Author: Dr. Sullivan

In the July 17 issue of BusinessWeek, Jack Welch, former CEO of General Electric and one of the most effective CEOs of all time, joined a significant list of critics who have devoted articles to publicly stating why people hate HR. After reading this article closely, I can say for the record that I agree with him.

    I categorize the BusinessWeek article as a “hate HR” piece because most people in the profession will end up judging it as such. In reality, it is a prescriptive article that clearly tells HR what it must do to become “the killer app” in the corporation versus the marginalized overhead function it typically is. If you haven’t read the article, you should. It provides a prescription for greatness. Rather than repeating all of Jack and Suzy Welch’s criticisms here, I’ll outline the positive things HR must do to become the most powerful player in any organization (which is how the Welches describe the potential role for HR).

    The Welches’ first challenge to HR is to elevate its approach to the level of financial management. They say that using our current approach has kept HR relegated to the background. It is true that some in HR have gotten the much-discussed seat at the table, but my little brother Ricky also had a seat at our table at home, and no one paid much attention to him. Rather than relishing a seat, HR must transform from top to bottom and learn to act solely as a business-impact function.

“Rather than speculating or saying, ‘I think’ or ‘I believe,’ HR must become the expert and actually know the cause and effect, as finance and supply-chain people do.”

    It’s time to realize that the other functions that are clearly “overhead,” like finance (formerly accounting and bookkeeping), IT (formerly office equipment repair) and supply chain (formerly purchasing and shipping), have used this business-impact approach to become corporate heroes. Here are four radical things that HR must do to join them:

    Quantify and convert people-management results into dollars. We must convert the impact of people issues and our program results into dollars in every area. It’s particularly necessary in capturing the productivity of the workforce, the cost of a vacant position, the negative cost of keeping a bad manager and the dollar impact of hiring and keeping top performers versus average ones in mission-critical jobs. This means building a solid partnership with the CFO’s office. The CFO is the undisputed king of placing valuations on activities that are difficult to enumerate.

    Drop the socialist “treat them all the same” mentality. Instead, HR must prioritize business units and jobs so that HR time and budget resources are focused primarily on the areas that most influence corporate revenue and profit. This means prioritizing the four critical HR functions that the Welches emphasize: hiring, development, promotions and poor-performer turnover.

    Adopt, as other successful functions have, “fact-based” decision-making. This should be the expected standard in HR. Rather than speculating or saying, “I think” or “I believe,” HR must become the expert and actually know the cause and effect, as finance and supply-chain people do. Things that HR must know include the causes of turnover, what motivates workers to produce more, and which HR actions can turn a business unit around. This means HR must shift away from its soft approach and instead become like the rest of the business elite. They rely on hard data to make every decision.

    Populate the HR profession with individuals who have run businesses and have P&L experience. As the Welches suggest, in order to become businesslike, HR must primarily recruit people with business school degrees or with experience outside of HR. This might seem harsh, but if you want to join the elite functions in business, your team must change from mostly administrative players to hard-core businesspeople.

    Our profession can criticize those who criticize us, or we can accept their judgments as universal truths and change. Do you have the courage?

Workforce Management, July 31, 2006, p. 42 — Subscribe Now!

Almost everyone now realizes that the so-called “next war for talent” is already well under way. In some industries it has only recently heated up, while in other areas, like health care, law enforcement and construction, the battle to attract top talent has been ongoing for years. Making the fight even more difficult is the fact that budgets in most recruiting departments have been cut to the point where there is no extra money to try new recruiting approaches. But here’s the secret: If you want to attract the very best talent, it doesn’t take a lot of money or technology. All it takes is the courage to try something new. So if you’re looking for almost foolproof no-cost recruiting tools, here some of the ones used by leading firms.

    Targeted employee referrals. Every bit of research that I’ve seen comes to the same conclusion: Referrals consistently produce the highest-quality candidates of any recruiting source. However, most companywide referral programs cost money, and because the Homer Simpsons of the organization know people too, these companywide programs can attract lower-quality referrals as well as higher-quality ones. However, there is a more focused referral approach that produces spectacular results with no out-of-pocket costs. I call this “Give Me 5.”

    It starts by identifying the top performers that currently work in the job family for which you are recruiting. The next step is to send an individual recruiter directly to a regularly scheduled management meeting that these top performers attend. You could simply ask them during a break to provide you with the names of the very best people they know. Unfortunately, what often happens when you do that is that people will draw a blank. Instead, use “name stimulators.” These might include a request to name the best team player they know, the best innovator they have worked with, or the best manager they know within 50 miles. Invariably, you will find that by approaching them directly and asking for their help, they will provide you with the names of the very best people they know–without any expectation of a reward.

    A variation of this approach that has been utilized by Eli Lilly and FirstMerit Bank is to hold a “Rolodex party” and invite these top performers to a conference room to help identify the names of the very best. After identifying the names, it is also wise to ask these individuals to help you in contacting these individuals and persuading them to formally apply for a position.

    Use employment references as referral sources. A reference referral is quite simply asking the references that were given to you by previous successful hires to act as a referral source for the names of other top performers that the references also happen to know. The process is really quite simple. You call the references of your top-performing employees in the job family you are recruiting for. Identifying them is really quite easy because you already have their names and phone numbers in your recruiting files. Identify the ones that made accurate (and positive) comments about the candidate that you hired. Next, call the references and say something like, “I want to thank you for giving us a reference for Mr. XYZ. Based partially on your recommendation, we hired him, and he turned out to be an excellent employee.” Next ask, “Would you be willing to help out again by giving us some names of some other equally or better-qualified candidates?”

    You’ll be surprised at the number of times that they know the names of other individuals who are equally qualified—or even better qualified. Next, ask your current employee if she knows the newly referred individuals, and if so, use her for the initial contact. Incidentally, you should also consider targeting the references directly, because the people that individuals use as references are almost always superior individuals.

    Learn to “boomerang.” Boomerang is a term that was coined to identify top-performing former employees who are purposely targeted and brought back. Boomerang recruitment is a high-ROI activity, because you are bringing back proven top performers who already know your culture. In addition, boomerangs are highly valuable because they bring back great external experience, as well as a fresh perspective.

    Major firms that have utilized the boomerang approach include McKinsey & Co., Ernst & Young, Bain & Co, Deloitte and Gensler (one firm has been written up for having boomerang rates as high as 12 percent of all hires). However, the best-practice leader, based on my observations, is the management consulting firm Booz Allen Hamilton. It has gone the extra step and developed a unique team known as the “comeback kids,” who have proved to be very successful in getting former employees to return.

   Some of the former employees you should target include individuals in key positions, top performers, people with key skills and even recent retirees. Begin the process by looking for the targeted individuals that during the past three years have left the job family you’re recruiting for. The benefits department will often have their contact information if it’s not in their employee file. Next, call and let them know there is no animosity. Then ask them if they would be open to a conversation about the possibility of returning. If they express an interest, identify any possible concerns they might have about returning and don’t be surprised if more than a third of the individuals that you have targeted express an interest in coming back.

    New-hire referrals. Consider using your new hires as referral sources. That’s what FirstMerit Bank and Quicken Loans do. The basic premise is that new hires, because they generally come from other firms, know and can successfully influence top-performing colleagues from their former firms to consider your firm. The approach itself is really quite simple. On the first day, during orientation, you ask each new hire, “Will you help us identify others like you?” If they agree, you ask, “Who else should we recruit from your former firm?” After getting the names, you should also ask them if they will make the initial contact, and if they will help sell these individuals on your firm.

    CEO calls as selling tools. While the previous approaches focus on identifying top candidates, this final cheap-but-effective approach focuses on persuading the identified candidates to apply and to say yes to your offer. When you have identified a must-have individual for a mission-critical position, you have the CEO of your firm call that individual up and sell them on your firm. The CEO call is so effective because most recruiting processes are impersonal and have no “wow factor.” Nothing about the process is designed to get a candidate’s attention, make them feel wanted or build the impression that they will have senior executive access. A personal call from the CEO changes all of that.

    The process begins by getting the CEO to agree to call a small number of candidates each month. Give the CEO a profile on the targeted individual. The call should be scripted to the extent that it includes something like “We really need you. Please join me, and together we will build the future of this firm.” Other variations of this approach include a CEO meeting at an industry convention or simply inviting the candidate to lunch. Having a CEO contact a candidate does require some preparation, but its nearly 100 percent success rate tends to make the preparation worthwhile. Try it. You will be amazed at the results.

Workforce Management, June 26, 2006, p. 66 — Subscribe Now!

Every organization has barriers to productivity, but few organizations address them, despite an almost daily challenge to increase productivity. With intense international competition, everyone is facing the challenge of producing more, at a higher level of quality and at a lower cost. The human resources function has tried using compensation to motivate, offered new types of training and even tied hiring and internal transfers and promotions to competency profiles. But no matter what gets tried, little changes.

Enter a new approach, one that is gaining acceptance and one in which HR accepts responsibility for identifying and removing barriers to productivity. It’s a solution that produces real results almost immediately. And it makes HR look proactive, line managers look sincere and the organization compassionate.

State government leading the way? The seminal work and inspiration for this column came from what might seem an unexpected source: the North Carolina Office of State Personnel. It is doing something most citizens would applaud, but what many would consider impossible: building a performance culture within state government. Part of that “big hairy audacious goal,” as Built to Last put it, includes identifying and reducing barriers to employee productivity. Not only is the approach proving effective, it is doing so in an environment well known for conservatism and having a “that’ll never work here” attitude.

If you have read Thomas Friedman’s The World Is Flat, or any business magazine in the past six months, you should already be aware that globalization is forcing many organizations to find new ways to increase productivity just so that they can remain viable. Quite often internal brainstorming sessions focus on outsourcing manufacturing, re-engineering the supply chain or reorganizing product development. But these rarely consider what HR can do. No one seems to be asking, “What could have more impact than helping managers identify and then reduce barriers to employee productivity?” It’s an opportunity not only to cut costs, but also to reduce errors, increase customer satisfaction, cut time-to-market and, yes, increase profits.

This approach offers HR a unique opportunity to step up in the organization and take the lead in developing tools and capabilities to identify and strike down barriers that keep employees from doing their very best. From the employee standpoint, reducing productivity barriers has additional benefits: It helps cut frustration levels, builds morale and decreases the causes of turnover.

Identifying barriers to productivity: The Office of State Personnel in North Carolina, working with the North Carolina Office of Commissioner of Banks, proposed an innovative and simple way to identify things that keep employees from being as productive as they could be. They came right out and asked them.

The process started when the HR Design Team, a consulting group within the Office of State Personnel, devised an online survey that asked employees a series of questions that would help them list the barriers to their productivity, and any potential people-related problems that might prevent them and the organization from achieving their mission and business goals. Employees were promised anonymity, but the form did ask them to identify themselves so that the design team could identify whether or not a barrier was present across the whole organization, or only in specific units.

Those of you opting to try this approach might devise a form that does the following:

• Makes a statement to the effect of “We need your help! Will you help us identify barriers to your productivity and job ‘frustrators’ that inhibit you, so that we can improve your work environment?”
• Provides examples of what you mean by “barriers to productivity” on the form because employees are not used to being asked such questions and many will not grasp the concept right away.
• Asks about barriers to increasing output volume that they face on a daily basis.
• Asks about barriers to increasing quality.
• Asks about barriers to innovation and continuous improvement.
• Asks about how prevalent the barrier is and how the employee might recommend the organization remove it.

In North Carolina, the design team had the Commissioner of Banks write what can only be described as an impassioned letter, asking employees to be brutally honest. In addition, he offered to make himself and his leadership team available to help employees walk through their thinking. Within a week, more than 170 barriers and potential problems had been submitted. The team asked employees to identify the issue, describe it, rank it in terms of its impact and frequency of occurrence, and then to provide their view of the characteristics of an optimal solution. Barriers included such things as lack of communication, weak support for field staff and job profiles that saddled employees with activities not related to their core strengths.

This process did something unique, and something few HR programs do. It came at the problem from the employees’ perspective. When it comes to an organization’s ability to hire, develop, motivate and retain staff, managing to employee perception is critical. An organization, after all, makes decisions based on employees’ perceptions, not that of managers. In a very short period of time, this process centered on at least 170 things that employees identified as barrier to their increasing productivity. If the organization were to remove just a few of those stumbling blocks, it stands to reason that employees would have fewer excuses for not exceeding expectations. That alone makes this process worth it. But in North Carolina, this process also helped employees realize that they can take an active role in making the Office of the Commissioner of Banks a great place to work.

The real work–sitting down with line managers and devising approaches to remove the barriers–still lies in front of the design team. But the hardest part is over. Although managers will implement the solutions, HR will play a vital role in designing, developing and continually improving the response of management to productivity barriers.

A similar approach in the hotel industry: MGM Grand, the largest hotel/casino in the world, implemented a similar approach. Employees were invited to participate in focus groups to discuss the results of a previous survey. That instrument covered barriers related to the work environment, management practices, rewards and recognition, and career opportunities. During the focus groups, employees were asked probative questions to discover perceptions about organizational issues that limit MGM Grand’s efforts to become the best employer in Las Vegas. Following the focus groups, survey results and focus group comments were sorted into categories and organizational departments. Within months, a majority of the issues identified had been acted on and resolved or improved. The remaining issues require longer-term planning and capital allocations and are currently being addressed. Incidentally, the process was so successful that the CEO agreed that the entire process will be repeated each year.

Action steps you should take: The first action step is to get off the sidelines and announce that HR is accepting responsibility for identifying and resolving barriers to employee productivity. Then develop a process to identify barriers that fits the organization’s culture and provides employees with the confidence to come forward with what they see. Focus the process initially on things that can have immediate impact. That way, everyone from the CEO on down will see the immediate and measurable results and attribute the success to HR. There you have it: a chance to become a corporate hero.

Workforce Management, May 22, 2006, p. 42 — Subscribe Now!

I routinely ask HR leaders around the world, “Do you see increasing productivity of your workforce as a primary part of your job, and do you compare your results with those of your worldwide competitors?” The response of most leaders is the same: bewilderment, a long pause, a blank stare. It continues to amaze me that HR leaders do not recognize that every business function, whether it be marketing, finance, production or HR, is in the productivity business. That means continually getting more out of every dollar you spend on the resources that you control.

    Workforce productivity is in the news: I am highlighting this issue because workforce productivity is in the news on a daily basis. Corporate giants like Ford, Kraft, Hewlett-Packard, United Airlines and General Motors are being pounded by analysts because their labor costs are skyrocketing past those of their domestic and foreign competitors.

    My point is simple: Despite the constant rants by analysts and CEOs, few HR leaders attempt to take responsibility for their workforce’s productivity. In finance, for example, calculating the productivity of financial investments is a common practice, as in real estate, marketing, manufacturing and supply-chain management. Measuring workforce productivity is not that hard. The most basic measure is simply the cost of the inputs (all salaries, benefits and HR department costs) compared with the value of the outputs (production output value, revenue or profit).

    HR must declare itself “captain of the ship”: One argument I often hear is that HR does not directly manage the workforce and therefore cannot be held directly responsible for productivity. That argument is weak. Every other corporate function is held accountable when the resources that it manages do not produce adequate results, so why should HR be exempt? HR must declare itself accountable and then design systems that influence, cajole and sell managers and employees so that the productivity levels of the workforce remain competitive.

    Cutting costs is easy; managing strategically is hard: Occasionally HR leaders will respond that they do manage the productivity of the workforce by manipulating labor costs. Any accountant can figure out how to shave 10 percent off the budget, but developing systems to maximize the output of all the budgeted pieces requires significant thought and coordination. This, in my estimation, is the true purpose of HR: to increase workforce productivity through activities that increase the other (but most important) side of the ROI equation, which is revenue. If HR leaders can shift their emphasis to driving increases in workforce output without increasing people costs, they will have demonstrated that they can strategically manage the workforce.

    Global competition is forcing HR to change: Globalization and economic growth in China, India and Eastern Europe, where labor rates are significantly cheaper than in the United States and Central Europe, will make managing workforce productivity an imperative for organizations that wish to survive. This new imperative means that HR must monitor labor productivity and advise senior management when moving offshore or outsourcing presents an opportunity to better compete. HR must begin to look at what type of work must be done and under what parameters, and then suggest to management what labor type to use and where such labor should be sourced or located. In addition, HR must advise managers when they have too many employees before a wide-scale correction is needed. Labor costs will be a component of the analysis, but they cannot be given more weight than quality, innovation and agility.

   I argue that these wake-up calls signal that it is time for the DNA of HR to change. The new HR leader learns from the old slogan “What’s good for General Motors is good for the country.” But the lesson learned is a new one: Managing workforce productivity like HR at GM has may be the cause of your organization’s downfall.

Workforce Management, April 24, 2006, p. 50 — Subscribe Now!

Everyone knows that a motivated worker is a more productive worker. Yet, you can search the hallways of HR for hours and never find the “nonmonetary motivation department.”

    So the question arises: Is there an easy way to increase the motivation of individual employees without spending any cash? Fortunately the answer is yes. There is a workforce management practice known as “personalized motivation,” or “how would you like to be managed?” profiling. These approaches can be easily implemented and, in no time, enable you to give your manager information on the best ways to motivate their employees.

    Baptist Health Care is breaking new ground in personalized motivation: One organization that has boldly adopted a personalized motivation process is Baptist Health Care of Florida. The approach is simple but effective. Baptist Health Care distributes a survey to employees asking them how they would like to be rewarded and recognized. From the survey, an individual manager can see what type of reward or recognition is likely to have the greatest impact on this particular employee. While Baptist Health Care focuses primarily on rewards and recognition, I suggest a slightly broader approach that also asks employees what excites and frustrates them.

    Four powerful questions that are just never asked: I don’t know about you, but my working life has spanned over 40 years and not once has any manager of mine ever asked a single one of these questions:

• What would you like more of? That is, what are the elements of any job that excite, challenge and motivate you to be more productive?

  
  

• What would you like less of? That is, what are the elements of any job that frustrate you or inhibit your productivity?

  
  

• How would you like to be managed? Help me understand the best approach to get the most productivity out of you.

  
  

• Why did you quit your last few jobs? Help me understand why you quit, so that I can avoid repeating the same mistakes that your previous managers made.

  
  

    The advantages of personalized motivation: It’s a common business practice in sales and market research to spend hours attempting to find out what motivates each individual customer to purchase a firm’s product. That practice needs to be duplicated internally.

    The need to identify employees’ critical motivators is important because, simply put, most managers are terrible at motivating their employees. When managers don’t know what motivates an individual, they mistakenly assume that all workers want the same thing, or they make random guesses about what motivates an individual. Both are serious errors.

    If we expect managers to successfully motivate their individual employees, human resources professionals must accept the responsibility of providing managers with a list of what motivates and frustrates a new or recently transferred employee. I have found that even “bad” managers, when they are educated about what excites and challenges an individual worker, can become “good” managers in as short as a month.

    Steps that you should take: Producing a “how I like to be managed” profile starts with developing a simple questionnaire that is administered to new hires and transfers during orientation. (A sample copy of a customized motivation survey can be found at workforce.com/motivation_survey.) It can be a simple paper questionnaire, but it works best when it’s available online.

    If you are really bold, give the survey to every other hire in a particular job classification and see whether the “motivated” employees produce higher output, retention rates and performance appraisal scores after one year than the sample population that did not complete the survey. Calculate the dollar amount of any increased productivity, and show it to your CFO with a smile on your face and a swagger in your walk.

Workforce Management, March 27, 2006, p. 50 — Subscribe Now!

Ten tenets of 21^st century HR:

1. It is a solver of business problems. It directly impacts the business, its products and its profitability.


2. Its primary role is to be a productivity consultant that helps managers recruit and retain the best workers and to develop and motivate all employees so they are the most productive they can be (per dollar spent) return on investment (ROI).


3. It is forward looking. It monitors the environment and it anticipates business opportunities and problems.


4. It is metric and reward driven. It proves and rewards the business impact of everything it does.


5. It shifts ownership of people issues to managers and employees. It influences managers to make hard people decisions.


6. It coaches managers and gives managers choices but it does not actually solve managers’ people problems.


7. It uses HR tools to increase the organization’s capability to beat the competition.


8. It builds a sense of urgency and of continuous learning and improvement.


9. It uses technology and “e-management” to manage people “remotely” and to do all HR faster, better and cheaper.


10. It is agile. It can rapidly redeploy resources (people, information and talent).

Workforce, January 2000, Vol. 79, No. 1, p. 54.