Tuesday, January 27, 2009

Is this Recession a Good Thing for HR?

I just read an article from Workforce Management, titled, HR is Dead...Long Live HR.  (I believe you have to be a member to view).  The article discusses whether or not HR can weather these turbulent times.  I am a  glass half full type of person, so I believe, "YES WE CAN!" to quote our new President.  Sherry Caudron quotes Dave Ulrich regarding how HR will be split into two distinct areas:

1) Transactional and administrative-which is easily outsourced and trending to continue to be outsourced
2) Transformational-Strategic work in areas of culture transformation and performance.  This work is better handled internally so that it is specific to goals and strategy of the organization.

At the end of the day, it is up to us to make sure we can successfully meet our organizations needs in these difficult times.  If we continue to be comfortable in the areas of transactional work then we have to be prepared for a shrinking HR professional population.  (Ulrich predicts the profession to shrink by 25%).  If we like the transformational work and that work is there and very challenging then we just need to DO IT!

As my business partner, Barbara Hughes pointed out, "This situation is not unique to HR." I believe she is right that there are many positions that are trying to prove their value its just that HR has been talking about it for so long.  Caudron agrees: but has a caveat for HR:
"With the unemployment rate hovering around 6 percent, the same thing can be said of many jobs, including information technology, telecommunications, and marketing. But when the economy turns around, people in those positions are likely to find work again. That’s not necessarily true for HR professionals, because the profession is enduring a wave of changes that by all accounts are likely to significantly reduce the number of people needed."
So what do we do?  We are at a major cross roads.  I believe we will weather this storm and here is why:

1) I have been encouraged over the last few months with HR professionals I have worked with as clients.  They are smart, savvy and they have their CEO's ear because they are business people.
2) We have a new generation of HR professionals behind us that are learning from our success and failures.  They are eager and smart.  I believe they come into our profession with a focus on technology and performance.
3) Someone has to make sure the right people are performing to their potential and the organization has the talent it needs short and long term to succeed.  This sounds easy but it is very difficult to do.
4) This transformational job is what  most HR professionals have wanted all their careers.  This recession has just caused us to shut up and execute.  Because of shear necessity, I think we will succeed!

Please comment and tell me your thoughts!

Thursday, January 22, 2009

Performance Appraisals: Stay or Go?

I have been giving some thought lately to the value of performance appraisals as I am in the middle of redesigning a few as we speak. Over the last few months there have been many blogs and articles written on the need to get rid of performance appraisals. Samuel Colbert, from the Wall Street Journal wrote on article back in October 2008, entitled, "Get Rid of the Performance Review." (I would link but you have to be a subscriber).

His reasons for getting rid of appraisals and my comments follow:

1) Two people-two mind-sets: I agree the boss is the reviewer and the employee is sometimes on the defensive. Can you say training and set expectations?

2) Objectivity is Subjective: I agree that there is a lot of subjectivity that CAN plaque appraisal feedback. However, if the managers are trained and the form has been designed properly with expected behaviors and job related competencies then that reduces subjectivity.

3) One size does not fit all: I agree with this so make sure performance appraisals are job specific meaning you probably need more than one form for all employees.

4) Personal Development is impeded: I disagree. Colbert thinks the manager gets in the way of development because he knows the weaknesses of the employee. I think most managers want their employees to be more productive, so pointing out career development is on their best interest.

5) Disruption to teamwork: Maybe. If you have true teams in the workplace then make sure team members have the ability to rate each other's performance and part of the rating includes ability to function and perform in a team.

He goes on to say that appraisals do not lead to improvement. I say they can if they are done correctly but that sure does take a lot of work. Now is not the time to get rid of appraisals. We have to be more focused on performance today than we have ever been.
His answer: A performance PREVIEW that focuses on the future instead of a performance REVIEW that focuses on the past....now that is interesting...thoughts???

Monday, January 19, 2009

Profitability Through Human Capital

It's a new year and our blog has a new name. We changed our name from "Find Your Metrics that Matter" to "Profitability Through Human Capital.”, which more accurately reflects our work, our customer feedback and even posts in this forum.

When you think about your business’s definition of success, there are many variables that impact outcomes such as profitability, market share or growth. Measuring and tracking those variables is a part of a good strategy but the focus has to be on the things that "enable" and "facilitate” your business outcomes. We believe the enablers of high performance are:

1) Customers
2) Employees
3) Leadership/Strategy
4) Culture

These enablers are also the source of your competitive advantage and the key components of your company’s profitability. HR has the key role in "managing and impacting" these enablers. In last week's blog, I discussed the spillover effect from employees to customers. Without an effective customer-focused strategy and a culture that celebrates the customer, that can't happen. When culture, leadership and strategy support the employees’ efforts to service the customer, you’ve got the "spillover effect".

The following are facilitators to high performance and profitability:

1) Processes
2) Products
3) Technology
4) Financial Capital

The facilitators are necessary but easily duplicated. If they are not efficient, meet needs or support a customer-focused strategy, facilitators could sabotage the enablers and the customer will know it. For example, if your technology is old and slow, employees get frustrated and this spills over to your customers who experience disgruntled employees and slow service.

I believe that you have to take a holistic approach to the organization by examining desired outcomes, enablers, facilitators, strategy and mission, to determine what is working and what needs to be tweaked. Metrics that matter allow you to monitor high performance and create an early warning system when areas need attention.

Human Capital is the unique capabilities and expertise of individuals, which applies to our employees and our customers. Another reason for our name change: we believe that we must understand the cause and effect between these two groups of people as our business outcomes are dependent on both.

Sunday, January 11, 2009

Making Engagement Contagious

I read one of the best articles on the topic of employee engagement and the impact it has on customer engagement. The article is by Dr. Gary Rhoades, entitled, "The Spillover Effect." I highly recommend reading it.

We have all heard that "happy employees equal happy customers", even I have said that many times. We all know that it is intuitively true, but it is and has been very hard to measure and track. An analysis by the Allegiance group noted that companies that had high levels of engagement for both customers and employees were TWICE as effective in financial performance that those that had high levels in just one group.

As companies that have used linkage analysis are out- performing those that do not, I believe it’s time to move away from traditional employee surveys and think differently about engagement as a business outcome. The key is to understand those emotional drivers of employee engagement and how they play out in the customer experience. If your employees are emotionally engaged, that engagement spills over to your customers, which leads to better business results.

The first step is to pay attention to what makes emotionally engaged employees. You are not looking for just satisfaction. HR can play a significant role in this type of work by understanding the positive and negative characteristics in the working environment that drive emotional engagement so that changes can be made or best practices can be sustained. Those behaviors that customers value need to be identified so that they can be repeated over time. Repeat positive customer experiences are what leads to customer loyalty.  We all know that customer loyalty leads to better profits, revenues, and market share. 

Monday, January 5, 2009

HR Skill Set: What you need in these Chaotic Times

We have all said, these are crazy times and that business is forever changed. What does this mean for HR? Last week, I posted a blog that argued HR’s time to be strategic is now. So, what kind of skills will it take for an HR professional to be successful in the next 5 years?

I believe the usual HR competencies still apply:

1) HR Technical knowledge- Be in expert in the field, i.e. benefits, compliance, employee relations, etc.
2) Change Management skills- HR must lead and not follow.
3) Performance Management - It is all about performance.
4) Workforce planning/Staffing - Right people in the right seat at the right time.
5) Strategic focus- Understand the business, the direction, and how HR can impact results

I believe these are the ones that are needed now:

1) Analytical thinking- Demonstrate impact/ROI of HR programs, track trends in workforce planning, metrics, etc., link employee behaviors to customer loyalty and measure results. Shift from making decisions by gut to decisions by data.
2) Understanding the organization’s customer and the service culture-Understand what value the organization brings to the customer, make sure employees deliver on that value and design infrastructure to support service delivery.
3) Relationship builder-Ability to build relationships with line managers, executives, vendors, etc. in order to share knowledge and collaborate on solutions.
4) Business consultant-by understanding the business HR aligns all systems to support business strategies, goals and objectives.
5) Operational expert-HR studies operations to create and improve best processes.

Next question, if you don’t have all of these, how do you go about obtaining those? I am asked that question at least 2-3 times per month. Thoughts?