| making 'People' work

To have meaningful work that enables our independence and to live with dignity should be a basic human right

Month: May, 2013

Employee engagement won’t work either

Employee engagement should be among the top priorities for organisations, according to surveys conducted with HR professionals around the world.

  • More than half (62%) of organisations surveyed say employee engagement is their top HR priotity in 2013, according to research by law firm Speechly Bircham and King’s College London. (Employee Benefits)
  • Engagement/retention of the workforce (55%) is the top priority for organizations in 2013. (The CEB Global Talent Measurement Solutions)

The generally accepted definition of ’employee engagement’ is the degree of emotional commitment an employee has towards their job that influences their work performance and willingness to contribute to better outcomes for their team and their employer.  ‘Employee engagement’ is also variously defined in more tactical ways: as a strategy for improving workforce management; a measurement of employee satisfaction; a barometer of productivity, employee retention or performance; an incentive program; a talent management plan; employee rewards and benefits, and more.  One thing that all proponents of employee engagement agree on is that increased levels of employee engagement lead to tangible benefits for the employer.  Research consistently points to employee engagement as having a direct positive impact on sales, profitability, customer satisfaction, reduces accidents, disputes and sick days, and all achieved with less management intervention.  It is no wonder that HR has strapped its collective boots on to begin a new pilgrimage in search of this ideal.

However a lot does not make sense about this new sense of urgency to engage the workforce.  The profession of human resources grew out of ‘Personnel’ against the backdrop of theories and research that emerged in the 1970s on job satisfaction and its impact on worker productivity, most notably the work of Edwin A. Locke  (Range of Affect Theory, 1976) who defined job satisfaction as “a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experiences”.  Management eager for the gains a more satisfied workforce promised, looked to earlier theories including Maslow’s Hierarchy of Needs (1954), Herzberg’s Two Factor Theory (or Motivator-Hygiene Theory, 1959), and Theory X and Theory Y (Douglas MacGregor, 1960), for ways to practically apply the ideas the theories suggested.

In the 1980s the focus of human resources shifted to motivation.  Job satisfaction, it was argued, was not enough as a satisfied worker was not necessarily a better worker.  Employee motivation was as described by Robert Kreitner as “the psychological process that gives behavior purpose and direction” (Management, Houghton Mifflin Company, 1986).  Alongside the growing emphasis on lean manufacturing and just-in-time management to drive down costs and increase efficiency, the management focus on targets cemented the practice of creating measures that employees could use to aim for higher performance, and this desire to improve results would be the basis of greater motivation.

In the 1990s the well-being of workers came to the fore.  Restructuring became a mainstream management practice and put paid to any doubts that job security existed.  With the wholesome embracing of valuing workers based on continuous and ever-widening measurements, and adding to this the mainstream adoption of mobile phones, the work environment was becoming increasingly long and intense.  Employers began to take note of work/life balance and recognise that stress and poor well-being were an anathema to productivity.  Attention to issues such as gender and race equality, flexible working condition, employee assistance programs, employer-supported health initiatives, ‘mental health’ breaks, even the term ‘work/life balance’ itself, took greater priority throughout the the 1990s.

By the beginning of the new century, twenty-plus years of efficiency drives had left little room for new ways to cut costs and lift profits.  Attention turned to savings from the costs of replacing employees.  This was not the reinstatement of the social contract that existed in the traditional job model, that is, the exchange of employee loyalty for a job for life, but a concentration on ‘retention and talent strategies’ to attract ‘better’ workers who would stay longer.  With few exceptions, job structures did not change; attracting and retaining talent was encouraged through incentives, greater flexibility for leave, education grants and increasing career development opportunities.  The savings from an employee that did not need to be replaced were often cited as being in the order of 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialist or high level employees, once the costs of recruitment, training and lost productivity are taken into account.  Hiring errors could make these figures even higher.

So there has been no shortage of attention to finding the formulae that will deliver workers who are happier, cause employers less grief, and who willingly work harder to support their organisation’s ability to do more with less.  Not much has been written about employee engagement that adds anything new, other than perhaps providing more proof than ever that it is highly desirable.  It is impossible to see how the same ideas and the same approaches can suddenly give a different result just because the banner under which they are delivered has changed.  A review over the forty years of workforce practices since we first became concerned for employees’ job satisfaction shows remarkably little change.  In fact, with a quick search and replace action of the words ’employee engagement’ for ’employee motivation’ or ‘talent retention’ for instance, there is little to distinguish what this new awareness of employee engagement has achieved.

Without a doubt, there will be many who will huff and puff at what they will perceive as a disregard for the value and importance of people – in itself interesting that much of this will come from those who still refer to employees as ‘human resources’ and ‘human capital’.  The message from this blog is actually the polar opposite.

People are not naive, empty vessels that can be simply manipulated into certain attitudes and actions because an employer makes it sound attractive.  That organisations continue to think that ‘incentive’ and ‘performance’ are a rational exchange between two equal parties insults the employees who submit to what even the law refers to as a master/servant relationship.

Short of new ideas perhaps, the current buzz of activity is around data (even better if it can be big data).  The wave of offerings that will finally solve the conundrum of how to make people want to happily work harder for longer indicate that the missing piece is measurement.  The path to employee engagement, if the companies’ product claims are to be believed, is either through surveys or speedier delivery of performance data to employees.  It was harder to find exactly how all this new data, coming on top of data already available, will be used.  Will this data consider, for instance, the amount of talent that goes unused when jobs are too narrowly defined, or contributions that were not appreciated by systems too inflexible to accommodate different ideas, or problems that do not get fixed because too many managers can say ‘no’ and not enough will say ‘yes’?  How about data that considers the behavioural side of people whose work is a product of their emotional and social influences not just what is economically rational?  How about no data at all, just an organisation designed for people to excel in?  Surely no data is better than data used to dictate the next form of manipulation?

Employee engagement is important and it should be amongst the top priority for employers.  The attitude that it is an end game that needs to be won is not only wrong but will simply lead to yet another yet-to-be-labelled phase of workforce management focus when this one yields no more gains than its predecessors.  Employee engagement is a state the workers reach when the organisation as employer offers itself as a partner to those who have the values, skills, abilities, aptitude, knowledge and experience to contribute to the achievement of its goals and objectives, and the interactions and the progress made in the process are rewarding and satisfying.

Should there be any doubt that this article is not an exercise in cynicism but a real despair that the next forty years will be better, critics might like to read more about the CEB Global Talent Measurement Solution report referred to above.  The report was based on analyses of various organisational practices and an online survey of 592 HR professionals.   It found that the top HR priorities to emerge from the survey were:

  • Engagement/retention 55%  (of respondents)
  • Leadership development 52%
  • Workforce planning/analytics 43%
  • Performance management 49%
  • Training 42%

It went on to note that workforce analytics had moved up the agenda as a priority for HR, in line with other recent surveys, however:

  • Less than a quarter of respondents reported that their organisations have a clear understanding of workforce potential.
  • Less than half reported using objective data to make decisions about the workforce.
  • Less than half reported their organisations use talent data to drive business decisions.
  • Nearly 75% of respondents indicated that their organisations want to improve the way in which they measure talent.
  • Fewer than one in five respondents reported being satisfied with their systems’ ability to manage talent data.

The problem with having identified such poor response to managing workforce analytics, said the report, is that the battle that HR is engaged in with Marketing, Finance and Operations for the ownership of talent strategy is being fought and would be won on these grounds.  “The outcome will depend on which group owns the talent agenda, can provide the most meaningful data analytics to drive business decisions and can demonstrate that talent management truly impacts business outcomes.”  Because the “responsibility for talent strategy ultimately lies with the group that can demonstrate how managing talent impacts the bottom line”.

Understandably it is difficult to find time to properly engage with workers when there is a bigger war going on for survival and relevance.

Rethinking downsizing

Fans of the hugely popular Dilbert comic strips will recognise Catbert, the Evil Director of Human Resources, whose sole aim is to torment the comic strip company’s employees.

Downsizing, or mass redundancies, is used by organisations to improve their financial position particularly when they are under pressure from shareholders, competition and/or shifting consumer trends.  Downsizing has become one of, if not the most, preferred option for reducing costs and increasing efficiency, yet evidence points to the fact that the results of downsizing are often illusory (this Ivey Business Journal article, Downsizing isn’t what it’s cracked up to be gives a great summary).  With more attention generally given to implementing the redundancies than to the disruptions to workflow, morale, loss of organisational knowledge and the need to recreate the social structure to reflect the reduced personnel, the cost of downsizing is often underestimated and its ability to positively impact on profit often overestimated.  Thus firms often find that one round of downsizing is not enough.

The real reason that downsizing does not work is that organisations do not work the way in which downsizing needs them to if it is to be effective.  One of the outcomes of the industrial revolution (late 1800s/early 1900s) was a system in which work could be mechanised.  Creating standardised jobs allowed labour to be treated as a commodity; workers could be easily replaced, trained, measured and directed, and scales of economy could be achieved.   The organisation charts, divisions and hierarchies became part of the cost overhead needed for the organisation to manage its labour.  Managing well meant not only finding ways to keep the labour needed as low as possible, but also keeping the management overhead as lean as possible.

In this labour-is-a-commodity context, downsizing is logical: as demand changes and processes can be made more efficient, organisations can (or must) make do with fewer bodies.  People are a consideration only so far as downsizing has unfortunate human cost.  Interestingly downsizing began to become more commonplace and accepted in the 1970s, a time when a firm’s value was mostly comprised of physical assets: buildings, equipment, machinery, stock, and so on and labour was needed primarily to power production.  Only 17% of a firm’s value was made up of intangible assets, such as brands and designs.

Markets have been changing steadily since the 70s.   What is produced now extends far beyond the physical goods only to a long list of non-physical attributes: style, reputation, service, environmental concerns, social responsibility, prestige, brand associations, lifestyle affinities, technological advancement,  to name but a few.  In 2010 a firm’s physical assets typically made up only 20% of its total value.   And what delivers these intangible assets to the firm is the non-labour component of work.  It comes from people’s different human inputs: experiences, their endeavours, sense of pride, desire to achieve, curiosity, creativity, camaraderie, and many more, some so fleeting they are barely noticed, but all adding up to significant value for their employer.

Unlike mechanical labour these intangible assets are not the result of the organisation structure managing output.  Managers do not elicit inspiration, innovation, inventions, ideas, a desire to pursue a vision, a dedication to a purpose, interactions that create sparks or spur enthusiasm, through the setting of a roster, or tick of a clock, nor through a list of competencies, or data that can be used for comparative measures.  The infrastructure that produces the far greater component of the organisation’s value is not a cost but an asset, and it is not scalable at all.

Work is and never was a mechanical process.  Treating it as one worked for a time, when demand for mass produced goods drove the economy.  Today’s knowledge economy however demands that work is a human process.  It requires people to interact, collaborate, solve problems, create and use networks, learn, share, and participate in the workplace physically, socially and emotionally in countless ways.

Downsizing is only relevant to the scalable, labour side of work – the side that addresses the organisation’s 20% value in physical assets.  It lays to waste the social and knowledge-based inputs that generate value.  The real failing of human resources is not so much in its failure to plan a workforce to meet the forces that lead to downsizing, but to continue to treat labour as a commodity and management as an overhead that, by downsizing these, are expected to improve an organisation’s performance.

Even if organisations are unconcerned about the human cost of downsizing, the senselessness of using an approach that is so mismatched to the purpose it is meant for, that it is as likely as not to fail, is only to be expected.  And human resource Catberts will continue to play with them before downsizing them.

Moral blindness

The day following the blog post, “HR: Morally Culpable?” an article appeared in the business publication, In The Black, entitled Are You Guilty of Moral Blindness?    Article author, Eva Tsahuridu, writes:

Generally, when we assess unethical behaviour, we tend to see it as rational and intentional. Sometimes it may not be so because of the specific frame we use to see the issue….  Failing to identify the ethical content of an issue leads to moral blindness, which is potentially more concerning than deciding to behave unethically. Moral blindness prevents us from considering the moral consequences of our actions….  Workplaces develop their own frames, which are shared and affect how people generally perceive situations. For example, framing something as an opportunity is very different to seeing it as a bribe. Frames can make something desirable or undesirable. They blind us to some aspects of the issue while emphasising others. They may make things that we would see as unethical and wrong outside the workplace seem appropriate and right.

Frames are necessary because they enable us to deal with the complexity of living. But they pose ethical risks that we must mitigate. One way to do this is to use multiple frames and make sure one of them is an ethics frame. … Failing to see the ethical content of issues increases the risk of unethical behaviour. Remembering that ethics is an inherent part of every business decision can help us avoid moral blindness.

The organisational prerogative to meet targets and/or maximise profits creates the frame through which employers are entitled to treat people as the human resource; to repeatedly quantify workers until they are defined as the sum total of their most desirable parts.  They know which of their inputs (competencies) will produce the required measurable outputs (KPIs – key performance indicators).

Within this frame the objective of employment is to analyse what perfect combination of procedures, activities, skills and knowledge  will achieve optimum productivity.  The typical HR approach applies processes designed to separate work from the workers and workers from the people who enter into the employment relationship.  This objective approach to managing performance using data enables decisions for selecting, managing, training, promoting or reducing staff  to be more accurate and therefore the workforce more effective.  Equally employees, knowing what is expected of them, can leave their employers and find more suitable employment elsewhere, a natural selection process to achieve a workforce ‘best fit’.

The rationale for this approach goes further, that an objective focus on work creates fairness; because the evaluation processes are evenly applied, all employees have an equal chance of success (when people are withing this system they are staff or employees, another indication of the system’s impartiality).  Having their performance measured using set criteria they will thus know which skills should be developed and being successful in these they will experience greater job satisfaction, increased job security and improved career prospects. The increased confidence and morale that follows leads to even better performance and the employment relationship should be long and mutually rewarding.

The narrow frame of ‘competency-based’ employment systems creates the very moral blindness Tsahuridu describes.  Firstly the criteria used to evaluate workers is not applied equally.  People are no more able to be separated as workers than research in behaviour and brain functions show that their workplace assessors are able to be impartial.  Further the criteria the employees are informed affect their employment usually do not mention the technology, changing business/organisational direction, stakeholder interests or outsourcing options, for instance, that are also evaluated for achieving targets and profits.

The frame used to create fairness is possibly responsible for the majority of the unfairness that exists around employment.  The separation of the person from the performance is a significant factor in the rise of workplace bullying.  The ability to justify actions that produce results help managers turn a blind eye, if not actively protect, those whose actions push the boundaries of ethics.  Those who have been involuntarily out of work for any amount of time know full well that no matter how strictly applied a process for evaluating their merit against a pool of other applicants, age, nationality, any visible disabilities and appearances are just some of the other factors that will play a part in the hiring decision.  It is ironic (if not breathtakingly hypocritical) that organisations responsible for assisting the disadvantaged/unemployed to find work, who actively encourage employers to look beyond the exterior and give untapped potential a chance, are as likely to be the most avid proponents of deconstructed work, quantifiable criteria and measuring  performance.

The rights of employers to prioritise their desired results and for people to seek work that suits their abilities and preferences are not the issue.  It is the rational economic frame that people can be dealt with as productive resources that is so morally dangerous.  Dealing with workers as complete people who can contribute beyond the job description will not only potentially result in more ethical employment practices, but in the knowledge economy where work cannot be mechanised, employers stand to gain substantially (future blogs will deal with the hows and whys).  While HR that has built an entire industry around the fallacy that humans are rational resources may have little incentive to dismantle the system, employers have much to gain from increased emphasis on people as contributors to organisational objectives.

HR: morally culpable?

Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over. And the situation is even worse than it appears. Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What’s more, these jobs aren’t just being lost to China and other developing countries, and they aren’t just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.

This excerpt is from a report entitled, “Recession, tech kill middle class jobs“, published in newspapers around the world in January 2013.  Its authors, Paul Wiseman and Bernard Condon, describe the ‘hollowing out’ of mid-skill, mid-paying jobs that are being lost in large part to technology.  Like many manual jobs before them that were replaced by machines, the ability to self-serve, self-manage and automate, is changing the demand for secretaries, travel agents, accounts clerks, tellers, retail sales assistants, manufacturing workers and countless other – predominantly service – jobs.  With middle class jobs the backbone of the developed nations, the prospect of these jobs disappearing is truly frightening.  In the US, 7.5 million jobs were lost during the Great Recession; half of these were midskill, midpay.  Since then 3.5 million jobs have returned: 70 per cent low-paying jobs, 29 per cent high paying jobs, and just over 1% of the jobs in the middle.  The euro currency-based countries are faring even worse: since mid-2009 the number of low-paying jobs have increased by 4.3 million, while since July 2008, 7.6 million mid-tier jobs have been lost and the numbers are continuing in the downward trend.  The story was the same for 20 countries analysed for this report.  The evidence of the shrinking of this sector of the job market is not recent with data pointing to such a trend since the 1990s.  Labour markets experts, say the report authors, predict the problem will get much worse.

HR – human resources – is the profession/function that is responsible for the workforce of an organisation.  What this means in reality has been the subject of much contention.  Unlike other professions, HR has no mandates outside of their organisation.  Qualifications are not compulsory, there are no mandatory standards for the practitioners or their practices, and there is no independent oversight of competence, integrity, objectivity or effectiveness.  The fact that HR has one of the most critical areas of responsibility to an organisation’s success but are generally so poorly equipped to make a difference contributes to the on-going debate about what HR really does and even whether it is a legitimate profession at all, such as the ideas proposed in the article, “Why everyone hates HR“.

We expect when we receive advice from professional advisers such as our lawyers, doctors, financial planners and accountants, that that advice will be sound and reliable.  In these professions the advisers would be liable for negligence if an act or omission occurred due to a failure on their part to exercise the degree of professional care and skill appropriate to the circumstances.  Of course the same degree of duty of care does not apply to HR because the same rigour does not apply to its qualifications and practice.  While it could be arguable because of the variability of human behaviour, it would be difficult – if not impossible – to manage the profession in the same way, it is interesting to note that HR qualifications do not actually include the study in people or people management.

So if HR does not answer to workers but to the organisations that employ them, and no professional liability applies to its practitioners, are they nonetheless morally culpable for the way they exercise their duties?  For instance, how many of the millions of midpay, midskill workers who have not worked since their retrenchment participated in HR-devised programs in which they were exhorted to work harder and do better because that was how their career ambitions would be realised?  How many would have been better off attending training in new skills rather than encouraged to aspire up a disappearing ladder?  What if they were given warning a year in advance to prepare their finances and plan for an impending redundancy?  Of course these are philosophical rather than practical questions and HR has no obligations outside the walls of the employment relationship.

As much as HR practice may be wanting, however, few practitioners would be unaware of the bigger job market problem of which they are all a part.  Should HR as a profession think more widely about its responsibilities?  For instance, job descriptions – those mechanisms designed to cut people down to the sum of the skill and knowledge parts relating to a particular part of a workflow – were a construct of the last century.  In a world far less static, where because of technology, a workflow once designed may only be useful for a few months, categorising workers by job descriptions is outmoded and it could be argued makes it more likely that people in certain jobs and industries will be unemployed for longer.

Whatever the direction for HR, the question of culpability is worth discussion.   If I can sue my financial adviser because I lose my house due to deficient advice, should I be able to sue the HR director of my employer if I had the same outcome because I was not given full and frank professional advice?

Another blog on people and work, and the concept of collateral gains

It’s already a crowded space, the many articles and writings available, full of ideas and opinions on what makes the intersection of employment and people successful.  Amongst them all is there room for yet another blog?  The fact that employment continues to be plagued with difficulties: disengagement, unemployment, underemployment, skills shortages and bullying, for instance, would suggest that the conversations should continue; that many more ideas need to be proposed, tested, debated and learned.  And so I hope this blog can add to this.

My interest in this area was piqued many years ago when I first began working in management.  The approach of human resources was so different from that of marketing, the field of study I first completed.  In marketing, activities start with understanding the target market and how to cater to them; in human resources it starts by telling the target market what’s good for them and how they can be part of it.  This interest was mostly academic until one day, sitting in the city traffic, I saw a body of staff of the major metropolitan newspaper, The Age, sitting outside their workplace (a building nicknamed ‘The Spencer Street Soviet’ for its stark façade) on makeshift stools on the street in the cold, protesting management decisions to reduce staff following the establishment of a new print facility in Tullamarine.  The set of their expressions communicated their determination to have their views heard by management.  It was easy to imagine how these – the news stories would suggest – semi-skilled workers, many  in their fifties and older, would find getting their next job a struggle.  Two thoughts struck me in quick succession.  First was how much stress these people would be under: going home each night to discuss with their spouses the possibility that the next paycheck could be the last for a while.  This was overtaken by the second thought – why a company that employed thousands of people could not have found a way to benefit from the single-mindedness shown by this group joined by their common predicament, just one of the many attributes they could no doubt offer beyond their labour.

From this point – unconsciously at first – I became increasingly aware of the impact of management on the lives of workers. Job security and job prospects can affect workers at the most fundamental levels from their ability to care for themselves and their families to the quality of education their children will receive.  No one’s child/parent/sibling/partner should be demeaned at work either by the workplace structure or from their treatment.  Yet no statutory minimum standards exist for managers; there is no specific responsibility imposed on managers to the people whose livelihoods depend on them.

The term ‘collateral damage’ – the incidental costs that occur as a consequence of the pursuit of another objective – is used often to refer to the job losses or other pain inflicted on members of a workforce.  Yet in my work with organisations large and small I see many incidences of ‘collateral gain’ and even more untapped opportunities to build them from the daily efforts of people .  These potential gains covered all ground from new ideas, to new solutions for old problems, to feelings of camaraderie within a work unit, to knowledge shared, to fresh enthusiasm for a task, to awareness of new problems yet to be fully understood.

The industrial model that still dominates despite massive changes in the types of, and how, we work since it was initially devised in the early 1900s is no longer relevant for today.  This method, born of FW Taylor’s Principles of Scientific Management, is based on the assumption that division of labour and time and motion efficiencies (finding ‘one best way’ to complete a task) will produce maximum productivity returns for the employer.  This was true when most job were comprised mostly of manual tasks, but even then it was only so long before the gains were eroded by boredom, mistakes, employee turnover and accidents that resulted from work that was mundane and routine.  Unfortunately, the initial gains to industry were so significant, the conviction that dividing work into specialisations, supervising inputs (such as time and skills) and quantifying performance is the ‘one best way’ continues to this day.  Even as we are in the full swing of the knowledge economy we continue to apply the rules of the production era.

The other mantle that persists is the ‘science’ of performance management.  An industry worth billions thrives on the ‘sciences’ developed for selecting and managing people.  Despite the emergence of actual scientific studies on how people behave (usually not rationally), neuroscience, the influence of environments and networks on performance and much more, outmoded notions such as, “If you don’t measure performance how can you improve it?” are still treated as valid.  However, as some wise person (most people believe Albert Einstein, but wise nonetheless) once said, “Not everything that can be counted counts, and not everything that counts can be counted.”  Oddly, what most employers say they want to foster in their people are emotional connections: caring about the job they do, committing to the organisation’s goals and values, building relationships with customers, a sense of pride in their work, and so on.  At the individual level however, their discussions are about the rational: career steps, targets, competencies, KPIs (key performance indicators), KRAs (key result areas).  One thing science has clearly proven is that cognitive reasoning instantly displaces emotional engagement.

This blog intends to explore these and similar issues.  In the years since watching the determined workers from The Age, I have had the benefit of working with many organisations and their hundreds of employees.  I have met and spoken to many people doing amazing work and breaking new ground in understanding.  I have read about new things we are learning about work and motivation and found new apprp://isabelwudotcom.wordpress.commportant to my client organisations.  I look forward to sharing these with you.

Isabel Wu

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