ENGAGEMENT YOUR EVP IN THE SPOTLIGHT BULLYING LEGISLATION 6-MONTH UPDATE
HUMAN RESOURCES DIRECTOR DIVERSITY & INCLUSION A CEO’S JOURNEY FROM SCEPTIC TO ADVOCATE
HCAMAG.COM ISSUE 12.6
LEADERSHIP + CULTURE = PERFORMANCE
The CFO/HRD partnership behind Diageo’s success
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EDITOR’S LETTER / HUMAN RESOURCES DIRECTOR
THE ULTIMATE IN PEER POWER HRDs are well aware of why employee engagement matters. As Gallup’s 2013 State of the American Workforce report points out, “Actively disengaged employees are more or less out to damage their company. Whatever the engaged do – such as solving problems, innovating, and creating new customers – the actively disengaged try to undo.” Of all the various sources of research cited in this issue of HRD, one in particular caught my eye. It’s not about the problem of disengagement; it’s more a possible solution. As the Gallup research makes clear, every company has unmotivated employees who consistently do not pull their weight, ultimately dragging the team down. One way to engage these indifferent workers could be to change the traditional bonus structure. A start-up called Bonus.ly uses a web platform to offer a different approach to employee recognition, reward and collaboration. To begin with, employers decide on a bonus budget for the peer recognition program, with companies being able to use incentives like an overseas trip instead of hard cash. Once it is set, each team member gets a monthly allowance for granting peer bonuses. Each member then rewards their colleagues for their work in the form of peer bonuses and praise. The bonuses come in set levels, starting from $20, with increments of 10% of the employee’s total allowance budget. At the end of the month, employers pay out employee reward bonus balances. With the bonuses given by peers, there is a sense of transparency as employees know exactly why they got the award. The top performers can also be highlighted. Bonus.ly was piloted by Oracle in November 2013. Of the 78 team members involved, 78% were engaged in giving and 94% in receiving. Employees competing for peer rewards are motivated by the recognition itself; the praise they give is almost equal to the praise they receive from a manager or someone in a senior position. While recognition, especially financial recognition and bonuses, is just one element of engagement, perhaps it’s time for a rethink of traditional models. Iain Hopkins, editor, HRD
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ENGAGEMENT YOUR EVP IN THE SPOTLIGHT
HUMAN RESOURCES DIRECTOR HCAMAG.COM ISSUE 12.6
BULLYING LEGISLATION 6-MONTH UPDATE DIVERSITY & INCLUSION A LEADER’S JOURNEY FROM SCEPTIC TO ADVOCATE
LEADERSHIP + CULTURE = PERFORMANCE
The powerhouse partnership behind Diageo’s success
COPY & FEATURES EDITOR Iain Hopkins JOURNALIST Janie Smith PRODUCTION EDITOR Roslyn Meredith SUB-EDITOR Richard Wood
ART & PRODUCTION DESIGNER Marla Morelos DESIGN MANAGER Daniel Williams TRAFFIC MANAGER Maria Katsiotis
SALES & MARKETING MARKETING EXECUTIVE Alex Carr COMMUNICATIONS EXECUTIVE Lisa Narroway BUSINESS DEVELOPMENT MANAGERS James Francis, Steven McDonald, Gareth Scott
CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Iain Hopkins tel: +61 2 8437 4703 iain.hopkins@keymedia.com.au Advertising enquiries James Francis tel: +61 2 8437 4766 james.francis@keymedia.com.au Steven McDonald tel: +61 2 8437 4757 steven.mcdonald@keymedia.com.au Gareth Scott tel: +61 2 8437 4784 gareth.scott@keymedia.com.au Subscriptions tel: +61 2 8005 6674 • fax: +61 2 8437 4753 subscriptions@keymedia.com.au Key Media keymedia.com.au Key Media Pty Ltd, regional head office, Level 10, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 • fax: +61 2 9439 4599 Offices in Auckland, Toronto, Denver, Manila hcamag.com
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CONTENTS / HUMAN RESOURCES DIRECTOR
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Moving the engagement dial After a prolonged period of economic uncertainty, now is the time to re-focus corporate energy and resources on Cover story: engagement. Where to start? HR Director Leadership + culture explores the options = performance? We’ll drink to that The above equation may seem simple, but if that’s the case, why do so many employers get it wrong? Iain Hopkins talks to Diageo’s HRD and CFO about collaboration, creative conflict and making ‘people are brands’ more than an empty sentiment
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Past, present and future: Anti-bullying update Six months on, HR Director obtains a status update on the anti-bullying legislation, and asks the experts what’s next for anti-bullying measures in the workplace
38
Man in the mirror: A diversity journey Nicholas Barnett, CEO, Insync Surveys, went from stereotypical sceptic to passionate diversity campaigner. He shares his story with HR Director
50 52
Profile: Cindy Reid, Konica Minolta Cindy Reid, Konica Minolta’s Australian head of HR, reflects upon balancing the humanitarian and commercial aspects of HR, lessons learnt from bad leaders, and how she is preparing for a massive transformation projectpersonal life
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Business thinking: A change in perspective How do you convince leaders to understand there are other ways of seeing the world and processing inputs? Adrian Smith outlines how it’s possible to convert ‘thinking concepts’ into hardcore commercial acumen
REGULARS 04 | Insight: Skills underutilisation 10 | Infographic: Talent/opportunity matching 54 | Last word: Job titles
CHECK OUT THE HRD ARCHIVES ONLINE: hcamag.com
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HUMAN RESOURCES DIRECTOR
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NEWS ANALYSIS / LABOUR PRODUCTIVITY
PULL THE (PRODUCTIVITY) TRIGGER
Are employers ignoring the biggest productivity lever right under their noses? A recent report suggests that skills underutilisation is costing business big money – but there are some relatively easy fixes
Productivity remains a hot topic in Australia but there remains uncertainty about how business leaders can boost it. And while organisations have focused their attention on capital expenditure, process re-engineering and generally doing more with less, there remains one trigger yet to be pulled: more effective skills utilisation. A recent report by HR and recruitment services firm Chandler Macleod, Skills Utilisation: How Effectively are Businesses Utilising the Skills at their Disposal, paints a disheartening picture. “Unsurprisingly, our research confirms that skills underutilisation exists – the surprise is that it presents at far higher levels than employers
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HUMAN RESOURCES DIRECTOR
presume,” says Cameron Judson, CEO of Chandler Macleod. EY’s May 2013 Productivity Pulse found that, despite corporate Australia and some government departments and agencies seeing incremental improvements through restructuring and costcutting, there is still $305bn in productivity potential for the taking. It reported that four in five workers (85%) believe they could be up to 21% more productive every day, representing $305bn ($26,300 per worker) in untapped potential. “How do you improve the performance of organisations? It’s got to be a product of productivity. And with those other productivity levers already pulled, it’s time to focus on how skills are being utilised,” Judson says.
DEFINITIONS Just like the broader topic of productivity, the issue of skills utilisation is clouded by uncertainty about its definition – and it’s difficult to measure what cannot be defined. Given this confusion, it’s hardly surprising to learn that 81% of employers cannot estimate the extent of underutilisation within their own organisation, and although skills shortages impact on their performance, just 17% have tried to quantify the cost of skills shortages. The Chandler Macleod report clarifies the definition: “Effective skills utilisation is about confident, motivated and relevantly skilled employees who are aware of the skills they possess, can align these to the organisations’ goals and know how to best use them in the workplace. The other side of the coin is that they need to be working for an employer that provides meaningful and appropriate encouragement, opportunity and support for them to use their skills effectively. Together, this can lead to outcomes such as improvements to innovation, productivity, profitability, staff retention and safety.” Again, just like productivity, Judson recommends that employers unearth the key drivers of business success, then outline how that connects to a definition of productivity and how it can be measured effectively, and finally communicate with employees why these drivers are important. “The economics of my business is quite simple,” Judson says. “Gross margin contribution per FTE, for example, translates to number of people interviewed, number of people placed in jobs, and so on. I’m sure in many other businesses it can be that simple, but it’s about distilling that simplicity
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down to an economic measure and converting that into what productivity means for people. In terms of skills, businesses need to know what skills are vital to their organisation’s success now and what skills will help the business grow in the future.”
EMPLOYER/EMPLOYEE MISMATCH Further complicating matters is a mismatch between employer and employee perceptions of the extent of skills underutilisation. Of those employers who could put a figure on underutilisation, most approximate it at less than 20% and only 8% believe the level of underutilisation is over 50%. But almost two thirds (64%) of employees indicate that they have skills that current or recent employers are not utilising, and 74% report that their employers do not know all their skills. What’s going on? Judson says two interlinked factors are at play. Firstly, there is Australia’s economic cycle. Employers
SKILLS UNDERUTILISATION SNAPSHOT
19%
Employers who can estimate the level of underutilisation in their workforce
8%
Employers who assume their employees’ skills are >50% underutilised
64%
Proportion of employees who report their skills are underutilised
42%
Employees who don’t advertise all their skills for fear of being perceived as overqualified
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NEWS ANALYSIS / LABOUR PRODUCTIVITY
“How do you improve the performance of organisations? It’s got to be a product of productivity”
skills employees already hold, he urges employers to also reconsider their definition of skills and qualifications. “A lot of employers spend time looking at formal vocational and tertiary qualifications but not so much on experiential, on the job development. Yet that’s often where employees learn the most.” Australian organisations do in fact have practices in place to manage the (utilised and underutilised) skills of their employees. Ninety-five per cent of companies surveyed keep track of the skills of their workforce, 43% use a skills register, 35% keep formal records and 17% have an informal understanding of the skills of their staff. The larger the organisation, the more likely that some form of tangible record is held; 92% of large organisations have formal mechanisms in place compared to 85% of medium and 65% of small organisations. Around one in five organisations have formal skills utilisation measurements in place, a further 35% use informal measurements of skills use and 25% measure skills use in some areas of their operation. Keeping a record of employee training is a widely used tool to assess the skills available within an organisation. This may be popular partly because it is relatively easy to implement,
Almost 1 in 10 organisations estimate that more than half their workforce has significant skills underutilisation
have focused on capex, cost out, restructuring, business process automation; they haven’t focused on their own employees and the skills they have right in front of them. “Now they have to – it’s the only lever left to pull,” says Judson. Secondly, in the current economic environment, Judson suggests employees themselves have been wary of presenting their own skills and how these skills might help the organisation. Forty-two per cent of employees surveyed said they did not advertise all their skills to their employer for fear of being perceived as overqualified. If their employer has little to no knowledge of their skills, underutilisation will occur. “In the context of organisational change, industry change, technological change, employees don’t feel confident that they can present the skills they have to their employer. There’s a fear WHAT PROCESSESS DO YOU HAVE IN PLACE TO FORMALLY they’ll be viewed as overqualified and IDENTIFY AND MANAGE THE SKILLS YOU HAVE WITHIN YOUR potentially replaced by someone at a ORGANISATION? lower cost-point,” Judson says. Training records register Easing this fear comes down to culture and employee engagement. Updated formal records of staff (ie reflecting skills acquired Employees need to know the value of since recruitment) their skills and then be engaged in a Skills register conversation about how the organisa tion can best use them. It’s worth Undertake a skills audit noting that underutilised skills can result in employees feeling bored and Updated CV register library unsatisfied at work; it’s in their best interest to speak up. Personal development planning “It’s about being brave enough to ask staff about their skills,” says Judson. Total (n=386) Don’t know “It can be done informally one-on-one Less than 200 employees (n=138) between manager and employee, None or it can be done more formal200–999 employees (n=89) ly at organisational level to facilitate Other 1000+ employees (n=159) aggregation of data.” While Judson concedes it takes 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% “time and energy” to find out what
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NEWS ANALYSIS / LABOUR PRODUCTIVITY
or because employers are required to report this information for other purposes. The finding that only 28% maintain a skills register suggests there may be organisations that hold skills data but do not make full use of it.
WHAT PRACTICES ARE IN PLACE WITHIN YOUR ORGANISATION TO INCREASE THE SKILL UTILISATION OF YOUR EMPLOYEES? Communication, consultation and collaboration with employees and line managers
PLAN OF ATTACK Chandler Macleod identified the following key areas that business leaders urgently need to address to realise the sizeable latent potential associated with skills utilisation: Rethink business models. Discern which work needs to be done by full-time employees and which can be done more efficiently through contracting, outsourcing or offshoring. When employees are not utilised for 100% of their time and skills, it may make economic sense to outsource. This applies as much to senior managers as it does to other employees. For example, you may need an IR manager to deal with complex employee laws, but if employing a full-time employee means their skills and time would not be fully utilised, it may make sense to outsource.
A strong organisational culture which encourages employees to contribute to the organisation
Utilise technology more effectively. There are many possibilities for applying data capture and measurement around skills utilisation. Implement some form of time recording – by capturing timesheets you will better understand current utilisation and productivity. Use an employee engagement survey to drive changes in productivity. Don’t just track employee training – go a step further and use your HRIS to conduct skills audits, move underutilised employees into the right roles, and track, support and retain staff.
Having effective HR processes to manage employee requirements (includes rewards for performances, recognition, etc.)
Conduct a skills audit. Because it takes time to alter skill levels, businesses must not only understand their current demand for skills but be able to predict future demand. Conducting a skills audit can uncover the skills and talents you have access to now, as well as help forward planning to improve future productivity and utilisation.
62%
Encouragement from managers for employees to be innovative and challenge their role within the organisation
53%
48%
35%
Having good change management processes to provide leaders and employees with clear understanding of directional change of the organisation
33%
Regularly updated skill matrix
28%
Don’t know
6%
None
13%
Other
2%
WHO’S LEADING THE WAY? Good skills utilisation requires both a deep understanding of the individual employee (to gauge their skills) and a holistic understanding of the organisation’s needs. Within medium to large organisations, this knowledge is rarely found within the one person. It is therefore appropriate that skills utilisation is managed by both those with a deep understanding of the individual (such as team leaders and employees themselves) and those with an appreciation of the strategic skills needs of the enterprise (CEO, COO, office manager). HR can fall into either or both categories, depending on the role of HR within the organisation.
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Implement job design. The step following a skills audit, job design leads to job enrichment, engagement and, in the best-case scenario, better skills utilisation. Ensure work is designed to make full use of employees’ skills and abilities, and design jobs to involve teamwork, flexible job descriptions, multiskilling and flexible work arrangements. Get the culture right. As Peter Drucker is famously quoted as saying, ‘culture eats strategy for breakfast’. An open culture that gives employees flexibility, autonomy and a supportive environment in which they can contribute their ideas is a key success factor in successfully introducing skills utilisation practices. Offer training for casual and part-time employees. IBISWorld chairman Phil Ruthven says that by the middle of the century all workers will be their own enterprise as contractual arrangements supplant the concept of being an employee. With the changing face of the workforce, it no longer makes sense to invest less effort in upskilling part-time and casual employees and independent contractors. Reward productivity. Identify metrics and support managers in setting productivity goals for employees. Motivate employees to deploy their ability by linking productivity metrics to performance reviews, and reward employees financially with a share in productivity gains. Provide flexible working options. Mobility will play an increasingly important role in hiring practices as employers look further to recruit talent and fill skills gaps. Consider virtual teams, outsourcing, international placements, contracting and job sharing as opportunities to increase your skills base and more fully utilise the skills you do have. Set the tone from the top. CEOs must make productivity a priority by setting the tone and following through. Businesses will see the most benefit from initiatives where leaders weave them into performance expectations for managers and enable employees to execute on those expectations.
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IN BRIEF / TALENT MANAGEMENT
ADAPT AND THRIVE:
ALIGNING TALENT AND OPPORTUNITY A recent study by LinkedIn and PwC has analysed the ability of labour markets to adapt to evolving demands, including the willingness of employees to adapt their skills to available opportunities and the ability of employers to find talent with the right skills for their needs PWC/LINKEDIN ADAPTABILITY SCORE In the most adaptable markets, productivity is higher because people and jobs are better matched. The research calculates the productivity gains that are available to countries if their talent market becomes as adaptable as the Netherlands
85
67
61
Netherlands
UK
Canada
57 57 Singapore
US
KEY MEASURES
52
41 39
36 34 23
Australia
France Germany Brazil
India
China
Promotion rates (scaled for growth)1
Vacancy rate2
Average number of profile positions3s
Average number of employers3
Industry switching rate3
Talent adaptability score
Netherlands
6.7% (2nd)
1.3% (5th)
4.5 (1st)
2.5 (2nd)
1.1% (1st)
85
United Kingdom
3.1% (4th)
1.7% (8th)
4.2 (4th)
2.4 (3rd)
0.7% (7th)
67
Canada
3.3% (3rd)
1.4% (6th)
4.0 (6th)
2.3 (7th)
0.8% (3rd)
61
United States
2.7% (5th)
2.7% (9th)
3.8 (8th)
2.3 (6th)
0.8% (5th)
57
Singapore
9.1% (1st)
1.6% (7th)
3.9 (7th)
2.4 (4th)
0.4% (11th)
57
Australia
0.9% (8th)
1.1% (4th)
4.5 (2nd)
2.5 (1st)
0.6 (8th)
52
France
2.9% (5th)*
0.9% (2nd)
4.0 (5th)
2.3 (5th)
0.6% (9th)
41
Germany
2.9% (5th)*
1.0% (3rd)
4.2 (3rd)
2.3 (8th)
0.5% (10th)
39
Brazil
2.9% (5th)*
1.3% (6th)*
3.4 (9th)
2.1 (10th)
0.8% (6th)
36
India
2.4% (6th)
1.3% (6th)*
2.7 (11th)
1.8 (11th)
1.0% (2nd)
34
China
2.3% (7th)
0.7% (1st)
3.4 (10th)
2.1 (9th)
0.8% (4th)
23
*Median figure for countries analysed; specific country data unavailable ¹ PwC Saratoga data 2013 ² National statistics offices for each country ³ LinkedIn data 2013
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HUMAN RESOURCES DIRECTOR
KEY FINDINGS Adaptability could unlock up to $136bn in additional productivity Markets with the most adaptable talent are more efficient and productive – a better talent fit between employer and employee results in a greater return on the organisation’s investment in people. The skills gap will narrow with increased productivity Worldwide unemployment continues to rise while jobs go unfulfilled. In Australia, 43% of CEOs intend to increase their headcount over the next year, but 72% are worried about the availability of key skills. As talented professionals become more adaptable, the skills gap will shrink, leading to better economic performance.
Compromising on talent costs the economy In less adaptable talent markets, poorly matched candidates drive up recruitment costs associated with hiring and onboarding people. The hiring process takes longer and recruits don’t stay. This creates a cost burden of $385m p.a. for Australia in unnecessary recruitment costs and $20.6bn in the 11 countries surveyed. Visibility from online professional networks leads to better hiring Online professional networks give organisations access to a larger talent pool and, critically, to passive candidates as well as those actively looking for a job. This visibility works both ways and allows workers to see the roles available and the skills needed to get them.
KEY RECOMMENDATIONS The report suggests recommendations for four key stakeholder groups
43% 43% of CEOs intend to increase their headcount over the next year
72% 72% of Australian CEOs are worried about the availability of key skills
1. INDIVIDUALS >> Future proof your career The age of the linear career is over. Individuals shouldn’t be afraid to be bold and brave in their choices and take an open-minded and long-term view of their careers. 2. EDUCATORS >> Offer courses and job training that produce adaptable people Closer collaboration and a two-way dialogue between educators and business will help address skills gaps and anticipate the needs of employers. 3. GOVERNMENTS >> Create a climate of adaptability Governments must take the lead in the national debate about adaptability, as well as actively shaping a mindset that values and rewards it.
$385m The cost burden to Australia in unnecessary recruitment costs
4. Employers >> Seek out, nurture and reward adaptable talent Businesses need adaptable people if they’re to capitalise on new opportunities in fast-changing markets – people who can be found within the organisation, or elsewhere. Organisations should: ensure recruitment, L&D, retention and reward practices are designed to encourage, nurture and support adaptability use talent metrics to identify the hard and soft skills they will need, and then train and hire strategically use online professional networks to identify relevant candidates – both active and passive – who may have the skills they need The report draws from LinkedIn’s 277 million members and PwC Saratoga’s database of 2,600 employers across the world. For the full report, visit pwc.com/talentadaptability
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COVER STORY / HR AT DIAGEO
LEADERSHIP + CULTURE = PERFORMANCE?
WE’LL DRINK TO THAT Iain Hopkins talks to Diageo’s HRD and CFO about collaboration, creative conflict and making ‘people are brands’ more than an empty sentiment Diageo is a place you want to work. You feel it as soon as you walk through the door of their North Sydney office. Not surprisingly, given the iconic brands under the Diageo umbrella (Guinness, Johnnie Walker, Baileys, Smirnoff ), the office walls are adorned with classic advertising campaigns and posters, there are ‘mini bars’ stocked with Diageo beverages scattered throughout the buzzing openplan office, and of course there’s the Bundy Rum bear standing under the stairwell. But we all know appearances can be deceiving. Scratch the surface of many an attractive-looking company and there’s turmoil underneath: disengaged workers, uncertain leadership, black clouds hovering… Fortunately, this isn’t the case at Diageo. Beneath the appealing exterior lies substance and plenty of examples of ‘best practice’ in people management. This is most clearly apparent in the close, collaborative bond between two senior executives: CFO Michael Gabriel and HRD Lucinda Gemmell. The finance and HR teams may not always seem like natural BFFs (best friends forever, according to the Urban Dictionary), yet Gemmell and Gabriel could not see their relationship operating any other way, mainly because the people agenda is first and foremost in both their minds, as Gabriel explains: “Diageo is a branded consumer goods company, but really, at heart, we’re a people business. So we’re aware if we don’t have these great people coming through we can’t really drive performance.” Gemmell reiterates that attracting, developing and retaining great talent is now more important than ever: “We’ve got high engagement, which is terrific, but we need to work hard every day to ensure we keep doing that. We know it’s a massive strength of ours, but it’s also a massive expectation from our people.”
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A RELATIONSHIP THAT WORKS To deliver on these expectations, Gemmell and Gabriel work closely together on day-to-day functions and also on longerterm projects. Gemmell runs not only a people agenda but also a business agenda, especially when it comes to managing overheads and allocating resources. “We talk a lot about the business,” Gabriel admits. “I haven’t worked for another business for a long time, but I get the impression Lucinda is far more integrated into the business on a performance basis than a lot of other HRDs might be.” Gemmell says the current round of budget planning is a good example of the collaboration between the two. “Mike holds me accountable for the cost line, but equally there’s a joint expectation. I look to him for the performance, shape and plans from a top-line perspective, and then we work closely on how we’ll deliver on the bottom line,” she says. The two will typically look at the big picture first, and Gemmell will look to Gabriel for more detailed shape and specifics on how that big picture might be delivered in practical terms; “and then we’ll have good robust brainstorms and discussions about how we’ll meet that plan,” she says. Gabriel adds: “To get the performance we want, with the people we have, Lu is looking at how to resource/reallocate and the right way to structure the business, in order to drive efficiencies.” He says that, like most budget cycles, people in the business want more funds allocated than can be comfortably delivered. “We might typically get more requests for head count than we actually can afford. So we’ve got to work out where do we take from, or how do we drive efficiency optimisation to fund the growth areas. That’s the big discussion at the moment.” Sometimes it means looking at the best way to resource or reallocate funds, and people resources. “If we need to put
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HUMAN RESOURCES DIRECTOR
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COVER STORY / HR AT DIAGEO
MICHAEL GABRIEL AND LUCINDA GEMMELL He says...
She says...
What keeps me up at night
“The talent agenda here is the thing that worries me. Our business is driven around leadership and culture that delivers performance. You can’t deliver that agenda unless you have the right people and the best practices to develop people.”
“Attracting, developing and retaining great talent I think is now more important than ever. We need to make sure we’re living by the way we want to lead in this organisation and doing the right thing by our people.”
What makes a good HRD?
“A good HR director is integrated into the business, understands the business, and is able to read the pulse of the business. Lu will be able to read the pulse about how people are feeling, so in certain conversations we can ask, ‘Are we pushing enough?’ Do we need to push them harder?”
“Mike expects me to have a good knowledge of the business. He expects me to be as accountable for the performance of the business as anyone else, including himself.”
What I like most about working with the other...
“Lu is very good at holding people to account. She doesn’t necessarily sit in the day-to-day performance agenda, but when things come up she can say, ‘Well, that’s not what we’re about, because if we’re being true to our culture that should drive performance’. Our culture is about ownership, about leadership, and she drives that agenda.”
A SIMPLE EQUATION... “Mike has an incredible knowledge of this business, how it operates, all of the levers that drive our success, and I look to him to continue to learn. And equally I think we’ve got a relationship where he’ll bounce ideas off me, about key talent, about succession, so we’re learning from each other.”
someone into a particular sales function that doesn’t currently exist, for example, then it may not necessarily have to be generated from sales – it could come from marketing. Lu’s job is to decide where is the best place to resource from, or to reallocate. It’s really about building the right organisational structure to meet the strategy,” Gabriel says. Naturally, when passionate people are working together, there can be disagreements. “We don’t
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always agree, but I think that’s a good thing,” says Gemmell. “The whole exec team in fact has a good number of honest and constructive relationships where we can challenge each other but do it in a very honest way with great intent.” A full headcount review is conducted every quarter, involving close interaction on overheads with each group head. “We have a deep dive, basically,” says Gabriel. Labour efficiency is top of mind. Both Gemmell and Gabriel agree that outsourcing of shared services “has a place”, including at Diageo (some of Gabriel’s team is based in Manila), but both would prefer to look to other internal efficiencies. There is some overlap of the HR and finance functions. For example, an essential part of Gemmell’s role is delivering seamless basic services to employees: onboarding, payroll, keeping the development agenda clear and on track, ensuring annual leave balances are kept in check. Gabriel’s team will assist with tax issues and offering advice on employee-related overheads. “Traditionally, my financial controller would handle a lot of the people- and office–related overheads. Now they are managed by Lu’s team with my controller supporting. We stay on top of all that because that’s a real cost driver through the business,” he says.
How does Diageo maintain its 90% engaged employee score? The equation Gemmell refers to seems simple: leadership + culture = performance. Yet there’s plenty going on behind the scenes to ensure this happens. “I think that mantra has given us a platform and the freedom to think very clearly about the integration between our people agenda and our business agenda. We’ve driven it as a constant theme without being too clever about it; we’ve just been consistent. Our culture has evolved by doing good things consistently,” says Gemmell. To cite just one example of undertaking “good things”, the Diageo Leadership Performance Program is run for Diageo’s top 60 leaders. Each member of the executive team leads one aspect of the program, ensuring buy-in from the very top. Diageo uses the Human Synergistics Life Styles Inventory model to encourage self-reflection and self-growth, and then internally run development programs are put in place to bolster leadership effectiveness.
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For Gemmell, concentrating on leadership is a no-brainer: “The stronger your leaders are, the more authentic, the more genuine, then the more effectively they lead their people. It has such pronounced flow-on effects to your culture.” Likewise, the people agenda is engrained in executive meetings. Team development, succession planning, spotlighting key talent, and leadership development are regular topics of conversation. “Even at the top level we’re giving each other feedback and planning the next six to 12 months in terms of leadership development for the rest of the business. It’s a very commercial agenda and we treat it exactly as we would managing the performance of the business, or our revenue or our market share,” says Gemmell.
LEARNING ON THE JOB If Gemmell has one tip for other HR professionals looking to improve their working relationship with the CFO, it’s to get involved. Every day she challenges herself to be more involved in conversations about
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“Diageo is a branded consumer goods company, but really, at heart, we’re a people business” Michael Gabriel
market share, or revenue projection over the next six or 12 months. “HRDs today are expected to play as big a role in the running of the business on a day-to-day basis as anyone else does. That probably puts some pressure on talent in HR because some people are probably more predisposed to operating that way, or enjoy that – they’ve done MBAs on the side – and others may not. But that shift has definitely occurred and is continuing to take place,” she says.
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ENGAGEMENT / ENHANCING THE EVP
MOVING THE ENGAGEMEN After a prolonged period of economic uncertainty, now is the time to refocus corporate energy and resources on engagement. Where to start? HR Director explores the options
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There is overwhelming evidence to link employee engagement to profit, revenue, share price, total shareholder return, customer satisfaction and market share. There is also compelling evidence demonstrating that engagement has a tangible impact on the lives of individuals: their satisfaction, their happiness, even their wellbeing. Yet for something seemingly so simple, it’s surprisingly difficult to get it right; instead, it’s easy to lose sight of all those aforementioned benefits when you’re immersed in yet another round of surveys and assessments. And there’s a further problem, which Ed Hurst, consulting practice leader, IBM Smarter Workforce, ANZ, outlined at a recent forum in Sydney. “Helping individuals to be happier, more productive, and more authentic can be somewhat at odds with
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HUMAN RESOURCES DIRECTOR
mean by the culture of an organisation. It’s getting to the bottom of all of that that is of vital impact.”
A FOCUS ON THE EVP
MENT DIAL organisations being commercial, efficient and hardnosed. But ultimately the two extremes are not at odds with each other. Assessing how individuals can be fulfilled and motivated, and helping organisations be more effective, is ultimately the same question, just approached from opposite ends.” Central to any discussion about engagement is recognising that individuals are motivated by slightly different factors; there are also different drivers of engagement. However, there are still patterns to be discerned, Hurst said. “There are fundamentals around recognition, around inspiration, around being valued, around learning. Most individuals list those attributes, but you can find a different set of priorities across organisations, across business units, across teams. Those differences are an expression of what we
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For the purposes of this article, we’ll concentrate on how satisfied employees are with an important element of the culture of an organisation: the employment value proposition (EVP). Why EVP? A quick glance at the chart on page 18 reveals the components that make up an EVP. It is, essentially, all about the employee experience at work. The EVP has been defined by the Corporate Executive Board (CEB) as the set of attributes that the market and employees view as the most valuable when considering an organisation for employment. The EVP framework allows HR to bring a sharper science to the management of the ‘employment product’. “It’s a powerful way of using product marketing or using a product management lens to optimise the investments we’re making,” says Brad Adams, head of HR research, CEB. If staff are satisfied with the EVP, they are twice as likely to report high discretionary effort and high intent to stay. • Only 13.3% of staff with low EVP satisfaction report high discretionary effort and only 18.5% report high intent to stay • 32% of staff with high EVP satisfaction report high discretionary effort and 61% report high intent to stay For a group of individuals to be engaged, it essentially means they are proud of the organisation, satisfied with their own experience of being a part of that organisation, proactive advocates of the organisation, and committed in the sense of feeling that their future and the organisation’s future are intertwined. “When you feel all those things, there’s a better chance you will be loyal, that you will proactively choose to work hard,” said Hurst. “But it’s important to remember that discretionary effort is an outcome of engagement; it’s not part of engagement itself.”
WHERE ARE WE NOW? The bad news first: according to CEB’s report,* satisfaction among employees in Australia is below the global average on all key EVP categories. The key EVP areas are work, people, organisation, opportunity and rewards.
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ENGAGEMENT / ENHANCING THE EVP
WHY IS AN EVP IMPORTANT?
EVP framework and benefits of a differentiated EVP EVP The set of attributes that the labour market and employees perceive as the value they gain through employment in the organisation
REWARDS yy Compensation yy Health benefits yy Retirement benefits yy Vacation
OPPORTUNITY yy Development opportunity yy Future career opportunity yy Growth rate yy Meritocracy yy Stability
ORGANISATION yy Customer prestige yy Empowerment yy Environmental responsibility yy Ethics/integrity yy Formality of work environment yy ‘Great employer’ recognition yy Inclusion/diversty yy Industry desirability yy Market position yy Product or service quality yy Respect yy Risk-taking yy Organisation size yy Social responsibility yy Technology level yy Well-known product brand
ATTRACTION BENEFITS yy Reduces the compensation premium needed to hire by 50% yy Enables organisations to reach deeper into the labour market to attract passive candidates
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WORK yy Business travel yy Innovative work yy Job-interests alignment yy Level of impact yy Location yy Recognition yy Work-life balance
RETENTION BENEFITS yy Decreases annual employee turnover by 69% yy Increases new hire commitment by 29%
Australian average (%)
Global average (%)
Rewards
29.1
33.4
Opportunity
29.2
31.9
Organisation
35.2
37.4
People
35.8
38.5
Work
36.7
37.4
“Australia’s results were broadly in line with what we’re seeing both globally and also historically over the last six or seven quarters, but we do lag behind in certain areas,” says Adams. However, before we get carried away with talk of a disengagement epidemic, it’s worth noting there have been external factors at play, which Hurst also alluded to in his speech. “Economic conditions definitely influence the way employees relate to their employers,” says Adams. “Despite improved sentiment from employers, our data does not show that employees
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PEOPLE yy Camaraderie yy Collegial work environment yy Co-worker quality yy Manager quality yy People management yy Senior leadership reputation
feel more confident about the economic picture or their employment picture; in fact, the opposite is true. They are concerned and expecting further organisational changes and other negative forces that make them nervous.” CEB’s data shows it’s not the experience of change (layoffs, structure change) that is most debilitating in terms of engagement, but rather it’s the anticipation of future change. Executives in particular are susceptible to engagement dips, if only because they are more privy to what’s coming down the line. This is confirmed by data from Gallup^ which suggests only one in five Australian managers and executives are highly engaged. “Based on our research over the years we do see executives reacting just like employees, especially when they’re being asked to make hard decisions, and in many cases they may themselves be uncertain whether their job is on the line,” Adams says. With this cloud hovering over the results from the last 12 months, let’s dive deeper in each of the five
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areas, and then assess how employers can move the engagement dial upwards.
REWARDS Attribute
Australia (%)
International average (%)
Vacation
41.1
42.3
Retirement benefits
27.4
29.3
Compensation
27.2
29.6
Health benefits
20.9
32.4
Percentage of employees satisfied with EVP attributes Red = significant lag in the Australian market vs global market
The results in the rewards category, which includes attributes such as health benefits, retirement benefits, compensation and other employee benefits, reflects this uncertainty in the Australian market. “During periods of organisational change or where austerity is one of the governing forces for executive decision-making, we do see employees increasingly dissatisfied with rewards and the extent to which they are being compensated for the effort they are putting in,” says Adams. It’s evident that organisations with highly engaged workers tackle this particular category from a ‘total rewards’ perspective, with a strong focus on elements such as a formal recognition and reward strategy, and a broad suite of appealing employee benefits; both form key planks of a strategy to engage, retain and motivate their people. “Employers certainly identify the relationship between recognition and benefits, and productive, loyal employees, but often underestimate how to develop and manage these solutions correctly,” says Richard Wilkins, head of sales and marketing, Accumulate. When handled effectively, Wilkins says these elements of the total rewards strategy can provide employers with a key point of differentiation, particularly when it comes to attracting and retaining new recruits, who are increasingly asking ‘what else?’ once a competitive salary has been negotiated. Reward (and recognition, outlined later in this article) can often be a larger-scale strategic initiative, requiring buy-in from a broader range of business stakeholders. A suite of employee benefits is an easier win for the employer and has almost become the ‘cost of entry’ when it comes to employee
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engagement, but only when executed properly (see boxout, p23). “When done well, effective recognition and reward, coupled with a compelling benefits suite, can form a powerful combination and have a profound impact on employee engagement and loyalty,” says Wilkins. Leaders often assume financial reward is critical to engagement, but CEB’s research does not bear this out. The results show that while it’s important for employees to feel they are being compensated at a reasonable level for their efforts, there are other EVP attributes that are more powerful drivers of engagement, and thus discretionary effort. “Compensation is usually middling in terms of its impact on engagement, compared to drivers like development opportunities and whether or not someone sees a fulfilling career within the company. Those are especially powerful drivers of whether or not I will put in extra effort at work,” Adams says.
OPPORTUNITY Attribute
Australia (%)
International average (%)
Stability
44.5
45.3
Growth rate
28
32
Future career opportunity
27.9
29.2
Development opportunity
26.7
30.2
Meritocracy
19
24
Percentage of employees satisfied with EVP attributes Red = significant lag in the Australian market vs global market
Adams stresses that opportunity is a critical category, not just for engagement but also for attraction. “It’s so important as an attraction driver – why people ‘want in’ – but it’s also a critical reason why people work hard and want to stay with a company. In Australia we’re seeing a definite lag in development opportunities compared to what’s happening globally. It’s well known that companies will cut back on training opportunities in tough times – both for external courses like Executive MBA programs and inhouse training – but doing so can result in disengaged employees.” Advisory services firm Bersin & Associates has suggested 2014 might see the end of annual employee development programs, replaced by continuous actions aimed at developing, engaging and motivating
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ENGAGEMENT / ENHANCING THE EVP
“It’s important to remember that discretionary effort is an outcome of engagement; it’s not part of engagement itself” – Ed Hurst employees. Company founder Josh Bersin anticipates: “Companies will aggressively redesign their appraisal and evaluation programs to focus on coaching, development, continuous goal alignment, and recognition. The old-fashioned performance review will slowly be replaced by a focus on engaging people and helping them perform at extraordinary levels.”
ORGANISATION Attribute
Australia (%)
International average (%)
Product or service quality
46.5
47.5
Respect
41.8
42.7
Organisation size
40.3
43.3
Ethics/integrity
39.5
38.8
Well-known product/brand
38.5
40.5
Formality of work environment
38
39.4
Technology level
36.9
37.1
Industry desirability
36.4
40.1
Market position
35.8
38.8
Social responsibility
34.5
35.6
Inclusion/diversity
33.4
34.1
Customer prestige
31.2
36.3
Empowerment
30.6
33.8
Environmental responsibility
30.4
32.1
‘Great employer’ recognition
27.9
Risk-taking
21.9
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PEOPLE Attribute
Australia (%)
International average (%)
Camaraderie
39.6
42.1
Co-worker quality
39.3
41.4
Manager quality
37.2
37
32.2
Collegial work environment
36.8
40.1
26.6
Senior leadership reputation
31.9
35.4
People management
29.8
32.5
Percentage of employees satisfied with EVP attributes Red = significant lag in the Australian market vs global market
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Adams says there were few surprises in the results for Australia in the organisation category, and the results differ according to job sector. Someone in the IT function, for example, would place high importance on technology, while a salesperson might be more interested in product or service quality or reputation and company prestige. “There are interesting nuances in different talent segments,” he says. “But in Australia one of the interesting things we found was a gap between their global peers when it comes to risk-taking appetite. Only 21.9% of employees are satisfied with the level of organisational risk-taking compared with 26.6% globally. Again, this must be assessed against the backdrop of economic uncertainty.” Other attributes in this category appear to be less important for engagement. Social responsibility, for example, features strongly as an attraction tool but not necessarily as an engagement driver. “It’s the extent to which organisations are helping employees feel connected to each other, to our communities, and so on. In certain industries we see social and human connectivity being much more powerful,” says Adams. He relays a recent conversation with the HRD of a financial services firm. When asked what had the biggest impact on employee engagement over the past 12 months, she said it was when the high-price relationship managers and private bankers were given the opportunity to use their financial skills and knowledge to help financially challenged families get back on their feet. While social responsibility may fall into the lower tier as an engagement driver for most workers, Adams stresses that in certain sectors such as financial services “it should not be ignored”.
Percentage of employees satisfied with EVP attributes
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HUMAN RESOURCES DIRECTOR
THE HIGH PRICE OF DISENGAGEMENT Your employees might be physically present, but what if they’re emotionally or mentally checked out? Accumulate weighs the cost 76% of Australian workers are either in two minds about their jobs or, worse still, are completely disengaged
24% are engaged
60% are not engaged
WHAT LEADS TO DISENGAGEMENT? There’s no single answer, but avoid these common pitfalls:
16% are
» Not providing a purpose or clear direction » Relying too heavily on pay as a motivator » Providing tasks that don’t match education or skill » Poor relationships with managers » Offering no recognition for achievements » Not facilitating personal growth or career progression
actively engaged
Disengagement costs the national economy a whopping $54.8bn p.a.
CAN YOU AFFORD ‘SLEEP WALKING’ EMPLOYEES? Less profi table Organisations with highly engaged employees achieve 2x the annual net income of organisations whose employees lag behind on engagement
60% of engaged employees say their job sparks creative ideas compared to just 3% of the disengaged
Less loyal
Less safe
81% of the engaged are willing to provide positive recommendations of their employer’s services, compared to 18% of the actively disengaged
Engaged employees are 5x less likely than disengaged employees to have a safety incident and 7x less likely to have an incident resulting in time off
65% of all lost customers can be traced back to a disengaged employee
Employees with lower engagement are 4x more likely to leave their jobs than those who are highly engaged
ACCUMULATE’S 5 WAYS TO INCREASE ENGAGEMENT WITH RECOGNITION
1 2 3 4
Less innovative
Less committed to CS
Less likely to stay
5
MAKE YOUR VALUES KNOWN... The only driver of engagement constant across all countries is ‘commitment to organisational values’ ...THEN RECOGNISE THE BEHAVIOURS THAT ALIGN WITH YOUR VALUES “An organisation becomes what it rewards” PUT EMPHASIS ON THE POSITIVES Managers who focus on their employees’ strengths have the most engaged workgroups, with 43% engaged and only 4% actively disengaged ENSURE MANAGERS SHOW GRATITUDE Workers in organisations with higher business value agree that their “immediate manager recognises and appreciates good work” FIND OUT WHAT INSPIRES EMPLOYEES A 10% improvement in employee attitude can boost productivity by 5%
IT ONLY TAKES ONE BAD APPLE A disengaged employee can disrupt company culture and positive levels of engagement among peers if they choose to publicly express their disdain towards their employer
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Sources: Adapted from an infographic at accumulate.com.au. Research from the Gallup Organisation, Gallup Poll: Worker Attitudes, Worker Behaviour and Productivity; Employee Engagement: A Roadmap White Paper, Tembosocial; The Loyalty Deficit, Hay Group; Effective Practice Guidelines: Employee Engagement and Commitment, SHRM; Driving Performance and Retention Through Employee Engagement, Corporate Leadership Council
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ENGAGEMENT / ENHANCING THE EVP
The old saying that ‘people join companies and leave managers’ is “definitely true”, says Adams. “Especially in uncertain times, people management and manager quality often starts to feel suboptimal for the employee and they start to question the decisions the executives and HR departments are making. They start to feel they are getting the short end of the stick and that can leave a bad taste in the mouth.” Hurst agreed that ‘my manager treats me with dignity and respect’ does have an impact on engagement. However, in IBM/Kenexa’s studies there other issues above it, such as career goals, leader vision, and the future of the organisation. “We would never argue the manager has no impact, but the assumption that this is the pre-eminent issue is not supported by the data,” he said. “It’s true, however, that if you have an awful manager, it will drive you to leave. But if management is OK or better, there are other factors that have a bigger impact.” Indeed, in the CEB results, while ‘manager perception’ has remained stable over the last 12 months, there is a widening deficit occurring on ‘people management’ in Australia. “The governing approach companies are taking to get through in uncertain times and manage the workforce seems to be OK, but there is some concern about the way in which people are being managed, perhaps relating to how companies have navigated downsizing or change management,” says Adams.
WORK WORK Attribute
Australia (%)
International average (%)
Location
61.6
56.5
Work-life balance
45.6
40.6
Job-interests alignment
35.8
37.5
Recognition
34.1
35.6
31.2
33.2
Level of impact
31.1
33.6
THE ROAD AHEAD: RETURN TO CULTURE
Business travel
17.5
24.6
Even if the worst of the economic conditions are behind us, there is still an expectation to do ‘more with less’ in many organisations. How can employers continue to meet the EVP needs outlined above? This question was posed to a group of HR professionals at IBM’s Business Connect event held in May. Tania James, GM, people and culture at
Innovative work
Percentage of employees satisfied with EVP attributes Red = significant lag in the Australian market vs global market Green = significant lead in the Australian market vs global market
The work category consists of EVP attributes, including location, work-life balance, innovative
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work and recognition. It’s this last EVP attribute that Adams focuses on. “Employee recognition is almost a proxy for how strong all the other attributes are, and we see Australia [34.1%] is behind the rest of the world [35.6%] right now. This is no doubt a reflection of scaling back and tightening the purse strings – employees start to question whether they are receiving due recognition for the effort they are putting in,” he says. Wilkins adds that behavioural recognition, which supports an employer’s core values or guiding principles, can work successfully on its own – for example, everyday, informal recognition such as e-cards is a great building block for developing a culture of appreciation. “Its objective is to be surprising and personally meaningful to create a long-lasting, positive memory,” he says. But ideally, everyday recognition forms part of a broader strategy which forms the basis for employees to be publicly recognised and rewarded at business unit or company level; at this point, the trophy value of higher-value, more personal rewards can effectively ‘close the loop’ on recognition and further reinforce outstanding work or tenure. Taken together, recognition and reward are the tangible versus intangible aspects of emphasising an employee’s contributions, creating a powerful combination that meets both their emotional and rational needs. However, Wilkins warns that reward in isolation – that is outcome driven rather than behavioural – can lead to a transactional and disengaged relationship with employees. “It’s crucial to get the balance right,” he says. On a positive note, Australian employers are doing well on work-life balance. “This is a bright spot for Australia, but overseas it’s been a significant reason why people leave one organisation for another, especially in markets where employees have been pushed almost to breaking point and have been asked to go above and beyond and pick up the workload for departed employees,” Adams says.
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SPOTLIGHT ON BENEFITS Innovative companies recognise that benefits form an integral part of their EVP. An effective benefits program can be utilised as a significant competitive advantage that boosts engagement and attracts and retains key talent in an organisation. Mercer’s Australian Benefits Review, released in September 2013, found that 19% of businesses surveyed had a discount/benefits program. Interest in employee benefits programs has grown dramatically, especially since the recent proposed Federal Budget, with companies seeking a cost-effective and creative solution to employees’ additional pressures. Kylie Green, business development manager at leading Employee Benefits Program provider API Leisure & Lifestyle, explains further: “Employee benefits programs provide employers with an opportunity to significantly increase their employee’s disposable income by saving on everyday expenses such as groceries, petrol, insurances and more.” Consider an employee on $80,000. Typical annual savings would range from $2,377 to $4,474, depending on usage patterns. This represents a staggering 3.9% to 7.3% increase in their disposable
Converga, said it was about finding a balance. “For us, engagement drives performance. I’m lucky to have a leadership team that buys into that, so I’m halfway there. However, sometimes it’s the role of HR to keep this on track. Just like most organisations, we have limited resources, so we need to be smart about the strategies we deploy.” She added that in tough times it’s tempting to cut back on the recognition and development programs, but “it’s actually the time to ramp them up”. “Having leadership buy-in makes such a difference, especially if people start saying, what about those frothy HR things? Can’t we cut those? But think about that for a moment: what impact will it have on your team if you pull back on your training program? What message does that send to employees?” Nicole Blunck, head of culture and engagement, AMP, said her organisation was one year into a transformation project, shifting the culture towards customer-centricity. She said the ‘cost in’ equalled the ‘cost out’ when it came to engagement, especially when an organisation was going through a tricky transformation. “I can tell you from a leadership and talent perspective, a large proportion of what we’re investing is going into that [engagement] space, because that’s our business. We have to get people aligned to our purpose, to our strategy, to where
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income, after tax. It represents a significant ROI on the typical employer investment of less than 0.1% of payroll. Of course, an outsourced employee benefits program is more than just stretching your employees’ disposable income. Employers can also utilise the program to reinforce their employment brand, enhance employee morale and engagement and build their ‘preferred employer’ status. An effective employee benefits program will have a diverse range of benefits, communication tools and servicing options. This ensures enhancement of your EVP across employees in diverse demographics. API Leisure & Lifestyle provides employees with access to thousands of benefits, at over 90,000 locations nationally. Employees enjoy benefits across multiple categories, including entertainment, shopping, home and garden, travel, motoring, wellbeing and financial services. API tailors its communication and servicing plans around client needs. “The most effective programs have an extensive benefits range, allowing employees to select the products and services that suit their individual needs” says Green.
we’re going, in order to deliver upon it,” she said. To refocus on customer-centricity, Blunck said the leadership team went back to the drawing board to establish what was unique or different in the AMP culture and how that drove engagement. “We did some internal research and the outcome is probably the same that you would pull out of a textbook: ‘these are the drivers of engagement…’. But it became our own story, our own data. We spoke to something like 350 business leaders across the organisation who had higher than average engagement scores but also had higher than average business results. “What we were trying to do was make the connection with higher engagement in a team driving better business results, and here’s the proof – in an AMP context. We’ve tried not to make engagement a score unto itself, but link it to the other parts of the story in the organisation, and draw some parallels.” And her advice to other HR directors? “Engagement is not an add-on or something you do once a year in a survey. The message we’re working on is you’re doing it all the time, every day, whether it’s conscious or not.” *CEB’s Employee Engagement Insights for Australia report, March 2014 ^Gallup, State of the global workplace report: Employee engagement insights for business leaders worldwide, October 2013
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ENGAGEMENT / RECOGNITION
RECOGNITION LESSONS FROM THE BATTLEFIELD David Jackson outlines how the current debate raging in the US about how and why recognition occurs in the armed forces also has repercussions for the workplace There is a significant debate being waged in the US about armed service medals. The advent of the ‘cyber warrior’ or virtual soldier is shining a light on traditional thinking about recognising outstanding service in the military. Are drone pilots deserving of the same recognition as those soldiers who risk their lives in battle? Drone pilots wage their battles on computers, operating thousands of miles from the battlefield, and log off at the end of the day to commute home to their families. And while they don’t risk their lives they are potentially responsible for game-changing outcomes.
TIES TO THE WORKPLACE
David Jackson is the director of Solterbeck. For further information, visit solterbeck.com.
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Comparing anything to war is fraught with difficulty. Clearly, a soldier’s courage and heroism are not to be lightly compared to everyday life, much less the challenges of the modern corporate world – but there are some insightful parallels between military recognition and corporate recognition. This debate highlights the desire for recognition and its importance both as a signal to the recipient and to those connected with the recipient, both within and without their organisation. Each of these two signals meets a need. The first fulfils a personal need that can result in greater individual engage ment, leading to higher performance. The second meets the organisation’s need by allowing it to highlight outstanding endeavour and outcomes without necessarily considering the individual; think posthumous recognition, for example. The vicarious benefits conferred on non-recipients are harder to quantify but doubtless enhance the organisation’s overall culture of recognition. Legends, stories and even myths add power and meaning to the organisa tion’s recognition palette and cultural narrative.
THE REASONS FOR RECOGNITION Not only does this debate underscore the need for recognition, but it prompts us to consider the reasons for recognition. In their seminal recognition article, An Analysis of Employee Recognition, Brun and Dugas (2008) identify four types of recognition:
Types of recognition Person
Existential recognition
Work process
Recognition of work habits
Recognition of work commitment
Results
Recognition of results Brun and Dugas, 2008
The power of this framework, when applied in the workplace, is that the motivation for recognition becomes clear. Each recognition type articulates a reason for recognition. To put this in the context of the drone debate, advocates for recognising drone pilots are arguing for recognition of results – the ability of a computer operator, through hard work, skill and experience to strike a decisive blow on the enemy which, in practice, might end or shorten a conflict, saving countless lives. ‘Traditional’ recognition from the battlefield draws largely on existential recognition and work process. Importantly, in both the military and corporate worlds, these four types of recognition complement each other and are not exclusive to one another. Indeed, building a rich culture of recognition requires careful design to deliberately map these recognition types against the organisation’s objectives. Put another way, the debate should not focus on the nebulous and relative question about who tried harder, or who did better or who had more at stake; it is about understanding that all those factors are worthy of recognition, none at the expense of the other.
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BENEFITS / INCOME PROTECTION
DO YOUR BENEFITS TRULY ADD VALUE? Brought to you by
Income protection insurance is becoming an increasingly important part of benefits suites. Jason Potter-Rose highlights why it’s time to rethink what your company offers Which benefits suite do you think is more valuable to your employees? First, a stock-standard suite of wellbeing benefits, false discounts at restaurants and hotels the employee will never visit, and other non-relevant ‘must-have’ services or products? Or second, something that connects with employees and provides a useful, practical service, perhaps built around elements such as: 33 securing your staff’s financial future in case of accident or illness 33 genuine back-to-work and rehabilitation programs 33 relevant discounted and subsidised insurance offerings (health insurance) 33 tailored and unique hybrid insurance offerings (income protection with identity theft insurance) Providing a relevant suite of products that protect your staff’s most important survival tool – that is, their income – can only assist in an organisation’s quest to become a true employer of choice. Flow-on benefits include higher staff retention rates, and by using the correct service provider you are also creating a back-to-work and rehabilitation program, creating higher ROI on your staffing pool. So why haven’t organisations rushed to offer these benefits? Part of the reason is that the product developers and underwriting agencies have not promoted themselves correctly in this corporate
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space, concentrating instead on the group market (superannuation) and retail opportunities. This is about to change; Windsor Income Protection is setting up its own division to solely concentrate on product lines and service lines for the corporate market, no matter the size. These products are not off-the-shelf and can be tailored and even customised to the client’s branding to help promote the fact that the benefits program has been structured to suit the individual needs of employees. It’s also possible to incorporate staff rewards into the program, such as reducing the waiting period or even increasing the benefit on claims, due to exceptional work attendance or employment loyalty. While take-up of these benefits is growing in the Australian market, there are significant trends afoot that are helping to shape the products offered by specialist firms like Windsor Income Protection.
1. PROACTIVE CLAIMS MANAGEMENT A growing trend in income protection – and one that we’re proud to say Windsor Income Protection is at the forefront of – is increasingly proactive claims management. As super funds in particular jostle with each other for the same members, the whole insurance experience offered is becoming increasingly important. Part of that is a drive for providers to be claims managers, rather than processors. A processor’s job is just about paying claims, and very little more. A true claims manager’s job isn’t just to send the
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12/06/2014 3:59:17 PM
HUMAN RESOURCES DIRECTOR
WHAT’S ON OFFER? A range of products can provide protection for your employees’ income. These include:
P Income protection/salary continuance P Trauma insurance P Accident and unemployment insurance P Identity theft P Accidental dental P Funeral benefits P Group travel insurance P Corporate travel insurance P Health insurance cheques, however; it’s to get people back to work. In order to do this, early and regular intervention, assessment and discussion with claimants is essential. You need to talk to people to find out what’s wrong, what their priorities are, and recommend the best course of action. For example, if a claimant needs a knee reconstruction and doesn’t have private health, it may be more beneficial for ‘us’ to pay for the operation. It may seem like a big upfront expenditure; however, paying $10,000 for a knee operation and getting the employee back to work in three months is more beneficial than having them sitting on the sidelines for two years getting paid 75% of their salary. That helps the worker, the employer and the insurer. It’s not just the employer who wants their worker back at work, either. By speaking to claimants early, and around every two weeks after, you can assess their appetite to return to work and potentially find them alternative duties. After all, the insurer might be paying 75% of a wage, but many people want to get back to work because they need that other 25%. For example, we had a chef who was desperate to get back to work, so we got in touch with the employer and together we found him admin duties earning full pay. That was a win for all parties.
2. PRICING AND PSYCH CLAIMS Insurance premiums are increasing. This is a result of both greater awareness among members – which leads to increasing claims exposure across the board – but also the emergence of a significant claim type: claims relating to mental health conditions
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A true claims manager’s job isn’t just to send the cheques; it’s to get people back to work (depression, stress and anxiety). With greater public awareness of these conditions, members are no longer hiding their conditions. The issue with ‘psych claims’ is twofold: they now account for a larger part in the claims portfolio and are often long-term in nature. By comparison, physical injuries such as fractures usually resolve in a matter of weeks or months. These rising costs mean it is critical to ensure that policy design both provides the required benefits and is affordable. It also means that proactive claims management is essential to managing claims exposure. For example, our claims staff undertake training regarding avenues for rehabilitation; we also ensure that the claimant is referred to an appropriate specialist for that condition. And we ensure that every claim is handled in an empathetic manner; after all, our aim is not to make the claimant even more stressed.
3. WORKFORCE CHANGES The changing nature of the workforce also has implications for income protection policy design. More and more workers are employed through casual, part-time or contract arrangements, which means they can fall foul of minimum-hour requirements in many policies. Another area in which claimants can get stung is the claim waiting period. Usually, this is six weeks; however, the average Australian typically only has enough savings to last three or four weeks without income. Therefore, when arranging cover it’s critical to look at the profile of potential claimants and their requirements, and to seek a bespoke product if needed. Windsor Income Protection works closely with clients – including brokers, corporate entities, enterprise bargaining agreements and superannuation funds – to construct bespoke, cost-effective products, underwritten by Lloyd’s of London syndicates. Windsor also has full third-party authority to run claims management. Windsor would love to openly offer HR professionals the opportunity to find out more about how to incorporate a tailored employment-based insurance program as part of your Employment Engagement Strategy, or EAP, by providing an obligation-free corporate insurance analysis quote on your portfolio. Visit windsorip.com.au or call 1300 547 966.
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12/06/2014 3:59:23 PM
REWARD / FINANCIAL INCENTIVES
G N I C N BALA ACT
Rewarding performance through financial incentives can pay dividends – but it’s a fine balancing act, writes Trevor Warder There has been a fair amount of public and media negativity around financial incentives in recent times. Financial incentives have been part of the motivation debate for as long as people have been working for money. But they can do a lot more than motivate. If you design and implement them well, financial incentives can help focus employees on what really matters to the business, as well as create a sense of fairness – a genuine share in success. They can also give organisations greater control over their compensation costs, which can help them avoid redundancies (and keep hold of their talent) when times are hard. Paying employees based on the contribution they make to performance has become standard practice and in many organisations something that employees have come to expect – especially at senior levels, where the direct influence on corporate performance is clear.
CAUGHT BETWEEN A ROCK...
Trevor Warder is head of reward strategies, Hay Group
To give in to public and media pressure and call time on financial incentives would therefore be a risky strategy that could push up base salaries and related costs, make the company less attractive to potential employees who expect incentives, and negatively impact on its performance – all of which could ultimately put the company at risk. No
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wonder most of the world’s most successful companies choose to use financial incentives: in last year’s Hay Group Best Companies for Leadership survey, 82% of the global top 20 reported that they reward their people “based on a rigorous measurement of performance against goals”. And the FORTUNE World’s Most Admired companies are more likely than others to align pay to performance. There’s a huge amount of research into the different motivational properties of different types of reward that can help you to understand how your total reward structure will impact upon company performance (and employee behaviour). To make things simple, we’ve distilled some of that research, as well as what we know from our consulting work, into the table opposite. But as ever, the right balance is going to be unique to your organisation – and no incentive will work unless the person or team it’s aimed at has direct control over the performance and behaviours you’re incentivising.
MAKING THE CALL How much variable pay to use depends on the level of job and total income, as well as the sector norms where you work. As a general guide, if you don’t have enough scope in your variable pay to
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HUMAN RESOURCES DIRECTOR
differentiate, it’s too low and hardly worth the effort. If it doesn’t feel equitable to employees, because they feel the variations are too wide, it’s too high. Trust is a crucial issue here: if people don’t trust your plan and the way you run it, they won’t be happy with how much it pays. And remember that incentive plans that over-pay and aren’t linked to performance and behaviours can have a very negative (and public) impact on corporate reputation – which could lose you the trust of your customers and shareholders, too. It’s for you to decide if financial incentives are right for your organisation and context, but it’s not a decision to take lightly. Make sure you consider all the possible outcomes of your decision – good and bad. And remember: an incentive will only work if the person you’re giving it to can affect performance against the targets you’ve given them; and in some cases, that’s just not going to be possible.
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If you’re hoping to...
...then you could consider these first:
1. support competitive strategies, such as quality and customer focus
financial incentives
2. encourage flexibility, creativity, cooperation and commitment
financial incentives
3. reward efficiency, short-term objectives and past performance
financial incentives – short-term cash
4. encourage reliable and continuous performance
salary progression and competitive benefits
5. improve the skills of your people and encourage innovation
performance and talent management, L&D
6. foster self-esteem and competence
recognition, coaching and mentoring
7. motivate front-line staff
non-cash recognition awards financial incentives for some – linked to market practice
8. motivate junior staff
financial incentives, linked to individual and team performance; non-cash recognition awards
9. motivate executives
financial incentives, linked to individual and company performance
10. motivate all staff
all-employee plan (eg profit share, company recognition plan)
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12/06/2014 4:00:32 PM
BEST PRACTICE / OFFICE DESIGN
The power of a DECONSTRUCTED OFFICE We’ve all heard about activity-based working being wonderful in theory, but actual successful examples of it in operation are rare. In a bold move for the conservative medicines industry, Merck Sharp & Dohme has put theory into practice. HR director Lisa Onsley reports on the progress made Activity-based working (ABW) is a relatively new design concept that actively supports staff with their particular activities and needs. Rather than the traditional office layout where staff are tied to a desk with a computer and phone, the ABW concept comprises a variety of environments, each facilitating different activities, such as open areas with large tables for team meetings, small quiet desks for concentration, lounge areas or stand-up desks. All the facilities in an ABW office are shared between co-workers and supported by a fast wireless network, which enables greater mobility. So whether there’s a need for collaboration, creative thinking or peace and quiet, there’s a space to choose from.
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Taking the outlook that work is something you do, not necessarily a place you have to be, the transition of the Sydney headquarters of Merck Sharp & Dohme (MSD) at 26 Talavera Road, Macquarie Park, is believed to be the first by a pharmaceutical company in Australia. The office design has been embraced by the company’s 400+ employees.
NO SET DESKS – EVEN FOR THE MD With no designated seating for anyone, including managing director Dr Susanne Fiedler, the new activity-based design and layout presents a hybrid environment for people to come together and share
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HUMAN RESOURCES DIRECTOR
spaces and resources in a range of work settings. The space that MSD now inhabits is substantially smaller than our two previous office locations combined, yet due to careful observation, planning and foresight every aspect of employee needs and interactions has been carefully considered. The result? A fresh and vibrant workspace that fosters an increased sense of freedom, trust, responsibility and belonging. Essentially, the building has become a partner to the organisation, the design of the space itself facilitating collaboration while naturally promoting a healthy working environment. As Lawrence Fernandes, IT leader and member of the ABW Project Lead, has found, “the building has brought a new level of excitement and friendliness, encouraging new ways of working as well as bringing people together”.
COLLABORATION IS FRONT AND CENTRE A core theme driving the design concept was collaboration and the sharing of information and insights, so the physical layout has been carefully structured to encourage this, whether from a teamwork perspective or for impromptu meetings. The centrally located staircase designed for easy commuter access, for example, is a feature that has been capitalised upon. At MSD’s previous headquarters staff opted to use the more easily accessible lifts. Now, with the lifts relegated to a distant corner, the staircase has been built at the core of the building, with everyday facilities such as printers and a range of workspaces nearby making it a hub of activity. Apart from the location, the design of the staircase was also carefully considered, with each step wide enough to enable people to pass by each other easily. Not only do the stairs encourage incidental exercise but they help facilitate chance meetings. With no desks or drawers to call their own, every member of the MSD team has a designated locker in which to store their belongings. Yet a personal cubbyhole doesn’t tie people down and they are free to take up a space anywhere in the building, depending on their individual and team needs. To support employee mobility, staff use exactly the same lightweight laptop (stickers abound to ensure differentiation) as well as headphones and smartphones so they can work from the most
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The new design has allowed a reduction in office space by 30% and conservatively provides seven seats for every 10 members of staff appropriate location without being tied by wires and cables. Whether it is a small gathering to discuss projects, a brainstorming session or a tight-knit work group, staff can choose from a range of seating and collaborative spaces located around the central staircase, or small cubicles and pods nearby. Standing desks and duo desks provide further options, and spanning further from the core the loud and bustling area gives way to more focused, quieter positions on the extremities for private spaces or individual work. Some teams, due to the nature of their work and to support effectiveness and maintain proximity, need to co-locate. Yet they move together as a group and won’t sit in the same spot every day. Office mobility naturally delivers increased physical movement too, and there is a greater overall use of the space. Even the design of the kitchen has been carefully considered. There are kitchenettes on each level for tea and coffee, but the main one on the ground floor
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BEST PRACTICE / OFFICE DESIGN
carpool. An honesty system is in place to record this, with a large percentage of employees choosing to take it up. Bike racks are available, as are showers, and even a dry-cleaning service is available, all helping staff to get active.
STEPPING OUT WITH A SMALLER CARBON FOOTPRINT From a more practical operational perspective the new approach to work has allowed MSD to reduce its physical and carbon footprints quite dramatically and minimise its reliance on paper. Taking into consideration travel and flexible working arrangements, the new design has allowed a reduction in office space by 30% and conservatively provides seven seats for every 10 members of staff. Current office use shows that catering for 60% capacity may be feasible in the future. The move has also removed the logistical nightmare of team reshuffles as there’s no desk-specific desk allocation.
PROOF OF ABW IS IN THE PUDDING
is home to microwaves and toasters and creates more of a cafe feel to encourage staff to gather for lunch and a chat. And it’s working.
DID YOU KNOW? About 10% of staff at Google, Facebook and AOL use standing desks, which despite their recent popularity have actually been around for almost 20 years
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A HEALTHY TEAM IS A HAPPY TEAM In parallel with ABW, MSD has also instigated a sustainable commute program, encouraging the new ‘lighter’ and healthier approach to work to spread beyond the four walls of its Macquarie Park headquarters. Essentially, the company pays employees $10 a day if they leave their car at home and commute to work by public transport, bicycle, on foot or by
The progressive and ever-evolving nature of MSD’s new approach to work has been its resounding success at all levels. In the wake of the shift to an ABW model, a survey of MSD staff has revealed that 80% would prefer not to go back to a more traditional model of working. But this didn’t just happen by chance. The vision was there and a committed project team came together to determine how people at MSD were actually working. Were they regularly using meeting rooms or the phone to conduct their daily business? Alternatively, did they want open spaces for brainstorming? Surveys were run, time and motion studies analysed, research was undertaken and the founders of the ABW phenomenon, Dutch firm Veldhoen, were consulted and finally commissioned to make the successful transition. ABW is not a stagnant model; it is a holistic and fluid concept that is part of the vision and culture of an organisation that supports a progressive outlook. Once adopted, the concept naturally engenders greater sharing and creativity, bringing staff together in new realms. MSD is just taking its first footsteps on the ABW path, but even in these early days the increased sense of place, cooperation and innovation is emerging.
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12/06/2014 4:07:07 PM
EMPLOYMENT LAW / BULLYING
PAST, PRESENT AND FUTURE:
Anti-bullying update Six months on, HR Director obtains a status update on the anti-bullying legislation, and asks the experts what’s next for anti-bullying measures in the workplace
Federal anti-bullying legislation has now been in place for six months. In that time, the expected flood of bullying claims predicted and anticipated by the Fair Work Commission (FWC) has not eventuated. The FWC had prepared itself to receive 3,500 applications per year for orders to stop bullying. Instead, the FWC’s first Anti-Bullying Quarterly Report indicates that only 151 applications were lodged in the first three months.
WHAT’S GOING ON? While numerous theories have emerged, the consensus among the workplace lawyers contacted by HR Director is that, due to the only remedy available under the new laws being an order that the bullying stop – in other words, there is not an ability to receive any form of compensation – this has deterred applications. “As no damages or pecuniary penalties can be imposed by the FWC, those who have suffered loss as a result of bullying are still making applications in jurisdictions where such awards are available – for example, general protections, or discrimination,” says Alana Paterson, special counsel, workplace relations at Australian Business Lawyers. Additionally, Paterson says there are other remedies an employee can pursue in lieu of a bullying claim. For example, if a person has been bullied in the workplace and it has had an adverse effect on their mental wellbeing, it may be better for the person to lodge an application for workers’ compensation.
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12/06/2014 4:08:02 PM
HUMAN RESOURCES DIRECTOR
In addition, there was a high level of awareness about the new jurisdiction before the new laws were enacted. “Employers may have proactively taken steps to deal with bullying incidents in the workplace in the lead-up to the new laws, for example by arranging mediation,” says Vanessa Andersen, partner, Henry Davis York. Andersen says another possible reason for the low number of claims is that an applicant must be at risk of a future bullying incident, which means all persons who have already left their employment as a result of any alleged bullying are not eligible. Can the laws be applied retrospectively? The FWC has now made it clear that it can consider past bullying behaviour that occurred before the new laws were introduced on 1 January 2014. This does not mean that the laws apply retrospectively; rather it means that past bullying provides the basis for the prospective order to stop the bullying. “Of course, before such an order can be made, the FWC also needs to be satisfied that, in the absence of such order, the bullying would likely continue,” says Andersen. There is one other contentious issue which is yet to be clarified. Can unions bring applications for bullying, or must the claims be made directly by individual workers? “The Commission has considered this recently, and the NUW wound up withdrawing an appli cation made on behalf of a group of labour hire workers,” says Athena Koelmeyer, managing director, Workplace Law. “However, all indications are that the decision won’t be the end of the story for the unions. It may be that a small legislative clarification could be of benefit with this one, just to make it clear who has standing to make a claim and whether complaints have to be made on behalf of an individual or whether group applications are permitted.”
‘REASONABLE ACTION’ STILL IN THE SPOTLIGHT Prior to the legislation being enacted, there was also considerable concern about what constituted ‘reasonable managerial action’, especially in relation to performance management. This definition has been clarified in part in recent
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KEEPING BULLYING CLAIMS OUT OF THE COURTS Catherine Gillespie, director, Workplace Conflict Resolution, provides four key tips that may prevent bullying claims escalating to the courts 1. Show genuine concern for worker wellbeing Workers instinctively know when management cares. Displaying empathy, concern and regularly communicating with a worker is often enough to keep the worker engaged in the internal resolution process rather than seeking external adversarial avenues. 2. Undertake early intervention Managers must learn to place equal importance on the practices of tracking task/work productivity and looking out for their people. Being aware of incidents and worker reactions allows a manager to intervene early with informal processes that can often avert a bullying claim. Knowing what to look for and how to intervene in a constructive manner are crucial management skills for today’s ‘adaptive manager’. 3. Provide a detailed yet succinct complaints-handling policy Each party must have clarity around
process and their role within it. This keeps management accountable for ensuring that all complaints are addressed promptly and appropriately, and removes the assumption that someone else is handling the matter or that the issue will simply ‘go away’. A clear policy also reinforces the issue of confidentiality, and encourages parties to be accountable for self-management (where suitable), and to participate in resolution options. 4. Minimise risk of harm This can be achieved by being proactive through policy and training and holding all workers accountable to policy. In the event of a complaint, it may also mean temporarily separating parties. Addressing issues means a stop-bullying order may not be applicable so a worker would be less likely to approach the FWC. The risk of a damages claim being pursued by a worker in the court system would also be reduced as it would be more difficult to prove negligence by the employer.
weeks by a decision handed down in the matter of Ms SB (2014) FWC 2104. In this matter the applicant was a manager who claimed that she had been the subject of bullying by two of her direct reports. In this case Commissioner Hampton took the opportunity to provide some clarity around reasonable management action and stated that the action by management was to be assessed objectively and in context. In particular, the commissioner pointed out that ‘reasonable’ did not mean ‘perfect or ideal’ and that action could still be reasonable even if the steps that led to the action were not. The commissioner also emphasised that whether an action was reasonable involved an impartial assessment of the action, not how the applicant perceived it.
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EMPLOYMENT LAW / BULLYING
“This is an important point as the standards in relation to perception are different in other areas,” says Koelmeyer. “For example, in workers’ compensation psychological injury claims in NSW, it is the perception of the injured worker that can be sufficient to ground a claim, even if that perception is not ‘reasonable’.”*
THE IMPACT ON WORKERS’ COMP CLAIMS One aspect of workplace bullying in relation to the law that has not yet been considered in great detail is the potential impact the decisions of the FWC could have on workers’ compensation claims. Shane Koelmeyer, director at Workplace Law, says this is “a big deal”, as a FWC finding that
PAST BEHAVIOUR A CONSIDERATION New anti-bullying provisions came into effect on 1 January this year, but according to a recent ruling handed down by the Fair Work Commission (FWC), that doesn’t rule out employees coming forward over alleged bullying from previous years. The case, Kathleen McInnes [2014] FWCFB 1440, related to a stop-bullying application made by McInnes on 9 January this year. She alleged that she was subjected to workplace bullying behaviour from November 2007 to May 2013. She did not refer to any bullying after May 2013; however, she has been on leave since that time. The issue for determination before the bench was whether the Commission had jurisdiction to hear and determine an application that involved alleged bullying conduct which occurred prior to the commencement of the anti-bullying amendments to the Fair Work Act 2009 (Cth). Although the FWC made it clear that the legislative scheme was not designed to be applied retrospectively, they ruled it appropriate to consider past behaviour if there was a risk that the employee would continue to be bullied at work. “Effectively, this decision allows employees to make applications based on past conduct and behaviour that they fear will continue in the future. Past occurrences of bullying conduct will be admitted as evidence, regardless of whether these events occurred prior to 1 January 2014,” says Athena Koelmeyer, managing director of Workplace Law.
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bullying has occurred would have significant impact, primarily because it could be used by an employee to support a workers’ compensation claim. “An insurer could be persuaded by the FWC finding to accept liability for the claim without any independent investigation, as would normally occur in a workers’ compensation claim,” he says. As mentioned above, there are different standards in relation to psychological injury claims versus bullying claims. As workers’ compensation is a way for an applicant to actually receive some compensation in relation to alleged bullying, it is probable that a psychological injury claim and an anti-bullying claim could be made at or about the same time. This means that communication is required between the employer and the insurer about the approach to both claims to ensure consistency. “An admission in one area could pose a real problem for the other,” says Shane Koelmeyer. “It’s going to be important for insurers to recognise that they are not bound by the FWC’s findings and should conduct their own factual investigation and assess the claim in accordance with the relevant legislation. “The converse can also apply, of course, where an applicant to the FWC might use an acceptance of a psychological injury claim by the insurer to try to persuade the FWC that there was bullying,” Shane Koelmeyer adds.
FUTURE AMENDMENTS Paterson believes there will be further clarification and possibly amendments to the law. Her firm believes there may be further developments in the following areas: • the meaning of ‘reasonable management action’ • whether alleged behaviours constitute a ‘risk’ to health and safety • the need for the conduct to be ‘ongoing’ and not just an isolated incident may see attempts to link unrelated incidents • the scope of the orders that can be made. It has been noted that orders could be challenged on the basis that they are uncertain if they are ongoing and not for specified times or reviewed
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HUMAN RESOURCES DIRECTOR
FURTHER STEPS Education about standards of conduct and behaviour is the foundational building block for any employer looking to not just avoid bullying claims but stamp out bullying altogether. This could be combined with more effective training about what is and what is not bullying, especially in relation to actions of employers in managing performance and enforcing the expected standards of conduct and behaviour. There is also a prevailing view that investiga tions being conducted by employers in response to bullying complaints may not be up to the required standard. “One difficulty that employers often discover is that if HR are charged with doing the investigation, this creates complexity with any disciplinary proceedings that may arise subsequently based on the investigation findings,” says Athena Koelmeyer. A measure of independence or impartiality is
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The commissioner pointed out that ‘reasonable’ does not mean ‘perfect or ideal’ and that action could still be reasonable even if the steps that led to the action were not always advised for an investigator; this allows HR to guide any subsequent action without being accused of bias. “Of course, procedural fairness in investiga tions has also become a hot topic, not just in relation to bullying but even in dismissal decisions. A short-cut investigation can lead to problems with the decisions that are derived from it later on,” Koelmeyer warns.
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LEADERSHIP / DIVERSITY
MAN IN THE MIRROR Nicholas Barnett, CEO, Insync Surveys, went from stereotypical sceptic to passionate diversity campaigner. He shares his story with HR Director
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As a well-educated, middle class white male who showed early potential, I was given many high-value and special learning opportunities in the early stages of my career. After three years at KPMG and having achieved my chartered accounting qualification, I was transferred to Taiwan for 18 months to manage KPMG’s (then Peat Marwick) office in Taipei in January, 1980. The office had around 60 employees, many of whom were two and almost three times my age. Despite my relative inexperience and being only 22 years old, I was treated with the utmost respect by our employees, clients and others. It was a lot of fun and a fabulous learning experience. On returning to Australia, I worked for a further 18 months with two of Australia’s best known and respected insolvency practitioners, Jim Poulton and David Crawford, in KPMG’s insolvency division. I was encouraged and sponsored through the firm from one great opportunity to the next. I was one of the youngest people ever to be admitted to the partnership of KPMG at the age of 28 and was the youngest to retire two years later at the age of 30. Throughout my career, I’ve been introduced to many business and community leaders and became a member of many great sporting and other clubs where lots of people just like me frequented. I’ve been asked to take on many leadership positions during my life and have found it quite natural to do so. HCAMAG.COM
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HUMAN RESOURCES DIRECTOR
I have also had the added benefit of being tall at six feet and three inches. In the US, males who are over six feet two inches tall are over three times more likely to become CEOs than shorter males. Today I am a husband, father and grandfather. I sit on a number of boards, have headed up companies and have written two books. I often wonder if I didn’t fit the ‘leadership mould’ quite so well, where might I find myself?
“My antenna in relation to unconscious bias is now very sensitive, but for most of my life, I couldn’t see or recount a single case of unconscious bias”
THE LIGHT WAS TURNED ON As I began to reflect upon my 35-year career, I came to realise that my quick rise through the ranks was due, at least in part, to the fact that I have been given so many opportunities, so much support and had so many obstacles removed for me by others. It began to occur to me that those same special opportunities and support have been given to very few women, those that aren’t white Anglo-Saxons and people with a disability. It has also occurred to me that I have spent most of my time working with people just like me. I have always felt part of the ‘in-crowd’ and have never been discriminated against. I have begun to realise that very few non-white women or people with a disability would say they feel part of the in-crowd and have never felt discriminated against. Senior women point out that well-educated, white, middle class men are given respect as soon as they walk in the door. Such men are assumed to deserve respect until they prove otherwise. Women of a similar status are more likely to need to earn the respect before it is given. Many women tell of their experiences in visiting clients who would regularly defer to their more junior male colleague, assuming that he is in charge. I regularly encourage my male colleagues to
AUSTRALIA’S PAY INEQUALITY » In 2012, it took women 64 days to reach parity, while in the previous two years it was 63 days. On average, men earn 17.5% more than women in comparable jobs » In 2012, the EOWA annual employee earnings report found the average male worker was earning $1,227 a week, while the average female earned $819 a week » Less than 40% of companies surveyed by EOWA (now WGEA) conduct an annual gender pay equity analysis. Of the organisations that did conduct an analysis, just over half put together an action plan to address the gender pay gap
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reflect on their careers in the same way I have in the hope that they might also see the light – in the way I have.
UNCONSCIOUS BIAS – UNCONSCIOUS PREJUDICE Recently I heard a mum telling her young son of age three or four: “Now son, you’re the man of the house, so make sure you look after your sister”. We’ve been telling our boys and girls for years that the boys are the boss and they’ve got to look after the girls. And when our boys show any sign of weakness, we tell them not to be a ‘girl’! Our gender schema, which sets our perceptions as to what it means to be a boy or a girl, is learnt so early on and is reinforced so often, including in our daily media, that it simply becomes unconscious and the natural order of things. Unfortunately, this means that legitimate leadership decisions are routinely biased in favour of men against women, against non-Anglo-Saxons, against those with a disability and even against shorter people. When choosing a leader or a person for promotion, numerous research studies(1) have shown that most men and women who look at exactly the same resume will select the one with Jack’s name more often than the one with Jill’s name. The men are considered to be more competent, hireable and have greater leadership ability than the identical female candidates. Harvard’s Implicit Association Test(2) has also shown that the majority of the population has an unconscious bias linking men to careers and women to family. It also shows minimal difference in unconscious bias by demographic – women have the same bias as men and younger women are just as biased as older women. My antenna in relation to unconscious bias is now very sensitive, but for most of my life, I couldn’t see or recount a single case of unconscious bias. I now see examples every day that I know most of my
DID YOU KNOW? » 20-25% of Australian residents are overseas-born and the largest growth in religious affiliation has been in Hinduism and Buddhism^ - yet approximately 75% of the leadership pipelines of Australia’s ‘Big 4’ professional services firms are Australian-born or born in North-West Europe (eg the UK, France, Germany, Sweden)** » Australia ranks 21st out of 27 OECD countries for disability employment^^ Sources: ^Australian Bureau of Statistics; ** Diversity Council Australia; ^^PricewaterhouseCoopers
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WHAT’S HAPPENING? Women make up...
52% 52% of university graduates
63% 63% of Australian workers in entry-level roles
43% 43% of supervisor/ junior management roles
27% 27% of middle management roles
20%
20% of senior executive positions Source: ‘Stop blaming women: Prescribing a 21st century approach to gender diversity’, Hay Group
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male colleagues and friends don’t see. Imagine for a moment a CEO and his leadership team sitting around a large boardroom table with the only female team member at the other end of the table. The CEO has a conference phone in front of him with a ‘post it’ note with a phone number on it of someone they need to join the meeting. He asks the female leadership team member to dial the number. After a moment of hesitation, she dutifully gets out of her chair, goes to the other end of the room and dials the number. Neither the CEO nor other men noticed the inappropriateness and unconscious bias displayed by that request. That woman wishes she had thought quicker and said something like, “Your CFO is beside you, he’s good with numbers, why not let him dial the number?” The cumulative impact of unconscious bias and prejudice over the career of employees in favour of the dominant group (white Anglo-Saxon, well educated men) is significant. Non-dominant groups have to manoeuvre around or over obstacles throughout their careers that are automatically removed for the dominant group. The nondominant groups are given much less support and encouragement and have to climb difficult terrain, whereas the dominant group are encouraged and supported as they take the escalator to the top. Having read much of the research on this topic(3) and having watched unconscious bias play out in many different ways, it is now clear to me that, when it comes to positions of leadership, the playing field has been tilted in favour of white men for centuries. I have arranged unconscious bias training in our organisation and I take every opportunity to talk on this topic, particularly to men, including in public forums and in survey and consulting assignments for clients. This includes telling my story where appropriate. These actions are making a positive difference in our organisation and in others.
THE MYTH OF THE MERITOCRACY Australians believe in a fair go for all. Most argue that all of our leadership decisions have been based on choosing the best person for the job. As stated above, the evidence is overwhelming that this is not the case. Our workplaces are not meritocracies, never have been and are unlikely to be for decades to come, unless something radical is done to re-tilt the playing field. Even when Insync Surveys and Gender Worx
have carried out diversity surveys for organisations that clearly show that L&D, career opportunities and promotions favour men, some senior executives overlook the compelling data to argue that their organisation is still a meritocracy with everyone treated equally regardless of gender, colour, or cultural background. A study at Goldman Sachs that is described in Laura Liswood’s book, The Loudest Duck(4) was very telling. The white Anglo-Saxon male executives argued that Goldman Sachs was a meritocracy. They were so sure of themselves, that they allowed an experiment. The white AngloSaxon men were put in one room, the white AngloSaxon women in another, blacks in another and other minority groups in another. They all discussed whether Goldman Sachs was a meritocracy. The white Anglo-Saxon men were unanimous that Goldman Sachs was a meritocracy and were stunned that all others were unanimous that Goldman Sachs was not a meritocracy. There are many white Anglo-Saxon male executives, perhaps most, who genuinely believe that their organisations are meritocracies, that they don’t make biased decisions or prejudge people based on their gender, colour or cultural background. These men are not bad people. Like me, they have a sense of entitlement, dominance and unconscious biases and prejudices that they learned from a young age and which have been reinforced on a daily basis for decades. They have never been discriminated against and, like the white Anglo-Saxon Goldman Sachs executives, can’t see what those in minority groups see so clearly.
A COMPELLING CASE FOR CHANGE Removing the discrimination and the impact of bias and prejudice against non-dominant groups when it comes to leadership decisions is compelling simply as a result of our desire for equity and a fair go for all. I argue that it is a failure of leadership not to give women the same opportunities as men. There shouldn’t have to be any other reason for change. The fact that there are many compelling business advantages of achieving diversity adds to the case for change. There is overwhelming evidence that diverse groups add new perspectives to discussions, make better decisions, are better places to work, more innovative, productive and more profitable. These benefits are consistent with my own experience.
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Much of the evidence for improved profitability is based on research in relation to gender and points to improvements in profitability and return on equity of between 25% and 40%(5) as a result of diversity at senior ranks in organisations. Insync Surveys’ own research found that gender diverse boards are more effective than male-dominated boards. Gender diverse boards make fewer assumptions, are more open to different perspectives, have broader discussions, have an increased focus on problem solving, are more self-reflective and, accordingly, add more organisational value. Interestingly, the men on gender diverse boards don’t think like the men on male-dominated boards – they actually think more like the women on the gender diverse boards. Men – and women – actually moderate their behaviour when in a gender diverse environment and that’s where the benefit is derived. It’s not because men or women are better. The benefit comes from them working more effectively together than separately. Many consider that change has been glaciallike. Some have calculated that it could take over 100 years for us to achieve equality based on the current rate of change. I doubt that our society will let us wait anywhere near that long. If substantial change isn’t achieved in the next several years, it is likely to be forced upon us in the form of quotas and other interventions. Personally, I don’t think quotas can be avoided because I don’t think there is a sufficient understanding of ‘others’ by male stereotypical leaders nor a sufficient collective desire to bring about change. Until a critical mass of male leaders see the light and campaign for change, it will take many generations before we achieve true diversity and inclusiveness in our leadership ranks in Australia and the rest of the world. Sex Discrimination Commissioner Elizabeth Broderick’s initiative, the Male Champions of Change, is doing good work in this area and many of the male champions are great campaigners for change. I’ve joined this campaign for change and encourage you to do the same.
SIX SUGGESTIONS FOR MALE LEADERS WHO WANT TO MAKE A DIFFERENCE
1. Reflect on your own career: Consider the extent to which you have been helped and supported throughout your career and compare that with the career trajectory of one or more females who were at a similar stage to you. Consider whether you have been discriminated against. In what way? Have you ever been the only man in a meeting with 10 or more senior females? If it has ever happened how did it feel? It felt very strange and I became quite guarded when this first happened to me only a few years ago. Note that this is a regular occurrence for senior females. 2. Study the evidence: There are hundreds of global research studies on the topic including by McKinsey, Catalyst, Bain & Co, The Conference Board, many universities and others. Read The Loudest Duck(4) and Unlocking the Potential of Women at Work: A Decade of Evidence(3). Do you agree that the evidence shows the playing field is tilted in favour of men and to the disadvantage of women? Can you recount evidence that demonstrates that gender diverse organisations perform better? 3. Become conscious of your unconscious bias: In the early stages of your journey, attempt to articulate two or three examples of unconscious bias playing out in your organisation. Most males can’t recount any examples early on but after a time can see new examples every day. Complete the Harvard Implicit Tool(2) for gender and careers to measure your own unconscious bias. Consider how unconscious bias effects recruitment, pay, performance review and promotion decisions in your organisation. 4. Join the discussion: Start or join a discussion in your own organisation. Seek out data from your own organisation that will identify any inequities in recruitment decisions, pay, performance reviews, promotions and allocation of high value opportunities. Join discussion groups outside your organisation and find out what the leading organisations are doing in this area. 5. Build a narrative and join the campaign: Develop a compelling narrative as to why this topic is so important and why you are committed to help bringing about change. Build a coalition of like-minded people, support each other and become a positive force for change in your organisation. 6. Commit to the journey: Treat it as an L&D opportunity but note that there will be a cost in time, effort and focus. You may even experience some backlash along the way but commit to the journey as it will be worthwhile. You’ll begin to see things in new ways. It may be worth finding a mentor or a coach to assist you along the way.
References (1) Agars MD (2004). Reconsidering the impact of Gender Stereotypes on the Advancement of Women in Organizations, Psychology of Women Quarterly, 28, 103-111 Moss-Racusin CA et al (2012). Science faculty’s subtle gender biases favor male students, New Haven, CT, USA (2) Havard’s Implicit Attitude Tests are found at implicit.harvard.edu/implicittaketest.html (3) Dr. Karen Morley (2011). Unlocking the Potential of Women at Work: a Decade of Evidence, Melbourne
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(4) Liswood L (2010). The Loudest Duck: Moving beyond diversity while embracing differences to achieve success at work. John Wiley & Sons, New Jersey Catalyst (2004). The Bottom Line : Connecting Corporate Performance and Gender Diversity. Catalyst, New York Adler (undated). Women in the executive suite correlates to higher profits. European Project on Equal Pay Desvaux G et al (2007). Women Matter: Gender Diversity, a corporate performance driver. McKinsey & Company
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LEADERSHIP / / EMOTIONAL LEADERSHIP EMOTIONAL INTELLIGENCE INTELLIGENCE
GETTING INSIDE OUR 42 | JUNE 2014
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HUMAN RESOURCES DIRECTOR
LEADERSHIP: KEY QUALITIES
EMPATHY COMMUNICATION PROCESS & TACTICAL ORIENTATIONS LOGIC
EYE FOR DETAIL
INSPIRATION
EMOTIONAL INTELLIGENCE & SELF-AWARENESS
‘BIG PICTURE’ VISION AUTHENTICITY
Source: Deloitte Leadership Academy
Taking your team to the next level means understanding your employees and yourself. Jill Fraser reports “A good leader possesses two key attributes, the ability to set direction and the skill to drive people towards that direction, motivate and align them and ensure that the direction appeals to their hearts as well as their heads.” Their hearts? Twenty years ago, an article on leadership would have reflected the domination of boardrooms by alpha males who believed that emotions and feelings in an office environment were about as relevant as children’s storybooks and as welcome as T-shirts. It probably kicked off with something like: “A good leader recognises that business strategy is a highly rational process of eliminating variables and maximising opportunities”. Leadership today is a much more holistic concept: leadership training institutions such as Deloitte’s Leadership Academy use the analogy of children’s stories to encourage business leaders to tap into their own stories in order to become more
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open, honest, transparent and real – whereas employees wearing T-shirts is now a universal sign in major corporations around the globe, showing that a relaxed dress code lifts staff morale, acknowledges individuality and potentially increases creativity and productivity. Today, as expressed in the opening quote by Deloitte’s Leadership Academy chief and founder, Tom Richardson, good leadership engages the heart as well as the intellect, and encompasses a number of key qualities. Richardson established the Deloitte Leadership Academy to expand the capabilities of leaders after recognizing that ‘people, not PowerPoint’ drives organisational performance. He has years of experience in the leadership stratosphere – working intimately with 15,000 top business leaders – and so is uniquely placed to explain why leadership is a people game. “The characteristics and capabilities of good
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leadership are universal across almost all industries,” he says. “But it’s become more and more vital in industries such as finance because of
“If you don’t understand yourself you’re never going to understand others – subsequently you’re never going to be able to motivate them” John Toohey the pressure around bonuses and remuneration. “People will only stay in an organisation if they feel connected and engaged. They’re not being paid to stay there with bonuses anymore. The need for leaders in the financial services industry to build up their people skills has become increasingly important.”
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Andrew Henderson, a veteran of leadership management, introduces the term “leadership charisma”. “It’s to do with connection – a connection that makes me feel that my leader is charismatic and the only way that connection will be established is if my leader has the emotional intelligence to understand me – what motivates me, why I’m here, how I react. “Unless leaders understand and invest in their people, they will not be able to influence them because when they want to rally their team to do something the reaction will be ‘you only want us to do this because of what you will gain,’ ” he adds. “But, if each individual knows from experience that their boss is invested in them, listens to them (consultative leadership) and honestly cares about them they will trust the leader’s decision on behalf of the team. That’s leadership charisma,” Henderson maintains.
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HUMAN RESOURCES DIRECTOR
IN THEORY: EMOTIONAL INTELLIGENCE The rules of the heart Emotional intelligence (EI): • • • •
the ability to perceive emotions in yourself and others the ability to use this information in decision-making understanding emotions and their consequences the ability to manage emotions in yourself and in others. According to research conducted by Daniel Goleman, one of the world’s leading proponents of EI, “the higher up the organisation you go the more important emotional intelligence becomes”. Goleman’s research suggests that EI is twice as important as IQ and technical skills. He classifies EI as a framework of five elements: • HIGH SELF-AWARENESS – People with high emotional intelligence are usually very self-aware. They understand their emotions, and because of this, they don’t let their feelings rule them. They’re also willing to take an honest look at themselves. •
•
•
•
CAN YOU IMPROVE YOUR EMOTIONAL INTELLIGENCE? Researchers disagree over whether you can build your ‘innate’ level of EI. However, it’s generally acknowledged that you can train to be better at EI, like any other skills. Corporate psychology firm Mindtools suggests carrying out the following exercises: •
OBSERVE HOW YOU REACT TO PEOPLE. Do you rush to judgment before you know all of the facts? Do you stereotype? Look honestly at how you think and interact with other people.
•
LOOK AT YOUR WORK ENVIRONMENT. Do you seek attention for your accomplishments? Humility can be a wonderful quality, and it doesn’t mean that you’re shy or lack self-confidence. When you practise humility, you say that you know what you did, and you can be quietly confident about it. Give others a chance to shine.
•
DO A SELF-EVALUATION. What are your weaknesses? Are you willing to accept that you’re not perfect and that you could work on some areas to make yourself a better person? Have the courage to look at yourself honestly – it can change your life.
•
MOTIVATION – People with a high degree of emotional intelligence are usually motivated. They’re willing to defer immediate results for long-term success.
EXAMINE HOW YOU REACT TO STRESSFUL SITUATIONS. Do you become upset every time there is a delay or something doesn’t happen the way you want? Do you blame others or become angry at them, even when it’s not their fault? Staying calm and in control in difficult situations is highly valued – in the business world and outside it. Keep your emotions under control when things go wrong.
•
EMPATHY – Goleman says this is perhaps the second-most important element of emotional intelligence. Empathy is the ability to identify with and understand the wants, needs, and viewpoints of those around you.
TAKE RESPONSIBILITY FOR YOUR ACTIONS. If you hurt someone’s feelings, apologise directly – don’t ignore what you did or avoid the person. People are usually more willing to forgive and forget if you make an honest attempt to make things right.
•
EXAMINE HOW YOUR ACTIONS WILL AFFECT OTHERS - BEFORE YOU TAKE THOSE ACTIONS. If your decision will impact others, it is important to put yourself in their place. How will they feel if you do this? Would you want that experience to happen to you? If you must take the action, how can you help others deal with the effects?
SELF-REGULATION – This is the ability to control one’s emotions and impulses. People who self-regulate typically don’t allow themselves to become too angry or jealous, and they don’t make impulsive, careless decisions.
SOCIAL SKILLS – It’s usually easy to talk to and like people who have good social skills – another sign of high emotional intelligence. Those with strong social skills are typically team players.
NEUROSCIENCE IN ACTION A high trust factor is paramount in the leader/ employee equation in the insurance industry, says Professor John Toohey from the Business Psychology Discipline, Graduate School of Business and Law RMIT University, because of the nature of the business and the fact that a culture initiated and practiced at the top is mirrored down the line and will eventually shape customer relations. Toohey familiarises his graduate MBA students with neuroscience to add weight and credibility to the argument that the most effective, charismatic leaders function from their emotions. “Through neuroscience, which looks at how the brain operates, we have come to realise that
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decision making is primarily emotion-based,” Toohey explains. “The emotional parts of our brain kicks in long before the rational parts. The rational parts follow and try to make sense and contextualise.” “A lot of men in business are afraid of that component, and don’t want to know about it. The executive education I’ve done in this area is fascinating: people have quite bemused smiles when I first tell them this but as they dig into it and I show them the research they begin to look more bewildered than amused.” Toohey contends that an area of critical importance in business education is the nature of beliefs and biases. He teaches that the brain is
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Effective communication... it’s about understanding individuals, as opposed to seeing them through your own lens highly plastic/durable. Beliefs belong to the irrational/emotional world, and a strongly-held belief can change the neural pathways of the brain (thus the plasticity). “Leaders usually don’t understand this and therefore don’t get the impact,” he says. The significance of all this, he says, is to highlight the relevance of self-awareness (what we believe, why and how we behave, and why) in what he refers to as “the psychology of strategy” for leaders to “inspire people to act in predictable ways”. “I challenge managers and executive MBA
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students because usually they are very good at identifying biases in others, and very poor at identifying them in themselves,” Toohey adds. “I tell them, ‘if you don’t understand yourself go and grow cabbages or do some other solo job.’ “Don’t pretend that you can go into a business and take a leadership role because you’ll only make a mess of it. If you don’t understand yourself you’re never going to understand others, you’re never going to be able to motivate them.”
LEADER, KNOW THYSELF Jason White and Juliet Bourke, human capital partners at Deloitte, who are in the business of creating “extraordinary leaders”, agree that selfawareness is a crucial element of leadership training. Post-Global Financial Crisis (GFC), due to external market forces and related circumstances that prompted change, leaders with higher ‘emotional intelligence’ (self-awareness being a
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HUMAN RESOURCES DIRECTOR
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t gence tes sts are i l l e t n i l te motiona ve. Basic
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COMMUNICATION Lee Iacocca, former CEO, Chrysler Corporation, once said, “You can have brilliant ideas, but if you can’t get them across, your ideas won’t get you anywhere.” Nido Qubein – businessman, motivational speaker, president of High Point University in North Carolina since 2005 and master of communication skills, says that the most common mistake made by leaders is “confusing the art of communication with the science of connecting”. “Effective communication is not merely the transference of knowledge, data or information. The heart and soul of effective communication relates to the ability to build a bridge of understanding. That means to connect with them,” he says. “Something amazing happens when someone believes that the person communicating with them knows his or her fears, goals, aspirations and needs. Qubein adds that when leaders really connect they use language that their people relate to, speak from their perspective and address issues they find important. The moment they do that the value of what they’re saying is heard in a modality in which people can relate and recognise the benefit to them. “When this happens both the art and the science have been employed and communication has, as we say, clicked.” Deloitte’s Tom Richardson sums it up. “We all know the ability to drive performance, be financially astute and commercial and deal with operating issues,” he says. “Possessing the emotional intellect to understand where your
workforce’s mindset is at, what’s driving their motivation and be a real person with them and build engagement has been proven to be crucial in retaining top talent.” Bourke adds that it’s about understanding individuals, as opposed to seeing them through your own lens. “The ASX’s focus on diversity skills is causing leaders to sit back and question whether they are actually seeing the person in front of them, or simply making assumptions based on stereotypes,” she says. “Seeing the person accurately is about seeing their strengths, how they sit with other team members, their career orientation, and creating an environment in which you can pull together the best of everyone in order to create a high-performing group in which everyone can excel.”
T O-D O L
critical component of emotional intelligence) have emerged at the forefront, reveal White and Bourke. Successful leaders during the GFC ensured that communication with staff was increased 10fold, often spending at least 30% of their time with their teams, says White. “Whenever we experience a crisis, it’s an opportunity to reflect and minimise certain notes and amplify others, one of which has been becoming more inclusive,” Bourke adds. A trend towards increased inclusivity and collaboration are by-products of a growing prominence in leadership prototypes on emotional intelligence and communication.
to h online, wit . available rs e id ial prov commerc
onal our emoti successful y e v o r p to im style of ke efforts. Study the practice anl?dHow do they inspire Ma ce ssfu intelligehnat makes them succeem? W th . m rs leade best fro ther d get the teams an ees and o hat are their y o l p m e r W ? u ten to yo : what makes them tiacllky? Lis s n r o e rs d e l p o stakeh – professionally and d ees and priorities r employ harness their desires an u o y h t i w , : k e c y l a g l tr a g ona em on En ers emoti gy. Keep th environment is rk o stakehooludr core business strate w nsure the e aims to y dset and ur people. g their min yo monitorin et the best out of g to le b suita
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BUSINESS THINKING:
A change in perspective How do you convince leaders to understand there are other ways of seeing the world and processing inputs? Adrian Smith outlines how it’s possible to convert ‘thinking concepts’ into hard-core commercial acumen In a previous article (see p24, HRD12.2), we discussed the role of business thinking in leadership. We noted that Martin Luther King once wrote: Rarely do we find men who willingly engage in hard, solid thinking. There is an almost universal quest for easy answers and halfbaked solutions. Nothing pains some people more than having to think. We went on to discuss our observations that in more than 20 years in business and L&D we have seen a lack of desire to, or an incapacity of, managers and leaders to engage in deep, hard thinking, and
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that this incapacity to change the way they think significantly limits their ability to function in our complex business world. We believe traditional business thinking must be challenged and the capacity to undertake ‘hard, solid thinking’ must be developed as a platform for achieving high-impact business leadership and decision-making.
TAKING THEORY INTO PRACTICE So far so good, but how do you go about it? How do you engage leaders to understand there are other ways of seeing the world and processing inputs; other ways that give new insights and enhance the capacity to deal with complexities, make better business decisions, and communicate in a powerful and engaging way? Before answering this, let’s have a look at some different thinking styles, and how they may apply in a business sense. The chart opposite is one we often use to help our managers understand how a combination of perspective and thinking styles allows them to consider and deal with a full range of issues, opportunities and problems presented to them, regardless of their level of seniority.
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HUMAN RESOURCES DIRECTOR
THE PT MATRIX Non-linear thinking
Holistic perspective
Conceptual
Subjective
Issues perspective
Objective
Practical
Linear thinking
The perspectives continuum recognises the range of perspectives required from, at the left-hand side, short-term and situational, to on the right-hand side a more long-term and holistic perspective. While not losing sight of the fact that they do need to be able to drop into the specific and situational as issues require, this more holistic perspective is critically important to senior leaders who are responsible for strategy, planning and creating the future. This perspective is often called ‘systems thinking’, which is an approach that views issues, opportunities and problems as parts of an overall system. Rather than reacting to specific issues and potentially incurring unintended consequences, systems thinking is based on the belief that the component parts of a system can best be understood in the context of relationships with each other and with other systems, rather than in isolation. The thinking continuum recognises different thinking styles: on the left is unstructured nonlinear, often called lateral, thinking, which has its strength in innovation and creativity, and then through to more structured and analytical thinking, often called linear thinking. When combining these two continuums we get the PT Matrix where there are four distinct quadrants, all of which have application in an impactful business leader’s toolkit. The green quadrant reflects working in a more conceptual space with a clear understanding of the world around us and interconnections between the different parts of the business and the environment. The green is well suited to creating the vision for the future and developing strategy. It is innovative and creative.
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The blue zone is very objective. Again, it understands the business as a holistic unit but is very practical and takes an analytical and rational approach to dealing with issues and opportunities. The purple zone also brings this analytical and rational approach to bear; however, its focus is much more insular and issues related. Strengths are around deductive problem solving, technical problems, and systems and process issues. The orange zone, a bit like a traffic light warning, is an area to be handled with care. This quadrant has an issues or specific focus; however, business thinking tends to be more lateral and non-linear. While this encourages unconstrained thinking and innovation, it does risk unaligned and insular thinking that drives non-rational decision-making. Let’s have a look and see how business thinking and decision-making work within the PT Matrix. As an organisational level, particularly for business leaders, the PT Matrix looks like this: Perspective
Action
Thinking style
Understanding the world around us
Linear thinking for processing information Non-linear thinking for conceptualising a complex world
Holistic (systems thinking) for context
Blue
Non-linear thinking
Systems thinking
Green
Creating the vision
Quadrant
Green
Developing the strategy to deliver on the vision Develop options
Non-linear thinking
Holistic
Green
Develop decision criteria
Linear thinking
Holistic
Blue
Measure risk
Linear thinking
Issues
Purple
Understand implications
Linear thinking
Holistic
Blue
Map options to decision criteria
Linear thinking
Holistic
Blue
Decide
Linear thinking
Holistic
Blue
Plan
Linear thinking
Issues
Purple
Communicate
Non-linear thinking
Holistic
Green
Act
Linear thinking
Issues
Purple
Measure
Linear thinking
Holistic
Blue
Act
For problem solving at all levels of management and leadership, see the following table.
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Action
Thinking style
Perspective
Quadrant
Identify problem
Linear thinking
Holistic
Blue
Collate information and analyse
Linear thinking for collating and processing information
Holistic
Blue
Green
Non-linear thinking for conceptualising a complex problem Develop options
Non-linear thinking
Holistic
Green
Develop decision criteria
Linear thinking
Holistic
Blue
Measure risk
Linear thinking
Issues
Purple
Understand implications
Linear thinking
Holistic
Blue
Map options to decision criteria
Linear thinking
Holistic
Blue
Decide
Linear thinking
Holistic
Blue
There is no doubt that business thinking requires a high degree of flexibility, and managers and leaders must be able to let go of their preferred thinking styles. For example, even simple problem solving requires a blend of linear and non-linear thinking, and a blend of issues and holistic perspectives! The question then is, how do we help managers and leaders release themselves to think differently? Research shows that placing a major emphasis on ‘learning by doing’ with actual organisational data is highly impactful. The challenge of course is to manage the issue of objectivity and capacity to step away from traditional thinking and personal biases.
»CASE » STUDY: TURNING THINKING CONCEPTS INTO ACTIVE LEARNING WITH THE COUNTRY FIRE AUTHORITY We recently had the opportunity to work with a cohort of operations managers from the Victorian Country Fire Authority (CFA) to assist them with their business thinking as part of an advanced diploma in management program, with our learning partner Frontier Leadership. To ensure that we created an impactful learning environment we chose to use, rather than CFA, a sister emergency services organisation as a case study for this program. The intention was to leave the operations managers’ experience of CFA behind and encourage them to step into a very objective and open-minded space that required deep and solid thinking, but which also facilitated the capacity to HCAMAG.COM
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HUMAN RESOURCES DIRECTOR
think differently from the past. This involved moving them from a space where past experiences, personal knowledge and perhaps even biases may have inhibited their thinking and kept them focusing on content from a historical perspective rather than the learning process and a genuine exploration of what the sister organisation could be. During the program, we were able to challenge the thinking of this cohort and work with them to change their perspective and open their minds to thinking on a whole of entity basis, and to consider issues from the perspective of multiple stakeholders. We also worked with them on developing their thinking and decision-making tools to develop innovative ideas, solutions and strategies that broke the paradigm of the CFA thinking they brought to the start of the program. The participants actually surprised themselves with their capacity to deal with whole of organisational complexities and their own capacity to make bold and innovative plans for the future of
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their sister organisation. This is the power of this learning experience and reinforces the concept of ‘learning by doing’.
A WORD OF WARNING! We are asking our managers and leaders to really stretch themselves to adopt what is often a totally different thinking style from what has made them successful to date, and more importantly from what is natural and comfortable to them. This requires them to have the emotional intelligence and self-awareness to be conscious of their preferred perspective and thinking styles, a recognition of the benefits of changing how they think, and a desire to challenge themselves and take a risk! It also places requirements on the organisation to actively encourage new ways of thinking, to provide ongoing guidance and support to their managers and leaders, and to establish a culture of learning and having a go.
Adrian Smith is a principal of Management Partners Australia and can be contacted at adriansmith@ managementpartners. com.au.
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IN PERSON / CINDY REID
Photo credit: Thilo Pulch: pulchphotography.com
IN PERSON:
CINDY REID, KONICA MINOLTA Cindy Reid, Konica Minolta’s Australian head of HR, reflects upon balancing the humanitarian and commercial aspects of HR, lessons learnt from bad leaders, and how she is preparing for a massive transformation project HR Director: Konica Minolta is about to launch a significant transformation project. What sort of transformation is it? Cindy Reid: Traditionally the copier industry is all about hardware sales and service. It’s very focused on machines in the field (MIF). The margins are decreasing significantly to the point where you can’t make a lot of money solely out of copier machines. In addition, the cost of doing business has gone up. We need to do something that complements our current business, that sits with our current skillset and capabilities, but stretches us a little bit away from what we’re currently doing. We need to shift from a hardware focus and expand to a software and solutions focus.
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HRD: You’ve just started recently at Konica Minolta. What are your expectations of the role, especially given the significant transformation project you have in front of you? CR: I’m in that uncomfortable stage where I’m moving from unconscious incompetence – I don’t know what I don’t know – towards being conscious of what I don’t know. And that is, essentially, the challenge of transforming a business and formulating the people agenda to support that change.
HRD: Being new to the role, there must be a lot to learn? CR: There are lots of surprises coming at me. I’m learning about the business and its history. In my HCAMAG.COM
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first 100 days I want to be able to develop a HR strategic plan. I’ve been spending time in our branches across Australia, I’ve been doing ridealongs with our service engineers and sales people, so I can live and breathe our critical roles in this business. I’m developing relationships with the people, my team, and the leadership team, and making sure I understand the business strategy and objectives from each of their perspectives. I want to be a trusted adviser to the leadership team.
HRD: Is there a timeframe around the project? CR: In two years we need to look like and feel like and be working as a business that is quite different to what we are today. We need to be fitter, faster and we need to grow.
HRD: You have managed similar projects in other roles at IBM and elsewhere. Can you apply anything from these experiences to Konica Minolta? CR: It’s the concept of excellence. Everything I do and everything I work with our business on focuses on being excellent in what we do. What guides me in my decisions is an understanding of the moral or humanitarian perspective: what’s the right thing to do in terms of our customers, our employees and our community? Then I will go to the commercial perspective of what’s the right thing to do for the business: the financials. I often talk about head and heart. People who know me will know I’m always saying, ‘well, this feels fair and reasonable’, and that’s the humanitarian side of me, but I also know we need to be a very agile business in order to grow. That’s me; that’s my personal brand.
HRD: Do you think CEOs expect that moral, humanitarian side from their HRDs – perhaps they don’t get it from other execs? CR: I’ve done some work with Andrea Grant [formerly group HR director, Telstra] who now runs HR Ingenuity. She recently interviewed a number of CEOs and HRDs, and the feedback from CEOs was this: I picked my HRD to be a good, strong, commercial thinker. They need to have the same attributes as any business leader. But at the same time, I need them to be fulfilling the humanitarian role. I look to them to know when they will be tough on the commercial front, and warm and caring on the other hand. Some CEOs might suggest the pendulum went a little bit too far with HRDs. This HCAMAG.COM
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“I believe we’re still trying to get the right balance between commercial pragmatism and the humanitarian role” isn’t my personal view, but there’s a perception that HR leaders went too far towards being business savvy and now the pendulum has to come back. I believe we’re still trying to get the right balance between commercial pragmatism and the humanitarian role.
CINDY REID CAREER TIMELINE
HRD: What’s been your best experience in HR? CR: At IBM we formed IBM Global Services Australia
Qualifications
with Telstra and Lend Lease through a joint venture. The buzz out of forming a new business that totally transformed what IBM was known for in the market was awesome – but it was backbreaking work.
Bachelor of Arts, Mass Communication and Psychology Macquarie University
HRD: And your worst? CR: It’s the experience we all dread; working for a leader who isn’t a good leader. People leave companies mainly because they work for a leader who isn’t competent or commercial or compassionate or present. They are fantastic experiences in a way because these are learning moments to reflect on and you can say: ‘Hang on, how am I doing as a leader, what are we developing here at Konica Minolta?’
HRD: What advice you would give to a person just entering HR? CR: My best professional advice would be, ‘be who you are’. If you are being who you are, then you will be motivated to do a good job. For me, it’s that balance between the commercial and the compassion. People who go into HR thinking it’s going to be glamorous or touchy-feely because you’re doing the people side of things, it’s not that. It’s about being a business leader, and if you can be who you are by balancing compassion and commerciality, then HR is an outstanding business discipline to build your career.
1985–1988
1998–2001
MBA, Business Administration and Management, General Australian Graduate School of Management
Work history 1989–1999
IBM HR manager
1999–2001
Excite@Home HR director
2001–2005
PricewaterhouseCoopers Director, talent strategy
2010–2013
Korn Ferry International Client partner
March 2014–present
Konica Minolta Business Solutions Australia Head of human resources
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LAST WORD / JOB TITLES
THE LAST WORD
John Doe Embarrassing and/or Ambiguous job title
What’s in a name?
Why does the HR profession have such a fixation on titles? Not only does the profession constantly rebrand itself, the practitioners are also guilty of the crime, as Gary Taylor outlines “What’s in a name?” apparently implies that labels or titles aren’t supposed to be important. Well, those of us who have been in HR long enough know just how important titles are for people and their departments. Let’s start with the ideal name for the HR Department. Only great-grandpa was around for the Hawthorne studies of 1924–1932, but that was perhaps the start of our HR profession. Of course, it was called “Welfare” back then, which was probably appropriate to the thinking, and the Taylorism which followed. The Personnel Department label stayed for a long time, before evolving into Human Resources, still the brand of choice for the established employer, but deemed passe by the new generation practitioner.
NEW ERA, NEW NAMES “Human Capital” has mounted the most serious challenge, only to be diluted by even more millennial sounding departments, such as People & Performance and a range of other Love ‘n’ Harmony phrases designed by Hallmark, but with a hint of the Orwellian 1984. Without exception, these titles are self-awarded, commonly by a newly-appointed HR director straight after the strategic retreat. Confused colleagues wonder why the same people in the same place doing the same job for the same company want a new picture frame. New intentions, is the answer. Perhaps that’s OK – especially if you believe the Hawthorne findings that almost any change makes people feel better. One word of caution: All HR
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heads obsess over the strategic partner status for HR and the seat at the board table. Just think about how many accountants and engineers are likely to support having a Director of Zen & Empowerment sitting on the top floor (in a power suit, driving the right car, of course!)
OLD EMPEROR, NEW CLOTHES? Moral of the saga – perhaps the name is the last thing that matters, and re-packaging the old goods probably does little to shift perception if HR’s actions have not already made the difference in the eyes of our clients. How come Finance and IT always get taken seriously, without having transformed into Liquidity Capital and Synaptic Interface departments?
DEFINED BY A TITLE Department titles aside, the titles for people and their jobs is a far more nuanced issue, and certainly one which impacts HR. Generally, we in HR get to decide on titles in the company, because we police the grading system, which gives us the power to say that it’s against the rules, and no one wants to publicly challenge our glib rationale of consistency and equity. Some line managers wonder why we reclassify our old HR clerk as a consultant or business partner, but mostly they are trying to figure out how to uptitle their own departments, just to keep up with the Ulrich-creep within the HR titles.
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HRA20
HUMAN RESOURCES DIRECTOR
Hosted by Julia Morris at the new venue Doltone House, Darling Island
Book Your table now
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LAST WORD / JOB TITLES
IT’S NOT JUST HR... One of the biggest printers of business cards in the US, moo.com, has claimed young and trendy companies are moving away from traditional ‘name-rank-and-serial-number’ business cards that fit the typical HR matrix. Instead of ‘Managing Director’, for example, the card might declare the beholder Head Cheese. How about Sales Ninja for a leading sales rep, or Web Kahuna for your SEO guru? To prove that HR are not alone in their job title fixation, here are some ‘classic’ 21st-century job titles for other roles. »» New Media Guru »» Word Herder »» Linux Geek »» Social Media Trailblazer »» Corporate Magician »» Master Handshaker »» Communications Ambassador »» Happiness Advocate »» Copy Cruncher »» Marketing Rockstar »» Problem Wrangler
Gary Taylor has over 25 years’ experience in the HR profession and currently works with the South African Board of People Practice. He has worked in multinational organisations on two continents, and has contributed articles to publications in Australia, South Africa and the UK
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The most pressure we are likely to encounter is actually near the top, when managers want to differentiate themselves. Somehow, it doesn’t feel right when one manager has to supervise another manager, so we call him a senior manager. Then, when he takes on that extra responsibility, it’s time for another title, and HR often gets asked to think up a nice label which is not too grand, but just elevates one person even more, and so we are into the title game. Sure, if you work for a company run by Ricardo Semler, you have only three levels in the entire organisation, and everyone is happy for a while. But, face an acquisition, and the titles battle becomes allout war. Us-and-them factors add spice to the debates, and the desire to accommodate these pressures has HR diving into the Titles Thesaurus again. So, why does it matter so much?
CALL ME SUPREME COMMANDER Well, we are human, and love affirmation. What is reflected on my business card tells something about me, to my family, my mates and even my enemies. Ask someone “what do you do?” and they answer with their title first. Military organisations go as far as to put your rank on your shoulders, just so that everyone can see. Should HR pander to the titles
game or take a tough stance? Tom Peters told the story of a CEO who allowed an assembly-line employee to print up a business card reading “Supreme Commander” just because he wanted to illustrate a point. It might sound like a silly issue, but attracting and retaining talent clearly involves extrinsic motivators, such as a director title. And so we have deputy directors, associate directors, divisional directors and even real directors. Then you have the selfeffacing executive, such as the managing director of global giant Lever Brothers, who simply called himself Chief Soap Maker – just to introduce perspective. Despite my own cynicism, I fully understand the need to concede a title, if that’s what it takes to keep a star with an ego and another job offer in his hand. Even if you know it will come back to bite you, expediency is very persuasive when having to find solutions in a hurry. Sensitive or ambitious egos don’t like our HR line about flat organisations and lateral development. Be honest: when you get handed a business card, what do you look at? The person handing it to you knows that too! Just look at the titles some people award themselves on LinkedIn……. “visionary, trouble-shooter, thought-leader-atlarge….” The sober HR practitioner remains unmoved at this point. You will want to have the grading system uncorrupted by inflated titles which send the wrong signal. You will want to avoid having fake directors complain that their salary is lower than the job advert they saw in the newspaper carrying their title. You will want to put an end to the endless cycle of title-mania. And, logically, you will be right. However, I remember once holding the line against an attempt to re-title a hugely promising actuary facing a head-hunting offer which seduced his young ego. His experienced line manager knew the elevated title was premature, but thought it a pragmatic compromise necessary to keep an extraordinary mind. I wouldn’t compromise, and we lost him. I thought I had served the employer well by denying the aspirational job title. Now, I’m not so sure. All in a day’s learning in the HR Department.
Gary Taylor Gary Taylor Author Extraordinaire!
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