Wage Stagnation: Renewed Focus on Benefits

Tuesday, December 31, 2013

In the constant struggle to retain an organization’s talent, employers must use all of the resources at their disposal.  This is especially true during this extended period of wage stagnation most employers are experiencing.  It is easy for a top performer to be enticed away by a competitor with a 25% or 50% of an increase.  Even a well educated employee can fail to consider the true financial impact of jumping ship, particularly if it involves relocation of family members.  A number of years ago I worked for an organization where my primary role was oversight of retirement plans.  I was approached by a senior organizational member for help in understanding an offer from a competitor.  I was able to help him appreciate the loss of future retirement benefits if he were to accept the offer at this point in his career.  Ultimately, he decided to stay.

In the December 18^th release of the “2013 State of Employee Benefits in the Workplace Series”, the Society for Human Resource Management (SHRM) concluded that that “the use of benefits as retention tool in not widespread among HR professionals”.  SHRM’s study reported that between 2012 and 2013, the percentage of organizations using benefits to retain talent had fallen 2 percentage points from 20% to 18%.  For those employers who do attempt to use employee benefits to retain talent; health care, retirement, and flexible work benefits were the top 3.  However, the sobering fact is this accounted for only 60 out of 335 survey participants.

Considering the cost of employer provided benefits average 30% of an employee’s total compensation, how is it that organizations are not using benefits to dissuade top performers from walking?  As reported in SHRM’s May 2013 “Workplace Visions, 2, 2013”, the top issue for CEO’s in 2013 was “Human Capital”, per the Conference Board’s, 2013, “CEO Challenge 2013 Summary Report”.  Again, why are over 80% of employers failing to leverage every possible tool to retain their talent?

Human Resource functions are often lightly staffed and one of the first organizational units to be reduced, outsourced or eliminated during down times.  Since 2007, most HR functions have been impacted, yet at the same time organizations expect HR to provide the same or even expanded levels of support.  HR staffs may not have the tools to help employees understand the value of their benefits relative to a competitor’s.  Often by the time HR learns of a top performer leaving, it is too late, the employee has already terminated.  Employers with multi locations often have no local HR support and many regional and site managers do not have the time, knowledge, skill or tools to leverage their organization’s benefits retention power.

With 30% of the cost of production tied up in employee benefits, it is a missed opportunity not to leverage benefits as a retention tool.

Non-Profit Organizations Facing Brain Drain

Friday, December 27, 2013

 

Non-profit organizations (NPO’s), including religious, educational, philanthropic, health care, labor unions, and professional associations are facing a critical talent drain as Baby Boomers retire over the next five years.  A recent study [highlights] by the Plan Sponsor Council of America and sponsored by the Principal Financial Group reports that almost 70% of NPO’s will be forced to replace most retirees and over a third will report difficulties finding replacements.  Over 50% of NPO’s project they will lose 10% to 20% of their workforce to retirement.  While the study focused on 403(b) plan design, eligibility, participation, and administration, the study points to a serious pending loss of talent.  The survey is available for purchase at:  2013 403(b) Plan Survey.

 

Faced with such a significant loss of talent, NPO’s will have to go head-to-head with for-profit organizations to acquire the required talent to meet their missions.  While there has always been a tug-of-war between private for-profit and non-profit organizations, however with both sectors feeling the burn of Baby Boomers’ forthcoming retirements, talent acquisition and retention will take on an increased sense of urgency.  Candidates with advanced degrees in the sciences have typically leaned towards schools of higher learning for teaching and research opportunities, those same skills are increasingly sought by the private sector.  Organizations such as Bain& Company actively seek masters and PHD level applicants for consulting and internship positions, the same candidates often sought out at many NPO’s.

 

Organizations cannot compete for talent solely on the merits of their benefits and retirement plans.  Even the most altruistic candidate can be swayed by cash and non-cash opportunities, as well as work culture.  Both for-profit and non-profit employers will be faced with the challenge to present applicants with a total package.  This challenge will demand a new level of flexibility in the design and administration of the employer-employee relationship.  Organizations will be faced with situations which necessitate the retention of their current talent while acquiring their replacements.  Phased retirement could be one tool smooth the transition from an employee with decades of service to their replacement.  Many of us entered the workplace in a “phased” manner, working part-time, summer jobs, internships, and finally full-time employment.

 

While the loss of organizational talent is not a pleasant prospect, it does bring with it the opportunity to re-design and re-invent how work is done for many employers, including NPO’s.  Concepts such as Creative Destruction can be applied to job level tasks in an effort to bring about workplace change from “we have always done it that way”.  A self-managed and cross-functional team culture could appeal to the mind-set of many Generation X and Y cohorts as potential Baby Boomer replacements.  Finally, leveraging of technology for non-profits is just as vital as it is for their for-profit counterparts if they are to focus on their mission.

The Best Workers Are the Least Engaged

Friday, December 20, 2013

 

Is this possible, some organizations’ best workers are those who are the least engaged?  Susan Adams, a staff writer at Forbes, reported a 2013 study, “Job Performance Not a Predictor of Employee Engagement”, authored by Mark Murphy, CEO of Leadership IQ which found that job performance is not a predictor of an employee's engagement level.  Thus, it would appear, low performers could be more engaged than high performers.  If true, the findings reported in the study brings into question many of the commonly held beliefs of a large number of employers.  A PDF of the full report is available at: Study  

 

“Low Performers Are the Most Motivated To Give 100% Effort at Work.”

Why aren’t top performers giving 100%?  They are not being challenged or motivated to perform up to their full potential.  Murphy’s recommendation is to have one-on-one time with those high performers to provide a few gentle “Shoves and Tugs” to direct them towards opportunities for them to shine and thus feel recognized.
 

"Low Performers Are More Likely To Recommend Their Organization As A “Great Place To Work.”

This directly impacts the applicants, customers, and vendors with which an organization has to deal.  The concern Murphy has with this is simple, if an employer’s top talent does not perceive the organization as a great place to work, they are going to be job hunting and soon.

 

"When Low Performers Are Not Held Accountable For Poor Performance It Negatively Impacts High and Middle Performers."

It always seems there are a few workers who just do not carry their load, yet they are rewarded as if they did.  So while low performers are delivering 50% or 75%, an organization’s top performers are knocking down 125% or 200% just to keep the project on its timeline and under budget.  Leadership IQ’s advice, hold every employee accountable for their work.  This would be a good use of some “Shoves and Tugs” for those low performers to “shape up or ship out.”

 

"High Performer Efforts Go Largely Unrecognized While Low Performers Receive Positive Reinforcement."

An organization’s top performers are self-starters, self-mangers, and deliver results.  Low performers need a constant stream of directions and follow-up by managers, who have little time left over for top performers.  Murphy believes that organizations must identify those attitudes, in addition to skills, which create successful employees for their businesses.

 

"High Performers Feel Helpless About the Trajectory of Their Careers."

High performers want to be in charge of their lives and especially their careers.  Leadership IQ relates this to linking the organization’s vision, the acquisition of attitudes and skills, and top performers finding a role to help the employer achieve that vision.

 

"Low Performers Don’t Know They Are Low Performers."

It is a very unpleasant and uncomfortable situation to sit down, face to face with any employee and say they are not performing.  The impact on the high performer is de-motivating since they perceive the low performer is not being held accountable.  So, they start job hunting.  Murphy thinks this not a lack of skills, rather the wrong attitudes.  Change the attitudes, and you will change the performance.

Internal Pay Compression Important

Friday, December 13, 2013

 

According to WorldatWork, the human resources association for professionals and organizations, market pricing jobs remains the most frequently used method for job evaluation in organizations today.  Compared to other methods of evaluating jobs, market pricing is relatively simple and inexpensive.  However, after years of salary freezes, minimal salary increases, and job consolidations, should organizations be concerned about the impact of pay compression within job classifications?

 

Internal pay compression occurs when cohorts within the same job classification are paid very similar rates but have very dissimilar skill and/or experience levels.  Rates are compressed as new hires, with little or no experience, enter the classification while existing incumbents, with significant experience, have had their rates frozen or have received only minimal increases over time.  Compression may also occur when an individual contributor approaches the pay level of their immediate manager.  A significant and contributory factor in recent years has been the suspension or radical reduction of annual pay increases by many organizations for large numbers of employees.  This stagnation of wages has resulted in a flattening of pay variation within most salary ranges and thus increased the likelihood of compression.

 

Pay compression becomes an issue for an organization’s talent acquisition and management efforts when top performing employees perceive their efforts will go unrewarded and new hires enter the organization at or near the top performer’s pay level.  While it is easy for an employer to pronounce that workers should not have “expectations” of automatic pay increases, employees do have expectations their individual efforts beyond the standard will be rewarded.  Compression has the ability to have a significant impact on employee morale and productivity, even in down economic times.  By failing to reward their best employees, organizations risk the possibility of increased turnover among their top talent.

 

The solution for pay compression appears to be very simple, raise employees’ pay.  Unfortunately, all that may do is to perpetuate the issue for the same group of employees or generate compression issues for a whole new group of workers.  Organizational redesign might also sound like a solution.  However, creating advancement opportunities where there are no valid organizational needs also creates its own unique set of future problems.

 

Jim Kochanski and Yelena Stiles, at Sibson Consulting, a The Segal Group, writing for SHRM, the Society for Human Resource Management recommend several long term solutions to pay compression in their July 19, 2013 article, “Put a Lid onSalary Compression Before It Boils Over”.

• Look for high-potential external candidates ... ready to move up into the job and will see it as a promotion.

• Control pay both from an HR policy standpoint and from a budgetary standpoint.

• Limit how high within a range new hires can be paid.

• Require a review of equity adjustments for incumbents if new hires are brought in at higher salaries.

• Institute transparency across units, either before or even after compensation actions are taken.

• Institute calibration across units.

Where has all the Talent Making Gone?

Friday, December 06, 2013

Talent making is a lot like cooking, you get out what you put in.  Use the wrong cook or sub-standard ingredients and you’ll get a sub-standard product.  Talent making, just like cooking, depends on understanding how the various ingredients work together to produce great talent.  Cooked too slowly and talent is under prepared, cooked too fast and talent is burned out, cooked in the wrong appliance and the final product is undesirable. 

In today’s “just-in-time” everything, organizations often expect talent acquisition and development to be the same.  With organizational demands which often require employers to turn-on-a-dime at a moment’s notice, it is understandable that mangers expect somewhere out there in the talent-sphere, there is a supply of potential employee’s with just the right mix of knowledge, skills, and abilities to match their needs.  However, as the economy continues its slow and protracted recovery, fewer and fewer desirable individuals are waiting in the wings.  Increasingly, employers are faced with the dilemma to buy or build their talent.  In either case, the raw materials must be identified within the organization or acquired externally.

On the one hand, there are hundreds of “staffing agencies” who have stables full of talent.  In the world of a la carte staffing organizations, employers can staff virtually any position required on a “temp” basis.  Why should any organization attempt to source, screen, recruit, onboard, and manage a cadre of workers when in 6 days or 6 months workers with a different set of skills may be needed?  Hobbled with all of the current and future rules and regulations surrounding employment, compensation, and benefits, would it not make economic sense to let some staffing agency deal with those issues?  And, there is an upside for “temp” workers”, many do get placed with employers.  So employers get to “test drive” an employee and the worker gets to try on the job for a “goodness of fit”.

On the other hand, the very fabric of an organization is found in its employees.  Often the brand itself is linked closely to the services provided by those same employees to the organization’s customers.  As good as many temp workers are they have little vested interest in an organization which sees no value in their long term tenure.  While there are exceptions, long term employees see a connection between the success of their organization and their own success.  As much as it can be in today’s business world, employers and employees are symbiotically bonded to one another.  That bonding is best explained by “social exchange theory”.

Regardless, whether an organization buys or builds its talent, talent is essential to the long term success of any employer.  From the CEO down to the loading dock, employers are always seeking the best talent they can find and afford.  Cheap talent is like the throw-away paint brush from the corner home improvement store, it is good for one job, and sometimes not even for that.

Compensation Plans in the Future

Friday, November 29, 2013

 

At one time the standard model  for many compensation plans was to annually price jobs based on internal job evaluations and market data comparison to external competitors with similar organizations, benchmark jobs, labor forces, revenue streams, even down to regional variations.  Organizations often employed a merit matrix, designed to allocate specific salary percentage increases based on a combination of comp-ratio and performance levels.  It was not unusual for most employees to come to expect an increase simply because they had clocked one more year of service with the organization.  “Just doing one’s job” qualified many employees for an annual increase, although it was the same level of performance as the prior year.  While many employers reported they had a “performance based pay” system, many of those systems were performance based in name only and were neither robust nor valid.

 

But “the times they are a-changin’”, organizations have begun to re-think who, when, how, and. why employees are rewarded.  A trend that has been emerging for some time now is that employers must reward and recognize the continuous creation of “value” by their workers.  Current compensation design has already built into “base” pay, remuneration for an average level, i.e., “meets” level of performance.  Only those employees who can demonstrate creation of value for the organization should be rewarded.

 

But exactly what is “value creation”?  Value creation is whatever makes an organization more competitive, effective, efficient, and compliant either to its internal or external customers.  Value creation includes, designing new profitable and competitive products and processes, eliminating and reducing cost, waste, errors or re-work, developing new profitable markets, and customers, avoiding or limiting litigation, regulatory penalties, … etc.  How does an employee create value for an employer?  It starts with engaging and empowering workers to think like owners and entrepreneurs.  Even small changes in a process can yield significant results.  Often this change requires “creative destruction” of the existing process or product, which can make many organizational leaders uncomfortable.

 

Compensation plans in the future must reward an organization’s talent who recognize opportunities and convert those opportunities into desirable outcomes for their employers, thus adding value.  Merely continuing to “do one’s job”, will only delivery last-year’s results, which in today’s hyper-competitive world is no longer acceptable.  Organizational managers who inhibit innovation, change, and value creation must be re-educated to become coaches, mentors, and enablers of talent.  Future compensation systems must reward those managers who routinely produce a flow of talented employees for the organization.  While many managers consider themselves to be a control point, reward and recognition methods must reinforce their talent development and growth-enabling characteristics.

 

Finally, future compensation systems must be designed in a way which meets the organization’s needs today yet be flexible and robust enough to continue meeting its ever changing needs as the organization evolves, growths, and re-invents itself.

2014 Salary Outlook: A Repeat of Prior Years

Friday, November 22, 2013

 

About this time of the year, human resource professional organizations often disclose their salary and wage increase projections for the coming year.  In an 11/14/2013 article written by Jason Adwin, Vice President at Sibson Consulting and posted on The Society for Human Resource Management (SHRM) website, the author discusses salary and wage changes for the coming year and the last several years.  Adwin makes a clear and compelling connection between the continued high level of unemployment and the lack luster changes in employee compensation projected for 2014, as well as those experienced over the last two years.  With salary budget increases hovering at or just below 3% and salary-range adjustments near 2%, it is evident that most organizations feel no pressure to raise compensation levels.

 

With strong evidence there is little wage and labor market pressure to push salary budgets and ranges faster and higher, what is an organization’s alternative for rewarding and recognizing high achieving talent?  Variable pay plans, a.k.a., incentives, bonuses, and commissions is generally the response.  Stephen Bruce, Editor and HR Daily Advisor at Business and Legal Resources (BLR), quotes Teri Morning from a recent BLR webinar:

 

“Average performance is already compensated for in the base pay at the market rate.

Average performance doesn’t necessarily require a merit increase.

Variable pay programs should pay for themselves.

Incentive pay isn’t always applicable to every position.

Variable pay rewards outcomes—not good tries.”

 

The issue with many variable pay plans is they often fail to recognize and address that today’s workforce in not homogeneous.  Cohort members are going to perceive reward and recognition differently from their adjacent group associates.  What motivates a Baby Boomer may have the opposite effect for a Gen-Xer, even to the point of deceasing performance.  This phenomena means that how reward and recognition systems are designed and communicated, must include continuances for tailoring that reward and recognition to the individual employee.

 

When communicating feedback to a multi-generational labor force, reward and recognition messages have to be crafted to each group:
 

·         Traditionalists – you are valued for your experience,

·         Baby Boomers – you are valued, the organization needs you,

·         Gen-X’ers – have it your way,

·         Gen-Y’ers – you'll work with creative peers in a creative environment.

 

A variable pay plan which pays a 10% incentive for on-time on-budget project completion will be perceived differently by each generation.  A Traditionalist may expect a “pat of the back” and a “we could not have done it without your years of experience”.  A Baby Boomer would have been happy the check.  A Gen-X’er will want recognition that doing it their way was really the way to do it.  A Gen-Y’er will want to pick their next assignment and staff it with creative types just like themselves.

Gamification for Talent Development and Retention

Friday, November 15, 2013

 

We saw how gamification might play a role in the staffing of a new customer service center.  Now let’s look at the role that gamification could play in raising the skill level of talent and building employee affiliation with the organization.

 

Our new customer service center is up and has been operating for six months, but the analytics are pointing to some troubling trends.  First call resolution is below standard, mis-re-directed calls are too high, escalated call cases to Level 2 and 3 are too high, and staff turn-over is increasing.  Root cause analysis has identified several inter-related issues.  After reviewing various options, management has elected to re-design the gamification platform and re-introduce it to the call center staff.

 

All call center staff members are encouraged to explore the re-designed gamification platform.  Staff who participant and reach top level game performance will be recognized with an achievement “badge” as a mentor.  As part of their recognition, mentors will also be provided with development in coaching the work of other employees.  Staff members who are struggling with a specific issue, e.g., first call resolution are encouraged to voluntarily seek out a mentor for one-on-one coaching.  In addition, mentors will be asked to seek out and engage with employees who may be at risk of turnover.

 

Management is confident this approach will lead to significant improvements in the center’s analytics, nevertheless, they are expecting to see a change in the trend into more positive territory and they have allowed us 90 days to change the trend direction.  In addition to tools for recognizing mentors, staff members who improve their individual and team performance are eligible for spot bonuses, time-off with pay, and travel and entertainment gifts, and the opportunity to become mentors themselves.

 

While management wants to see improvement in individual performance, they recognize that call center functionality is highly correlated to the overall inter-workings of the “team”.  Management does NOT want to engender an “us vs. them” or a “have vs. have not” environment.  Consequently, in the re-design of the gamification platform now includes an internal “crowd-sourcing” component which was added to encourage and allow both real and spontaneous “teams” of Customer Relations Representatives to achieve recognition by solutions to performance issues.

 

While not a panacea, gamification holds the prospect of becoming another viable tool to address talent motivational and retention concerns.  Gamification may have a special and unique connection to both Generation “X” and “Y” employees.  Generation “X”, the lost generation, may be skeptical of gamification, nevertheless, they entered the labor force as personal computing took over the workplace.  On the other hand, generation “Y”, the millennium generation, has grown up with ubiquitous technology. 

 

Last but not least are Baby Boomers, an estimated 79 million Baby Boomers are in the work force and many plan to continue working well past their normal retirement age.  Baby Boomers are not “technology” novices, however, they are idealistic, competitive, loyal, and tend to question authority.  So, gamification design must address these characteristics if it is to be effective with this cohort.

Gamification in the Selection Process

Friday, November 08, 2013

 

Gamification is the process of applying of game-like techniques to address organizational issues including employee screening and selection.  Consider that you must source, recruit, select, onboard, train, and assign 50 new customer service representatives (CSR) for a new service center within 30 days.  Traditional methods could take much more than 30 days just to source, recruit, select, and onboard 50 employees.  Now they have to be trained, requiring 40 classroom hours to reach mastery.  Past experience has show that 20% of new hires fail to achieve mastery and must be released, requiring that you over staff to compensate for the potential turnover.

 

Our gamification approach is to create a game-like scenario and invite our pool of applicants to “play” the game as part of the selection process.  The applicant creates a profile giving themselves a user name, password, and an alter ego avatar and enters the game at the lowest level.  The applicant’s avatar is presented with the basic duties of the CSR’s role as well as a tool kit with a limited number of solutions to entry level tasks.

 

Next the CSR is faced with entry level challenges and simulations from the game’s “wizard”, i.e., logging on to the system, recording time and tasks, logging an inbound call,  re-directing calls, assigning calls to a higher level CSR, … etc.  Our avatar is permitted to reach into their toolkit for solutions to these entry-level tasks.  Each solution contains basic information on the task, response(s) to the task, and a simulated exercise.  Successful completion of the simulation and challenge allows our avatar to attempt the next challenge.

 

The game’s wizard rewards each successful challenge encounter with “game bucks” and offers coaching on any unsuccessful encounter.  Our avatar may attempt any challenge an unlimited number of times, but cannot advance to the next game level until they have successfully completed each challenge at the current level.  As our avatar advances to the next level, they are awarded a “badge” recognizing their current level of achievement and a few game bucks.  Game bucks are used to buy a solution toolkit for each succeeding level and can be used to buy additional solutions for the current level if our avatar runs out of toolkit solutions.

 

The game’s design may include numerous task levels from entry to supervisory.  As our avatar progresses to each succeeding level in the game, the challenges become more difficult and the simulations become more complex and lengthy.  Our avatar may choose to stop and end the game at any level.  Based on the applicant’s past experience and skill level, they may successfully complete one or all levels.  Information collected during the applicant’s play provides the selection decision maker(s) with an insight into the applicant’s possible performance.  Such information is intended to “assist” with a robust selection and assignment process and is NOT intended to supplant practices such as personal interviews, background, and reference checks.

To Train or Not To Train

Friday, November 01, 2013

 

This must be another age-old question every organization has faced.  Does an organization train its employees and face the possibility those employees will leave or does an organization NOT train its employees and face the possibility those employees will leave?  Either way, the organization could be faced with the loss of talent.  Yes, it is possible that whether you train or not, employees might choose to exit the organization and that is the chance every employer takes.  While there are no guarantees in life or for that matter, business; the bonds between the organization and its top talent must be based on more than a paycheck or the availability of training.  “… rewards create a stronger emotional bond between employees and the company.”

 

Training is an investment.  Like any investment, the investor expects, demands a return.  As with any investment, there is a risk the expected rate of return will or will not materialize.  If the only bond between the employee and their organization is a paycheck, the likelihood of the employee’s continued retention is small.  The employee has to “desire” to remain with the organization.  The value of that “desire” is complex and multidimensional.  Cash compensation is certainly part of the equitation, but so are employee benefits, as is non-cash recognition, the organization’s brand, peer relationships, managers, organizational leaders and their agenda.

 

Training is a multiplier.  Just as capital investment in new equipment, systems or an organizational acquisition can leverage an employer’s ability to compete, so can training.  While training on a new Customer Relationship Management system (CRM) is required for all Customer Service Representatives, leadership development should be reserved for the organization’s top performers.  Although training should never be couched in terms of punishment; training is a development tool for all levels of performance.

 

Training transfers core organizational values.  The transfer of core organizational values is essential to the sustainability of every culture, including a corporate culture.  Common core values, between the employer and employee, help to bond an employee to that organization.  As with any relationship, core values must be communicated, training provides one means of effecting that communication.  To be effective at engaging employees, training must incorporate core organizational values in all phases of its design and implementation.

 

Training is global.  It should come as no surprise to anyone that training is a global issue in retaining top talent.  While it is an over simplification, the desire for training and top talent are mutual values competitive organizations want in their global workforce.  As such training provides a means to engage a workforce that is often disconnected and out of touch with an organization’s mission.  Training is the glue that bonds together the various components which make-up a multinational employer.

 

Training is a motivator.  Training can be designed in a manner that will excite, instill focus, and direction in otherwise unguided employees.

Cash Bonus Programs, How Effective Are They?

Friday, October 25, 2013

 

Cash Bonus Programs are a mainstay of many organization’s Total Rewards, but how effective are they is driving the desired performance behavior and linking that performance to organizational initiatives?  The answer can be found in their design, communication, execution, maintenance, and measurement.

 

Design:  “If I offer a large bonus, won’t my workers will do an outstanding job.”  Not necessarily.  Who is eligible, what performance outcomes are desired, what performance behavior is eligible, how is the calculation done, when are payment made, is the bonus integrated with base pay, is a portion of the bonus “held back” or deferred, are bonus payments included in calculations for benefits, are pay-outs scalable and variable based on performance levels required and organizational needs?

 

Communication:  I once worked for an organization where eligibility for bonus programs was not communicated to the covered employees.  How much, how often, when, and to whom bonus program edibility is communicated is essential to driving the desired performance behaviors and linking those behaviors to organizational initiatives.  Communications drives the “brand” identity of a bonus program, its perceived organization support, as well as its creditability.

 

Execution:  It is never sufficient to design and communicate a rewards program if its execution falls short of delivering on the payouts effectively and efficiently.  The power of a rewards system loses its ability to drive the desired performance behaviors if payouts are incorrect, delayed, lack creditability or presented in an inappropriate manner.  While an organization may not want to publish dollar amounts on their corporate web site, top reward earners should be celebrated nevertheless in some internal/external fashion, e.g., “The Million Dollar Club, Top Sales of the Year, Zero Lost Time Accidents for 10 Years”, … etc.

 

Maintenance:  Organizations live in a dynamic and complex ecosystem of competitors, regulations, and technology.  To be successful, every rewards system must be adaptable to the changing internal and external environment in order to tie performance behavior to the ever changing and new organizational initiatives.  A bonus plan from 2000 is unlikely to drive performance behavior or be linked to the organizational initiatives of today.  Left unattended, any bonus program will become out-of-date and un-harmonized and may even drive the organization to be less competitive, create recruitment and retention issues, and raise sustainability questions with stakeholders.

 

Measurement:  It is a commonly held belief that failing to measure is tantamount to failing to manage.  Ongoing outcome measurement of any bonus program is the foundation for the determination of its effectiveness in changing behavior, i.e., increased profitable sales, reduced costs, … etc.  Without a base-line measurement, it becomes impossible to know if the incentives of a bonus program are too high, too low or just right.  While financial measurement is generally the realm of an organization’s finance function, it is vital that a program’s owners (HR, Marketing, Sales, and Production) be in alignment with its Return on Investment.

 

Workplace Bullying and Top Talent

Friday, September 27, 2013

 

According to The Healthy Workplace Campaign, workplace bullying takes the general forms of:

 

•Verbal abuse.

•Offensive behaviors that are threatening, humiliating or intimidating.

•Work interference or sabotage that prevents work from getting done.

 

Writing for the Society for Human Resource Management (SHRM), Roy Maurer reports that since 2003, two dozen states have established legislation which provide protection for bullied workers and allows them to sue without the need to first demonstrate discrimination.

 

The basis for workplace bulling behavior is complex and employers are generally not equipped to address or correct it.  However, failure to address situations of workplace bullying can have both a direct and an indirect impact on an organization’s efficiency and productivity.  This impact can include increased turnover, lowered levels of service, missed deadlines, and potential litigation against the employer for “allowing” a hostile workplace to persist.

 

An article in the Harvard Business Review for January-February 2013, “The Price of Incivility”, authored jointly by Christine Porath and Christine Pearson paint bulling as an infectious disease.  The authors conclude: “Incivility [bullying] is expensive, and few organizations recognize or take action to curtail it.”

 

Gary Belsky, writing for Time’s Business and Money, reported on a Canadian study in which it was found that “witnesses” to bulling may be as impacted as the intended target of the bullying event.  So visualize this, some of the organization’s top new talent are in a conference when Employee X berates the comments and questions of a co-worker.  What impact is there on the employer’s new top talent?  One, they will adopt that same behavior or two they will start looking for their next job.  Either way, it can be assumed that the unit’s productivity will suffer if such behavior is allowed to continue.

 

An employer’s “brand” is an essential part of the organization’s talent recruitment and retention toolbox.  Street rumors, even if unfounded, concerning an environment which tolerates bullying, can dull the sharpness of the ability of an organization to attract and retain the best talent.  As most organizations have sought to diversify their talent base, they have adopted policies which do not tolerate inappropriate verbal and non-verbal behavior towards women, minorities, and other protected groups.  Jackson Lewis, a US based law firm, dedicated to representing management exclusively in workplace law matters, recommends the adoption of workplace bullying policies.

 

In its efforts to source, recruit, and retain top talent, an anti-bullying policy sends a strong message to current and future employees that the organization will not accept such behavior.  In the same manner that employers have worked to foster a conducive work environment for women, minorities, and others, businesses desiring to attract and retain top talent need to consider the chilling impact that bulling has not only on their top talent, but on their customers and clients.

How to Lose Great Employees in 10 Easy Steps

Friday, September 20, 2013

 ● Ignore them – disregard their advice and suggestions.

Great employees don’t expect to have their advice and suggestions noticed or taken seriously.

● Hide them – bury them somewhere so no one knows they exist.

Visibility to organizational executive management and customers is overrated.

● Don’t challenge them – great employees do not want to be tested.

Great employees don’t want any additional responsibilities; they already have enough on their plate.

● Forget recognition – they are happy being the unsung heroes.

There is no need to recognize great employees, anyway they shun the limelight.

 ● Rewards aren’t required – great employees are rewarded by their jobs.

Just working for the organization and their managers is enough of a reward.

● Don’t promote them – they are too valuable where they are.

The organization cannot afford for great employees to move into other roles.

● Exclude from projects – great employees are not motivated by project work.

Great employees would not enjoy the prospects of a special assignment.

● Isolate them – they work best off-line, excluded from other employees.

Working with others on a team is something from which great employees shy.

● Don’t provide training – great employees do not need training.

Great employees are already fully trained and if they are not, anyway, they are insulted by training.

● Exclude from interviewing – they have no insights into a candidate’s potential.

Great employees are uncomfortable interviewing job candidates.

Great employees start with great hires.  Short changing the sourcing, recruiting, and selection process is akin to including out-of-date ingredients in a cake.  Great employers are absolute in their desire to hire the best employees – and to keep the best of the best.