Author: Shari Caudron

In 1978, Jac Fitz-enz published an article in Personnel Journal (the predecessor to Workforce Management) titled “The Measurement Imperative.” In it, he proposed a radical, anti-establishment idea: that human resources activities and their impact on the bottom line could be measured. The reaction? Apathy. Disagreement. Disbelief.

    During a recent speech in Phoenix, the tireless 71-year-old corporate agitator zeroed in on what he has learned from all the fuss. “The secret to success, I’ve found, is to outlive the bastards who oppose you.”

    A quarter of a century ago, conventional wisdom held that human resources couldn’t and shouldn’t be measured, Fitz-enz says. “They told me HR was about truth and goodness and making life better for people.” What they told him, in effect, was to go away, and let the under-the-radar practice of human resources remain as it was. Fitz-enz did not fade away. Instead, he became a renegade pioneer who consistently championed the economic value of human resources despite the fact that initially, no one seemed to care. Over the last 25 years, he has nudged, prodded, poked, argued and written more words about the business effects of human resources than just about anyone else on the planet. Along the way, he has amassed an impressive résumé.

    Fitz-enz was the first to argue that human resources decisions affect real dollars and, consequently, have a real impact on the bottom line. He was the first to develop a set of useful and systematic measurements for practitioners to utilize in their companies. He established the Saratoga Institute, the first organization to gather and distribute solid benchmark data about compensation, staffing, hiring and retention. Today, the institute is world renowned for its work in providing executives with comprehensive human resources measurement and analysis tools. Fitz-enz is also the author of seven books and more than 160 articles and book chapters about measurement.

“I kept asking myself: ‘when are people going to get this?’”

    His steadfast crusade has inspired the work of countless other human resources visionaries, including John Sullivan, head of the Human Resource Program at San Francisco State University. “Jac has been a pioneer,” he says. “I’ve been developing HR metrics for 20 years, and I learned the basics from Jac.”

    Thanks largely to Fitz-enz, a majority of companies are now at least talking about the importance of measurement. “Jac started this conversation,” says John Boudreau, research director for the Center for Effective Organizations at the Marshall School of Business, University of Southern California. “He established very clearly the reality that you could measure a soft thing called HR. We couldn’t have gotten here without him.”

    Today, the unknown author who so annoyed readers back in 1978 is the undisputed father of human capital metrics, and his fans are legion. In February, Fitz-enz delivered a keynote talk to 200 at the Human Capital Metrics Summit in Phoenix. After his speech, several members of the audience stood in line like groupies waiting for Dr. Jac, as he likes to be called, to personally autograph his books.

    Although there’s little doubt that Fitz-enz will go down in history as a business visionary, his career began rather inauspiciously. Born and raised in Aurora, Illinois, he graduated from the University of Notre Dame with a bachelor’s degree in political science. He then spent three years working as a naval intelligence officer in Hawaii. Upon discharge, he moved to California and worked in a variety of line jobs, including sales positions for several companies.

    In 1969, after returning to college and acquiring a master’s degree in organizational communication from San Francisco State, Fitz-enz accepted his first human resources position, a job in the training department of Wells Fargo Bank. At the time, he says, the personnel department was populated by bankers who had failed at banking. Because the company didn’t know what else to do with these employees, they were shoved into the department that was regarded as a repository for second-class employees. “Personnel was housed in an annex to the main corporate office,” he says. “We were put there, I was told, so that we couldn’t hurt anybody. I’d come out of sales positions where I was considered hot stuff. To be thrown into the annex with failed people…that was tough to take.”

   Feeling angry, unappreciated and defensive, Fitz-enz began to gather data about the bank’s personnel department so he could demonstrate to line managers that the function did indeed have value. This was the first tentative step on a path that would eventually become a lifelong journey to prove the value of human resources. Fitz-enz started his research in the bank’s staffing department. He reviewed the time to fill job requisitions, the cost to hire new employees and the number of requisitions filled by given staff members. “It was all very basic: cost, time and quantity,” he says. “We were simply trying to justify ourselves.”

    The bank’s reaction to his reports was, in a word, underwhelming. Line managers, who believed it was impossible to measure a soft, feel-good function like human resources, reacted to his data with disbelief and derision. “It was a long fight,” he says, but after a few years the bank’s “brighter people,” as he calls them, began to see the wisdom of his work. In 1974, Fitz-enz left Wells Fargo and took a position with Imperial Bank in Southern California, where he’d moved to complete a doctorate in organizational communication at the University of Southern California. The bank had been founded by two former construction professionals who innately understood the importance of quantifying business activities. “They weren’t afraid to innovate,” Fitz-enz says. It was here that the young rebel began to shift from a defensive posture concerned with justifying the existence of human resources to an offensive position designed to prove the value of human resources.

“The HR manager before me had destroyed the department’s credibility, and it was my job to rebuild it.”

    Upon receiving his doctorate, Fitz-enz moved back to the San Francisco Bay Area and accepted a position with a computer company in the Silicon Valley. Only he didn’t call the department human resources. “The HR manager before me had destroyed the department’s credibility, and it was my job to rebuild it,” Fitz-enz says. “I changed the name to industrial relations to take away the stigma.” The move reflected his characteristic reluctance to accept the status quo. This is, after all, a man who dropped the k from his first name because he’d never liked writing the letter, and added a hyphen to his last name because he got tired of people mispronouncing it.

    While at the computer company, Fitz-enz grew more confident than ever that he could address bottom-line business problems through human resources activities. He started by implementing a supervisory training program. Survey results from before the training and six months afterward revealed significant improvements in product quality. “The improvements were so significant, I started looking around and wondering, ‘What else can I do?’” He then attacked hiring concerns and retention issues, and was soon being invited to the Monday morning executive meeting held by the CFO. Like other department heads, Fitz-enz, the company’s first human resources professional to attend these meetings, always had data to share about his department’s progress.

    Despite his reputation as a numbers guy, Fitz-enz insists that he didn’t start out intending to focus on metrics. “My goal was to find a way that HR activities could help improve decision-making in companies,” he says. “I was never that into numbers. I actually flunked math twice in high school.” And yet he intuitively knew that the only way he and others in the field could make a difference in their companies was by understanding metrics and being able to talk quantitatively with other executives. Since no other human resources executive was talking this way, Fitz-enz decided to start the conversation with his 1978 article in Personnel Journal.

    Looking back, it’s perhaps no surprise that the article was met with such contempt. In the 1970s, America was still very much a manufacturing-based economy, and most companies were involved in producing a product. Because of this, organizations were especially concerned about tangible assets such as plants, equipment and inventory. The idea that human resources and the department that manages them could affect the bottom line had not gotten much attention. “Jac was talking about the value of people years before anyone could hear the message,” says Nick Burkholder, president of Staffing.org in Willow Grove, Pennsylvania.

“My goal was to find a way that HR activities could help improve decision-making in companies. I was never that into numbers. I actually flunked math twice in high school.”

    Fitz-enz didn’t care. What he was concerned about was improving the ability of managers to make decisions. To make better decisions, they needed data, and Fitz-enz wanted to bring it to them. In 1980, the former math failure left the corporate world to start his own consulting company, the Saratoga Institute. He hung out a shingle and the response was, once again, underwhelming. Although he was spending all his time speaking and writing about metrics, his message did not find a ready audience, and for the first six years of the institute’s existence, Fitz-enz lived off credit cards. “Fortunately,” he says, “the interest was then tax-deductible.” In those early days, he admits, he was often frustrated by the inability of people in human resources to understand his message. “I got tired of talking to people who were unwilling to open their minds to new ideas,” he says. “I think I pushed too hard in the beginning. I got caustic. I kept asking myself, ‘When are people going to get this?’” Faced with a lack of money and a lot of resistance, he found other things to keep him going. “Stubbornness, for one thing,” he says. “But I was also in my 50s by that point. I had to make the company work because if I didn’t, I would probably never be hired for another human resources job.”

    Fitz-enz is a man who is highly articulate when speaking about subjects such as metrics. Measurement is his mantra. But when asked about his personal life, he is not forthcoming. In short, he raised four children, has five grandchildren, has been married and then divorced, and remarried two years ago.

    Although it was rough going in the early years, eventually the business landscape began to change and opposition to his message receded. The quality movement, the shift to a service economy, and the introduction of technology that made data gathering and analysis easier all helped executives accept the fact that human resources practices could be measured, should be measured and do have a demonstrable effect on the bottom line. Fitz-enz gleefully cites surveys revealing that 92 percent of CFOs now believe that human capital affects customer service, 82 percent believe it affects profitability and 72 percent believe it affects innovation. The idea that employees can have such a measurable business impact was unheard of when Fitz-enz began.

“Jac was the first person to get people focused on metrics. Without him, we would clearly not be as far along today.”

    In the last 10 years, the practice of measuring workforce activities has become widely accepted, and some companies rely so heavily on metrics that they might not even be around if it weren’t for Fitz-enz’s early work. Outsource providers like Exult, for example, rely on data to prove to their customers that outsourced human resources services have value. “Jac was the first person to get people focused on metrics,” says Bruce Ferguson, Exult’s vice president of talent acquisition. “Without him, we would clearly not be as far along today.”

    Betty Silver, director of SAS’s corporate university in Cary, North Carolina, agrees. Her company develops business-intelligence software. She says Fitz-enz’s work has been instrumental in helping SAS determine what human resources analytics are necessary for companies to make good business decisions. “Jac partnered with us on the development of our human capital software,” she says. “This is a man who understands that HR is not a cost center but a revenue-generating facility.”

    In 1998, at perhaps the height of his popularity, Fitz-enz sold the Saratoga Institute to Spherion, but stayed on in a management capacity. In 2003, the company was sold to PricewaterhouseCoopers, and Fitz-enz officially retired from the institute. “It’s a testament to Jac’s work that Saratoga has been acquired by an accounting firm,” says Yves Lermusiaux, president of iLogos Research, a division of RecruitSoft based in San Francisco. “This shows you that people are now taking HR measurement seriously and looking at the financial consequences.”

    Fitz-enz’ reason for selling are simple. “I had to get my equity out,” he says. “I was 65 years old.” Freed from the day-to-day management of a consulting firm, he is still speaking, writing and consulting. But he is also looking forward to his retirement in about three years. His goal then? To golf. “I’m a seven handicap now. My goal is to reduce that to a four by the time I retire.”

    Three years from now, when Fitz-enz has little more to worry about than which club to select for a 95-yard shot from the rough, he’ll be secure in the knowledge that he has made a difference in the business world. Nick Burkholder likens him to John Harrison, the self-taught English clockmaker who in the 1700s invented the device that measures longitude, which made seafaring navigation much safer. “The implications of Jac’s work are just as great,” Burkholder says. “In fact, I would have left human resources if it weren’t for Jac’s work. He was a rock. He made me see what I could do with the function.”

Workforce Management, April 2004, pp. 49-52 — Subscribe Now!

Watson Wyatt, a global HR consultancy, recently took a look at companies thathave lower-than-average health-cost increases and are meeting or exceedingcompany financial expectations. The research discovered that companies that arelikely to see lower-than-average health-cost increases are those that run theirhealth-care programs like a business. More specifically, successful companies:

• More directly manage their health-care supply chain.
• Emphasize employee productivity and overall health as key goals of their health-care program.
• Have longer health-care strategy planning cycles.
• Include employee self-service features in their health-care program.
• Empower employees to take responsibility for health benefits.
• Provide employees with self-care information and decision support.
• Use data in health-care decision-making.
• Make use of the Internet to administer benefits and distribute health-care information.
• Are less likely to consider reducing or eliminating coverage.

    Perhaps most important, the Watson Wyatt research also discovered thatcompanies with lower-than-average health-cost increases don’t make incrementalchanges that do things to employees. Instead, they make changes with employeeinput.

Workforce, September 2002, p. 34 — Subscribe Now!

In 2000, Coca-Cola agreed to a $192 million settlement in arace-discrimination suit. As part of the settlement agreement, the companypledged to conduct a top-to-bottom review of its HR systems in an effort topromote a diverse environment and ensure fairness and equal employmentopportunity. An external task force was appointed for four years to review thecompany’s progress.

Last September, the task force issued its firstreport, which revealed thatalthough Coke has made significant progress in many areas related to equalopportunity, challenges still remain.

On the plus side, Coke is in the process of:

• Conducting routine monitoring of various HR systems, including performancemanagement, staffing, compensation, and  problem resolution, to ensure fairnessand consistency.

  
  

• Implementing a uniform performance-management system for all U.S.-basedemployees to ensure fair, documented performance evaluation based on specificjob-related measurements. The system is designed to increase senior managementaccountability by tying their performance reviews and compensation to theireffectiveness in performance management.

  
  

• Implementing changes to its compensation system, including moving to a commonreview data for merit increases, instituting routine pay-equity analyses, andreinforcing the connection between performance management and merit increases.

  
  

• Instituting executive briefings and strategic-thinking sessions among seniormanagement regarding the company’s diversity strategy.

  
  

• Implementing a program to provide employees with several avenues forresolving problems, including an employee hotline and ombudsperson program.

  
  

• Piloting a large-scale, one-on-one mentoring program.

  
  

Despite progress in these areas, the task force revealed that significantchallenges still face the company. For example:

• A distinct gap exists between white employees’ perception of the company’sdiversity practices and that of racial and ethnic minorities. For instance,black employees were less positive than white employees about advancement andcareer-development opportunities.

  
  

• The company missed an important opportunity to show its commitment todiversity when it nominated two white males to its board of directors in thespring of 2002. Members of the task force believed that the company’s failure toconsult with them about the nominations undermined diversity efforts andsuggested a lack of sensitivity to declared diversity goals.

  
  

The report also revealed that:

• Of 6,864 non-hourly U.S. Coke employees, 30 percent are minorities, up 4percent since December 31, 2000. Two-thirds of those minority employees areAfrican-American.

  
  

• Between January 1 and June 30 of last year, women and minorities werepromoted at a higher rate (5.0% and 5.7%, respectively) than white men (4.7%).

  
  

• Promotional rates at the executive level were far greater for women andminorities. However, minorities make up only 20 percent of the workforce at theexecutive level and are over-represented among the lowest-paid “supportpersonnel,” at 47 percent.

  
  

It’s a warm spring morning in May and Carly Fiorina, CEO of Hewlett-Packard Company, is in her element. It has been exactly one year since the company’s controversial merger with Compaq Computer, and the high-tech rock star is on stage celebrating with the announcement of major new products. Inside the San Jose Convention Center, dozens of journalists capture her words in notebook computers as Fiorina, speaking without a single note, details the highlights of the new software and services. She’s direct. She’s articulate. And she makes her points without revealing a trace of humor or personality. She’s a well-rehearsed businesswoman with a buttoned-down message to customers that echoes HP’s new marketing theme: “Demand more.”

It’s a daring slogan for a company that promises to meet the demands of the most demanding IT customers. But the words could also describe Fiorina’s own management style. Opinions vary on the stylish 48-year-old leader with the multimillion-dollar paycheck, who has been described as everything from brilliant and visionary to arrogant and self-serving, but on one point people agree. Carly Fiorina–who rises at 4:30 a.m. and routinely puts in 16-hour workdays–is a furiously driven executive who expects the very best from herself and her 141,000 employees.

“She’s not in our offices every day beating on us, but she expects us to be on top of what we’re doing,” says Shane Robison, executive vice president and chief strategy and technology officer. “She believes our culture should be based on performance, self-motivation and high achievement.”

Those high standards have had an extraordinary impact on HP’s workplace. When she arrived in 1999, employees were used to working for a company in which layoffs were exceedingly rare. Today, pink slips are common. By the end of October, 17,900 people will have lost their jobs. One disgruntled veteran, who has been at the company for 20 years, declares, “Employees are now viewed as assets or tools, no different than machines or buildings.”

When Fiorina arrived, HP was a flat, decentralized company, and individual departments were given a great deal of autonomy. Decisions were made by consensus, or not at all. Today, HP is a tightly coordinated corporate machine where the most important decisions come from the top. “Before, we never talked about members of the executive council (a team of senior vice presidents who report directly to Fiorina),” says Renee St. Denis, general manager of product recycling solutions. “Now we not only know who they are and what they do, we know they have ‘super votes’ that can override others.”

Under Fiorina’s tutelage, HP also conducted the largest technology merger ever: the $19 billion deal with Compaq Computer. It initially was criticized, in part because HP’s khaki-wearing, laid-back culture was so vastly different from Compaq’s caffeine-fueled Type A workforce. Today, the merger is hailed as one of the finest ever. Even Tom Ridge, director of Homeland Security, has sought Fiorina’s advice on how to merge 22 disparate government agencies into one forward-thinking organization.

Wall Street likes what it sees, too. “From a financial point of view, it looks as though the increased centralization and focus on performance are working to integrate HP with Compaq,” says Joe Beaulier, a Morningstar, Inc. stock analyst.

A predatory animal
    As her example demonstrates, organizational change really does start at the top. HP today is a different and more predatory animal than it was four years ago, and the culture mirrors Fiorina’s own style. HP is driven, decisive, customer-focused and successful. In the first quarter of this year, four out of five of the company’s business segments were profitable, despite the fact that the technology sector remains depressed. Second-quarter earnings handily beat Wall Street estimates. And in April, the company signed its largest contract to date: a $3 billion deal with Procter & Gamble. As James J. Cramer recently wrote in TheStreet.com, “It wasn’t supposed to be this good. Hewlett-Packard should have screwed up.”

Carly Fiorina was hired by HP’s board of directors to turn around a company that was desperately in need of change. HP had become sluggish. It had failed to capitalize on the personal computer and Internet revolutions, and missed nine quarters in a row during the biggest technology upturn ever. Hopes were high for Fiorina, who, unlike her predecessors, was not an engineer or HP insider. She was a willful, market-focused executive skilled in major organizational change. Just three years earlier, she had orchestrated the spin-off of the 120,000-employee Lucent Technologies from AT&T. But just because HP needed to change, that didn’t mean employees were ready for it. From the get-go, Fiorina’s slick market-savvy focus was at odds with the company’s relaxed engineering culture.

“In the old days, when HP execs would visit, they would rent a car from Hertz,” says a management employee from the Fort Collins, Colorado, plant. “But Carly traveled in a stretch limo; she wanted to be treated like a movie star.”

“Previous CEOs talked about the company as a we,” says Barton Coddington, a former employee who now works for the company as an independent contractor. “Carly may have used the word I too much.”

But if Fiorina had difficulty in her new role before the merger announcement, it was nothing compared to what came afterward. She announced the proposed merger with Compaq in September 2001. She liked the company because it was strong in areas that HP wasn’t, including data storage and direct sales. Compaq was also known for its speed and customer focus–characteristics that were glaringly absent from HP. “HP was more analytical and methodical,” says a former Palo Alto employee, “which means they moved a lot more slowly.”

The reaction to the merger was immediate and negative. Overnight, HP’s stock price tumbled 19 percent. Shareholders and heirs of the company’s founders resisted the plan. So did employees. An external poll revealed that they objected to the deal by a 2-to-1 margin. To make matters worse, just days after the announcement, the terrorist attacks of 9/11 occurred, pushing the already depressed technology sector into a heart-stopping free fall.

Despite the enormous challenges, Fiorina held firm. She was the HP outsider who saw what needed to be done, the courageous executive unafraid of naysayers. As she told members of the Wharton Club of Northern California in March, “If you start making decisions on the basis of conventional wisdom or chatter in the hall, generally speaking, you will make the wrong decision.”

Up for the task
    To understand this complex, risk-taking woman, one must go to Austin, Texas, where she was born in 1954. Cara Carleton Sneed–the nickname Carly came along in high school–didn’t follow the course you might expect of someone at the helm of a multibillion-dollar international enterprise. Her mother was an abstract artist and her father was an itinerant law professor who taught at Stanford and other universities. As a child who lived in London, Ghana, Palo Alto and other places, Fiorina grew accustomed to being the new kid on the block.

She graduated with a degree in medieval history from Stanford. She then attended law school for one semester at UCLA, dropping out–she once told Investor’s Business Daily–after learning that law “was all about discovering precedent someone else has set.” As a young adult, Fiorina was briefly married, taught English in Europe and worked as a receptionist for a commercial brokerage firm. It was there, while writing deals for brokers, that she became captivated by business. After obtaining an MBA in marketing from the University of Maryland, she landed a job as a sales rep for AT&T, and quickly rose through the ranks. In 1994 alone, she received three large promotions.

In 1995, she accepted one of her most challenging assignments to date: to execute the spin-off of Lucent Technologies. “Fiorina brought all her attributes to the task,” says Peter Burrows, author of Backfire: Carly Fiorina’s High-Stakes Battle for the Soul of Hewlett-Packard (John Wiley & Sons, 2003). These included “her capacity for hard work, her gut instincts and her ability to build and motivate a team.”

Anyone who has worked with Fiorina will say she’s “scary smart” and relentlessly driven. The only outside interest she has time for is family, which consists of her husband, Frank Fiorina, who retired early from his job as a vice president at AT&T to support his wife’s career, his two daughters from a previous marriage and his granddaughter, whom she calls daily to say good night.

Fiorina no doubt demands so much of others because she expects so much from herself. She’s a white-knuckle flier who travels more than a quarter million miles a year without complaint.

It has now been a year since the merger was finalized, and Fiorina’s impact on the HP culture has been profound. Pre-Carly, HP was a company that concentrated on innovation and product development. Post-Carly, the market reigns supreme. Today, all employees are–or should be–intently focused on customer needs. “Carly is all about the customer, the customer, the customer,” says Chandrakant Patel, a principal scientist who’s been with HP for 15 years. “In today’s market we can no longer do pure research. We have to get out and learn what the customer needs so we know what to make next.” Patel, who’s talkative and enthusiastic, likes the change but admits that many scientists don’t. “They’d rather work with technology than people,” he says.

Customers, of course, love the new mind-set. “In the past, HP had difficulty staying focused on customer needs,” says David Thompson, CIO of PeopleSoft, who has worked with HP for nine years. “Carly has been able to turn that around. I’ve been in meetings with her where she’s listened to my needs, and then turned to her staff members and made it clear to them what her expectations were in terms of meeting those needs. As a customer, I like knowing the leadership of the company is in control.”

The focus on customers is a 180-degree shift from the way decisions used to be made, says Susan Bowick, executive vice president of human resources and workforce development. And employees are being held accountable for making the shift. On Fiorina’s watch, the profit-sharing plan has been eliminated in favor of a performance bonus that is based on financial and customer metrics. “The idea is to hold employees accountable for displaying behavior that results in increased customer loyalty and fewer at-risk customers,” she says.

But in addition to serving customers more effectively, employees are being asked to perform at a higher level for the company overall. An HP middle manager from Fort Collins, who like Fiorina once worked at Bell Systems, says that “Carly instituted the concept of automatically firing the bottom 5 percent of performers.” That’s the way it was at Bell. “But HP never did that. If someone was a poor performer, they were given a year to turn around.”

Bowick agrees that the company’s philosophy is different, and for good reason. “HP has always had a performance distribution system, but if you looked at where folks were placed, we were not dealing with unacceptable performance. We had literally nobody ranked as ‘improvement needed,’ ” she says. “Prior to the recession, quite a few companies, including GE, Cisco and Intel, used performance distribution as an ongoing way of refreshing the workforce,” Bowick says. “But we’d never put teeth into that practice. When we started ranking, we made it clear to employees that the hurdle had been raised, and that we would terminate people who did not have competitive skills. Carly wanted to make sure people would be rewarded and promoted based on results, not other factors such as longevity or who they knew.”

More than 16,000 jobs have been cut since 2001–the majority of them related to the merger–and those job losses have escalated the workload of remaining employees. “The idea of work/life balance is a joke,” says a manager in one of HP’s product groups, who routinely puts in 60-hour workweeks.

“Everyone is working harder now,” Bowick concedes. “A lot of jobs just aren’t doable in a 40-hour week, and people have to be willing to make that choice for themselves. For some of us in key jobs, work/life balance is not a goal to have.”

Perhaps the biggest change since Fiorina’s arrival is the loss of the company’s decentralized consensus-based culture. Long-term employees don’t like the transformation. “It’s now a top-down, do-as-I-say company,” says a 25-year veteran of the technical staff.

But for others, the change is welcome. “HP had a very consensus-driven style,” Barton Coddington says. “This may have worked when the company was small, but as it grew, it was taking too long to get things done. It was difficult to get any large-scale programs off the ground because all the power was concentrated at lower levels.”

Renee St. Denis adds that in the old days, nothing got done when there was no consensus. “Today, the reality of the corporate caste system has set in, and that’s a good thing. You need hierarchy–a final decision-maker–to get things accomplished.”

“Before, people were reluctant to make decisions until they had all the facts. Carly has changed that. She’s made it okay for people to take risks and go with just 80 percent of the data.”

Decisions at HP are also made more quickly now, St. Denis says. “Before, people were reluctant to make decisions until they had all the facts. Carly has changed that. She’s made it okay for people to take risks and go with just 80 percent of the data. For example, I work in product recycling, and our work is leading edge. Instead of making us churn out a business case for everything we do, Carly says just go ahead because recycling inherently makes sense.”

Keep The best, Dump the rest
    The sweeping changes that have taken place at HP were accelerated by the merger with Compaq. That was part of Fiorina’s plan, says Webb McKinney, executive vice president, merger integration and organizational effectiveness. Compaq was stronger than HP in many areas, he says, including speed, customer focus and agility.

“Her approach was to keep the best and do away with the rest,” McKinney says. Instead of wasting time trying to blend the cultures and create something new, she challenged the integration team, which was composed of representatives from both companies, to determine which company had better products, processes and people in a given area and run with them. Compaq, for instance, had a better sales force, so many of the top sales jobs in the newly merged company went to former Compaq employees.

The strategies are working. Last December, the company achieved $2.5 billion in merger-related cost-savings 18 months ahead of schedule. In January, HP’s personal computing business reclaimed the No. 1 market share in the global PC industry. And in May, HP took the top worldwide position in total server revenue away from IBM. “This is an integration story I believe will go down in history as one of the finest,” says Larraine Segil, president of The Lared Group, a Los Angeles-based strategic alliance consulting firm, who has researched the merger.

Of course, not everyone is happy with the merger or with HP’s new culture. “It’s a culture of fear right now,” says a former director-level employee who provides consulting services to the company. “Nobody believes their job is secure, and it’s become habitual to wonder when your number is going to come up.”

Bowick acknowledges that morale is suffering in some parts of the company. Mid-level managers who were used to running their own empires now have to coordinate their activities. And the back-office employees who weren’t accustomed to interacting with customers now have to exercise those skills. “If we hadn’t gotten a CEO like Carly, I would have left because we were gradually winding our way into an also-ran,” the 26-year HP veteran says. “We were not relevant, we were not competitive, and employees had given up hope. It was a great company, but it was dwindling.”

On May 1, Standard & Poor’s raised HP’s credit rating to “stable,” citing its strong financial profile, and in June, financial analyst James Cramer urged readers to buy HP stock because of its “gigantic cash flow and a chance for a big boost in the dividend.” With such high-profile endorsements, Carly Fiorina’s Hewlett-Packard dwindles no more.

HP’S WAY
Pre-Carly	Today
There were no mass layoffs	To date, 16,000 people have been downsized
Employees were nurtured	Employees must meet bottom-line performance goals
There was great respect for competency; little respect for rank	Rank and competency matter
Decisions were made by consensus	Decisions are often made at the top–quickly
Managers and departments had a great deal of autonomy	Departments have to coordinate their efforts
The organizational structure was flat	The structure is more hierarchical; the executive council has greater authority
The focus was on products and engineering	The focus is on sales and customers
Research and analysis were important	Research and analysis are still important; but so is speed
Risk-taking was frowned upon	Risk-taking is encouraged

Workforce, July 2003, p. 15 — Subscribe Now!

I was in New York last week with my friend Ray, who works for a multinationalfinancial services firm. He and his coworkers from around the country hadgathered in the city for a week to review marketing plans and revenue goals.Which they did. But during the meetings, the Pooh-Bahs in his division alsocryptically mentioned the possibility of a division-wide restructuring.Something they called a “re-org.”

    After the second day of meetings, I returned to the Embassy Suites to findRay sitting on the couch, staring into space, his shirt rumpled and untucked.

    This worried me. Ray is never rumpled. I asked if he was okay.

    “What do they mean by re-org?” he asked, still staring straight ahead.”I’ll tell you what they mean. They mean job cuts. I think I’m okay–butmaybe not. Maybe I’m not okay. Do you think I’m okay?” He didn’t waitfor an answer.

    “I should’ve talked more during the meeting today,” he said. “Ishould’ve gone to the dinner last night. I should’ve worn black shoes. Ilooked too casual.”

    I told him I thought layoffs were rarely decided on the basis of shoe color.

    “YOU don’t know these people,” he shouted, as red blotches bloomedacross his neck. “I just don’t understand why they’re doing this.”

    Ray crossed his arms over his chest and began rocking back and forth, clearlyon the edge of a gale-force panic attack. I tiptoed from the room and shut thedoor. From down the hallway, I could hear him repeating the phrase “re-org,re-org, re-org” like a stuck 45 on a diner jukebox.

    At the time, I felt that Ray’s behavior was a tad extreme. After all, hiscompany’s restructuring was far from certain–and besides, no one knew whatit would entail. But the next day I went to an exhibit on Albert Einstein at theAmerican Museum of Natural History and experienced, firsthand, the panic andconjecture that come from not knowing how to interpret information. Physics willdo that to you.

    The exhibit started off well enough. I entered the hushed museum and learnedabout Einstein as a young boy. I reviewed a copy of his report card, whichrefutes the myth that he was not a motivated child. I saw a replica of thecompass that launched Einstein’s fascination with the forces of nature. And,in something that belongs in the “who knew?” category, I read one of themany love letters he wrote to one of his many mistresses. Apparently, Einsteinwas a hottie in his day, a babe-magnet with a large romantic appetite.

    But then, as I began to read about Einstein’s theories, my sunny enjoymentof the day disappeared behind a dark cloud of ignorance.

    I read about his general theory of relativity, which overturned the classicNewtonian view of gravity, which said that apples never fall far from the tree,or some such thing.

    I read about the imaginary gravity of projected black holes, which helps toexplain why SUVs plow into sinkholes on rainy days.

    I learned about Einstein’s search for a grand unified theory that wouldexplain everything about everything, including, I presume, why Michael Jacksonthinks he’s Peter Pan.

    See, the more I read about Einstein’s work, the less I understood it. Andthe less I understood it, the more I felt compelled to fill in the gaps with myown interpretation. Even though I listened to the curator’s talk, and watcheda film narrated by Alan Alda, and reviewed the 72 handwritten pages that make upEinstein’s theory of relativity, I couldn’t grasp what his theories reallymeant.

    I started to get agitated and speed through the exhibit. Gravitational warps?The space-time continuum? Yeah, yeah, whatever.

    By the time I hit the gift shop at the end of the exhibit, I had a massiveheadache caused, no doubt, by an unprecedented cerebral failure. I sped past thewall of books on Einstein and picked up a souvenir writing pen. Ahhhh. This wassomething I could understand. So simple. So elegant. I held it to my chest untilmy breathing returned to normal.

    And when it did, I thought about my friend Ray and his company’s re-org. Ibegan to understand his panic over the proposed restructuring. He didn’tunderstand why it was necessary. He didn’t understand how it could affect him.He didn’t understand why he’d been told that information. And in the absenceof all that understanding, he filled in the black holes with his own warped viewof the outcome.

    As Einstein might explain it, Ray was suffering from an extreme case ofE=MC2, which I believe means that expectations are driven by managementcommunication–or the lack thereof. 

Workforce, April 2003, p. 24 — Subscribe Now!

---

Other columns byShari:

• Vague Speak and the Thistlebottom Line
• The Road to New Resolutions
• A Higher Cause
• Infections and Inadequacies
• Befriending Barbie

The future of human resources has perhaps no greater champion than KathleenS. Barclay, vice president of global human resources for General Motors. Whenasked if the function is becoming obsolete, Barclay is adamant. “I don’tagree with that,” she says. “I suppose it depends on the company that you’redealing with, but my view is that there has never been a more important time inany company to have a very strong, active HR organization. HR can have so muchimpact on the way the company works, how the culture feels, and the type oftalent you have both now and in the future.”

In companies where HR has taken the reins and moved the function in a newdirection, the financial results have been impressive. Research from WatsonWyatt’s WorkUSA 2002 study indicates that companies with effective HRpractices deliver shareholder returns that are three times higher than those ofcompanies without such practices.

Despite the evidence and the firm belief in HR’s potential among executivessuch as Barclay, the profession’s rosy future is far from certain. In fact,the number of available HR jobs has dwindled significantly in recent years, andopportunities are not likely to increase anytime soon, says Frank Allen,president of Frank E. Allen and Associates in Florham Park, New Jersey. Allen,who has been in the HR recruitment field for more than 17 years, has placedthousands of HR professionals in jobs ranging from benefits manager to seniorvice president. And right now, he’s drowning in résumés. “I’ve got adatabase listing 18,000 HR professionals and out of that, somewhere around 7,000active résumés,” he says. “I’m also getting 200 to 300 résumés a week.”The likelihood that Allen will be able to place all these people is pretty slim.

Is it an HR realityto become indispensable and more vital than ever? Or do the job losses signify adifferent trend? Could HR be on its way toward obsolescence?

With the unemployment rate hovering around 6 percent, the same thing can besaid of many jobs, including information technology, telecommunications, andmarketing. But when the economy turns around, people in those positions arelikely to find work again. That’s not necessarily true for HR professionals,because the profession is enduring a wave of changes that by all accounts arelikely to significantly reduce the number of people needed. David Ulrich,co-author of The HR Scorecard: Linking People, Strategy, and Performance(Harvard Business School Press, 2001), believes that the head count in HR willeventually plummet 25 percent–or more.But wait. People like Barclay believe that HR is primed to leadknowledge-intensive companies into the future. Is she right? Is it an HR realityto become indispensable and more vital than ever? Or do the job losses signify adifferent trend? Could HR be on its way toward obsolescence?

First, the bad news
    If you are a pessimist who thinks that HR’s cup is slowly draining, you’llfind a lot of support for your position. The primary evidence comes in the formof outsourcing. Today, there are vendors available and champing at the bit tohelp with every single product and service offered by HR, including staffing,payroll, benefits administration, training, employee relations, andcompensation. According to research by Gartner, Inc., 80 percent of companiesnow outsource at least one HR activity, and the number is swiftly growing.

Consequently, what started in the 1980s as simple payroll outsourcing hasexploded into a $32 billion a year business involving all facets of HR. In thelast two years alone, the value of the business-process outsourcing industry hasgrown 20 percent, and analysts from Gartner estimate that it will become a $55billion worldwide industry by 2005. In just four years, one outsourceprovider–Exult–has grown from a start-up with a handful of people to anestablished company with 1,500 employees and more than $400 million in annualrevenues. Other big players include Accenture HR Services, ADP, Fidelity,Hewitt, and Convergys.

“Right now, it is primarily large companies that outsource their HRactivities,” says Rebecca Scholl, senior analyst with Gartner. “But we’redefinitely seeing an uptick in the number of medium-sized companies that arelooking for providers to take on more HR processes.”

Outsourcing has become popular because companies are finding that externalvendors–through technology and economies of scale–can provide more efficientand cost-effective HR services than in-house departments. In 1999, BP (formerlyBritish Petroleum) contracted with Exult to take over all of its transactionalactivities in the United States and United Kingdom, including all payroll,recruiting, expatriation, records management, vendor management, and relocationservices for its 63,000 employees. The only function that remains in-house is BP’slearning and development program in the United States.

Over the last two years, the company has reaped many benefits from thearrangement. Payroll processing is more timely and accurate. Employees get theirbenefits questions answered sooner. HR processes have been standardized acrossthe company. And for the first time, BP has measurable data on which HRactivities are effective.

Because BP is no longer handling routine transactional work in-house, a lotof its HR employees were deemed unnecessary. As a result, its core HR staff hasbeen slashed 65 percent–from 100 to 35 people.

This kind of staff reduction is fairly typical in outsource arrangements,says Jim Madden, chairman and president of Exult. “What usually happens whencompanies outsource with us is that one-half to two-thirds of the jobs in the HRdepartment go away because the jobs are declared redundant.”

External vendors have been so successful doing routine HR work that the listof companies handing over their HR activities continues to grow. In the last fewmonths, Sony, Prudential, AT&T, and American Express have all inked dealswith outsource providers. Chances are good that in the next few months, a lot ofHR people in those companies will be looking for work.

But what about strategy?
One of the primary arguments for downloading HR activities onto an externalvendor is that getting rid of routine transactional tasks allows HRprofessionals to focus on the kind of transformational work that helps thebottom line. But despite all the talk about becoming strategic partners,research indicates that the majority of HR people still don’t have what ittakes to fulfill leadership roles.

Ed Lawler, director of the Center for Effective Organizations at theUniversity of Southern California in Los Angeles, has been gathering data on theeffectiveness of HR since 1995. In the last seven years, he’s seen very littlechange in how HR professionals are spending their time. “It seems that insteadof responding to this period of business turbulence by playing a centralstrategic business partner role,” Lawler says, “HR has responded bymaintaining the status quo.”

His findings are supported by a recent survey of HR professionals conductedby the Society for Human Resource Management. When respondents were asked toidentify two or three HR/workplace trends they believe will affect the HRprofession, only 7 percent identified “HR as a strategic business partner”as a key trend. Much higher on the list were such things as managing diversityand administering health care. Clearly, HR professionals will never be able totransform the function–and hold on to their jobs–if they cannot embrace thisnew role.

Part of the problem is that many HR people simply don’t understand what itmeans to be strategic. In a separate SHRM study entitled “The Future of the HRProfession,” eight leading consulting firms shared their thoughts on thecurrent and future state of HR. One of the themes that emerged is that few HRprofessionals possess both the business acumen and functional expertisenecessary to move their companies and the HR profession forward.

    Frank Allen, who’s frequently given the task of finding high-level HRpeople for companies, estimates that of the 18,000 people in his database, “I’dsay less than 1 percent of them are A players.” And who are those A players?They are the people who not only have a solid understanding of HR, but also areconversant in finance, sales, marketing, and manufacturing, and know how HR canhelp companies meet their goals.

The dearth of business talent within HR is causing more and more companies tolook outside the profession when seeking to fill top HR slots.

The dearth of business talent within HR is causing more and more companies tolook outside the profession when seeking to fill top HR slots. Today, 75 percentof top HR executives have come up through the traditional ranks of HR. Fouryears ago, that number was 79 percent. What this means is that today, fully onequarter of the top HR jobs are going to people with backgrounds in marketing,manufacturing, finance, and other operational areas–and the number is growing.What hope does the profession have for its future if it is increasingly beingmanaged by people from the outside?

To be fair, HR isn’t solely to blame. Senior leaders have to recognize therole HR can play and give its HR team the time and resources necessary to makelasting changes. Unfortunately, not all CEOs understand that strategic workforceplanning and management is an ongoing effort. Allen knows of some companies thathave hired strategic high-level HR people only to let them go once they thinkthey’ve achieved their objectives. “Either that, or a new chair will come inwith a different idea of HR,” he says. “Instead of viewing HR as an asset,they’ll view it as an administrative function and fire the person who wastrying to make strategic changes.”

Fortunately, corporate leaders who do understand the role HR can play alsorealize that it takes time and a lot of serious effort to make changes.

Four years ago, when Barclay was promoted to vice president of global humanresources at GM, it was the first time in the company’s history that an HRperson reported directly to the CEO. Barclay launched a company-wide HRtransformation effort that involved standardizing processes, creating HR centersof excellence, and outsourcing routine activities. In a company with 362,000global workers in 58 countries, a change of this magnitude obviously takes time.Barclay has already been at it for three years and says it will take three moreyears to fully complete the process–but that the CEO is committed to thechange.

A key part of GM’s global HR transformation involves developing HR peopleso that they understand and can take on the role of internal consultants. “Wehave a global HR curriculum that helps our people understand what we areattempting to accomplish in HR, what the transformation means to them, and wherewe’re going as an HR community,” Barclay says. “We have 15 to 20 coursesout there now, and they are mandatory for all HR professionals.” Among otherthings, these courses help HR professionals acquire business acumen,change-management skills, and the ability to forge relationships across theorganization. As a result, in the not-too-distant future when a business unit ishaving trouble achieving its goals, GM’s HR people will be able to work withthat unit to diagnose its problem. It might be because the talent makeup is notadequate, the incentives are wrong, or goals have not been properlycommunicated. By training its HR people to understand–and address–suchbusiness issues, Barclay is slowly transforming the way the function operates.

In addition to training the HR people, her team has to train line managers tounderstand that HR is now there to help with strategy, not transactional work.”We have a global HR Web site that houses materials our HR people can use withtheir operating leaders to help those leaders understand how HR is changing, whyit needs to, and why the value equation is better for the company,” she says.

As in many other companies, a key part of the HR transformation at GMinvolves transferring responsibility for HR activities to line unit managerswith the help of technology. For example, GM recently instituted a compensationplan for 40,000 employees that was implemented by managers entirely over the Webwithout any intervention from HR. “This experience helped managers understandhow HR is working differently now,” Barclay says.

However, this kind of change isn’t always easy for organizations to accept,Lawler notes. “Line managers typically like the close, hand-holding type ofrelationship they’ve always gotten from their friendly HR person,” he says.”The idea that transactional work might take place in an outsource company ordisappear entirely because of employee self-service technology is unattractiveand anxiety-producing for many managers.”

But blaming anxious line managers or noncommittal CEOs for presentingobstacles to HR’s transformation does not a strategic, fully employed HRperson make. The fact remains that the HR profession itself has a long way to goin developing the skills, competencies, and focus necessary to become internalbusiness consultants. Until that happens, the slow decline of HR jobs andstature is likely to continue.

Finally, some good news
    If you’re an optimist who sees an unlimited future for HR, there’s plentyof reason to celebrate.

Let’s revisit the idea of outsourcing. Yes, it is reducing the number of HRjobs available in companies that choose to outsource. But those jobs tend to belower-level administrative and technical positions. The good news is thatoutsourcing is finally giving higher-level HR professionals the time they needto tackle strategic workforce challenges. Even better, the demand for suchstrategists is higher than ever, for several reasons.

To begin with, demographic changes are making it harder and harder forcompanies to find and keep qualified employees. It will be up to HR to determinewhat kind of talent is needed to meet company goals and then devise recruitmentand retention programs based on that need. Second, technology is making itpossible for companies to become more and more decentralized, with employeesdistributed across wider geographic regions. HR people will be the ones whodetermine how to keep widely dispersed employees connected to corporate goals.

Third, although outsource vendors have proven their ability to handle routinetransactional work, internal HR consultants will still be needed to determinewhat combination of pay, benefits, and learning opportunities is necessary tokeep employees engaged. Finally, even if outsourcing does remove all thetransactional work, someone with a solid understanding of HR and business willbe needed to manage the multimillion-dollar vendor contracts. HR will always beresponsible for ensuring the speed and accuracy of employee transactions,regardless of who is doing the work.

“Essentially, what’s happened is that the field of HR has begun to splitinto two parts,” Ulrich says. One half consists of administrative andtransactional work, which is becoming more automated and routine and isincreasingly being turned over to employee self-service or outsource providers.The second half consists of transformational work, in which HR developsorganizational goals, determines what capabilities are needed to meet thosegoals, and then creates HR practices that make those capabilities come to life.

Put all of this together and you realize that the field is in the midst of anenormous transformation and its final form is not yet clear. However, thefunction is likely to be smaller and very different from what it is now. Andthere will be no shortage of challenging work. HR professionals can have animpact on their companies. And obviously, the need is there.

Is HR up to the task? In companies like General Motors, the answer is adefinite yes. But as research shows, there’s still a huge chasm between desireand reality when it comes to the future of HR.

Is HR becoming indispensable–or obsolete? Only the people currently workingin the profession know the answer to that. If they are able to forge a linkbetween HR initiatives and corporate goals, their indispensability is all butassured. If not, a lot more HR résumés may be circulating in the near future.

Workforce, January 2003, pp. 26-30 — Subscribe Now!

Most of the men and women who run corporate America have the rightintentions. They are working hard to boost profits, maintain jobs, and deliverquality products under arduous economic circumstances. Ask these executivesdirectly and they’ll tell you their efforts are honest, and that they haveeveryone’s best interests at heart–which is probably true. But employeesaren’t buying it.

A Watson Wyatt survey of nearly 13,000 workers in all job levels andindustries reveals that fewer than two out of five employees today have trust orconfidence in their senior leaders. It’s an appalling statistic from a humanrelations standpoint, and potentially disastrous to corporate profitability. Butreally, can you blame employees for feeling the way they do?

Since the collapse of Enron a year ago, some of America’s biggestcorporations have been rocked by greed, scandal, bankruptcy, reportingviolations, executive dishonesty, and massive confusion over who is–or shouldbe–safeguarding the corporate coffers. The long list of egregious legal andethical violations is causing even the most loyal corporate employees to looksideways, cock their heads, and wonder: Can we trust what the top dogs aretelling us?

Now, maybe you’re thinking this isn’t something that concerns you,because your company has a clean record. No executives have been indicted.Profits are intact. There’s no reason for employees not to trust, right? Notso fast. Although high-profile malfeasance makes headlines, in the averagecompany it’s the little things that chip away at the trust bedrock. Littlethings like saying one thing and doing another. Forgetting promises. Generatingconfusion.

“Those of us in senior management often get so many projects going that weforget about or don’t pay as much attention to the promises we’ve made,”says Chuck Fitzgerald, vice president of HR for DFB Pharmaceuticals, Inc., inSan Antonio. Most executives are not a bunch of crooks, he adds. The vastmajority are concerned about doing the right thing. But the truth is, executivesare human. They get busy, forget to communicate, and neglect to follow through,and trust declines as a result.

Loss of trust can be devastating to company performance.

This loss of trust can be devastating to company performance. When people don’thave confidence in management, productivity falls, turnover rises, gossipspreads, cynicism sets in, and initiative evaporates. As an employee in thefinancial services division of American Express said recently: “Why should Iput in any extra effort when nobody has a clue what is happening around here?”

Left unattended, low trust can exact a high financial price. According toWatson Wyatt’s WorkUSA 2002 survey, the three-year total return toshareholders is almost three times lower at companies with low trust levels thanat companies with high trust levels. A report by Towers Perrin on employeeengagement shows similar findings. “Those organizations that have highemployee engagement [which is driven by high trust] have higher revenue growth,lower cost of goods sold, and lower sales, general, and administrative expenses,”says Emmett Seaborn, a principal with the Stamford, Connecticut-basedconsultancy. Simply stated, trust matters, and it matters now more than ever.

But just because maintaining trust is going to be difficult, that doesn’t mean HR shouldn’t try.

But addressing trust in the current economic climate is not going to be easy.“We’re concerned that employee trust could be further eroded by virtue ofthe fact that companies are having to make hard choices about health care,retirement, and compensation,” Seaborn says. Think about it: If you had justhad your pay frozen and benefits cut, as have many employees, would you be moretrusting?

But just because maintaining trust is going to be difficult, that doesn’tmean HR shouldn’t try.

HR and employee trust
    So, how do HR professionals shore up the trust levels in their organizations?They do it by first understanding that trust cannot be fabricated with slickvideotapes, family picnics, or corporate rah-rah sessions. Today’s skepticalemployees can see right through such transparent efforts. In reality, trust isbased on honesty, confidence, and the ongoing belief that management will followthrough with its commitments.

“When people think of trust, they often think about what’s legal andwhether or not someone is lying to them,” says Ilene Gochman, organizationmeasurement practice director for Watson Wyatt. “But that’s not necessarilytrue. A lack of trust can also be fostered by incompetence, a lack of direction,or a sense that the organization is floating.” In other words, trust is theresult of countless management decisions made over a long period that helpemployees feel secure about their own–and the organization’s–future.

Because of this, it’s perhaps no surprise that a key predictor of employeetrust is the effectiveness of an organization’s HR function. In companieswhere employees believe that the HR department is effective, 62 percent ofworkers also believe that the organization is trustworthy, according to theWorkUSA research. However, in companies where HR is deemed ineffective, only 8percent of employees believe that management can be trusted. “This clearlymakes the case that there is a definite relationship between HR and employeetrust,” Gochman says.

But let’s be clear about this. HR isn’t necessarily responsible forbuilding trust. The CEO and other senior leaders are the true stewards oforganizational trust and integrity. If they are saying one thing and doinganother, no amount of HR backpedaling can fix the kind of doubt that’sgenerated. “HR, in and of itself, cannot make the culture of a company,”says Suzanne Smith, director of HR for Concurrent Computer Corporation inDuluth, Georgia. “HR can help guide the culture, but if HR doesn’t have thesupport and leadership of top management, it won’t work.”

But while HR cannot build trust without the help of senior leaders, trustcannot be maintained without an effective HR function. Why? Because, accordingto Gochman, there are two primary drivers of trust in organizations, both ofwhich fall into HR’s bailiwick. The first driver is communication. “Oursurvey reveals that companies with high levels of trust communicate both goodand bad news to employees and they do it often,” she says. The secondtrust-driver is how well a company manages changes such as mergers, downsizing,and restructuring. “It doesn’t matter what the change is,” Gochman says.“What matters is how well it is handled. High-trust companies simply do abetter job of it.

Communication drives trust.Change management is accomplished by good communication. And in the center ofthis organizational knot sits HR.

“From a statistical point of view, communication and change areintertwined,” she adds. “While they are distinct threads that can beanalyzed separately, they are also woven together. Communication drives trust.Change management is accomplished by good communication. And in the center ofthis organizational knot sits HR.”

Making it work
    If effective HR departments are associated with higher levels of trust, what,then, does an effective HR department look like? What does HR do, exactly, tokeep trust high?

To begin with, HR professionals don’t do anything about trust directly. Asking to be trusted without being trustworthyis like expecting to be loved without being lovable. Instead, HR professionalswork diligently to build and maintain the kind of organizational culture thatinstills faith, loyalty, and confidence among employees.

According to the WorkUSA research, the most effective HR departments do fivethings to accomplish this–and they do these five things well. Effective HRdepartments:

1. Communicate openly. Companies with high trust levels give employeesunvarnished information about company performance; explain the rationale behindmanagement and HR decisions (such as compensation and promotion); and encourageemployee involvement and information-sharing. They also are unafraid of sharingbad news and admitting mistakes.

Two years ago, Brent Longnecker, president of Resources Consulting Group inHouston, designed a long-term bonus plan that affected two-thirds of the company’s1,500 employees. He calculated what each employee was likely to receive atyear-end based on revenues and head count, with a certain level of turnoverfactored in. He then communicated these figures to employees. Then the dot-combust occurred, turnover at the company fell, and consequently, the amount ofbonus money available per employee dropped by a whopping 40 percent.

“Our leadership group sat down and acknowledged that we hadn’t managedemployee expectations very well,” Longnecker says. “As a result, our trustand credibility were threatened.”

To remedy the situation, Longnecker and other company leaders traveled to 40cities over a two-week period and held meetings with employees to personallyexplain what had happened and admit they’d made a mistake in theirprojections.

“It wasn’t easy,” Longnecker says. “One employee came up to me andsaid he’d bought a new PT Cruiser believing his bonus would be a certainamount. Because the bonus fell short, he wanted me to personally pay thedifference.”

In the end, though, the visits from executives helped the majority ofemployees understand the problem and forgive management. “I was proud of our company,”Longnecker says. “We didn’t hide behind the bad news and refuse to addressit–which was good. Today’s workers demand explanations and expect employersto admit fault and communicate bad news.”

2. Communicate the value of benefits. Over the last few years, companies haverealized that many if not most employees are unaware of the value of theirbenefits package. To change this–and increase employee appreciation of benefits–some companies have begun to issue an annual “total awardsstatement” that communicates the total value of an employee’s compensation,including salary, medical and disability benefits, retirement, and so on.

An unexpected side effect of this is that companies that do communicate theoverall value of benefits tend to enjoy higher trust levels. The reason isn’tentirely clear, but it may be because employees in these companies have a morethorough understanding of what their employers do for them.

Five years ago, when Suzanne Smith joined Concurrent as its HR director, thetrust levels in the organization were low. Instead of trying to change theoverall culture, Smith focused on changing the culture of HR. She maintained anopen-door policy. She walked around and chatted informally with employees. Andshe focused her attention on shoring up the HR systems, such as compensation,rewards, and health care. She also began to talk to employees about the value oftheir benefits and work with them to take full advantage of the benefitsoffered.

One employee, for example, needed a loan from his 401(k) to avoid aforeclosure on his home. Another employee needed some mental-health counseling.Slowly, as it was made clear to employees that the company’s benefit program–andHR department–was there to help, trust began to creep back into the workplace.Today, company morale has improved to the point where there is virtually noturnover. While many factors were involved in this turnaround, communicating thevalue of benefits certainly played a part.

3. Make constructive changes based on employee input. One of the first thingsthat companies suffering from low trust should do is assess worker attitudes andtry to determine why trust is low. But as the WorkUSA data reveals, companies can’tstop there. To create a high-trust organization, executives must also seekemployee input for improving the work climate and act on those suggestions.

Maril MacDonald is a partner in the strategic consulting firm MathaMacDonald, which is based in Chicago. Two years ago, she worked with a5,000-employee midwestern manufacturing plant where quality and customer servicehad plummeted, morale was in the basement, and worker trust was nonexistent.

“Our first step was to sit down and talk with employees to determine whatwas wrong and why they felt they couldn’t trust managers,” MacDonald says.Employees made it clear they were tired of the fact that management promotedquality but refused to give workers the tools or decision-making authority toput out a quality product. They also made several suggestions for plantimprovements and reorganization.

MacDonald says plant managers not only implemented many of the suggestions,but also became disciplined about telling employees when the changes were made.“It’s not enough to seek employee input and make changes,” she explains.“You also have to tell employees you made the changes they suggested. You can’tassume people will notice on their own.”

According to MacDonald, acting on employee suggestions improved trust levelsat the plant, and the company also exceeded its cost-reduction targets, boostedquality by 70 percent, and increased on-time delivery by 40 percent.

4. Establish clear lines of sight. High-trust companies do a good job ofcommunicating the company’s business goals and explaining to employees whattheir role is in achieving those goals. “In order for employees to beeffective, they have to know what to do–and how,” explains Gochman. While it’sdifficult to dictate everything an employee should do, if you rely too heavilyon employee discretion, it’s too easy for employees to make mistakes. And whenemployees make mistakes, they don’t blame themselves. They blame managers fornot making it clear what was expected of them. Then, they hesitate to trustmanagers in the future.

5. Hold employees accountable. Companies where trust is high not only rewardhigh performers but also hold poor performers accountable through discipline andtermination. Companies that don’t do this risk immediate and lastingconsequences.

Several years ago, Chuck Fitzgerald worked in HR at a company where one ofthe senior leaders was engaging in ongoing sexual harassment–and everyone inthe company knew it. “Our HR recommendation was that this person be removedfrom his position,” Fitzgerald says. “Unfortunately, my boss, who was anofficer in the company, chose not to do that, and it was clear to me thatemployees lost trust in management because of it. About nine months later, myboss was terminated, and soon after that, the perpetrator of the harassment wasremoved from the job. Afterward, the president of the company called and told meI’d been right.”

For Fitzgerald, the experience underscored not only the importance of holdingpeople accountable for their actions, but also how important it is for HR tomaintain its own integrity. “Everyone in management has to be accountable forthe organization to be trustworthy,” he says. “But in particular, HR has tobe accountable because we are the interstitial tissue between management andemployees. We are advocates for both sides. If we aren’t trustworthy, nothingin the organization can be trusted.”

To maintain the trust levels in your organization, youhave to remember that trust, in and of itself, isn’t the end result you shouldbe aiming for. Effective HR departments maintain employee trust because they arefocused on business results.

How true that is. But to maintain the trust levels in your organization, youhave to remember that trust, in and of itself, isn’t the end result you shouldbe aiming for. Effective HR departments maintain employee trust because they arefocused on business results. They understand how things like communication,consistency, follow-through, respect, and internal customer service contributeto those results.

In a nutshell, effective HR departments gain trust by being trustworthythemselves. It’s true in personal relationships. It’s true in familyrelationships. And it’s definitely true in the workplace. Somebody has to bewilling to trust first, and in corporate America, that somebody is HR.

Workforce, October 2002, pp. 28-34 — Subscribe Now!

I’m not a particularly passionate person. Oh sure, I haveinterests. I’minterested in cooking. I’m interested in hiking. But I’m not what you’dcall a fanatic. I don’t tape the Food Network, nor do I intend to hike all 54of Colorado’s 14,000-foot mountain peaks so I can brag about my conquests atdinner parties. Fact is, I find fanaticism strange.

I once attended a slide show given by an avid rock collector who describedvarious pieces in her collection as “droolers” and “show-offs.” Afteradvancing to a slide of a rock with sparkling purple crystals, the collectorslumped in her chair. “Ohhhh,” she said. “This one could win a pageant.”Afterward, I invited friends to stone me to death if I ever got like that.

But lately, I’ve been interested in people with passions. I want to knowwhat drives the urge to, say, collect Roman coins, or trace the family historyback to Charlemagne, or tie flies for hours on end in some dank basementworkshop.

In a quest to find out where this kind of passion comes from, I recentlyattended the 22nd annual National Barbie Doll Collectors Convention–a place I’dnormally not be caught dead at–where a thousand men and women from all overthe world had gathered for four days of doll shopping, workshops, and socialevents. My first meeting was with Debbie Baker, convention co-chair, who has3,000 Barbies in her personal collection.

“So tell me,” I asked, “what is it about Barbie that makes you sopassionate?”

“We love the dolls. We love the clothes. And pink.We really, really love pink.”

Debbie tapped her long pink fingernails on the table and gazed into thedistance. “Those of us who love Barbie light up whenever we see anything to dowith her,” she explained. “We love the dolls. We love the clothes. And pink.We really, really love pink.”

Believing that such a consuming passion had to be based on more than a color,I talked with other collectors.

I spoke with Brenda Blanchard, a retired schoolteacher from Carson,California. “I like Barbie because she doesn’t talk back,” she noted.

I chatted with George Marmalejo, a veterinarian from Hayward, California, whoenjoys the sense of community that comes with being a Barbie aficionado. “Whereelse can I be surrounded by 1,000 people who don’t think I’m nuts when Ispend $100 on doll clothes?” Conventioneers also told me about pajama partiesin the hotel rooms where guests bring their favorite dolls and sip strawberrymargaritas.

I heard about a fashion show in which 50 lucky people got to sashay down therunway wearing their favorite Barbie outfits.

I was invited to a competition in which people entered treasured pieces oftheir collections in an effort to earn prize ribbons. The rules of the contestwere stiff. A doll dressed in “Sparkle Squares,” for instance, would not bejudged against “Jump into Lace.”

I took all this in with the detached amusement of an outsider. Then I talkedto Judy Stegner, a 43-year-old collector and single mother from Fort Worth,Texas, who told me how she had met her Barbie friends. In the process, sheforever changed my opinion of doll collectors.

“It was Thanksgiving night in 1998, and my son said: ‘Mom, there’sprobably a chat room where you can talk with other Barbie people.’ I looked athim like he was crazy. I mean, I didn’t know anything about the Internet orchat rooms. He had to do everything. He found a site, logged me on, even gave memy screen name. I was online talking to Barbie people until two in the morning.I’ve met great people on the Internet. I never could have made it withoutthem.”

I asked Judy what she meant and learned that just 10 months after her17-year-old son introduced her to the Barbie chat room, he was killed in thehighly publicized shooting at Wedgwood Baptist Church in Fort Worth. He was heronly child.

Upon hearing about the shooting, her online Barbie friends coalesced into a full-time, round-the-clock, on-callsupport team. They sent her money. They sent care packages every day. Theyraised thousands of dollars for a tuition-assistance fund that Judy establishedin her son’s name. They contacted Mattel, which sent Judy a special Barbiecollectible and a handwritten note on the first Christmas after her son’sdeath.

“Let me show you something,” Judy said, jumping to her feet. She grabbedher tote bag, pulled out a quilt, and unfolded it on the cushioned bench infront of us. The quilt, which was made to honor her son’s life, featured 18hand-sewn panels contributed by her Internet friends. Judy used to have thequilt hanging on a wall, but now she curls up with it while watching televisionor reading a book.

“Barbie people everywhere are really giving,” Judy explained, teary eyed.

“Why do you think that’s the case?” I asked.

Judy said it’s because Barbie dolls are about having fun, and when you’rehaving fun you’re not stressed and can naturally be more giving. “We allhave things that make life hard,” she said. “Anything that allows us to playis a good thing, and I don’t know why people are so critical of Barbiesometimes. I tell you what: that’s something our group never allows. Beingcritical, I mean.”

“Do you sit down and play with your dolls?” I asked.

“It’s total therapy for me to play,” she admitted. “After my sondied, I could lose myself for hours.”

It’s been six weeks since I attended the Barbie convention, and I’ve beenthinking about Judy Stegner ever since–not only because her story was sopowerful, but also because she shed some warm, glowing light on a world that hadbeen completely foreign to me. And because it was so foreign, I’d criticizedit. Barbie??? I thought before the conference. These people should get a life.What I learned is that Barbie collectors do have lives–rich and supportiveones at that.

Although the conference did teach me about passion–Barbie passion–it alsotaught me something more, and that is to not be so quick to judge others who dothings that I find odd. This doesn’t mean I plan to invest in doll clothes,mind you, but I’m certainly not as likely to criticize people who do.

Workforce, September 2002, pp. 22-24 — Subscribe Now!

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Other columns byShari:

• The Remodel Role Model
• Musing Her Way Through Life
• Not Just Another Fish Story
• Creativity 101
• Whiners Need Not Apply

 

Excuse me if I seem a little, um, unfocused. I’ve spent the last two months ensnared in the great American drama known as kitchen remodeling. Thanks. I appreciate that. But it hasn’t been that bad. Really. I like eating salad on my bed.

    More than 25 people have been involved in the design and installation of my new kitchen. This includes a designer, general contractor, two carpenters, a plumber, a small army of electricians with matching yellow wire-cutters, two concrete people, a roofer and his wife, two floor refinishers, a painter, a tiler, and three masons who’d spend 40 minutes putting a single brick in place, 20 minutes standing back and admiring the brick’s placement, and two hours at lunch, where, presumably, they celebrated their exquisite first-brick handiwork. Additionally, there were countless people who helped me acquire windows, light fixtures, appliances, Valium, sinks, door handles, and faucets. And Valium. And countertops. And Valium. Did I mention Valium?

    Watching these people work over the last nine weeks has provided valuable insight into the workings of effective teams. To begin with, my remodeling crew had two clearly defined objectives. The first was to remodel my kitchen according to a set of highly detailed plans. The second was to complete the project sometime before we colonize the Red Planet. As all the team books will tell you, objectives are necessary to give teams focus and direction.

    Secondly, each subcontractor on the team had a distinct responsibility. Never once did I hear an electrician argue with the plumber about who should position the waste lines. The painter did not think it would be fun, just this once, to install a window. The masons didn’t, well, do much of anything. But at least they weren’t in anyone’s way. Having distinct responsibilities allowed the crew to avoid turf battles, competition, jealousy, and back-stabbing. The guy who poured the concrete knew he was better at concrete than the guys who installed the cabinets, who knew they were better at carpentry than the guy who shingled the roof. And so it went. No overlaps. No conflict.

Team rah-rah is great, but let’s face it: we’re all more willing to contribute when our contributions are acknowledged.

    Watching the workers in action, I also realized there’s something the teamwork guides fail to reinforce, and that is how important it is to recognize individual talents and make each person feel like an indispensable part of the team. Team rah-rah is great, but let’s face it: we’re all more willing to contribute when our contributions are acknowledged.

    For example, at the start of my project there was some concern about whether we would be able to raise the kitchen ceiling. See, I live in a 1970s home similar to the one inhabited by Beaver Cleaver. At the time the house was built, it was fashionable to drop the kitchen ceiling a foot lower than the ceilings in the rest of the house, leading to a feeling of cooking inside a hobbit’s kitchen. (Frodo! Pass the butter!)

    The only way we could successfully raise the ceiling in our kitchen would be if the plumber could tuck the existing plumbing from the upstairs bathroom into the bay between the upstairs floor joists. Let me say that again: joists. I love the sound of that. It’s one of my new remodeling words. Other additions to my vocabulary are load-bearing, soffit, caissons, oops!, conduit, backorder, and delay.

    But I digress. I warned you that I’m unfocused.

    So the plumber comes over to my house, looks at the newly exposed pipes in the ceiling, and says: “No way.”

    “No way?” ask the carpenters.

    “No way,” the plumber says, crossing his arms. “There are too many pipes to tuck them any higher. You can’t raise this ceiling.”

    “But you were able to hide the pipes in that house in Castle Rock.”

    “That’s true.”

    “And that house in Englewood.”

    “True again.” The plumber uncrosses his arms and squints sideways at the ceiling.

    The carpenters switch tactics. “If anyone can tuck those pipes up, it will be you,” they tell him.

    “It won’t be easy,” the plumber insists.

    “We know. We can call anybody for easy. We call you when we have more sophisticated challenges.”

    “Oookaaaay,” the plumber finally says. “But it won’t be easy.”

    And it wasn’t. But thanks to the plumber’s extraordinary effort, our ceiling was raised, and now that I can stand fully upright in my kitchen, I’ll be forever grateful.

    And really, my being grateful was all that anyone on the remodeling team wanted. The carpenters wanted me to appreciate their problem-solving abilities and finesse with a table saw. The general contractor wanted me to recognize his talent for hiring the best subs and keeping them on schedule. The tiler wanted us to appreciate the fact that the kitchen wouldn’t be finished until the tile backsplash was put in and that if we failed to show proper deference, he might not show up at all. “You don’t want to upset the tile guy,” the carpenters told me.

    None of these expectations were spoken, of course. But whenever I complimented a contractor on his work, you could sense the change in his demeanor. Suddenly, instead of merely informing me that a job was finished, he’d want to tell me, in great detail, how he’d finished the job, what challenges were involved, and why it took until 12:30 on Saturday night to finish laying the tile, but “gosh, it sure looks great, doesn’t it?”

    A team of 25 people working in lockstep was needed to bring my kitchen into the new century. But the team was effective because of 25 sets of individual talents. To reward the team without recognizing the individuals would be just plain wrong, and I’d probably still be waiting for the masons to get back from lunch. Simply put, when people aren’t being recognized for their contributions, they’ll find a way to let you know how important those contributions really are.

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Other columns by Shari:

• Musing Her Way Through Life
• Not Just Another Fish Story
• Creativity 101
• Whiners Need Not Apply
• Feeling Bad About Doing Good

Workforce, August 2002, pp. 22-24 — Subscribe Now!

Craig Goudy is a software developer in Denver who, like many other ITprofessionals, was recently laid off. He’s 45, articulate, and passionateabout his work, and he has over 20 years of broad business experience thatincludes stints in finance, marketing, and public relations. You’d think thatfinding a job would be a snap for someone with his experience and enthusiasm,right? It probably would be if he could get HR professionals to listen to him.But during a three-week period in April, Goudy made five cold calls a day to HRpeople in companies he knows are hiring. “I call them not only to give them asense of who I am and what my experience is, but also to find out the best wayto approach their company from an employment perspective.”

To date, he’s made about 80 calls, and well over half the HR people hetalked to seemed desperate to get off the phone, and only two took the time tomeet with him in person. “I’m amazed at how short they can be,” heexplains. “It’s almost as if a job-seeker like myself is a detriment to whatthey are trying to accomplish.”

How times have changed. Two years ago, HR professionals were on their kneeslike beggars at the Vatican, tugging at the pant legs of any qualified jobcandidates. With unemployment at record lows, companies were so humbled by theneed for workers that they were willing to do whatever it took to entice worthyapplicants. Now that the labor market has opened up, the power has shifted, andHR is acting like an arrogant prince stepping around the unwashed masses.Job-seekers are a burden, the flood of résumés a distraction, and cold callsfrom candidates are viewed with as much eagerness as a telemarketer atdinnertime — at least, that’s the perspective of today’s job-seekers.

“Most HR people know the economy is bad and there are lots of peoplelooking,” says Lisa Crispin, the newly hired quality assurance manager atKBkids.com. “Because of this, they feel it’s okay to jerk people around.”

This isn’t as much of an overstatement as it may sound. Talk to job-seekerstoday — especially in heavily downsized industries such as high-tech andtelecommunications — and you’ll discover they are so fed up with theperceived arrogance, disrespect, and ineffectiveness of HR that they are doingeverything they can to avoid the function altogether. As Bill Stegen, an ERPmanager who lost his job a year ago, explains: “If you want to get work, thetrick is getting around HR.”

A recent post on Vault.com’s job-search message board reveals the depths ofthe job-seeker’s despair. “I’m sending résumés out to companies andtrying to avoid sending them into the HR black hole,” writes a person lookingfor advice. At last count, the post had drawn 60 passionate responses frompeople who referred to HR professionals as “clueless pinheads who areoverwhelmed,” “on power trips,” and who “only pass along cookie-cutterrésumés to the hiring manager.” One person summarized it this way: “Jobapplicants will always have a better chance of being hired by avoiding HR.”

These anonymous message-board complaints are supported by such well-knownconsultants as Peter Drucker, who believes that hiring is one of the leasteffective corporate functions. “By and large, executives make poor promotionand staffing decisions,” he writes in The EssentialDrucker, (Harper Business,2001). “By all accounts, their batting average is no better than .333; atmost, one-third of such decisions turn out right, a third are minimallyeffective, and one-third are outright failures.”

Lloyd Gottman, CEO of Synergetic Systems, a Littleton, Colorado, company thatdistributes the Profiles International employee assessment, believes the battingaverage is even worse. “A large, well-known, highly respected national companywith many salespeople told me they lose over 80 percent of all new salespeoplewithin the first three years of employment.”

To be fair, it’s not that easy to be a recruiter today. Because of thedepressed economy, HR departments are under enormous pressure, and many HRstaffs have been downsized. Thus, at the same time that more people are lookingfor work, there are fewer HR professionals to field résumés and focus on thebest candidates.

Job candidates aren’t making the process any easier, adds Jane Paradiso,recruiting solutions practice leader in the Washington, D.C., office of WatsonWyatt Worldwide, a global HR consultancy. “In the Silicon Valley, whereunemployment is high, a well-known company announced it was hiring and wasoverwhelmed with résumés, 95 percent of which were from people who clearlyweren’t qualified.”

Despite these challenges, an HR person who is seeking to become morestrategic would be well advised to understand the job-seeker’s complaints.Why? Because the labor pool, although abundant now, is going to tighten up againin the very near future. In fact, according to research by Watson Wyatt, if theeconomy rebounds with even half the momentum of previous recoveries, the UnitedStates could be looking at full employment again within a year. Simply put, thepeople you scorn today may be the ones you covet tomorrow.

Furthermore, adds Don Weintraub, president and CEO of Boston-based RainmakerAssociates, a job candidate you treat poorly now might eventually become acustomer or a competitor. “If you disrespect people today during the hiringprocess, there is no reason to believe they wouldn’t look for an opportunityto return the favor,” he says.

By looking at what’s broken and understanding how to fix it, HR can beginto reinvent the hiring process and, in turn, polish the function’s image.After all, if HR professionals are ever going to be taken seriously as keepersof the corporate culture, they have to begin by getting the right people in thedoor without alienating them in the process.

A plethora of complaints
To find out what life is really like for today’s job-seekers, Workforcespent several days at CareerLab, a Denver-based outplacement and careerconsulting firm, interviewing job-seekers, attending networking events, andeavesdropping on career-counseling sessions. What became clear immediately ishow widespread complaints about the hiring process really are. They come frompeople in a range of industries and employment levels, and run the gamut fromthe ineffectiveness of résumés to a lack of follow-up.

One of the chief complaints is that HR professionals don’t alwaysunderstand the requirements of open positions. “My greatest frustration withHR is that they don’t have a complete understanding of what a successfulcandidate looks like,” Weintraub says. “People who do the recruiting forcompanies have never done the job, so it’s an abstraction to them, especiallyin the technology areas.”

Weintraub’s view is supported by Stegen, who has been applying forpositions as an IT director for several months. At his last job, Stegen led theimplementation of an ERP software package known as EPCS from start to finish andbrought it in on time, within budget, and got a performance bonus for hisefforts. But when applying for jobs, he has found that companies want peopleexperienced in the implementation of J.D. Edwards software as opposed to EPCSsoftware, even though the programs do essentially the same thing. “Three timesI’ve been told in interviews that since I don’t have the exact experience, Idon’t qualify for the job,” he says. “But the functionality of thesoftware is exactly the same, which leads me to believe that HR people don’tknow what they are talking about.”

Ron Cutadean, vice president of HR for BoldTech Systems, Inc., a Denver-basedsoftware consulting firm, defends HR professionals, saying that because the jobmarket is so tight, companies can hold out for the exact requirements. “Withloads of people and competition out there, a candidate has to have exactly whatthe company needs or we’re not interested,” he says. However, he doesn’tdisagree that many HR people may not understand the positions they’re hiringfor. “This is especially true when HR doesn’t have the internal respect ofhiring managers.”

So how can HR improve its understanding of job requirements? Weintraubrecommends a dual screening process in which a technical person evaluates acandidate’s technical background and competence, and an HR person screens forsoft skills and cultural fit. “It’s not a good use of HR to look atbuzzwords on a résumé,” he says. “Technical employees who understand whatthose words mean should be doing the first assessment of candidates.”

Paradiso adds that HR people should also be working much more closely withline managers to carefully and specifically develop the requirements of eachjob. “When candidates are many and positions are scarce, job descriptions haveto be much more tightly written,” she says. “The requirements should be veryspecific, and the job posting should indicate if certain certifications ordegrees are essential.”

A second major complaint among job-seekers is the ineffectiveness ofrésumés as a screening tool. Paul Wyman, formerly with CareerLab and now anindependent career and executive coach, says bluntly: “Résumés suck as aselection tool. As a job blueprint, they ignore a candidate’s most significantcharacteristic, and that is what they can do for the company. But HR believes aperson’s past is their future. This makes it very difficult for people who areburnt out in one job to make a shift to a new career.”

Job-searchers unanimously agree that the over-reliance on résumés oftenleads to tunnel vision about a person’s capabilities. “Résumés are ascreening-out tool,” says a lawyer who wants to make a shift into corporatemanagement. “They put people into little boxes and give companies reasons notto hire you.”

Jeanne Long has 30 years of experience in the telecommunications industry,most recently as a technical-support engineer for a company involved with fiberoptics. She was laid off last October and has been looking for work ever since.Two obstacles stand in the way. First, she doesn’t have a college degree. “IfHR is looking at the résumé, that’s what they look at,” she says, “notthe fact that I’ve held several management positions. Although the lack of adegree never hindered my ability to do a job and be promoted, it gets in the wayduring a job search because HR people are not trained to look at the wholeperson.”

“There are some excellent tools HR people can purchase and use on their career Web sites.”

Second, all her experience has been in telecommunications, and she believesit’s difficult for HR people outside that industry to understand how she mightfit into another kind of organization. “I put in sophisticated data networksfor all kinds of companies,” she says. “While I do have a telecommunicationsbackground, I’m not limited to working with phone companies.” Because ofthese frustrations, Long has been working hard to get around HR. “I dowhatever I have to do to get an introduction to a director at a company,” shesays. “HR will not let you get past them if they can help it.”

Instead of relying so heavily on résumés, Paradiso suggests that companiesuse more profiling and screening tools. “There are some excellent tools HRpeople can purchase and use on their career Web sites,” she says. These toolsgive recruiters a much broader picture of a person’s capabilities.

Roadway Express, a national trucking firm, uses a questionnaire on its Website, www.roadway.com, that not only queries candidates about their jobexperiences, but also asks them to rate their competencies in such things asanalytical skills, assertiveness, and ability to work independently.

Bank One uses a similar tool on its site, www.bankone.com, to ask job-seekersabout their education, salary requirements, and openness to relocation. Wyman,who would like to see a move away from résumés altogether, suggests thatcompanies consider accepting “job proposals,” which are, in essence, pitchletters wherein candidates tell employers what they are passionate about andwhat they can do for them. “Wouldn’t it be better to hire people based onhow excited they are about working for you in the future, rather than on whatthey did in the past?” he asks.

The frustration doesn’t stop at the interview stage
Once a candidate makes it through the initial job-screening and snags aninterview, you’d think the frustrations with HR would end. Sadly, that’s notthe case. If anything, from a job-seeker’s point of view, the angst onlyincreases. Their chief complaints? A lack of internal coordination andfollow-up.

Lisa Crispin was laid off from a job in February. The next morning, thanks toprofessional contacts, she had an interview with a line manager at Qwest. Twoweeks later, she interviewed with two of the company’s senior vice presidents,who wanted her for the job but said they would have to finalize things throughHR. While waiting to hear from Qwest’s HR people, Crispin continued to pursueother leads, including one at KBkids.com, which eventually offered her aposition.

“I called the hiring manager at Qwest, where I really wanted to work, andtold him I had another job offer. He said he was still waiting to hear back fromHR. Because I couldn’t put off my decision any longer, I accepted the job atKBkids.” A week and a half later, Qwest’s HR person called Crispin,apologized for the lack of follow-up, admitted he’d screwed up, and asked whathe could do to entice her back. “I told them ‘nothing,’ ” she relates.”There was obviously a severe lack of internal communication.”

Jim Grenfell, former CFO with ICG Communications, has experienced similarfrustration with HR in his job search. “About six weeks ago, I had a voicemail from an HRprofessional whom I’d already spoken to a couple of times whowanted me to come in the next week to, I assume, talk about a position. Thecompany was hiring, and I’d already spoken to the CFO and auditors about myexperience. I called the HR woman back that afternoon, left a message, and I’venever heard from her.” Grenfell says the situation is not unusual. “Dealingwith HR has typically been a dreadful experience.”

Weintraub views the lack of follow-up as disrespectful, an attitude that isbrought on by HR’s low status in organizations. “Typically, the higher upyou go in a company, the better you are treated. I’ve never been disrespectedby a CEO; I’ve often been disrespected by someone in HR. It’s apower-and-control issue. People who feel unempowered in their own companiesoften take it out on those who are lower than they are — i.e., those attemptingto get a job.”

Regardless of where the disrespect comes from, the fact remains that it cando a lot of damage — both internally and externally. “As an externally facingfunction, HR needs to be well-versed in how to treat the public,” Goudy says.”They are spokespeople for the company, and they set the tone for what kind ofcompany it is.”

So how are candidates getting work?
Given these frustrations, it’s no wonder that job candidates are doingeverything they can to avoid HR. Primarily, they’re getting around thefunction by networking with colleagues to learn who is hiring and then callinghiring managers directly, which isn’t a bad thing from an HR point of view. Ifyou really want to hire the best people, and those people are trying to findjobs by networking with employees, why not provide incentives for employees tomake those referrals? By training managers to conduct interviews withcandidates, HR can minimize its negative impact on the hiring process.

The point is that HR must do whatever it can, within the constraints oflimited resources, to improve the hiring function — and fast. In the nearfuture, the tables will turn and HR will once again be in the beggar’s shoes,and may remain there for a long, long time. In less than eight years, there willbe 33 percent more people over the age of 55 in the workplace, and 19 percentfewer people between the ages of 35 and 44. Without enough bodies to go around,the most qualified candidates will be attracted to companies that treat themwell from the very first point of contact.

Workforce, June 2002, pp. 36-44 — Subscribe Now!