Overdoing HR Analytics – Is Automation A Boon or Bust?

No doubt, the explosion in business automation software has been a boon to HR departments. Certain business processes have become significantly easier (managing headcount, labor costs, turnover rates, demographics). Business software is also providing us with reams of actionable HR data that was previously unattainable. So what could go wrong?

You can send a whole department down a rabbit hole of data-mining if you don’t have a strategy and a framework for understanding, and acting upon, that data. If you don’t know precisely what you’re looking for, you’re not likely to find it. What began as efficiency measures have now become a drag.

Analysis Paralysis

HR departments and entire business units are collecting terabytes of data on employees’ behavior and performance. But overdoing it with analytics can lead to ‘analysis paralysis’. How do you find that sweet spot with HR analytics and use it to maximum advantage?

“I think the main area where companies overdo analytics is when a large number of individual metrics are created without an overarching framework for why these particular metrics matter,” says John Hausknecht, Associate Professor of Human Resource Studies at Cornell University’s ILR School.

“A stronger approach moves beyond individual metrics and gets into understanding linkages among multiple factors. It shows what HR data, specifically, predict performance, or better yet, can show that changes in certain HR policies or practices actually cause business performance to increase.”

“Most HR issues cannot be reduced to a single number, so it makes sense to think about building (and testing with data) more sophisticated models that capture the causes and consequences of whatever it is we’re interested in understanding. Once that work is done, we can have greater confidence in why we’re tracking and trying to influence certain metrics.”

Culture Coding for Fully Formed Adults

How to create and maintain good culture while fighting complexity creep.

The issue of creating and fostering culture in a company or organization is tricky. Partially because the concept of culture is somewhat nebulous, but also because in order to do it right, you have to make one giant assumption.

Darmesh Shah, CTO and co-founder of Hubspot, gave a talk at DF13 about creating, establishing and maintaining culture in a company. We’ve talked about the why, and a bit about the how.

Dharmesh pulled back the curtain on Hubspot’s struggles and successes with exploring, creating and documenting company culture. And that included one significant assumption that might seem a little obvious, but it’s implications for Hubspot might surprise you.

Assume you’ve hired fully formed adults

That’s it. Assume that when you hire someone, they are an adult with all the neat features adults come equipped with – good judgment, responsibility, the ability to use logic to make rational decisions, etc.

With that in mind – here’s how company culture played out for Hubspot.

  • Employees choose their own hours and where they work from. Results matter more than where or what time of day we produce them.
  • Vacation time is not tracked and there are no limits on vacation time. And, Dharmesh cautioned, his employees do abuse this policy, but not in the way you might expect. He found people weren’t taking enough vacation.
  • Almost complete transparency is tucked into every crease of Hubspot’s culture. The average age at Hubspot, Dharmesh said, is 27 years old – a fairly young crowd. They love transparency. More precisely, they “love it; love it; love it” he said.
  • No social media policy. You should know whether or not you should post something to your network.

That’s just a sample of some of the outcomes when you assume you’ve hired fully formed adults…for Hubspot, anyway. According to Dharmesh, the approach was – “don’t write rules, right wrongs.”

And using good judgment is crucial when you allow this amount of freedom. Dharmesh described a hierarchy of good judgment that sounded a little like a military creed, but it’s really built like a mathematical formula. You solve for a series of things:

Solve for team over self, company over team, customer over company.

If you choose the wrong side, the equation falls apart – and that’s the definition of using bad judgment. Every decision should be run through this test. Failure will be painfully obvious.

There are dangers, Dharmesh said. Complexity has a way of creeping in. What’s good for one group might not be great for another. Even raising the issue of culture might rub some people the wrong way.

Address the complexities immediately, as their true toll lies below the surface and can slowly and silently pull your culture apart at the seams.

One way to approach culture coding that can help address complexities before they arise is to start with a “federal” set of values – an executive-level take on things.

But, Dharmesh said, you’ll run into “state” laws that conflict.

The key is to balance federal against state – it won’t be the same for every organization, but it’s a good framework to apply to the task of codifying culture.

Dharmesh described building, defining and maintaining Hubspotter culture as the hardest thing he’s taken on during his career to date. It’s easy to see why and even after you’ve “created” your culture, the challenge isn’t over…in fact, it never ends.

The final task for creating a company culture is not being married to any version of it you’ve created. Workforces change. Companies change. Organizations grow and shrink and mutate time and time again. Your culture should, too.

“As you grow, there is a very very strong temptation to preserve culture – understandable, but wrong,” Dharmesh said. “You have to adapt.”

The Challenges of Creating Organizational Culture

Darmesh Shah exposed the why of Cracking the Culture Code at Dreamforce 2013 today, but his approach is even more interesting.

As co-founder of the then-young Hubspot in the late 2000s, Shah was posed the challenge of defining the culture of Hubspot.

“For the first three years at Hubspot, the word ‘culture’ wasn’t spoken,” he said, confirming the uniqueness of the challenge.

The idea came from co-founder and CEO Brian Halligan, who had joined a CEO support-group of sorts and other, more seasoned CEOs warned that company culture could end up biting you a lot harder than you think if left untended.

Dharmesh started with a simple survey of 60-or-so Hubspotters – “On a scale from 1 to 10, how likely are you to recommend Hubspot as a place to work?”

The responses indicated a maniacally happy workforce.

But the real question is why? And that’s where the work really started with Dharmesh – documenting the culture of Hubspot…on paper.

The Hubspot culture deck is, apparently, the second most widely read culture document in the history of the planet. The first? Netflix.

Hubspot found that the key to documenting your company culture is remembering that it “can’t be about who you are. It should also be who you want to be.”

And the measurement should happen with frequency and consistency.

Have a company meeting? Ask your employees afterwards on a scale of 0 to 10 if they would have that meeting again.

Meet with company alumni and ask how happy they are to have your company on your resume.

Always measuring. Always adapting.

Cracking the Culture Code – Why You Should Care About Creating Culture

“There is no magical unicorn that craps out great culture”

Those are words of caution from Dharmesh Shah, CTO and co-founder of Hubspot and self-anointed introvert that captivated the audience during his Dreamforce 2013 talk on developing and implementing culture in an organization.

Tasked with documenting the Hubspot company culture a few years back, Dharmesh claims it was the “hardest thing I’ve taken on in my career.”

Shared beliefs, values and practices – that’s culture

Company culture used to be standard – rules and regulations handed down from executive-level folks were accepted by employees as long as the benefits and compensation were good.

No more, Dharmesh found. That model is broken and Hubspot set out to figure out how to tackle company culture.

But why? As a business leader you probably think of 100 things more pressing than something as seemingly trivial as company culture.

Here are Dharmesh’s top reasons why to spend calories in culture:

  1. Creating a culture is hard, killing it is easy – left alone most things degrade to crap without outside intervention
  2. Culture debt is insidious and often interminable – hiring the wrong people can be a really tough and lengthy thing to overcome
  3. Good culture makes the easy decisions unnecessary and makes difficult decisions easier!
  4. The team determines the destiny and the culture determines the team
  5. Don’t just hire to delegate – hire to elevate
  6. Culture is to recruiting as product is to marketing – customers flock to great products, workers flock to great companies with good culture
  7. Helps the stars “shine”
  8. Whether you like it or not, you will have a culture – why not take the time to design?

We’ll have more from Dharmesh. Specifically – how do you actually go about documenting and creating the blueprint for culture code.

What Really Drives Employee Engagement? Getting a Handle on Causes And Effects, For Starters

Passion, commitment, job satisfaction, positivity, drive, connection to the company—all sentiments that explain or define employee engagement. When you start to look at employee engagement seriously*, you’ll find rather quickly that it’s easy to confuse cause and effect. Making the distinction between driver and outcome is instrumental in developing a strategy around engagement, especially when it comes to measuring it.

For example, would you say that one’s tendency to help others around them is a driver or an outcome of employee engagement? Is a commitment to customer service a driver or outcome? What about good communication among employees?

Cornell University’s Chris Collins explains the importance of making these distinctions and why they’re so important to identify.

Note: We pick up the discussion here at 2:05, so click to the beginning of the video for a better grasp on the ways that we’ve historically defined engagement.

*Here are 4 tips to increase engagement and set your team on a course for growth and prosperity.

Employee Engagement: Four Tips for Team Growth

Sustaining high growth can take a lot out of your team. Without specific strategies to engage employees on an ongoing basis, you will not be able to achieve your long-term goals. At eCornell, we are committed to finding and supporting those ideas that work, and the proof is in our nearly ten years of double-digit revenue growth with low employee turnover.

1. Be Open

This one is simple; the more people know, the more they can contribute to results. We have no closed-door offices. We hold bi-weekly all-hands company meetings where information from across all functional areas is shared. I share company financials (good or bad) on a monthly basis at our company meetings.

2. Be Connected

About one-third of our company works from home, and many more travel or telecommute part time. This provides a lot of flexibility for people to balance work and life. We’ve turned this potential challenge into an opportunity by investing in keeping people connected. We probably hold dozens of desktop video meetings throughout the day. Everyone can share goals, accomplishments, news, customer complaints, testimonials, and resolutions on Chatter by Salesforce, our internal messaging system. And of course, we live and die by Google Chat. We’ve had employees comment that they sometimes feel more connected when traveling than when in the office.

3. Be Celebrating

I learned long ago two important things: (1) you can never over-celebrate team and individual accomplishments and (2) there are way better people in our company than me to figure out how to do that. We announce all sales wins on Chatter, we celebrate major project milestones, and find ways to accomplish major life events for employees. To make this happen, we have our B.E.E.R team (Building Employee Engagement and Recognition team) that plan major company events through the year so the employees from across the company are deciding when and how to launch an event to help us blow off some steam.

4. Always Be Learning

Dozens of our employees have earned a Cornell Certificate through our employee learning program; so yes, we use our own product! But sometimes, we need to go above and beyond. We encourage all of our managers to set learning goals for each team member so that we are bringing new ideas and skills into the company all the time.

Telecommuting: Value Add or Risky Fluff?

Dialogue around telecommuting (or telework) captured a lot of attention in 2013 with some high profile companies, including Yahoo and Best Buy, sparking new debate over the value of these programs. While many organizations continue to experience the benefits of well-designed and administered telecommute programs, headlines about other organizations abandoning or restricting their programs sparked new debate over an old question;

Does a telecommute program add value, or is it a risky and inefficient means to provide employee flexibility?

Whichever side you take in this debate, you can find plenty of evidence to support your argument. Organizations that have implemented telecommute programs through carefully designed plans that are strategically aligned to support business goals are likely realizing the value of telework. On the other hand, well-intended organizations that allow employees to work remotely without a strategic plan risk feeling pain similar to those that have made recent headlines.

Let Business Strategy Lead the Way

While at times telecommuting may appear to be a solution in search of a problem, many organizations with successful programs have identified strategic business goals before considering it as part of their strategy. Some of these business goals include:

  • Business Expense Reduction – Real estate expense reduction can be significant when owned or rented space is replaced by home or other remote work arrangements. But the existing space needs to be disposed of, or the remote work arrangements become an additional expense.
  • Business Continuity – While bad weather, building emergencies, even flu and other communicable diseases have regular and significant impact on productivity, an effective telework program can markedly reduce the risks and impact by decentralizing portions of the workforce.
  • Employee Engagement and Retention – In 2012, Cornell Assistant Professor Brad Bell surveyed employees of a 30,000+ employee company where 40% of employees work from home on a full-time basis. About 5,000 office-based and remote employees were asked to rank a list of potential advantages offered by telecommuting. Schedule flexibility and care of family members were identified as advantages, but savings in money and time were ranked at the top by a significant margin. The same company experiences consistently higher rates of retention and engagement among its telecommuters, with the same or better performance, and has realized opportunities to retain valuable talent who would otherwise be forced to leave due to spouse transfers, family illness or other family/personal issues.
  • Talent Acquisition – Let’s face it, some talent is hard to find. The ability to recruit for essential skill sets wherever they are, avoiding the need for relocation, can offer a huge competitive advantage; as can the ability to place stakeholder-facing employees where you need them without the need for local office space or extensive travel.

Aligning the Business and Telecommute Strategies

A well-designed telecommute strategy includes the establishment of criteria for when and how it will be used. The business goals and strategy form the basis upon which these criteria are designed. Some strategic organizations have established criteria that focus on a combination of three factors:

  • The Work Itself – Jobs in which employees work independently, and typically communicate with customers and coworkers electronically, are likely to be better suited than those that rely on regular face-to-face interaction and collaboration. In any case, it may be appropriate to limit eligibility to those jobs that serve the needs of the business strategy.
  • The Employee – Telecommuting does not work for everyone. Some selection criteria are in order to ensure that only employees with the skills, behaviors, and performance to succeed are moved to a remote environment.
  • The Work Environment – You want to be at least as disciplined with telework as you are in the office when it comes to protecting your data, property, products, services, customers, and employees by ensuring a safe and secure workplace. Policies and procedures should be reviewed and updated to ensure they accommodate new work arrangements, and expectations around these should be clearly communicated.

Training and Change Management Are Important

As telework arrangements are deployed, training and change management programs will increase the odds for success. While some of this may be dismissed as “common sense,” it can contribute significantly to institutional learning about new workplace models, and help to shape the culture change that’s about to take place. Consider focusing on:

  • deliberate additional communication with and among telecommuters to account for the lack formal and informal face time;
  • clear communication of expectations for managers and employees;
  • tips and guidance for managing work and time in the absence of normal workplace queues;
  • methods that ensure privacy and potential interruptions are managed appropriately (no working/daycare arrangements);
  • planning face-to-face meetings as often as possible. When time, distance and budgets present challenges, use technology to pull the team together virtually and include team-building activities similar to those you would include locally.

A couple more thoughts:

When implementing a new program consider doing so through a series of pilots measuring results and adjusting along the way. I’ve seen real success with the creation of a Telework Employee Resource Group/Affinity Group. Like other ERGs, they allow employees with like interests and challenges to share ideas and best practices, participate in supplemental training, provide feedback and ideas to management, and support employee engagement.

I’ve seen its challenges, but it’s been my experience that telecommuting is a great workforce solution when it is designed and implemented as a strategic initiative aligned to support identified business goals. What has your experience been? Have you seen it succeed; seen it struggle or fail? What are some unique ways in which you’ve seen it used, and what were the outcomes?

Effectively Navigating Employee Issues and Employment Laws

As an HR practitioner, you are often asked to determine whether an employee issue is heading into legal territory. To do this, you need guidance and a utilitarian method for assessing complex issues. Read today’s post, then download the free HR Law Navigator tool as your resource and “check in” for assessing employee concerns.

Most HR practitioners aren’t lawyers, yet they’re on the front lines of handling employee situations that have the potential for raising legal concerns. Navigating the ins and outs of ever-changing Equal Opportunity Employment (EEO) laws—at the federal, regional and even country level—isn’t an easy job. Even though you may have a centralized HR department that handles employee relations issues, HR generalists and consultants are still usually responsible for gathering information about potentially problematic situations. HR practitioners are also often asked to seek advice from legal experts and to partner with them to determine how to manage and respond to such situations.

As an HR practitioner, your job is not just to minimize your organization’s risk of legal exposure and make sure people “play by the rules”; it’s to ensure all employees have a safe, productive working environment within which to thrive and create the most value for your organization and its stakeholders. HR practitioners need to feel confident making the call to send an employee concern up the chain, or to launch a full-scale legal investigation. But what kinds of questions should you ask to make sure you’re assessing a situation fully? How do you make sure you recognize whether an employee situation has the potential for legal concerns? The answer is, it often depends.

“The toughest part about dealing with EEO issues in HR is the nuance involved. Every situation is unique and requires empathy, rationality, and understanding. The reasonable person standard that exists when determining disparate treatment in many cases creates a lot of grey area to work within, but good faith efforts go a long way,” said Beth Livingston, assistant professor of Human Resources at Cornell University’s ILR School.

That grey area is one reason Livingston argues that empathy is perhaps the most important skill for an HR practitioner when it comes to figuring out which HR issues require legal advice.

“Most employees want to be treated fairly and want to avoid litigation; HR practitioners want likewise. If we look at it from this perspective, the incentives are already aligned,” said Livingston. “The same situation can affect different people in very different ways, and the more HR practitioners can attempt to understand the employees they work with and what their values are, the better they can address issues before they become legal liabilities.”

Download the free HR Law Navigator, a resource included in eCornell’s Human Resources program, to help you recognize potential legal issues involving employee situations, gather sufficient information for seeking advice from legal experts, and chart a safe course when making decisions that impact your employees and your organization.

CAHRS Top 10 List for June 2013

Each month, the Center for Advanced Human Resource Studies (CAHRS) publishes this list of the top 10 resources and articles that we have found in the HR world. Read through and let me know if you find them useful or if you found other links we should take a look at in the comments section below.

1. When Pay is Kept Secret, the Implications on Performance Are Revealing
Summary: Researchers set out to draw from expectance theory notions to explain how the effects of pay secrecy on perceived performance-pay instrumentalities are likely cause a generally adverse effect on individual task performance.

2. The New Employer-Employee Compact
Summary: The authors propose a new employer-employee compact to make organizations more agile and entrepreneurial. The article outlines 3 key components with action items to make the compact workable: (1) Hire employees for a defined period of time (2) Encourage and even subsidize employees to build networks outside of the organization (3) Establish employee alumni networks to build career-long relationships with employees after they have moved on.

3. An HR Icon Reflects on Retirement
Summary: Effective June 1 Randy MacDonald, senior vice president of human resources for CAHRS Partner IBM, will be retiring after 42 years in HR, the last 13 of which were with IBM. In this interview he shares about the succession planning leading up to the selection of Diane Gherson, what HR needs to do to be even more successful in business, and the key attributes of an extraordinary HR leader.

4. Balancing the Pay Scale: Fair vs. Unfair
Summary: Reward system designs need to balance incentive effects and equity concerns, and increased transparency around compensation and benefits can help employees understand their level of compensation.

For more on Compensation, take a look at Kevin Hallock’s Business Insider article Why Pretty Much Everyone Thinks They’re Underpaid.”

5. Fixing the Disconnect in Talent Decision Making
Summary: Trying to make decisions without integrated data—or the wrong kinds of data—can send a company off course. HR analytics illuminate patterns that are difficult to observe with the human eye.

For more on HR Analytics, take a look at the January Working Group Summary.

6. Hitting the Intergenerational Sweet Spot 
Summary: HR should target maximum engagement for all employees by not taking    characteristics of  millennials out of context and understanding that both millennials and Baby Boomers value challenging, meaningful work and opportunities for development.

7. Research Backs the Benefits of Flex Work for Workers – and Companies
Summary: There is a large quantity of academic research on flexible work arrangements that provide valuable insights into the debate, for example the positive effects of telecommuting are maximized at 15 hours per week and flexibility around work hours is more effective than flexibility around workplace.

For more information on Remote Workers, take a look at the Remote Workers Working Group Summary.

8. Incentivizing Creative Employees Towards Increased Competitiveness
Summary: 
The author argues that compensating and acknowledging employed inventors can incentivize creativity, innovation, and profitability.

9. The HR-Risk Connection
Summary: 
HR and risk management have begun working closer together to improve their bottom lines, streamline processes and ensure risks are addressed and/or countered before they take on any significance.

For more reading on Talent Management, visit the CAHRS Talent Management Center of Excellence.

10. Your Assumptions About Cultural Adaptation Are Probably Wrong
Summary:
 The workforce has never been more global, yet when working internationally most people focus on more concrete pressing tasks than the global element of their work. As a result, they often follow “gut” instincts about cultural adaption, which tend to be wrong.

For more reading on Globalization, take a look at the Singapore Human Capital Challenges for the Emerging Market and Talent Management Challenges for the India Market.

Utilizing Gender Pay Issues to Inform HR Policies

Beth Livingston Examines Gender Roles and Their Impact on the field of HR

Beth Livingston, HRS Assistant Professor at Cornell University, studies gender roles and their impact on employer relationships. She is currently expanding work on a CAHRS grant, out of which was published an article in 2008. In 2011, Livingston started expanding on the paper, looking at sexist attitudes about women in workplace. “I’ve found that men with more sexist mindsets make more money than women, whereas men with egalitarian attitudes don’t show a gender-wage gap,” she explains.

As a human resource expert, Livingston wants to know what this means for employers and employees. “Why the wage gap?” asks Livingston. “Do individuals with different sexist attitudes negotiate differently? Is it discrimination? What is happening? Understanding interpersonal issues can help us take the next steps in terms of what to do about the wage gap,” she points out.

For instance, Livingston’s CAHRS research centers around employer/employee relationships. Each person’s role orientation was identified, and then each person was put in a mock interview situation, where one person played the part of the boss, and one person played the role of the employee. “We wanted to see if these people focused on different things during the interview based on their gender attitude,” explains Livingston, such as being more or less assertive. “Is a male with more egalitarianism focused more on salary? Or if someone gets paid less do they negotiate for more flexibility?” Initially, the results of the survey indicated a difference in how people negotiate. The thought is that traditional men are less likely to have flex time than egalitarian men.

The second step to the research included a National Longitudinal Survey of Youth (NLSY79)  The final part of the grant – in progress as this article goes to press — involves MILRs and undergraduates getting jobs right now. “We started off by determining their gender attitudes and then looked at their first job offers,” she explains. “How do they negotiate, and for what sorts of things? Did they get flex time? Did they ask for it?

“Even controlling for types of job, we have already found differences in wages in our 2008 research on gender-role attitudes,,” Livingston states.  As every company knows, rewards can be seen as more appealing than salary. One example would be a total package of rewards that includes all those things.”

“We intend to look at the data with a finer analysis. Some men value family – and this type of personality adds a nuance to gender distribution particularly in regards to work and family,” says Livingston. “Women may get paid less but they’re not dissatisfied by what they’re getting paid. Not all women and men have the same family values,” she explains. The research project will wrap up with a paper estimated to be completed by summer of 2013.

What’s Next?

Livingston is currently working with two PhD students on gender and how it relates to work and family. She’s interested in looking at employees holistically. “In order to understand how to look at rewards, you have to look at the total picture. I’ll be examining couples and how their interaction affects work decisions – particularly as they relate to ex-patriot positions,” she explains.

Livingston is looking to analyze how organizations address their employees’ work. It can be easy to talk about policy but more broadly, how do employees experience this in terms of their partners?

Moreover, Livingston is looking at negative attributions such as “how organizations can reduce blame and provide resources with the possibility of avoiding negative attributions.” For instance, every employee will, at some point, experience negative work and family spillover—but who do they blame for it? Who is perceived to have caused the conflict? How individuals perceive these interactions and how they attribute blame for them might also help us understand how organizations can manage this inevitability.

The Power of Words

Livingston is also pursuing the stereotype of women as catty, and is working on an article about the label of conflict as catty. Facebook’s Sheryl Sandburg – whose Leaning In spurred a debate about the privilege of having a career and family — commented on the book, saying, “Everyone loves a fight — and they really love a catfight,” she writes. “The media will report endlessly about women attacking other women, which distracts from the real issues. When arguments turn into ‘she said/she said,’ we all lose.”

“When men debate, it can be heated and filled with conflict. But when women have the same types of debates, it becomes a label,” points out Livingston. We examine the effects of how people are perceived as a result, she says. And above and beyond the “catty” label, she’s looking to prove how careful we need to be about words and also about how conflict is perceived. “Ideally, more information about this topic can reduce incivility and bullying and how is it perceived in the workplace,” she states.

In the end, Livingston points out, how can we fundamentally judge and see people if we don’t understand the psychology behind the behavior? “Policies can be put in place, but that’s not proactive. We’d like to get to the point where managers will have tools to learn to perceive but not label conflict,” she states.

Talk with Beth Livingston about any of her current projects – or to get involved in a future gender-role research endeavor.