HR That Works Blog

GE super executive Jack Welch was a firm believer in ranking employees and annually eliminating the bottom 10%. We agree with Welch that there should be no hiding from performance. Ranking and rating workers makes sense, provided that you meet these conditions:

1. Get the data needed to identify good performance. This is easy in sales, but more difficult in administration.
2. Make the data available in a format that allows managers to understand and use it.
3. Have a dialogue with employees, setting forth expected performance benchmarks. Ask yourself, “How would an employee know if they were doing well or poorly without having to ask me or without my having to tell them?” If they can answer that question, you’ve defined your performance benchmarks clearly.
4. Prepare draft guidelines for ranking and rating and then hold a townhouse meeting where employees can express their concerns about it. Consider answering some of their fears in advance with Frequently Asked Questions (FAQs) that might answer such inquiries as:
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     • How does our performance affect the ranking?
     • How do we know if the rankings are accurate?
     • What do the rankings mean for our pay?
     • What if we disagree with a ranking?
     • What if we feel that our contributions to the company aren’t presented accurately in the ranking guidelines?
     • What will you do with good performers — and poor ones?
     • Who gets to see the list? The answer should be only those in the company with a need to know. It might not be a good idea to share the rankings and ratings from different departments; the more open your environment, the more sharing that can go on.

Acknowledge that there will be some fears on all sides. Identify and address them up front. If you’re acting with integrity, the only fear that should remain is that of non-performance.

Here’s what I’m doing with my employees to manage more effectively in this economy.

These ideas make sense for your organization, no matter its size or industry:

• Be very clear with workers about how the business makes and keeps money. Although I’ve always had open-book management, to help employees understand the numbers that much better, I had them watch the HR That Works The Accounting Game Webinar. You might want to have at least your management team do the same thing.
• Refocus your objectives. This is a good time to reestablish your core values. In our recent webinar, The Integrity Dividend, Cornell University professor Tony Simons advised members to focus on no more than three to five core values. Make these points memorable and brand them as often as possible. Then ask a simple question: How does this activity help or hinder moving toward these values?
• Increase your productivity. Eliminate any time wasters. Whether it’s a MySpace chat or shopping online, there’s simply no time for it in today’s workplace. We’re tightening up our standard operating procedures, job descriptions, benchmarks, and 90-day game plans. If you’re an HR That Works member and haven’t yet done so, please watch my Training Module on Performance Improvement.
• Work on your business. In my business, the summer months are generally slow. Every year, we use it to work “on” the business. Right now, we’re all having an early summer and I believe that smart companies will use the slowdown to strengthen their operations. As the economy recovers, your company will be better positioned for growth and prosperity.
• Live up to your commitments. Tony Simons reminded us about the risks associated with making “casual commitments.” In my workshops I talk about the trap of heroes being over committed. When we over-commit, we produce a lie and then the drama begins. So, be clear about what you’re committed to, don’t over commit — and then walk the talk.
• Create some positive dramas. Lord knows we’ve had enough of the negative ones! Don’t allow your business to wallow in some collective pity party. Create a fun committee. Have a creativity day. Let your employees’ kids do artwork that can be displayed in one of your hallways. Create some “positive energies” and you’ll get some positive results!

The recent SHRM Workforce Diversity Conference identified nine distinct themes. Here are our insights into each of them:

1. Communication. Are your communications “inclusive”? Do they reach out to the widest range of employees, or do they focus only on the narrow few? Don’t forget such informal communication venues as the executive lunchroom.
2. Measurement. Are your diversity numbers consistent with the local population and your industry norms? Do you have the same percentage of managers as rank and file employees in the various “suspect” classifications? Remember, Coke, Wal-Mart, and many other companies faced discrimination lawsuits largely due to numerical imbalances in hiring and promotion.
3. Leadership. Are you helping women and minorities break through the “glass ceiling”? What’s the composition of your leadership team? Are minorities given a career path to follow should they wish to reach the top? Do you post management trainee positions?
4. Conflict Resolution. When conflict arises, does your company ignore, bury, or deny it? Or, do you provide a safe place for parties to communicate? Is there an ombudsperson or some other “neutral” party for employees to go to who will listen and help to iron out their differences?
5. Disabilities. How proactive is your organization in hiring the disabled? Statistics indicate that disabled employees are quite loyal and have lower rates of absenteeism and turnover. Also, many governmental agencies will provide financial assistance for hiring them. If you’re facing disability challenges, are you taking advantage of such organizations as the Job Accommodation Network (http://www.jan.wvu.edu/)?
6. Cultural Competency. “Culture” can be defined as how we collectively deal with our “stuff.” To build a powerful culture, you need to hire people who are trustworthy, get them working in a shared direction, create safe places for communication, and be very clear about your commitments. An empowering culture gives employees something “larger” to focus on than the minor differences between them.
7. Team Building. One of the greatest challenges in this area is assuming that everyone has the same concept of “playing team.” The chances are that they don’t! Don’t assume anything. Gather your team commitments through consensus, put them in writing, have people put their signature to it; and then blow it up and put it on bulletin board sized posters so that everybody can walk past it every day.
8. Sexual Orientation. With more workers “coming out of the closet” and with liberalized laws in this area, how tolerant, or even accepting, is your organization? What is management doing to help people move past their fears in this area?
9. Aging Workforce. Last but not least is the “boomerang” challenge. Are you allowing your older workers to become dinosaurs or are you keeping them invigorated? Are you taking advantage of their wisdom and placing them in mentoring roles or are you allowing newer technologies to push them aside?

These issues apply to any organization or business. Each is important, even where a diverse workforce does not exist. To learn more about the October conference, go to www.shrm.org/conferences/diversity.

These are challenging times for companies. The good news for the HR executive is they are more valuable now than ever. When the money stops coming in the front door, companies become more concerned about what goes out the back door. For the first time in some time, risk management and employee productivity are real concerns. What follows are some suggestions to help HR make an impact on the bottom line:

1. Eliminate the waste – Dr. Deming stated that every company does three things: add value, engage in administrative activities (accounting, etc.), and produce waste. One way to reduce waste is to get rid of the poor performers—now. Don’t wait until you’re forced into a layoff. Help the company engage in rating and ranking of the workforce and put forth a plan to set aside ten percent of it. The idea is not to replace that ten percent of employees, but to “cascade” down responsibility to the lowest common denominator. For example, an employee making $50,000 a year is paid roughly $25 an hour. It is your job to make sure they’re not doing any $10 or $15 an hour work.
2. Force employees to contribute – There’s a reason why most employee suggestion systems don’t work. It’s because most employees are more concerned about any judgment attached to any suggestion they make then the contribution it may afford the company. The only available solution is to force people to provide suggestions. It is now part of their job requirements. Hold monthly suggestion meetings where every suggestion is rewarded with a dollar, raffle ticket, or lottery ticket. Make them fun. Then begin to implement the ideas. Once the employees realize the process is “safe,” be prepared to handle all the suggestions you will get.
3. Cut out the time distracters – In today’s environment, there’s no time for 10 minute smoke breaks or fooling around on MySpace, Amazon, or texting your best friend. Make clear your prohibitions against these activities. If necessary, create a separate area where employees can engage in these activities during lunch and break times. In our new economy there will be no for wasting time.
4. Don’t let your bread winners walk out the door – One of the biggest mistake a company makes is to ignore their star employees. “Bob makes the company $250,000 a year and causes me no headaches.” And, in the process, Bob gets ignored. Big mistake. Feed the ego of your top performers before they look to get it fed elsewhere!
5. Make sure you don’t get sued – Litigation goes up when unemployment does. Make sure you have proper documentation to support any termination or RIF decisions. If you are an HR That Works user and you are not using the compliance training tools and Employee Compliance Survey, now would be a good time to begin.

Help the company with these critical objectives and watch your value soar.