April 26 , 2017

How Uber Destroyed Its Employer Brand — Is It Time To Blow Up HR Again?

 

As seen on ERE Media (February 24, 2017)

A powerful employer brand is essential at any firm that requires strong recruiting and retention. However, a great employer brand is especially critical in a growing company that is considering an IPO. And if you look at the last decade, it’s hard to find a firm that has destroyed its employer brand as quickly and effectively as the ridesharing firm Uber.

First, there was its CEO’s involvement with a Trump advisory board. But that bad publicity was quickly upstaged by Uber’s perceived lack of support for immigration, even though many of its drivers are from immigrant families. This misstep resulted in the quickly popular hashtag #DeleteUber. The resulting damaging publicity changed the competitive marketplace so much that for the first time ever, its competitor Lyft got more app sign-ups than Uber. The damage is so great that Uber has begun sending letters to those who try to delete their accounts which say that “everyone at Uber is deeply hurting after reading Susan Fowler’s blog post.”

But the ultimate blow to Uber’s employer brand occurred last week with the revealing of how it treats women engineers. Exactly how they treat women employees was illustrated in Susan J. Fowler’s blog “Reflecting on one very very strange year at Uber.” At this point, we are only hearing one side, but if half of what Ms. Fowler says is true, I nominate Uber’s HR cesspool of mismanagement as literally “The worst HR department on the planet.”

This Negative Publicity Will Cost Uber Turnover, Recruits and Millions of Dollars

Even a quick scan of this former Uber employee’s well-written and unemotional blog reveals numerous HR actions that are both illegal and horrendous. It’s literally a story of sex, lies, and screenshots (instead of videotapes). In fact, the revealed absurd blunders were so embarrassing, that the CEO of this 11,000-employee firm Travis Kalanick (who once carelessly described the firm as “Boob-er”) apologized for the firm’s lack of diversity and failing to respond to employee complaints.

The situation is so bad that now Board of Directors member and women’s rights advocate Arianna Huffington and an outside expert, former U.S. Attorney General Eric Holder, are actively involved in the investigation. So many women are involved with Uber as both drivers and passengers, that there’s a negative impact on employee recruiting, retention, and a likely negative impact on its IPO value. Two early investors have publicly expressed their disappointment in Uber’s “destructive culture.” The New York Timesrecently revealed that on other occasions managers have groped the breasts of female coworkers, shouted homophobic slurs, and threatened to beat an underperforming employee with a baseball bat. Taken together, I estimate that the overall negative economic impact on Uber will eventually reach over $100 million.

Highlighting the Horrific Actions of Uber’s Management and HR 

If you’re not familiar with the case, here are some of the breathtakingly idiotic actions that are alleged to have occurred at Uber. After each questionable action, this author’s assessment of Uber’s actions, appear in all italics.

  • A manager openly solicited a newly hired employee for sex — this female employee’s manager used the company’s internal chat feature to reveal that he was in an open relationship and that he was seeking sexual partners. Fortunately, Fowler reacted with a cool head and took screenshots of the messages and sent them to HR.
  • Top performers are exempt from harassment punishment — both HR and managers admitted that this was sexual harassment. But because this manager was a top-performing employee, HR wrongfully assumed that this was “probably just an innocent mistake on his part.” Therefore HR told the employee that a verbal warning was all that was possible. Obviously, the sexual harassment law does not allow exceptions for top-performing managers.
  • Receiving a negative performance review wouldn’t be retaliation — the employee was told that she would most likely get a poor performance review as a result of her complaint. But HR told her that such an act wouldn’t be retaliation because she had been given an option to leave the team. The net result of this action would be to essentially punish the complainer, a no-no in harassment cases. 
  • This employee’s transfer was blocked for outrageous reasons — Ms. Fowler’s request for transfer was blocked (despite the fact that she had a perfect evaluation) because HR said that she had “undocumented performance problems.” They later shifted their excuse to “she wasn’t technical enough.” This employee was later told that “performance problems aren’t always something that has to do with work, but sometimes can be about things outside of work or your personal life.” It is simply beyond comprehension that the performance appraisal process would miss “undocumented problems.” And it’s even sillier to contend that performance appraisal should cover outside of work activities or an employee’s personal life.
  • Her performance appraisal was changed after the fact and without notice — this employee was told later that her perfect “performance review and score had been changed after the official reviews had been calibrated.” First, they said that the reason for the downgrading was that the employee didn’t show any “signs of an upward career trajectory” and they later changed the reason for blocking her transfer to “undocumented performance problems.” Changing an employee’s perfect score down to the point where they no longer qualified for transfer without notifying them is simply outrageous. Continually changing the reasons provided for the downgrade is also unacceptable.
  • HR blamed the complaining woman — in a meeting with an HR rep, Ms. Fowler was asked if they “had noticed that *I* was the common theme in all of the reports.” That was laughingly true because the employee had been making complaints and providing documentation across multiple incidents.
  • Reporting issues to HR is illegal and a fireable offense — this employee was berated by HR for “keeping email records of things”, and HR said that “it was unprofessional to report things via email to HR.” A week later her manager told her that she “was on very thin ice for reporting his manager to HR.” Her manager further stated that “California is an at-will employment state, he said, which means we can fire you if you ever do this again.” After she told him that this was illegal, “he replied that he had been a manager for a long time, he knew what was illegal.” Obviously, both California law and Dodd-Frank regulations require employers to provide multiple avenues for employees to complain. For HR to do anything that discourages employee complaints reveals how weak Uber’s HR function really is.
  • Their answer to a dwindling number of women was to blame the women — when Ms. Fowler asked a director at an org all-hands meeting about what was being done about the dwindling numbers of women in the organization “his reply was, in a nutshell, that the women of Uber just needed to step up and be better engineers.” To make matters worse, an HR rep responded to an inquiry about the shortage of women engineers “with a story about how sometimes certain people of certain genders and ethnic backgrounds were better suited for some jobs than others, so I shouldn’t be surprised by the gender ratios in engineering.” Obviously, this is Neanderthal racial and gender bias thinking on the part of HR. Diversity advocates around the world should be alarmed that such a phrase could be uttered in the 21st century. 
  • HR lied about this being the manager’s first offense — even though HR repeatedly said that this was the manager’s first offense, other women employees reported that the manager was in fact involved in other inappropriate actions before Ms. Fowler ever joined the firm. Even after subsequently reported offenses, HR continued to report that this was his first offense. Even though Ms. Fowler routinely provided documentation, HR somehow lost it. Not knowing about or lying about the number of harassment instances is simply inexcusable. Destroying or failing to keep accurate records in the area of harassment is both illegal and unacceptable.
  • The employee was asked to reveal how women engineers privately communicated with each other — the HR rep shockingly asked Ms. Fowler to disclose “if women engineers at Uber were friends and talked a lot.” And then they asked her “how often we communicated, what we talked about, what email addresses we used to communicate, which chat rooms we frequented, etc.” Even the thought of asking about employee’s private communications channels is repugnant. It clearly appears to be a thinly veiled attempt to stifle communications between women and eventually to stifle dissent from women.
  • As a result of their mistreatment, the number of women engineers in SRE teams was down to 3 percent — after all of this mistreatment, it is not surprising that Ms. Fowler quit Uber and found another job within a week. On her exit, she calculated that “out of over 150 engineers in the SRE teams, only 3 percent were women. Obviously, with all of these negative actions and the resulting publicity, the talent drain of both women and men from Uber will accelerate. Successfully attracting new hires to this chaotic and insensitive environment will take a minor miracle.
  • Men got their promised leather jackets, but women didn’t in order to be equitable — and the last but perhaps the most laughable of all incidents involved being rewarded with leather jackets. The men got their promised leather jackets as a performance reward. However, because the promised women’s jackets would cost more, they were never provided. As a justification, a director actually said that “if women really wanted equality, then they should realize we were getting equality by not getting the leather jackets.” Labeling if women got slightly higher priced jackets as “an inequity” has to be the most ridiculous Uber statement of them all. Rewarding men but not women for reaching the same goal typifies the cesspool of mismanagement at Uber.

Is Uber’s HR Incompetence an Indication of a Systemic Problem With HR?

As shocking as the numerous errors made by Uber HR are, consider the possibility that they are also occurring simultaneously at many other firms. Because of HR’s consistent lack of proactive and predictive metrics across most companies, the Uber HR experience is, unfortunately, not unique. It’s equally important for executives and HR leaders to begin to recognize that with the growth of social media, blogs, and mobile phone cameras, that many previously hidden negative HR actions will soon become publicly visible. In my view, all current CHROs need to immediately conduct an audit to ensure that nothing approaching what happened at Uber is or can occur at their firm. Obviously, Uber needs to blow up its HR department, but maybe you should too!

Final Thoughts

This Uber case will likely become a classic “how not to do it” case study that will be studied by business students and scholars for decades. At the present time, it’s quite easy to assume that these outrageous actions are unique to Uber. But a quick scan of current and former employee comments on glassdoor.com across many companies reveals that these, in fact, are not isolated incidents that are only occurring at Uber.

So if you don’t want an up to $100 million employer branding disaster at your firm, at least audit your HR function as to how it proactively seeks out problems and how it responds to employee complaints. And in many cases, it’s time to go further and to literally “blow up HR.” Replace it with a proactive data-driven model where these types of egregious errors could never fester. And, where “managers from hell” like those revealed at Uber can’t survive even a single day.

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Image Credit: Picjumbo

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.