How Technology is Changing Recruiting (video)

03/29/2014

I’m often asked to give presentations to HR groups on trends in recruiting. Here is a video of the slide deck from my last presentation to the Human Resource Association of the National Capital Area (HRA-NCA).

The key takeaway is that Google search algorithms have a significant impact on the results you will receive from job postings, the visitors to job boards and LinkedIn are increasingly on mobile devices, and millions of job seekers are rating employers. All three factors require employers to adapt their recruiting strategies, or risk being left behind.

Fair warning, the purpose of the presentation was to highlight the trends, not to prescribe solutions, so there’s no easy answer to be found in the last slide.


What’s the Real Problem with Job Advertising?

03/28/2014

We humans tend to confuse scarcity with value. We tend to overvalue what is difficult, and undervalue what comes easily. We overvalue what we don’t have and undervalue what we do have. You hear the mental confusion when a recruiter puffs up his chest and intones, “Good people don’t answer job ads.”

The recruiter is trying to build up the perceived value of the difficult work of reaching people who do not answer ads, and diminish the value of what comes easily (people who answer ads). But c’mon, the phrase just sounds ridiculous. Of course good people answer job ads.

Recruiters don’t actually believe that the very act of answering a job ad degrades a candidate’s skills in some way, while remaining unresponsive to advertising makes them better at their job. Obviously someone’s ability to perform on the job is wholly unrelated to how you recruited them. In our executive search work, we’ve found good people who answered job ads, social media outreach, cold calls, and emails. We haven’t tried it, but I’d bet that we could walk around wearing sandwich boards and some good people would respond (if the messaging on the sign was good enough).

So what’s the real problem with job advertising?

The problem is that good people rarely respond in large enough numbers to teach you anything useful about your job market. And there’s the rub. We’ve looked very closely at the engagement rate of good people to job advertising, and in our experience, it hovers around 1-3% of the total candidate pool. Don’t get me wrong; there are some fine people in that little number. (But I should also mention that our ratio of “on target” to “off target” resumes is about 1:30, so it takes a bit of reading to find the good ones.)

But if you want to hire a top performer (by definition, one of the top 10% of people with that skill in the market) and your job advertising only engages 1-3% of the best people in the market, how do you know when the candidate sitting in front of you is one of the best? All you really know is that they are one of the best people who happened to see your ad. You simply lack the context to know how they compare to their peer group.

How do you decide whether or not to hire them?

And that’s the most vexing conundrum of staffing for most hiring managers. The hiring manager always wants to hire one of the best possible people in the job market, but lacks the context to understand if the candidate sitting in front of him is one of the best. It’s vexing because in order to properly evaluate the handful of good people who answered your job ad, you need to understand the entire job market. But only a small fraction of the entire job market will ever answer your job ad, and, by definition, only a tenth of them are in the top ten percent. Without a sophisticated candidate research capability, you are flying blind.

While hiring managers can easily define the skills they would like to see in a position, they rarely know how the job they defined compares to the skills of the people in their job market. Supply and demand for skills varies wildly by position, by city, and by time-frame. It’s fairly common to define a job in a way that makes it unfillable, or undesirable, or that requires someone you cannot possibly afford. How will your recruiting process catch the error?

Can your recruiting process answer questions like these?

  • How many people in Washington work in finance for a nonprofit with a budget over $50 million?
  • What do their salaries and career paths look like?
  • How many would be interested in the position you have open?
  • How do their titles compare to your internal title?
  • How will small changes in your title, or responsibilities, or experience requirements change your recruiting outcomes?

Without this data, you can’t make an intelligent comparison between your open job and the supply of people. And you cannot get to the next level questions like:

  • How does your job stack up against other places your candidate might want to work?
  • How does your compensation compare to their other options?
  • Should you hire the person in front of you or hold out for someone better?

And that’s the real problem with job advertising, social recruiting, or any recruiting approach that only yields a few good people. You may be missing the people you really want to reach, and you may get a few good people, but you have no idea what to do with them.


Do You Really Need to Interview a Slate of Candidates? Or Just One?

03/11/2014

When hiring, it’s tempting to rush into interviewing, rather than waiting to develop a full slate of candidates. Hiring managers are often eager to interview as soon as they approve a job description. It’s a request most HR folks try to oblige. And it’s often a mistake.

So what’s the downside to interviewing the first few qualified people who responded to your recruiting efforts? If it only takes one great person to fill the job, why wait around for more candidates to emerge? What if the good people get other jobs while you are waiting? 

Occasionally, it does make sense to interview the first few people who apply. But most of the time, you actually slow down your search by interviewing too soon. Unless you are incredibly familiar with the job you are filling, waiting until you have developed a full slate of five to eight candidates almost always results in a  better hiring decision. (To be clear, I’m talking about waiting 3 or 4 weeks, not 3 or 4 months.)

So how do you know when to jump, and when to wait? We’ve put a lot of thought into this question, and here is our decision process (click to see the larger view):

SA Candidate Slate Flowchart

For example: If you routinely hire for Network Engineers, and currently have several on staff, then you have an excellent basis for comparison when you interview another Network Engineer. Because you have recently interviewed dozens of these candidates, you can instantly recognize a good one when you meet them. And you know what to pay them. No need to wait for a slate here.

But if you have not recently interviewed any Network Engineers, you don’t really have a basis for comparison. You need to educate yourself before you can make a fully informed hiring decision. You are unfamiliar with the job market, no matter how deeply familiar you are with the job and skills required. You need to see firsthand how people from various backgrounds would bring different capabilities to the job. You need to see how compensation for the role varies by skill level. In short, the early candidates might be fine – but without a full slate of candidates to choose from, you are not ready to properly evaluate them, or to understand how your job compares to their other options.


When You Undervalue HR, You Undercut Your Managers’ Effectiveness

02/24/2014

desperationOne of the fastest ways to sabotage your business results is to hire the cheapest HR professionals you can find. When you saddle your executive team with under-staffed (or under-skilled) HR support, you hobble their performance. Here’s why:

  • More than any other person in an organization except for the CEO, the top HR executive impacts how much courage managers will show in hiring and performance management.
  • HR has an enormous impact on your budget. In many organizations, the lion’s share of the annual budget is spent on salary and benefits, and HR typically determines how strategically that money is allocated. (Good luck attracting great people when you offer lousy benefits and no clear way of measuring or rewarding performance).
  • HR has a huge impact on results. HR maps out the strategies that attract, retain, and inspire the staff to help you achieve your mission. (Good luck trying to achieve great things without great people. Even if you hired some great people, ineffective or bad HR strategies could end up demoralizing them just before you need their best work).
  • And when things really go sideways, HR helps you evaluate the legal risk of ushering your hiring mistakes out the door, before they cause even more damage. (Or do you enjoy making chit-chat with your former employees’ lawyers?)

But it’s a precarious business to be an effective senior HR executive. In a cruel twist of fate, doing the HR job well requires putting their own job at risk repeatedly, because it’s often their responsibility to speak the uncomfortable truths to power. Great HR people make the CEO less comfortable, not more comfortable. Consider how:

  • When you feel like your organization is already spending too much on salary and benefits, a top HR executive will tell you that your compensation still isn’t competitive, and you need to spend more if you want to hire and retain the best people.
  • When you think you’ve communicated enough about your performance expectations, great HR tells you the team is still fuzzy on the details and you need to do more for them to understand you clearly.
  • When you would rather dodge addressing a situation with a problem employee, great HR won’t let you shirk your responsibility, and keeps the issue on your agenda until you resolve it.
  • When you want to blow up in righteous indignation at someone’s failure, great HR instead cools you down and points out that there are environmental factors that set them up to fail.
  • When you make the workplace less productive by occasionally micromanaging, undercutting your executives, or not acknowledging high performance, great HR points out where and how you could improve.

Good ol’ HR, always the life of the party. (Mommas don’t let your babies grow up to be cowboys HR pros.)

If you are a CEO and your top HR pro does not make you uncomfortable, consider that you might have the wrong person for the job. Or consider that you may actually have the right person. But instead of letting them speak truth to power, you instead make it abundantly clear that they shouldn’t bring you tough information. Either way has the potential to put everything you worked for at risk; your pay practices, performance management, and maybe even legal compliance could be sorely lacking. You need to encourage HR to bring you the bad news. Take a Dramamine if you need to, because it will rock the boat.

But if you ever want to hear the truth, don’t make it your policy to shoot the messenger.


Good People Know Good People … or Do They?

02/22/2014

icebergConventional wisdom says that, “Good people know good people.” So it naturally follows that the most common question in recruiting is, “Who do you know who might be good for this job?” Good people will inevitably lead you to other good people, right?

But what if, “Good people know good people” was more untrue than true? What if it’s really a “tip of the iceberg” situation, where the visible part of the statement that’s true is so much smaller than all the hidden assumptions underneath the statement that are not true?

The visible part is easy. We all have evidence to support it. When you hire someone you know, it can be less risky than hiring a stranger. Whether you worked in the same organization or just volunteered with someone, you probably know more about them than you would learn in a typical interview. So yes, it’s true. Good people do know good people. 

But it’s not that simple. There’s quite a bit missing from the argument that, “Good people know good people.” The frame of reference is far too small. The five simple words overlook the fact that:

  • Good people never know ALL the good people.
  • And of the people they do know, they rarely remember or recommend ALL the people who should be considered.
  • Good people aren’t necessarily good at matching people to jobs
  • And they don’t have ANY idea how the people they know compare to the people they don’t know.

So no matter how well connected anyone is, they only ever meet a fraction of the potential candidates for any particular open job. And we all have preferences and biases about the kinds of people we might recommend. And none of us have any idea about the people we’ve never met. So whenever I ask anyone, “Who do you know who might be great for this job?” their answer is always limited by:

  • Their desire to take any time to help me with my question.
  • The size of their circle of friends.
  • Who they actually remember from their circle of friends.
  • The depth of what they remember about someone they worked with years ago.
  • The context of the work environment in which they observed someone else’s work.
  • Their understanding of your open job and their ability to discern who might be a fit
  • The kind of people they happen to enjoy working with.

When you add up all those unspoken limitations, the limitations are bigger than the true part. The biggest part of the iceberg is invisible.

When you look at the larger context, “Good people are an unreliable way to find other good people” is a more accurate statement.

So, to keep from fooling yourself, if you want to keep playing the “Who do you know?” game, just give voice to the limitations of it. To that end, please allow me to offer you a more complete question:

“If you don’t mind me interrupting you, and you are willing to spend time with me on this question, who have you ever worked with for long enough that you could actually comprehend the totality of their skills, and have you taken the time to carefully evaluate their ability to thrive in a completely different context such as the one I am proposing to you now? And precisely what are your qualifications to evaluate someone’s ability to succeed in a different work environment? Have you left anyone out from the list of people you are recommending, and is that because of a personal preference of yours that you may not even be aware of? Do you know if I share that personal preference? Have you ever considered just how many people you do not know? And, if you are even qualified to judge them, please evaluate the abilities of the person you are recommending relative to the population of other qualified people?”

But if you are a recruiter, and if you are talking to a stranger, I suppose that question could be a bit more uncomfortable to ask.

 


Chronic Employee Turnover Is Almost Never About the Employees

01/22/2014

bad-adsSenior executives often call me when they are at their wits end with people on their team:

  • “I’ve tried to make things work, but my VP of HR is just not delivering the results I need.”
  • “My Communications Manager just won’t step up to the plate. We seem to only react to things without any strategy.”
  • “The world changed around us, but Finance is doing the same things we did ten years ago. I’m getting no useful information and feel like I am constantly dragged into the weeds. We need to rethink what we are currently doing, but frankly I’m more worried about all the problems we are not even thinking about yet.”
  • “Our IT department is a real bottle neck. We want and need streamlined processes, better information sharing, and improved productivity. But all we get are surprise expenses, empty promises, and long delays. Even simple requests seem to get buried in obfuscation and complexity.”
  • “Our Chief Marketing Officer is not doing anything that drives revenue. We’ve spent money to upgrade our social media presence, revamp our website, and conduct extensive customer surveys. But our revenue is still flat-lined.”

Some of these concerns might sound like people problems. But twenty years of experience as an executive recruiter has taught me that what looks like a people problem is often a situation problem. An occasional bad hire is nearly unavoidable. But if you churn through executives every few years, your chronic turnover almost certainly runs deeper than just one bad egg. When your department or executive team has a pattern of failure, it’s likely that your work environment sets people up for failure (however unintentionally).

The First Law of Holes is, “If you find yourself in a hole, stop digging.” In the face of chronic turnover, don’t hire anyone new until you fix the underlying issues. Chronic turnover problems won’t be solved by blaming individual employees and then going out to immediately hire more. As Einstein noted, “We cannot solve our problems with the same thinking we used when we created them.” Instead, chronic turnover is best solved by looking beyond the individual people and exploring any issues in the work environment. Before you move forward with another round of hiring, step back and look at your own role in these seven common causes of employee failure.

1)      Are you using an outdated business strategy? Maybe the way you’ve always done things no longer works. Nothing runs on autopilot forever. If it’s the wrong task for the times, it won’t matter who you assign to do it — they will fail. The skills required for success ten years ago are not nearly enough to achieve success today. Almost every job has an increased demand for results, coupled with dramatically higher complexity and ambiguity in the work. You can’t just use old job descriptions and salary budgets to hire new people … but many people still try to.

2)      Maybe the best people are just not that into you. Do you have trouble attracting great people to your open jobs? Or do you interview great people, only to see many of them withdraw from a second or third interview? That’s a signal that you, your job, your organization, or your industry are just not that attractive to the people you want to hire. No one stands in line for an iPhone 3G anymore, even though they did a few years ago. Have you considered that the job market might have changed around you and the best people have better options elsewhere? When was the last time you benchmarked your salaries against the competition? Do you really understand who is available in your job market and who you are competing with to hire them? (Almost nobody does this kind of market research when hiring.)

3)      Are you still placing .22 caliber people in a .357 Magnum job? Growing organizations outgrow people. Your internal positions inevitably become more complex as you grow. So your next HR Manager will face dramatically different challenges than your last one. Just because the last HR Manager was willing to work for $90k does not mean you can use the same salary budget to replace her. When you hire, you need to think about the future, not the past. And if you need a new business strategy (see #1), are you ready to pay a salary premium to hire someone with those skills? Strategy never comes cheap, but far too many managers hope (in vain) to find it in inexpensive candidates.

4)      Are you disappointed with everyone you interview? Perhaps your recruiting team is only considering the people who fit your salary budget, or perhaps your recruiting strategy only reaches the people who respond to job advertising (only about 18% of the total candidate pool responds to recruitment advertising). If you want different recruiting results, you need to align your HR practices with your business strategy.

5)      Do you hire new people to shake things up, only to be disappointed after you hire them? Do you find that your people will not step up to the plate? Do you give new people big audacious goals, then disappear while they get stuck in the thicket of executing? Do you hover at the big picture level, never getting in the weeds with them, making them feel like they are going it alone? Do you ask new people to build consensus with your overworked, understaffed current team, or do you help pave the way? And when it comes to conflict — be honest with yourself — do you reward your team for encouraging healthy debate, or reward them for getting along and not rocking the boat? Change agents need more support than senior leadership usually provides them, and they always cause more chaos than their managers prefer. You can’t say you want to hire change agents and creative thinkers and then not facilitate their ability to foment change.

6)      Do your new employees charge ahead, or freeze like a deer in the headlights? There’s an old saying, “The fish stinks from the head.” Do you share the credit and take the blame? Or vice versa? If your new hires know that they will be blamed for every error, how many risks do you think they will take? Do you swiftly make gutsy judgment calls in the face of uncertainty, or do you expect your subordinates to take those risks instead? If you are always traveling or behind closed doors, is your team forced to guess at what you are thinking? Do new employees have to figure out their mistakes from group emails or other employees? Or do they get honest, direct, and regular feedback?

7)      Do you have a rule for everything? Are your employees trusted to exercise good judgment or do you have a thick set of policies for everyone to follow? Maybe your HR policies were initially designed to mitigate your legal risk, but after years of adding small edicts to your employee handbook, your office now exudes the depressing atmosphere of a police state, repelling the very people you want to attract. Police states are rarely nimble or fun. (And in a sad bit of irony, some employment attorneys suggest that all those oppressive policies might actually increase your legal risk.)

If you find yourself blaming the person who failed in a job, you’re probably looking in the wrong place. You’ll almost never find the solution there.

Before you look at new people, look at yourself. Chronic turnover problems are best solved by looking long and hard at how you might be contributing to the very problem you are asking someone else to solve.


5 Steps To Build A More Innovative Organization

11/20/2013

business strategy Are you struggling to get your new initiatives off the ground? Do you wish your organization was more nimble and entrepreneurial? Do you yearn to build a team of people who don’t need a rule-book … people who can handle ambiguity? Do you daydream about having a team of fearless innovators who bring you great ideas, and then leap into action to make their ideas a reality?

OK, fine, it’s good to have goals.

But if you don’t work in that kind of environment right now, are you sure you know what innovation really looks like … up close and personal? And when you interview an innovator, just what exactly should you look for? And after you hire them, will your office be like the set of Mad Men?   

If you’re looking for someone with a history of serendipitous moments, where the innovation muse whispers brilliance into their ear, the cosmos align, the sun bursts through the fog and birds start chirping, you will be looking for a very long time. As children we all heard the tale of the apple falling on Sir Isaac Newton’s head, causing a supposedly sudden insight into his theory of gravity. But few of us heard what Mr. Newton was doing prior to that famous moment. So does innovation look like blindingly brilliant moments of fruit-inspired inspiration? Or does it look more like the part of the story that happened before the apple fell?

Sorry kids, strokes of genius are really tiny–more like pointillist painting than the broad-brush conversational style used in most executive suites. If you want to hire an innovator, don’t look for a fast-talker with grandiose ideas, they will not go the distance. As Harvard professor Rosabeth Moss Kanter put it, “Everything looks like a failure in the middle. Everyone loves inspiring beginnings and happy endings; it is just the middles that involve hard work.”

Instead of hiring a big talker, seek out someone who can methodically and painstakingly take tiny, unconnected painted dots (ideas) and form them into a bigger (and more interesting) picture. Scott Berkun, author of The Myths of Innovation, calls this the “Myth of Epiphany.” As he puts it, “Epiphany stories project illusions of certainty since they’re always about successful ideas. Epiphanies are a consequence of effort, not just the inspiration for it.

Other researchers have also concluded that innovation is a far more arduous process than most of us are led to believe. Keith Sawyer describes how one researcher set out to chronicle Eureka! moments only to find that good ideas are actually built upon bit-by-bit.  Peter Sims studied Pixar and the creative process used by world-class architects and comedians. Here is what he said:

“It may take Chris Rock six months to a year to develop one hour of comedy, and he does it by just scribbling ideas down on sheets of paper, going into these clubs unannounced and sitting down in a very relaxed, casual way with the audience, so that they know that, “Hey, this is not Chris Rock in prime time. This is Chris Rock in development mode.” He’ll just start riffing with the audience and he’ll bomb. It will be awkward at times. But what he’s doing is he’s looking for just a little hint as to where a hidden joke might be, and, once he finds that, then he keeps on that idea and keeps iterating, keeps improving, tweaking, until it becomes more and more a joke that he can use in his routine.”

Chris Rock knows many of his joke ideas will bomb. More importantly, he knows that’s completely OK. He revises and edits his material until he arrives at the tightly crafted sets we see on HBO. Breakthrough ideas and innovations are built on foundations of mistakes and dead ends. Innovation is surprisingly methodical, as it emerges over time out of “peripheral” knowledge, or out of seemingly irrelevant ideas.

Even on TV, innovation does not look so easy:

What appears to be an effortless flash of brilliance in this clip did not come out of nowhere (though the timing is fortunate). Prior to the dramatic scene, Don Draper had spent the entire episode scribbling countless pitch ideas onto napkins, only to decide they were all terrible.

So how do you build a more innovative organization? 

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How to Hire an Innovator and Change Agent

11/20/2013

iStock_000017017468XSmallEvery week I talk with organizations who are looking for a change agent–someone with creativity and drive, and a proven track record of kicking new initiatives into high gear.

Why do they come to me?

Because hiring managers are beginning to realize that the skills required to create a track record of success in good times (any time before 2008) are different than the skills needed since the downturn began. Managers have been disappointed by candidates who spoke eloquently about innovation in the interview but failed to deliver results. At Staffing Advisors, we live and breathe innovation. We see it up close every day within our firm, and across hundreds of searches, we’ve learned what to look for when we interview people for our clients.

So how do you weed out the hacks and the phonies during the interview process? How do you find people who are delivering results right now? Here are five of our best articles on how to hire an innovator: 

  1. How to Interview an Innovator – How can you accurately discern from the interview how a candidate will perform on the job? Separate the real deal innovators from the poseurs and empty suits with these methods.
  2. Hiring People Who Can Handle Ambiguity – Innovators often excel at ambiguous and complicated grey-area tasks. But to effectively understand how candidates handle ambiguity don’t ask,”Tell me about a time you were in an ambiguous situation.” It won’t work. Try this instead.
  3. Hiring People Who Have a Growth Mindset – A survivalist mentality crept into some workplaces, characterized by fear and risk aversion.  This outlook is counter to what’s needed to jump start growth. Here are 5 important qualities needed in people who lead growth initiatives.
  4. Don’t Believe Everything You Think – If you’re looking for an innovator, be sure to hire candidates who demonstrate successful adaptation to rapid change. What distinguishes these people? They are the ones who consistently challenge your organization’s out-dated assumptions, the ones that take the time to constantly view problems from new perspectives. Is an innovator really going to be an effective change agent for your organization if they can’t do this regularly?
  5. Why Do Change Agents Often Fail? – After you successfully identify and hire a real deal innovator, you’re not out of the woods yet – studies show that up to 70% of change initiatives fail. Fortunately, you can dramatically improve your odds using these insights from the field of neuroscience.

If all these articles make you begin to think that innovation is more perspiration than inspiration, then you are on the right track.


When Hiring, Should You Ask for Salary Requirements? It Depends on the Market.

11/04/2013

resume2I’ve talked a lot recently about how employers need to adapt to the rise of mobile job seekers – especially by making the application process less painful. Let’s tackle a related job-seeker frustration – asking that salary history be included with an applicant’s resume. A recent job seeker – who is underpaid in their current position – asked me “Is it possible to fulfill this request without revealing this information? Or do I have no choice but to disclose it?” With the job market recovering, job seekers are concerned that your compensation strategy just involves tacking on an additional 10% to their undervalued recession salary, keeping them behind the curve.

If you’re looking for a candidate with highly competitive skills, remove the salary history requirement. Asking for a salary history is instantly off-putting. High-quality, in-demand candidates will tune out and not complete the application process. And why should they? They’re being heavily recruited by other organizations that didn’t put up as many hurdles in the initial application. And they’ll likely take it as an attempt to lowball a salary offer, and steer clear.

Is the market for the position particularly scarce, where every application you get counts? Then don’t be such a stickler for the rules that you will instantly disqualify a top performer because they chose not to include the required salary history. You may have overlooked someone perfect for your organization. And odds are they didn’t include it because they want to ensure that your compensation philosophy is market-based – not based on their salary history.

Now, I’m aware that not all positions and budgets require a top performer, and not all positions are lacking in highly qualified candidates. If you’re looking to fill a dime-a-dozen position in a market with a plethora of talent, you can probably get away with including salary history in your application process. You get market data for free – so you can easily narrow applicants down to those that meet your budget. Candidates will still find the question off-putting, but the resulting few that drop out of the application process likely won’t damage your chances of finding someone to fill the position. It’s much more destructive to your chances when there’s market scarcity for the needed position.

Recently I spoke with an HR executive who had just filled out a frustrating application.  She said, “I implemented all these labor-saving components into my Applicant Tracking System, but I didn’t realize what a terrible experience the candidates were having as a result.”

Go test this – apply for a job in your own company and see if you give up before completing the application process. If you’ve instituted multiple requirements or labor saving measures, I’m betting you’ll walk away with a headache – especially if salary history is only one of many hurdles. Now imagine how many top performers did the same thing for all your past open positions.  Your search for talent might be easier (and maybe more successful) if you lower your organization’s initial barriers to entry.


Determining Salary for a New Hire? Think Like a Compensation Pro

10/21/2013

woman with stack moneySalary negotiations with top performers are a pivotal time in the hiring process. As an employer, it’s easy to forget that the candidate is not yet one of your employees. You can create or destroy trust, and set the tone for your entire employment relationship by how skillfully you negotiate salary. Sadly, salary negotiations are also where hiring managers risk snatching defeat from the jaws of victory. Job seekers now have access to credible salary information, so you need to assume they know the market for their skills as well, or better than the hiring manager.

Early in a new search, and again at the offer stage, we talk with hiring mangers about what kind of salary they plan to offer the candidate. In those conversations, it appears that many hiring managers struggle to find a framework to talk strategically about compensation. Fortunately, most experts agree on what factors you should consider in discussing compensation. I’ll share some of those factors below, but remember that salary is not everything–it’s also important to understand how salaries fit into your total reward strategy. See, “Are You Ready to Explain Your Compensation Strategy (Coherently?)” 

Before we start with the expert recommendations, let’s first dispense with two common, but really counterproductive salary negotiation tactics:

The weakest logic I hear from hiring managers is when, in generating a job offer, they say, “I just looked at the candidate’s previous compensation and added 10%.” This flawed approach demonstrates that the manager has no compensation strategy of their own. They are simply hoping the candidate’s last company had a smart compensation strategy; otherwise they compound the very mistake that caused that employee to consider leaving.

Another salary negotiation tactic that’s certain to backfire is to low-ball a job offer to a top performer and expect that they are either: a) poorly informed enough to accept it; or b) willing to keep negotiating after a bad-faith move from the hiring manager. Taking this approach overlooks the big picture of compensation–you need to pay fairly because other employers are hotly competing for the very same people. Only desperate people accept a low-ball job offer. Top performers will simply go elsewhere–to find an employer that understands their market value and does not play games with their pay.

You simply can’t wing it in these conversations – money is too much of a hot-button issue. Follow Dan Pink’s advice from his book Drive:

“The best use of money is to take the issue of money off the table . . . Effective organizations compensate people in amounts and in ways that allow individuals to mostly forget about compensation and instead focus on the work itself.”

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Are You Ready to Explain Your Compensation Strategy (Coherently?)

10/21/2013

Hands of two men counting, giving and taking dollars (Count money)Transparency is vital when discussing how you will compensate and reward top performers. But research shows that the majority of managers do not understand their own organization’s compensation philosophy. (And it’s pretty darn hard to transparently explain something you don’t understand yourself.) This was not a big problem until recently, because managers generally had access to better compensation information than job seekers, so they could wing it.

Those days will soon be over. Credible salary data was once the exclusive province of employers, who paid dearly for it. Now it is available to job seekers at a very reasonable cost.

“On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.” -Stewart Brand to Steve Wozniak at the first Hackers Conference, circa 1984.

Whatever your opinion of hacker conferences, Julian Assange or Edward Snowden, they illustrate a fact of modern life: information gets out. And salary data is no different.

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And Now, For a Completely Different View of What Management Could Be

09/17/2013

Future of WorkIn the late 1970’s Tracy Kidder captured a new kind of work ethic and (at the time) a novel kind of management when he wrote the business classic, “The Soul of a New Machine.” It was a rollicking good story about engineers building a new computer. The story was really about people, and teams, and how management could create a completely new culture where amazing work could occur. Long before we were using phrases like “knowledge workers” or referring to part of California as “Silicon Valley” he gave us a preview, a new choice really, of what leadership could look like.

Scott Berkun has done the same with his new book, “A Year Without Pants, WordPress and the Future of Work.” With warmth, humor, and finely crafted prose Berkun shares the story of his time working for Automattic, the tiny company behind WordPress–the 15th most popular website on the planet, hosting almost 20% of the top 10 million websites in the world.

Berkun is no passive observer in this story. After a decade working successfully as an author, he gave up that glorious life of freedom to work as a Project Manager at Automattic. He did actual work, and apparently did it well (having worked at Microsoft on Internet Explorer during the browser wars, he knew how to lead a technical project). His experience brings us gems of insight like, “The bottleneck is never code or creativity; it’s lack of clarity.” And, “Ambiguity makes everyone tolerant of incompetence.”

If you run a small firm, or manage people, or care about what the future of work might be, you’ll want to know this story. It should be required reading in business school. Not because Berkun makes any claims to know the future. There’s no way of knowing whether this book predicts the future, as Tracy Kidder did. Perhaps the set of open-source management principles he outlines will forever remain a wild outlier to traditional management theory. Frankly, it doesn’t matter. Because his book will make you question assumptions you have not thought about in a very long time.

What’s it like to work in an open source culture? Berkun says Automattic is, “not managed at all in any conventional business sense.” The founder of Automattic, “went to great lengths to keep support roles like legal, HR and IT from infringing on the autonomy of creative roles like engineering and design. The most striking expression of this is that management is seen as a support role.”

Berkun illustrates both the bad and the good of working at Automattic with penetrating clarity. He shares that, “Meetings at Automattic were always qualified disasters. They happened so rarely, certainly in-person ones, and had so little urgency there was little pressure to get better at running them.”

There are also worthwhile insights into innovation and project management, “It’s never a surprise in great projects to find grueling work somewhere along the way … It sometimes takes ugly effort to make beautiful things.”

He offers insights into how to evaluate people, “The real story behind some people you meet with fantastic reputations isn’t notable talents or skills, but merely an exceptional ability to choose the right time to join and leave particular projects. The work of managers everywhere is rarely evaluated with enough consideration for the situation they inherited and the situations they faced that were not in their control.“

The book is a primer for how to be a project manager in an open source world. But don’t read the book today and expect to apply these lessons to your company tomorrow. Berkun cautions, “A great fallacy borne from the failure to study culture is the assumption that you can take a practice from one culture and simply jam it into another and expect similar results.”  And this gem, “Often acquisitions create a paradox: they’re hard to fit into a company for the same reason they’re attractive to acquire. The thing you want to buy reflects a different way of thinking, which has value, but that difference is at odds with the culture you already have. Like an organ transplant, natural antibodies will fight against having the new organ fit in. And the more you do to force it in, the less of what you wanted to acquire in the first place remains. The vast majority of acquisitions fail for this reason.”

Fair warning, once you start the book, it will be hard to put down. And once you finish it, you’ll need some time to go away and think about it.


Want to use a Feedback Sandwich? Don’t You Dare.

09/16/2013

two businessman with laptop discuss somethingIn a recent post in the Washington Business Journal, I interviewed Dr. Alice Waagen about how to be more effective when managing employee performance. She had some great insights into how the context of the performance conversation matters as much as the words you say. It’s a good read, check it out.  But we also talked about how much she detests the “Feedback Sandwich.”

Some managers struggle with praise, but more struggle with delivering criticism. One of the most commonly recommended techniques for more easily delivering criticism is the “Feedback Sandwich.” Simplistically, the idea is that you open your feedback meeting with praise of some aspect of your employee’s performance, follow it up with some criticism, and then end the feedback on another high note. It’s an idea Mary Poppins and her Spoonful of Sugar would love.

But Alice is no fan of The Sandwich. Here’s the problem as she sees it:

“According to research on listening and perception, after a lengthy conversation, the thing that is best retained is what is said last. If I sat you down for a meeting and said, “Bob, your customer is very happy, I love your enthusiasm and dedication…by the way you messed up the budget on this project. And I’m recommending you for a new project.” Which parts do you hear and remember? I’d remember the new project! You’re not improving performance, because your staff member will gravitate toward and focus on the compliments, while simultaneously shrinking the importance of your criticism.”

For different reasons, most researchers have arrived at the same conclusion: The Sandwich is a fundamentally flawed way of delivering performance feedback.  Much of the research comes down to how your brain interprets both positive and negative feedback. Some people are very focused on any praise they receive – which may also depend strongly on the management style of their supervisor. If the feedback provided by their manager is typically negative, then any positive praise may stick out. Or by contrast, maybe the positive feedback would go unheard if it’s surrounded by constant criticism. Stanford professor Clifford Nass makes this point:

“One fascinating side effect of the power of negativity is that you remember less of what is said before receiving criticism because negative remarks demand so much cognitive power that the brain cannot move the prior information into long-term memory”

No matter which cognitive theory you accept, it’s pretty useless to open with a small positive thing. It either won’t be remembered, or remembering it will potentially contribute to forgetting your constructive feedback.

The approach recommended by Dr. Nass sounds to me more like an Open-Faced Sandwich…maybe a Reuben. He suggests that you start with the important negative feedback, and then move onto a long list of praise (key word: long). Opening with “criticism will bring people to attention in time to listen to the praise,” but positive remarks are both less memorable and more readily disregarded in the face of criticism, so you’ll need that longer list of praise. The Open-Faced Sandwich grants you the opportunity to negate some of that natural anxiety that comes from receiving (and giving) criticism.

But even the Open-Faced Sandwich brings to mind what George Burns said, “Sincerity – if you can fake that, you’ve got it made.”

The most devastating criticism of any kind of Sandwich is the insincerity of the conversational structure itself.  Roger Schwartz, writing in the Harvard Business Review, finds the Sandwich ridiculous, as it’s “designed to influence others without telling them what you’re doing — it is a unilaterally controlling strategy — in other words, a strategy that revolves around you influencing others, but not being influenced by them in return.” He then offers a simple thought experiment for determining whether the Sandwich (or any similar “non-transparent” strategy) is an effective way of doing things:

Imagine that you plan to use the sandwich approach with Alex and Stacey, two direct reports who just gave a presentation to your senior leadership team. To understand why you’re reluctant to share your strategy, take the transparency test — a thought experiment with three simple steps:

  1. Identify your strategy for the conversation. Your strategy is to start with some positive feedback to relax Alex and Stacey, then give them the negative feedback — the purpose of the meeting — and then end with more positive feedback so they won’t be so disappointed or angry.
  2. Imagine telling the people your strategy. You would say something like, “Alex and Stacey, I have some negative feedback to give you. I’ll start with some positive feedback to relax you, and then give you the negative feedback, which is the real purpose of our meeting. I’ll end with more positive feedback so you won’t be so disappointed or angry at me when you leave my office. How does that work for you?”
  3. Observe your reaction. Do you find yourself laughing at the absurdity of making your strategy transparent? If you think “I could never say that,” it’s because the strategy is unilaterally controlling: it is an attempt to control the situation without letting Alex and Stacey in on the plan. Unilateral control strategies only work when the other people don’t know your strategy or are willing to play along. And they are less effective than transparent strategies.

So if all forms of the Sandwich are a ridiculous way to give feedback, what do you do instead?

Consider the recommendations outlined in these two short articles:

But you probably want to grab a sandwich before you read them.


Hiring Usually Gets In the Way Just When You’re Trying to Get Something Done

08/22/2013

avalancheIn a small organization, hiring gets in the way just when you’re trying to get something done. When you have your sights set on a new goal, you’re excited and ready to get moving! But then an avalanche of complexity rains down on you. You have to stop and write up a job description in that stiff  bureaucratic language loved only by lawyers. Then you need to get approval for the new job, budget for it by taking a wild guess at the salary (locking yourself into a salary before you have any idea what the good people actually cost). Next you have to write a job advertisement, think about how much you want to spend on the ad and think about where to post it. The whole business is uncomfortable, unfamiliar and extraordinarily time consuming.

Unfortunately, once you finally manage to post the job ad, things get even more complex. Now you have a stack of resumes to deal with. So you spend even more precious time sorting through and deciphering the resumes. Often the resumes that fit your ideal mental picture turn out to be terrible candidates. And you have the nagging feeling that buried in that stack of underwhelming resumes might be someone far better than their resume indicates, but should you spend even more effort sorting through hoping to find that diamond in the rough? Really, how many frogs must you kiss just on the hopes of finding a prince? You’ll probably just get warts – and lose more time. And the cherry on the top of the misery sundae is knowing that only 18% of fully-employed candidates will ever see your ad, no matter where you post it. Yup, 4 out of 5 people are busy working, and not reading job ads, so most of your ideal candidates never made it into that stack of resumes.

So you finally get to the bottom of the stack of resumes and look at the meager handful of candidates that meet some of your requirements. By this point, you’re only mildly depressed, so you begin interviewing the candidates. The first candidate arrives in your reception area. You shake their hand, bring them in, and look down at your notes. And only then do you realize that you really have no idea what to ask them about, or how to guage their answers. You don’t have a rigorous evaluation framework, no method to test the candidate’s credentials in critical areas. So you wing it, and hope you find a candidate who impresses you. But the skills that impress people in an interview are not necessarily the skills that make someone successful on the job.

Often, after all the interviews, nobody really impressed you. Exhausted by the prospect of starting everything over again, you decide instead to select one of the people you’ve already met, knowing they’re less than ideal. And since you settled for “the best of the worst,” you resign yourself to their inevitable mediocre job performance.  Of course, you would like to replace them with someone better, who wouldn’t? But, you did the best you could, and came up short, so hoping for better is futile. Of course pushing someone mediocre to meet your ideal goals is risky, so you stop bothering and accept what you get from them. After all, they would be miserably difficult to replace.

Yeah, in a small organization, no matter how many times you’ve gone through the hiring process, it just feels like you’re doing it for the first time, every time. Every position is different, so you can never approach hiring with real knowledge of who is available to you in the job market. You never actually know if you are looking at a representative sample of the best people who could do the job. You simply have nowhere to turn to ask if you should recruit more people, pay more, change the title, or rethink how you designed the job. It feels like you’re just guessing at everything, with no real answers.

Hiring Managers, the only real solution to this problem is to get it off your desk … all of it, not just the little tasks other people are willing to help with. Find someone who will accept the responsibility for the entire outcome- finding you productive staff members. Because it’s not good enough to give away little pieces of the hiring process, that still leaves you saddled with the problem.

When delegating the problem who should you look for? Find someone with job market knowledge that informs every aspect of the hiring process. You need someone to provide input into how to design the job, someone who can tell you how your job compares to other jobs in similar organizations, someone who can write compelling job descriptions that get a movie playing in the mind of your ideal candidates. But you also need to reach the 82% of people who don’t look at job ads–if you want the best people, you need to recruit them, not just hope they apply. You need someone who understands job seeker behavior and adapts to emerging job market trends like mobile recruiting. You need real market data to decide when you have enough good candidates to move forward with interviews, and when to hold back.  And you need a rigorous hiring process to help you interview effectively and reduce your hiring risk. That’s a long list of requirements, but falling short in any area only leaves you saddled with the hiring problem, instead of working on your goals.


What Really Engages Employees?

08/11/2013

GrawitchA while back, the Washington Business Journal asked me to write something about the Gallup 2013 State of the American Workplace report. I’ve long thought that Gallup has it backward and said so in a post titled “For Better Employee Engagement, Ditch Your Engagement Projects.” In my post I stated that engagement projects are not the path to success. It’s better to manage your people well, but chase victory. Engagement will likely follow success, not the Gallup formula of success following employee engagement.

But hey Gallup is very well-known and I am not, so I didn’t expect widespread agreement with my post. I was simply satisfied with joining John Sumser in taking the contrarian viewpoint on this important topic.

Well, last week, Dr. Matt Grawitch posted something on the site of the American Psychological Association Center for Organizational Excellence.  The title of the piece was, “I Agree, Bob Corlett: Ditch Those Engagement Projects.”

Yeah, I admit, that felt pretty good. I really did not expect that kind of validation.  Naturally Doc Grawitch was more eloquent that I. Here is a snippet from his post:

” … organizations don’t need “engagement initiatives.” They need effective structures and processes that allow workers to excel and make a positive contribution, that recognize those contributions and that allow workers to meet their professional goals. And they need to do so in a work environment that is respectful of all the demands they face and whose primary output is something other than stress and strain. If you develop sound business structures, processes and work environments, you don’t need to worry about engagement, because it will naturally occur.”

If you like that argument, you’ll find quite a bit more to like on the APA Center for Organizational Excellence Good Company Blog, check it out.


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