucial to have a presence in the internet. HR should design a user friendly recruitment and HR site, where job seekers and new graduates can have an understanding of the systems applied in the Organization. Social networks such as; facebook, linkedin, xing, twitter must be used, for job ads, company information....

As I said, people are online more than ever, and the internet is a valuable source for gaining a sustainable competitive advantage over competitors if efficiently used.

3- Managing Talent

Talent Management addresses the challenges of recruiting, developing and retaining highly capable employees and providing them with opportunities to perform and to advance.

It's scope, is either within and outside of the Organization. Managing talent is the "management of potential new employees and high performing/highly capable existing employees in systematic way".

In a study of BCG, in all of the focus countries and across all industries, managing talent is viewed as a critical HR topic. (How to Address HR Challenges Through 2015)

In order for HR to be successful in talent management function, followings must be considered:

top management and line management support is the key,
employer branding is an issue to address in order to attract new graduates from reputable universities,
setting a transparent talent management system; explaining the selection criteria, what will be the next moves, what are the development applications to be used...
engagement, morale and awareness; a system which will enhance employee engagement and motivation to increase the employee performance and to push employees' self potentials up to maximum.

4- Demographics Management

The global world is aging, so does business world. There are fewer qualified employees entering into the workforce market.

Aging is critical to the long-term success of the Organization as it means, "experience/knowledge loss" which are expensive to replace.

How HR can be proactive on this matter?

Assessment of the workforce; how will it change in 5-10-15 years; breaking down into ages, gender, job groups, management levels.
Nationwide demographics should also be followed in order to attract the top management's attention into the topic.
Internal training/job rotations in order to enhance cross-job qualifications to prepare people to work in job groups other than their own.
Offering employment options to retired employees in order to hold in delay the knowledge losses.
If the latter is not applicable, offering coaching options to senior retired employees in order to transfer their experiences to their replacements.

Cash is King... What about Good People?

2010-06-05T22:18:00.007+03:00

The economic crisis harshly hit the world so dramatically that even the most developed economies have been busted. Business environment has no exception... Big global companies went bankrupt, thousands of people's contracts have been terminated. But the recovery is near; the expectations point out the second half of 2010 according to PWC 13th Global CEO Survey.

It is very normal that, during the economic crisis times cash becomes the king, the primary driver of survival. Companies are heavily relying on internally generated cash flows for long-term success and growth.

On the other hand, I believe that cash will remain upon human capital's throne in the short-run. Once the economic recovery takes place and when it becomes easier to access cash, people assets will stick out in importance.

Why?

Today the world is aging, working population decreases sharply, skill shortage hit the business environment and damages the sustainable success.

In such context, how long will the cash continue to be the King? Without good people to manage it, what can cash do on its own to sustain long-term growth?

Cash is important, that is undeniable... But people's impact is much more drastic.

Here are some global figures...

Population aged 60 years and over is projected to be 2 billion in 2050, compared to 737 million in 2009; three times greater than today... And the percentage in total will population will double; from 11% to 22%.

In 2050, for the first time 60 years and older population will exceed 15 years and below age group by 8%.

According to Manpower survey 0f 39.000 employers across 33 countries; in 2009, 30% are having difficulty filling positions due to lack of suitable people available in their markets. Isn't that surprising when taking into consideration high unemployment rates? It seems that while more people were looking for jobs, they don't generally possess the necessary skills that organizations look for.

That is why learning and development investments positioned in the second place of CEO agenda although "initiatives to realize cost efficiencies" is number one. Development is considered as vital for long-term growth, indicates PWC 13th Global CEO Survey. Of the 1.198 top executives, 68% stated an increase in their development investments for the next three years.

Cash, liquidity, low debt ratios are critical nowadays. But Organizations need to carefully analyze the workforce demographics in the markets where they operate. Good people will be the only king once the recovery ends.

HC Strategy is on Facebook

2010-05-29T22:35:00.002+03:00

Dear followers,

I have created a more interactive platform on Facebook in order to share our ideas and discuss on specific HR topics.

The first one will be on HR Metrics. If you would like to add some comments just follow the link below.

http://www.facebook.com/topic.php?topic=64&uid=127725473920489

Kind regards

Emre Kavukcuoglu

Changing HR Perception

2010-03-02T22:18:00.008+02:00

"Perception is the process of attaining awareness or understanding sensory information."

Wikipedia

HR plays a key role in today's global business environment where people and performance are the critical drivers of long-term growth and sustainability. In order to fulfill the requirements of this role, HR professionals, systems, processes, applications should be understood by the immediate customers, in short, line managers.

Being a business partner or a strategic partner of executive board depend to a great extent the awareness created within the Organization and to the level of acceptance of HR solutions provided against the business needs.

In order to understand the HR perception, several studies are conducted and the results are explained and reported. You can find plenty of documents on this topic.

In this article, I would like to share with you two of these surveys, conducted in different periods of time and in different locations.

First one is by Jac Fitz-Enz, a study which is based on responses of 500 HR managers reveals line management images of the HR function. Table below summarizes the thoughts of line managers; the study dated back to 1990.

Keep in mind these, let's move to 2009, another online survey that Boston Consulting Group showing the reaction of HR and non-HR executives to several statements about the work of the Organization's own HR department:

From 1990 to 2009; I guess the perception is not so dramatically changed in favor of HR; unfortunately. Let's think of these statements and try to figure out a roadmap for ourselves in order to change our perception within our own Organizations.

What Line Managers Want?

Results for their requests: HR should come up with useful solutions, ideas, systems and processes in order to solve other functions' problems. HR people are the organizational facilitators. First, understand the problem and make other side 100% sure that you do understand the problem. Second, present more than one option rather than dictating only one and make the line manager pick up suitable for him/her by explaining the pros and cons.
Quick responses to the request: Once a request has dropped into your mailbox, you have to quickly allocate your resources for solving the problem. Because time is money and money is the king in those days.
HR people should be competent and understand the operational functions: I think this is the fundamental problem, that HR people perceived as "daydreamers" that they are not interested in the core business. It is critical to HR, and relevant lessons should be taken from these statements. We have to know what we are doing and why we are doing in an Organization. The things we do, should be in line with the direction of the business in which our Organizations operate.
To be cost effective: In today's crisis, cost minimization and efficiency are the most popular words in every CEO's statement. HR is no exception. In order not to be seen as "cost center" HR department solutions should be cost effective but with a high ROI. In this case, cost center image will return to "profit center".
Should have a vision, strategy and targets to achieve: Organizations are managed towards business strategies aligned with a vision. These strategies are supported with key performance indicators and targets. The same is valid for HR. HR Department should define the strategic intent by determining HR strategies, action plans and targets. Alignment is critical to the success of HR efforts.

Sources:

- 2009, BCG Creating People Advantage

- Human Value Management, Jac Fitz-Enz, 1990

HRM-Firm Performance Relationship

2009-12-22T21:46:00.005+02:00

Measurement is a vital part of an effective HR System that links HR activities with organizational performance. It is essential to determine success and sustainability of performance.

There is an ongoing debate on the topic of relationship between HR Management and firm performance. The question is: "Do HR practices/systems/applications make a difference in business results?" and "How do they effect?"

These critical two questions were profoundly researched by academics and results are obvious: Yes, HR Management and systems have significant impact in business results and add value to the overall business objectives if properly executed. My intent on this article is to show evidence from different research and from published materials.

Extended Assessments on HR-Business Results

Most of the empirical evidence on the effect of HR Systems to the business results, are found in 1990s. The interest in quantifying the impact of HR practices on financial performance became a hot topic in academic environment.

Turnover for example has been linked to job security, presence of a union, compensation level, culture and demographics (Arnold&Feldman, 1982; Baysinger&Mobley,1983). Productivity has been linked to HR practices, quality of work life programs, quality circles, training, extensive recruiting efforts, and incentive compensation systems (Cutcher-Gershenfeld,1991; Katz,Kochan,&Keefe, 1987; Weitzman&Kruse,1990). Investmens in various HR practices have been linked to firm financial performance, such as: training (Russell,Terborg&Powers,1985), selection and staffing (Terpstra&Rozell, 1993), appraisals (Borman 1991), and compensation (Gerhart&Milkovich, 1992).

However, these attempts to estimate the relationship between a firm's HRM system and its performance remains quite limited.

Huselid Studies on HR-Firm Relationship

A comprehensive study of the relationship between HR practices and firm performance was undertaken by Mark Huselid. His results are based on national surveys of organizational HRM practices conducted in 1992 covering the HRM system used by each firm in the preceeding calendar year. Data were ultimately collected on 968 firms each with more than 100 employees and publicly traded firms.

Huselid examined the impact of higher work performance practices (HPWS) which he describes as "rigorous recruitment and selection procedures, performance incentive compensation systems, management development and training activities linked to the need of business, and significant commitment to employee involvement" on three organizational performance measures employee turnover, productivity and financial results. For turnover, he found that a one standard-deviation increase in each HR practice reduced turnover by 7.05% on a per employee basis. For productivity each one standard-deviation increase raises sales an average of $27.044 per employee representing nearly 16% of the mean sales per employee. For financial performance; in terms of market value, the per employee effect of increasing HR practices one standard-deviation is $18.641 and a $3.814 increase in profits.

Another series of research were conducted by Huselid and Becker based again on national surveys in 1994 and 1996 with approximately 4.000 firms each year. Results are similar: In 1994 survey, a one standard-deviation in HPWS index was associated with a 11-13% change in market value per employee. Another interesting finding was a one standard-deviation in a firm's managerial compensation index is predicted to increase the firm's market value by 19% and cash flow by 27%. In 1996 survey, other things equal, firms with a one standard-deviation higher value on the HPWS measure have 24% higher market value of shareholder equity and 25% higher accounting profits.

Huselid and Becker analyzed in another study the impact of HPWS, implementation effectiveness and alignment with strategy on shareholder wealth. The study drawed on data collected in 1996 consisted of all publicly held domestic firms in US with more than 100 employee and $5m in sales and comprised 3.840 firms. A one standard-deviation change in the HR System and Effectiveness and Alignment indices is associated with a 21% and 23% change in shareholder value respectively.

Schuler&Jackson Study on HR-Firm Relationship

Susan Jackson and Randall Schuler studied on the impact of HR manager's capabilities on HR management effectiveness and the latter's impact on corporate financial performance of 293 U.S firms in 1992.

According to the research findings;

respondents described their firm's technical HRM activities are more effective than their firm's strategic HRM activities.

technical and strategic HRM effectiveness will be positively associated with firm performance.

respondents described the professional HRM capabilities of their firms' HRM staff members as greater than their business related capabilities.

on a per employee basis, a one standard-deviation increase in HRM effectiveness corresponds to an estimated increase in sales per employee of 5.2% valued at $44.380.

the impact of a one standard-deviation increase in HRM effectiveness on profits yielded an estimated increase in cash flow of 16.3% valued at $9.673 per employee.

a one standard-deviation increase in HRM effectiveness yielded an estimated increase in market value of 6% valued at $8.882 per employee.

Jack Phillips Study on HR-Firm Relationship

Phillips study aims to show empirical evidence for the relationship between the investment in the HR function and organizational effectiveness. The success of HR effort is judged in part by six measures: HR expenses, compensation expenses, benefit expenses, training and development expenses, absence rate and turnover rate. And, four measures of organizational effectiveness were also selected for the study: revenue productivity, asset utilization, operating income and return on equity.

Two basic approaches used in the study: costs and investment. HR elements that represent excessive costs serve to reduce organizational effectiveness by increasing costs and/or decreasing output. Investment approach is additional funds allocated to the HR function represent an investment in human capital that pays off with increased output and/or reduction in costs.

Results of the survey shows significant correlations exist between the measures of HR performance and measures of organizational effectiveness.

Revenue correlates with the investment in human resources as measured by total HR investment divided by operating expenses.

Revenue has a significant negative correlation with compensation and benefit expenses.

There is a significant positive correlation between revenue and training and development expenses.

A significant negative correlation between turnover and revenue.

Income divided by the employee cost correlates significantly with HR expenses, compensation and benefit expenses, absence rate and turnover.

Conclusion

Evidence is clear; HR Systems, practices add value to the overall business outcome significantly if and only if these are well executed and managed. In this era, HR professionals should excel on quantifying the HR efforts and come to Board table with hard data.

As marketing, finance, and other functional areas engage in dialogue using data and evidence, HR professionals can and should be able to talk explicitly about how they add value to business results. HR people have a need to measure their impact, to create tools to quantify it and to show their actions that link work with business results.

Four Forces That Shape HR Strategy

2009-12-12T15:15:00.015+02:00

Global environment is evolutionary changing at a revolutionary speed. In every aspect of our lives dramatic transformations continue. World continues to deal with the most profound changes that anyone can imagine.

Business conditions have no exception. In today's world where adapting to change is a must, the rules of the game have been re-written. Constant change is the only constant in business. Business competition now comes in many different forms and from a great variety of competitors and the challenges are increasing.

Successfully positioning the enterprise, properly deciding on the correct allocation, attrition and retention of resources (both human and nonhuman) and deciding what an acceptable level of performance might be in such a competitive environment are key tasks of senior management.

In short, gaining an advantage over competitors is harder than ever. Global business environment is getting smaller, resources are shrinking. Organizations must carefully analyze their capabilities, assess their resources and execute the best they can. To be specialized on what is done rather than diversified is important.

Competitiveness depends on the productivity with which an Organization uses its human, capital and natural resources. However, dramatic changes in business context shattered the conventional sources for sustainable long-term growth and competitive advantage such as cash, equipment, land... In this new business era, people have emerged as a new source of sustainable competitive advantage as the demand for skilled people is rising, at the same time the supply for this critical resource is going down.

Organizations worldwide are discovering that acquiring the right talent in the right place in the right time is more critical than ever before. Business competition has put people management in the first place as a priority.

Global facts shape the business strategy and the every single function’s strategy. HR is no exception. I will be trying to explore these global forces and try to give a profound insight.

Four Global Challenges

I think that global challenges that influence HR Strategy can be grouped under 4 critical headings;

Globalization
Technological Innovation
Talent Management
Demographics Management

Understanding these challenging forces, and their underlying consequences reveals the long-term success of Organizations while providing a framework for defining business and functional strategies.

Globalization

Since 1950s globalization triggered by trade, direct investments and communication revolution, has grown up by 20 folds. The world has become one marketplace and any company can invade practically any market. Countries got connected to each other. Globalization has changed the way we live, the way we do business.

Look at the current financial crisis... It has had a massive impact on economies, industries and companies around the world. Imports into the advanced economies in 2009 slumped 14.4% from 2008 levels according to Goldman Sach’s Global Economic Analyst, while consumer expenditures will fall 0.9%. According to PWC analysis, the crisis rapidly spread to all the major emerging economies, in different ways. Declining consumer demand in U.S and in Europe, stalled export-led growth in Asia and Latin America (sharp declines in exports from China by 13% and from Brazil by 12.7%). India was hit by the drop in demand for outsourcing services and the decrease in overseas lending.

A problem that started in the U.S has now infected all the major economies in the world, emerging and advanced alike. The Economist summed up the situation as follows: “The idea that emerging economies had decoupled, and would continue to boom even as the economies of America and other rich countries grapple with recession, has been exposed as fanciful”.

As a result, the IMF expressed fears that this period might be the worst for the industrialized economies since World War II.

The issue of globalization adds particularly to the challenge of organizational management. CEOs are now working hard to maintain sources of credit, preserve revenue, use working capital more efficiently and manage costs carefully in order to survive in the short-term. Productivity, efficiency and developing product and services with the lowest possible cost is vital.

On the other hand, as businesses try to survive immediate market conditions, they are also trying to make certain that they endure and succeed over the long term. Agility, customer service, talent and reputation remain at the top of the list of critical sources of competitive advantage.

As more companies move aggressively beyond their borders into world markets, the importance of collaborative business networks increases. Strategic alliances and joint ventures stick out for short-term survival and long-term success. This will bring up the necessity of cross cultural awareness and the ability to cooperate, interact with different cultures. Change in corporate culture is inevitable.

Although the global economy was hit by serious economic crisis, globalization will continue. The economy will continue to be driven by cross-border flow of information, people and capital. Organizations will re-shape their business strategies. HR departments will be a key partner and contributor during this period.

Technological Innovation

Technological innovations are allowing and forcing organization to restructure their operations, processes and even cultures. Once employees grasp the capabilities that electronics brings to communications and data manipulation, they find themselves empowered as never before.

Developments in information technologies and in communication technology affected the impact of the globalization and has become one of the key drivers of sustainable competitive advantage.

That’s why 83% of the CEOs stated technology as the critical source of the long-term sustainable growth in PWC Survey. Technology usage means increase in productivity and in effectiveness of the operations and of the services provided.

Same as globalization, technological innovation has changed the way we do business. Communication technology, driven by the internet madness and mobile technologies, push Organizations to be more web based rather than paper based. Workflows are changing accordingly and jobs are redesigning.

Let’s look at the internet usage around the world. Today, there are around 1.8 billion internet users online. This is almost 26% of the word population.

People are better connected and mobile more than ever. It has been estimated that today there are 4.6 billion cell phones and 1 billion personal computers.

Information is easily reachable from anywere around the world. Network groups such as Facebook, Twitter has developed information sharing platforms. Any mistake, or a defect in a product or any dissatisfaction from a service or any gossip about an Organization, can spread from one to another in a second causing a huge damage in brand reputation.

Every single part of the Organization, should adapt themselves according to the technological advancements. There is an increasing necessity for planning, designing processes, work flows and applications according to technological ability of the Organization.

Once again, HR is no exception on that... What can be done?

Talent Management

“As companies continue to operate in more and more complex environments, it is the quality of talent that they have that makes the difference” says Bimal Rath, the regional head of HR for Nokia for Asia-Pacific region.

In today’s globalized economy, talent is key driver that can help company reach its strategic objectives and realizes business strategies. According to PWC Survey, 97% of CEOs believe that the access to and retention of key talent is critical or important to sustaining growth over the long-term. Most (72%) rated critical and a similar number say that a limited supply of candidates with the right skills is a key challenge.

Organizations need to actively manage how they attract, nurture talent and they need to do it both globally and locally. Consider the followings;

• IBM expects to more than double its Indian operations by 2010, adding more
than 50.000 employees

• L.G Phillips is investing $1.1 billion in Poland and filling 12.000 jobs there

• Deloitte Touche Tohmatsu plans to double its staff and triple revenue in
China by 2009

• Cisco Systems plans to move 20% of its leaders to India by 2010.

These moves highlight the need for Organizations to understand the dramatically different environment in which they now operate. So; the new order dictates;

• Global demand for talent is growing more intense

• Supply of Western talent is shrinking

• Although rapidly developing economies have supplies of talent,
the challenges of operating in those markets are numerous and complex.

Remember, best results and best performance is achieved via talented, qualified people. And Organizations need to align their talent strategies with business strategies. But, alignment itself is not the only solution. The ability of designing processes, applications which will support this alignment is critical to the success of the talent strategy. HR has the key role and responsibility. What can be done?

Demographics Management

Aging workforce is a global issue, especially for the Western world. It creates two major risks for companies: the loss of capacity and the loss of knowledge. The ability of integrating younger employees into the Organization culture in a fast and effective way and to create a balanced working environment with older ones, is vital for the success of the company. Managing workforce flexibility is essential.

This brings an obligatory agenda into the CEOs desk: Managing workforce effectively and strategically planning the workforce needs.

As I said the integration of young employees is key. The better they integrate the lower the capacity decline and experience loss. CEOs are particulary concerned about managing younger employees. 61% of them experience difficulty recruiting and integrating younger employees.

However, demographics management is not only constituted of integration of youth. Also, having a clear understanding of employee expectations, needs and views critical for the success of a CEO. Most of the CEOs believe that information about the employees is critical to competitive advantage, but only 30% believe that they have a comprehensive understanding on that matter.

HR is the bridge between employees and senior management. It is the only function that can bring up the needs of the workforce into the table and create a platform where to discuss.

On the other hand, it should also bring the action plan propositions on how to deal with the demographics management and to strategically plan the workforce not only for one year but for the forthcoming 5 years. The question is: What can be done in order to fulfill this role?

Conclusion

The aim of this article was to identify and analyze the global forces or challenges which I believe significant impact on HR Strategy.

In a global business environment, these forces are interdependent to each other. Most of the Organizations are dealing with similar problems.

What will bring the competitive advantage is finding unique ways to deal with these and adding value to the overall business success. HR has this potential and HR systems are critical solutions of these challenges.

The important thing is to set HR Strategies by taking into consideration these four global challenges. My next article, “Aligning HR Strategy With Four Global Challenges” will be profoundly analyzing the issue.

Sources Used:
1. Human Value Management, Jac Fitz-Enz, 1990
2. PWC. 12th CEO Survey, December 2008
3. BCG, Creating People Advantage Through 2015
4. BCG, Align Talent for Global Advantage

Understanding HR's Value

2009-10-17T11:55:00.001+03:00

by Richard Beatty

An HR professor writes about putting the R back in HR: How HR can better sell its ideas by impacting the firm's value-creating capabilities.

There is an evolution coming occurring within HR often referred to as "HR Transformation". Many firms are looking at where they are and have been as they attempt to transform HR's back office to become more administratively efficient. At the same time, some HR functions are more focused upon the future and how they can impact the strategic success of the business. To their credit, some are doing both. The later is more critical to a firm's survival in a world where firms compete with "brainware warfare" to create economic value. Neither firms, nor HR can save their way to prosperity. The firms that have the right strategy, have identified the right work, have the right workforce and the right workforce practices have a substantial chance to out-compete others in the emerging market spaces no matter how much more efficient HR may become.

To be successful in this new environment, HR needs to focus on redefining the "to" part of the from/to transformation paradigm. HR must increase focus on how HR and line managers best utilize the workforce to impact the creation of customer and economic value. For HR to fulfill its promise of becoming strategic, it must significantly influence how the workforce impacts the scorecard of the business and enable "HR to score on the business scorecard."

In many respects the "to" is the "above the line" segments of Dave Ulrich's famous HR Champions (Harvard Business School Press, 1996) mandate, where HR is to to impact strategy execution and change management. This is not to say that administrative efficiency and employee advocacy are not required-they- are-yet changing in ways that often reduce investments in these activities as HR realizes its strategic leverage (and respect as a profession) lies more in enabling the firm to better utilize the workforce as a resource to execute the firm's strategy.

To set the stage for putting the R back in HR managing the workforce as a strategic organizational resource, we need to briefly review how firms will need to manage their resources even more differentially in the future. Effective firms determine a strategy and then decide how to execute that strategy. Strategy execution involves the differential allocation, management, measurement, and decision making with the firm's resources. Each resource is to be leveraged to the firms' best advantage and systems built to assure accountability of each resource.

Examples of such systems include budgets for the use of financial resources, supply chain management for material resources, and schedules for time. Managers and the respective functions which house these activities are held accountable for leveraging these resources to create and extend the firm's competitive advantages, as well as provide consequences to managers for the effective (or ineffective) use of these resources. But what is the accountability system for the resource we call human resources - our function and profession? We must be held accountable for workforce utilization and develop systems to do so if we are to become the profession with the impact we desire. In doing so, selling our ideas will become much easier, but we must first upscale our capabilities in business strategy (i.e., value creation) and data analytics to put the R back in Human Resources. This is what we have attempted to do in our book The Differentiated Workforce (Becker, Huselid and Beatty, HBS Press, 2009).

HR has long wanted to be a strategic partner, or better yet, a strategic player. This requires knowing what strategic means and understanding how to impact the only scorecard that matters. The word strategic is often carelessly used in organizations but really concerns how firms create value. Customer value first by providing offerings to society wants and is willing to pay for. Second, firms must be sustained by creating wealth to pay their employees, invest in growth initiatives and satisfy investors. Thus the organization must perform in an economically efficient way and use every resource as effectively as possible.

Strategy means focusing on the outside. Internal is tactics, external is strategic and firms must ask (and answer) these basic strategic questions:

a) How will we grow the business?

b) In what markets will we play?

c) How will we win in those markets?

Strategic alignment is when firms identify how they intend to differentiate themselves by differentially investing in capabilities that will enable them to win a disproportionate share of the marketplace in which they have chosen to compete.

Organizations are systems perfectly designed to deliver what they are delivering now. If you want different outcomes, you have to do different. Data analytics helps firms to do that. The only real data worth collecting in organizations is data that is interventional. That is, data that can be used to identify issues, when addressed, will have a profound impact upon the strategic success of the firm. Most data in HR seems to be reporting data which is after the fact and not used to intervene and achieve more desirable outcomes. But asking and providing answers to questions such as...

a) "What is the strategic mindset of our firm?"

b) "To what extent do we have strategic talent in those roles that make a difference?"

c) "To what extent are we holding line leaders accountable for the management of strategic talent?"

... provide critical information that can be used to intervene and achieve more desirable Firm outcomes. The concept is simple, the delivery is difficult. But, those that collect and act on strategic workforce data will win, those who don't may not.

Firms are beginning to understand that talent significantly impacts a firm's value creating processes with customers. That is, identifying the roles that really make a difference and how well talented our firm in those roles is essential. In the future, the emerging role of Chief Talent Officer will focus more and more upon determining the extent the firm has top talent, emerging talent, career-level talent or talent that does not fit those roles. The actions taken based on a rigorous analysis of such data will have a profound impact on the creation of customer value and subsequently economic value.

This moves HR into a new area of data analytics. Google and IBM have teams focusing on HR data analytics (see Steven Baker's Numerati), knowing and understanding what workforce is necessary to create customer value and doing so in an economically efficient way. Data analytics will be absolutely essential for HR's future. HR must be able to win arguments with numbers. After all, the language of organization is numbers and we have not necessarily used numbers effectively in the past.

Finally, HR must sell ideas. The best way to sell ideas, especially with an executive team, is to sell ideas that impact value creation and impact the scorecard that the executive team cares about. Knowing and understanding the strategy of the business, the work required, the workforce necessary and the HR practices which leverage the firm's competitive advantage is the path to HR's impact on the firm's success and the respect we seek. Regrettably, many HR professionals believe they are effective in the strategic understanding and data analytics described above, but I believe we must move to a much higher level of sophistication in strategic thinking and data analytics if we are to have the impact and gain respect.

For many HR leaders, this may be a difficult challenge because it means differentiating as never before. Differentiating around talent has a profound impact upon the value created by the firm. Without which the organization will underperform at a minimum and/or run the risk of extinction. This does not mean that you take away the support from other roles in the organizations that do not impact the firm's strategic success. It merely raises a question, "what are we going to do different for the workforce that makes the difference in firm's strategic success?" Otherwise, we may never be able to attract and retain the strategic talent (in increasingly competitive labor markets) that has the primary impact on our firm's ability to create value.

This is a perpetual challenge. Markets have changed, strategy has changed, and organizations must change. It will require a far more focused and flexible workforce for organizations to succeed in the future. Without such, it is very difficult to sustain an enterprise. Thus HR must be at the top of its game - not only understanding strategy but contributing to the creating of strategic value. If HR leaders can manage the workforce as a value-creating resource, not only will they be successful, but also (and more importantly) , their firms will be successful and sustainable. What a beautiful challenge, what a great opportunity. HR can become the profession that can do this, but it will require us to challenge ourselves to think differently, but most importantly to do differently.

Measuring Employee Value Added

2009-09-23T21:33:00.026+03:00

The world is involved in a global crisis and executives are trying to manage Organizations through the downturn without destroying its long-term success. Many of the giant corporations, most of which were subjects to many case analysis, are cutting costs frequently through lay-offs. Some companies need vitally reducing their headcount, but some others are just following the others expecting that they can rehire once the economy improves; what a pity...

We live in a world where yesterday is a distant memory and tomorrow is an uncertain dream. The only reality is now. However it is easy to understand that the talented, qualified workforce will be the scarcest resource in less than ten years for Organizations. All survey results point out this reality which can be foreseen from today. The important question is: Are Organizations ready for this challenge? Are they really aware of that? How did they reduce the size of the workforce? Are talented people downsized just to reduce costs? What role did HR department play? These are critical in order to address people issues and to establish people strategy in an Organization and should be addressed especially when the global economy recovers.

Today, the HR function sits at a pivotal place. It is the link between a company's long-term strategy and its human capital strategy. HR professionals should be able to understand how their company's overall business strategy drives the demand for people and how short term reductions in the workforce might threaten the achievement of long-term success. Although this should be the case, only 15% of the companies-covered by the survey conducted by BCG covering responses of 3.348 executives throughout the Europe, strategically plan their workforce more than three years in advance.

Rummler and Brache draw on their experience in process improvement to state "we believe that measurement is the pivotal performance management and improvement tool and such deserves special treatment". They go on to point out that without measurement we cannot:

Communicate specific performance expectations.

Know what is going on inside the Organization.

Identify performance gaps that should be analyzed and eliminated.

Provide feedback comparing performance to standard or a benchmark.

Recognize performance that should be rewarded.

Support decisions regarding resource allocation, projections and schedules.

In short, if we don't know how to measure our primary value producing asset, our human capital, we can't manage it.

According to Boston Consulting Group 2009 Creating People Advantage Survey, at most companies the links between HR and strategy and those between HR and metrics are broken or nonexistent. Measuring the performance of people and the HR department is a key issue. Few companies track the quality of the HR processes. In the same survey one of the top seven HR topics stated by HR executives is to measure employee performance; determining how to measure the value of each employee in order to create a more efficient and more productive workforce. I would like to add that, on the 2008 survey, the item was on the medium need to act zone. There is an increasing trend and interest on the subject.

That is why I have chosen this topic on this article.

How to Show Employee Impact on Value Added?

First of all, I would like to differentiate productivity and value added performance metrics as HR executives are confusing these two from time to time. Added value metrics are those that measure the relationship between profit from operations in relation to human capital employment cost. However productivity metrics look at the relationship of employment cost against net sales and total costs separately.

My focus will be the value added metrics and productivity will be a separate topic on my forthcoming article which will be published on October 2009.

There are 3 main value added performance metrics that are explained in the literature and used by consultants. I will be trying to explain these from my point of view and will show both the theoretical and the practical calculations by using examples.

Human Economic Value Added (HEVA)

Economic value added (EVA) is a financial performance method to calculate the true economic profit of an Organization. It is an estimate of the amount by which earnings exceed or fall short of the required minimum rate of return for shareholders at comparable risk. In short, it shows how much true profit is left not only after paying all expenses, including taxes, but also after subtracting the cost of invested capital. It is defined as net operating profit after tax minus the cost of capital.

EVA can be given a human capital perspective by dividing it by the average headcount within the calculation period. So the formula can be re-stated as: HEVA = ( Net Operating Profit After Tax - Cost of Capital ) / Average Headcount. Another simple method described by PWC Saratoga Institute, naming HEVA as Wealth Created per Employee, HEVA= ( NOPAT - 10% Shareholder's Equity ) / Average Headcount.

Both calculations are correct. However, I think that with this method of calculation, EVA may not be a true benchmark metric simply because of the use of net operating profit after taxes. For example, NOPAT is after depreciation, amortization and financial expenses. For those companies running in countries where fx losses are higher than any other country in the world, NOPAT will be significantly lower in comparison with developed countries. Or, companies that do not reinvest capital to maintain its plant or equipment can improve its depreciation line and will have a positive effect on EVA.

What I suggest is to use profit from operations namely operating profit in calculating value added performance metrics. I believe that it will be a true benchmark not only within the same industry but also between different sectors. Foreign exchange losses or interest losses are constraints that Organization management may have the least impact on and is highly dependent on external economic conditions. So do corporate tax rates. Management should find ways to add value in managing working capital.

Accordingly the formula will be; HEVA = ( Operating Profit - 10%Shareholder Equity ) / Average Headcount

With the help of this simple calculation you will be able to show how much wealth is in reality being created by the employees, including an allowance for shareholder dividends are taken into account. Let's take for an example XYZ Company financial data ( I will be using the same data for other metric calculations).

HEVA = ( $45.000.000 - 10% X $70.000.000 ) / 3.100 = $12.258 wealth per head created within the period of time. Data will be meaningful if and only if benchmarked with external data and trend is followed throughout the years.

Human Capital Value Added (HCVA)

Value Added is the difference between the cost of materials and labor to produce a product, and the sale price of a product. HCVA generates an adjusted profitability figure by each employee in the Organization.

PWC Saratoga Institut suggests to calculate HCVA by subtracting all corporate expenses except for pay and benefits from Revenue and divide the adjusted profit by the average headcount. HCVA = Revenue - (Total Costs - Employment Cost ) / Average Headcount. As total cost item is not mentioned in none of the financial statements, it is defined as the difference between the Revenue and Profit Before Taxes.

As I explained earlier, to me profit before tax figure is not a correct benchmark item as foreign exchange losses are included on it. The benchmark may be reasonable in developed countries where devaluation do not exist. Instead, I propose to calculate total cost as the difference between the Revenue and the Operating Profit. The formula then will be; HCVA = [ Revenue - ( Revenue - Operating Profit - Employment Cost ) ] / Average Headcount. And for simplifying the calculation; HCVA = ( Operating Profit + Employment Cost ) / Average Headcount.

Applying the formula to XYZ Company; HCVA = ( $45.000.000 + $55.000.000 ) / 3.100 = $32.258.

Human Capital ROI (HCROI)

Another relationship of human capital investments to profitability can be made visible through a ratio that follows from the formula for HCVA. HCROI looks at the ROI in terms of profit for monies spent on human capital employment costs. It drives human capital practitioners to the conclusion that they can have as direct an impact upon revenue and non-people related costs as any other business partner. HCROI represents the leverage of human capital employment cost within an Organization.

HCROI = ( Operating Profit + Employment Cost ) / Employment Cost

XYZ Company has a HCROI of = ( $45.000.000 + $55.000.000 ) / $55.000.000 = $1.81

In XYZ, every dollar invested in human capital employment gave a return of $1.81.

Conclusion

In this turbulent times of global economy, the recovery will last longer than it is expected. Effective organization management, productivity, efficiency, performance have critical importance, so do talent. HR has a critical role in these times. Showing the employee performance, added value per each employee are important more than ever. HR should excel on measurement and increase the ability of creating many other performance related metrics and to come up with external benchmark data. That is how HR will be treated as strategic business partner and add value to sustainable competitive advantage.

Sources Used:

1- The ROI of Human Capital - Jac Fitz-Enz

2- http://www.valuebasedmanagement.net/methods_eva.html

3- Creating People Advantage,2009 Survey - Boston Consulting Group

Talent Myth Management

2009-09-22T21:26:00.001+03:00

by Anna Orgera and Loree Griffith

As the economic downturn continues, one thing seems clear to employers and employees: Uncertainty is the new reality. What began with a financial crisis in the United States has echoed worldwide as weakening global demand lowers economic growth rates and slumping confidence among consumers and producers drives cuts into spending. There is an urgent need for action, but governmental policy solutions will take time. If organizations are to thrive, not merely survive, until things improve, they need to embrace change now.

In this difficult climate, talent leaders are struggling with significant talent management and reward system challenges. Understandably, there is a tendency to be reactive when embracing a number of myths related to retention, compensation levels, performance management and reward systems. But reactivity may undermine long-term workforce effectiveness.

The Myths

Retention myth: Don't worry about retention. No one is going anywhere.

Retention reality: Retention challenges have given way to engagement challenges. Important questions to address are: How do we foster employee focus and performance in a climate of fear and uncertainty? And, how do we treat employees now to ensure we retain our higher performers when times get better?

Career pathing is one key to employee engagement because it fosters workforce focus on performance, development and the future. It incorporates strategies to develop connections between jobs as a means to achieve advancement, higher pay, benefits and enhanced skills.

Pay reduction myth: The key is to reduce pay levels now. Cut across the board and worry about competitiveness later.

Pay reduction reality: While it may be necessary to reduce compensation costs, it's important to be clear and transparent about the rationale behind actions taken. The key to retaining employees in the long run is to demonstrate the logic and wisdom behind certain actions.

Performance and rewards myth: Don't worry about whether salary increases or incentive programs work well. Not much will be paid out anyway. The current performance management system is good enough to differentiate pay-for-performance given current limited pay dollars.

Performance and rewards reality: Having effective pay-for-performance programs is critical in a time of limited resources to ensure any salary increases and incentives are distributed appropriately, with an emphasis on top performers and key workforce segments.

Market compensation data myth: Market data is unnecessary this year given pay cutbacks.

Market compensation data reality: It's important to understand what's happening in the market to ensure talent managers can control costs. They need to avoid falling too far behind market, particularly when it comes to high performers, who always will be in demand.

Practical Advice

More than anything, organizations need to find the right direction based on their business and talent imperatives. They need to create the right talent and rewards strategy and design the right management solutions for that strategy. This demands an understanding of the competitive environment and of the organization's internal labor market - its skills and capabilities - so talent leaders can create and implement solutions - from competencies to staffing, succession planning, performance management and rewards - that will drive business results.

Knowing who the workforce must be, what it must do and how to engage it will drive strategic direction. It's a matter of knowing the specific competencies required for mission-critical roles. Further, what changes are needed in organization structure? How is bench strength? Does it need building to fill critical talent gaps? What specific reward and recognition programs are best suited for critical talent segments?

Some guiding principles for success include creating and managing unique workforce segments aligned with the critical realities of the business; knowing high potentials and high performers; and allocating rewards and designing employment value propositions for them. Assess the short- and long-term risks of specific plans and programs to business and workforce performance. And engage the workforce through transparent, rational decisions while creating understanding and acceptance. Specifically:

Enable career paths to provide development opportunities, especially when monetary rewards are limited. Career paths are critical during an economic downturn because they help organizations focus employees on the performance requirements for today and tomorrow. Effective career paths provide clarity to employees around career choices they can make, skills they need to have and responsibilities they need to execute. Key components to address include:

a) A summary of the knowledge and skill requirements of key roles, such as people managers, professionals and professional support.

b) The level and type of impact required of each role.

c) Knowledge, skill, and behavioral and technical competencies required for roles on a generic basis. That is, applicable across people manager, professional, and professional support roles across all job families.

d) Knowledge, skill, and behavioral and technical competencies required for roles on a job-family basis - specific to job families such as marketing, sales, IT or finance.

Tune up the performance management process. In the past few years, firms have been revitalizing performance management to aid identification and differentiation of top talent. Mercer's research shows success drivers for firms most successful at performance management include:

a) Executive commitment to the process.

b) Use of calibration or cross-business meetings to level the playing field in how ratings are assigned and to aid differentiation.

c) Well-trained managers who provide fair evaluations, honest employee feedback and effective career development coaching.

d) Use of technology to enhance processes and analytics.

Be sure to review each element of the performance management process, such as performance planning, including ensuring goals are aligned at the organization, team and individual levels; interim and year-end performance information at the business level; interim performance feedback at the individual level; year-end performance evaluation including a review and assessment of the employee's performance versus goals, performance standards and competencies; and linkage of performance evaluation results with career progression, salary increase and incentive decisions.

Don't ignore market compensation survey data. Be sure to continue participation in market compensation surveys, particularly to cover executive jobs, hot jobs, those that are either in demand in the marketplace or are critical to the organization's competitive advantage, and those held by higher performers, as well as key workforce segments in key geographies.

Review reward program design and delivery to strategically allocate reward spend. It is critical to ensure practices and plans are effective to enable the organization to pay fairly for performance and concentrate limited dollars on high performers. Areas to address include:

1. Segmentation.

When an organization doesn't have a large reward budget, it is important to figure out how to segment the workforce - or where to place your bets - based on factors such as business life cycle, geography, business unit or brand impact. Segmentation allows an organization to identify where to provide premium, standard or discounted reward arrangements, depending on whether the focus is attraction, retention or a combination.

2. Salary increases.

Ensure they are aligned with performance. Consider how a proposed new salary level will compare to market to facilitate competitiveness and cost control.

3. Short-term incentives.

Now, more than ever, it may be the right time to introduce more structure into incentive plans, particularly if discretion currently prevails. Ensure incentive opportunities are competitive, provide for the desired degree of risk-reward leverage and align with performance results at the organization, team and individual levels, as appropriate.

4. Holistic rewards.

Emphasize rewards as something more than pay and benefits. Include careers and other intrinsic work factors such as culture, leadership and work-life balance.

Develop and implement an employee communication plan to quell fears, minimize distractions and increase productivity. Having clear, complete and honest communications is particularly important when employees are frightened. Talent managers may not always have good news for the workforce. But it's better to be honest about what's happening than to leave it up to their imaginations, because they will imagine the worst.

Whether curtailing costs or making strategic talent investments, have the right information readily available via development of human capital dashboards. These Web or desktop solutions combine multiple sources of financial and HR data from diverse corporate systems, surveys and external benchmarks into a single view to support human capital decision making and deliver the right information to the right people. Human capital dashboards can help track, measure and monitor internal and external workforce trends and reward program effectiveness.

Consider developing a human capital dashboard to enhance talent leaders' ability to answer questions such as: How effective are sourcing and recruiting efforts? Are retention programs having the desired impact? How well are we compensating high performers versus market?

Without question, these are challenging times for organizations and talent leaders. It's vital to avoid becoming a true believer in the myths of retention, performance and pay program effectiveness. Instead, take a critical look at practices and programs to manage through this economic downturn and position your organization for success - not merely survival - in the better days ahead.

[About the Authors: Anna Orgera and Loree Griffith are principals in Mercer's human capital business in New York.]

Strategies for Retaining Top Talent

2009-09-22T21:21:00.001+03:00

by Mark A.Royal

While many organizations proclaim that people are their most important asset, a good many fail to act as though they really believe it. But that doesn't make it any less true that people represent the best source of competitive advantage. Strategies, business models, products and services can all be readily copied by competitors. Talented staff, by contrast, provide a sustainable source of differentiation - if you can retain them.

A weak labor market associated with the economic downturn may have held down turnover rates in many organizations. But it could be argued that we are currently in the eye of a turnover hurricane. Those organizations that fail to identify and act on issues negatively affecting employee commitment during this break in the storm are likely to find employees exiting in increasing numbers as other opportunities become more plentiful.

As the social contract surrounding the employment relationship has been rewritten, individuals and organizations have become more tenuously attached to each other, making turnover an inevitable fact of the organizational life. As a result, the challenge for organizations is to understand and manage turnover, rather than to eliminate it entirely. In this article, we provide recommendations regarding the key components of an effective employee-retention approach.

Developing A Retention Strategy: Ready, Aim, Fire!

Ready: Identify the Issues

1. Conduct regular employee surveys.

What can companies do to hold on to valued employees? The first imperative is to gain a thorough understanding of the problem. Turnover drivers vary considerably from industry to industry, company to company and from employee group to employee group within companies. So, to understand turnover, you can't rely on off-the-shelf models.

The best way to get a handle on the issues in your organization is through a carefully crafted employee survey. Surveys can predict if, when and (most importantly) why certain employees may be thinking of leaving.

The number of current employees indicating through an employee survey an intent to leave is an excellent leading indicator of attrition that can help you identify employee groups at "high risk" of turnover.

Statistical analyses can then be performed to determine the predictors of intent to leave for different employee groups, to identify the key issues needing to be addressed. If performance data can be merged with employee-survey data, separate analyses can even be conducted to isolate drivers of retention among high-performing employees.

2. Consider surveying former employees.

Most organizations obtain insight into causes of turnover through exit interviews with employees who have recently resigned. Exit-interview data are certainly informative. But they can be problematic, particularly if collected internally. Research has demonstrated low correlations between reasons given for leaving in exit interviews and those cited in follow-up surveys conducted in the months after departure.

In exit interviews, departing employees may feel apprehensive about criticizing the organization, not wanting to compromise letters of recommendation or create difficulties for former colleagues. Alternatively, when the exit interview is conducted, departing employees may simply not yet have fully examined and evaluated highly charged feelings toward the organization.

To gain a full understanding of the causes of turnover, it is helpful to supplement exit-interview data with information collected at a time when the employee has placed some "emotional distance" between him- or herself and a former employer.

In addition to supporting exit surveys, Hay Group Insight conducts numerous former employee surveys for clients. These surveys gather the perspectives of employees who have been out of the organization for several months or several years regarding their work experiences, their current employment situations and their current perceptions of their former employers.

Aim: Sharpen Your Focus

1. Calculate your annual cost of turnover.

With increases in unwanted turnover come increasing costs. Studies estimate the cost of replacing employees to be between 50 percent and 150 percent of salary. For an organization with 2,000 employees and an annual turnover rate of 5 percent, that translates into approximately $3.5 million in turnover costs (assuming an average salary of $35,000).

And the "hidden" costs of turnover may be even greater, in terms of disrupted customer relationships, lost organization- and job-specific knowledge, and increased strain placed on remaining employees.

To build the case for your retention efforts, calculate your organization's cost of turnover. Then, as you implement your retention strategy, continue tracking turnover costs on an ongoing basis to determine your return on investment.

You are likely to find that retaining just a few additional valued employees will pay for your efforts. For example, using the turnover cost assumptions above, a $200,000 investment in retention would be recouped with just six fewer unwanted employee departures.

2. Target your efforts.

Organizations can never eliminate all turnover. Nor would that be desirable, as not all turnover is problematic. Where employees fit poorly in their roles, they and their employers may both be better off after severing ties.

Managing turnover, therefore, requires establishing priorities. In developing your retention strategy, examine turnover rates to determine where in your organization retention is the greatest issue. Then identify your most critical employees - and focus your retention efforts on them.

Fire: Recommendations

1. What drives employee turnover?

Contrary to what many might assume, it's generally not compensation. Though pay is often a factor in departure decisions, it is seldom the primary one. Research suggests that dissatisfaction with pay is typically not what leads employees to begin exploring alternatives, although the prospect of better compensation elsewhere may solidify the decision to leave once the search for other opportunities has begun.

Nonetheless, retention strategies most commonly focus on compensation (e.g., retention, bonuses, stock options). Below we provide some alternative recommendations regarding the components of an effective retention approach.

a) Manage first impressions.

It is much easier for prospective employees to understand how they will be paid in a new position and what they will be asked to do than it is for them to assess how it will feel to work in the organization. But the fit between the employee and the organization's culture and operating style is one of the biggest factors in determining whether the employee will be productive and remain with the organization.

To increase the likelihood of successful matches, organizations should work to provide realistic job previews for prospective employees, including as much information as possible about the organization's culture and values.

b) Connect people to the big picture.

Hay Group Insight has done extensive research to identify the factors that determine employee commitment, drawing on data collected through employee-opinion surveys we have conducted in hundreds of organizations. Our findings suggest that employees' confidence in the ability of top management is among the most important predictors of turnover.

The relationship between confidence and retention should not be surprising. Today's employees recognize that their prospects for continued employment, career development and advancement are dependent on their companies' health and stability.

Increasingly in charge of their own careers, they cannot be expected to bind their futures to those of their employers unless they are confident that their companies are well managed and headed in the right direction.

c) Identify growth and development opportunities.

Employees are increasingly aware that they are responsible for managing their own careers and that their futures depend on continuous elevation of their skills. If employees are not expanding their capabilities, they risk compromising their employability - within their current organizations or elsewhere.

Accordingly, opportunities for growth and development are among the most consistent predictors of employee commitment. To retain key talent, potential career paths for employees need to be clearly identified, especially early in their tenures with the organization.

d) Strengthen supervisory relationships.

An individual's supervisor plays a critical role in determining his or her career path within an organization. Through coaching and regular performance feedback, supervisors can help employees identify developmental needs and enhance their skills. Supervisors also often serve as mentors for their employees, helping them understand organizational expectations and develop supportive networks. Finally, supervisors play an important role as "sponsors" for their employees. Supervisors are in a position to help employees secure additional responsibilities or get promoted by "talking them up" to others in the organization or helping them "work the system."

Hay Group Insight employee-opinion norms suggest that many employees are not getting the advancement-related support they seek from their supervisors. Only 53 percent of non-management employees, and just 57 percent of managers, consider their supervisors to be doing a good job of counseling them in their career development.

To keep more of their best people, most companies would do well to focus managers on the need to attend continually to the development of their employees.

Conclusion

Demographic trends as well as competitive pressures suggest that the war for talent will continue well into the future. Indeed, Bureau of Labor Statistics data suggest that the pool of U.S. workers between the ages of 35 and 44 will shrink by 7 percent between 2002 and 2012.

We have outlined a three-phase approach to developing retention strategies. But when it comes to retaining valued employees, perhaps the most important advice is this: Listen carefully. Your employees are remarkably willing - even eager - to talk about their career needs. And embedded in their responses are the solutions for keeping attrition under control.

[About the Author: Mark A. Royal is a senior consultant with Hay Group Insight - the survey research division of Philadelphia-based global consulting firm Hay Group. He works closely with clients in all aspects of survey projects, from initial planning and design through the effective use and communication of survey results.]