HR Metrics: Tracking vs. Insight































HR Metrics have been a passion of mine for several years now. It seems that HR Metrics have gained a lot of momentum in the last 2 years. I get many requests to speak on the subject and our company has increased projects and workshops in this area.


What bugs me the most, is the same issue I observed 5 years ago...


HR departments are not providing insight to leadership they provide tracking to leadership.


Yes, leadership wants to know something that impacts results or something they didn't already know. Here are some examples of things leadership is not (typically) waiting on pins and needles to see:


1) days to fill
2) # open reqs
3) # of training participants
4) turnover % for entire organization
5) hiring ratios from recruiting sources


But give leadership some insight, and you will be a rockstar:


1) turnover % of high performers with reasons for turn and an action plan to improve
2) HR forecast with new hires projected over next 12 months with staffing plans attached
3) ROI of recent training initiative with % increase in productivity and $ revenue increase
4) Average performance rating of new hires with baseline revenue/employee (to see growth over time)
5) Analyze new hire recruiting data and performance data to create a "success profile" for candidates increasing hiring success rate and decreasing cost per hire.


I was at a metrics conference last year and an attendee asked me the following question:


"Our team spends hours on our metrics, we have over 100 HR metrics we provide to our management. I send the document with a return receipt request to over 50 managers. I had 2 people actually open the document." "How can I increase the number of managers that use our data?"


I said, start over. After some more questions I found that ALL of the metrics were tracking metrics. If you were a CEO would you want to see how many transactions accounting processed last month, or so you care about receivables outstanding and what the impact is to the business? Same thing with HR. Yes, those tracking metrics are important to your department to make sure we are delivering quality service efficiently BUT what really matters is impact.


You have to start with strategy and work your way to metrics. By mapping your organizational strategy and then aligning HR to that strategy...the metrics that your leadership cares about become crystal clear.


Don't just start measuring for measuring's sake....you will wind up with way too many measures that don't tie to anything. Make your metrics matter by aligning them to your organizational strategy.


Life - by Steve Jobs

Sometimes people say great things and they should be spread around the world. This I thought was brilliant.

“Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma - which is living with the results of other people's thinking. Don't let the noise of other's opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.” --- Steve Jobs


The Phantom Has Returned!!!




Phantom stock – it's alive! 

There are signs of a spectre walking the halls of Corporate America. A tool which has languished in obscurity at public companies – phantom stock – recently has shown signs of emerging. While the reasons for turning to phantom stock are varied – uncertainties in the financial markets and insufficient authorized shares for actual stock awards are two for public companies – we believe that the compensation device deserves more consideration. Phantom stock can provide valuable attributes of equity and can help with motivation, focus, and retention of recipients.


What is phantom stock?The basic concept of a phantom stock program involves a company's agreement or promise to pay a recipient of an award an amount equal to the value of a certain number (or percentage) of shares of the company's stock. Commonly structured through the award of units, a phantom stock program enables a company to make an award that tracks the economic benefits of stock ownership without using actual shares. Since phantom stock is a contractual right and not an interest in property, the tax event for the executive and the employer occurs at the payment in settlement of a properly designed phantom stock arrangement.

Phantom stock plans are shadows that mimic their real equity counterparts; phantom stock and shadow stock are terms that are often used interchangeably. Although shares of real stock can be traded at will, phantom shares or units take on value only when key contingencies or vesting conditions are met. A phantom stock plan typically does not require investment or confer ownership, so its recipient does not have voting rights. It is essentially an upside opportunity, as participants' investments are typically limited to their services; they stand to gain from any upside growth of the company.

In making awards under a phantom stock plan, there is a determination of the value of a phantom share or unit in connection with awards to one or more participants. Valuations also will be needed for periodic reporting to participants (and to actual shareholders and the Securities and Exchange Commission if used by a public company) as well as for determinations of amounts payable at the time of settlement.

Phantom stock programs can be simply designed. However, they should be created to meet the company's specific needs and objectives in protecting the unique knowledge and skill base that is represented by those key employees selected for awards. The two types that are most prevalent are (1) the 'appreciation-only' plan (much like a stock appreciation right), and (2) the 'full value' plan, where the award includes the underlying value of the unit (like a restricted stock unit).

Generally a phantom stock plan or agreement spells out how the program operates and how payments are determined, along with various other details, often including:





Eligibility criteria






Vesting schedule






Valuation method or formula






Settlement and payout events






Handling of various termination events, including retirement, death, disability, dismissal and resignation






Restrictive covenants






Form of payment






Provisions for the sale of the company






Any funding vehicle




Spooky designs and accounting monsters...
One of the key challenges of inviting a phantom into your offices is that it may come with another ghoul – the accounting monster. Historically, phantom plans have been viewed as undesirable from an accounting perspective because of the resulting liability (variable) accounting treatment. This creates volatility on the company's income statement, which is something that concerns most chief financial officers. Generally, for financial accounting purposes, phantom shares must be treated as an expense over the required service period, and the company does not receive its income tax deduction until the benefits are paid out. This timing is similar to other equity awards but can prove to be not as advantageous in periods where the value of the award increases. With liability accounting, the accounting expense and corresponding tax deduction will be the same. When real equity is used, the company may get a tax advantage as the expense can be locked in at grant while the tax deduction can grow as the value of the equity grows.

In addition, coming up with cash to cover phantom payouts can be tricky. Phantom stock plan gains (in appreciation-only programs) or current fair value (in full value programs) must be paid by the company versus the public markets which is the case when using publicly traded equity. Finally, phantom stock programs typically are subject to the often complex rules applicable to non-qualified deferred compensation under Internal Revenue Code section 409A, so care must be taken in their design.



Why use phantom stock for LTI awards?Phantom stock can help in getting an executive team to think and act like equity partners. It creates a sense of ownership in the success of the business because having phantom stock means the participants have 'skin in the game.' The concept of being an equity partner by having phantom stock can create the same feeling of connection as the more traditional equity tools such as stock options and restricted stock.

In addition to its incentive components, a phantom stock program involves deferred compensation and can act like golden handcuffs in retaining key executives. Phantom stock most often is used by privately held companies, but some publicly traded organizations are using phantom stock or similar cash based long term incentives as well.

Phantom stock plans can be especially useful in providing the economic benefits of equity without diluting shareholders. Because recipients of phantom units lack voting rights, a company can issue these units without altering the governance of the company, or worrying about dilution issues. Phantom stock does not directly dilute the value of real outstanding shares. Phantom stock awards do, however, have a significant effect on cash flow at payout. This is why some plans have a conversion feature, and may pay out in actual stock.


Another advantage to a company is the ability to design an award so that an executive receives no benefit unless vesting conditions are met and, under the appreciation-only model, the company's value has increased. The fair market value of the stock is commonly used by public companies, while private companies have various approaches. For example, a professional valuation may be preferred but viewed as too costly; many companies then turn to book value. Other approaches include a formula using revenue, EBITDA, net income, or a combination of relevant measures; a formula also can help with consistency of the valuation over time.

There are many reasons a company would consider a phantom stock arrangement:







A public company may find that it has insufficient authorized shares to award the desired amount of awards that require actual stock






A company's leadership may have considered other plans but found their rules too restrictive or implementation costs too high






The owner(s) may desire to maintain actual and effectual control, while still sharing the economic value of the company






There may be ownership restrictions for certain types of entities (i.e., sole proprietorship, partnership, limited liability company), such as the S corporation 100-shareholder rule






The objective is to provide equity-type incentives to a restricted group of individuals
     -  A corporate division that can measure its enterprise value and
       wants its employees to have a share in that value even though
       there is no real stock available

     -  A desire to focus on an event or contingency, such as a sale,
       merger, IPO, etc.




A phantom plan can typically provide a more flexible alternative that is not subject to the same restrictions as most equity ownership plans. For many, the simple desire to use an 'equity-like' vehicle without giving up true ownership may be reason enough to implement.






Pros and cons of phantom stock
Advantages
Disadvantages
  1. Allows employees to share in the growth of the company's value without being shareholders

  2. No equity dilution as no actual shares are awarded

  3. Powerful retention tool when combined with vesting

  4. Board/compensation committee has flexibility to design plans based on their own discretion

  5. Can be tied to overall company or business unit results

  6. No employee investment required

  7. Can provide for dividend equivalents

  8. Design can permit phantom stock to be converted into actual equity

  9. No income tax until proceeds are converted to cash or real stock

  10. Potential tax deferral of employee compensation

  11. Retirement benefit opportunity

  1. If paid in cash, can be a financial drain on the company's cash flow

  2. At a private company, may require outside valuation on an annual basis

  3. Company needs to communicate financial results to participants

  4. Payments to employee are taxed as ordinary income

  5. May impact the overall value of the business in a transaction

  6. IRC section 409A rules add complexity and difficulty in achieving objectives



Who is using phantom stock?Phantom stock is not only a private company phenomenon. According to our research of recent proxy filings, some well-known, publicly traded companies are using this tool to attract, retain, and motivate select groups of employees.


No need to fear the phantom
Phantom stock is a traditional long-term incentive vehicle, and not a fad du jour. While trends may come and go, cash based LTI plans do have a place in the executive compensation portfolio. While these plans are generally simple, and do provide flexibility to the company, they can also raise various issues that must be considered carefully. In the appropriate situation, a phantom stock plan can keep the company spirit alive in the executive suite.





a reprint from the Hay Group - August 2010

Post-Crisis Strategy Moves


U.S. business leaders, and HR recognize the increased volatility associated with the post-crisis economy and are approaching their companies’ most strategic initiatives with more caution than ever before. Risk aversion still dominates corporate psyche especially HR, but concerns over risk are shifting from avoidance to successful management. Executives, reflecting on lessons learned in the downturn, are concerned about the impact of failure as never before. As a result, many are assuming a corporate strategy of “perfection,” tightly scrutinizing how capital is being spent.

It is no wonder three quarters of companies have changed their approach to strategic initiatives in the past year, according to the latest FD/Forbes Insights Strategic Initiatives survey of 180 C-level executives, senior strategists, and communications professionals. The study, done with the Council of Public Relations Firms and the Association for Strategic Planning, also uncovers overall optimism that well-considered plans can still yield productive initiatives. Respondents believe there is room for growth, but they are
being more selective and taking careful steps to be more informed and better prepared than in recent years.

What are your thoughts on this post-crisis dilemma? 

Are Your Skills Really Transferable?


If I’ve heard it once, I’ve heard it a thousand times. You, the job seeker, announce with confidence: “I can do the job. I know I can. I just need someone to give me a chance.”


But in a tough economy full of qualified job seekers, skills don’t need to transfer. That’s because there are plenty of well-trained people with the right company background, certifications, and experience to meet and exceed the job requirements.


Those candidates don’t need training. There’s no delay in the new person’s affect on the department, and no risk for the hiring manager.



That makes it an easy decision for the hiring company.


• Are your skills transferable? Probably.
• Can you do the job if given the chance? Likely.
• Will you be given the chance? Unlikely.


So, if your skills are not transferable in a tough job market, what can you do?
Pursue jobs in your field, at your level, and in your function


While it’s exciting to try something new, in a tough job market you need to stay focused on where you are immediately relevant. Sounds limiting, I know. And it can be frustrating to hear. But companies are looking for specialists these days, not generalists. And transferable equals general.



Consider delaying your career change
I’m not saying give up. But maybe it’s time to establish a longer time horizon. If you decide to delay, here are a few steps you can take today to create longer-term momentum: get a certification, attend a seminar, volunteer, or accept project work to get experience or exposure in the new industry or function.
Stop applying for jobs unless you’re truly qualified
Tighten your focus around your true strength areas and work more aggressively to create a relevant target company list. Once you have it, begin a push to network with everyone you know who can get you introduced or considered for jobs where you are highly qualified.


Employ a dual strategy
If you’re committed to making a change sooner rather than later, apply for jobs in your current field or function. Even if you don’t accept that job offer, at least you will have some options to consider when money gets tight.


Go get a job and then transfer, over time, to the new one
One way to reduce risk for a hiring manager is to get a job in your strength area and then, over time, apply for other jobs within the same company. This way, once you’ve established social credibility within a company, you can apply for other internal jobs. They’ll know you and your work. You can also be a star on cross-functional teams to expose your brand to other departments.


One other theory is to apply for everything and let the hiring company decide whether you have the necessary qualifications.


To Coach or NOT to Coach

























I had the pleasure of speaking at a lunch and learn last week at one of my favorite company's headquarters here in Atlanta. The topic was coaching and the audience consisted of HR Managers and Directors.


Most of the discussion centered around how HR can influence managers to use coaching to increase performance.


After reading a lot of material on the subject and a really good recent blogpost from Kris Dunn, I have decided there are 2 camps on this subject:


1) Get rid of the performance review and replace it with coaching sessions
2) FORCE managers to coach in the current performance management process


I think there is a happy medium that uses coaching skills to produce RESULTS. Really? Coaching can impact results and that is how HR can influence managers to be coaches. I think HR managers must educate line managers on the benefits of coaching employees:


1) Employees have cited the need for feedback as an engagement driver. X'ers and Y'ers have come into the workplace expecting feedback. Managers have not been trained on effective coaching skills...so there is a disconnect...big time.


2) Goal attainment. Think about a sports coach with the goal of winning. There are countless hours spent on coaching the athletes getting them ready for the game.


3) Employee Development. Managers can coach employees on many subjects but the WIIFM for the manager is an employee that has developed a skill that he/she didn't have before.


Back to the lunch and learn....when asked why managers DO NOT coach employees, the audience said:


1) Managers don't have time


2) They don't like confrontation


3) Our culture is one of getting things done and fast...all about results.


My answer to the objections above are...you have to make the time because employee's engagement at work is stronger when feedback is 2-way. Coaching is not confrontational it is collaborative. And for #3...coaching is about getting those results, with clear goals and objectives set, results will follow.


Sometimes, coaching is seen as a punitive activity. "We do coaching when someone is going to get fired as a last step." If this sounds familiar, then some education has to be created around why coaching is positive and needed in the organization.


So I ask you, coach or not to coach?

Who Is that Leader in the Mirror?


"Mirror, mirror, on the wall," asked the Queen in Snow White, "who is the fairest of them all?"
Things got sticky when the Queen got the answer she didn't want to hear, but at least her mirror was honest. Too many bosses are looking in the mirror and being told that they're doing just fine, despite evidence to the contrary.


An article in Training Magazine titled "The Blind Leading the Company" reported on research into manager confidence in their skills and the accuracy of their self-perception. Here's the money quote.
"97 percent of the managers who think they are “good” or “excellent” also believe they know their strengths and development areas. Compare this to only 63 percent of the managers who think they are “fair” or “poor.” Data reveals the managers most confident in their skills are also most confident that they see themselves."


I don't find this surprising at all. Study after study shows people in all kinds of situations are likely to over-estimate their abilities and underestimate the need for improvement. But if you're a boss and you want to be a good one, this research has three powerful implications.
You can't trust your mirror. No more excuses. After reading this post you can't fall back on the "nobody ever told me I overestimated my abilities" excuse.


You must commit to the rigorous and discomforting process of getting the true picture of who you are and how you're doing. Seeking feedback must become a habit. Hearing the feedback and acting on it, hard as it is, must be part of your plan. You can get some help from Mary Jo Asmus' excellent post, "The Value of Knowing Exactly Who You Are."


You must commit to the difficult habit of getting better. As you grow and develop, that target will move as Marshall Goldsmith wrote in What Got You Here Won't Get You There.


Boss's Bottom Line
Lieutenant General Robert Forman summed it up: "In the pursuit of excellence there is no finish line."


Posted by Wally Bock at 8/18/2011 3:42 PM

Have You Addressed the Digital Skills Inventory of Your Employees?

Since it seems forever HR has touted, or should I say professed, the need for skills inventory and training to keep employees competitive. Surely, you have addressed this over the years and even with the extreme cutbacks over the last 2 years you have continued to develop your people either with a decent training and development budget or one that may be something less than a shoestring.

Today, both on the talent acquisition side or the talent management side you need to take a serious look at the "digital skills" inventory of your new hires, key executives, fast start employees, mid-level management and sales teams. This is not your average skills inventory but one that your company will benefit from for years to come. If you have not looked at this important element then here are a few of the key components of your new "digital skills" inventory checklist:

  • how to get connected to the Internet, both on the road, in the office and at home. This may seem basic but if your employees cannot do this "you lose!!"

  • how to use basic collaborative and knowledge exchanging tools for on-line meetings. This is important for non-centralized management teams, sales people displaying products and product testaments;

  • mail - yes as simple as logging into mail systems, company proprietary, or products like G Mail, Hot Mail, or Yahoo Mail;

  • how to capitalize on your company's internal social network (Facebook and Twitter, NSS), PeopleSoft/Oracle or other data gathering systems that employees would use;

  • Smartphone and other mobile apps that are important for the company or employee to use; and

  • searchable databases external to the company utilized databases. 

All of these are important for your company to be competitive in today's world and to make your employees more valuable to you in generating additional revenue or product launches. In this effort your goal should be to be "digital" across the board. 

You should do a search on Google to see what other companies are leading the way in "digital skills". One company that is leading the way in P&G, and I am sure you are not surprised at that. 

I would appreciate your comments on this post and what your company is doing in defining and managing "digital skills" inventories.  

Telling A Great Strategy Story















Once upon a time, there was this big company. This company wanted to grow into a bigger company, so it huffed and puffed and blew its competition over...THE END.
I wish I had $100 for every time I have heard, "Our organizational strategy is stuck." "We did our planning, but it was just that, planning and no execution."


What we have found, with some of our clients is that strategy gets stalled. And it gets stalled somewhere between the top and the employee, who by the way has to actually execute on that strategy. The problem is, in my opinion that leadership understands the strategy and doesn't do a good job of translating it for the next level. The 3 ring binder with all the initiatives, the vision, the mission, values etc is great. Except....when no one knows what to do differently.


So, why not explain the strategy in a simple, easy to understand way. I know....what a novel idea. Use a story, with a beginning (current state) a plot (what we will do differently) and an end (what we will look like when we are finished).


Employees will be so grateful. No more strategy by PowerPoint...just an easy to understand story.


HR is great at this, so get your strategy documents and start writing!!


I wish strategy execution was as easy as telling a story, but it's not. There are several other critical success factors for a successful implementation:


1) Make sure strategy is understood by ALL employees
2) Make sure ALL functions, departments, and divisions have mapped their strategy and understand how their contribution impacts the overall strategy
3) Make sure goals and objectives are tied to performance management system
4) Make sure metrics are created and tracked
5) Accountability for results is a must


Don't let all your planning be in vain...be deliberate about your execution!


Tell me about your challenges and successes with strategy execution....


From Freelancers to Telecommuters: Succeeding in the New World of Solitary Work


As the economy flirts with a double-dip recession and cost-conscious companies hesitate to re-hire, the workplace for many Americans has shifted away from crowded offices to a new world of solitary work. From freelancers to telecommuters to laid-off workers making do with temporary jobs, an increasing number of Americans are reporting to work each day from a corner of their home, a space in the garage, a private office or even a table at the local coffee shop.
For some, it's a dream come true. But the transition isn't smooth for everyone.
"It's easier to get in the mood to work when everybody else around you is working," says Maurice Schweitzer, a Wharton professor of operations and information management. Without an office, "you have to create that entire structure yourself."
For solitary workers, re-creating the workplace goes beyond buying a phone and a laptop. Lone workers must also take greater responsibility for their own professional image, networking opportunities, training and daily motivation, experts at Wharton and elsewhere point out. If they don't, they risk missing out on important social connections and possibly career growth. Companies, too, should mind the gap. Despite the apparent cost savings of offsite workers, remote connections could possibly lead to miscommunication, and threaten productivity in the long run.
It's unclear how many Americans work in isolation. According to the New York-based Freelancers Union, independent workers make up about 30% of the American workforce, although this figure does not include telecommuters who are part of a company but work from home. Also, many independent workers -- including freelancers, part-time workers, consultants, independent contractors, contingent workers, temps and the self-employed -- work on job sites with other people.
Being physically apart from co-workers creates challenges both internally and externally, Wharton experts note. One of the most basic: Without a physical office, it can be difficult for some workers to find a balance between work and play. The isolation raises "the whole question of how you manage the boundaries between work and the rest of your life," according to Wharton management professor Stewart Friedman, who studies how leaders integrate the four domains of work, life, community and self. For those who are independent-minded, working from home can be more productive than working at the office because it frees them from distractions and allows them to work as they please. For others, home life gets in the way. "You have all sorts of other activities that might be a distraction from the work. So how do you focus your attention on the things that matter, when they matter? You need to have a greater sense of discipline about creating those boundaries."
Some people require more boundaries than others, points out Wharton management professorNancy Rothbard, who has studied how people blend or separate their work and personal life. "People actually have different preferences for how they manage these boundaries," she says. "There are some people who like to blur the boundaries between personal and professional -- people who prefer to integrate their work and life domains.... Then there are people on the other end of that spectrum who really strongly want to keep their work and personal lives separate." For the latter group, working at home would be "a disaster," Rothbard adds. "It's going to be very distressing to them. It's going to be hard for them to manage."
A New Way to Define Your Career
Monica McGrath, a leadership consultant and adjunct management professor at Wharton, recommends a dedicated space at home or a shared office -- not the ubiquitous coffee shop, which is filled with distractions. "If you shift to a home-based business, it is quite easy to assume all you need is a phone and a desk. What you actually need is a new way to define your career," McGrath notes. Without the structure of the office, solitary workers can succumb to "the distraction of the laundry, the pets, the neighbors, friends looking for company, boredom and other types of demands. While all these things can distract your mind at work, the fact is, you can't really do the laundry at work."
For independent contractors and freelancers, work-life boundaries can blur not only in space but time. Since contractors paid by the hour tend to become very focused on how they use each minute, they sometimes end up working more, according to Wharton management professor Matthew Bidwell. "It becomes more salient to them if they're not working," says Bidwell, who has done extensive research on contract workers in the IT sector. "If they take off an afternoon to do something fun, it is much easier for them to put a dollar figure on how much that costs."
Money matters also lead to meaning-of-life questions for workers who are on their own. Susan J. Ashford, a professor of management and organizations at the Stephen M. Ross School of Business at the University of Michigan, believes that questions about purpose and meaning come up more easily to workers who have no organization behind them. "Our argument is that your ego is very invested in the work because it's just you," she notes. "There's nobody there to tell you that what you're doing is great even though profits are going down."
In a study recently presented at the Academy of Management, Ashford conducted in-depth interviews with solitary workers about how they stay motivated, and discovered that many needed to create a larger narrative of meaning behind their work. For some, such as a rug maker who likened her basement workshop to Picasso's studio, the stories were strictly imaginary. Others created ego-boosting surroundings, like the financial analyst who set up his office to feel like the cockpit of a jet plane. The narratives helped sustain motivation when money got tight or stress levels rose. "When you are on your own, meaning-making feels much more necessary to your work life than when you're in an organization," Ashford says. "The more freedom you have in your work, the more you have to do this."
Creating Virtual Face Time
Managing personal time, space and motivation is just the first step: Lone workers also have to work to keep themselves on other people's radars while battling the misperception that they are not really working.
"There's a sense of illegitimacy about it," notes Debra Osnowitz, a sociology professor at Clark University and author of Freelancing Expertise -- Contract Professionals in the New Economy.Offsite workers have to make extra efforts to communicate that the job is getting done, Osnowitz found from interviews with freelance writers, editors, programmers and engineers. "Their being offsite and out of sight means needing to be accountable and clear," she says. "You can't depend on just being there to indicate that you're attentive to what your client wants."
Wharton management professor Peter Cappelli agrees. "In many organizations, if not most, there's still a premium based on face time. The more we see you, the more we think you're working or are valuable -- particularly in jobs that don't have clear performance measures."
Indeed, a study released this month by WorldatWork, a nonprofit association that examines workplace issues, found that the number of people who worked from home or a remote location for an entire day at least once a month declined to 26.2 million in 2010, compared to 33.7 million in 2008. A higher rate of unemployment is believed to play a role in those numbers, the association reports; but so is anxiety over job security and the widespread belief that visibility creates awareness of a worker's value to a particular company. Although the total number of "teleworkers" decreased, the percentage of people who worked remotely more than once per month went up, from 72% in 2008 to 84% in 2010.
Distance can also create gaps in communication and training opportunities, Cappelli notes. "You kind of lose out on the office politics in terms of knowing what's going on. It's still true that people who are liked get more opportunities." And skills can diminish without easy access to training and new projects. "You get hired as a contractor to do the work essentially that you did before," Cappelli says, "so you could become obsolete pretty quickly ... unless you do things to [increase] your skills."
Lack of face time also makes it more difficult for offsite workers to cultivate professional relationships that can grow a career. "Face-to-face communication allows people to build trust and communicate more completely than they would otherwise," according to Schweitzer. When it comes to building lasting work relationships, the most important communication is that which is not related to work -- the handshake, a pat on the back, jokes and office chitchat that disappears when workers are only remotely connected. "Non-task communication is what goes missing with this distant work," Schweitzer says. "So in the absence of non-task communication, we don't build that relationship -- that rapport -- and ultimately we don't build that trust."
Over time, lack of contact could shrink a lone worker's professional network and the benefits that come with it, Friedman points out. "You lose so much of the benefits of social interaction ... the serendipitous contact with other people that might lead you to resources and connections." With fewer chance encounters in elevators, lunchrooms and daily meetings, it becomes more difficult to build one's reputation, find mentors or mentor others, or seize the chances to contribute to other people's welfare and success. "It's more difficult to effect that building of social capital," Friedman says. "If you're working in social isolation, you have to make an extra effort to connect with people."
Distance creates not only a potential problem for workers, but also for the teams and clients they support. Without face-to-face, in-person contact, important pieces of communication can get lost. "Emotions are information ... and emotions influence performance," notes Wharton management professor Sigal Barsade, who researches emotions, organizational culture and team dynamics. More than half of communication about emotion is transmitted through facial expression; about one-third comes from tone, and less than 10% comes from what is actually said, she points out. That means people who communicate primarily through phone and emails are at a disadvantage because they aren't getting complete information from each other.
The solution is not to stop telecommuting, but for management to be "hyper-vigilant" about potential communication gaps and take steps to prevent them or compensate, Barsade says. "If you can't get the full information about people's emotions, ultimately that will affect your performance, their performance and the performance of the organization."

Top 10 Reasons NOT to Measure HR









I speak and write on the topic of metrics a lot. And I always ask where individuals are on their "metrics journey." I get answers from beginners to "we are using data to be predictive." I also get "we aren't measuring anything." I always ask, "Why not?" Here is my unscientific list of why HR professionals do NOT measure:


1) It's hard
2) Don't know what to measure
3) My leadership doesn't understand why we should
4) Our data is in too many places
5) We do not have anyone analytical in our department
6) We are swamped, don't have the time
7) We used to measure a few things, but no one did anything with the data
8) You can't measure the impact of HR, it's too soft
9) Finance is doing that!
10) We don't have the technology to do that


Ok, now for my answers to the "excuses" above


1) If you can't do basic statistics, or even just formulas, partner with an analyst in your company to mentor you. Take some classes, be curious
2) Start with organizational strategy and work your way to metrics from there
3) Find something in the data that your leadership didn't know....you will be a rockstar and in a better position to ask for resources.
4) Data is scattered in an organization. Getting it in to one repository is challenging but really worth it. Access and Excel are 2 choices that most everyone has on their computers right now.
5) See #1, find someone within the company, an intern, learn by doing....
6) Metrics allow you to focus on what is important, you can't afford not to make the time
7) It's all about the data story and how you present the data. If you use rows and columns then expect no one to act on it.
8) You can measure the impact of HR, it just takes time to understand causal relationships and then testing those hypothesis. Today with most companies spending 60-80% of budget on HR related costs, you have to understand the ROI of this investment.
9) Finance can and will do this if we don't start measuring ourselves. Enough said...
10) Start in Excel it is powerful and available...


If you aren't measuring today, start by mapping your organizational strategy within your HR department. Mapping is a great way to illustrate what is driving your strategic initiatives. This exercise will also assist in the discovery of what metrics matter to YOUR organization.


Ready, set, start measuring....

Are CIOs Missing the Cloud?

Four disruptive forces are causing executive teams to reconsider how the CIO function will add strategic value in a world where cloud computing, distributed architectures and mobile ubiquity are givens for future competitiveness.
·                       Rising Server-to-Admin Ratios
When 25 physical servers for each IT admin was the norm, CIOs built organizational structures suited to that reality. Hiring, training, reporting lines, compensation, key success factors, annual reviews, career advancement and social norms were all built around that 25:1 ratio. Now, enterprise IT is facing the near-term reality of ratios that are 100:1, 500:1 or even 1,000:1. Google is rumored to be aiming for a 10,000:1 goal.
This massive increase in administrative density signals wholesale changes in the enterprise IT org chart. It changes who is hired, what skills they must have, how they will be trained and managed, evaluated and compensated, how they interact with and support business units, and what their long-term career paths will look like.
·                       IT Becomes a Variable Cost
In the early 90s, when the CIO title was gaining popularity, the chief driver for bringing IT into the executive suite was the massive capital allocations required to give organizations a competitive advantage through rapidly changing technologies. These technologies demanded larger and larger percentages of the corporate budget, so a direct line to the president or CEO was paramount in justifying these spends.
Cloud and next-generation IT strategies dramatically change this. What was once CAPEX increasingly becomes OPEX, and long-term risk falls accordingly. So, where’s the strategic value in having IT in the executive suite? Arguably, it’s more important than ever.
The increase in business agility and responsiveness that cloud computing makes possible shifts the strategic value of the CIO from a technical role to a business role. CIOs must understand the functions they support, so they can help these functions quickly put the infrastructure and applications in place to support quickly moving new ideas to market, testing them, and iterating them to general release. Competitors will be doing this (and already are, in several industries).
·                       End-User Auto Provisioning
End users are gaining a level of power that makes past demands for integration of Blackberries and iPhones seem whimsical by comparison. CIOs accustomed to pushing back against new ideas based on security threats and support burdens will increasingly find themselves cut out of the deal by end users who can go online and provision SaaS (software as a service) and IaaS (infrastructure as a service) with a credit card.
As Vivek Kundra, until recently the White House CIO, has said, “the more a CIO says ‘no,’ the less secure his organization becomes.”
·                       Infrastructure Becomes Commodity
New — and largely uninvented — processes are required to deal with all of this change. Governance, compliance and security are all matters that 20 years of client/server policy is ill equipped to deal with. On top of this, CIOs must develop policies for the rapid growth of collaboration technologies (and, yes, social media) that employees will increasingly require in order to do the job the CEO is asking of them.
These shifts signal the need for the new CIO to bring an entirely new set of skills to the game. Yes, the new CIO’s job will continue to require an understanding of infrastructure and architecture, but a knowledge of how to turn the dials and knobs will be far less important tomorrow than it was yesterday. Tomorrow’s winning CIO will bring an MBA’s understanding of finance, marketing, operations, HR and the other functions. CIOs will understand how to say “yes” to new services that make their companies competitive, while mitigating risks and allowing for small-scale failures in the pursuit of long-term success.
Written by Scott Bils
Scott Bils is a partner at the Everest Group, an IT consulting firm.

10 Principals of Employee Engagement

Here are 10 principles of employee engagement that David Zinger outlined as part of his Employee Engagement Network, located in Winnipeg Canada. I encourage you to determine your own or to add yours as you  comment on this post.
  1. Employee engagement is a human endeavor. Engagement is depersonalized when we refer to employees as human capital or human resources. I manage capital or resources, I work with people!
  2. Employee engagement must create results that matter. This means results that are important to the employee, manager, leaders, organization, and customers. There is little point in having engaged employees if they are not contributing and creating significant results. In addition, if the results only matter to the organization and not the employee – or the employee and not the organization – employee engagement will not be sustained over time.
  3. Employee engagement is connection. Connection is the key. Authentic employee engagement involves connection to our work, others, our organizations and ourselves. When we disconnect we disengage. Read this short post on employee engagement and connection.
  4. Employee engagement is fueled by energy. We must pay close attention to mental, emotional, and spiritual energy at work. In addition we need to enhance organizational energy through meaningful connection and high quality interactions.
  5. Employee engagement is more encompassing than motivation. Employee engagement embraces our emotions about work, how hard we work, how much we care about the organization, etc. I think it is a richer and more complex concept than simply using motivation to look at work.
  6. Employee engagement is specific. We cannot sustain engagement all the time and everywhere. When we talk about engagement we need to ask: Who is engaged, with what,  for how long, and for what reason?
  7. Employee engagement requires purposeful disengagement. We need periods of rest, recovery, and rejuvenation to sustain engagement over the long term. Theoretically we may be able to work 24/7 but practically we work best when periods of full engagement are punctuated with periods of disengagement from specific work or tasks.
  8. Employee engagement makes a difference. Employee engagement can improve organizational performance while also contributing to individual performance and satisfaction.
  9. Employee engagement is vital in recruitment, retention, and satisfaction. I believe the majority of workers want to be engaged and look for work that will engage them. People will often leave organizations when they feel disengaged. It may even be worse for all if they remain when they are disengaged.
  10. Employee engagement is now. Look to the now. Don’t wait for some survey results or diagnosis from a management consultant. Look at the work you are doing right now and determine how you can engage with it more fully. Look at who you are working with and determine how you can help them to be more engaged. In addition, look at what you are engaged with now and make sure the results matter!

I encourage you to leave a comment about the principles you follow for employee engagement activities at my email address wgstevens2@gmail.com 

David Zinger is an employee engagement expert committed to moving employee engagement into authentic and significant workplace engagement with benefits for all

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Day 1: HR Strategy and Metrics Recap














Today I had the pleasure of facilitating a HR Strategy and Metrics workshop for the Performance Institute in Washington DC. I had just over 30 attendees that were eager to learn more about linking HR strategy to organizational strategy and how to measure the execution.

The majority of the day was spent on a tool we use, called the Business Strategy Map. I have written on this topic here.

The participants were engaged as they brought their own strategic outcomes from their companies to gain hands on real time experience with this process.

After we spend the majority of the day on this process I asked the participants what the good, the bad and the ugly was...here is what they said:

1) It's hard, really hard but worth it
2) I can see how this could be a communication tool in the area of strategic execution
3) It can be a collaboration tool between functions as most organizational strategies require interdependency between functions
4) HR coud be instrumental in leading this process (YES!)
5) It identifies gaps in the understanding and interpretation of strategy by different functions and leaders
6) It serves as a visual clear line of sight that can be shared with all employees

So tomorrow, we will use the maps and determine the necessary metrics that need to be tracked and analyzed from an HR perspective...I can't wait!!

It was more than evident in the room that no matter if you are a large corporation, a non-profit, a government agency or an educational institution this process is needed because strategy if not executed is useless.

Drilling down and mapping the strategic details is where the rubber meets the road and where your front line employees begin to behave with purpose.

I believe that spending a few days on mapping strategy is well worth it...

Information on our next HR Strategy and Metrics bootcamp can be found here.

FCC Moves to Give Viewers Choice and Provide More Competition on Cable Systems

The U.S. Federal Communications Commission has adopted rules designed to halt cable system operators from retaliating against independent channels when there are business disputes or discriminating against them in favor of ones in which they ownership stakes.

The rules are intended to ensure that the monopoly power of cable operators is not used to deny viewer choice or harm competition channel providers.

One rule is designed to prohibit systems from dropping channels when there are business disputes with systems that have been taken to the commission for resolution.

Another rule is designed to create a more level playing field for independent channels by making it possible for them to reach more viewers. Comcast Corp., for example, has been accused in recent years of forcing competitors’ sports channels into premium packages that fewer viewers select.

Given that price rises for cable services have far outstripped inflation rates in recent years, that service providers create bundles of channels that primarily serve their benefits rather customers, and that consumers continually express dissatisfaction with choices, prices, and customer service provided, it is not surprising that the commission decided to act to slightly limit the power of the major players.

The big cable players are livid about the rules, of course, and can be expected to be highly active in the next regulatory stage seeking comments on how to implement the rules.

At this point they and they supporters are complaining that keeping channels on the air while dispute resolution is underway is somehow unfair to them. The system operators, of course, refuse to recognize how it is particularly unfair to customers who have no way to influence the decision.