As I enter the HR department I notice it’s distinctly different than when I retired as a VP of HR way back in 1998. It was quieter, smaller and had much
Why was I returning to HR after 10 years of retirement? It was to give the student I was mentoring from the HR program at the nearby San Francisco State University a view of a real HR department (as opposed to the theory they get in school.) The tour of the Department was led by a female intern named Irene, also from SFSU.
I suggested we begin in the HRIS department but the intern giggled and said there was no centralized system inHR anymore. Everyone used technology and the large systems of client-server software we used to manage (SAP/Peoplesoft/Oracle) etc. were now accessed through the internet and managed by those firms. I was shocked! That must have saved millions. Actually no software of any kind resided in HR. Even the traditional windows and MAC software was on a server a thousand miles away.
The intern (Irene) asked where I would like to go after my false start in HRIS so I suggested we start in Benefits. She laughed again and said there is no benefits department! Ninety percent of it was gone and the rest was integrated into the new “Total Compensation” Department. Benefits had all been outsourced directly to providers. Information and changes are provided to the firms on a self-service basis by the employees. I responded with several but-but-but’s and asked how could employees possibly handle their own benefits? She responded that everyone had access to a computer or a kiosk at work but that most just did their benefits changes at home on their Web TV. It was an “idiot proof” program that allowed “self-service” changes to their benefits at any time an employee wanted. She said that the new HR philosophy was to treat employee’s like mature adults so self-service was the only option that would fit that philosophy. What about questions – can they still call the Benefits Call Center? She laughed and said that had just beenshut down last month for lack of use. Why wait for minutes on the phone when the extensive intranet coupled with a direct click connection to the vendormade answers easy to come by.
She also mentioned that the major health providers and insurance companies had formed a partnership, so that all firms now essentially “bought a preset benefits package” to meet their needs – standard package A++, A+, B+ were available to companies. It turns out employee research had shown that employees wanted a good package but all of the companies existing packages were so much of a quagmire of confusing offering that employees didn’t even know when their benefits were superior to a neighboring company. Once companies realized that and after some bickering, the only decision required by the HR department is what percentage of each plan would our company pay for.
Ok, I had to ask, what else in HR has gone away? My mentee popped in with a comment, Mr. Sullivan you certainly haven’t kept up with HR. Everything changes faster now. The shelf-life of HR knowledge is down from 4 years when you were in HR to 18 months. Now everything in HR changes so fast that we can now lead our organization in change. HR must change faster than the rest of the
Our next stop was compensation. Except, now it was called “Total Compensation” because the level of benefits
But what about equity I jumped in? Well, now a manager has a software package developed by Watson Wyatt Hay that gives the manager guidelines and lets them decide with equity comparisons generated by a software application. A salary change beyond the preset limits is still automatically implemented (without approvals) with the only “control” being that an e-mail copy is sent to the managers boss.
I started a response by saying “you can’t trust manages to make those decisions” and both of them in unison shouted at me! That kind of thinking will cause the company to crash in 1999 right after you left. Shame on you. That kind of thinking left our managers weak. The people decisions (hiring, pay, firing, etc.) are the toughest ones.
By being too control oriented, HR caused this company to falter and to have to lay off ½ the workforce. Weak decision making in “people” areas seeped over into product decisions and it really hurt us. You let managers make million dollar decisions in plant and equipment but we wouldn’t let them give the receptionist a $.50 raise. So now managers are responsible and make all, yes all, people decisions. You treated managers and employees like immature children and did the tough stuff for them. Now we are taught to treat managers and employees like mature adults who volunteer at our firm.
What if a manager screws up I asked. Another scream from the intern. You never fired a single manager when you were here. Your HR staff was so afraid to take risks. We have a bad manager identification survey on our intranet that periodically surveys employees on the quality of their management. If employees aren’t challenged, recognized, get fair treatment or feel they don’t have open communication with their manager then the managers are given a quick fix program and if it doesn’t work they are fired. I jump in and say what about lawsuits. The intern, Irene, an aggressive young woman I might add, spouts back that post-exit surveys (6 months after leaving questionnaires) told us that the number one reason our best performers left was poor management. Our ROI analysis showed the increased productivity as a result of fixing or firing bad managers was 10x that of any possible legal costs – I never thought of it that way – I was impressed.
The aggressive intern popped in again, I bet you can’t guess the # 2 reason for the Hi-Performers leaving? I smiled and said the lack of job challenge! Finally she was impressed. You are right – but what did you do about it – I said once a year performance appraisals. She pounded her fist on the table and said how could you! We have actual performance data, customer, and team 360-degree feedback on the computer. With online data, employees can self manage their own performance in 90% of the cases. HR (PCC) gets involved in coaching the manager on the other 10% of the performance cases. In addition, every employee has a custom designed challenge plan to ensure they are continually challenged and are developing and growing as an employee – Wow I said out loud! And 25% of a managers pay comes from attracting/retaining and developing their employees said
As a result of strengthening our managers and our
I decided to be brave and ask my escort Irene a question that had been haunting me since I entered the office – What about the sign? The name outside the office when I came in. It didn’t say HR – it said PCC. My mentee jumped in with a response that made sense. HR departments have been renamed. They are now called “Productivity Consulting Centers (PCC) People come here for ideas on how to increase productivity. We no longer just “run” HR programs and hold managers hands as some HR people did.
We provide consulting advice, coaching
If our advice doesn’t work – the client pays only ½ the fee. We produce or we are out.Irene
In fact, this year our company’s productivity exceeded our competitors by 19% and the 5 departments that utilized our consulting services the most had a whopping 68% increase in productivity compared to the year before and 90% higher than the 5 departments that used us the least. Our data appears in the annual report and since we have been tracking PCC (HR) and sharing it with investors our stock price has gone up 27% faster than the World 500 index. Great HR impacts market value – and we can prove it. What did the CEO have to say about all of this I asked? Not a lot – said the intern, she did it when she was HR VP before she took over the job as CEO – I said wow again but this time to myself. I was never ever considered for the CEO – I guess I was too much of a “partner” and not enough of a leader!
Well, I was ready to see some more so I suggested we go to employment. It was smaller than I expected and it was free of visitors and candidates. I asked why. The intern said most applicants and all managers have Web TV with a video camera both at home and at work. As a result, all interviews are now done long distance on the web. They are recorded so those not available can view them later. She added we now have IVR (interactive voice response) automated telephone interviews as well as online computerized “first” interviews on the Web which sort out candidates without the right experience levels and culture “fit”.
A web-based simulation game simulates the job they will do and assesses whether they have sufficient technical skills to go to the next step. The next step in the process is an in-depth simulator “game” on the web that allows potential candidates to be“final” screened to see if they prequalify for the job. The job simulator is so realistic (and it measures both current skills and the competencies for forecasting and assessing future problems) it beats any human interviews invalidity and reliability by 47%. The intern proudly stated that the simulations were so effective that interviewers (managers) could focus solely on whether the applicant was a good fit for our culture. These “putting them in the job” simulations reduced EEO complaints to near zero and resulted in the productivity of our new hires being the best in the industry ($10 in output (productivity) per every dollar of people costs spent (people cost include prorated HR costs, training costs, salary, and benefits). The highest productivity ratio in the industry she beamed. Our PCC advice is so good we get the most out of our people, they are the most challenged but also the highest paid. We have the lowest voluntary “performance” turnover rate (3%) of any firm and we recently topped HP as “Fortune’s” best place to work in the world.
How can you pay the most and still be productive I interjected? Its easy workers work smart and produce more because they waste less time on approvals and rules that the HR “cop” used to place on them. I had to interrupt, what about the accountants, they have more rules than HR ever had. Without missing a beat she said they are all gone too. Replaced by a computerized audit system that warns managers but does not prevent them from making “outside the norm” financial decisions. Now that was ok, firing accountants. I always called them “historians” because they told me what happened last year as opposed to what I needed, which was what was going tohappen next year!
I was tired but impressed. What else had changed? Irene noted that no one has resumes anymore and everyone now has a web page with a “portfolio” of their work. Our computer periodically scans possible hire’s web pages for updated skill or projects.
References are all done electronically by C check, very much like today’s TRW type systems.
Most hiring is no longer fact to face. In
We recruit using new tools also. Push technology has allowed us to send
How has College
If managers do all compensation and hiring what is left for HR. I just assumed the way things were going that managers do all employee relations work but I wondered how so I asked. My mentee injected that a software program called “Decisis” had a decision tree that walked managers through all tough employee relations issues. It included questions to ask and various other checklists. It also had laws and court cases that could be easily accessed without a Philadelphia lawyer. It even had video clips and role plays on how to fire, discipline and motivate workers. It even has a “call” button that connects your directly with HR or an attorney if you feel you are in over your head. I asked if I could play on the system for a while and the intern agreed. Wow, what neat toys that allow almost anyone to be a better manager.
Now I’m beginning to see the big picture now. I asked the dynamic duo if I can take a shot at what training mustbe like. Online competency assessment tools, video clips, teleconferencing, skills/interest inventories electronic articles, books, and e-mail learning networks. The “twins” smile and shake my hand. But they smile and say you left out a low tech one – we give video and audio tapes to employees so they can train during their commute or at home(actually less than 40% of the employees come to work 5 days a week thanks to our “just produce baby” telecommuting flexiplace program. Managing “remote”workers is in fact one of the key areas the PCC people help managers with. It turns out its harder to motivate workers at
I’m both excited but exhausted. I suggest we get coffee. As we sit down I ask what happened to all of those HR people. Oh, that’s easy, the best (1/3) are still here as strategic consultants and they love it. One third became line managers (they have the highest success rate because of their people skills). The last third
We are HR leaders that are now heroes in our organizations. We now get promoted to be CEOs because we
Note – Nearly every example in this “dream” is currently in use TODAY in an actual U.S. company
© Dr. John Sullivan March, 1998 for the IHRIM journal