IMPACTFUL THINGS HR SHOULD BE DOING…

BUT IT OFTEN DOESN’T

High-impact “Omitted Practices” to Consider

2011

© Dr. John SullivanProfessor, Author and Advisor to Management

WWW. DrJohnSullivan.com

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Goals for today

1. To make you think• But rather than thinking about improving your

current practices • Instead, to get you to think about… what

you’re not doing • And to consider adding 1-2 omitted practices

that would really improve productivity

Is this the reason for the lower productivity?

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We proudly manage exclusively using the…

Homer Simpson principles of management

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The process I used for identifying these practices

I studied the most innovative HR firms to

identify “next practices” (Google, Microsoft, Facebook etc.)

Next, I examined the best practices of highly effective/well-funded business functions… to identify “omitted practices” that could be transferred into HR (Finance, supply chain etc.)

I will have met my goal…

if your reaction to at least a handful of these “omitted” practices is… “that makes sense, I wonder why we don’t do that?

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Let’s look at omitted HR practices

12+ “next” and “omitted” practices that can increase productivity and… HR’s impact

(with examples)

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Next practice - Reward great people management

Productivity problem

Many managers don’t spend much time or take their people management responsibilities seriously

Although HR “owns” all of the key components (performance management, performance appraisal, competencies and reward systems), we do not usually reward people management performance

What percentage of firms reward managers for their performance on people measures (Source: Stephen Gates of The Conference Board) > (39%)

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Next practice - Reward great people management

Actions to take Develop a “people management scorecard” for

each manager Measure, report and reward managers for

outstanding people management results (reward

through bonuses and requirements for promotion)

Benefits What is measured, reported and rewarded is…

done first and done best Mgrs. have already learned to respond to rewardsAn example >

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Ex. – Quarterly people management scorecard

1.Team productivity & quality2.Employee innovation impacts3.Quality of hires4.Retention of key employees5.Development of leaders6.Internal release of developed leaders7.Employee satisfaction with feedback8.Best practice sharingAverage combined rating on the 8 factors ______

Bot

. 10%

Bel

ow a

ver.

Ave

rage

Top

25%

Top

5%

Name _________________ Dept._________Quarter # ______

Key people mgmt performance factors

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Next practice – Identify productivity barriers

Productivity problem

Managers operate in a competitive world... that forces them to periodically increase productivity

HR must offer help in the form of internal productivity consultants (IPC)

I have found that the most effective approach for increasing productivity… is to utilize employees to identify and remove the barriers that prevent productivity improvement

HR productivity consultants can help execute the process

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Next practice – Identify productivity barriers

Action Institute a productivity barrier identification

and removal process which includes… surveys & small groups to identify the barriers

Benefits

When employees and managers are given the right tools, they excel at identifying these barriers

Many barriers are relatively easy to break down Productivity can increase by double digits

within monthsAn example >

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Productivity improvement process

Identify barriers to productivity

“I need you to increase output by 25%, help me to identify the factors that prevent you from doing

that?”(200% in two months)

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Productivity problems come from 20 key factors

1.The manager 2.Hiring/ retaining top ee’s3.Learning/ sharing4.Clear goals / 5.Motivation/reward/ engage

6.Employee skills degrade7.Right job placement8.2 way communications9.Performance metrics10.Plans and strategy11.Collaboration for innovation

12.Prioritize to max impact / focus

13.Info. for better decisions

14.Team member capability

15.Tools and equipment 16.Inputs/ raw materials17.Resources & budget 18.A lack of integration19.Outside work factors 20.Perceived barriers to

productivity/innovation

Even policies can impact productivity

Our Dog Policy

“Google's respect and affection for our canine friends is an integral facet of our corporate culture. We have nothing against cats, per se, but we're a dog company…”

Why does it work – Spend more time, more cross functional collaboration, aids recruiting/retention & personalized motivation

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Next practice – Improve promotions through contests

Productivity problem

Promoting the wrong people can have dramatic negative impacts on productivity, retention and morale

Employees often assume that promotions are biased… and are not based on actual abilities

Sometimes each team member has not had an equal chance to demonstrate their performance and capabilities

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Next practice – Improve promotions

Actions Promote people based on their ability to perform

in a “work problem” contest (e.g. Iron Chef)

In other cases, let employees appeal when they consider a promotion to be unfair (IBM)

Benefits A chance to find and assess many candidates Fewer complaints about bias… because the

results are performance-based and anonymous Superior results after a “contest” promotionAn example >

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Internal competitions can improve performance

MGM Grand sends a message that…

performance triumphs over tenure (400%)

Learn more about MGM’s commitment to it’s people: http://bit.ly/fotn55

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Omitted practice – Convert HR impacts into $

HR problem

Current HR metrics fail to WOW senior executives… who only understand dollars, revenue and profit

HR is often underfunded partially because it uses a different language (turnover, engagement, time to fill etc... vs. profit, productivity and ROI)

A focus on cutting costs is not as impressive as increasing revenues

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Omitted practice – Convert HR impacts into $

Action Convert all major HR outputs into revenue impacts Include the $ impact of… great hires, employee

innovations, reduced turnover of top performers and the value of developed leaders

Benefits

Senior managers can see the tremendous $ impact of HR directly alongside the business impacts of other functions (finance, marketing, supply chain etc.)

Some examples >

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A quick example to illustrate… the difference between rev. impact metrics and std. metrics

Standard L&D metrics are OK

1. 98% of employees are satisfied with L & D

2. The cost of each L&D hour is down 12%

These two could be labeled as “so what” metrics >

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A quick example to illustrate rev. impact metrics

But revenue impact metrics… grab your attention

1.$148k is the average yearly sales of a salesperson

2. It is $197k if they completed a job rotation last yr.

3. It averages $249k if they spend 6 hrs. a wk. or more on social networks… sharing best practices

4. It is $301,000 if the salesperson did both

5.For every 7 salespeople that do both, we increase revenue by $1 million

6.We have 211 salespeople

Google calculates business impactof a single great hire

One top-notch engineer is worth “300 times or

more… than the average

…

we would rather lose an entire incoming class of engineering graduates than one exceptional

technologist.”21

Alan EustaceSenior Vice President,

Engineering and Research

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Next practice – Offer “free time” / flexibility

Productivity problem

There is a need to dramatically increase ideas, productivity and innovation

HR needs an additional effective tool to supplement the “barriers to productivity” reduction program

Next generation workers expect flex scheduling, remote work & free time for their own projects

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Next practice – Offer “free time” / flexibility

Action Provide top performers with 20 % time or

ROWE optionsBenefits

When top performing employees are allowed to make their own time and project decisions, productivity and innovation can increase dramatically (i.e. Genentech and 3m)

Office/ real estate costs can be cut dramatically

3 examples >

What is the value of 20% time?

What is the measurable bus. impact of 20% time?

54% of Google products started as 20% time

Up to 35% of their traffic comes from them (Rough estimate)

Google programs initiated during 20% time:Google News OrkutGmail AdSenseGoogle Translate Google ReaderGoogle Earth Google TalkGoogle Maps Google Sky

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What is the business impact of offering a flexible work environment?

Results Only Work Environment•Pick your hours•Pick where you work•No in-person meetings required

The business impacts:ROWE individuals have 45% lower turnover

($13 million per year at $102k per employee)When workers switch to ROWE, their

productivity jumps by 35%

Deloitte lets you design a flexible job

Mass career customization (Deloitte)

Every employee can dial up/ down their job… as career aspirations & personal needs change including:•Work hours• Travel demands• Job responsibilities

Unlike flextime/ job-sharing, all at the location are automatically enrolled to minimize any stigma

Results: most choose to dial up their career (66%), Voluntary turnover rates of top performers choosing this option was 200% lower

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Offering “no cost” short-term projects

A “free time projects” website They offer employees a chance to

“bid” on short-term projects These “part-time job rotations” allow

individuals to grow and learn in new areas The projects also increased the visibility of the

participants These were “free time” projects without

additional compensation Literally hundreds of projects have been staffed

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Next practice – Increase non-monetary motivation

Productivity problem

Employee motivation needs to increase, especially during economic downturns

The compensation function focuses exclusively on salary, benefits and bonuses… even though a significant % of motivation comes from… recognition, praise and feedback

Salary increases and promotions are expensive and permanent… and the motivation might not even be maintained

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Next practice – Increase non-monetary motivation

Actions HR must develop non-monetary motivation tools

for managers that are easy to use and that produce measurable results

Also consider a “how to best manage me” approachBenefits Research shows that recognition can be an

employee’s highest rated motivation factor (before promotion, money & benefits) Source: Research Journal of

Internatıonal Studıes - Issue 14 (May, 2010)

Non-monetary motivation is significantly cheaperManagers can mass personalize the motivators2 examples >

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Personalized mot. - Tell us what motivates you (besides $)

A survey finds what individuals prefer

Employees rank the types of reward and

recognition that will have the most impact

Some prefer a pat on the back, a small token of

appreciation, or public notice in a staff meeting

/companywide newsletter

This enables managers to customize recognition,

& promote employee satisfaction and retentionBaptist Health Care

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Another personalized productivity approach

“What’s the best way to manage you” profileHow often do you want to meet?What is your preferred way to communicatePreferred method of feedbackYour preferred way to be recognizedTop motivators & frustratorsMost impactful rewardsIndividual contributor or team preferenceWhere would you like to be in 2 years?

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Next practice – Bad manager identification program

Productivity problem

Managers oversee the single most expensive cost item at most firms… Which is?

The employees (60% of variable costs) Manager actions have a significant impact on

innovation, productivity & the development of ee’s Bad managers may be the #1 cause of turnover Bad mgrs. seldom hire “A” players / innovators Managers are often promoted using criteria other

than their people management abilities

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Next practice – Identify bad managers

Actions Develop a bad manager identification program Utilize a survey (for employees and managers) that

identifies bad managers based on their actions Also use a productivity /performance index Utilize post-exit interviews as a final approachBenefits Fixing 5% of the bad ones may have millions of

dollars of impact on productivity and innovation Dell, FedEx, Monsanto have implemented

effective BMI programsExample >

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Prevent bad managers from… bad hiring

Google takes extraordinary steps to limit the damage “We do everything to minimize the authority and

power of the manager in making a hiring decision”

“Managers often want to hire people who seem just like them”. So

…”hiring decisions are made by a group.” Lazio Bock, Google VP of People Operations

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Omitted practice – Provide integrated HR solutions

Productivity problem

Managers are faced with multifaceted problems that simultaneously require at least a partial solution from several different HR functions

The solutions that are provided to managers by HR are almost always fragmented & independent

Managers prefer a single integrated solution

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A typical “fragmented” manager problem

I learned the need for integrated solutions when

a GM asked me for a single solution to his problem, which was…

Increasing his output by 12% While cutting labor costs by 8% Increasing innovation by 23% Reducing employee turnover by 20% Increasing his customer satisfaction rate by 37% Increasing revenue by 6.5%

What would the name of your integrated HR solution be?

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Omitted practice – Integrated HR solutions

Action Develop a process for providing integrated

solutions… that result from all HR functions operating as a boundaryless and seamless team

Benefits

To a manager with problems, a single integrated solution only requires a single stop in HR

An example of the potential choices in an integrated solution >

More productiveMake talent more productive

and/or innovator

Buildinternal talent

Movetalent internally

Buy external talent

(Employee, temp or outsource)

When managers need increases in performance and productivity… they have 6 basic HR choices

Release weak and excess labor

Use substitutes for labor

(Technology or software)

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Omitted practice – Increase innovation by collaboration

Productivity problem

Innovation has surpassed efficiency as the prime driver of profit

Most HR functions don’t know the factors that increase innovation

Google has led the way in understanding the factors that increase innovation >

What is required to increase innovation?

Google uses fact-based decision-making… so they have a formula for increasing innovation (Algorithm)

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Innovation = Discovery + Collaboration +Fun!

Source: K M World Magazine Webinar 2008

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Omitted practice – Innovation through collaboration

Action HR must take steps to increase both continuous

self-directed learning… and cross-functional collaboration

Benefits Continuous self-directed learning is superior to

most corporate learning for increasing innovation Collaboration also reduces roadblocks and

resistance (TTM)

Collaboration increases excitement and professional competition… as well as learning

Some examples >

Increasing innovation, sharing & collaboration

Examples of the Google approach

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The Google “bump”

Additional Google collaboration approaches

150 ft. rule 20% time Cafe lines are measured (By Laszlo Bock)

Learning by walking around – broadening manager span of control to limit restrictions

Internal collaboration websites – •Google ideas – marketplace for sharing new ideas

•Moma – directory for finding collaborators

• Snippets – updates on all current project

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Google has found some bold ways to increase collaboration and fun

“Pajama day” at Google

Martini “blowout”

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Google increases continuous informal learning

Google “Testing on the toilet”

www.flickr.com/photos/gubatron/246489031

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Next practice – Proactive internal placement

Productivity problem

Often external talent must be recruited because of

weak internal movement programs

Most internal transfer and promotion programs

fail… because employees are reluctant to

move… or they are unsure about the best

placement for their career & the company (MJ & baseball)

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Next practice – Proactive internal placement

Action

Assign one or more recruiters to proactively identify individuals that would benefit from a move… and what the ideal placement would be for both parties

Benefits

Increase productivity because of “smarter” internal job placement

Improved leadership development Reduced turnover due to frustration An example >

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Improve internal movement

Booz Allen built a “career mobility team” It utilized recruiters to proactively move internal

candidates faster and to more accurate placements Microsoft has a similar team National Oilwell Varco holds an NFL style draft

for new hires after their first year

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Omitted practice – Risk analysis in HR

Productivity problem

An increasingly important function throughout the business is risk analysis… which attempts to identify and quantify the risks (probability and costs) associated with potential problems

HR encounters numerous high-cost risks in hiring, retention, layoffs, leadership succession, lawsuits etc. but it has no formal risk analysis function

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Omitted practice – Risk analysis in HR

Actions

Recruit someone from the business side to conduct HR risk analysis every six months

Also conduct “failure analysis” after major errorsBenefits

Not only will potential risks be identified but accurately estimating their large potential cost could help HR get funding

An example >

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Internal consulting center/ risk advisor

At Zappos, the HR function…

“Operates as “risk advisors.”

“HR doesn't decide”. We empower the manager to make a decision

Source : #hrhappyhour 2010

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Next practice – Stories for branding and referrals

Productivity problem

Social networks and media make it much easier for your employees to build your employer brand and to find referrals

Stories are the most powerful and credible way of spreading a firm’s message…

but most firms have no way of cataloging powerful people management stories

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Next practice – Stories for branding and referrals

Action

Develop a story inventory and a process for gathering and providing access to great people management stories

Benefits

With so many negative comments on the Internet, “authentic” stories can be a powerful counter argument (glassdoor.com)

Providing free access to stories is superior to other methods which may be viewed as propaganda

Some examples >

Employee videos are powerful branding messages (Yielded 1,000+ videos)

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Consider a story book

Zappos publishes a book full of 300+ employee written stories about what it’s like to work there (Available on Amazon)

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Microsoft developed an internal story inventory

Microsoft “Spreadthelove” internal websiteTheir “Spreadthelove” website allows Microsoft

employees to “write up” their own individual story about their career with Microsoft (their story might include pictures, testimonials and video)

Employees can then share the web link and “spread the love” with targeted friends, family and potential referrals

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Educate employees so they can better spread stories

Source: Whirlpool

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As time permits – some next practices

Randomly ask how ee’s are being treated (Retention)

A blocking strategy for retention

Off cycle recruiting

Internal social media for learning &

collaboration

Best practice sharing

Generate a profit (HealthEast)

Corporate Headcount “Fat” Assessment Plan

Remote college recruiting

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As time permits – some omitted practices

Competitive analysis

Prioritize jobs /individuals (recruiting & retention)

Parallel benchmarking (SW Air)

SWAT team

Unintended consequences & “other pocket” costs

Alerts and smoke detectors from precursors

Lean or agile HR

Apply the CRM model to HR cust. interactions

OMG !“I want that one”

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Did I make you think?

Provide you with some new ideas?

www.drjohnsullivan.com