The People Practices that Guarantee Mediocrity: Learning from what the “worst employers” do Andrew Bell

The People Practices that Guarantee Mediocrity: Learning from what the “worst employers” do

Andrew Bell

2To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006

*Source: Hewitt Associates Employee Engagement and Best Employer Database of approximately 1,500 companies (1999-2003).

How Engaged Are Your Employees?

*

DestructiveZone

Uncertainty Zone

Performance Zone(Avg.TSR = 24.2%)

25%

40% 60%

100%

$

Benchmark Averages*

*

0%

(Avg.TSR = -3.4%)

IndifferenceZone

(Avg.TSR =9.1%)

Best Employers (74%)High Performers (61%)Total Shareholder Return (TSR > 20% from 1999-2003)

Global Engagement (54%) $


Research-based Points of View


Our Topics Today – Practices that Guarantee Mediocrity

Leadership

Rhetoric v Reality

Talent Management

Performance Management

HR Stuck in the Middle


“Good is the enemy of great”

Jim Collins, Good to Great


The Strongest Organizations Make High Performance Practices a Competitive Differentiator

Execution Quality

Bu

sin

ess

Pay

-Bac

k

Activities and steps are in place…“We do that”

Commitment to manager capability—doing it so well it’s a competitive advantage

They Know Performance-Related Activities—Goal Setting, Coaching, Talent Deployment, etc.—Have a Strong Execution/Pay-Back Connection

Leadership


The Leadership Data

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Senior leadership treats employees asthis organization's most valued asset

I trust our senior leadership toappropriately balance employee

interests with those of theorganization

Our senior leaders are excellent rolemodels of our organization's values

Senior leadership is worthy of mytrust

Our senior leaders fill me withexcitement for the future of this

organization

% E

mpl

oyee

s A

gree

and

Str

ongl

y A

gree

Best Employers Average Employers Worst Employers


Real Conversations in Real Organisations

Leader A - I think HR are letting us downLeader B - How so?Leader A - They should come and tell us when someone on our team has done a good job so we can go and give that person recognition.Leader B - Great Idea. Except I don’t know who all our people are, so I wouldn’t know who to give the recognition to?Leader A - They could give you a map showing their cubicle and a picture of the personLeader B - I don’t think we have photos of all staffLeader A - Maybe if everyone wore name tagsLeader B - True, but some of our staff these days have such long names the tag would have to stick out past their shoulderLeader A - Maybe if we had really big tags and people hung them round their necks on a string ?


Leaders Believing Their Own Rhetoric

“If our employees have told you that communication is a

problem here, they are seriously misinformed.”

Response to Focus Group findingsFrom Company Chief Operating Officer


EngagementEngagement

Work Tasks

Reputation

Organisation Purpose

Career Opportunities

Senior Leadership

Policies

Intrinsic Motivation

Valuing Employees

Communication

Patterns of Influence

= opportunity and threat = threat= opportunity = small opportunity and threat

Rhetoric Vs Reality


Quick Quiz—Guess the Organisation

RESPECTRESPECT—we treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don’t belong here

INTEGRITYINTEGRITY—we work with customers and prospects openly, honestly and sincerely. When we say we will do something we will do it; when we say we cannot or will not do something, then we won’t do it

COMMUNICATIONCOMMUNICATION—we have an obligation to communicate. Here, we take the time to talk with one another … and to listen. We believe that information is meant to move and that information moves people

EXCELLENCEEXCELLENCE—we are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be


Surprise?


It is Easy to Develop Attractive Employment Brands…

MetLife… where work meets life.

Our Key Beliefs - The Way We Will Always ActUncompromising Integrity Constant Respect for People

"Treating others the way you want to be treated"

Imagine, solve, build and lead

Kraft strives to instill values it believes will drive the business—focus, innovation, passion, trust and teamwork—and is continually investing in training, development and career management to steadily improve employees’ skills and opportunities.

… “We take care of our People so that they can deliver impeccable Service to our clients who will give us the Profit necessary for FedEx to be successful. This philosophy governs every FedEx activity.”


…but Much Harder to Deliver Those Brands

0%

10%

20%

30%

40%

50%

60%

70%

80%

Decision to Join Current Impression


Our Employees see Through our Rhetoric

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

This organization delivers on the promises it makes to itsemployees

I am made to feel like a valued member of this organization This organization's policies create a positive work environmentfor me

% e

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s ag

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& s

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“They’re Just Employees…”

VeteransBaby

boomers Gen X Gen Y

Core Values:• Diversity• Thinking globally• Balance• Techno literacy• Fun• Informality• Self Reliance• Pragmatism

Core Values:• Optimism• Civic duty• Confidence• Achievement• Sociability• Morality• Street smarts• Diversity

Core Values:• Hard work• Duty before pleasure• Honour• Delayed reward• Patience• Law and order

Core Values:• Optimism• Team orientation• Health & wellness• Personal gratification• Involvement• Work• Youth

Job security

Rewards

Recognition

Autonomy

Meaningful work


Toblerone and Hershey Kisses

Talent Management


Brand Fulfillment in Careers and Development is Low

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

I can fulfill my career aspirations here In this organization we are promoting thepeople who are best equipped to meet the future

demands of our business

The organization provides learning anddevelopment opportunities to help me build

valuable skills

I have appropriate opportunities for personaland professional growth

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Managing Opportunity is AboutFueling Company and Individual Growth

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Double Digit Growth Companies Single Digit Growth Companies

We Need to Allocate Talent Just Like Capital—and Ban “Random Acts of HR”

Rotational Assignments for Key Talent

0%

10%

20%

30%

40%

50%

60%

70%

80%

Double Digit Growth Companies Single Digit Growth Companies

Use Strategies that Define How to

Select, Deploy, and Reward Leaders

Performance Management


Most Employees Don’t Know What’s Important

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

I completely support this organization's goals and objectives I have a good understanding of this organization's goals andobjectives

I know exactly what I need to do to help this organization meetits goals and objectives

% e

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Spotlighting the Major Disconnects Between What we Intend and What People Hear—One Company’s Analysis

What they really hear now from everything we’re doing:

What we need them to hear:

High Performers

We’re glad you’re here It’s a given that you’ll produce great

results every year We’ll reward you as much as the

system allows We depend on you to carry the rest

We need you to be glad you’re here! We deeply appreciate all you do Your rewards will keep pace with your

impact, period Here, high performance is rewarded

and underperformance is addressed

Solid Performers

You’re not a hi-po, but we still value you…though somewhat less

Do your job well and it’s not necessary to improve or grow

Performance matters as much as potential—both are ways to be a key player here

We all must keep stretching to stay ahead of our competitors—“it’s grow or go”

Your solid contribution is vital to us

Under Performers

“This too shall pass” (a new performance initiative)

There are ways around the new processes

Help’s available, but turning things around is up to you

Without real improvement, this likely isn’t the right place to be

Expectingimprovement,

offering support

We’ll increasingly need to

“re-recruit” these people with

everything we say and do

Recognizing Achievement is Fundamentalto High Performance—But It Isn’t Automatic


F D C B A• “Meets” feels to most people like they’re getting a “C” grade—it doesn’t say,

“you’re a winner!” Managers can be reluctant to give good performers this rating so we get rating (and pay) creep

• And having two levels above “Meets” can erode the message that goals should be set at a challenging level: If people set the aggressive targets we ask for, how likely is it they can achieve two levels more?

ImprovementRequired

Meets SomeExpectations

MeetsExpectations

ExceedsExpectations

Far ExceedsExpectations

And What About Our Rating Scales?


$$

It’s easy to send the wrong signals about what we value:

The Mediocre Reward Mediocrity

In this company, many people were rewarded more for caution than courage

High

Moderate

Low

Goal Difficulty

$$$

We say this performance is what matters…

…but reward this performance as much or more!

Missed Partially Met Fully Met Exceeded


HR is Stuck In The Middle …

… and Unable to Deliver on the CEO Agenda


Being Stuck in the Middle Means Spending Too Much Time on the Wrong Activities

7% 10% 15% 13% 28% 15% 4%

2%

6%

Strategy (7%)

Program Design (10%)

Consultation (15%)

Delivery (13%)

Program Admin (28%)

Customer Service (15%)

Systems (4%)

Vendor Mgmt (2%)

HR Dept. Mgmt. (6%)

Source: HR Analyzer Benchmark Database. Hewitt Associates. 2004.

Strategic Tactical

Even as HR costs continue to rise, HR staff are spending 56% of time on program delivery and transactional activities.They are only spending about 32% of time on more value-added activities.


Top 4 Reasons HR is Still Stuck in the Middle

Reason #1: Unclear Vision

Reason #2: Poor Change Management and Execution

Reason #3: Right People Doing the Wrong Work

Reason #4: Inefficient Delivery

So What Do We Do?


The Critical Path to a High Performance Workforce—Our Point of View

Across the Organization, We Have to Get Three Things Right

Powered by a management team clear about what’s at stake and capable of getting it done

Everyone working on what’s important, hitting targets, and playing by the rules

Opportunity Managed for Impact and Growth

Dual focus on best person and most learning in every assignment and job

The people we depend on feel appreciated and confident, ready to give their best

People Who Perform Know They’re Valued

Accountability for the Right Results

Thank You

[email protected]

Documents

The People Practices that Guarantee Mediocrity: Learning from what the “worst employers” do Andrew Bell