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Part of delivering HR effectively, is actually getting stuff done.  Sometimes a necessary part of getting stuff done, especially in a big organization is knowing how and when to take a punch.

People who are only looking for positive reactions, broad active and passive receipt of their work and projects are almost always underachievers.  In an organization with any size, any complexity, any dynamism, there is disagreement about change.  Making important change therefore requires conflict, compromise and persistent management.

If an HR group (or any group) is unwilling to occasionally stand there and have someone punch them in the nose, shake it off, and simply continue on with what you were saying, they will not succeed in the organizations I know. 

Now you may say, why not punch back?  Why not take them on when they attack and prove the wisdom of your position.

Taking a punch and then immediately refocusing on your message of change makes it clear that your priority is the important work of the day and not your being right.  Taking a punch and continuing with your agenda projects power.  If your message of change is in fact the correct path for the organization to take, having taken that punch and yet prevailing, makes you stronger.

One caveat – there is a world of difference between taking a punch and being pummeled.  If you attacked not by one or two people, but by the entire group, you need a different strategy.  You have already created your failure by not having done your pre-work.  You need to go back and pick off people in smaller units and come back to restate your message.  The “take a punch” theory only works in small doses.

There is a market for influence in your organization.  Influence is a scarce commodity – influence moves around an organization in trade for credibility and value creation.   The paradox is that in the right circumstance, taking a punch and moving forward helps you compete in that market than fighting every fight, or worse appeasing every constituent.

No Comments | In: How to do HR | tags: How to do HR, Influence, markets, Take a punch. | #

 Last week, His Holiness Pope Benedict XVI released a “papal encyclical”.  Essentially this is a “white paper” from the Pope.  This particular one is entitles, Caritas in Veritate(Love in Truth) deals with economics and finance.  It makes some broad statements about the ethics of economic activity and is very clear about markets.  His Holiness makes some powerful and to me, surprising points.  His intellectual power as well as his firm grasp of the reality of the “real world” come through in the document.  Frankly, I would not recommend it as a read for the uninitiated.  It is hard to get through and papal encyclicals are written as much for a “technical” theological and philosophical audience more than for the average person on the street or “in the pew”.

An excellent summary of the encyclical can be found by Robert Sirico.  Sirico is a Catholic Priest and the President and CEO of the Action Institute.  The review appeared on the opinion page of the Wall Street Journal.

Here is my take on what is being said.  They are great lessons for anyone in business; especially so for HR.  You certainly don’t have to be Catholic to want to follow them and they will make you better professionally regardless of what if any religious sensibilities you hold.

We are economic beings.  Participation in economic activities and specifically in market economics for goods, services and labor is a good an natural part of the human condition.

It is unhealthy and unnatural to seperate your economic self from your real self.  “In truth” is the point.  We are, “in truth”, meant to recognize that there are standards in life.  Truth is not relevant.  Now if you buy in to a Catholic Christian theology that might mean one thing to you.  Even if you don’t it may come down to the ‘golden rule”  – being fair; being honest are absolutes.  Bottom line economic market activity is good and natural but you don’t get a pass from holding yourself to absolute moral standards just because you are acting in a market based, economic activity.

Finally, His Holiness call on us to act with Charity.  Beyond just ethics or doing no harm, he calls us to our real selves and our inherent charitable essence.  Does this mean that we can’t compete in a market?  That we have to only cooperate in our economic activity.  No.  He teaches that the Church has not technical advise to give about economic activity only that we we need to bring our integrated selves to the market.  Be the person that you know you should be, doing what you know you should be doing.

My own take on this is compete away.  Sometimes that means getting the better of the other guy.  It means getting the best price.  It means winning.  It doesn’t mean lying.  It means giving what you said you were selling.  It means telling the whole truth and then letting your customers or sellers deciding. 

For me, if in HR I fire somebody because business is bad, I can look myself in the mirror.  If I fire somebody because the boss is tired of having an extramarital affair with them, I can’t   I am only one person – economic and spiritual.  I have only one market.

I am a Catholic.  I like being Catholic and proud to be a Catholic.  This encyclical will help me be a better one and a better business person in HR.

2 Comments | In: Ethics, Labor, Multiple Markets | tags: Encyclical, Ethics, Love In Truth, markets, Pope. | #

  I am thinking a lot about unemployment.  How will it impact our business?  How will it impact wages and benefit expense.

It is easy for me, and I have from time to time, fall into the trap of thinking exclusively about national unemployment numbers.  My organization has locations around the country.  The “national labor market” is a mistaken focus for me.  I need to reorient my head to multiple local markets. 

This graphical display on NYTimes.com is a great start to thinking the right way about the issue and making sure that I am a sharp competitor where my hourly workforce labor market matters – locally.

2 Comments | In: Compensation, How to do HR, Multiple Markets, Recruiting | tags: Labor, markets, NY Times, relocation; how to do HR. | #

I have taken my time on this one.  This is the “don’t trust HR” article.  My first reaction was that the good folks at Human Capitalist had nailed the right reaction.  Don’t whine; do.  HR doesn’t have a reputation that matters – only you do.  Bang. Done. 

I have decided to whine anyway.  Professor Beatty is wrong on this one.  Not because he believes that you shouldn’t trust HR or because he thinks that we don’t focus on the right things.  He is wrong because his point of view lacks sophistication.   His work here just isn’t very good.

I don’t take that lightly.  Professor Beatty’s CV on the Rutgers School of Management web site is very impressive and filled with achievements that I would love to have – but don’t.  Prof. Beatty appears to be substantive as a thinker, consultant and doer within the profession.  I hope to meet this guy one day – I bet I will learn something if I do.

Prof. Beatty lacks sophistication in his criticism here however, because he fails to account for the range of business models and profiles across organizations.  Organizations have different human capital needs because they economic and market profiles.  Some are labor intensive; others are not so much.  Some organizations really do rely on a few people at the top and the rest of the organization is, sad to say, low-value-added.  Other organizations however have massive people needs and quantity is inextricably linked as a driver of value with quality.  The real truth, the A+ essay, might be that some organizations are hetrogenius and actually have more than one set of characteristics.  In other words – for some organizations the focus on broad-based employee satisfaction might be just right.  For others, a focus on fewer high achievers might be right. 

The better question is how well do you understand the economic model and risk of the organization relative to people.  HumanMarkets did a post last March on this point relative to benchmarking, “Benchmarking isn’t wrong, it’s sometimes just dumb”  The point is that saying a myopic focus on top performers is a cliched and narrow as “employee satisfaction is always good.”

Here’s an example – if your business is about availability and volume – 24/7/365 maybe having a large number of competent people is exactly what you want.  It’s the toll collector model.  They can’t make change much better than the other guy.  The  difference in accuracy rates from the best to the median, is, I am guessing fairly narrow.  (Customer spots it right away too.)  Friendly and service oriented – ehh, not so important – certainly not compared to smooth pavement.  The point is that the road, the physical asset is where the value is.  Even maintenance workers only have a small degree of variation in what they do to make the road valuable.  A few engineers and planners do the value planning around the physical asset but even then, it is the fact that there is an army spread out of a couple hundred miles of concrete that matters more.

Better work on this point for Professor Beatty might be to start with an excellent piece by McKinsey.  Their argument is that best metric to understand the quality of most businesses is “profit per employee“.  They make a great case for this metric and for the fact that some businesses are modeled on the competitive proposition that higher profits are their KPI while for others (they cite Walmart) having a boat load of employees at an acceptable albeit low level of profitability works.  The article is premised on research about the incredible increase in the portion of market capitalization that is made up of intangibles rather than hard capital assets.  Intangibles are largely what people bring to the business table.

I would have been OK with the Professor and CFO.com if they had said something like, HR can’t be trusted because they should be the principle drivers of identifying, measuring and enhancing return on talent as measured through profits per employee and they aren’t.  HR doesn’t think in terms of a return measure or on about financial and outcomes measures relative to the contribution of the workforce.  HR is too concerned about subjective indications of a productive workforce and not enough about quantifying objective measures of productivity and therefore can’t be trusted. 

The fact is that the article and the work misses the opportunity to really focus HR issues on driving value for the organization.  They miss the need for more quantification – especially when trying to make a bridge to finance.  The article misses that HR manages risk and is a market player.  Instead, the article basically says that you should not trust HR because they focus on the wrong soft, subjective measure.  Professor – that is not the solution to the problem, that is just substituting one for the other.

There is a market for professionals who can figure out the methods, resources and management of building intangible value as measured by profit by employee.  It’s the market for great HR people.

2 Comments | In: How to do HR | tags: Finance, HR, markets, risk management. | #

There is a market for attention and passion among people. The capacity of a person to think about stuff is limited – that capacity is a scarce resource. The person gives that scarce resource in exchange for information that he or she feels is valuable to them.  It is valuable because it is informative, entertaining, stimulating, etc… This basic dynamic – scarity traded for scarcity is the definition of a market.

Take everything you just read, but apply it to a person’s passion or engagement and it works, but probably even more sharply because most of us have less capacity for passion than we do for attention.

These are critical lesssons to learn when communicating to employees.  To be good at it, you must realize that you are competing with other messages in the work place.  Messages from other managers, from co-workers, from customers, from family and friends during the work day, from third-parties (unions, government, etc…) abound. In addition, you are competing with those that want to get to your employee for their own self-interested reasons – they are selling soap to your employee, they are selling loyalty to a sports team, they are selling movies or music or services, or blogs.

If you want to effectively communicate with your employees, you need to recognize that you are engaged in competitive, market activity.

One way to compete better is to have a feel for the mood around the market. What is the context that the market is operating in. Just like the mood on Wall Street can impact the valuation of stocks, the mood around the market for employee engagement impacts it.

Here is why this thought jumped out to me today.

I am affiliated with a non-profit that is holding an auction – pretty typical stuff. One of the items however is a shopping spree at Neiman Marcus.  To a person, other people affiliated with the organization has commented on how that just doesn’t “feel right” based on the economy, unemployment, and general current events. People are finding it “odd” that we would be auctioning off a night at one o f the most elite department stores in the world at this time.

In fact, the other items for auction, the normal buzz of people anticipating the auction, and the importance of the auction to the organization, have all been impacted negatively because of the attention on Neiman Marcus.  The organization is losing in the market for attention and passion because their competitor, “idle gossip” is winning.

2 Comments | In: HR Strategy, Multiple Markets | tags: HR, markets. | #

Our friends and mentors over at KnowHR.com recently did a spot on, call to action regarding EFCA. I have nothing to add to their analysis and recommend it whole-heartedly. Look over the next couple of days for the HumanMarkets analysis of EFCA which will approach it from a very different angle.

Today’s thought however is about something that I think will be bigger than EFCA – Lilly Leadbetter Fair Pay Restoration Act. 

For an nice overview see theMiddleClass.org 

Even for things that are right to do, having no rules on how to enforce them can create chaos. No matter how you feel about this, the market for HR litigation just got a stimulus package.  Expect challenges to pay equity to be a major part of your job for the next couple of years.  It would be a great time to get up to speed on the type of analysis that plaintiff’s counsel might be doing.  Check out a nice overview from Mercer through the WAW web site.

1 Comment | In: Compensation, Employee Relations, How to do HR | tags: Employee Relations, HR, markets, risk management. | #

I had a conversation the other day with a pretty sophisticated CFO of a big non-profit (about half a billion dollars in assets under management). The conversation was about what to say to people about investing in the 401(k). In so many words, is the market so bad that people should stop contributing to their account.

My advice was that while, it may not be the time to twist arms to get new participants or higher deferral rates, it was not the time to tell people to put their money in their matteress either.  Here’s a quick list of some things to consider when you are asked by executives or line employees about whether or not the 401(k) is still a good idea:

1. This is an ethical question, then a human capital one, then a legal one, then a “I want to be able to go into the cafeteria without being pelted with food one.”
2. The ethical issues for you to consider is that these are peoples’ lives and security you are talking about. You need to be fully competent to discuss this. If you need help – get it. It is immoral for you to take opinions that are made up on the fly. If you don’t know what you are taling about – be quiet.
3. There are legal issues. You need to protect yourself and your employer. If the plan does not give investment advise, and it probably doesn’t and shouldn’t, then don’t start now. It is not a great time to initiate that policy. 
4. Consider the impact of your employer match. First if you still have one that is a happy thing. Second do the math. If you even have a modest match of say 50% of the first 6% of compensation deferred, you are doing well. The employee defers $1000.  The match is half of that or $500. If the $1,500 in total drops by 30%, or $450, the employee is still ahead at $1,050 on principle alone. If there is a better match the math is really compelling.
5. If your employee is paying some income taxes, the math improves.
6. If you have not done a professional review of your investment alternatives, that is a bad thing. Get on that now.
7. President Barack Obama said falling share prices may mean bargains for investors with a “long-term perspective.” (Bloomberg.com 3 March 2009).  Before you tell people to not invest, you should be pretty sure that you know that they will in fact not make money – money they will need to retire.
8. Does your play offer some type of professional investment advice – maybe your administrator, maybe a third party like Ayco? If you are in a position of offering the professional services of a Fidelity or Vanguard, a bank or an insurance company that is running the plan – market the hell out of it. They will have the best advice for you and your participants – better than mine.

What did I miss? What is on your list? What are you telling people? The retirement investment market is among the murkiest of all. We should all be thinking about this.

2 Comments | In: benefits | tags: benefits, HR, markets, risk management. | #

I was lucky enough to attend a leadership conference – I was one of about 800 people in the audience. One of our speakers was Eric Schmidt – the CEO of Google.

He was asked what is the most important reason that Google is able to be on top of the Fortune list of ‘Best Places to Work”. His answer got a big laugh, then a big pause and finally an audible “hmmm… 

  ”Big margins.”                                                    

First place to start the fight to add HR programs that will help your company be a best place to work, might be to fight for the programs that make your place work the best.

2 Comments | In: Compensation, HR Strategy, Uncategorized | tags: google, markets. | #

I was a little too glib. I talked about HR people as “mechanical manipultators”. Dr. Smoot was nice enough to talk about the post on his blog (there is a link in my blog roll, or here) Dr. Smoot HR

Dr. Smoot’s comments:

“Good HR acts as a market player, not a mechanical manipulator of people.”

This was written by Bill Strahan in a new blog called HumanMarkets.
This really fits with what I have been attempting to discuss in my blog. Too much of the time over the years, I have seen HR trying to manipulate people instead of trying to really improve the business.

A comment on that Dr. Smoot posting appropriately called me on the phrase “mechanical manipulator” Andres said:

I’m curious, what kinds of situations have you experienced where HR tried to manipulate people?

I’ve seen some poor decisions, but HR as “a mechanical manipulator of people”, I’ve not seen.

So, please let me clarify what I mean. I am not using manipulator as a negative comment in the sense of a duplicitous, or dishonest means to get people to change. I am not saying manipulative as in twisting emotions or facts. I do not mean manipulator to be threatening.

Rather I mean in almost a physical way – manipulator as “changer”. In this case almost a “Newtonian” sense - if I do X; they will do Y.

Think as in, if I give them a $1 raise, they will voluntarily resign less. Cause and effect. Mechanical, predictable action.

People are not like that. People have market reactions, not mechanical reactions. I when I say be a “market player” it is understanding that the relationship to people, whether individually or as a group, is better understood a market-based relationship. I give you something, you give me something in return, or not. Most importantly, the market-based relationship exists in time.

Think about soccer versus chess. Both involve competition, strategy, and tactics. Soccer is constant, fluid, organic and interactive. No one action on the part of a team dictates the outcome, it is only part of the interplay that determines the match. Chess is periodic. Time stops between discrete moves.

Back to being a market player versus manipulator. Good HR recognizes that people are smart. They make decisions based on a vast array of diverse inputs as to what is in their best interest. We as HR professionals and managers can learn to be more astute market players, but we will never be able to be the mechanical manipulator. We get astute at being market players by doing what other people who succeed in other market places do – listen, learn, react, anticipate, caluculate and act on risks. Most importantly – good market players respect that their competitors in the market and their trading partners have the ability to act with freedom to optimize their total value – as they uniquely define it.

The most important thing that market players do however, is that they recognize they are competiting. As HR I compete for the attention of my managers, employees, labor and captial markets. I compete for their talent, for resources. I compete for the respect of my employees and for a measure of credibility in their eyes. I compete for for their trust. In fact the list goes on and on. Mechanical manipulators think that by virtue of their position, the dictate results. They are the exclusive body interacting with another. Just ain’t so. It’s not about me. It’s about the market for volition.

Thanks Andres – you helped me learn my own advice. “Don’t assume that my actions will be interpreted by others the way I mechanically intended.” It was nice to be in the market place of ideas with you.

No Comments | In: Housekeeping/Caveats, How to do HR | tags: How to do HR, markets. | #

Housing values are down across the vast majority of the country. How is that impacting the ability of companies to relocate talent? Survey results suggest that the volume of relocation might be down or flat but that expense is up. 

( Two good surveys of trends are: www.gmacglobalrelocation.com and www.atlasworldgroup.com )

One issue of concern for everyone involved is what to do for an employee who is asked to move for a new job and has to sell their home in a down market. If someone bought a house for $300,000 and can only sell it for say $225,000 before they have to pick up and move, should the new job/employer pay the difference?

I have been talking to companies across the country about their policies and have reached the conclusion that there are two basic positions – those that do and those that don’t. (You’re welcome.)

Seems like the optimal position is to have two or three tiers of benefit. With each one pick a limit of the equity that you would make an employee whole to, in the event of a loss and then do it. Reasonable limits might be $25K, $50K and $100K.

Tougher question is how to define a loss. Many employees are going to want to think about the “real value” of their house as “what I know my neighbor got two years ago – and he didn’t even have an indoor fish pond!!!!”; or, what they paid, plus the cost of the capital investment to have the fresco of themself rendered as a Greek diety in the dining room. Right answer is likely, the average of three appraisals, one of which has been selected by the employee. Measure that value against their tax basis.

Key lesson for HR folk: many markets matter. This is the collision of the housing market and the labor market. Your needs (demands) in the labor market may not be met when they have to be optimized against a play in the housing market.

Please comment on what you think makes sense and if you have any words of wisdom for a weary HR marketeer.

5 Comments | In: Compensation, How to do HR | tags: markets, relocation; how to do HR. | #