Monday, September 24, 2012

Why is Accountability so Hard?

Over the last few weeks I have heard the following:

1) I wish our managers were more accountable
2) Our culture needs to move from entitled to accountable
3) One of our core values is accountability, but we still can't reach our goals and objectives

Why is holding people responsible and accountable for their actions/goals so hard?   It must be because organizations have a hard time persuading employees and managers to be accountable.

I guess, I have come to the conclusion that accountability is just plain hard to do.

That begs the question....why is that?

Here are some theories I have, please feel free to contribute:

1) Accountability requires difficult conversations sometimes and difficult conversations are problematic at work, so manager avoid having those conversations.

2) Goals are handed down to employees without any input or direction from employees so they do not feel they "own" the goals.

3) Alignment of goals is hard work.  Key systems like performance management and the feedback process have to be up to date and effective for alignment to occur.

4) It's the blame game.  Office politics and egos force managers/employees to point the finger rather than take responsibility for actions/lack of actions.

5) Accountability has not been a part of the culture.  In some organizations accountability is not a value that the culture contains.  Post recession companies have realized accountability is a must for survival and high performance.

Here is a question, I had just a few weeks ago:

What can be done to instill accountability if an organization is just starting to move in that direction.

Great question but a hard question.  I believe leadership has to tell a story of why accountability is so important and what is going to be different.  Employees find it hard to change if they don't know the reason for the change.

Next, the organizational infrastructure, processes, and practices have to be aligned for accountability.  This step is the hard part.  So for example, if the performance appraisal process has just been a "check the box" exercise, more emphasis and work has to be focused on performance management.

Successes need to be rewarded and communicated to send the message that accountability works.  Reinforcement of the message has to come often and consistently.

Accountability doesn't happen over night, it takes hard work and commitment.  It takes leadership modeling what accountability looks like on a daily basis.  It takes HR making sure goals and objectives are aligned and tracked.

Accountability doesn't just happen by's a process.

Thursday, September 20, 2012

HR Moving From Business Partner to Business Leader

It's time for the new era of HR to roll in.

It's about influence.

It's about leadership.

It's about HR being business leaders first and HR people second.

It's about HR stepping up and becoming VISIBLE in organizations.

It's time that CEO's right hand is the Chief People Officer because that is how work gets done efficiently and effectively.

It's about time that when business leaders think of HR they think, "we have to have them to survive NOT that HR is overhead."

It's going to be a new day on HR street I feel it coming.  Forget the table, the HR Business Partner and being invisible in the's over.

Stay tuned for details on how we can make this happen...coming to SHRM-Atlanta, 2013!!

Tuesday, September 11, 2012

How to Calculate Cost of Terminations

By now, HR Professionals are so used to reporting and tracking turnover and retention.  That data is great, but we need more.  I think it is very important to uncover root cause of why people leave and stay so that you can do more of the right thing and less of what makes good people leave.

With that said, understanding root cause of turnover is like having half of the story.  Some turnover is good, some is not.  What we need to know is how much is that turnover costing the organization and how can we as HR professionals make that number lower.  

So, there seems to be several schools of thought on how to arrive at a cost of turnover.  

One theory is to separate involuntary and voluntary terminations and figure out cost separately as the theory is that the involuntary terminations could cost less.  In my view a termination is a termination and if it is involuntary, perhaps we did something ineffective on the front end that needs correcting.

However you separate turnover is fine, the real issue becomes HOW do you arrive at the termination cost?  Just like with anything else there is:

1) The easy way: take a multiple of the annual salary of those that have left the organization.  Many organizations use a multiple of one times the annual salary to estimate termination costs.

2) The not as easy way, but way more accurate way: Calculate the true cost of a termination.  This process is very similar to calculating cost per hire.  It's all about what are the direct and indirect costs of a termination.  

Let's take a look at some of the factors to consider when embarking on this calculation:

Direct costs: (departure costs)
accrued vacation payment
temp replacement help
recruitment advertising (if replacing terminated employee)
screening costs
increased salary over previous employee
manager and HR time to process term
manager and HR time to refill position

Indirect costs:
lost productivity
ramp up time for new hire to gain proficiency
customer defection costs

My recommendation would be to try and get an accurate cost for YOUR organization.  If you can determine that on average you are tracking with a multiplier of salary then by all means, use it.  

The key is to be able to defend your numbers because management will truly be surprised especially in those organizations with high turnover.  

The next step once you KNOW how much turnover is, and WHY turnover is happening, you then have to DO something about it.  

Be careful what you ask for...