Archive for the ‘Talent Management’ Category
Employee Potential in the Eye of the Beholder – Part 1
Posted by: grandma in Leadership, Performance Management, Succession Planning, Talent Management on July 11th, 2010
One of the challenges companies face today is managing their employee turnover, specifically for key positions in the organization. A key position is defined as a critical role that would adversely affect a company’s operations if it were vacated. These positions are typically leadership or managerial and make up between eight and twelve percent of all positions (Berger, 2004). When an employee vacates a key position, via unexpected leave, retirement or promotion, an organization ideally backfills the position with a cadre of highly-qualified candidates ready to replace that person. Human Resource (HR) departments plan for succession to hedge against the risk of departure. Hence, companies cannot afford turnover of high-potential employees in line for key positions.
Like leadership, potential has as many definitions but is even more ambiguous. These definitions range from “inherent capacity for coming into being” to a “latent excellence or ability that may or may not be developed.” Leaders need to start somewhere; their entrance into the realm of leadership usually begins in a front-line management position. One of the key criterion in selecting a leader is the anticipation of their success to lead their team. In essence, what is their leadership potential? Most organizations measure potential by intuition or “gut feel.” The problem with this informal measurement is that it is often wrong. Society is littered with poor managers hired by people who thought the person had leadership potential. The fallacy in their selection is based on past performance, not on their potential to be a good leader. These are generally the data points that create the ubiquitous “9-box” companies use to slot future stars. Performance is regularly measured, albeit inexactly. Potential is not something that is actively measured and companies do not utilize the proper research instruments to measure it.
A Manager Provides the Right Antecedents for Employee Success
Having the proper antecedents for leadership development will likely produce better leaders. Malcolm Gladwell (2008) extensively analyzes the conditions that make people successful in his book “Outliers.” Date of birth for junior hockey players, affinity relationships for certain professions like law, and native languages assisting math skills for Asian children are all foundations that provide better success. These antecedents are harbingers of success and set the stage to bring out the best in their subjects. Silzer and Church (2009) discovered that an employee’s potential can be stifled by his or her immediate manager by not providing the right antecedents for high performance. Hence, a good manager provides the right conditions for an employee to realize his or her potential.
In part 2 of this post we will look at ways of identifying high-potential outside of past performance based on two predictive attributes: self-efficacy and mindset.
Communication – The Common Leadership Competency
Posted by: grandma in Employee Engagement, Leadership, Talent Management on June 6th, 2010
“If they are to be effective, all communicative acts must be interactive.”
-Conrad and Poole, Strategic Organizational Communication (2005)
Yukl (2001) examined a number of definitions of leadership and concluded that no one definition encompasses all of the aspects required of a leader. Most agree, however, that communication plays a huge role in effective leadership. Communication rolls into some of the other leadership traits like setting an agenda, strategic planning, modeling the way, inspiring a shared vision, and transformational leadership.
Employee engagement largely rests on upper management’s ability to communicate with line and staff. According to Towers Watson, 15 of the 20 factors of engagement are directly related to the manager. The other 5 are engagement factors related to the organization – meaning that it very important for the employee to feel connected to a company’s culture, policies, and strategic direction.
Let’s look at 8 of the 20 following factors for engagement for both sets:
• Provide fair and accurate informal feedback
• Emphasize employee strengths in performance reviews
• Clarify performance expectations
• Leverage employee “fit” to the job
• Provide solutions to day-to-day challenges
• Amplify positive employee performance traits and filters negative effects
• Connect employees with the organizations’ strategy and its success
• Instill a performance culture of open communication, flexibility, and innovation
What do all of these have in common? Communication…!
HR is the staff function that should facilitate organizational communication. Communication, like other competencies, has different behavioral anchors depending on the leadership level. Certainly CEO’s in large companies have anchors that require them to communicate with the entire organization.
So how does a CEO/Leadership connect with the company of 10,000 employees? How does operations roll out a project? How does a VP of HR convey new programs? I happened to be in demonstration with a major ERP vendor when they presented a new product called “Workforce Communications”. It gives a company the ability to do targeted communications with its employees based on attributes contained in their HR systems. It also has the ability to conduct bi-fabricated organizational surveys (meaning a certain answer in the first survey could trigger another survey or follow-up question) like employee engagement. So if the CEO of a company wanted to send a congratulations to the engineering team for obtaining 100% safety compliance, you could simply identify the requisite job codes in the HR tables (and throw in other criteria to personalize it) and send the targeted communication. Does it send a message to those engineers that safety is important when the CEO writes? Absolutely!
Pretty inventive software which you would not expect coming from an ERP vendor, which by the way, was Oracle.
Safety and Contingent Workers – are the Savings worth the Costs?
Posted by: grandma in Employee Development, Employee Engagement, Leadership, Talent Management on May 9th, 2010
Some industries heavily utilize contingent workers to save money from employee owned burdens. One of those industries is oil and gas. A recent illustration of this issue is the Transocean oil rig incident in the Gulf of Mexico. Of the 126 people onboard that rig, 79 worked for Transocean, 6 for BP, and 41 of them were contingent/contract workers. Sometimes, contingent workers have skill sets outside of the core competencies/operator qualifications of employees – in this case Halliburton had just cemented the 18,000 foot well before the explosion. In other, and in most cases, contingent workers are hired to simply save money.
Contingent workers are less safe than employee owned workers. Why is this?
The metaphor I like to use for contingent versus worker is renting or buying a home. I think both of these illustrate the difference between owning a process or simply being part of one. Do the renters of your house take care of it like you did when you lived there? Probably not. Employees absorb the culture, the symbolism, the politics and the human factors of working in an organization. They have an ownership experience. Contingent workers, on the other hand, collect a paycheck and do not receive the same indoctrinization as an employee would.
Jeffry Pfeffer, professor of organizational behavior at Stanford, studied contingent workers in 1994 and determined that they were less safe than employee owned workers. I continue to validate his findings with HR professionals when discussing safety and human capital practices – they always concur with Pfeffer’s conclusion. Laurie Bassi, of McBassi and company, showed that companies with optimized human capital practices recorded fewer safety incidents than those with subpar HR practices. One of the pillars of her research was “learning capacity.” Learning capacity describes and organizations ability to instill learning in its employees. She showed that American Standard was able to reduce the number of incidents by nearly 25% when elevated levels of human capital were present.
I am a huge believer in the value of training and you can train someone into a mindset if they are willing to learn. You can train any employee into a safety mindset. There are many international laws that define the contingent classification. In some countries, like Canada, training for contingent workers has to be separate than those that are company trained. This disenfranchises employees from the cultural mindset needed to be safe. Willingness of contingent workers to be trained is also an issue – what is the upside of this training with no positive payout in the end? Even before the incident, Transocean put safety ahead of production as a company-wide goal. If they really want to create shared ownership and permeate a safety culture, they should stop sourcing contingent workers and start hiring them.
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.