Category: Archive

Posted on

Tips on Improving Job Performance for New Employees

As HR executives well know, improving the job performance and retention ratesof new hires is essential. The following tip on how to implement a multi-facetedprogram is based on an interview with Blue Valley HR administrators SandraChapman and Walter Carter.

    • Use orientation to prepare new hires for clients’ expectations. At BlueValley, the HR team makes sure that new hires understand the level of competenceand performance that the district’s parents have come to expect. That way, they’reless likely to be caught unprepared when under pressure.


    • Use “just-in-time” mentoring. It’s possible to learn through trialand error, but new hires will develop more confidence and learn more if they getthings right the first time around. Make sure that mentors can be available onshort notice, to give advice while a new hire is actually dealing with achallenge.


    • Recognize and reinforce the positive. At Blue Valley, peer-assistanceevaluators point out things that new hires do well, not just the areas that needimprovement. Just as important, the evaluators get novices to explain the “why” behindtactics and strategies that worked, which helps them to apply that thinking tofuture challenges.


    • Give your new hires an opportunity to improve their credentials. Theeasiest way to build a better-educated workforce is to give new workers accessto graduate-level classes right in the workplace. Develop a partnership with alocal college or university so that employees can amass credits toward anadvanced degree.


    • Use your retention and performance-improvement program as a recruitingtool. Blue Valley says that entry-level teaching applicants often ask how much support they’ll receive as they try to learn the job. By touting yourprogram through the Web and news media, you can create a positive image thatwill attract the best and brightest to your organization.


Workforce, September 2002, p. 66 — Subscribe Now!

Posted on

Detecting Employees Who Steal

Employee fraud is on the rise, soaring from $400 billion in lost revenue forU.S. businesses in 1996 to an estimated $600 billion in 2002. But there arepreventive measures that HR executives can take to spot employees who might bestealing.

    First, recognize that small businesses are most vulnerable to employee theft,says Dick Stackpool, a consultant with Aon Risk Services in Minneapolis. In asmall firm, a single employee has more responsibility, and therefore often hasmore access to company information and finances than an employee in a largebusiness.


    There’s also less managerial oversight in small companies and a morefamilial atmosphere. Many small-business owners refuse to believe that theiremployees, who have been treated as friends and family, would ever turn on thecompany, Stackpool says.


    Aon and the Association of Certified Fraud Examiners, in Austin, Texas, haveidentified several trends that can help HR managers detect employees who mightsteal:


  • The majority of employees who steal–68.6 percent, according to ACFE–haveno prior criminal record.


  • More of them are males–53.5 percent versus 46.5 percent females–who havea high school education or less. “Losses are strongly related to theperpetrator’s position, and in many organizations, the vast majority ofmanagerial and executive positions are still held by males,” states ACFE’s 2002 Report to the Nation.


  • As the employee’s education level rises, the incidence of theft declines:56.9 percent of thieves have a high school education or less, 32.7 percent havea bachelor’s degree, and 10.4 percent have a postgraduate education.


  • Watch for employees who are struggling financially or suddenly make largepurchases far beyond their means. Stackpool poses this question: “Are theygoing through a difficult time in their lives–possibly a divorce, or theirspouse is laid off– or do they have a mountain of debt?” Although mostemployees undergoing a personal or financial crisis don’t steal, he says, “sometimesthey find themselves in a situation where they are just taking some cash to getthem over the short-term hump, and that short-term hump moves into a long-termhump . . . and gets out of hand for them.”


  • Also watch for an increase in fraud prior to, or in the midst of, merger andacquisition activity. “Employees get the ‘I’m going to get mine while Ican, I don’t have a career here’ attitude,” he says.


    Most fraud and theft can be prevented with a few simple internal controls:


  • Background checks, which could include criminal checks as well asdouble-checking of references, are a simple preventive measure. “At a minimum,I would think that checking the past employment would be obvious. Many companiesnever do reference checks or background checks,” Stackpool says.


  • The duties of employees should be segregated, so that one employee does nothave all control and oversight over the finances and/or inventory. “Does theindividual who makes bank deposits also reconcile the books, so they can hidethe fact that the cash was not deposited?” he asks.


  • An internal accounting system, or a system of checks and balances wherebytransactions are reviewed and approved by managers, is essential.


  • An internal anonymous hotline for employees to report fraud can also behelpful. “Tips from employees led to the highest percentage of cases beingdiscovered (26 percent, according to ACFE),” Stackpool notes.


  • Corporate kindness goes a long way. “Share the wealth,” he adds. Rewardscan range from buying pizza for employees to giving them bonus checks. “Itmakes it more difficult for them to steal in a place where they’re valued.”


Workforce, November 2002, p. 31 — Subscribe Now!

Posted on

Grading on the Curve

High-visibility lawsuits and Jack Welch’s celebrity have brought recent-mostly unwanted–attention to forced ranking. But there’s nothing new about the process itself. Law firms, college faculties and the military have operated under an “up or out” ethos for eons, and a number of companies, including PepsiCo, have used it for several decades.


    Its modern history begins in 1999 with the publication of Topgrading (Prentice Hall), by a consultant and industrial psychologist named Bradford D. Smart. In 2001, The War for Talent (Harvard Business School Press) came out. However, forced ranking did not pierce the public consciousness until Jack Welch’s autobiography, Jack: Straight from the Gut (Warner Books), arrived in bookstores on September 11 of that year.


    Welch devoted almost an entire chapter to what he calls The Vitality Curve, but what many readers remembered most vividly was his philosophical/emotional argument for forced ranking. “Some think it’s cruel or brutal to remove the bottom 10 percent of our people. It isn’t. It’s just the opposite. What I think is brutal and ‘false kindness’ is keeping people around who aren’t going to grow and prosper. There’s no cruelty like waiting and telling people late in their careers that they don’t belong-just when their job options are limited and they’re putting their children through college or paying off big mortgages.”


    Although it is unknown how many CEOs agree with him, what’s more certain is that the post-9/11 recession fanned the flames of both forced ranking and corporate reticence on the subject.


    These days, a new question is whether the expected economic turnaround will decrease the popularity of forced ranking. Byron Woollen, for one, thinks so. When times are good and the money is rolling in, he says, people who might be perceived as weak performers are a less endangered species.


    Helen Handfield-Jones, not surprisingly, has a different view. She believes that five years from now, the need for differentiation will be even greater. “As we look down the road, we won’t have the senior leadership that we have today. There’s a declining population in that age group.”


    She adds that 75 percent of all current senior vice presidents will either retire or be on the brink by then, and because of the recent “delayering” of companies, there’s a whole tier of managers missing. “So how else,” she asks, “are we going to find the people ready to make the leap from plant manager to leading a business unit? Because the skill that’s needed in the top 50 jobs at a company is going up all the time.”


Workforce Online, July 2003 — Register Now!

Posted on

The Ethics of Forced Ranking

Many of the people who spend their time thinking about business ethics for a living devote a large chunk to thinking about forced ranking. They have to. What businesspeople call forced ranking is known as “grading on the curve” in academia—and professors and students grapple with that slippery statistical slope every day.


“Grading on a strict bell curve means that if you give someone an A, you have to give someone else an F,” says W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley College in Waltham, Massachusetts. “But perhaps—and maybe a lot more than perhaps—the people at the low end of the bell curve don’t deserve to flunk or be kicked out of school. Or in the case of a corporation, fired.”


Hoffman personally finds grading on the curve (and its corporate sibling, forced ranking) distasteful, but not unethical. It’s distasteful, he says, because it doesn’t recognize students who aren’t good test-takers (or employees who lack champions upstairs at evaluation time) but who demonstrate unquantifiable qualities like loyalty, dependability, determination and persistence. It’s not quite unethical, he says, because it’s often unavoidable. In the classroom, as in the workplace, a laissez-faire attitude toward grading may lead to grade inflation, the Lake Wobegon Effect, where just about everybody is judged to be above average. And that makes the grades meaningless to students, teachers and prospective employers alike.


Hoffman adds that forced ranking remains ethical “as long as there are certain transparent and clearly communicated criteria that employees are aware of when they take and while they’re working on the job. If employees take the job knowing there are going to be bell-curve criteria based on pre-announced testing and evaluation, then they could say at the get-go, ‘I don’t want this job.’ ” But if an employer—as employers are wont to do—announces that it’s going to rev up the workplace by suddenly ringing in the bell curve, “then I would have some concerns.”


So would John Wilcox, director of the Center for Professional Ethics at Manhattan College in New York City. His main worry is how the individual employee is evaluated. “A lot depends on how fairly the system is developed. And how fair the people are who carry it out,” he says. “Who has input into the evaluation? Is it used for political purposes? Does the person at the bottom have a chance to appeal his evaluation? Do people in the organization see it as a positive dimension of the culture? Or as a way to get rid of people that the CEO doesn’t like?”


Thomas White, director of the Center for Ethics and Business at Loyola Marymount University in Los Angeles, takes this a wobbly step further. Regardless of any evaluation system, he says, most non-unionized private-sector employees can be fired “at will” anyway. “When you come down to it, most people wouldn’t agree to at-risk employment unless they had to. Would many people sign a contract that said, ‘We reserve the right to let you go for a good reason or a bad reason. We don’t have to give you an explanation.’ I don’t think so. But what if the contract said: ‘If I’m not doing my job properly, I can be fired.’ They’d sign that.” On another sticky point, White considers the guarantees of “freedom” to an employee to leave his employer and look for a more ethical workplace a bit hollow and hypocritical in these hard times.


Then there are the absolutists. On one hand, “I personally think it’s horrible,” says Robert Shoemake, director of programs and membership at the Center for Ethical Business Cultures in Minneapolis, of forced ranking. “If you don’t give people what they need to perform well and expect them to succeed, if you set a measure to which people should perform and don’t give them the tools to do it, then it’s abusive and unethical.”


On the other hand, James W. Fowler, director of the Center for Ethics at Emory University in Atlanta, says, “If the evaluations are carried out in fair ways, and if people know the grounds or expectations on which they are being evaluated, it could be a reasonable way to reward growth and ability and to cull unpromising or underperforming employees.”


Michael Josephson, founder and president of the nonprofit Joseph & Edna Josephson Institute of Ethics in Los Angeles, won’t declare forced ranking either ethical or unethical. “My instinct is that it’s probably more bad than good,” he says. “My instinct is that it hurts morale, pits employees against each other when you’re trying to create teamwork. The justifications are theoretical. What we really ought to have is pressure on managers to make honest performance evaluations.”


Workforce, July 2003, p. 49 — Subscribe Now!

Posted on

The Do’s and Don’ts of Competency Modeling

  Here are some recommendations about how to get the most out of competencies:

What to Do
Establish a clear definition of the term competency that can be readily understood by decision-makers.
Make the business case: show decision-makers why they should care about competencies.
Identify the exemplary (best-in-class) performers in your organization by job category (such as supervisor), department (such as Marketing), or issue (such as “leader”).
Set out to clarify what the competency model is intended to be used for. Will it be used for development only, for instance? Or will it have other, more comprehensive, uses?
Manage decision-maker expectations, emphasizing that “you get out of things what you put into them,” “you get what you pay for,” “there is no free lunch,” and “garbage in will lead to garbage out.”
Clarify the focus of the competency effort. Is the goal to discover the differences between exemplary and average performers at present? Is the goal to clarify minimum expectations upon entry? Is the goal to build a competency model for each department or job category in the future? Is the goal to clarify what individual characteristics are demonstrated by those who are “effective leaders,” “outstanding customer-service workers,” or something else?
Realize that what it takes to be a successful performer in the future may be different from what leads to exemplary performance now.
Help decision-makers reach some agreement on their vision of what characteristics a successful performer should possess.
Realize that competencies are useful only when they are made measurable and observable.

What Not to Do
Assume that everyone understands competency modeling.
Assume that everyone already knows why they should care about competencies. 
Avoid the politically charged question “who is best-in-class” when the organization has no objective measures of performance.
Assume that the purpose of the competency effort makes no difference. 
Assume that all decision-makers are on the same page from the start, wanting the same goals–or even knowing why competency modeling is done at all.
Assume that it is not important to have a focus.
Set no stock in differences between present and future.
Assume that all decision-makers agree with the results of a competency effort.
Use competencies by themselves with no behaviors linked to successful performance.

Workforce Online, September 2002 — Register Now!

Posted on

Quick Fix Is a Bad Idea

 
Name: GREAT PLACE TO WORK INSTITUTE
Location: SAN FRANCISCO
Business: RESEARCH AND MANANGEMENT CONSULTANCY
Employees: 11

Employees naturally expect to be treated well by the company that produces theGreat Places to Work lists for 23 countries. So when Amy Lyman, president of theinstitute, wanted to put together a package for the company’s first expatriateassignment, she struggled with how to make it good–but not too good.

    In 2001, the institute already had several affiliates established in foreigncountries, but Lyman needed someone with experience to set up the 100 BestCompanies in Europe list. Fortunately, the employee who had established theoriginal Best Companies structure for the U.S. lists wanted to move abroad, andher partner had dual citizenship in the U.S. and the United Kingdom. “Theyboth saw relocating as an exciting opportunity for them, not as being uprooted.It made tremendous sense for both of them,” Lyman says.


    But Lyman didn’t have the first idea what needed to be done. She admitsthat she was very naive about the complexities of arranging an expatriateassignment. “My biggest problem was creating a compensation package that wouldwork for anyone we moved overseas, not just something special” for therelocating employee.


    Lyman also quickly discovered that the institute’s tax accountant did nothave enough expertise in foreign taxation laws to manage the assignment. “As asmall company doing this for the first time, we needed someone who could explaineverything, from how to compensate for housing and living costs to how to count401(k) contributions and pay medical benefits in the U.K.”


    Finding a service provider that talked to her in plain English about the taximplications was critical to the success of the assignment. “It’s amazinghow complex the tax laws are,” she says. “If we had done this on our own, itwould have been a financial disaster.”


    Lyman used a firm that specializes in expatriate tax law, which helped heravoid some costly mistakes. For example, she initially wanted to go with an “easyfix,” raising the expatriate’s salary to accommodate all of her financialneeds in the U.K., but quickly learned it was not the right approach. “Wefound out that it was better to set the salary at what it would be in the U.S.and add living adjustments.” That way, the compensation expectations for theemployee’s return were managed, and Lyman can justify the package if otheremployees want to know why they aren’t receiving the same amount.


    Because they got the expertise early on, the assignment was a success, somuch so that the expatriate asked to extend her stay an additional two years,Lyman says. “It changes the tax situation, but we trust that our tax personwill make it work.”


Workforce, June 2003, p. 104 — Subscribe Now!

Posted on

Task Force Report Reveals Coke’s Progress on Diversity

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.


Posted on

Question Authority

This is going to annoy the lawyers. But some things just have to be said, the most important of which is this: Never think for a moment that your corporate attorneys have HR interests foremost in their minds when they give opinions and advice. Your job is to take care of HR. Their job is to try to keep the company out of court and its leaders out of jail. And sometimes your job and their job will conflict. If the stakes are high enough–or important enough–battling it out in a courtroom wouldn’t necessarily be the worst thing in the world.



    But it rarely comes to that. Usually it’s just small stuff. The “safe” approach here. The “wise” approach there. Prudence rules. But HR and your people may suffer the consequences if HR always takes the safe approach and doesn’t take a risk and make a stand for what’s right now and then. Doing the right thing for your employees is often more important than protecting the company against some vague potential for trouble.


The cost of latex gloves
    In late 2001, when anthrax was frightening mailroom workers around the country, I happened to hear a lawyer advising a group of Bay Area HR executives. Their top concern of the evening was their legal exposure in the face of terrorism. And rightly so. One of the executives said that he worked in a manufacturing facility that wasn’t highly visible the way the media companies that had been hit with anthrax were. Therefore, he felt it was highly unlikely that his company would be a target for terrorism.


    But that day his mailroom clerks had asked if they could have latex gloves and masks to handle the mail. The low point of the presentation was when this attorney flatly and authoritatively said, “You don’t have to give mailroom employees latex gloves just because they think they want them. There’s no law that requires you to do this.”


    He may have been legally correct (although I do believe that employees have the legal right to feel safe and secure in their workplace). But he was answering the wrong question. The HR audience member had asked him whether or not to give out latex gloves to employees. The spirit behind the question was: “What steps can we take to take care of our employees legally and morally? And, if we give them the gloves, are we setting ourselves up if, God forbid, something really happened?” He wanted to protect his employer and his employees at the same time. The question the attorney was really answering was, “How do we keep ourselves from getting sued?”


    This piece of advice was meant to be reassuring to the gathering. But the result may have been that all these people went back to work the next day and said to their petrified mailroom staff, “Sorry, no can do. Lawyer says no.”


    How much does a box of latex gloves cost? Whatever the price is in your neighborhood, it’s a bargain compared with the price you pay when you lose the loyalty and respect of your employees, who want to work for a company that values their well-being–especially while on the job.


    A few days later, working closely with our administrative manager, I visited our mailroom. We supplied our people with protective gear and a Plexiglas and rubber-gloved box for opening suspicious mail. We added a small premium to their hourly rate as hazardous duty pay because overnight their jobs had become different, more complex, and more difficult. It was a small cost for Yahoo!, but it meant a great deal to these employees. And it was the right thing to do.


    HR is bound on all sides by rules and laws. And, yes, you certainly need to be regarded by the leadership as a trusted partner in keeping the company on the right side of legalities. However, I would like to add this: Break as many rules as you can. As long as your plans don’t violate employment or labor laws, SEC or FDA rulings, or any other legal restrictions, bend and break the rules wherever you feel that a fundamental HR value or principle is at stake. If your HR principle is to make sure that your employees can feel reasonably secure while they’re handling miscellaneous envelopes, buy the box of latex gloves, already!


Attorneys can be wrong
    Develop the habit of questioning authority of all kinds. And you might as well start with your employment lawyers. Remember, their job is to protect you from lawsuits, not to support you while you create a dynamic, alive HR function.


    There will always be people who will tell you that you can’t or shouldn’t do something. If you’re not equipped with a prestigious law degree, you might think it’s prudent to believe them. You might, for instance, believe the attorney who tells you that it’s illegal to hire for anything other than skills. That’s not true at all. It’s illegal to discriminate against people because of their age (if they’re over forty), race, nationality, and so on. And somewhere along the line, attorneys found that a useful rule of thumb is to emphasize performance, experience and skills.


    By training HR to look only at those attributes, the legal department can protect recruiters from violating truly meaningful civil rights laws. But there is no civil rights law that gathers jerks and misfits into a protected class. Still, we hire jerks and misfits because attorneys tell us we can look only for performance, experience, and skills.


    In human resources, we have far more creative leeway in the way we run our operations than we’re in the habit of exploring. There usually is a far better way of doing something than the established rules would have us believe. It will probably come as no surprise that I learned this lesson very well at Southwest. Herb Kelleher made it his personal mission not to do anything by the book, and he is a lawyer. And I saw firsthand–especially in the compensation arena–how his maverick style opened up the potential for truly spectacular results.


    When I first beheld the Southwest compensation plan, I couldn’t believe my eyes. I noticed that many non-airline-specific jobs were paying 20 percent or even more below the market rate. I wondered, “Why would these people want to work here?” According to the “official rules” I had learned in an American Compensation Association (now WorldatWork) certification course, if an employer is below the 15 percent differential, it is in serious jeopardy of losing its talent. That was the rule. But here I saw a value override the rule: the value of the intangibles that made working at Southwest so attractive that the company could defy the accepted way of doing things.


    Employees were saying through their commitment (even at lower pay), “I love my job, I love my coworkers, I love what I’m doing. I’m willing to make less because I see the future in this company.” Those employees could have done 20 percent better somewhere else, but guess what? They could also have been laid off after September 11, as hundreds of thousands of their counterparts at other airlines were. At Southwest, they weren’t.


A lobster is not a dog
    Strict overemphasis on rules can also discourage employees from thinking independently and making the best decisions for their customers. Even at relatively freewheeling companies like Southwest, employees may take certain rules and regulations to extremes.


    One of Southwest’s most rigid rules, for instance, is that it does not carry live animals (except for service animals, such as guide dogs and search-and-rescue dogs). The airline’s business model depends on twenty-minute turnarounds at the gate, and that poses too much of a danger to animals, who require safe, careful, and therefore slow handling. The airline is full of pet-loving employees, and no one wants to face the prospect of a passenger’s pet being lost–or worse–in transit. This rule is an easy one to enforce. And it’s so cut and dried that who would have thought it was subject to original thinking? Until one day…


    If you’ve ever flown out of any of the coastal New England cities, you’re familiar with those shops selling live lobsters in cardboard cartons. Animal. Live. No live animals. Right? That’s what our gate agent concluded when someone wanted to check his lobster: No lobsters allowed. The hapless passenger had to leave his dinner behind!


    We didn’t fire the gate agent for being so rigidly attached to the rules. But the airline has been using this story ever since as an illustration of how common sense can tell you to break the rules.


    Can you teach people good judgment? Probably not. Once they’re adults, they pretty much have their judgment skills in place. But what you can do is cultivate a workplace culture in which it’s safe to use independent judgment. Start with yourself and then extend the principle throughout the organization, especially to your customer service representatives. They’re your link to your buying public.


    And the next time you observe a lawyer rigidly sticking to a stupid rule (as opposed to a law–let’s be clear about that), send him or her a lobster dinner and a copy of this book with this chapter explicitly marked.


Excerpted from HR from the Heart, Inspiring Stories and Strategies for Building the People Side of Great Business by Libby Sartain with Martha Finney. Copyright ©2003 Libby Sartain and Martha Finney. Published byAMACOM books, a division of American Management Association, New York, NY. Used with permission. All rights reserved.