Removing Bias (and Desperation) from Your Hiring Decisions

In a doomed attempt to save time, many hiring managers unwittingly make themselves both more desperate and more biased in their hiring decisions. When you prematurely narrow the number of candidates you are willing to interview, you set up the perfect storm for bias and desperation.  Here’s why.

The Washington DC metropolitan area has a great job market. As I said in The Washington Business Journal,  job seekers have the upper hand again. Mid-career professionals often receive multiple job offers and can afford to be choosy. This means that candidates who do well in their first interview with you often withdraw from consideration before you’ve even had time to schedule their second interview.

So, if you have not started your first round interviews with a field of at least six highly qualified candidates, you will probably find yourself coming down to the wire with only one viable candidate. That makes your hiring decision both simple and dangerously flawed. When you only have one person, your choice is either a) hire, or b) don’t hire. Really, the choice is a) continue doing two jobs, or b) get help from someone. So naturally most hiring managers a) decide to hire now, and b) live to regret it later.

A recent study suggests why you make better decisions by improving your frame of reference. Harvard Professor Iris Bohnet explains it this way:

“Our hunch is that the mechanism works something along the following lines: if you look at one pair of shoes, it’s hard to evaluate the quality of those shoes. You will be much more likely to go with stereotypes or heuristics or rules of thumb about shoes. But if you have several pairs of shoes available, you’re much more likely to be able to compare different attributes of the shoes.”

The Harvard study showed promising results in removing gender bias from hiring and promotion decisions, but the frame of reference principle applies equally well to other aspects of hiring, such as evaluating the competencies and cultural fit of the candidate.

Don’t set yourself up to make a bad decision. Do what it takes to assemble a robust slate of qualified candidates, you won’t regret it.

Are Your People a Drag or a Sail?

We staff a lot of new initiatives. And we’re often brought in when executives want to rethink how they have staffed a position.

So I regularly hear how executives talk about the intersection of strategy and people. And some executives describe their current staff like a tractor pull–a powerful engine (strategy) is dragging a heavy sled behind it (the current staff).

Organizations often say “people are our most important asset” but people are also the source of most of your problems.  People often disappoint you. Top performers quit. Average performers often fail to deliver. Bottom performers threaten to sue. Departments go to war with each other. You spend less time than you want leading new initiatives and more time than you want refereeing internal squabbles. And when I see that, I usually see an understaffed, underfunded, underwhelming HR department awaiting further instructions from the executive team.

It does not have to be that way. In great organizations the culture fuels the strategy. The HR strategy supports the business strategy. Your systems, processes, expectations and rituals give lift and propulsion to your strategy, like a sail pulling you forward.

People are not your most important asset. People come and go. How you harness human achievement is your most important asset, and your only enduring source of competitive advantage.

The systems and processes of dealing with people are where the magic happens.

• How you attract great people, and how you recognize and deploy the internal talent you already have
• How you align the people to the mission.
• How you consistently inspire top performance from your people.
• How you retain the most valuable and drive away the least valuable.
• How you gracefully exit the people who no longer drive results.
• And how you do all this at a price you can afford.

Competent HR keeps you in compliance with the law. Great HR practices transform people from a drag into propulsion.

Condescension – The Sure Sign of Bad HR

How can you tell if your HR team is toxic to your work environment?  Look for any hint of condescension.  If your conversations with HR sound like Dana Carvey’s “Church Lady” or Dolores Umbridge from Harry Potter, then it’s time to re-staff your HR department.

 

I have no idea why, but in my experience it is often the least competent people who exhibit the most condescension.  And the people who are most eager to enforce the rules are often the least accountable for delivering their own results.  

One thing is for certain – no matter what deparment they work in, your organization is always better off when you don’t tolerate people who walk around lecturing you using their ”teacher voice.”

Needlessly Offensive Hiring Practices

On a typical search we’ll review 200 – 500 resumes.  Even with the right staff, finely honed processes, and a state-of-the-art applicant tracking system it’s a lot work.  And hiring is all we do.

So really, I understand when employers feel overwhelmed getting through a mountain of resumes unassisted.   But far too many employers are needlessly hostile to their potential future employees.  Not just unkind, hostile.

Writing in Glassdoor.com, blogger Liz Ryan comments on how this phenomenon plays out:

“Their job ads are unfriendly (‘Candidates lacking two or more of these qualifications will not be interviewed or contacted’) … Their careers sites are like stone-walled fortresses. Their interviewing manner is cold, and their overall hiring processes signal to candidates, ‘Go away and die.’

“What right-thinking company would drive talent away? It sounds incredible. Yet we see it, every day. The best employees, of course, are also the most marketable ones. They get to choose their employers. Companies that treat job seekers like dirt can expect to hire the most-needy people with the fewest alternatives.”

Here are Ryan’s top six ways employers signal “DO NOT ENTER”: 

“1. Their auto-responder message is unfriendly.

An auto-responder from an employer’s careers site is not a bad thing in itself. At least when you get the auto-response email message, you know they got your resume. But if you were the one writing that auto-response message, wouldn’t you write “Thanks for sending us your resume!  We’ll review your resume as soon as we can. We’ll contact you if it looks like one of our job openings is a good fit for you. Otherwise, we won’t contact you again, but we welcome you to apply through our site whenever you see a job opening that looks right for you. Thanks again for applying, and enjoy the rest of your week!”

Here’s a shocker: auto-responders from career websites don’t read like our fictional example above. They’re terse and unfriendly. “Your resume has been received and you will be contacted if we wish to interview you” is typical. Why would employers be so forbidding and stand-offish if they wanted great people to work at their company?

2. Their communications style is hostile.

One friend of mine got a voicemail message that said “This is XYZ Company. [The caller didn't even leave her name.] We will call this number at 2:00 p.m. tomorrow for a phone screen.” In other words, if you have a life that includes an appointment at 2:00 p.m. tomorrow, you’re out of the running. Who wants to work for a company that treats people like livestock? We have to expect that these companies are the ones in the worst financial straits, since organizations that mistreat job seekers tend to treat employees badly also, and badly-treated employees don’t usually take great care of their customers. If your telephone or face-to-face interview begins, “Today, we’re going to ask you questions to decide whether you’ll make it to the next round – if you make it that far, you’ll get to ask some questions yourself” you have my permission to get up and leave the interview. An interview is a two-way conversation. If you don’t get air time – and friendly, open air time at that – hit the road, because you will not like working for this company if you do get the job.

3. They want your life delivered, before an interview.

You can fill out an application form online, and you can provide a writing sample on an online form, too. That’s where I draw the line. I wouldn’t give up your social security number, and I definitely wouldn’t give up your references’ contact information before you’ve so much as talked to a human being in the employer’s shop. That’s your personal information.

4. They keep you waiting.

It’s normal to sit in a lobby or five or ten minutes, but a thirty-minute wait screams “You are nothing to us.” It’s even worse when they fetch you from the lobby and take you into a windowless conference room and deposit you there. Three to five minutes of that is about as much as most people can stand. Fifteen minutes of abandonment in one of those tiny rooms is torture. We have to take interview-day behaviors very seriously, because at this early stage in the relationship, they don’t own you. If job applicants are treated badly, imagine how they treat their employees!

5. They don’t talk about salary.

By the second interview – or between the first interview and the second one – the employer should bring up salary. It could be a waste of your time to pursue an opportunity if the money isn’t going to work for you. Bring up the topic by asking “Shall we talk about compensation, to make sure we’re in the same ballpark?” when the HR person contacts you to set up the second interview. If you get all the way through the pipeline without any dollars discussion (don’t do it!), expect a low-ball offer at the end of the line.

6. They act like they’d be doing you a favor to hire you.

Be cautious of organizations that behave as though getting a job with them would be the greatest thing that ever happened to you. You have value in the equation, too. You’ll be doing some employer a great favor when you choose to work with them. If the company’s attitude is “Get in line – everyone wants to work here,” you’re better off somewhere else.”

I agree with Liz.  If you are doing any of these things, change now. The job market (in DC anyway) has changed dramatically in the past 9 months.   Top performers are already on the move, and you can be sure they will all be moving away from you.

Busting HR Out of the Box

I have the privilege of working with some incredibly talented HR professionals.    People who are really integral to, and transformative in their organizations.  But until recently you would never hear their stories.  My blog (the one you are reading right now) is about recruiting and hiring – not about being a transformative HR leader.   

So when John Sumser asked me to join the Editorial Advisory Board for the HR Examiner I jumped at the chance.  The goal of the HR Examiner is to “illuminate the amazing power of HR – well executed” and to help you “build an HR operation that is a competitive weapon.”   I like the sound of that, and hopefully you’ll enjoy reading about people who are doing exactly that, like Mary Kitson at Mitre Corporation and John Murabito at CIGNA.

You can also read my first post  “Get Your Own Yardstick to Beat Your CFO (In An Argument, That Is.”

How to Hire Within Your Salary Budget

As a manager, you have the financial responsibility to hire the very best person you can, given the salary budget you have.   But sometimes you can’t find the person you want to hire within your salary budget.   What do you do then?  (First, be sure to read my previous post about hiring to fit the budget instead of hiring to fit the job).   

Before you overpay for your next hire, or underpay and waste salary dollars on someone unqualified, you need to first understand whether you have a recruiting problem (you have not yet seen the right candidates) or a salary budget problem (you have seen plenty of candidates, but simply cannot afford to hire the right ones).  

If you think you have a salary budget problem, when you really have a recruiting problem, you will overpay for skills, probably hire someone too senior for your job and throw your salary budget out of whack.  In casual conversation this recruiting problem is often presented as a salary problem (as in “we had to stretch our budget, because Frank was the only qualified person we interviewed.”)

If you think you have a recruiting problem, but really have a salary problem, you will interview endlessly and never end up hiring someone qualified.  In casual conversation this salary problem is presented as a recruiting problem (as in “we just need to see a few more people”).   A salary budget problem left uncorrected forces you to underpay relative to the market – which first leads to hiring low performers and then leads to turnover problems as your people leave you to make more money elsewhere.  

So how do you know whether your salary budget is unrealistic or whether you just have a recruiting problem? 

In my experience, conducting hundreds of executive searches across all functional areas, here are a few “rules of thumb” that will serve you well:

• Have you spoken with, and learned the salary of, at least 6 qualified people who have experience similar to what you need?  If not, you definitely have a recruiting problem – you simply don’t have enough information to know if your salary is unrealistic yet.  (In counting your six people, do not count people who have progressed beyond your position but are “willing to step back.”   And don’t count people who aspire to your position, but have not yet “stepped up” to prove their ability in a similar organization). 
• OK, if you have spoken to at least 6 people who are well qualified to do your job, were at least 5 of them interested in the position?  If most of your candidate pool was not interested in your position, you still have a recruiting problem – you simply don’t have the right candidate pool.
• OK, if you have at least 5 people who are qualified to handle your job, and interested in taking your job, you will probably find that at least 3 of them are earning roughly the same salary (give or take 5%).   Typically in your group of qualified candidates, you can ignore the lowest salary, ignore the highest salary, and find your “sweet spot” right in the middle.  That sweet spot is the “market rate” – ignore it at your peril.    You are welcome to look at several salary surveys, but they give you nothing but job title to help you make a comparison to your job opening … which is hardly scientific.   Hey, you can talk to anyone you want, or read anything you want - the hard cold reality is that when you find at least 3 living, breathing, qualified people with similar skills and abilities who are all earning roughly similar salaries … THAT is what you need to pay your new hires.   End of story.

 So when you know you have a salary problem, stop interviewing, gather up that salary information from all those qualified people you interviewed, muster up some courage, and go make a compelling case to your leadership team to raise the salary for the position.  Be absolutely sure you have the salary budget you need, or else ask your managers to let you off the hook for all those goals you are accountable for.   Not asking for what you need is not doing your job.

I’ll tell you what some people do when they have a salary problem. They keep looking.  And looking.  And looking.  Hoping to get lucky.  Hoping to find someone willing to accept less than fair market rate for their skills.   That is what I call the “ignoring reality” approach.   And here is how it plays out: first your job is vacant a long time, followed by a brief period of mediocre performance by someone underpaid, soon followed a vacancy when the person discovers they can make more money elsewhere and quits.   Because nothing is more expensive than hiring cheap employees.

Social Media Only Makes Recruiting Fundamentals More Important

Every day I see more recruiters starting to engage with social media.  Understanding social media is no longer optional for recruiting professionals, your career will suffer if you are a Twidiot. But one of the most common mistakes I see from newbies is to assume the social media platforms are a strategy, or that somehow just using the tools will make much difference in their results.  (“Yup I tweeted my job posting, the resumes should be pouring in now”).   

Twitter and Facebook are not a strategy, they are tools.  And social media tools are not going replace recruiting fundamentals, instead they will only shine a bright light on everything that is already wrong with your current recruiting process – they will, in fact, make your recruiting fundamentals even more important.

• A badly written job description gets no more attention from great candidates just because you posted it on Facebook or Twitter – in fact it gets less because there is so much more competition now for people’s limited attention.
• Attracting more candidates through a clever social media outreach campaign will only make you look bad to more people if your hiring process is flawed … in any way.
• Candidates who have a poor interview experience with you now have so many more places to voice their disappointment, through Google’s Sidewiki, or Glassdoor,  Diigo, Twitter or other emerging sites.  And their comments will do more to define your recruiting brand than anything you are thinking about doing with your website.

 So the rise of social media is clearly a mixed blessing.  

Before the rise of social media I used to work for a guy who said “If the 60 Minutes News crew was filming our every action, would you do anything differently?  If so, change your behavior right now and then act like that camera is running every day.”   Now that social media is here to stay, I’d like to update that challenge to this:

If everyone who has any interaction with your recruiting process could post their experience on YouTube, what would you change about your recruiting process?  Then change it right now.

But just to be sure we’re on the same page with this idea, perhaps you’ll first want to watch this this YouTube video (watched over 7 million times) about Dave Carroll’s poor experience with United Airlines:

You Put the Wrong Person in Charge of Your Hiring Process

It’s a cruel irony.  As a Hiring Manager, the only time you are forced to think about hiring is when you are too busy to focus on it … because you are understaffed.  But being busy is not really the big problem with hiring.

I can tell you with absolute certainty that hiring efforts do not fail because Hiring Managers are too busy – managers can always find time for their critical priorities.   So why exactly does hiring so often fail in small organizations? 

Hiring efforts fail because the wrong person is in charge.  Most small firms make the Hiring Manager run the hiring process.  If you have 20 managers you have 20 different hiring processes.  Which is a fiasco.

Hiring fails when you bog down the Hiring Manager with all the hiring process decisions.   Hiring fails when the people who know the most about hiring are not creating the hiring process.  The Hiring Manager should be an active participant in a good hiring process, but should almost never be in charge of it.  

Think about it, when you put Hiring Managers in charge of hiring, you take them away from what they are good at (managing their function) and instead force them to make dozens of time consuming decisions they are ill-equipped to make, perform tasks they find unimportant, and take risks they do not fully comprehend.   

To most Hiring Managers, the tasks involved in hiring seem unproductive, uncomfortable, or vaguely legally threatening – like writing a job description, recruiting, selecting people to interview, figuring out what interview questions you can ask, writing up notes from the interview, checking references, and making the job offer.  It feels like one mis-step and BOOM you are in litigation.  (At least that is what the company lawyer said in that mandatory training they slept through took last year).

So managers minimize their effort on the hiring project and instead focus on that other work on their desk that is so much more familiar, that actually interests them and makes them feel competent.    

But don’t most managers get help with hiring?  Of course they do.  Perhaps they enlist the help of a Subject Matter Expert (SME) from HR.  That should help, right?  

Except it does not help – because the “helper” is also in the wrong role.  The (SME) often simply advises, leaving most decisions in the hands of the Hiring Manager – who is still serving as their own hiring project manager.  (The acid test of who is the advisor and who is the hiring project manager is this:  Who reads the resumes, conducts the phone interview and decides who to bring in for a face to face interview.  Whoever makes that decision is your de facto hiring project manager.   In my experience, most Hiring Managers are not well trained to make this choice, often selecting candidates for interview based on the wrong criteria). 

Here’s how it usually plays out when HR plays the supporting role:

• The “helper” ( HR person) makes the manager submit a hiring requisition … with a job description, in accordance with policy.   But the Hiring Manager thinks:  “I can’t write a job description.  I don’t really know what I need.  This is no help at all!”
• Next the “helper” runs an ad or does some recruiting and submits a stack of resumes to the hiring manager.   But the Hiring Manager thinks: “I have no idea if these people are any good, and no time to read all this dull stuff.  I can’t decide who to interview.  This is no help at all!” 
• Next, the busy Hiring Manager looks at their jammed calendar and determines they only have time to see 3 people, fitting them in over a series of weeks.    The “helper” has no earthly idea why only 3 were selected, how the manager selected those 3 people, or why others were not selected, but they are just an advisor and have no voice in the matter.  (Actually, In this case, the manager is actually not upset, these long delays are considered normal hiring practice).
• The manager does not have time to prepare for each interview, does not know what questions to ask, and after the interview can’t quite remember the strengths and weaknesses of any of the prior candidates because the “helper” provided no guidance about what questions to ask or what competencies to look for.   (Again, nobody is upset, this is considered normal hiring practice).
• After weeks elapse unproductively, the Hiring Manager is not impressed by any of the candidates. So they tell the “helper” to go get more candidates.    But the “helper” learned nothing about what the Hiring Manager was looking for and now thinks “I have to start all over?  This is ridiculous!”   Meanwhile the Hiring Manager thinks “This hiring is not rocket science, I just want to meet somebody worth interviewing.  Why can’t I get any help around here?”  

So there it is.  The person who (theoretically) knows how hiring should work (the HR Professional) is not running the hiring project.  And the person with valuable subject matter expertise (the Hiring Manager) is not being debriefed appropriately as an advisor, but is instead bogged down making hiring process decisions without the appropriate training or experience. 

 If you want your hiring to work, reverse the roles.  Have your hiring expert run all the hiring projects, and put your Hiring Managers in the role of   SME, or “end user” – providing valuable input, but not running the hiring project.  

The hiring project manager should thoroughly debrief the Hiring Manager about who they need to hire, what skills the person needs, how to evaluate candidates, etc..  Then  the hiring project manager should provide the structure and run the hiring project front to back using best practices.  In this role reversal, the Hiring Manager does not manage the hiring schedule and spends only the minimum time necessary to interview people and make hiring decisions - no more writing job descriptions, reviewing resumes, scheduling interviews, or any administrivia involved with the hiring process – that is left to the experts.  (If your Hiring Managers only make a few hires per year, it’s simply not practical to try to train them all to become hiring process experts). 

If your HR team does not have the time or capability to do this,  you should look at the how much bad hiring is costing you, or how much slow hiring is costing you, and then rethink your HR budget.  If you are using search firms or outside vendors to who are not managing your search efforts this way, call me, we need to talk.

If you make this simple change, your Hiring Managers will be thrilled, their productivity will rise, your hiring decisions will improve, and your positions will be filled far faster.

HR Blogs at a Glance

It’s difficult to keep up with the latest thinking in any field.  Heaven knows I struggle mightily to keep up with the latest thinking in staffing and performance management, and frankly, I don’t even try to keep up with the wide range of laws and issues that HR generalists must grapple with. 

So if you don’t have time to load up your Google Reader with blogs to follow, or if you are new to blog reading and you don’t know who to follow, just check out Halogen Software’s HR Blog Search Engine.  It’s all right at your fingertips.  It’s the “easy button” for the latest thinking on any HR topic.

Contingency vs. Retained Search – Common Fallacies

In selecting a search firm, it’s wise to look first at their track record and their understanding of your business needs.   But then, when you start comparing search firms, you will see a broad array of business models, involving when you pay (retainer, contingency, or hybrid pricing); how much you pay (flat fees,  fees as a percent of annual compensation, or contract recruiting by the hour);  what you pay for (interview questions, reference checking, education verification, etc.);  what performance is guaranteed by the search firm; and how long placements are guaranteed (3 to 12 months typically).    The recession has only spurred more innovation, and all kinds of new business models are sprouting up.  With all these variations in search firm terms and conditions, it is perhaps no wonder that so many buyers are confused about which firm to engage, and on what basis. 

Unfortunately, some employers try to simplify their decision making by implementing a search firm policy, as in ”we will only work with search firms on these terms and at this price.”   These policies essentially put the cart before the horse, selecting pricing terms over search firm competencies – as if search services were all interchangeable.  And while these policies may appear to make things simpler and perhaps even more cost effective, all too often they backfire in expensive and unpredictable ways.   I recently spoke to someone who inherited such a policy, and it cost them dearly.

But first some background.  I’ve worked in executive search for over 20 years.   When I was just getting started in the search business (3 recessions ago), I worked for a large contingency placement firm.  We charged a fee equal to a percentage of each candidates’ first year salary (25%) and we were paid only after the candidate started work.   While that business model is still quite common, it lends itself to functional specialization (such as working exclusively on HR searches, or just  IT or accounting searches) and therefore was not the right model for Staffing Advisors.  We set out to make staffing easy for our clients – handling all their staffing needs across the functional areas – so we chose to work on a flat-fee retained basis, meaning our search fees are not indexed to candidate salary and our retainer is paid at the start of the search.  A third of my current clients do not have the budget to afford a traditional search firm and another third have NEVER used a search firm before. (You can read more about our business model here.)  OK, so that’s the background you need.  Now back to the story of the policy that backfired.

 A few weeks ago, I was referred to a company who had struggled for months to fill a $100k position.  We offered to do the search on a retained basis for $10k (yes astute mathematicians, that particular search fee amounted to only 10% of annual salary – our normal fee is about 12.5%).  But, because that company had been “burned” in the past by a poor outcome on a retained search, they implemented a “policy” of only using contingency search firms – so they could not even consider our offer.  Everyone in the meeting knew that a typical contingency search firm would charge tens of thousands of dollars more for the same search (20 or 30% of annual salary).   Most contingency firms have a 3 month guarantee, ours is 12 months.  Typically a contingency search firm will produce 3-4 qualified candidates, we usually produce 6-8.   And finally, most of our searches complete in just 4-5 weeks – considered blazing fast by any standard.   None of these facts were lost on the buyer, but they had a “policy.”   End of conversation. 

Their well-intentioned, but misguided HR policy had boxed them into spending twice as much for a search that will take longer, produce half the number of qualified candidates, and be secured by a guarantee less than half as long . . .  probably not the result they intended when putting that policy in place.

Just like your employee handbook, many HR policies are created to avoid repeating a bad experience in the past.  Did we need to fire a past employee for bad behavior?  Well let’s add a policy about that particular bad behavior into the employee handbook.   Did a search go wrong in the past?  Well let’s add a policy to deal with that.  But rigid ”policy” is a poor substitute for good judgment. 

I find that most search policy decisions are based on misconceptions and outdated information – fallacies.  For example, many HR professionals think retained search firms always cost more than contingency search firms.  Many people think contingency search firms are faster, and retained search firms are more thorough but slower.  Some people think retained search firms are better for senior level hires and contingency search firms are better for mid-level hires.  Some people think retainer firms are more ethical than contingency search firms.  

And of course, many people are wrong.  

Retained versus contingent search is simply a choice of business models.  Neither one is inherently more thorough, or expensive, or faster, or more ethical.  While these misconceptions are common, they are not facts you should make business decisions with, or worse, base policy decisions on.

If you work on a retained basis, you are essentially paid by the employer to research and find great candidates – and it is presumed that any candidates you uncover from that research are “owned” by the employer until they are removed from consideration.  The entire candidate pool “belongs” to whoever paid for the research.  The retainer firm wants the employer to hire the most qualified, compelling candidate from any source – either in the pool or drawn from an employee referral.  It’s all the same to them.  

In a contingency basis, the search firm takes on the risk and expense of developing relationships with lots of candidates (which is why they often specialize in just one functional area).  They did the work and took the risk, so essentially, they ”own” the candidate pool.   To ensure they get a return on their candidate research investment, they must present those great candidates to lots of employers.  The employer committed nothing, and therefore has no right to the pool of candidates, so the search firm is wise to present the best people to multiple employers.  If you hire a contingent search firm, you are essentially in a race with other employers to see who makes an offer first.  This is why some employers feel their interests are better represented by a retained search firm and some job seekers feel like they are better represented by a contingency search firm.   The contingency search firm wants ANY employer to make a compelling  job offer to their candidate, while the retained firm wants the employer to make an offer to ANY compelling candidate, regardless of source.

With all the innovation occurring in the search business,  it pays to be flexible with your search firm policy, re-examine your assumptions, and understand the implications of the new and innovative business models that are emerging.

Beware: People Under Stress

There is a growing realization among hiring managers that their current recruiting and hiring process is broken.  Whatever you did to hire all your current employees in a “normal” environment, suddenly appears inadequate to the task of hiring people who will thrive to today’s extreme conditions.   

Many pre-employment assessment tools will reveal how people under stress might behave differently than when things are “normal.”  Some people dig down to find hidden reserves of ability.  Some people step up to challenges and become more confident.  Some people do the same old things but work really, really hard at it.  Some lash out and blame others, and some people shut down and hide out, trying to avoid being noticed. 

With family finances under stress, uncertain company revenues, and even more uncertain job prospects, this is a stressful time for most people.   Business guru Jim Collins has declared turbulence is the new normal, and has been studying what distinguishes those who prevail when the world goes out of your control.   Along similar lines, I have  previously pointed out that managers have higher performance expectations when hiring now -  ”Wow is the new normal.”  …  But while this is important, smart hiring now is not only about raised performance expectations. 

I’ve written before about failure – how some people learn from it, and other people don’t learn from anything.  A looming danger right now is in being too cautious – in trying harder to avoid failure than to succeed. This is a time for experimentation, and for innovation … But although this must be considered, smart hiring now is more than just assessing risk tolerance.  

One reason “same old-same old” hiring is failing right now, is that critical success factors have changed in most firms -  but nobody updated your hiring profile - so your candidates all just seem inadequate.    (No silly,  I’m not referring to the job descriptions  -  those useless things will never change – they’ll easily outlast the cockroaches).  

It’s about adaptation to this environment.

So what does this mean for how you hire and manage employees now?

John Sumser points the way in a fascinating post about extremophiles - organisms that thrive under harsh conditions.  He makes an interesting analogy to the military – an organization that is designed to perform best in the harshest possible environment:

“In order to function effectively, the military has two operational modes. In peacetime, decisions are made by consensus and politics is a well refined sport. In Wartime, decisions have to be made in a hurry by people who understand the implications and remain able to act. The military employs a group of people who are known as “Wartime Generals”. These people are terrible peacetime leaders and great at the job during a war. If you let them be in charge during peacetime, they’d destroy the place. Good wartime leadership and good peacetime administration are really different from each other.”

So, are you seeing your wartime generals emerging, or are you still staffed with peacetime generals?

The Results-Only Work Environment (ROWE)

I’m enthralled with ROWE –  the Results Only Work Environment.   The concept of ROWE is that as a manager, you focus only on results, and not managing activity, or worse – the appearance of activity.   Best Buy has adopted this approach to work, and preliminary results are intriguing.   As Ashley Acker puts it, time does not equal productivity:

“Arriving at the workplace at 2:00 p.m. is not considered coming in late.  Leaving the workplace at 2:00 p.m. is not considered leaving early.”

As an employee, this sounds great right?  Yet, not all employee feedback is positive.  As a manager, of course, it can appear to be a free-for-all, but the same complaints are leveled against telework.  So what are the other problems with ROWE?  Matt Cholerton observes, the concerns are mainly because HR practices cannot support it in most companies:

“ROWE doesn’t quite work, and we don’t have confidence it can work for us, because we aren’t doing HR and business well enough. Some low-hanging-fruit examples are that we don’t have good job descriptions, we don’t always understand what outcome we want, we don’t measure/or know how to measure success, there are no consequences (or follow up), and we don’t communicate.”

Frankly, I’m surprised that more companies have not moved to improve their performance management systems already.   (See my earlier post “HR, Don’t Let the Crisis Go to Waste“).  ROWE requires many of the same underpinnings as a decent performance management, telework, or offsite disaster planning policy.   Yet, I find that most firms still lack the ability to really manage performance well in their current 9-5 face-to-face, in-the-office setting.

Harvard Business School professor Rosabeth Moss Kanter suggests that the simple act of working from home one day a week would make a profound difference for the environment, for work / life balance, for morale, and for productivity. 

“During this time of economic crisis and reinvention of global capitalism, one of the things crying out for reinvention is the rigid workplace of the last century. It is amazing in the digital age that most work is still associated with industrial age work rhythms and the symbolic chains that tie workers, knowledge and otherwise, to fixed locations. Flexible workplaces with flexible hours and days are long in coming.”

Amen to that.

HR, Don’t Let The Crisis Go to Waste

I was meeting with a senior HR leader recently, asking how she was navigating the economic storm.  She mentioned that in a recent senior staff meeting, her CEO wondered aloud if they needed to consider across-the-board pay cuts.    When she took her job, the CEO used to just make those kinds of decisions, perhaps in consultation with the CFO.  Now, the CEO asks her. 

And so in the meeting, she said “Let’s assume we go with your approach, you know that star player we just recruited from our biggest competitor?  Do YOU want to tell him about the changes you just made to his compensation plan?”  

That put a new spin on things.   Naturally she did not come unarmed to the meeting, she had a long list of other places to cut back before the tired old chestnut of across the board pay cuts.  In the end, she found the savings they needed, communicated it clearly to hundreds of employees and avoided creating a new problem beyond their need to reduce expenses.  

Score one for using HR strategically.   

I’m not suggesting that across the board pay cuts are a bad idea, indeed, they might be brilliant for your situation - your employees can be amazing.  22,000 Montgomery County School employees recently agreed to forego their contractual pay raises to balance the school budget, rather than cut classroom jobs. 

But before you make big HR decisions, you need to look at all your options and choose wisely.  Few CFOs have the tools to do that.  But HR does.

A few weeks ago, I wrote that this is HR’s Golden Moment - a time to shine, to earn that “seat at the table” and really make a difference.  And now I read, in the Huffington Post, an article about a national conference of HR professionals held in Australia.  The writer, Juliet Bourke seems to agree with my viewpoint, observing that now is the time HR leaders need to pull back business from “knee jerk retrenchments.”  So she went looking for how HR pros were helping their companies to avoid layoffs and other damaging across-the-board actions. 

“Our bottom line proposition was that the global financial crisis provides HR with a unique opportunity to demonstrate its value to business — namely, how to survive, if not thrive, under extremely challenging conditions. One hundred percent of the HR attendees agreed that talking about flexibility was relevant to their business’ needs . . .”

But sadly, she found that more than three quarters of the attendees were nowhere near ready to lead this effort.    ”It’s as if they are looking for someone else to lead the way.”  So sad. 

If you are a CEO and don’t feel like you are getting sound HR advice for your big decisions, grab your phone and call me.  Right now.  That’s easy to fix.  And if you are an HR professional please know that I, for one, hope you don’t let this financial crisis go to waste.   Send me a private note, or post a public comment, tell me how you are using your golden moment to step up and make a difference in the future of your organization.

Why Your New Hires Just Aren’t That Into You Anymore

Sometimes you can do everything right in your hiring, and the person just does not work out after a few months.  Hiring is hard enough, but starting all over is really frustrating.  So why are mis-hires so common? 

Well, one answer lies not in our hiring, but rather in how we manage those precious new employees.  Research shows that employee morale, or enthusiasm declines precipitously after just five or six months.  The culprit?  Poor management practices.  And those management mistakes pile up right from day one.   

• David Lee, speaking at the ERE conference, says that if your new hires experience any of these emotions when they join your company, you have trouble: Confused, frustrated, overwhelmed, bored, annoyed, anxious, insecure, disappointed, regretful. 
• Instead these emotions are the ones your onboarding and orientation programs should inspire:  Welcome, comfortable, secure, valued, important, proud, excited, confident.

Uh oh.  Few small and midsize employers are very good at onboarding and orientation.  Very few managers offer a real orientation or a performance and training “ramp-up” plan.  Even fewer assign a seasoned mentor, most just expect people to “jump in” and then blame them when they fail. 

What a colossal waste of resources.

In “The Enthusiastic Employee” David Sirota reviews specific management practices that offer the greatest performance impact.  Although I rarely encounter someone who has read it, I still rank it right up there with “First Break All the Rules” as a way to understand human motivation and the major reasons people stay with or leave an organization.  The book is thoroughly researched - based on surveys with two and a half million employees.   It is not trendy, but rather chock full of timeless but perhaps unconventional wisdom.  Consider this grabber:

“…the often-asked question, “How do you motivate employees?” is foolish.  Most people enter a new organization and job with enthusiasm, eager to work, to contribute, to feel proud of their work and their organizations.  Perversely, many managers then appear to do their best to demotivate employees!”

Management practices that destroy enthusiasm are insufficient training, poor equipment, bureaucracy, indecisiveness, the status structure, and conflict within the organization.  As David Sirota puts it, “People don’t come to work to fight.”

The authors posit a ”Three Factor Theory of Human Motivation in the Workplace.”    Here they are:

1. Equity:  to be treated fairly in relation to the basic conditions of employment.  These include a safe, respectful working environment, management that can be trusted, reasonable job security, and satisfactory compensation and benefits dispensed without favoritism.
2. Achievement:  To take pride in one’s accomplishments by doing things that matter and doing them well; to receive recognition for one’s accomplishments; to take pride in the organization’s accomplishments. 
3. Camaraderie: To have warm, interesting, and cooperative relations with others in the workplace.  The authors note that “We often neglect the extent to which an organization functions not only as a business entity, but also as a community that satisfies the social and emotional needs of its members.”

So how are you doing welcoming the new members of your community, showing them respect, making them feel valued, and helping them get some early successes under their belts?

A Golden Moment for HR

This is a golden moment for HR.  But I don’t see HR leaders taking an active role in it.  It’s like HR leaders don’t have a speaking part in the unfolding drama being played out on the national stage.

HR issues dominate the national news like never before.  But it’s not just national news –  in my conversations with small company CEOs, HR issues also dominate the minds of executives who are working on their own “economic recovery efforts.”

At a national level:

Treasury Secretary Timothy Geithner is woefully understaffed, with his top 17 deputies not even named, and over 30 Senate-confirmable positions unfilled.  Want to know who is working on the recovery effort?  Just take a glance at the list of Treasury Officials on the official website – it lists only Mr. Geithner.    Yikes!  Who is staffing this guy?

AIG sparked national outrage with their “retention bonus” debacle, particularly when it was found that many of those employees have already left the firm.  Where was HR in this?

The proposed Employee Free Choice Act (EFCA) or “Check Card” Legislation has serious implications for employers.  Where is the voice of The Society for Human Resource Management (SHRM) in the debate?  Many say it’s far too quiet.

Beyond the national headlines, small companies everywhere are innovating, trading in poor performers and managing productivity like never before.  And many are “winging it” without strategic HR support.

In this blog, I’ve posted articles on managing in a time of turbulence, the why old-school management fails in a recession, and why ideals are the new business models.  In a post on McKinsey’s website, Gary Hamel adds more fuel to the fire.  It seems that thought leaders everywhere are proposing radical new models of management and leadership.  But why don’t I see HR leading that conversation?   

Every CEO I talk with is trimming poor performers and “trading up” to better people who will drive results.  Yet a recent Accenture survey says that almost half of employees feel insufficiently challenged in their current jobs.  A disturbing Corporate Executive Board study showed that disengaged employees are 24% more likely to remain at their current employer due to the recession.  So why isn’t HR taking a bigger role in resolving these problems?

This is no time to be silent.  No time to play it safe.  This is the time for HR to move from tactical to strategic, or the latest round of HR bashing will continue.  I’ve spoken with several CEOs who empowered HR to take a more strategic role, and they are already reaping the rewards of that decision.