HR, Clean-up On Aisle 3 – Under The Radar HR Processes That May Require A Clean-up (Revisit these high-impact but less glamorous HR processes)

After years of turmoil, it’s time for HR to revisit these high-impact but often ignored processes.

My research has found that after years of focusing on strategic HR issues like COVID-19, remote work, DEI, AI, and recruiting/retention. It’s time for HR to revisit and “clean-up” several of their processes that have been mostly ignored. Those neglected processes often include performance management, internal movement, performance appraisals, and fixing bad managers. The goal of this “clean-up effort” should be to transform these processes so that they become data and technology-driven.

Cleaning Up These Basic HR Offerings Will Produce Significant Business Impacts

After years of relative neglect, it’s time to revisit and re-energize these processes that both managers and employees heavily use. My top 10 most important off-the-radar areas are listed below, where the processes likely doing the most damage appear first.

• HR must focus on increasing workforce productivity – it’s true that ever since the pandemic, the productivity of most corporate workforces has been decreasing. So, the first “under the radar issue” that must be cleaned up is HR’s role in workforce productivity. The first key point is to note that measuring and improving employee productivity should be the primary goal of HR. Unfortunately, it is seldom even listed as a strategic goal (based on the fact that HR doesn’t have total control over the factors that increase productivity). However, the lack of a focus on productivity in HR is unique. Other functional leaders, like those in finance, routinely accept their primary role of increasing the productivity of the financial resources they oversee. In HR, workforce productivity should be defined as increasing the output value of your corporation’s workforce without increasing labor costs. That improved productivity would result from HR’s improved use of talent management tools and processes. At the very minimum, HR should begin calculating the company’s workforce productivity using the simple revenue per employee metric. Then, HR leaders can show corporate leadership that they have improved the amount of revenue produced by the average employee over the last year. Notice: You can learn more about HR’s role in increasing workforce productivity here.

• You need an effective process for identifying bad managers – among all the factors influencing positive employee behavior. An employee’s manager has the highest impact on employee productivity and retention despite the multiple impacts that managers have. It is, unfortunately, quite rare for any corporation (Google is the rare exception) to have a formal “bad manager identification process.” I have found that starting a data-driven effort to identify, fix, or release bad managers will almost instantly improve HR’s credibility because it shows the courage to tackle this obviously serious but highly political problem head-on. It is important to make individual managers aware that weak manager performance will be quickly noticed. It will, by itself, drive individual managers to improve. Note: You can learn more about the steps for developing a bad management identification program here.

• Your performance appraisal process requires attention – because the performance appraisal process takes up so much of both manager and employee time each year. That fact alone should be enough to force HR to make the process perfect. However, they seldom do. I often find that a majority of managers and 66% of employees literally hate the current PA process. This process earns its #1 hate rating because it is highly subjective and doesn’t even measure actual employee performance. Finally, there is often no or only a slight connection between PA scores and raises and promotions. So, HR’s goal should be to make PA “a performance counting process.” And for the first time to show corporate leaders that despite the amount of time it takes, your PA process actually results in an increase in employee performance”.

• You must increase the effectiveness of your internal movement process – an accelerated and targeted internal movement can dramatically improve workforce productivity by proactively moving underutilized talent to where it can have the most impact. Speeding up internal movement will also increase top talent retention. Your best employees won’t have to move externally to get the better job they have earned. Filling more open jobs internally will also reduce the high cost of external recruiting. Knowing that current employees are considered first for any opening will make your organization much more attractive to recruits. Unfortunately, almost all current internal movement programs are flawed. Primarily because they are driven 100% by employee interest and their personal preferences. Internal movement won’t be more impactful until intra-placement professionals can help educate and guide individual employees who are ready for a move. Note: you can learn more about intra-placement here.

• Updating your performance management process may be essential – PepsiCo’s employees rated their HR performance management approach as literally the worst process in the entire company (not just in HR). And, of course, having an essential process perform so poorly is a costly mistake. Because “prematurely giving up” on poor-performing employees that might be “fixed” is expensive. Even though many HR functions already have a formal performance management process. However, when performance metrics are applied to this process, few programs can prove that their process actually improves either individual or overall employee performance over the long term. In fact, a bad performance management process can have other negative impacts. Cisco discovered that most individuals placed on a PIP left the company anyway (within a year, regardless of whether their performance improved). Incidentally, this process would receive a lower rating if more employees were placed under an improvement plan.
• You need to reward managers for producing great talent management results – it’s well known that individual managers pay the most attention to what is talked about, measured, recognized, and rewarded. Unfortunately, only 39% of all managers are measured and rewarded for producing great people management results. So, when HR doesn’t measure or reward talent management results. Managers naturally spend less time on these talent areas (because they assume not being rewarded means they are less important). In addition, great talent management results should also be an absolute requirement before any manager can even be considered for a promotion. Note: You can learn more details about rewarding managers for great talent results here.

• Your current DEI process must be updated – SHRM’s recent dropping of equity from its DEI definition should be a warning sign to all who care about diversity. It should serve as an indicator that they need to prepare for a potentially strong backlash in many areas of diversity. Well, I find that it’s true that something must radically change. Research has shown that less than 2% of those surveyed in HR were “confident that they were achieving DEI goals.” So, to those HR leaders who have argued that HR shouldn’t even need a “business case” for DEI, I say get your head out of the sand and stop acting like you are entitled. In my experience, the primary problem with DEI programs is that they are not data-driven. Note: you can learn more about why you’re getting poor diversity recruiting results here.

• You should modernize the interview template you distribute – recently released research has shown that traditional interviews identify the best candidate only 9% of the time. This means job interviews select the wrong candidate over 90% of the time. Fortunately, reducing the standard interview questions can improve the traditional interview template. Then, substitute “How would you solve this problem” interview questions. Increasing the amount of time spent on selling the candidate will also reduce both your candidate dropout and turndown rates. Note: You can learn more about a dramatically improved interview template here.

• You need to understand the factors that motivate and excite individual employees – a highly motivated worker will produce up to 25% more than the average worker. So, it makes sense for every employee’s manager to know and use their individual motivators to increase their performance. Unfortunately, most HR departments have no formal way of determining each new hire’s motivators and excitement factors. Many managers don’t even consider it their job to identify the motivators for each of their current team members. So, HR should devise a workable way to update each employee’s “motivation profile” at least once a year. Notice: You can learn more about raising the excitement level of your employees here.

• You must improve the accuracy of your exit interviews – as long as high turnover rates remain with us. It will always be essential for HR to identify the precise reasons why top employees are leaving. Unfortunately, getting accurate answers can be quite difficult using the traditional exit interview. Because the departing employee often resists being honest in order to preserve a future reference. Instead, at least for your regrettable turnover. You should add a delayed exit interview (a.k.a. a post-exit interview) because these have been proven to provide as much as 50% more accurate answers. Note: You can learn more about what’s wrong with exit interviews and how to improve them here.

• HR needs to begin its shift away from paternalism – there can be no doubt that since the pandemic. HR has been suffering from a bad case of “mission creep” into what is known as paternalism. This is where the company and HR mistakenly attempt to provide its employees with everything they need and want both during and outside work. This expansion of offerings is, however, unwise. It dramatically increases the workload in HR. However, there is no proof that providing employees with everything they want actually leads to increased productivity or retention. 

Final Thoughts

It’s easy for HR leaders to get distracted by hot emerging issues to the point where they pay insufficient attention to their less glamorous but still highly impactful “under the radar” processes. So, I suggest that now that we are two years beyond the pandemic. Today is an ideal time to revisit and modernize each of these listed processes.

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