Saturday, February 28, 2009

Ways to Know When It’s Time to Get Out of Human Resources

Here are some ways for you to know when it’s time to get out of HR:
  1. You actually look forward to firing someone
  2. You have a 20-year collection of SHRM tsotschkes displayed in your office
  3. You don’t think that anyone can get a 5 in a 5-point rating scale
  4. Your phone rings less and less each day, and not from managers either
  5. You’ve never been seen at the table, and there is one empty seat
  6. You think that it’s just a matter of the right forms, no exceptions
  7. You can no longer say no to management, even when it’s the right thing to do
  8. You spend more time talking about employee engagement than talking to employees

What are your thoughts on ways to determine when it is right to get out of human resources?

Thursday, February 26, 2009

10 Steps to a Successful CRM Implementation

Avoid a rocky CRM rollout with this checklist by David Claus which is a reprint from BtoB. I am sure you are asking yourself why is an HR person talking about CRM. Well having been involved in the implementation of as massive CRM at my former company if you are not involved then lots can go wrong. Certainly good implementation managers and knowledgeable people make it all the easier.

CRM has proven its ability to enhance business performance time and time again. However, the path to effective implementation is not always easy — complexities often arise as a result of trying to align an entire company behind the concept. You can find the success that comes from leveraging customer knowledge to the fullest measure by following these 10 steps: 
  1. Calculate the value. Exactly how will CRM benefit your business? Strive to answer this question in terms of measurable ROI (return on investment). Don’t focus too much on how the software will help customers — what will really improve your bottom line is how CRM helps your employees use customer data more effectively. 
  2. Work closely with key departments. Good planning is critical to your success. Use members of the call center, sales force and marketing departments as parts of your CRM planning team, because these departments can be affected to the greatest extent by a new solution. Let them tell you the business processes that need improvement. Then hammer out agreeable objectives mapped to new business processes. It’s often a good strategy to place some easy ones on top of the list so you can celebrate some victories early on. 
  3. Budget realistically. Be a bit pessimistic when it comes to the budget to avoid the painful process of increasing cost estimates. CRM customization and integration with existing software present two big expenses. It can cost two to three times the price of software for implementation and ongoing maintenance. Make sure you factor in all of these expenses from the early stages of your CRM deployment. 
  4. Organize customer data. The underlying customer data is the backbone of a CRM solution. Most companies store duplicate and outdated data in multiple locations. Putting this data in a unified database, scrubbing it and making it available to the entire organization Copyright © 2007, Tippit, Inc., All Rights Reserved before implementation will make for a smooth rollout. If necessary, get help from vendors who offer data-cleansing software and deeper customer information. 
  5. Lead the project from the top down. Experts agree that the No. 1 reason implementations don’t work is that senior executives fail to lead. After all, if managers don’t work hard to ensure CRM success, why should employees? It’s not just about signing paperwork and attending meetings. Executives must adopt CRM as a corporate-level initiative, dedicate significant time and energy, motivate stakeholders and keep everyone on track. 
  6. Find a reliable vendor and select functionality conservatively. Shop for a financially secure vendor with proven ability to expand the solution as your company grows. Beware of providers that rely heavily on partners for key functionality. When considering industry-specific software, make sure to find out if it really delivers on its promise. Talk to other corporate users in your field, try out the software and choose enough functionality to meet your business needs without sending your IT department on endless quests for the Holy Grail. 
  7. Implement gradually. Change is never easy, especially for employees who may fear the accountability that comes with posting data that can expose their true performance. Start your CRM initiative in a single department that stands to benefit the most in the short term; then follow with a zealous, companywide CRM proponent. When others witness the initial success of that department, bringing them on board will be much easier. 
  8. Market CRM to employees and deliver ongoing training. It may sound obvious, but it’s important to remember that employees have to use the solution in order for it to work. Clearly communicate how it will help them succeed, and start CRM training early on. This way, you’ll chip away faster at the 18 to 24 months it typically takes employees to adopt new business processes. 
  9. Actively manage the implementation. Technical difficulties, management turnover, employee resistance and adjustments in company direction will happen. Managers need to stay on their toes and quickly address changes to maintain momentum. Experts agree that the No. 1 reason implementations don’t work is that senior executives fail to lead. 
  10. Develop a culture of continuous improvement. CRM solutions should be adjusted to deliver a sharper competitive edge as a company and its business evolve. Be sure to keep employees in the communication loop, and they will help supply the information needed to continuously improve the way the system leverages customer information. Not all companies will achieve CRM success because many fail to take into account the items listed above. Then again, for the ones who do succeed, the rewards are great.
Stick to these steps, and you will rig the game in your favor. Having worked with some of the finest and you know who you are this goes a lot easier.


Monday, February 23, 2009

Cost Effective Strategies for Retaining Your Top Employees

Even given today’s economic uncertainty, creating a reward system that attracts and retains talented employees is important for the success of any organization. While you may not be able to afford to offer your employees regular pay increases, there are some other simple and cost effective ways to reward your workers.

To help keep your best workers around, consider implementing some of the initiatives found below:
  1. Find out what your employees want. Pay isn’t always most important. For many employees what is most important at work is the satisfaction that comes from a job well done, being recognized and appreciated for one’s efforts, and having the flexibility to balance work with personal obligations. Get a feel for what your employees want before implementing a new reward system. All that may be necessary are some simple changes, such as putting more effort into recognizing your employees or providing your workers with the autonomy that they desire.
  2. Extra time off. Providing extra time off is a simple way to offer a desired benefit without cutting into your bottom line. The extra time off is a win-win; it provides employees with an opportunity to catch up on personal business or just get some much needed R&R. And when your employees return, they’ll come back with a renewed commitment to their work and a feeling of rejuvenation.
  3. Bonuses for meeting targets. Offering employees a bonus for reaching certain sales targets is a simple motivator to ensure an employee’s hard work is rewarded. With the revenue made from reaching company sales goals, you can afford to share the reward with the employees who made it happen – and who will likely make it happen again.
  4. Flexible schedules. Most employees desire a work schedule that easily enables them to balance work with their personal life. To meet these demands, consider offering options such as telecommuting, flextime, job sharing, and shift swapping when appropriate. Employers that fail to offer their employees the flexibility to leave work early to care for a sick child or to attend a parent-teacher conference are not likely to keep quality employees around for very long.
  5. Increased responsibilities. Most employees are interested in performing work that is challenging. Whereas, work that is repetitive or requires little thought often results in disengagement. Increase job responsibilities and you will likely see an increase in dedication and commitment.
  6. Make advancement opportunities known. Employees that work toward a personal goal, such as career growth are motivated to work hard. So, let your employees know they’re doing well, inform them of advancement opportunities, and work with them to help them reach their career goals.
  7. Just say “thank you”. It’s the thought that counts. So if you can’t afford a pay increase this year, think of other creative ways to show your employees that they’re appreciated. Simple forms of recognition, such as praise, thank you notes, and “employee of the month” awardscan go a long way in keeping your employees happy.
  8. Tie rewards to performance. When rewards are tied to job performance, employees are more likely to put forth the effort and produce quality results. On the contrary, when employees come to expect pay increases or other rewards “just because”, their performance is likely to remain marginal. It’s important to reward employee performance soon after a job well done so that the employee makes the connection between their hard work and the reward received.
Given the circumstances of the current economy, pay increases may not be on the top of your company’s to-do list. But to be effective, employee rewards don’t have to dip into your company’s budget. Alternatives to pay increases, such as a formal employee recognition program, an extra day off, or even a simple “thank you” go a long way in showing employees that they’re appreciated – and that may be all that’s needed to keep your top performers around.

Are you doing any of these things at your company today?

Sunday, February 22, 2009

The Changing Policy Landscapet

The new administration has many new initiatives in the pipeline that will effect how we in HR do business going forward. Each of you need to be up to speed on these new policies that affect the workplace:
  • ADAAA - the Americans With Disabilities Act Amendments Act that when into effect on 1/1/09
  • FMLA - Family & Medical Leave Act as amended went into effect on 1/1/09 with sweeping changes on how we need to administer leave for employees
  • Changes in cost of COBRA to laid off workers means more cost to companies for those individuals who were laid off from September 2008 going forward
  • Ledbetter Fair Pay Act on pay for females signed on January 29, 2009
  • Employee Free Choice Act will critically define how we as HR practitioners deal with union organizing.
Keep abreast of these changes so you do not get caught in a legal trap of not administering these policy changes correctly. I attended an HR meeting earlier this month on FMLA and the changes are dramatic. Make sure you are up to date on the new rules and forms that need to be completed. More paperwork and administration.

Thursday, February 19, 2009

Goals Gone Wild': How Goal Setting Can Lead to Disaster

In early 1969, just as the U.S. was preparing to reach John F. Kennedy's lofty goal of sending Americans to the moon, the famed Ford executive Lee Iacocca gave a similarly ambitious mandate to his team of engineers.

Faced for the first time with competition from low-cost, high-mileage foreign imports, Iacocca set a specific target: Ford would design a new automobile that weighed less than 2,000 pounds and sold for under $2,000, and it would be on the showroom floor in time for the 1971 model year. What resulted was a mad dash to create the Ford Pinto.

The rush to roll out the Pinto had lethal consequences. Common-sense safety checks took a backseat to meeting Iacocca's deadline. In particular, engineers failed to examine the decision to place the Pinto's fuel tank only 10 inches behind the rear axle. When the Pinto was rear-ended, it often went up in flames. Fiery rear-end crashes caused 53 deaths, numerous injuries and a string of costly lawsuits.

It was a valuable lesson about the hazards of setting goals. In pursuit of such mandates, employees will ignore sound business practices, risk the company's reputation and violate ethical standards. This lesson, however, has not been absorbed by corporate America. To the contrary, ambitious goal setting has become endemic in American business practice and scholarship over the last half-century. Goals have pervaded industries as diverse as automotive repair, banking and information systems, even spilling over to the debate on how to improve America's public schools.

Yet new research by Wharton operations and information management professor Maurice Schweitzer and three colleagues documents how corporate goal setting can cause more harm than good. The paper, titled "Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting," was co-authored by Lisa D. Ordóñez from the Eller College of Management, University of Arizona; Adam D. Galinsky of the Kellogg School of Management at Northwestern University, and Max H. Bazerman from the Harvard Business School. Their work appears in the February issue of the Academy of Management Perspectives.

"We take a strong stand in this article, because we are pushing against the pervasive use of goal setting in practice and a very large body of literature that has endorsed goal setting. We argue that managers and scholars have grown complacent in their endorsement of goal setting ... often [neglecting] the harmful effects," Schweitzer says. "We argue that goal setting is wildly over-prescribed."

The paper is full of cases in which goal setting had negative and sometimes disastrous consequences for a company. Indeed, executives and business experts in those cases frequently failed to realize the prominent role that overly ambitious targets played in causing the eventual problem. One famous case that Schweitzer and his co-authors relate is the storied 2002 collapse of the energy-trading giant Enron. They cite literature noting that the once high-flying Houston-based firm used goals and an incentive system for its salesmen that was based solely on the volume of revenue that they generated -- and not whether the actual trades were sound or profitable -- which became a key factor in Enron's implosion.

The authors found that goal setting has become practically institutionalized in American corporations, backed up by a persuasive body of literature over four decades arguing that employees perform better when challenged to meet specific targets as opposed to asking them to simply "do their best." The leaders of this movement are two renowned organizational psychology experts, Edwin Locke of the University of Maryland and Gary Latham of the University of Toronto, who wrote: "So long as a person is committed to the goal, has the requisite ability to attain it, and does not have conflicting goals, there is a positive, linear relationship between goal difficulty and task performance."

Schweitzer suggests that goal setting has become so ingrained that the practice is greatly overused. "We argue that there are some contexts where goal setting is appropriate, such as when tasks are routine, easy to monitor and very easy to measure. In practice, many domains are ill suited for goal setting."

'Mistakes Did Occur'

One well-known example took place at Sears, which in the early 1990s set a specific sales target for its auto repair staff of $147 per hour. In order to meet management's goal, however, mechanics began to perform unnecessary repairs or overcharge customers, which triggered a major customer-relations crisis for the giant retailer. Edward Brennan, chairman of Sears at the time, later admitted that the "goal setting process for service advisers created an environment where mistakes did occur."

Why does this happen? Schweitzer and his co-authors identify a series of problems that they say are linked to the overuse of goal setting, especially when the targets are either too specific or too challenging. For example:

  • Goals that are too specific often lead employees to develop such a narrow focus that they fail to recognize obvious problems unrelated to the target. According to the authors, highly specific goals may cause workers to sacrifice safety for speed -- as in the case of the Ford Pinto -- or pursue misguided end results, as was the case at Enron. A typical problem is the sacrifice of quality in the interest of quantity, they note, citing the example of universities that require tenured professors to publish a certain number of research papers in particular journals, but without careful scrutiny of the quality of the work.
  • Likewise, too many goals have what the authors consider an inappropriate time horizon. They refer to the well-known example of managers who are pressured to meet quarterly earnings goals, causing them to ignore long-term strategic problems. The reverse side of this practice is that employees also have a tendency to ease up when goal horizons are set too low. The paper cites a 1997 study of New York City cabdrivers who found that on rainy days, taxis tended to disappear from the congested streets because drivers met their fare target early in the day and went home, rather than working longer hours to make additional income.
  • Workers with highly specific and ambitious targets will engage in risky practices in order to meet them. The authors note the case of one of the nation's largest banks at the time, Continental Illinois, where in 1976 the CEO issued a mandate to dramatically expand the loan portfolios to match those of some rival banks. The bank aggressively pursued new loan customers and even bought packages of high-risk mortgages from smaller banks, which eventually caused Continental Illinois to fail.
  • Unethical behavior is one of the more obvious pitfalls of overly ambitious goal setting, with potentially some of the most catastrophic consequences. This can happen in a number of ways -- such as the safety shortcuts at Ford or the bilking of auto-repair customers at Sears. The authors also note incidents where employees offered bogus results to claim that a target was reached, such as when employees falsified sales reports to meet their quota at the vision-products company Bausch & Lomb.

The irony, says Schweitzer, is that a lot of this specific goal setting is unnecessary. Research has shown that employees have a stronger intrinsic motivation to do a good job than their managers tend to give them credit for. He points to research by Stanford University organizational behavior expert Chip Heath, who "found that people tend to think that other people need extrinsic rewards more often than they really do.... To us, our work is interesting and meaningful, but we tend to think that other people come to work because of money."

Beware the 'Hedonic Treadmill'

In fact, the authors argue that this failure to recognize the value of simply doing a good job can cause managers to instead set goals and rewards that harm intrinsic motivation and place employees on a "hedonic treadmill." The notion of a hedonic treadmill, says Schweitzer, "is that people never 'get' to where they are going. For example, people constantly pursue happiness, but don't get there. They keep thinking that the next promotion, the new car, the salary raise, etc. will make them happy. They get the promotion, and that makes them happy for a time. Then they adapt and mistakenly think that it's the next promotion that will make them happy.

"People may be motivated by goals. But these goals can crowd out intrinsic motivation, so they will need more goals to motivate them in the future."

Schweitzer and his co-authors point to other negative consequences from overly specific numeric goals. For example, workers tend to lose their focus on learning new skills in favor of using tried-and-true methods to meet their quotas. In addition, companies that set targets for individual workers can create a culture of competition in which workers tend to shun teamwork in problem solving.

Despite all this, the use of goal setting has spread to other areas outside the corporate world. Arguably the best-known example is the federal education program known as No Child Left Behind that was enacted in 2001; it links government aid to highly specific performance targets for students based upon standardized test scores. Critics of No Child Left Behind say the program forces teachers to focus narrowly on what will be asked on those tests, ignoring other critical skills. There have also been several scandals involving falsified test scores and other forms of cheating. Indeed, the allegations in the classroom are quite similar to the problems that Schweitzer and his colleagues found in the business world.

"The 'No Child Left Behind' idea is compelling -- after all, who wants to leave a child behind?" Schweitzer says. "But the reality of this program is that it is fundamentally flawed. It is very difficult to monitor education, and this program narrows the focus of teachers in a domain that requires cooperation, innovation, broad thinking, high ethical standards and, we would hope, intrinsic motivation."

Schweitzer believes one reason that goals are overused is that we focus too much attention on the individual. When things go wrong -- for example, following the collapse of an Enron -- we tend to blame specific individuals rather than look at the broader culture established by top managers. The best-known example of this problem comes from the U.S. military and the well-documented detainee abuse at the Abu Ghraib prison in Iraq, he says. These cases of abuse were blamed on low-ranking soldiers -- "a few bad apples" -- and not on the broader directives from the Pentagon that created the climate of corruption. "What happens is that people neglect to appreciate the importance of the environment."

The authors suggest that goal setting should be undertaken modestly and carefully, with a focus more on personal rather than financial gain. They also make the case that much more research -- and more skepticism -- is needed about the practice of goal setting. "Rather than dispensing goal setting as a benign, over-the-counter treatment for students of management, experts need to conceptualize goal setting as a prescription-strength medication that requires careful dosing, consideration of harmful side effects, and close supervision," the authors write. "Given the sway of goal setting on intellectual pursuits in management, we call for a more self-critical and less self-congratulatory approach to the study of goal setting."

So what are your thoughts?

Sunday, February 15, 2009

Are HR People Terrified of Empoyee Friendly Legislation?

I read this blog post and I have to tell you it is exactly how I feel so I cut and pasted it directly verbatim. Read it carefully.

I talk about a lot of things on this blog but I rarely touch on legislative issues that will be impacting our trade. I keep myself well informed but most people aren’t coming here to get their employment law update. If you are, I am sorry because you’ve probably been in a state of perpetual dissatisfaction.

One thing I have noticed is that many of the practitioners in Human Resources are thoroughly against most employee friendly legislation. The dominant professional organization in the space (SHRM) has taken stands that nearly mirror the US Chamber of Commerce (a huge pro-business organization). Most of the HR bloggers I’ve talked to and interacted with are willing to speak out for pro-business interests.

Taking The Fight To The EFCA

Kris Dunn (of HR Capitalist) and much of his crew over at Fistful of Talent have taken on the torch most recently on the subject of the Employee Free Choice Act (EFCA). He has an older but still great article about the act on Workforce. Some have been informative, some have been funny and others could probably be classified as tedious. There are only so many articles I can read about the EFCA before my eyes start rolling back in my head and I die in boredom.

Let’s not mistake my feelings on the possible legislation versus the commentary: the EFCA, as written, is a big stinky pile of garbage. It is like the unions wrote out their wish list (and then some) and tried to cash it in like they were Bill Gates at an ATM. It could be severely damaging if passed. I am doing what I should be doing as a citizen: I am writing my representative and senators (no matter how little they actually care about my opposing viewpoint), I am voting appropriately and I am sharing my feelings on the law with all of you.

Missing The Greater Issue

Let’s face it though, I don’t have much influence on national politics (yet!). I have always believed that effective people focus on what they can impact and change. I can speak to people I know in HR about this issue that I know but still, it is going to lack effectiveness.

Let’s imagine that the EFCA passing as written is inevitable. It may very well be given large Democratic majorities at the federal level. So if the law passes, how would your company react? Would employee relations become an even bigger priority? Would you be looking at compensation and benefits more closely?

If we spent some of the intense energy used on trying to prevent EFCA from passing and instead worked on ways within our own companies to make it inconsequential whether or not the act passes, how much further along could we be? Instead of speaking out time and time again about and hammering the same points about the garbage law, articles could focus on how to make your business EFCA proof. And we could enact policies in our own organizations about pay transparency and a smart, progressive employee relations policy that takes all of the wind out of union bosses trying to recruit our employees to sign up.

Pending Pro-Employee Legislation = Pro-Activity Clue

So HR often gets a bad rap as a reactive bunch. It doesn’t have to be that way. One of the first and really easy things you can do as an individual or department is look at the pending employee legislation. If you look past the legislation, you’ll see a list of complaints that some of your employees may have had: my FMLA leave was administered incorrectly, my pay is different than my co-workers and I don’t know why, and why does this person get a new chair and desk while I’ve complained about my back and neck hurting?

You can use pending legislation as a check list. How effective is our FMLA administration? How do we examine whether someone is being paid correctly? And your organization can address these things now, make them right and prevent serious problems down the line.

And that’s not to say that good companies don’t get nailed for trying to make good faith efforts with bad laws. Admittedly though, many of the problems revolve around companies that can’t keep their own house clean and that railing against new legislation is a convenient crutch for fixing bad internal practices. I think with the new administration, a priority should be given to reexamining internal policies and pushing forward in the name of prevention and pro-action.

directly from: http://www.yourhrguy.com/2009/02/02/are-hr-people-terrified-of-empoyee-friendly-legislation/

Thursday, February 12, 2009

How Good Are Your Connections/Networking?

You say, " what is he blogging about this for, right". I ask this question because of the changing economic tide. Human resources professionals are arguably the worst people when it comes to networking consistently. I look at my own track record and I can tell you it is abysmal. So, it makes good sense for you to reestablish your connections, network feverishly, and keep in constant contact with them. For those who you have left by the wayside, reestablish those connections. I would openly suggest Linkedin as the best source but there is Twitter, Zoominfo, Spoke, and may more.

So get with it and CONNECT, you never know what the next day will bring in today's employment market.

What Differentiates the Leading-Edge HR Executives?

Last week at the Strategic e-HR Conference, Tod Loofbourrow, Chairman of Authoria, shared his view about those HR executives that “get it”.  I think they were spot on.  I am paraphrasing them, but the three critical skills he sees as differentiating progressive CHROs from the rest of the class are:

  • Business acumen.  They have a true understanding of their own company, its business, the products and the industry it operates.  Too many HR executives don’t even know the products their company sells and at what price or margin.
  • Analytical mindset.  They think in numbers not emotions.  They leverage data to make decisions and measure their business proactively.
  • Accountability.  They are will to make hard, critical decisions independently and will to put their proverbial “ass on the line”.  Accountability also means they have a favorable reputation within the organization and can garner support throughout.
  • They know what they don’t know.  This really means they know the right questions to ask and surround themselves with smart people, experts and knowledge. (yes, I said 3…the fourth is mine).
Does your HR executive have these skills?

Friday, February 6, 2009

Has Google’s Fabled Recruiting Model Lost Its Luster?


imageA couple of weeks ago, with unique transparency, Google’s VP of People Operations Laszlo Bock  announced they were laying off 100 recruiters (approximately 25% of their recruiter headcount).  When I first read the statement, my first thought was, “…do they really have over 400 internal recruiters?” 

Prior to the announcement Google’s recruiters accounted for approximately 2-4% of the employee population (not including outside contractors and agencies).  Sure this announcement makes sense since most companies hiring is destined to be substantially lower in 2009.  But does this announcement have more significance?

Jason Corsello has written about Google’s recruiting process in the past.  Interestingly, now comes news that all is not utopia at the Googleplex.  According to a private Google Group asking ex-employees why they left…

“The thread shows a brutal honesty about what it’s like to work at Google, at least from the point of view of employees who were unhappy enough to resign. Top amongst the complaints is low pay relative to what they could earn elsewhere, and disappearing fringe benefits seemed to elevate the concern. Other popular gripes - too much bureaucracy, poor management, poor mentoring, and a hiring process that took months.” 

Now that Google is no longer the high-flying company where stock options would quickly make you millions of dollars, it is well apparent that their recruiting model needs to evolve.  Google still has one of the strong employer brands but, from my viewpoint, the recruiting model needs to evolve in scale, efficiency and effectiveness with tight alignment to their onboarding and talent management strategy.

Has Google’s exhaustive recruiting process now become a liability?

Written by Jason Corsello


Thursday, February 5, 2009

Employee Free Choice Act

This pending legislation will put a strain on HR professionals who have been free and clear of union activity. The pending legislation that President Obama has, during the campaign trail, endorsed will certainly focus the HR involvement in the business if it is not there already.

HR will have to operate differently and CEOs will be forced to get the much needed help from human resources. So the question is, are the HR departments prepared for this and have they been trained or retrained to deal with this?

What is your take on this and for as full picture, please read the lead article in Workforce Management's January issue. Let me know your thoughts at wgstevens2@gmail.com .

Half-a-Million Job Cuts: Is There a Strategy Behind the Layoffs?

One month into 2009, job cuts by corporations have become a major news story around the world. In one week alone, almost 100,000 jobs were eliminated. These included 20,000 layoffs at NEC, 19,500 at Pfizer, 15,000 at Metro, 10,000 at Boeing and 8,000 at Sprint Nextel. Thousands more from Starbucks, Ericsson, Kodak, Philips, Microsoft, Caterpillar, Home Depot and others added to the total. According to an estimate by outplacement firm Challenger, Gray & Christmas, layoffs in January totaled 241,749, up 45% from December and the highest monthly number in seven years. In response to this situation, U.S. President Barack Obama pushed even harder for passage of an $819 billion economic stimulus plan. "The most important number for this recovery plan is how many jobs it produces," said Rahm Emanuel, Obama's chief of staff, "not how many votes it gets."

Unfortunately, more cuts are probably on the way, according to economists watching the situation. "From what we are seeing, the fourth quarter was breathtakingly weak for companies,' says Christopher Portman, a senior economist at Oxford Economics, which builds macroeconomic models for banks and governments around the world. "In terms of the global economy, 2009 will be the worst year since World War II and even since the 1930s. I don't know that the job losses we have seen so far show the full picture. Unemployment does lag [behind other indicators of economic performance], and even after we hit the bottom of this downturn, the job loss numbers will continue to rise."
Beyond the individual trauma of lost jobs and wages amid a global economic crisis, the cuts are notable for their depth and breadth. Since September 2008, major companies world-wide have cut some half a million jobs -- and these numbers exclude the financial services firms that have been at the heart of the crisis. Almost every sector has been affected -- autos, airlines, consumer products, retail, chemicals, technology and pharmaceuticals, among others. For some companies, the layoffs are more of a cyclical experience, but others are going through layoffs for the first time. For many firms that have announced or will announce cuts, it is a dramatic turn of events given that they were doing relatively well just a short time ago. It is this all-encompassing aspect that has fueled talk among analysts and strategic planners of a fundamental change in business -- a restructuring of the global economic system.

But is that really the case? Experts at Wharton and elsewhere argue that what companies are experiencing now is neither an indication of a transformation nor a blanket prognosis for the rest of the economy. Instead, they say, the job announcements highlight operational weaknesses and strategic issues that have been lurking under the surface for years. In the past, these were effectively concealed in the same way that weakness and instability in the capital system were hidden by the apparent boom in asset values. Now, the downturn has brought them to the forefront.

What's Going On?

Peter Cappelli, director of the Center for Human Resources at Wharton, says the problem is that the crisis is forcing many managers to focus only on the short term. "At least in the U.S., companies don't seem to be thinking about much beside the immediate impact. To some extent, this could be because of the pressure to manage operations to conform to quarterly performance expectations. It could also result from the fact that the negative effects of layoffs -- such as the long-term costs associated with hiring again in upturns; delays in getting performance back up; and morale [issues] -- are hard to track. And it also may result from the implicit assumption that the workforce is really a just-in-time resource -- that it will be easy to bring in new workers when business picks up.'

Nevertheless, the track record of companies that have gone through job cuts is terrible. "Virtually all studies show a decline in performance associated with layoffs,' Cappelli notes. "But the caveat is that layoffs are a proxy for the fact that companies which decide to do them are already in trouble. It is hard to sort the effect of the layoffs, per se, from the proxy effect.'

This means that, for many of the companies which have announced or will soon announce layoffs, the current economic crisis is not necessarily the cause of their problems; it is simply what has exposed them. As intuitive as that argument may be, experts say that managers within the companies as well as analysts, investors and policymakers outside the business face the risk of putting too much, or even all, of the blame on the current economic crisis, rather than looking at deeper causes.

Jay Anand, professor of management and human resources at Ohio State University, says challenging times like the present make differences between companies stand out in bold relief. "Looking at the strategic implications, not every company is feeling the impact [of the crisis] in the same way. Some companies have better buffers in place, better capabilities to withstand the pressures, better demand or loyalty for their products, cost structures that are a little more flexible, supply chains that are a little more adaptable, and so on.'

Experts note that job cuts should be recognized as an indication of the change that is happening -- even accelerating -- within some industries. This is clearly the case in financial services and autos, for instance, but it is happening in technology as well. It's part of the reason why some of the IT industry's biggest names like Microsoft, Hewlett-Packard, EMC, Dell, SAP and others have been hit. Each of these companies, in some way, is facing a transition point in its evolution, forcing changes in its business models.

At Microsoft, for instance, its first-ever significant cuts are tied to the sharp decline in demand for traditional PCs, which have long been the company's core market. The company recently announced some 5,000 layoffs. Signs of the shift in Microsoft's market in recent years had already forced the company to begin looking for ways to further diversify its business -- as seen most notably in its failed bid for Yahoo last year. Now Microsoft must accelerate those efforts. According to company reports and analysts, this could happen in at least two ways: First, even as Microsoft sheds jobs in traditional businesses in order to cut costs, it plans to add up to 3,000 jobs in areas such as search, online services and cloud computing. The number of people hired for search will depend on what some analysts describe as a potential "wild card" -- the Yahoo factor. They believe that with Carol Bartz at the helm at Yahoo, a future deal with Microsoft could still happen. In any event, the layoffs -- and hiring plans -- at Microsoft are driven by these strategic considerations rather than just the weak economy.

Similarly, at Caterpillar, the world's largest maker of construction and mining machines, the massive restructuring was primarily attributed to high operating costs in its manufacturing operations. These costs became unsustainable as capacity utilization plunged due to low demand. As a result, Caterpillar announced it would cut 20,000 jobs since the sales volume for construction equipment -- hit hard by the housing market's collapse -- has shrunk by 25%.

For both Microsoft and Caterpillar, and many other companies, the sudden drop in demand exposed inefficiencies in their operations.

As these examples reveal, the problems leading up to announcements being made now have been in motion for a long time. Job cuts, in fact, are trailing indicators, not just for the economy as a whole but also for the specific businesses involved. It takes time for them to be announced and hit the headlines because they are usually among the last steps companies want to take in response to challenging conditions. They also are extremely complex issues to handle, forcing management to make extremely difficult choices.

Looking Ahead

Now comes the hard part. For all the companies that have announced job cuts, operations will become significantly harder to manage in the months ahead, as they work through the process of notifying workers, supporting them and, not the least, finding ways to compensate for staffing changes through existing or new business processes. All these efforts will take a significant amount of management bandwidth, and at the same time many important projects will potentially be either understaffed or delayed. And all of this comes at a time when companies can least afford distraction.

Are any companies or management teams notably "good" at handling situations like this? Wharton's Cappelli says the key is to consider and pursue alternative arrangements first. It is difficult to believe that any company is really good at this process if they aren't also doing some other creative arrangements for cutting labor costs (wage cuts, job sharing, sabbaticals, mandatory vacations, etc.), he notes. "The reason is, it would be remarkable if, after careful analysis, the only option that made sense across a company was layoffs.'

Ohio State's Anand says it is critical, in the end, to maintain perspective. Specifically, he suggests that companies focus on the current crisis but also be prepared for a rebound. "When everybody agrees that times are wonderful, you need to hold on. Similarly, when everybody says times are awful, you should think things through in a balanced way. There will be regression to a mean in time, and it is very important that firms are prepared for that. Even though managers need to act now to respond to the situation, it is important to look ahead and keep open options for growth. You do not want to overreact in a way that causes a substantive reduction in competencies, and in turn fundamentally impinge on your future.'

The turn could come sooner than some expect. Portman at Oxford Economics points out that while previous recessions developed more slowly, and in a less global fashion, businesses are now seeing a fast transition of weakness from the U.S. to the rest of the world. But there is an upside, he says. "This crisis has come about very rapidly, but the converse is that the recovery in time will also come about much quicker than we have seen in the past. Today, the gloom and doom is being extrapolated without taking into account the dynamics that are present. The downturn shouldn't last as long as some people are expecting.

"We have received quite a big setback, and we will continue to be hampered over the next year or so," Portman continues. "But when things can start to move forward again, I don't see any reason to expect huge changes in how business operates -- I don't quite see how that will transpire. Businesses will adapt, and we are already seeing that. We are seeing improved labor productivity, improved competitiveness, and that will underpin and come to the fore when things pick up again. In two years, we will see things improving, and business will be able to focus again on growth.'

The caveat, of course, is deciding which companies will be able to do so. The answers here are unclear. Without a doubt, firms that have approached layoffs -- or alternative solutions to preserving their talent during difficult economic times -- will be better positioned for the recovery than those that have adopted a knee-jerk approach to job cuts as a way of slashing costs for short-term gains. "Today, some companies are being forced to let go of their competencies, while others have not had to cut into any muscle," says Anand. "When the economy improves again, we will start to see the difference."

Monday, February 2, 2009

Quit Standing Beside Your Power

Listen up.

Do you routinely defer the floor to others before you are finished? Giggle when nervous or, worse yet, laugh uncontrollably? End your statements with a lingering request for support? Do you work to be seen as the always-agreeable-can-get-along-with-anyone person on the team? Start your recommendations with qualifiers such as, "I am not sure you are going to like this idea, but." Not ask all of your questions because you feel you may have taken up too much meeting time already? Do you do any variations of the above on a regular basis?

Yes? Well, stop that right now.

When communicating, be prepared and be professional. Articulate your position and state the reasons why. Don't soften a message that needs to be heard and don't think for a minute that you deserve any less respect than the person sitting next to you.

Quit standing beside your power and step into it. Now.

"Information Overload"

Every employee wants to be performing above and beyond their call of duty to sustain in this tough competition they face daily at their work sites. And hence multitasking.

Due to this juggling tasks has become an inescapable element of work as revealed by a new field recognized as "Interruption Science" (Source: HR Magazine; August 2008). Information Overload often challenges the innovative and creativity aspects of workers when they have to constantly multitask or shift from one task to another or tackling two cognitive tasks simultaneously.

"A study showed that workers on average spend just 11 minutes on a project and, within that time frame, typically change tasks every three minutes" (Source: HR Magazine; August 2008; "Quelling Distraction: Help employees overcome 'information overload'.")

Companies/Organizations are starting to realize the importance of need to allocate some time for employees to be creative and thinking.

So companies are dealing with this new challenge by carving out "Creative Spaces". Some call it "White space" or Creative room or Work-Out sessions or even "Think Fridays". All these efforts try to provide a physical place or a specific time or day for employees to focus on creative thoughts or agenda-free reflection without any interruptions.

For more information read the complete article HR Magazine; August 2008; "Quelling Distraction: Help employees overcome 'information overload'."