Broaden Your Talent Pool – Lessons from “Undercover Boss”
Posted by: grandma in Employee Development, Employee Engagement, Leadership, Performance Management, Succession Planning, Talent Management on February 8th, 2010
There is an excellent CBS reality series on TV right now called, “Undercover Boss.” Executives from Waste Management and 7-Eleven go undercover and pretend to be entry-level employees. They experience what the front-line employee experiences.
Too often I encounter companies that completely ignore the hourly or salary non-exempt employee in the field when it comes to leadership development. (See previous post) This is easily discovered in the systems they own to enable this process. Companies don’t acquire software for the entire employee population. Sadly, and this really is the true divider, those employees with ready access to the internet get included. This is not a legitimate trigger.
The evolution of Talent Management has not evolved to every employee. This conundrum is often encountered in retail, manufacturing, oil and gas, hospitality and utilities where there is large percentage of skill workers. Most of the workgroups are out in the field, detached from corporate. High-turnover compounds the issue because companies are disinterested to go through the pain of measuring someone who is likely to leave within a year.
- How does a roustabout in an oil field get recognized as a high-potential when no one is looking at him?
- How does the retail employee get recognized when no one measures her?
- How about the hotel clerk who performs exceptionally high for the competencies required for the position?
Joe DePinto, CEO of 7-Eleven, encountered a high-potential first hand in Igor Finkler, a midnight fresh food delivery driver in Lewisville, TX. DePinto recognizes him for his energy, positivity, and enthusiasm – he wants more people like Igor working for 7-Eleven. (See the video here)
So how do you measure the potential of an employee like Igor? This is where I think the ERP vendors like SAP and Oracle have major advantages. They have way more touch-points into an employee than a niche talent vendor through core HR, portal, and self-service pages. Since they own the core HR system, they have the largest window from which to measure an employee. Having access to the internet shouldn’t be the gateway into the talent pool. You certainly shouldn’t have to send the CEO undercover to find a high-potential. I hope this series will open executive eyes to the potential of someone in these ranks.
Employee Engagement – Causal effect on Performance and Turnover?
Posted by: grandma in Employee Engagement, Performance Management, Recruiting, Talent Management on January 10th, 2010
Engagement has almost as many definitions as leadership. The one I like best was developed by Kevin Rutherford, principal of PeopleMaxHR, an HR consulting firm: The level of discretionary effort one commits on a consistent basis based on their connection to the job, their peers, their boss, and the organization. Note the modifier here: discretionary effort. This is the amount of “stored” performance to go above and beyond the minimal requirements of a position.
Employee engagement is the one factor that I believe has a causal relationship on performance. Simply put, a disengaged worker will underperform. The Corporate Executive Board did an engagement survey in late 2008 and found that engagement decreased by whopping 18% - this translates into a staggering 3-4% drop in productivity. They also found that 1 in 4 high-potentials planned on quitting their job in 2009. Now more than ever is the time to engage your employees to induce performance.
Engagement effect on Turnover
Kelly Morgan did some great work in an unpublished manuscript on people who abandoned good jobs in thriving companies (Helgesen, 1995). She showed that they are the highest risk of leaving because they can become very frustrated with their manager, peers and the organization. They would rather face the uncertainty of leaving their job than stay in the position that is not autonomous and meaningful. When you are managing your talent pools, you should measure engagement, and compare this data to every high-potential. Every employee that is high-potential should be at risk for leaving the company. Tower Perrin corroborates these findings as well. Their surveys found that a highly engaged employee is less likely to consider other offers than a moderately engaged one (31% to 47%).
Talent Management is littered with strong correlations that demonstrate the benefits of an optimized, integrated system of strategic employee management. Clearly, employee engagement is one factor that should be measured and monitored.
Father of Talent Management – Robert Owen
Posted by: grandma in Leadership, Talent Management on December 20th, 2009
The market term “Talent Management” has been around for the last 15 years or so. Only recently have companies realized that people are their greatest asset. One of the earliest pioneers of the modern company was Robert Owen, a Welshman born in 1771. Owen was the Jim Goodnight (from SAS) of his time and a successful textile entrepreneur by the time he was 30. He was berated in the business community because he didn’t think eight-year-olds should work thirteen hour weeks. Here is an excerpt from a historian who covered him (O’Toole, 1995).
Owen provided clean, decent housing for his workers and their families in a community free of contagious disease, crime, and gin shops. He took young children out of the factory and enrolled them in a school he founded. There he provided preschool, day care, and a brand of progressive education that stresses learning as a pleasurable experience (along with the first adult night school). The entire business world was shocked when he prohibited corporal punishment in his factory and dumbfounded when he retrained his supervisors in human disciplinary practices. While offering his workers an extremely high standard of living compared to other workers of the era. Owen was making a fortune.
Owen tried to convince his fellow capitalist that an investment in people provides greater return than an investment in tangible assets. He was 150 years ahead of his time. Numerous studies conclude that an investment in people yields long-term success in any company.
Motivation: Reinforce with Points, Reward with Money
Posted by: grandma in Employee Engagement, Incentive Compensation, Performance Management, Talent Management on June 24th, 2009
Behavior is a function of its consequence. Employees tend to focus their activities on the things with the highest pay-off. For these activities, it is important to show the instrumentality between a goal achieved and reward earned. In other words, what will the employee receive as a result of their achievement? The biggest difference between an employee reward and a reinforcer is the immediacy of the consequence. Rewards tend to be latent and monetary; Reinforcers need to occur daily and shape behavior as it happens. It is much better for the manager/employee to correct problems as they happen instead of waiting for the annual review.
One issue with focal/anniversary reviews is the goal period. Focal reviews tend to measure on a yearly or 6 month basis. The pay-off of the reward is too far in the future. The certainty of getting the reward needs to be present in order for the program to be successful. If your company does not have a history of celebrating successes, then you will be challenged to put forth a credible reward system.
So how do managers motivate their employees?
Your manager needs to ask these 3 questions of his/her employees to motivate them:
1) Do you anticipate your employee being satisfied with achieving the goal? (This is Valence – or anticipated satisfaction) – If this isn’t present than the activity is a non-starter for them.
2) What will he/she receive when it is achieved? (This is Instrumentality) – This is where a point/reward system comes in. What will I get if I achieve? This is the key factor of the 3.
3) Will the effort put forth actually yield achievement of the goal? (This is Effort Expectancy) If the employee knows that extraordinary effort is required for little payback, then they are not likely exhibit behaviors to achieve the goal.
(abridged from Organizational Behavior, Securing Competitive Advantage, John Hollenbeck and John Wagner, 2005)
So how do you reinforce behaviors that will accomplish your motivational techniques? Here is one system that your company can implement:
Establish a Company-wide Point System
Establish a point budget. Just as monies are allocated for budgets, management should set a point budget based on the available rewards. These allocations happen just as a budget for merit increases would. Points can be allocated using your incentive compensation/salary planning solution. Give each of your front-line managers a bank of points, much like a merit budget, to be used to divvy up among employees. Points should be given based on the employee performance for the month. Increasing the frequency of the consequence will lead to daily/weekly performance improvements.
Be as creative as you want here. Assign a point total to each reward. Since reinforcement and rewards are highly individualistic, you may want to give managers the flexibility to create their own. As employees accumulate rewards, they can cash them in for one of the services provided in your reward point catalog:
• Cooking classes
• Golf membership for one year
• Free Spa day
• Gym membership for one year
• Titanium DirecTV package
• Housecleaning for one year
• Dog boarding for one year
• Daycare for one year
• Lease on an exotic car
• Manicure/Pedicure
• First class upgrade on all business flights
• Free car wash
• 2 round-trip airline tickets
• Day-off with pay
• Week off with pay
• Lunch with the CEO
• Golf with the CEO
etc….
I think you get the picture. You should also create rewards that have no added cost to the company. Steve Kerr, former GE SVP of HR, has written extensively on cost-neutral rewards. He advocates that these types of rewards should be visible making them highly powerful. Monetary awards don’t give companies that luxury.
Best and Worst CEO’s
Posted by: grandma in Leadership, Talent Management on April 30th, 2009
In the May 2009 issue of Conde Nast Portfolio, they list the best and worst CEO’s ever. Number 1 on the “best” list was Henry Ford; Number 1 on the “worst list was Dick Fuld from Lehman Brothers. Now this list was judged on criteria for creating destroying/value, innovation, and management skills (or lack therof). The panel they chose for this list were professors from some of the best business schools in the United States (Sloan, Kellogg, Wharton etc.) What disappointed me the most about the “best list” was not one comment was written about how these CEO’s embodied strong human capital practices.
A couple of things stood out for on this list:
Best/Worst -Jack Welch of GE– the panel couldn’t decide whether or not to put him in the best or the worst category? Really? In my book, he is one of the best, if not the best CEO ever. Jack Welch may have fired many employees but at least he did it based on a credible measuring system. GE in many ways set the benchmark for Performance Management best practices. Jack thought his whole job was to put the right people in the right positions. Do this, and strategy and execution will come along for the ride.
Worst - Al Dunlap of Scott Paper and Sunbeam– if you asked the same panel back in 1998 what they thought of him, I’m sure they would have put him on the “best” side of this list. To me, Al Dunlap isn’t even a CEO. He was a liquidator. It doesn’t take much management skill to take a “chainsaw” to a company. When he actually had to manage Sunbeam he failed miserably.
Best - Herb Kelleher – SWA is the best, non-subsidized airline in the world. Instead of setting organizational goals to enrich shareholder value, they focus on the customer and their employees. Increased shareholder value is a by-product of this effort. It was disappointing to see the magazine cite their fuel hedging program as the reason for success when it’s the employees that make this company what it is.
The list focused on CEO’s of Public Companies and really looked at shareholder return. One person I would put on the “best” from the private side is Jim Goodnight of SAS. He said in an interview with 60 minutes a few years back, “95% percent of my assets leave the building every day, it is my job to bring them back.” Wouldn’t you like to work for a company whose CEO values you as his most important asset?
Time and time again, CEO’s who focus on their employees significantly outperform their competitors in every financial metric that matters. Hopefully, this panel will question the ratings criteria next time and rank CEO’s on their Human Capital practices. Now this is a list I would like to see.
Talent Management – Which Module Should We Deploy First? Learning Management
Posted by: grandma in Employee Development, Goals, Succession Planning, Talent Management on March 31st, 2009
Talent Management integration is natural between the primary modules. When companies look to deploy a talent management solution they often struggle with how to map out a technology strategy. There are a couple of good firms that can help companies with projects like this (HRchitect and Knowledge Infusion to name two). Software firms like SumTotal, which is the highest rated Learning Management vendor, have built their company around “Talent Development”. Learning Management has been around at least 15 years and is the most mature module in the talent suite. It is the first module you should deploy. On the opposite end, Succession Planning is the last module that should go live because so many inputs are required for a sound succession plan – many of those inputs come from the Learning function.
Most companies have training programs already for their employees. Learning Activities need to be tied to a development plan; the association of these activities needs to be in place to execute the training. Your company should do development planning during the goal setting process. Development goals can be created alongside with work goals. It is a great time for your manager to convey a growth mindset and that they are amenable to pushing their employee to train. Tacit permission is needed so the employee can feel comfortable diverting from their job activities.
Learning Management is also the primer for Workforce and Succession Planning. Any company that plans its people around business initiatives will need to train its people. Any company that plans for succession and leadership development will need its people to acquire new skills.
The last, and most important reason, is that the return on investment for Learning is the greatest and most provable for all the talent modules. I hear a lot of CEO’s on analyst calls claim to develop and train their people – often these are hollow statements. If your company spends greater than 4.0% of payroll on learning and development, you know that this isn’t lip service.
Unions, EFCA and Company Performance – Part 2
Posted by: grandma in Compensation, Employee Engagement, Goals, Performance Management, Talent Management on March 27th, 2009
One fundamental issue with anniversary or focal performance reviews is how often the frequency of behaviors are measured. For unions, the frequency of measurement should naturally go way up, but for the wrong reasons. These measurements will tend to reflect whatever negative behavior occurred. There is less incentive for the manager to reward good behavior because he/she can’t – that particular employee gets lumped into a group where discretionary effort is not rewarded properly. So how do companies improve performance in a union environment without a proper reward system?
Here are 3 techniques that managers in union environments can utilize to improve performance in their work group:
1. Aligned Goals
2. Grandma’s Law
3. Reward Point System
Aligned goals are one way to unite unionized workgroups. Missions of both the union and the employees should be the same. These goals elements should be the primary leverage points in an employment contract. Always ask how union demands align with the goals and the core values of the company. If they don’t, the demand is a non-sequitor. Aligned goals will make the employee feel their activities are part of the overall strategy. They also erase the divide between the competing interest of management and unions.
Managers can use techniques like Grandma’s Law to influence behavior. Watch what activities your employees do when given a choice. Make those activities contingent upon the completion of tasks that are necessary for their position. Aubrey Daniels has some great examples of this in his book on performance management. You will find that production will go way up when an employee knows they have to complete Task A in order to move on to the more enjoyable Task B.
Utilize a point system versus monetary incentives – some would argue that point systems do way more to shape behavior than any other reinforcer. Money tends to be a reward for something but generally isn’t a reinforcer of behavior. Earning points for many people is a badge of honor. Look no further than an airline point system – anyone that has flown over a million miles on American has bragged about it. There are several companies that offer merchandise and experiences based on a point system – it is also easy to create your own but be sure you have the individual in mind when doing so.
Josh McDaniels epitomizes Fixed Mindset
Posted by: grandma in Employee Development, Employee Engagement, Leadership, Talent Management on March 18th, 2009
Fixed Mindset case Number 1: Yoga
“Today somebody came into my office and asked me about a yoga instructor helping the players. I never thought I’d be talking about yoga. I don’t know anything about yoga.” -Josh McDaniels - Denver Post 1/25/2009
When asked about Yoga and other items 2 weeks later: “The football part of it has been pretty much what I thought it would be,” McDaniels said. ”Some of the decisions you make on a daily basis, on non-football issues, have been a little surprising. The color of paint on your walls. Whether to do yoga. I’ve never really had the opportunity to decide things like that.” Asked what he decided on yoga, McDaniels said he said no, even though his mother, Chris, enjoys it. ”There’s not a lot of teams in the league that were doing that,” he said. ”I’m not sure you have to do that to be successful.” – this means the Patriots didn’t do it…
• Yoga helped Jordan Farmar with his 42” vertical in the NBA combine
• Yoga helped Kareem Abdul-Jabaar play well into his 40’s
• Your future perennially all-pro left tackle, Ryan Clady does yoga
Fixed Mindset case number 2: Mike Leach
Mike Leach was the long-snapper for the Denver Broncos since 2002. The first signing that Josh McDaniels in the off-season was to sign Lonnie Paxton making him the 2nd highest paid long snapper at 5.3 million in the NFL shelling out 1 million in a signing bonus.
So what was so wrong with Leach that Josh McDaniels needed to bring in Lonnie Paxton? Did he muff some snaps? Did he send the ball over the punter’s head? Did he throw it too hard so the holder couldn’t place it for the kicker?
Let’s look at Mike Leach’s numbers:
40 extra points - any blocks, muffs?
34 field goals - any blocks, muffs?
46 Punts - any blocks, muffs?
None.
None.
And None.
What was so great about Lonnie? He was a Patriot.
Fixed Mindset Case Number 3 – Jay Cutler – Managing your “A” Player
You are a high-performing individual contributor and you were just notified that your new boss starts today. You didn’t anticipate the change because you thought your manager was solid. You are the star of your manager’s team. You know your skills are marketable and there are several competitors that would love to have you. You get a call from a head-hunter that you know and you find out that your new manager is trying to replace you with one of “his guys” from his old firm. You haven’t had a single conversation with this new manager so how can he assess your skills and assume “his guy” is better than you? Lo and behold, “his guy” went to another company with a better offer. You approach your new manager about this and he denies it; you have the evidence that proves otherwise.
How would this make you feel about your long-term prospects at the firm?
Could you put your full faith in your new manager?
Is this good management?
There isn’t much difference between a player and a coach in the business world:
• The manager/employee relationship is predicated on trust
• You still have a hierarchy – Head Coach, Position Coach, Player
• You have mutual goals – To win the division, to get home field advantage, to win the SuperBowl
• A good manager knows you perform better when you are engaged – The most successful quarterbacks have had a great quarterbacks coach
• A good manager helps develop your skills
• A good manager wants you to be more successful than him
The number one reason why someone leaves a company is the relationship with their manager. If you are not hired by your manager, your performance rating will generally be lower. This is a proven correlation.
If Josh McDaniels were in the business world, he should be fired for incompetence at the manager level. Pat Bowlen should seriously make this consideration.
Unions , EFCA, and Company Performance – Part 1
Posted by: grandma in Goals, Performance Management, Talent Management on March 15th, 2009
Last week marked the first debate on the polarizing bill, Employee Free Choice Act or EFCA. This bill basically makes it easier for employees to unionize. If it passes, America will likely see a surge in the number of unions. Unions counter many of the benefits that a best practices talent management system would provide. One of those benefits is the increase in performance from an aligned goal-setting and performance process. Unions normalize high performers and hide the dead wood in organizations. Poor performers are rewarded just the same as high-performers. Unions are the antecedent that makes management behave antagonistically. There is one major reason to have a performance management system in a union environment: compliance.
Performance Management for compliance is one business reason that companies should conduct performance reviews. Having this system will mitigate the risk of a lawsuit for wrongful termination. Companies that don’t conduct these reviews are at a steep disadvantage if they cannot track poor performance or incidents of insubordination. This isn’t a great reason to ramp this up because you are basically buying a performance system to reduce your insurance premium.
Here are two recent cases for wrongful termination where the judgment against the company was greater than $100,000.
1) Former County Health Clerk
2) Former Recreation Manager
This would easily justify the cost of an automated performance management solution.
Make Your Goals “Attainable”
Posted by: grandma in Goals, Performance Management on March 8th, 2009
The acronym SMART (Specific, Measurable, Attainable, Realistic, and Time-Base) is pretty handy when creating goals. To me, realistic and attainable are interoperable. The “A” and the “R” are basically the same thing. SMART sounds better than SMAT so I propose we can change the “R” to “Rewarded”. The instrumentality of the goal should be built into the goal – “If I do this, what will I receive in return?” (see Grandma’s Law) The biggest mistake you can make when setting goals is to make them unattainable. The best mistake that you can make is to set goals too low. Here is a great article touting this practice. Setting a goal too high will actually decrease performance because the end is too far in sight. This is tantamount to a “stretch goal”. It indicates that there is discretionary effort to obtain the goal. A manager will want to get the best effort out of his or her employees – do they really want them to hold something back?
There has been a lot of press lately about the downside of goals. Here is a recent Harvard Business Review article titled “Goals Gone Wild”. The major item that the author failed to address is the root cause of a poorly designed goal setting process. Organizations as a whole don’t do a good job of this. Goal-setting should be embedded in a company culture and how to set goals should be required learning activity by all employees. Too often, required learning centers on compliance versus development.