HUMAN RESOURCES DIRECTOR HCAMAG.COM ISSUE 13.5
AUSSIE SUCCESS STORY HR at global leader Orica
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COUNTDOWN TO ‘GO LIVE’ Managing new technology rollouts
2015 PERFORMANCE MANAGEMENT Time to scrap annual reviews?
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EDITORIAL www.hcamag.com MAY 2015 EDITORIAL
SALES & MARKETING
Editor Iain Hopkins
Marketing & Communications Manager Lisa Narroway
Journalist Chloe Taylor Copy Editors Moira Daniels Carolin Wun
ART & PRODUCTION
Business Development Managers James Francis Steven McDonald Gareth Scott
CORPORATE
Design Manager Daniel Williams
Chief Executive Officer Mike Shipley
Designer Marla Morelos
Chief Operating Officer George Walmsley
Traffic Manager Lou Gonzalez
Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil
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Human Resources Director is part of an international family of B2B publications and websites for the human resources industry HUMAN RESOURCES DIRECTOR MAGAZINE CANADA iain.hopkins@keymedia.com.au T +61 2 8437 4703 HRD SINGAPORE hrdmag.com.sg HC AUSTRALIA ONLINE hcamag.com
HR as ethical guardians? AS THIS issue of HRD went to press, mainstream media was reporting on the appalling employment conditions found in the supply chains of some of Australia’s largest supermarket retailers. The reports allege that migrant workers are being paid $3.95 per hour, working 22 hour shifts and sleeping on dog beds. Those who previously believed slavery was a thing of the past have been forced to reconsider. As much as HR professionals are considered the ‘corporate culture guardians’ in many organisations, they should also position themselves as ethical guardians. To claim ignorance of employment standards within an organisation – even if it’s via suppliers with only tenuous links to the parent company – no longer cuts it. As our feature on p4 suggests, HR directors should make it a priority to know more about their organisation’s supply chains and employment arrangements, if only because they are the ones who will be in the firing line from current employees and candidates. However, it shouldn’t really be classified as a tough homework task, or an ‘I have to know because…’ scenario. It should be an intrinsic part of any decent human being’s mindset to ensure such abuses do not occur.
To claim ignorance of employment standards within an organisation – even if it’s via suppliers with only tenuous links to the parent company – no longer cuts it “The longer we stay asleep to these things the longer they will continue. As individuals – whether as a consumer or an HR person or an employee – we have a responsibility to be mindful of what’s happening behind the scenes when you take a job or when you buy a $15 pair of jeans,” said one expert quoted in this issue. To all HR professionals, I urge you: shine the light within your own organisation and start asking the questions.
Iain Hopkins, editor
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MAY 2015
CONTENTS COVER STORY
EMPLOYER OF CHOICE 2015
The votes are in, and the results have been tallied. Find out how employees rated their employers in the inaugural HRD Employer of Choice survey
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FEATURES
COUNTDOWN TO ‘GO LIVE’
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REBUILDING PERFORMANCE MANAGEMENT
WHO WANTS TO BE A BEST EMPLOYER?
It’s the aim of just about every company, but earning the accolade of ‘best employer’ is fundamentally all about leadership, write Jim Kouzes, Barry Posner, and Michael Bunting
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FEATURES
FEATURES
New technology roll-outs have their own quirks when it comes to change management process. How can you ensure that your organisation is indeed ready to go on the ‘Go Live’ date?
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HR professionals globally are feeling the pressure to overhaul their performance management systems to keep up with the rapidly changing world of work. Are the new options really viable?
FEATURES
UNDER THE KIMONO: OPEN-BOOK MANAGEMENT Trudi Saul outlines how her company has embraced a fresh take on traditional Open-Book Management to boost engagement
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CONNECT WITH US Got a story, suggestion or just want to find out some more information? HRDirector_au +Hcamag HumanResourcesDirector
UPFRONT 01 Editorial
It’s up to HR to act as ethical guardians of business, the same way they act as corporate culture guardians
04 Things you should know
The latest research on employee benefits, remuneration and incentives
06 News analysis
A damning report has shed light on Australia’s poor record of international supply chains. Why should HR care?
52 Legal insight
Lisa Burrell outlines how a workplace investigation could make or break your reputation
PEOPLE 56 Head to head
Is there really a ‘skills shortage’ or are employers not effective in talent acquisition? We ask the experts
IN PERSON
HRD chats to Michelle Farrar-Eagles, HR director at hospitality groundbreakers Merivale
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HCAMAG.COM CHECK IT OUT ONLINE
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MAY 2015
THINGS YOU SHOULD KNOW
WHAT EMPLOYEES WANT: A SNAPSHOT A survey of 1,500 Australian workers has revealed what they want – and don’t want – from their employers. Here’s a snapshot guide to expected benefits and remuneration EMPLOYEE RETENTION BENEFITS Although there is a lot written about what tangible and intangible benefits can help retain staff and create a strong workplace, 64% of Australians said that ‘good Pleasant work pay’ was the biggest benefit that would keep them environment with a company.
Good pay
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64% 70% 66% 57%
Work that they love
59% 57% 55% 65%
Good working hours
57% 63% 57% 52%
Overall results
Gen Y 55% 60% 51% 53%
Liking the people
51% 55% 47% 50%
Flexible work arrangements
48% 48% 51% 47%
Close to home/ easy transportation
43% 43% 45% 40%
Gen X
Strong leadership
Good training/ education/ learning opportunities
Good location/ close to amenities
On-site childcare
Baby Boomers 32% 32% 27% 37% 28% 38% 25% 22% 27% 31% 23% 26%
3% 3% 3% 1%
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PAY RISES
By gender
Although 41% of workers admit to having asked for a pay rise before, when split by gender, 51% of men have asked for a pay rise compared with 31% of women. Of those that had asked, 70% had been successful. Interestingly, part-time workers were 23% more likely to ask for a pay rise than their full-time counterparts, however work status made no difference to the outcome. By generation Asked for a pay rise Gen Y
34%
Didn’t ask for a pay rise
66%
Received Didn’t receive a pay rise a pay rise
71%
29%
Gen X
44%
56%
71%
29%
Baby Boomers
45%
55%
69%
31%
51%
Asked
49%
Didn’t ask
69%
Received
31%
Didn’t receive
31%
Asked
69%
Didn’t ask
72%
Received
28%
Didn’t receive
Source: Sunsuper’s 2015 Australian Employee Insights Report
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UPFRONT
SUPPLY CHAIN ETHICS
Breaking point: Can HR influence supply chain decisions? A new report indicates that over 85% of fashion companies do not pay workers in their global supply chains enough to meet basic needs. What can HR do to safeguard ethical practices, no matter the industry? THE 2013 Rana Plaza factory collapse in Bangladesh, which saw over 1,100 garment workers lose their lives, was a long overdue wake-up call for international fashion and retail brands. Although it was tragic that it took such an incident for the spotlight to fall on the conditions that foreign workers operate under, and positive steps have been taken since, there is still plenty of work to do. A new report by international aid agency Baptist World Aid Australia, Behind the Barcode: Ending Worker Exploitation, has again shed light on the issue. Although the report targets consumers, with the intention of arming them with information to make more informed buying decisions, it also has implications for employers. It makes for an enlightening read. For example: • Policies: 71% of companies have a code of conduct that covers core International Labor Organisation principles. • Transparency & traceability: 52% of companies have fully traced their final stage manufacturers, but only 9% have fully traced down to raw materials.
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• Monitoring & training: 75% of companies use some kind of external monitoring system. Only 10% of companies regularly conduct monitoring audits unannounced and consult workers. • Worker rights: Only 14% of companies are paying some form of living wage and only 34% of companies have a functioning grievance mechanism for overseas workers.
“I think it’s something we’ve all – consumers and society as a whole – been asleep to for too long,” she says. “We really like being able to buy $15 cardigans.” However, she adds that a number of high profile scandals not limited to the fashion industry, such as the live trade of cattle, the hepatitis scare with Nanna’s Frozen Berries, and the revelation that Apple’s subcontracted assembly plants in China have
“Rana Plaza raised awareness but there hasn’t necessarily been a rush to correct it” Kate Nicholl Just doing business? Kate Nicholl, director of The Faculty, a consultancy that works with blue chip organisations to create better ways to procure goods and services, suggests Rana Plaza was an eye-opener for some, but it did not create the desired sustainable business change many hoped for.
suicide nets around them to prevent death or injury from suicidal workers, has made the issue of ethical and sustainable supply chains harder to ignore. And sometimes supply chains don’t need to be international to run afoul of expected standards. In early May, an investigation by the ABC’s Four Corners revealed migrant
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demand for lower cost and distribution all year round is responded to by organisations. And sometimes, unfortunately, they exploit that demand.” Best practice… from where? Nicholl believes the food industry is ahead of all other industries, with sustainable practices groups set up within their supply chains or procurement groups, for the simple reason that people are more conscious of what they are putting into their body. She suspects the fashion and retail industries are next on the frontline. So what lead can they follow? What
is best practice in 2015? “I don’t have an answer because there isn’t actually a global standard that we’re all accountable to,” Nicholl says. “Rana Plaza raised awareness but there hasn’t necessarily been a rush to correct it. There are a few standards in Australia – there’s FTSE4Good, where the FTSE are rated on their ethical sourcing. Then there’s the ILO International Labor Organization Standards. But it’s all about self-selection – there’s no global standard of compliance. It’s largely unregulated and there are no penalties.” Another example is the Fair Labor Association (FLA), which companies such
CSR SCORECARD
workers holding 417 working holiday visas across Australia were being paid $3.95 per hour and working 22 hour shifts. The national broadcaster alleged that black market gangs of contractors are acting as the middle men and supplying workers to Australian farms and factories where they were routinely underpaid, harassed and abused while working in low skilled jobs. Coles, Woolworths, Aldi, Costco and IGA are all implicated in the allegations, as are fast food chains KFC and Red Rooster. “When a factory collapses in Bangladesh, people think it’s almost acceptable and it doesn’t necessarily touch them here at home,” says Nicholl. “But as more and more of these stories emerge and they run in mainstream media, people start to ask questions.” Cynics, she adds, will imply that it’s “just business doing business. As a consumer you walk into a supermarket or go to buy your cheap jeans from H&M, and you don’t think about what’s happening on a global scale to deliver that bargain to you, or enabling you to eat avocados all year round. Having that
Slavery/Labour Rights Grade
Living Wage Guarantee
Abercrombie & Fitch
C
X
Adidas
B+
X
Berlei
B
X
Best & Less*
D-
X
Bonds
B
X
Coles
B-
X
David Jones
C-
X
Gap
B
X
H&M
A-
P
Industrie
F
X
Jeanswest
B
X
Just Jeans*
D
X
Lacoste
B
X
Pants to Poverty
A+
P
Lululemon
B+
X
Mimco
B+
P
Nike
B
X
Oroton
C
X
Peter Alexander*
D
X
Sportsgirl
B
P
T-Bar by Cotton On
A-
X
Valleygirl
F
X
Witchery
B+
P
*= non-responsive companies P = partial ABOUT THE REPORT Company ratings The guide grades 59 companies and 219 brands operating in Australia and provides two key pieces of information. First, an overall grade of the company’s labour rights management systems. Higher grades correspond to systems which, when implemented, should reduce the risk of modern slavery, child labour and other labour rights violations. Second, an indicator of whether companies are paying their staff a living wage (that is, a wage sufficient to meet their basic needs). How was the research conducted? Sixty-one separate criteria were used to analyse each company’s policies, knowledge of their supply chain and worker rights practices. Companies were graded based on their responses to these criteria and pertinent publicly available information. For the complete list go to baptistworldaid.org.au/behind-the-barcode/
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UPFRONT
SUPPLY CHAIN ETHICS as Adidas, H&M and Apple have joined. FLA members commit to fair labour practices and safe and humane working conditions throughout their supply chains. Although companies must meet strict labour standards in order to join, membership is voluntary. Nicholl believes the first step is transparency and self-reporting – something not yet in place – followed by having a global point of accountability for sourcing and supplier management in global supply chains. This is easier said than done. Manufacturers and retailers struggle to get end-to-end visibility; supply chains can be extremely lengthy – making management both hugely expensive and human resource intensive. Steve Shepherd, employment market analyst at Randstad, recommends business put the following in place: • Fair and transparent hiring frameworks • Quality control of all suppliers, including management of the supplier selection process in some cases • Contract management support and legal counsel to make sure all partners and clients comply with employment laws and regulations • Compliance monitoring and management with labour and immigration laws • Validated supplier hiring practices • Reviewed and assessed supplier’s compliance of labour and immigration laws • Supplier performance management and process for removal of non-compliant suppliers In some industries, scrupulous supply chain management and ethical treatment of workers is not a nice to have but an essential part of doing business. This month’s profiled HR director, Eileen Burnett-Kant, executive global head of HR at explosives manufacturer Orica, says that for her industry it’s just a given. “The way you control and manage your supply chain, who you’re dealing with, how you’re treating internal and external stakeholders
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and how you’re delivering a product, it has to be tight; as tight as any supply chain you could ever think of.” She notes this is backed up by a rigid code of conduct and a commitment to developing local skills and capabilities in each and every country the company operates in (ranging from African nations to the former Soviet republics and developed Western nations). “When you operate in so many different countries you always have issues that flare up every once in a while but I think the code of conduct and other safeguards have always provided the framework to work things through. It has to be embedded otherwise we couldn’t stay in business,” she says. For now, for other industries, Nicholl suggests “it’s about calling it out as an issue and setting goals: ‘by 2018 our supply chain will set the standard’.” HR’s role Of course, some would also argue that HR’s impact on international supply chains is
limited. Procurement decisions for HR usually come down to which recruiters to select for a panel. Yet Nicholl says HR should be paying attention, for the very fact that employees and candidates – from the Millennial generation in particular – will start asking them the questions, and will expect satisfactory responses. “From an EVP perspective it’s interesting. I’ve got Millennials working for me and I’d say they definitely do care about CSR. They have a very different view of the world compared to previous generations. For me, I’m Gen X – I just wanted to work for a blue chip company and have that life, that prestige. Millennials are not motivated that way. They want to work for sustainable, community minded organisations.” HR’s task is made that much easier if ethical treatment of workers forms part of an organisation’s values. “This can be a major part of the value proposition to employees,” says Nicholl. “ ‘We are an employer of choice because…’ Change will start to happen when organisations start
MILLENNIAL VIEWS ON THE ETHICS AND BEHAVIOUR OF BUSINESS If they aren’t already, organisations will soon have to listen to Millennials, who are emerging as leaders in technology and other industries and will comprise 75% of the global workforce by 2025. Some 50% of Millennials surveyed want to work for a business with ethical practices. Here are their views on their employers. They are helping to increase overall levels of prosperity They show a strong commitment to being sustainable Their leaders are committed to helping improve society They behave in an ethical manner They work hard to minimise the environmental impact of their operations They operate in an open and transparent manner 0
10 Global
20
30
Developed markets
40
50
60
70
80
Emerging markets Source: The Deloitte Millennial Survey, 2014
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seeing this as a competitive advantage that they can leverage off.” However, she warns that once a standard is set, it must be sustained. One slip-up and the hard work can be undone. “There’s a difference between calling yourself compliant and passing yourself off as a leader in sustainable sourcing practices. You need to be sure you can stand by it if you have put it out there.” Finally, she suggests that HR, despite historically having limited input into procurement or supply chain practices, is within their rights to demand transparency from their counterparts within the organisation who are doing the sourcing. “It’s almost in their best interest to know what’s going on and to start putting a spotlight on it,” she says.
HR CHECKLIST HR professionals should look out for the following warning signs that supply chain partners may be exploiting workers: Workers not provided with legally compliant contracts Multiple employment agents and labour brokers in the recruitment supply chain Fraudulently charging fees for travel, health checks and work documentation Underpayment of wages, delayed or withheld wage payments, or excessive or illegal wage deductions Workers required to stay in company or broker- controlled housing and prevented from entering or leaving the premises freely Physically abusive or humiliating discipline and termination practices Excessive overtime beyond legal or code of conduct limits The worker’s visa or work permit is tied to a single employer Monetary penalties or withholding of wages for early termination Undocumented migrants threatened with notification of the authorities if they leave employment Workers forced to pay financial deposits or security fees as “runaway insurance”
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PROFILE
EILEEN BURNETT-KANT
MINING FOR TALENT From Mozambique to The Republic of Congo, via the former Soviet Union republics, Orica is the very definition of a global company. HRD chats to the company’s global head of HR about transforming the company’s people experience in tough market conditions
WHEN ASKED TO name an iconic Australian company, most Aussies would probably say Qantas. Arnott’s, Woolworths or Fosters might garner a mention or two. Few would list Orica. While it may not have the same name recognition from the general public, Orica employs 12,700 people globally (some 80% of whom are based outside of Australia) and is an ASX Top 30 company. It is, by some margin (a factor of three in fact), the world’s largest explosives business. Fuelled by Australia’s mining boom, the 2015 version of the company is a far cry from its Victorian roots of 1874. Any global business has its challenges, and Orica is no different. Eileen Burnett-Kant, Orica’s global head of human resources, says frankly that “there’s no such thing as 9 to 5”. She knows this first-hand; to say her role
keeps her busy is an understatement of the highest order. With an HR team scattered in 26 countries and major management hubs in Melbourne, Denver, Santiago, Johannesburg, Germany, Sweden and Singapore, BurnettKant is on the road all the time. The next stop is Canada. “I think I just roll with it,” she says with a laugh when asked about how she de-stresses. “People might be shocked to know that I unwind by undertaking yet more travel with my family. Last holiday we went trekking in Chile.”
Orica is, by some margin – a factor of three in fact – the market leader The ultimate boomerang employee
ORICA AT A GLANCE • #1 supplier globally of commercial explosives • 1,500 blasts per day on customer sites • 15,000 employees across over 50 countries • 200 HR professionals globally • Sales: $6,796m (2014); $6,885m (2013) • EBIT: $930m (2014); $968m (2013)
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2008, she followed a broader business career spanning operational, supply and strategy consulting roles in Asia-Pacific and Europe. Her consulting role at McKinsey & Company was an eye-opener, and a career changer. “There’s no doubt I wouldn’t be doing what I do today without my McKinsey experience and my relationships with McKinsey colleagues,” she says. “As a consultant, I gained experience across the world on a host of different issues, from turnaround to growth, exposure to senior management and boards,
Something about Orica clearly resonates with Burnett-Kant: this is her second stint at the company. After qualifying as a manufacturing engineer (she subsequently added an MBA), she joined Orica 20 years ago as an engineer working in IT. Prior to her ‘comeback’ two decades later, Burnett-Kant’s career trajectory was fast and wide. Before joining the HR profession in
and problem-solving disciplines. However, the overriding influence of McKinsey on me is the strong desire to have positive, lasting impact on the organisations and people I work with.”
Experience is golden Burnett-Kant, who hails from Edinburgh, Scotland, has a knack for working in iconic Australian companies. Post-McKinsey, she
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PROFILE Name: Eileen Burnett-Kant Company: Orica Title: Global head of HR Years in the industry: 19 Previous roles: - Associate principal, McKinsey & Co - GM, planning, supply chain, Coles Myer - Business transformation manager, Coles Supermarkets - GM, HR, supermarket operations, Coles Group - Executive manager – people & communications, Jetstar Airways
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PROFILE
EILEEN BURNETT-KANT IN HER OWN WORDS… What’s the greatest challenge facing a global head of HR based in Australia? It’s incredibly important that the views and strategies are not shaped just by Melbourne. That means ensuring that we are creating the work environment in which every Orica employee can develop and grow – no matter where they’re from – and finding the right balance between global and regional in initiatives and control. We’re now delivering against regional HR plans, developed by the local teams, which reflect the very different market circumstances, business strategies and employment conditions in each market. At the same time, we’re implementing HR policies and standards that will provide clear global standards. What’s important is getting agreement on where global consistency is critical to Orica’s proposition to customers – like training standards – and where we are happy to have common principles with some regional variation – like benefits. enjoyed tenures at two leading Australian companies. Project work on organisational structure following the Wesfarmers’ takeover of Coles landed Burnett-Kant the opportunity to lead HR for Coles, covering their store network with over 90,000 employees. She grabbed it with both hands. “Coles was about creating cultural change and a feeling of excitement and pride in working for Coles,” she says. “I was able to help realise huge value from stabilising the workforce through greater permanency and from introducing the Retail Leaders Program – an on-the-ground training program to help team members progress to department, store and regional manager roles.” As of 2015, hundreds of Coles team members have graduated from the program, creating strong talent pipelines. Jetstar (owned by Qantas) was in growth phase when Burnett-Kant joined. Her mandate included building and growing Jetstar’s airline businesses in Australia and Asia, uniting team members around the customer service proposition, and creating sustainable HR systems and processes.
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Burnett-Kant helped to establish Jetstar Japan – now Japan’s largest domestic lowcost airline. Jetstar Japan has subsequently changed Japan’s airline industry by providing high service on a budget. Her team also lifted employee engagement significantly through a focus on frontline leadership and supporting crew and ground operations with its ‘Go Enjoy’ engagement program, which linked the customer and team member experience. These roles and the experiences they provided have come together at Orica, a global business that is transforming all aspects of its operations to focus on customers, grow selectively and demonstrate resilience to current market conditions.
Sustainable growth Indeed, with signs the Australian mining boom is tapering off, current market conditions are likely a significant concern for any business leader in Orica’s industry. Yet, the company is playing to its strengths: a diverse geographic footprint and commodity exposure; strategic focus on differentiated products and services; and the initial results of a transformation program are helping the company at a time
where conditions in some markets are challenging. In truth, Orica positions itself wherever its clients want to mine, quarry or tunnel. “We are diversifying into Africa and the CIS [former Soviet Union republics] – both businesses are growing strongly in terms of profits and employment. We’ve just opened our regional head office in Johannesburg to bring our African teams under one roof to provide better technical and business support. “We’re also capturing more margin from the delivery of advanced blasting services where we’re working directly with customers to improve aspects of mine productivity.” From an HR perspective, the company has changed the mix of its team geographically to put more resources on the ground in both Africa and the CIS – hiring trainers with language skills and investing in African remuneration expertise. Orica’s awardwinning graduate program was introduced to Africa last year with a first intake of nine graduates; a graduate recruitment program is about to be launched in Russia. Perhaps more significantly, the HR team, under Burnett-Kant’s stewardship, has been working to support the business to implement global centres of expertise for different aspects of mining and to ensure that all shotfirers and mobile manufacturing unit operators (employees involved in blasting on mine sites) are trained to a higher uniform standard. “We’re over halfway through the first phase of our operational training program under which we’re training all frontline employees in their roles to a higher global Orica standard. Over 8,000 employees across over 400 mine sites and manufacturing plants are involved and we’re formally accrediting all of our supervisors to assess training going forward,” she explains. A key part of the business strategy is leveraging scale and consistency in support functions because Orica’s operations are spread across so many different countries. Historically, support functions grew up around client operations. HR is driving this agenda through implementation of a global HRIS, which has
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See Eileen Burnett-Kant give the key note address talking about managing a geographically dispersed team at HR Summit Melbourne, 29 July – visit hcamag.com/hr-summit-melbourne/
been deployed to all employees, in addition to the creation of People Shared Services hubs and deployment of ServiceNow, which allows the HR team to create virtual HR teams and share workload across regions and languages. There is also extensive process harmonisation underway. For example, the company is progressively reducing 80+ payroll systems globally. It has also signed off on a global remuneration framework that will ultimately reduce the number of staff bonus schemes from over 20 to two.
Spreading the innovation net A company doesn’t become an industry leader without constant innovation. Orica has thousands of employees on customer mine sites conducting over 1,500 blasts every day – their ability to deliver expert, reliable service on the ground coupled with specialist technical expertise is critical.
“We also have almost 5,000 people involved in manufacturing and delivering explosives and detonators to customers – their focus on quality, efficiency and product stewardship is also key to Orica’s success,” says Burnett-Kant. Orica research has delivered technology including wireless detonation, ultra-high intensity blasting, noise, fume and vibration mitigation and data for mine optimisation. They might not mean much to people outside the industry, but such breakthroughs are part of the reason why Orica is so successful. However, Burnett-Kant is quick to point out that innovation does not just come from the dedicated R&D team. “Innovation comes in so many forms from so many different areas. It might be delivering technology to customers or saving a customer from having to shut down their business. It might be a bit of know-how, or excellence in
ORICA’S FY2014 EBIT CONTRIBUTION BY GEOGRAPHY
53%
Australia/Pacific
17%
Asia & Other
12%
Europe, Middle East & Africa
11%
North America
7%
Latin America
community relations. It’s up to us to ensure our employees feel empowered enough to come up with great ideas,” she says.
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COVER STORY
The votes are in, and the results have been tallied. Find out how employees rated their employers in the inaugural HRD Employer of Choice survey WE HEAR IT all the time, usually in social situations: “I would never recommend my employer to anyone else!” Its frequency indicates that employers are doing a lot wrong, and should perhaps expect a mass exodus of staff soon. Or not – disengaged workers are known to cling on for dear life. It’s therefore refreshing to read the results of the HRD Employer of Choice Awards. Not only are these employers bucking the trend, they are burning the path for others to follow. In this survey, we posed a range of questions to employees, asking them about everything from their satisfaction with current remuneration through to leadership effectiveness within their organisation. But really, being an Employer of Choice comes down to one thing: engagement. And
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with engagement comes that elusive extra element: discretionary effort. Importantly, these awards were voted on not by HR professionals themselves, but the people within their organisations. Companies vying for the title of Employer of Choice represent a range of industries from banking to health, hospitality, telecommunications, pharmaceuticals, professional services and more. Over the following pages, our winners of this inaugural awards reveal what’s worked for them. An age-old adage seems appropriate: “Shoot for the moon and if you miss you’ll still be among the stars”. All employers should shoot for the moon next year.
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LEADING THE PACK HRD is proud to partner with Maxxia for the 2015 Employer of Choice Awards. We chatted with Maxxia’s Ron Steiner, group executive customer relations, about why Employer of Choice status matters in today’s business world HRD: Why has Maxxia decided to be involved with the HRD Employer of Choice awards? Ron Steiner: We have the privilege of working with over 1,000 organisations in terms of providing salary packaging, novated leasing and other benefits. Increasingly, we know that engagement is a key element of business success and being an Employer of Choice is critical. For us, it’s a logical step to support good organisations that are developing their own value proposition to enhance the journey of their employees.
have an Employer of Choice mentality in all that we do. The best organisations go above and beyond the transactional and develop the right cultures, environments and relationships both internally and externally. HRD: How do you believe such accolades impact on candidates and existing employees? RS: There’s no doubt people are looking for these symbols and badges and brandings, but they will also scratch beneath the surface. Invariably, with something as significant as the
“To be able to attract the best, we need to have an Employer of Choice mentality in all that we do” Ron Steiner HRD: Employer of Choice status used to be a nice to have but is now almost essential – would you agree? RS: No question it is essential, but it needs to be ingrained into the leaders’ thinking. We now have so much access to information. People are in a position to compare and indeed select the organisations they would like to work with. That’s been part of our transition at Maxxia too. For us, to be able to attract the best, we need to
HRD Employer of Choice awards, any organisation that is recognised in this context will have been doing this for some time and will have proven that this is part of their long-term engagement strategy. HRD: The overall Gold, Silver and Bronze winners on the list had to perform consistently well across a number of different categories. What would your advice be to companies that
aspire to be seen as ‘best employers’? Should they tackle all elements of their EVP? RS: There are two components here. First, the leadership group should have a strong sense of what the priorities are. Secondly, those priorities should be tested by either engagement surveys or realistic feedback from staff. In our experience, our regular engagement surveys helped us identify those areas that were relevant to employees, and then we made the decision about how they fitted into our organisation. If we hadn’t done the testing and research then we may have been guilty of going down a path which would not have provided a genuine EVP. So the answer is, you can’t tackle everything but you certainly need to go for some low hanging fruit. HRD: Once Employer of Choice status is achieved how do you think organisations can maintain and, indeed, constantly improve upon that status? RS: This relates directly to the importance of internalising the desire to really want to improve and engage. If you take a survey and do nothing about it, then the next survey is going to be pretty ordinary. Equally, if you demonstrate that you’ve listened and acted, that becomes a powerful connection for everyone in the organisation. So this is actually only the first step as opposed to the end point. HRD: The space that Maxxia is in – benefits – is an important part of an EVP, but it’s just one component. True? RS: Indeed its just one part of the whole. We’re privileged to have a seat at the people and HR table for organisations across all sectors and all sizes, and the common element is that without exception employers are genuinely keen to do the right thing by their staff. The challenge is being able to identify what the expectation gaps are and being able to address them. Maxxia, as part of the McMillan Shakespeare Group, has enjoyed dynamic growth for over two decades. As the founder of the salary packaging industry, the organisation has undergone its own transformation – from entrepreneurial through to operational excellence, with significant external and internal growth. Over the past seven years there’s been a shift in focus to be not only customercentric but also staff-centric. As a result, Maxxia has been able to provide even better customer service, which means everybody is happy – customers, shareholders and particularly those 1,000 people in the organisation who actively help 200,000 Australians get the most out of their salary.
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COVER STORY
HRD EMPLOYER OF CHOICE
EMPLOYER OF CHOICE 1000+ EMPLOYEES
500-999 EMPLOYEES
Sanitarium
NSW Business Chamber
Suncorp
Wurth Australia
Aspen Medical
Evocca College
“At Sanitarium, we work very hard at building a workplace where people have an understanding of and believe that they contribute to our organisational goals, mission and ethos. We know that our people identify with our mission, values and purpose. This creates opportunity for people to be at their best. We have a number of programs that cut across holistic employee wellbeing, employee development and enriched work practices that help our people be the best that they can be for themselves and the business.”
“The NSWBC culture is very unique. While we are a professional services organisation, the organisation’s purpose is to create a better Australia by maximising the outcomes and potential of Australian businesses. Therefore, employees who join the organisation benefit from working for an organisation that has a greater purpose which contributes significantly to intrinsic employee motivation.” Alex Diab, general manager, human resources, NSW Business Chamber
Peter Hartnett, head of people & culture, Sanitarium
METHODOLOGY Date of survey: February-March 2015 Method: Online survey Number of respondents: 2,111 employees from 203 employers Employer of Choice status was determined by averaging employee scores given to a range of questions/statements. Scores ranged from 1 (strongly disagree) to 5 (strongly agree) for the following questions/statements: • “My employer provides satisfactory remuneration” • “My work provides sufficient opportunities for training and professional development” • “My work offers a clear career progression path for all employees” • “My employer has a strong commitment to achieving gender equality in the workplace” • “My employer provides me with sufficient opportunities to do interesting and challenging work” • “My employer gives me access to the technology I need to do my work effectively” • “My workplace has a strong work culture and a high level of engagement” • “My employer fosters an environment of trust and empowerment” • “My employer demonstrates effective leadership” • “My employer helps me achieve a work-life balance” • “My employer supports my health and wellbeing”
16
RESPONDENT SNAPSHOT
Gender:
Male
45% Female
55%
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100-499 EMPLOYEES
1-99 EMPLOYEES
1300 Apprentice
Employment Innovations
Insight Enterprises
Home Loan Experts
amaysim
Bicycle Network “It’s exciting to see our people recognised by HRD. Our success is definitely a combination of factors combined with a strong belief that everyone in the business plays a significant role in maintaining a healthy culture at work. Employee engagement is enhanced by strong relationships between co-workers as much as people initiatives driven from management. However, having a leadership team that genuinely believes our people and culture is our strongest competitive advantage is vitally important.”
“Our company depends on having the best employees possible. We are always looking for ways to include our employees in strategic planning and direction of the company and look for rewards in a number of ways such as further development and training opportunities, fun team days, paid maternity leave and flexible working arrangements.” Jane Kennedy, CEO, 1300 Apprentice
Ben Thompson, CEO, Employment Innovations
Are you likely to change employers in the next 12 months?
How many hours do you work each week?
19%
25%
39%
10-27 hours
28-47 hours
48-58 hours
17% 58+ hours
How many days of annual leave have you taken in the last 12 months?
13%
less than three days
20%
4-10 days
45%
11-20 days
22%
21+ days
86% Yes
14% No www.hcamag.com
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COVER STORY
HRD EMPLOYER OF CHOICE
REMUNERATION TOP-PERFORMING COMPANIES
Right Management Rozetta Tech 1300 Apprentice “Being a not-for-profit in a challenging environment we are always striving to implement strategies that are better than industry best. Remuneration is important, but we look at other systems of remuneration. We are a small organisation where service is paramount to our business. We select employees for attitude and commitment to our mission, and reward accordingly.” Jane Kennedy, CEO, 1300 Apprentice
ALTHOUGH HR consultants continue to debate just how important remuneration is to overall employee engagement, one thing is clear: it must be fair and it must be within the ballpark of similar roles in similar organisations. Fortunately, the results of the HRD Employer of Choice survey indicate that most employees are either satisfied (36.7%) or very satisfied (26.8%) with their current remuneration level. “I receive a competitive and fair rate against market and for expectations of the role,” said one participant. Other employees approved of the ‘pay for performance’ model used in an increasing number of organisations today: “We’re rewarded well for achieving outcomes, with added bonuses for over-achievement,” wrote another survey participant. Some employers are looking beyond just financial reward to keep employees engaged, as one participant noted: “We have a fantastic focus on motivators beyond
just remuneration. This includes a great purpose, flexibility and many employee benefits.” Another wrote: “I receive a reasonable salary, but also fantastic benefits and perks including meals, accommodation and travel.” Of course, it’s difficult to please all the people all of the time. As one participant noted: “Are you ever going to score a 5 [very satisfied] on this question? I’m paid competitively, and I believe that I’ve been afforded with more opportunity for salary progression here than I would elsewhere.”
HOW SATISFIED ARE YOU WITH THE REMUNERATION PROVIDED BY YOUR EMPLOYER?
9.4%
Very dissatisfied
4.2%
Dissatisfied
23.1%
Neutral
36.7%
Satisfied
26.6%
Very satisfied
0 18
5
10
15
20
25
30
35
40
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CAREER PROGRESSION OVER 55% of employees agreed that their employer clearly communicates career path opportunities and the steps to be taken in order to be considered for promotion. In this space, Employers of Choice are crafting individually tailored career development plans with related training. And while it’s up to individual employees to define their future progression, it’s the managers who help make this a reality. A recurring theme from employees was the growth of ‘nontraditional’ pathways. For example, those working in highly technical roles may have no desire to move up the ladder by managing other people yet are keen on alternative ways to progress their career. As one voter noted: “We have non-traditional career pathways but having a career plan does help. There are plenty of opportunities to develop via new experiences and projects.” “There is a lot of growth and certainly a lot of opportunities, but not necessarily a 100% clear pathway
as nothing is set and there are lots of options,” wrote another. Some employees felt stymied by flat organisational structures, which again require a smarter approach to career planning. Not surprisingly, smaller employers struggled in this field, as these comments indicate: “We are 50 people – career progression is challenging”; “We are a relatively small company that has experienced rapid growth in our three-and-a-half years. Therefore, almost all founding employees have been promoted into the management and corporate teams.” And of course, some employers were not great on this front, as this disgruntled employee suggested: “You have to wait for someone to die in order to progress, and we’ve all been told we won’t be promoted internally as they want ‘new blood’!”
TOP-PERFORMING COMPANIES
Wurth Australia Employment Innovations Suncorp “The organisation is very diverse so there are opportunities for employees to move within departments to further challenge themselves. Our mentoring program also assists in helping staff challenge themselves and find interesting work. Employees can gain insights and support from our senior management team in making decisions about taking the next step in their career or existing jobs.” Alex Diab, general manager, human resources, NSW Business Chamber
“MY WORK OFFERS A CLEAR PROGRESSION PATH FOR ALL EMPLOYEES”
4.8%
Strongly disagree
10.1%
Disagree
28%
Neutral
35.8%
Agree
21.4%
Strongly agree
0
5
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15
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40 www.hcamag.com
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COVER STORY
HRD EMPLOYER OF CHOICE
TRAINING & DEVELOPMENT TOP-PERFORMING COMPANIES
Home Loan Experts Bicycle Network MYOB “We are very proud of our Learning Lab, a development landscape that delivers world class learning opportunities directly to our team members, so they achieve their full potential both inside and outside of work. All Labs include face-to-face workshops or e-learning, online resources and internally accredited coaches to enhance the experience and sustain the learning.”
IN STUDY after study, employers that provide training and development opportunities for staff are highly regarded and are almost guaranteed high engagement. Every employee likes to develop their own capability. While it serves their own career aspirations, it also helps their employer to be more innovative, competitive and up-to-date in all aspects of business. Such is the case with the HRD Employer of Choice awards. A significant 69.8% of employees either agreed or strongly agreed with the statement: ‘my work provides sufficient opportunities for training and professional development’. Significantly, despite having tighter L&D budgets per employee, SMEs came through strongly in this category – perhaps an acknowledgement that with smaller headcounts, the contribution of each and every member of staff is critical. Some employers kick this category up to the next level. Here are just four respondents’ answers to this question: • “More than 40% of working hours is invested in training. This training has proven to be the decisive weapon in the battle for market share.” • “Our CEO encourages all employees to upskill and will, where possible, support it financially.” • “We have a strong L&D focus – six days per year per employee and one certification each is our target.” • “The staff who are recognised as Employee of the Month throughout the year get to participate in an overseas study tour each year.” One piece of criticism did emerge: in some organisations it’s only top level leaders who get the attention, and there is limited support for the all-important middle managers: “Training exists only for senior management, and they probably need professional development the least and can afford it the most!”
Alla Keogh, head of people & performance, MYOB
“MY WORK PROVIDES SUFFICIENT OPPORTUNITIES FOR TRAINING AND PROFESSIONAL DEVELOPMENT”
4.5% 7.9%
Strongly disagree Disagree
17.8%
Neutral
32.4%
Agree
37.4%
Strongly agree
0 20
5
10
15
20
25
30
35
40
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COVER STORY
HRD EMPLOYER OF CHOICE
GENDER EQUALITY TOP-PERFORMING COMPANIES
Insight Enterprises Evocca College Aspen Medical “We’ve always recruited and promoted on the basis of skills and potential, and we have for many years offered paid maternity leave, work-life balance days and additional annual leave to support family needs.” Marea Phillips, director, human resources APAC, Insight Enterprises
IT’S A shame that in 2015 this is a question that still needs to be asked of employers, yet progress on gender equality in Australia remains slow. Fortunately, for those who took part in this survey at least, some employers are moving the needle on this foundational diversity & inclusion issue. Not surprisingly, those doing it well have role models at the very top. One respondent wrote: “Our Australian CEO is female. There is a very strong female leader presence in my company.” Another commented: “Our company owner is a wonderful forward thinking and highly driven woman – gender equality and workplace diversity is paramount.” Other participants alluded to the strides that have been made in recent years: “This is the first company I’ve worked for where women have an equal voice, equally valued opinions and equally recognised skills. And for the first time in my working career I feel that my opinion matters and that my advice is listened to.”
Yet there are still roadblocks – some of which might be beyond the control of individual employers: “We do our best to provide opportunities to everyone and ensure equality across practices (eg, pay). However, it is an IT company, so there are still not enough women entering the IT field to have a completely even balance.” It also appears there is work to be done in some organisations when it comes to encouraging working mothers back into the workforce: “There are no females in leadership roles who have children. Things like maternity leave etc, are also only the government minimum.”
“MY EMPLOYER HAS A STRONG COMMITMENT TO ACHIEVING GENDER EQUALITY IN THE WORKPLACE”
2.5% 4.7%
Strongly disagree Disagree
17.9%
Neutral
29.9%
Agree
45.1%
Strongly agree
0 22
10
20
30
40
50
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QUALITY OF WORK EMPOWERING AND trusting employees, providing stretch assignments and having regular informal manager/employee catch-ups were highlighted as keys to facilitating interesting and challenging work. An overwhelming 78.9% of employees agreed or strongly agreed that their employer provided this. Here are some survey responses: “Job rotations within departments should be mandatory in every company.” “We are encouraged to support each department with relevant working parties and steering committees, bringing all employees closer together as well as allowing staff to really get to know what works for individuals and other departments. This is unlike some other companies that don’t encourage cross-pollinating working roles, hence they work in silos and are a bit like ‘mushrooms’, cut off from fresh ideas.” “I’ve been able to integrate my passion for training with the team at large in annual meetings, which is slightly beyond my scope in marketing but keeps my job refreshing and super challenging.”
TOP-PERFORMING COMPANIES
NSW Business Chamber Sanitarium Home Loan Experts
“We know that the most productive employees are intrinsically motivated – there is a lot of research to support this. Our people want to ‘own their space’ and expand their skillsets. An example of this is our brand managers who are responsible for end-to-end delivery of our product marketing. They are not only involved in owning the responsibility for our marketing campaigns but are also involved in cross-business initiatives where they work closely with our R&D teams, our category team and of course our supply chain team. Similarly with our people & culture team, everything we implement is developed by the team and executed by the team – it keeps us up-to-date with latest thinking and expands our skillsets to work with our business in making Sanitarium a great place to work.” Peter Hartnett, head of people & culture, Sanitarium
“MY WORK OFFERS A CLEAR PROGRESSION PATH FOR ALL EMPLOYEES”
2.7% 5.3%
Strongly disagree Disagree
13.1%
Neutral
34.6%
Agree
44.3%
Strongly agree
0
10
20
30
40
50 www.hcamag.com
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8/05/2015 2:11:15 PM
COVER STORY
HRD EMPLOYER OF CHOICE
TECHNOLOGY TOP-PERFORMING COMPANIES
Sizmek MYOB
FROM BYOD initiatives to collaboration tools and the day-to-day technology required to do a job well, it appears that Employers of Choice believe that investment in technology is good for business. Less than 10% of surveyed employees felt they did not have the tech tools required to do their job effectively, whether that’s in the office, on the road or from home. Here are three responses: “Absolutely, I’m supplied with phone, computer and tablet. My job is incredibly ‘real time’ as I look after the social media aspects for the business so I need to have everything on the go, ready to capture information as it happens.” “My employer offers a BYOD program, where you can purchase the computer you want to own and use at work, and they’ll pitch in.” “I have a phone, laptop and the necessary software to carry out my role. We also have remote access for when we need/want to work from home.”
1300 Apprentice “During a strategic planning process, our employees brought up the benefits of using tablets for a number of aspects within our organisation. We decided to implement this immediately and the benefits to employees and the company have been far greater than initially anticipated. As an organisation that depends on communication, we regularly review our technology requirements.”
“MY EMPLOYER GIVES ME ACCESS TO THE TECHNOLOGY I NEED TO DO MY WORK EFFECTIVELY”
2.7% 6.8% 14.2%
Strongly disagree Disagree
Neutral
32.5%
Agree
Jane Kennedy, CEO, 1300 Apprentice
43.9%
Strongly agree HRA ad third v2.pdf 1 8/05/2015 3:22:17 PM HRA ad third v2.pdf 1 8/05/2015 3:22:17 PM
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0
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20
30
40
50
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CULTURE AND ENGAGEMENT WHAT IS company culture? Sure, it consists of the behaviours of employees and the value that people attach to those behaviours, as well as the company vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits. But more than that, it’s something that pre-exists in a company’s genetic code and cannot be falsely manufactured. It’s also true that leaders play a critical role, as these two respondents suggested: “I’ve never worked in a business or seen a business where the CEO and other top management greet everyone by name, shake hands, hug and show genuine interest in the day-to-day lives of their employees. I’m still shocked to be working in a place that is genuinely kind and caring and supportive of all people, whatever their job.” “We have a hard working culture but high levels of staff engagement. There is an active social club and an EVP team of emerging leaders who provide input to the senior management team on improving the organisation’s culture and engagement.”
TOP-PERFORMING COMPANIES
Sanitarium Employment Innovations TNT
“MY EMPLOYER HAS A STRONG WORK CULTURE AND A HIGH LEVEL OF ENGAGEMENT” “Five key elements we use to create and maintain our culture are: 1. Clearly articulating our purpose and Big Hairy Audacious Goal (BHAG) 2. Following ‘The EI Way’ to align people with our BHAG and short-term objectives 3. Recruiting people who align strongly with our culture and are passionate 4. Using Power2Motivate to create a positive recognition culture 5. Valuing employee feedback through weekly staff surveys.”
3.2% 5.6% 14.8%
Strongly disagree Disagree
Neutral
30.5%
Agree
45.9%
Strongly agree
0
10
20
30
40
50
Ben Thompson, CEO, Employment Innovations
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11/05/2015 9:48:48 AM
COVER STORY
HRD EMPLOYER OF CHOICE
TRUST & EMPOWERMENT TOP-PERFORMING COMPANIES
Home Loan Experts Insight Enterprises Bicycle Network
TRUST, TRANSPARENCY and empowerment are organisational attributes that go hand in hand, yet they are difficult to manufacture or fake. Of special note here is that the three top performers come from the SME sector – indicating that larger organisations may struggle to build these connections with staff. Here are three respondent comments: • “’I trust your judgment’ and ‘I’ll support your decision’ are phrases commonly heard when talking to management.” • “One of our company’s values is audacity. Our PD’s state: ‘We have faith in our own convictions and dare to be different. We applaud those who have the courage to be fearless, bold, daring, intrepid and who approach life’s challenges as opportunity for transformation’.” • “My employer gives people the tools, guides them along the way, and tries to manage risks. The rest is up to the great talent we hire. They say ‘no’ to very little.” And finally, who can argue with this statement? “Once trust is developed, the business is your oyster to develop.”
“We have consistent, open and honest feedback from all; the good the bad and the ugly is shared. We conduct formal annual teammate satisfaction surveys and informal face-to-face ‘talk back’ sessions with employees from every function, where teammates have the opportunity to share with our SVP APAC any ideas for change or issues that are preventing them from being successful. While we set clear expectations, we operate as an adult work environment and assume that the team will do the right thing by the business and we find that the majority do so.” Marea Phillips, director, human resources APAC, Insight Enterprises
“MY EMPLOYER FOSTERS AN ENVIRONMENT OF TRUST AND EMPOWERMENT.”
3.4% 6.3%
Strongly disagree Disagree
15.5%
Neutral
34.6%
Agree
42.2%
Strongly agree
0 26
10
20
30
40
50
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LEADERSHIP WHETHER IT’S managing a crisis, navigating a challenging economic environment or undertaking the tougher tasks of leadership such as downsizing, the strength of an organisation often depends on the strength of its leaders. Less than 10% of our surveyed employees felt their leaders were not demonstrating effective leadership. Here’s what one survey participant said: “The CEO and CTO aren’t hidden away in offices – they have a standing desk in the middle of the office. There’s a strong emphasis on leadership through mentoring and a train the trainer program, encouraging staff to run their own study groups.” And it’s hard to argue with this gem of a statement: “Our CEO has a perfect balance of mind and heart.” However, while there appeared to be satisfaction with leadership being demonstrated at the top level of business, this was not being displayed by more junior leaders: “Senior management show excellent leadership; middle managers do not.”
TOP-PERFORMING COMPANIES
ClearView Wealth Employment Innovations Suncorp
“Much of our leadership success can be attributed to consistently following ‘the EI way’ and exhibiting defined leadership qualities. What we mean by that is maintaining consistency and rhythm to our planning and company goal structures (cascading goals from company to team to individuals), measuring our progress towards our Big Hairy Audacious Goal (BHAG), running quarterly themes to increase engagement with these goals and daily huddles utilising technology for sharing information across the business. The leadership group is also committed to becoming an increasingly effective team through ongoing training, self-development and learning.” Ben Thompson, CEO, Employment Innovations
“MY EMPLOYER DEMONSTRATES EFFECTIVE LEADERSHIP.”
3.2% 5.8%
Strongly disagree Disagree
14.7%
Neutral
36.4%
Agree
39.9%
Strongly agree
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COVER STORY
HRD EMPLOYER OF CHOICE
WORK-LIFE BALANCE TOP-PERFORMING COMPANIES
amaysim Dibbs Barker Right Management
SURVEY RESPONDENTS were clear: the days of working 9-5, Monday to Friday are over. As ‘work’ increasingly intrudes on ‘life’, employers have struggled to offer employees the flexibility required to keep both extremes in check. Again, the Employers of Choice lead from the front by walking the talk: “Our CEO advocates flexible hours and working from home where appropriate. She also models finishing the workday between 5-6pm most days.” Other employers have embraced flexible work as a solution to balancing work and personal life: “I have a nine-month-old baby and the company has been great to allow me to not work Fridays and have flexible working. I work from 9-4pm and then finish my hours in the evening. This is my choice and I have been fully supported. We expect people to work hard, and deliver to our customers – but over and above that there is always an amount of flexibility allowed to meet personal needs.”
“We do a lot to try to make work not feel like work. At amaysim, directors and managers are also empowered to make decisions for their teams, which means our people are not restricted by broad and impersonal company policies. For example, where it makes sense and people can still do their job, staff can negotiate alternate work arrangements with their direct managers. I believe this approach resonates with our people because it actually allows them to achieve life balance. What we see in return is an added commitment from our people who we place a great level of trust in.” Mark Roberts, CEO, amaysim
“MY EMPLOYER HELPS ME TO ACHIEVE A WORK-LIFE BALANCE”
3.2% 7.1%
Strongly disagree Disagree
16.2%
Neutral
31.3%
Agree
42.2%
Strongly agree
0 28
10
20
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50
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HEALTH & WELLBEING HEALTHY EMPLOYEES are more productive and happier employees. Perhaps for this reason, initiatives in this space garner a lot of attention from employers. Encouragingly, health and wellbeing is the sub-category with the highest level of employee satisfaction. A significant 48% of surveyed employees strongly agreed that their employer supports their health and wellbeing. As the balance between work and personal life continues to shift, employers have taken steps to ensure it’s not just the physical wellbeing of employees that is being tended to, but also their psychological wellbeing. Perhaps due to increased public awareness of rising levels of depression, burnout and anxiety in the general population, and the impact the workplace can have on these conditions, employers have responded with specific initiatives. Of particular interest was the number of respondent comments relating to anti-bullying initiatives and ‘zero tolerance’ days, focusing on building workplace cultures that do not tolerate bullying. Among the standard offerings highlighted by respondents were: health weeks, free fresh fruit juices, yoga and personal trainer sessions, massages, flu vaccinations, stop smoking courses, lunchtime walking groups and free fitbits. There was even one slightly more ‘out there’ idea, which may or may not fly elsewhere: “As a leadership team, we’ve gone jogging together as opposed to sitting in a meeting room to strategise about direction and creative.” HRD sees the logic in this: the team that runs together, stays together – and fresh air helps those innovative ideas flow!
TOP-PERFORMING COMPANIES
Sanitarium Sizmek Zenith Optimedia
“We have two programs in place: Life Matter and Better U. Our Life Matters program helps people with their own personal journey – be those spiritual needs or just life skills. This is a program that is held at the beginning of each day in various forms across our business. Our Better U program is a multi-faceted program to help people with their own health and wellness. It runs across our entire business and gives people access to health coaches, health assessments, on-site fitness programs, team health challenges, psychological services and medical services such as flu vaccinations and skin checks.” Peter Hartnett, head of people & culture, Sanitarium
“MY EMPLOYER SUPPORTS MY HEALTH AND WELLBEING”
2.7% 5.7%
Strongly disagree Disagree
14%
Neutral
29.5%
Agree
48%
Strongly agree
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LEADERSHIP
ENGAGEMENT
Who wants to be a best employer? It’s the aim of just about every company, but earning the accolade of ‘best employer’ is fundamentally all about leadership, write Jim Kouzes, Barry Posner, and Michael Bunting
LEADING A ‘best employer’ company in Australia and New Zealand is no longer a niceto-have goal – it has become a key strategy for all forward-thinking organisations. If you cannot attract the best people, keep the best people and get the best out of them, your organisation is going to pay a dear price in terms of lost productivity and profitability. The key is creating a workplace characterised by high levels of employee
engagement and commitment. This simply doesn’t happen without leadership. The evidence is clear: levels of engagement are determined by the leadership they received from those in charge. Leading a best employer company requires leaders who are trusted, competent, inspiring and forward-looking. The research, from more than two million people around the globe, clearly reveals that the employees of those leaders who most
KEY STATS: ENGAGED WORKERS • Great workplaces are also the best companies to invest in. Tracking market changes, Great Place to Work Institute data shows that the value of their 100 best companies grew by 291% between 1998 and 2012. • Similarly, statistics indicate 72% growth of the Russell 3000 Index, which measures the performance of the 3,000 largest US companies representing approximately 98% of the investable US equity market, and the 63% growth of the Standard & Poor’s 500 Index. • Aon Hewitt reports that companies with an engagement score of 76% or higher (what they call ‘Best Employers’) significantly outperform the average company on revenue growth, operating margin and total shareholder return. However, only 25% of organisations across Australia and New Zealand engage more than 66% of their people.
frequently use The Five Practices of Extraordinary Leadership are significantly more committed, proud, motivated, loyal and productive than those who work with leaders who engage in these practices less often. Data from Australia and New Zealand show overall levels of engagement scores that are 25–50% higher among employees with leaders who exhibit The Five Practices: inspiring a shared vision; challenging the process; enabling others to act; modelling the way; encouraging the heart. Refer to p.26, HRD13.03 for a detailed outline of the five practices.
Employee engagement gives you the edge Why should a person wanting to effectively
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“The evidence is clear: levels of engagement are determined by the leadership employees received from those in charge” lead in Australasia be concerned with employee engagement? After all, aren’t employees getting paid to do their jobs? Studies consistently show that engagement directly impacts both employee productivity and their wellbeing. According to Zrinka Lovrencic, managing director of Great Place to Work Australia, the companies ranked as ‘great workplaces’ are also the best organisations to invest in. Tracking market changes, their data shows
that the value of their 100 best companies grew by 291% between 1998 and 2012. Compare that to the 72% growth of the Russell 3000 Index, which measures the performance of the 3,000 largest US companies representing approximately 98% of the investable US equity market, and the 63% growth of the Standard & Poor’s 500 Index. In short, she concurs with our own findings: “It’s clear that great workplaces have stronger bottom lines and are superior in performance,” she says.
Aon Hewitt reports that companies with an engagement score of 76% or higher (what they call ‘Best Employers’) significantly outperform the average company on revenue growth, operating margin and total shareholder return. Research by Towers Watson Australia also finds that organisations with high rates of engagement consistently outperform their sector benchmarks for growth across a range of financials. The Gallup Organization’s research mirrors these findings, and demonstrates strong “links between employee engagement at the business unit level and vital performance indicators, including customer metrics; higher profitability, productivity, and quality (fewer defects); lower turnover; less absenteeism and shrinkage (ie theft); and fewer safety
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LEADERSHIP
ENGAGEMENT “If people don’t believe in the messenger, they won’t believe the message” incidents”. The data shows that when a company raises employee engagement levels consistently across every business unit, everything gets better. Given the consistency and clarity of these findings it has to be disheartening to learn that, according to Gallup, a staggeringly low 13% of employees worldwide are engaged. And, according to Aon Hewitt, only 25% of organisations across Australia and New Zealand engage more than 66% of their people. If performance, productivity, selfconfidence, organisational pride and morale are improved through engagement, it is imperative to understand more about the essential role played by leadership.
nor is it in the DNA of some and not in others. However, regardless of how much skill or talent an individual has, if he or she is not interested in improving or is unwilling to become better, then no amount of coaching and no amount of practice is going to make a difference. Leadership is within the reach of every individual, and the research shows that the more people are engaged in learning and the more interested they are in learning, the more successful they turn out to be in leading. Simply put: great leaders are great learners. They stay open to new information and to the ideas of others, and they aren’t afraid to experiment and to make mistakes in the pursuit of becoming more effective.
Leadership is a skill
Leadership: Where to start?
Leadership behaviour is the key to creating an environment for engaged employees. Leaders can build or break a workforce’s engagement; indeed, poor leadership can cause tremendous damage to an organisation. But can anyone be a leader? In our workshops and consulting engagements this question inevitably comes up: “Are leaders born or made?” We offer the intuitively obvious answer: all leaders are born. We’ve never met a leader who wasn’t born. Just as we’ve also never met an accountant, artist, athlete, engineer, lawyer, physician, writer, or zoologist who wasn’t born. We’re all born. That’s a given. It’s what you do with what you have before you die that makes the difference. For more than three decades we’ve been asking people to tell us about their personal best leadership experiences. We have analysed more than 5,000 interviews and case studies, and over five million survey responses from all kinds of organisations, industries, functions, levels, occupations, ages and ethnicities. What we’ve found is that leadership is a skill, and like any other skill it can be learned and developed. It is not something people are preordained to do,
The journey to extraordinary leadership begins with self-awareness and a commitment to living and leading from clear values. Stephen Hickey, director, Aon Hewitt Australia & New Zealand, says that the first, and most important, shortcoming on the part of organisations and their leaders “is when leaders don’t lead by example or walk their own talk”. We refer to this as Model the Way and it is a cornerstone of The Five Practices. So much so that we tell our clients that: “If people don’t believe in the messenger, they won’t believe the message.” This is the first law of leadership and the place to begin in becoming a more effective leader. Indeed, Australasians care deeply about values, and according to Towers Watson, we believe in values even more strongly than other regions across the globe. They report that values are among the top three drivers of engagement in Australia, but don’t even make the top five in their global findings. Building extraordinary leadership begins with clarity around values and leadership philosophy. A key payoff is that leaders who have a clear leadership philosophy are 66%
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more likely to be trusted by team members than those unclear regarding their values and beliefs. Not only are these leaders more trusted, but the data shows that employees also feel more pride about their organisation, a stronger sense of team spirit, and express more commitment to the organisation’s success. They set the standard in the way of values, principles and philosophy, and then demonstrate their importance by putting them into practice in their daily actions. Employee engagement begins with the leader.
Extraordinary leadership makes the difference Actual bottom-line marketplace results stem from how leaders behave and, in turn, how their people performed. Richard Roi, SVP at Right Management, in a study of 97 Fortune 400 firms, found that over a 10-year period the net income of the companies where leaders applied The Five Practices increased by 841%, compared to those that didn’t where income declined by 49%. Those same companies that engaged in The Five Practices experienced a stock price growth of 204%, while those that didn’t saw a stock price growth of only 76%. In our book, Extraordinary Leadership in Australia and New Zealand: The Five Practices that Create Great Workplaces, we provide even more evidence about the impact of leadership on employee engagement. Engaged employees have a higher output of productivity and quality performance, which directly impacts the organisation’s bottom line. How leaders behave explains how likely it is that employees will work tirelessly to achieve performance levels beyond expectations. The case studies in our book are not just about what leaders say but are backed up by our interviews with their direct reports and colleagues, who show that leadership makes a difference in the motivation and commitment of the workforce.
Jim Kouzes and Barry Posner are the coauthors of the award-winning and bestselling book, The Leadership Challenge. Michael Bunting is a co-author of Extraordinary Leadership in Australia and New Zealand: The Five Practices That Create Great Workplaces, from which portions of this article are excerpted. Michael is also the founder of leadership development consultancy, WorkSmart Australia (worksmart.net.au).
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TALENT ESSENTIALS
PERFORMANCE MANAGEMENT
Rebuilding performance from the inside out HR professionals across the globe are feeling the pressure to overhaul their performance management systems to keep up with the rapidly changing world of work. Chloe Taylor speaks to two experts who have put the concept into practice – but are the new options really viable? IN 2010, tech start-up Atlassian made the radical decision to abolish official performance reviews, replacing them instead with brief weekly self-analyses completed by employees online. “Instead of discussion about how to enhance people’s performance, the reviews caused disruptions and anxiety, and demotivated team members and managers,” Joris Luijke, Atlassian’s then HRD, said at the time. It has been debated, applauded and scoffed at in equal measure, but one thing is certain: the traditional notion of performance management is on borrowed time. “There’s been pressure on traditional performance management to change, as the world of work has changed significantly,” confirms Emma Grogan, partner at PwC. “Although traditional performance management doesn’t fit into business cycles
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any more, we’re not actually seeing those conventional systems becoming outmoded in the marketplace yet because most organisations are yet to find a replacement.”
Not so fast… Grogan adds that it is important for HR to find a balance, as the complete abolition of performance ratings could be a step too far. Although PwC did not encounter the complete removal of performance ratings in its research, Grogan says that she is aware of this occurring in some companies. However, this fresh approach is not without its problems. “It is very difficult to manage pay like this, especially in large bureaucratic organisations,” she tells HRD. “However, many of these organisations still have practices in place behind the scenes where employees are being categorised, at least into two or three performance-based
categories. The other extreme is bonuses either get removed altogether, and base salaries are increased, or bonuses are retained and they become a profit share type arrangement.” PwC recently delved into changing organisational practices in its report Performance management: Change is on the way but will it be enough?. See graphs on top of page. “ We f o c use d o n l a r ge, l i s t e d organisations, but we’re seeing more updates in smaller, more nimble companies,” Grogan says. “A lot of companies are sticking with elements of traditional performance management systems and driving innovation within them.” According to Meahan Callaghan, SEEK’s HR director, it’s important for companies to identify problems with their performance management methods
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HOW EFFECTIVE IS THE OVERALL EXECUTION OF YOUR PERFORMANCE MANAGEMENT? 4%
15%
EMPLOYEES: DOES YOUR ORGANISATION HAVE AN EFFECTIVE PERFORMANCE MANAGEMENT SYSTEM IN PLACE?
STATE HOW EFFECTIVELY YOUR PERFORMANCE MANAGEMENT PROCESS ACHIEVES THESE KEY OBJECTIVES (1 = not effective, 5 = highly effective) Ensure differentiated recognition and reward
28% 0%
20% 1
40% 2
60% 3
4
80% 5
100%
Promote creativity and initiative in employess
81%
72%
Highly effective
Somewhat effective
Ineffective
Unsure
0% Yes
Source: PwC
before making any changes; SEEK’s former method of performance management wasn’t working for several reasons. “It wasn’t giving us an indication of who our high performers were or diagnosing where our low performers were,” Callaghan says. “No one enjoyed it, from either the management or employee sides, and it took up too much time; the process lasted around two-and-a-half months annually, which placed a heavy and inappropriate burden on the organisation.”
Defining expectations SEEK have since made many changes in their endeavour to create a new performance management strategy. “We’ve taken a few new angles,” says Callaghan. “Firstly, we classified what the expectations of employees at SEEK are, which is an aspect of performance management we call ‘This is SEEK’. ” Alongside ‘This is SEEK’, there is a system in place whereby employees can look up their performance rating on any
20% 1
No
40% 2
Source: PwC
device to view how their performance is rated for the current period. “This reassures employees. If they are having a bad week, they are able to go back and see that overall they are a good performer,” Callaghan explains. “It also places a slight pressure on managers to be consistently open with workers about their performance. “Obviously, the key rationale is to drive performance in a way that’s more aligned with company objectives – we’re hoping to see more of this, as it translates to greater employee engagement,” Grogan adds. U n f o r t u n a t e l y, says Grogan, many organisations see performance management as more of a compliance process or a tick in the box, which is demotivating as it leaves employees with a single numerical rating. At SEEK, however, linking individual objectives to the company’s is a priority. “Every individual should be able to link their goals to the company’s vision,” says Callaghan. “This reinforces the idea
60% 3
4
80% 5
100% Source: PwC
that the work they do every day is helping SEEK to achieve that vision. Beforehand, employees would continue with their work despite not understanding its context because they were conscious of it affecting their performance review.”
‘THE ATTRIBUTES’ One component of ‘This is SEEK’ is referred to as ‘the attributes’ which encompasses the basic traits and abilities which the company expects all employees to have: 1. A passion for making the company better 2. Decision making and judgment skills 3. Technical skills and knowledge around your area of expertise 4. Leadership skills, if the employee is in a management role Out with the old One of the biggest transitions SEEK has made in relation to performance management is removing the concept of relative performance.
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TALENT ESSENTIALS
PERFORMANCE MANAGEMENT
“It’s too easy to have forms doing all the work. We want managers to do all that heavy lifting, and we’ve been providing training to help them feel comfortable with telling people how they’re doing” Meahan Callaghan “We have the view that the best thing that could happen is for every employee to be highly rated, rather than having a top and bottom 10% alongside a large ‘average’ chunk,” explains Callaghan, who adds that employees are now measured against the attributes rather than against one another. Another outdated aspect of performance management, Callaghan adds, is allowing forms to do “all the heavy lifting”. “It’s too easy to have forms doing all the work,” she tells HRD. “We want managers to do all that heavy lifting, and we’ve been providing
training to help them feel comfortable with telling people how they’re doing. In the end, we’ve been getting better performance because the managers are keeping staff updated on their performance.” According to Callaghan, forms are a static device; with SEEK’s new, tech-centric system, employees can be reviewed as often as their manager feels is necessary. “The relative nature of performance management systems is also demotivating – people get a rating that ultimately values them against everyone else,” says Grogan.
“Moving towards absolute performance management rather than relative models will drive engagement.” According to Callaghan, the disbanding of relative performance management is key to SEEK’s success. “We’re also phasing out the formal structured process of the biannual sit down,” Callaghan says. “We wanted to get rid of the idea of looking backwards all the time, as well as the idea that performance is relative and employees are only good performers if everyone around them isn’t as good.” “Establishing expectations at the front of the year rather than looking back at the end is absolutely more effective,” Grogan agrees. “Being upfront tells employees what ‘good’ looks like, which allows accurate feedback at the time it is needed. The conversation that often occurs under traditional systems involves employees’ performances being defined to fit quotas, rather than by their achievements.” SEEK is gradually dispelling the concept of setting employees goals for a 12-month period, and in order to maintain a mutual
WHICH OF THE FOLLOWING ARE THE BIGGEST ISSUES PREVENTING PERFORMANCE MANAGEMENT FROM ACHIEVING ITS CORE PURPOSE? Line managers don’t prioritise performance management conversations and feedback Line managers don’t have the ability or support to effectively lead performance management conversations and feedback Focus on process rather than quality of discussion and outcomes Performance management is seen as a compliance exercise
Leaders do not role model and prioritise performance management Line managers don’t have the willingness or ability to objectively assess and differentiate performance
0%
20%
40%
Companies rated as one of their three biggest issues preventing performance management from achieving its core purpose Issue prevents performance management from achieving its core purpose
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60%
80% Source: PwC
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understanding of employees’ goals, managers set them to be linked to the company vision and easily measurable. According to Callaghan, the new model works because the company ensures that new employees are aware they will be assessed against the attributes within a month of joining SEEK. “New employees are only hired if they have already demonstrated that they have strengths in those areas,” says Callaghan. “The idea of what’s expected of employees and why they come to work starts during the onboarding process.”
Challenging tradition At SEEK, talent managers are challenging the idea of progression planning. “We have no problem with development plans, as long as they have a purpose,” Callaghan tells HRD. “For example, development plans at SEEK are used to pick up on how employees are going with the attributes, whether they’re in the right role or if they should be moving into a role with more responsibility.” She adds that development plans such as these are only used if they can deliver an outcome. “We want to move away from the idea that employees always have to have a development plan, as it implies that they are never quite good enough,” Callaghan says. “Of course there’s always room for growth, but it’s not good to instil this idea that there is always a weakness to be worked upon.” The reduction in formalised development plans also acts as an opportunity to guide people who have fallen into the wrong career path. “If leadership is not an employee’s strength – or preference – then we suggest that they follow a technical path, where they can end up just as senior but without having a team beneath them,” says Callaghan. “Currently, there are people on the executive team who don’t have teams or people to lead.”
SHAKING UP PERFORMANCE MANAGEMENT: TOP TIPS Callaghan shared these tips for employers looking to reform their performance management strategy: – accurately assess the problem in your organisation, as well as the potential benefits of making the change – you will see a lot of interesting new ideas, but they are only good if they are able to solve the issues specific to your company; changing things simply because it seems like the new way to go is never a good idea – be prepared to challenge the data: it’s hard to look at results and see that nobody thinks something you manage is working Reception of the program Callaghan acknowledges that, like any new strategy, SEEK’s new method of dealing with performance is unlikely to be perfected for at least a couple of years. The company’s performance management overhaul has been well received across the workforce: employees attend training, are engaging with the new system and its language has become common lingo within the organisation. In its upcoming employee survey, SEEK is expecting positive feedback about the new mode of management. “I’ve been told that in other tracking mechanisms, there has been overwhelming support for the direction we’re taking,” Callaghan says. “It’s always a worry; in HR if you’re responsible for something that’s disliked, you have to do something about it – you can’t just get on with it.”
No one-size-fits-all Callaghan has one final and vital piece of guidance for HR professionals. “If your organisation has the same issues that SEEK had before the overhaul, then it’s worth considering implementing some of
– don’t fall back on management capability if things go wrong; address the issues – if you’re taking ideas from other companies, make sure they have similar demographics to yours. Really listen to what they say about their system and be prepared to tweak it to suit your workforce – constant monitoring is key –take a risk: managers love to help and support new initiatives, and although it might seem radical to HR, they might see the change as positive or even easy
the same changes,” she advises. “But the best HR programs are the ones that are designed specifically to suit a company – I would never suggest that this program is one-size-fits-all.” Grogan echoes Callaghan’s sentiment that the optimum performance management system depends on the organisation in question. “In some cases, a traditional performance management system makes more sense, and in others, these changes do make more sense,” she says. “Mostly, we’re finding that ultimately one of the key reasons for performance management is to engage employees and focus their attention on the right things.” Grogan suggests reviewing the current performance management model and eliminating its unnecessary components as an achievable first step towards change. “If employers are clearer on what the system is there for, then it will be easier to eliminate the parts of the performance management system that aren’t critical for your organisation,” she says. “Often organisations’ models have conflicting objectives – being clear on two or three specific purposes for it being in place will assist with the elimination process.”
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8/05/2015 10:58:06 AM
FEATURE
REMUNERATION
Steady as she goes Remuneration budgets may be tight and salaries are increasing at their slowest rate in more than a decade, but there are some positive hiring trends emerging. HRD gets a sneak peek at AIM’s annual National Salary Survey
“MONEY ISN’T everything”. It’s something HR leaders hear time and time again. It’s true – there are far more important things in life (and work) – than money alone. And yet… remuneration must be at least market competitive, for the simple reason that every employer wants to attract and retain talented staff. It’s for this benchmarking reason that the Australian Institute of Management (AIM) has just closed off its 51st annual
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National Salary Survey (NSS), which was published in late April. Insufficient financial reward is one of the key reasons staff leave to go to another job role. The cost of losing staff is high (most estimates are around 2.5 times annual salary), both in direct financial terms (ie, direct costs of recruitment and re-training) and indirect terms (ie, the loss of corporate intelligence – often to competitors – or the negative effects on
staff morale when their colleagues leave). The NSS was conducted on over 550 organisations across all spectrums of industry, covering some 25,000 employees. The survey included 280 occupations, ranging from senior executives to white collar, wage staff. One benefit of providing meaningful market data over such an extended period is that AIM is able to compare and contrast current data with past data, and thus spot any trends.
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BROUGHT TO YOU BY
Staff numbers – up or down? For the 2015 results, AIM’s Tony Gleeson, acting CEO – membership group, has noted several key differences from last year. “A notably smaller proportion of organisations reported that they are expecting permanent, temporary or contract staff numbers to decrease over the next 12 months,” he says. In the 2014 survey, 20.5% of organisations reported that they expected a decrease in permanent staff numbers – compared to only 10.9% in the 2015 survey. Similarly, in the 2014 survey, 16.2% of organisations reported that they expected a decrease in temporary or contract staff numbers – compared to 11.2% in the 2015 survey.
The pay question
TOPLINE RESULTS
Pay movements and pay forecast comparisons to/with HR job family: Pay movements 2014-15: • Overall = 3.4% • HR/IR job family = 3.6% (highest amongst the job families) Pay forecasts 2015-16: • Overall = 3.2% • HR/IR = 3.1%
While the news for fixed pay over the next 12 months (forecast at 3.2%, down slightly on last year’s 3.4%) may not be surprising given the general economic uncertainty, there was also a decrease in the proportion of organisations offering variable reward to employees, across all job levels. Within those organisations that reported offering variable reward, a smaller proportion offered company bonus schemes (also across all job levels).
Gleeson says this is surprising, given the low pay increase environment and also the relatively significant cost of wages to a company. He would have expected more organisations to utilise comparatively lowrisk, win-win variable reward programs (such as bonus schemes) to incentivise staff and help increase productivity.
Staff exits The NSS also provides insights into why people leave their jobs – and not surprisingly, fair reward offered elsewhere
Importantly, tight budgets should not hinder an employer’s ability to keep its employees motivated and engaged. They can even get creative with pay. Gleeson suggests employers could look towards variable reward schemes or profit sharing schemes. Alternatively, employers could look at the benefits they can offer on a fairly cost effective basis. Flexible work options, training and mentoring are other options that may be effective. “The little things can count a lot at this time,” he says. “Employers could also look at
“Provided the salary is recognised as being on the money, the things that really matter to people are flexible work practices, the opportunity for development and training and the opportunity for career advancement” Tony Gleeson featured heavily as a push factor. HR professionals reported that some 46.2% of staff left their job, to take on another job role, due to insufficient financial or nonfinancial reward. Other reasons cited by respondents were new challenges (80.4%), limited career advancement opportunities (55.3%), conflict with staff/manager (26.6%), lack of development/training (17.1%), and lack of recognition (14.6%). Gleeson says these results provide a conclusive indicator that workplace flexibility and L&D are often the tipping points in the battle to retain and attract the best people. “Provided the salary is recognised as being on the money, the things that really matter to people are flexible work practices, the opportunity for development and training, and the opportunity for career advancement.”
incentive schemes for more efficient processes, or simple ‘good work’ type awards.” The end goal, he adds, is extracting that elusive discretionary effort that only comes from engaged workers. Discretionary effort is willingly and spontaneously giving extra effort without being asked. “If your people have got a clear line of sight in terms of their career advancement, then you will benefit from uplift in discretionary effort. “People need to feel connected and feel they have opportunities to grow and develop. Pay can become secondary if you get these elements right.”
With more than 280 position profiles to benchmark your organisation against, including pay data from 25,000 employees in over 550 companies, AIM’s National Salary Survey is an essential HR planning tool. Order your copy today at aim.com.au/nss
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8/05/2015 10:59:24 AM
WORKFORCE PLANNING
MATURE AGE WORKERS
THE SILVER TSUNAMI Can mature age workers assist you to achieve long-term organisational goals? Gary Taylor suggests the answer might surprise some A 2015 report from the Society for Human Resource Management (SHRM) Foundation has offered some useful insights into the strategic approach being urged in respect to engaging older workers. The northern hemisphere countries are feeling the pressure of the ageing workforce more acutely, so it is good to see what they are doing (being under greater pressure than us) so that we can learn some lessons. In the US, 10,000 workers reach the age of 65 every day. The issue is not one of feeling sorry for the plight of older workers, but rather
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employers being genuinely proactive about the loss of skills and expertise. This development has not diminished the demand for bright and talented Generation X and Y staff. It is just that employers are increasingly aware of the difference between having ambitious young job-seekers on their doorstep, and whether they actually have enough trained/stable/experienced cadres of younger talent on their staff to meet tomorrow’s challenges. Questions which strategically-oriented HR professionals are asking include:
– What skills do we need to achieve our goals for the next five years or so? – What skills do we have on board (and likely to stay) to achieve this? – What will our pipeline realistically deliver (minus attrition)? – How could mature workers serve our long-term goals? – How do we effectively manage knowledge transfer? The following reflect some of the strategic responses being adopted by employers in their quest to attract and retain older workers:
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BENEFITS OF MATURE AGE WORKERS Knowledge: Older workers have often accumulated a wealth of knowledge, experience and skills during their time in the workforce, which are valuable assets to business Desirable traits: They are generally highly dependable and committed with more life experience and wisdom Established networks and external experiences: They have assets which also add value to business Workplace training and mentoring: Mature age workers’ wealth of knowledge and experience are valuable resources in workplace training and mentoring programs, helping businesses save costs on staff development and knowledge transfer Matching profiles with customer base: As the population ages, mature age employees will increasingly reflect the profiles of your customer base, allowing them to better empathise with and meet the needs of your customers
1. Flexible work arrangements Perhaps one of the vital win-win issues affecting older workers is their employer’s ability to accommodate greater flexibility. Some employers have them working fewer hours per day, possibly job sharing with a mother who needs a mornings-only role. Some work 12 hours per day for three days a week. CVS Pharmacy in the US has a ‘Snowbird’ program that allows workers to change job locations based on the seasons (literally flying south for the winter) or contract for that back-fill role for a person on maternity leave, which a career-chasing younger person is less keen on. Mature workers frequently provide stability with current operations which frees
other employees to focus on the introduction of new business lines or new markets. Project management for an ERP roll-out, a merger or other implementation frequently benefits from an older employee who can dedicate time to it and has been there before.
2. Training & development opportunities Counter intuitively, smart employers do not assume that old dogs can’t be taught new tricks. Assuming that turnover among mature workers is far lower than their younger and more marketable counterparts, the ROI for training the older workforce is just 12-36 months. Technical training for older workers has proven beneficial for employers. However,
some younger managers have requested training when given a very age-diverse team to lead. Some reports from younger managers have listed age disparity as one of the more challenging aspects of their job. Leadership development for younger managers helps them to cope with issues like a tendency to defer to elders or, conversely, a stereotype that older workers are inflexible or reluctant to adapt to new technologies. Nuanced techniques in performance management are also helpful support initiatives.
3. Knowledge management & transfer It is arguably easier to facilitate a planned program of knowledge continuity through older staff who are being phased out, than relying on younger experts who are serving their last 30 days of employment and moving on to better things. Mature staff were raised in the days of careful documentation, so should be versed in writing down their knowledge base, compiling instruction manuals and documenting processes. To protect institutional knowledge, the older staff should capture the assumptions and reasons behind historical initiatives, the success metrics or project phases employed. These knowledge houses on legs can be incentivised to transfer knowledge based on the success of their trainees. Strategically oriented employers will honour and recognise collaboration between generations.
Win-win In conclusion, the smarter employers can be seen to spend thought on what it is that they need from their older generations, and are putting in place planned initiatives to harvest the experience and capacity they need to meet the challenges of tomorrow. The approach of these employers is to find solutions which make good business sense, and which seek to align the old and the new, as opposed to a choice between which generation to support. Gary Taylor is an HR director who has worked for Australian, South African and British multinationals on two continents, including the Middle East. He is registered as a Master HR Practitioner with the South African Board for People Practice, and served as the vice president for the Institute of People Management
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8/05/2015 11:08:02 AM
FEATURE
PSYCHOMETRIC ASSESSMENT
SMOOTHING THE WATERS We’ve all read the stats; we may have even been there ourselves. More often than not, M&As fail to reach their desired objectives. Can psychometric assessment be used to smooth the process – even during the most tumultuous of times? WHILE THE specifics may vary, there is one recurring theme around why M&A initiatives fail to reach desired objectives: the people element has been neglected. If every organisation is ultimately the sum of its parts – and those parts are human beings – it stands to reason that extra care should be paid to all people engaged in an organisation during M&A activity. And what is the best way to obtain these insights?
It’s the recruiter’s most valuable tool: psychometric assessment. Psychometric assessment can be very powerful in helping to smooth the M&A process across three levels of organisational structure (see box below).
Putting it to use There are specific benefits of using psychometric assessment during times of corporate upheaval.
WHY M&A CHANGE INITIATIVES FAIL
HOW PSYCHOMETRIC ASSESSMENT CAN HELP
Organisational level, in terms of integrating cultures
By providing those driving the change with broad insights to shape the planning and communication processes.
Team level, in terms of fast-tracking the effectiveness of new teams
By providing employees with greater levels of awareness of their needs and preferences during change as well as insights into their triggers and responses under stress.
Individual level, in terms of helping people manage their own personal experience in responding to the change, which can include stress.
Where new teams emerge as a result of a merger, success and effectiveness can be fast-tracked by engaging in a team development program, so that team members may better understand their own preferences, as well as to appreciate and leverage the differences in others – ultimately improving communication and the quality of decision-making while reducing conflict.
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1. Assessing personality type It’s a shame that ‘fatigue’ is the word that often follows the word ‘change’. If change is the new norm in business, then why do we get so worn out by constant change? Simply put, it comes down to personality type and that somewhat hazy characteristic known as resilience. There are models of personality, such as those offered through the Myers-Briggs Type Indicator (MBTI), which provide insights into the different needs and preferences that people have during organisational change, and also provide insights into the typical triggers of stress and the reactions people have to increasing levels of stress. However, at what point stress is triggered, or the extent of stress that someone experiences, will often be determined by characteristics such as resilience.
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executives, and indeed employees at all levels, to be responsive to change – which is no surprise given the evolving nature of business. “Psychometric assessments can provide a number of insights into qualities such as resilience, flexibility, independence, impulse control, empathy, and mental agility as well as many others, which together will help us understand an individual’s capacity to embrace change,” says Nott. “However, psychometric assessments are just one piece of the puzzle. When assessing candidates for a role it is important to combine the insights from psychometric assessments with their real world experiences.” 3. Identifying change agents Change agents can be identified through psychometric assessment. These people are well versed in the technical requirements and the psychology of change. These change agents will likely: • approach change as a process rather than an event • pursue important changes with a sense of urgency • be unequivocal about guarding the most important change priorities • protect the integrity of intent – they ensure
“While employee responses to change can be very individual, certain personality models will provide ‘change agents’ with broad insights which can be used to support employees and the change process” Cameron Nott 2. Assessing for change agility When Cameron Nott, managing director and psychologist, CPP Asia Pacific, is asked to advise organisations on new hire decisions, a common theme is the ability (or otherwise) of
people understand and remain aligned to the true purpose behind the intent of the changes • demonstrate a willingness to make and carry out unpopular decisions
• communicates directly “While employee responses to change can be very individual, certain personality models will provide ‘change agents’ with broad insights which can be used to support employees and the change process,” says Nott. 4. Fitting new roles to existing staff Where an employee has been displaced as a result of a restructure, personality, mental agility and career interest assessments can be very useful in helping them to better understand their underlying motivations, capabilities, as well as the work activities that are important to them – ultimately allowing them to seek out roles that could be a good fit. “As a practitioner, it can be incredibly rewarding to see an employee who has lost their job, turn the experience around to be empowered, and pursue a career that they find much more rewarding,” says Nott.
Bucking the trend Corporate change is both an institutional journey and a very personal one. Individuals (or teams of individuals) need to know how their work will change, what is expected of them during and after the change program, how they will be measured, and what success or failure will mean to them and those around them. Change needs to be understood and managed in a way that people can cope effectively with it – and managers play a critical settling influence on employees. Gallup research indicates that only 2.5% of projects are successfully implemented. Even more disturbing, companies spend more than US$2trillion on acquisitions every year. Yet study after study puts the failure rate of M&As somewhere between 70 and 90%. It’s time to buck the trend – learn more about what motivates, demotivates and drives your employees and reap the rewards. CPP, the Myers-Briggs company, is a world leader in psychometric instruments, training and consultancy services
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TECHNOLOGY
CHANGE MANAGEMENT
Countdown to ‘Go Live’ New technology roll-outs have their own quirks when it comes to change management process. How can you ensure your organisation is indeed ready to go on the ‘Go Live’ date?
AS CONSUMERS we upgrade our technology at the drop of a hat. The queues around the block whenever Apple launches a new product are testament to our love for the latest and flashiest tech gadgets. How about in the workplace? It’s highly probable the desire for tech upgrades is far more muted. And with good reason. While we’d like to think that everyone has the same problems, time constraints and priorities, this simply isn’t true. A seemingly straightforward shift – say from Microsoft 7 to Microsoft 8 – can fail miserably. Why? “It depends on the context,” says David Guazzarotto, CEO of Future Knowledge, a company that helps organisations navigate technology change. “Sometimes the most innocuous technology upgrade can come at the same time that person is dealing with massive changes elsewhere. It could be a restructure or an acquisition. So, suddenly
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that innocuous change activity is met by people with their barriers up.”
Managing the change Smart employers will recognise that every change, no matter how big or small, or what type of change, is idiosyncratic. “In my experience a one size fits all approach, even when you look at what’s been written and researched, with standard methodologies and the like, just doesn’t work. That’s where many organisations get caught up, trying to manage the change process instead of managing the change itself,” says Guazzarotto. So, while there must be some sort of change process, it can be a lot simpler than one might imagine. Guazzarotto suggests it can be melted down to two essential questions, through which any change initiative must be filtered: 1. Why are we doing it? 2. What’s in it for me?
“If you can answer both at any point in time effectively, with transparency, you are likely to succeed with your change initiative,” he says. “If the ‘why are we doing it?’ is because we have to, and you communicate that, then everyone is going to accept it. If you can’t justify it well enough then you’ll struggle to get it across the line.” For the ‘what’s in it for me’ question, it’s important to understand that everyone deals with change in their own way; it’s not possible to take an entire workforce and consider one single ‘what’s in it for me’ across that group. “It might be relevant for some and not for others. The real key is to make sure you understand those audiences well enough. Give these people a way to connect and move it to the next level,” Guazzarotto says.
Change process Usually, the first step is to undertake an
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TECH CHANGE: CRITICAL STEPS “There are a number of change management elements that are essential to a technology rollout. Using some or all of these five practices throughout the process allow for a better end result for the employee, organisation and most likely your customer,” says Arlene Wherrett, managing director APAC, Bluewolf. 1. User acceptance testing – This is one of the most vital practices an organisation should undertake before going live. This gives you a chance to apply test cases and evaluate functionality in terms of desired outcomes before launching the roll-out business-wide. 2. Dress rehearsals – As with showbusiness this is the first time all the elements of the rollout come together. It allows all facets to be evaluated sideby-side to ensure any major system miscommunications can be addressed prior to Go Live.
A seemingly straightforward shift – say from Microsoft 7 to Microsoft 8 – can fail miserably. Why? It depends on the context impact assessment. This involves looking at what the vision is, to understand why the change is being made and what the hoped for outcome is. Then it’s time to look at stakeholders: who is going to be affected and impacted? “Today there’s this concept of user experience. In an effort to better understand the audience to be impacted, you can utilise user personas. This is where we create a persona that represents a group of affected people,” says Guazzarotto. He cites an example: installing a new payroll system. One audience would be the
existing payroll team; another would be an employee on a factory floor; another would be managers. Each persona describes the type of attributes they have and most importantly what perception or lens they will bring to that technology change. “We espouse doing this early on,” he says. “Many organisations take a very processcentric approach to change but they involve people too late in the piece. They haven’t asked questions, they haven’t tried to get them involved; they try to appease them or skill them up without properly involving them.”
3. Pilots – The pilot is the first time the technology is tested in a real-world situation. In essence one business unit goes live for a period of time while the rest of the business continues to use the old system to refine usability before rolling out company-wide. 4. Phased rollout – After the success of your pilot phase, the Go Live is gradually rolled out by business unit, while the old system continues to operate sideby-side. 5. Post Go Live support – Crucial to the success is the support post rollout. Both technology and behavioural change support will be needed during the first days, weeks and months of using the new system. A comprehensive post Go Live support function will benefit the uptake of your technology rollout no end.
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TECHNOLOGY
CHANGE MANAGEMENT
hall meetings to engage your entire workforce as well as plenty of team meetings and talk in terms of impact to employees,” she says. She recommends three key messages to convey, which echo Guazzarotto’s own advice: • The strategic vision for the business – what does this mean for the business? • Planning, phases and milestones – how will we implement the technology? • How each role is impacted – how will I do my work differently? “Communicating the big picture answers to your employees is vital – find ways of explaining the detail to employees without losing their interest,” she says. It’s also important to determine, on a day-to-day basis, how this change will impact their ability to do their job. “From that we plan the training activities. Some change initiatives – and this is true of a lot of technology change initiatives today where the technology is more user friendly or committed to the end user – don’t have a huge training overhead. This doesn’t mean it’s easier for people to adopt new technology. But if we understand the stakeholders and understand what the impact is going to be, we can then develop a program of activities that are tailored to meet that specific need.” Sometimes this program might be very heavy on communications; it’s more about marketing the change to people and motivating them to take it on. In other scenarios it’s training-centric where the employer must help people do something different to what they are currently doing; it’s about upskilling.
Why do tech change initiatives fail? There are two key reasons why change initiatives fail: underestimating or overestimating people’s capacity for change; and making assumptions about what someone thinks.
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“Making assumptions about how someone thinks might be framed from the perspective of you bringing your own experience or how you might personally deal with change. This is why it’s critical to engage with stakeholders. Understand their concerns, and their faith – or otherwise – in change,” says Guazzarotto. Secondly, and perhaps surprisingly, over-communication can be an issue. Employers often feel the urge to share micro detail about everything that’s going on to their entire audience. In an information overloaded society, it’s hardly surprising that messages – even when they are important and well intended – get lost in the mix. “If you bombard the audience with mundane details about the project, thinking you’re doing the right thing, being transparent, when it comes to the things you really want them to look at, they simply won’t. It’s more about engaging than simply pushing information out to people.” Arlene Wherrett, managing director APAC, Bluewolf, agrees and says it’s important to consider the volume as well as the medium used to disseminate messages. “Consider tone, frequency, hold town
Getting the doubters onboard Any HR professional who has driven a change initiative knows there will always be reluctance to embrace change. In Guazzarotto’s experience, that reluctance can come from surprising places. “You’d think moving from an archaic email platform like Lotus Notes to Gmail – which organisations like Woolworths have done – is something most people would endorse. They’d take a look at those newer email systems and say ‘wow it’s so much easier, so much funkier’. And yet, even from tech savvy people, you’ ll get resistance. They don’t resist because they don’t like the new technology; they simply don’t like having their cheese moved. They’re used to getting off the train, getting their coffee, and having the same routine of keystrokes. They get their job done and go home. It’s straightforward. The motivation to change that basic routine is not there.” Yet if you can answer those two questions mentioned earlier, it’s very hard for someone to say “I don’t want to” because it comes across as being selfish. “If you say, ‘this will be great for the organisation, it’ll mean we can invest half
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a million into training programs that we would have spent maintaining the old system’, who can argue with that? Then if you say ‘you’ll save 30 minutes per day on some of your work tasks’, you’re satisfying the what’s in it for me question.”
“Many organisations get caught up trying to manage the change process instead of managing the change itself”
Best practice
David Guazzarotto
Any change will have multiple stakeholders. “The key is not contriving some artificial approach to managing the change. The best solution is to work within the normal constructs that manage or lead change within organisations. That is the management and leadership structure. “When we’ve seen successful tech adoption it’s been when we’ve been able to leverage those structures to embed the change, move it from a project state to a business as usual state. Then you’re giving it every chance for the change to be embedded,” Guazzarotto says. Another key to success is to obtain sponsorship. Obtain the right executive sponsorship for the project to fly – sometimes even the most senior person can be the most powerful advocate. It must also be remembered that every organisation has its own construct or hierarchy: the ‘official’ organisational hierarchy and the ‘influence’ hierarchy. When looking at the stakeholders, it’s critical to determine who those influencers are and then engage them. “We did an HR payroll rollout for one of the big banks and we found, almost by accident, that the biggest, most influential group was not the operations functions or the layer of management but actually the EAs,” says Guazzarotto. “They had their finger on every pie, knew every single person within their boss’s sphere of influence and they made decisions on behalf of their boss. So it was about giving them the ability to understand what was required, motivating them to communicate effectively, so they were almost a proxy for
the executive they supported.” The social era has also transformed how influence is conveyed. It’s now possible to use social networking tools to identify where nodes of influence lie. “It might be someone quite low down the chain who is actually quite influential and they know a lot of people,” says Guazzarotto. “Let’s get smart and use these tools to determine where those influencers are.” Another tip is to use ‘ live content’ – especially when it comes to talent management technology. “We implement a system because it’s going to create great process improvements and then we wonder why people don’t get engaged with it,” Guazzarotto says. “Sometimes it’s because there is no content in there. It comes back to why am I doing this? If I go in there and there’s nothing of interest, nothing to engage me, I won’t join in. What’s the point of doing it?”
Training There are some key points to consider when it comes to upskilling employees around new technology. “Train your trainer so that they are a champion of change and understand the mindset of employees,” suggests Wherrett. Secondly, she recommends doing trials of the new system with a smaller sample of your workforce early on, and develop training to cater for everyone: face-to-face, group environment and online. “Allow for informal training by encouraging employees who ‘get it’ to help
with those that don’t,” she says. “These early adopters can become natural influencers, and being on the frontline with their peers means they are better placed to explain things in the most relevant way.” Training should also be done at “a point of need rather than a point in time”, suggests Guazzarotto. This is particularly pertinent for staff using talent management software, which might encompass everything from recruitment to succession planning and performance management. If all training efforts are put into all the skills needed to perform tasks in a new system and this is done in the weeks in the lead up to go live, “the whole population is put through mind numbing training in classrooms”. However, a performance review might not be done by that people manager for another six months – meaning all that training is forgotten. “Your training materials should be available at the point of need. In other words when I’m about to do a performance review for the first time, I can watch a two minute video that pops up and helps me. That’s much more valuable, and it can be much less expensive than traditional faceto-face training models,” Guazzarotto says. Finally, incentivising through gamification can be an effective way of increasing uptake. “Set up contests with rewards for completion or success – like logging on regularly and using the technology’s full functionality – and then recognise those leading the charge,” Wherrett concludes.
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TECHNOLOGY
CHANGE MANAGEMENT
Li
Case study: Terry White Facing up to the challenge of major industry and organisational change with the implementation of a new business system, Terry White Chemists used a simple but effective change process to ensure the project was a success REPORTING ANNUAL turnover in excess of $1bn, the independently owned network of Terry White Chemists employs more than 5,000 staff – 120 of whom support the franchise in the Brisbane office of Terry White Management. Following a negotiated brand buy-out in 2009 from Symbion Pharmacy Services, Terry White Management sought a new core business system. Microsoft Dynamics AX was selected as the best solution to support store owners and retail operations. Terry White was the first business in Australia to choose to implement Microsoft Dynamics AX for Retail. The company decided to appoint change management consultancy, Change2020, to help with the transition. Here are the steps taken:
communication and governance processes. A core group of six people, chosen from each department, was given specialist change management training to help drive the initiative forward. 3. The team communicated regularly with the business about the impending changes, using formal and informal channels to ensure staff were kept up to date. These included briefing events, regular newsletters and ensuring the project was included on team agendas. The team also met regularly to keep track of the project and address change issues.
1. Change2020 worked with key people in the business to complete a business impact assessment and clarify end goals. This helped Terry White’s management team identify ahead of time what it needed to ensure the project delivered desired business benefits from the software implementation.
4. Terry White Management undertook surveys before and during the project. This provided the opportunity to gauge the general attitudes of the team about the changes, become aware of widely held concerns and highlight actual problems the teams faced. It also provided the change team with the information it needed to assist the broader team through the transition.
2. A change management plan was developed for the project. The goals of the plan were to empower Terry White employees, nurture a positive work environment and maintain good
5 . T h e o r i g i n a l C h a n ge 2 0 2 0 engagement proved valuable enough that Terry White Management has appointed the consultants for the second phase of the software implementation, aimed at
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merchandising process improvements. Lessons learned from stage one will be used to formulate sustained change through phase two. “Investing in change management has really been a minimal cost in comparison to the total project budget, but it returned great value in terms of ensuring the business goals and benefits were met,” says Terry White’s chief information officer, Jane Sheehy. Co-founder and co-direc tor of Change2020, Vicki Daniel, says that with systems implementations it can be easy to get caught up in the technical implementation of a project, with peoplerelated issues left to the last minute. “It is important that companies recognise the importance of addressing how the project will impact on employees, while allowing plenty of time to communicate how things will change,” Daniel says. “Considering Terry White was the first retail company to implement Microsoft Dynamics AX 2012 in Australia it would have been extremely easy to become fixated on the project in terms of implementation, and forget about the human aspect… Terry White Management ensured its employees were a priority, which ultimately made the project a success. It speaks volumes about the way the company operates.”
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ELF_adv
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Rob Garratt Managing Director, General Manager Australia and New Zeland Revlon
Kathleen McCudden Director of Human Resources IBM
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18-19 JUNE 2015 DOLTONE HOUSE, HYDE PARK, SYDNEY
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BUSINESS STRATEGY
MANAGEMENT
UNDER THE KIMONO:
OPEN-BOOK MANAGEMENT We’ve all heard about the importance of transparency and leadership authenticity, but Trudi Saul outlines how her company has embraced a fresh take on traditional Open-Book Management to boost engagement and corporate responsibility UNLIKE GALLUP’S cited 76% of Australians who are disengaged at work, I can genuinely say I enjoy going to the office. What makes it different for me? I’ll give you a clue – it isn’t my position, my salary, or even my field. It’s that right now, at this very minute, I can tell if our business is on track for the month, if we are going to meet our forecast targets, who might need some help, and what I can do to contribute. I’m not the CEO, I’m not a manager, and I’m not an accountant, but I’m a part of a business that has turned the traditional management models on its head – one that is giving power to employees to truly ensure the business succeeds. I work for O’Connells OBM, an accounting practice that is about much more than debits and credits; instead, it’s one that is as focused on having a positive impact on the lives of team members, as on the lives of our clients – so much so that we’ve recently been named as one of B Corp’s Best for the World when it comes to work environment (see a detailed description about B Corp’s list further in this article).
Open-Book Management (OBM) O’Connells OBM run an approach to OpenBook Management called the Great Game of Business. At its core, the management style is about having a positive impact on the lives of our team by engaging, educating, and empowering them. When most people hear the term Open-Book Management they take it to mean simply
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sharing financial information with their team, and while many understand the concept when it comes to ‘opening the kimono’, people are hesitant. If you open the books in a lean year, will employees run for the hills? If you open the books in a good year, will they want a raise? Guess what? They already want one! What sets the Great Game of Business apart from other OBM operating systems is that it’s about much more than looking at a P&L each month – it’s about educating employees to think, act, and feel like business owners. Why would you want to do that? According to Gallup, employee engagement scores hover at around 13% globally, and only around 24%
A BRIEF HISTORY OF OBM Jack Stack, CEO of SRC Holdings Corporation, is considered the ‘Father of Open-Book Management’. The concept was born in 1983 when Stack was battling to turn around a dying division of International Harvester and save 119 jobs. He shared the company financials with his employees, but needed a way to help them understand how they could affect those financials. Stack’s open-book approach to managing the company grew from simply sharing financials to actually teaching his employees the ‘rules’ of business. Stack’s approach to managing the company became known as the Great Game of Business.
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in Australia – and that’s scary when we think about the link between our work environments and our quality of life generally. It’s safe to say that creating a sustainable business is now as much about creating an engaging, fun, and safe environment for the team as it is to deliver quality products and services. Engaging employees in the business doesn’t just mean having fun, but that simply going to work and doing a set of tasks is no longer enough. Using the Great Game of Business has provided everyone in our office with a story and purpose behind why we’re here.
‘THE GREAT GAME OF BUSINESS’
Know & teach the rules
Critical number
Follow the action & keep score
Provide a stake in the outcome
Shared vision and purpose Providing a sense of purpose is particularly important for Millennials who are increasingly looking for a larger meaning at work to drive purpose in their own lives. This is even more important as the distinction between work and life becomes blurred for this demographic. Open Book businesses can help employees create and build a sense of purpose by including them in developing and owning the business’ vision and values, and while that’s directly beneficial in terms of improving engagement at work, team members take that sense of fulfilment home with them every night. More businesses are starting to recognise their social impact, both within their own organisations and their external community/ environmental impact. In fact, over the past few years, a movement has been growing to help businesses score their impact on these areas. Businesses that undergo the certification process become Certified B Corporations. The B Corporation movement certifies ethics for business in the same way Fair Trade sets a standard for food and coffee. It is a growing movement around the world. Certified B Corporations meet rigorous standards of social and environmental performance, legally expand their corporate responsibilities to include consideration of stakeholder interests, and build a collective voice through the power of the unifying B Corporation brand. There are now more than 1,200 Certified B Corporations
How can you make opening the kimono work for your business? In its simplest form, a successful game plan has three elements: 1. Know and teach the rules All team members are taught to understand what success looks like for the business – whether that’s education on how to read the financial statements, what targets are critical to the business and how they are influenced, or how different team members contribute to the company’s success. 2. Follow the action and keep score The reason computer games such as World of Warcraft are so addictive is that they allow us to easily see our progress towards different goals. The same logic applies to business. Once team members know and understand the different elements of the business, scoreboards and continual team meetings/communications keep track of progress, provide motivation, and increase accountability. 3. Provide a stake in the outcome It’s in our very nature to ask what’s in it for me, so there has to be some type of intrinsic motivation to engage people in the success of the business. This could be in the form of an Employee Share Ownership Plan, a teambased bonus or reward system tied to your targets, or smaller rewards and celebrations for reaching milestones or focus goals. Note: The Critical number (in the centre of the diagram) is the financial or operational number that defines winning. When correctly identified, targeted and tied to a reward, the Critical number becomes the focus of the Game for everyone in the organisation.
from over 120 industries and 38 countries, representing a diverse multi-billion dollar marketplace. For us, becoming a Certified B Corp was a natural extension of our belief that a successful business starts with how the individuals inside a business are treated, and it’s our open-book management environment that led us to be recognised for creating the most positive overall employee impact by the non-profit B Lab, with the release of the fourth annual ‘B Corp Best for Workers’ list.
Success in business is about much more than numbers. It always has been; it’s about improving and having a positive impact on the lives of those who are connected to the numbers. While this mission has been an integral part of our business for years, to receive the independent recognition from B Corp as being among the ‘best for workers’ is a real honour. We are proud to be a part of a community of businesses that people can connect with and know we’re ticking the boxes across all areas – now more than ever we want to share that with others.
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EXPERT INSIGHT
WORKPLACE RELATIONS
Your reputation on the line Lisa Burrell outlines how a workplace investigation could make or break your reputation THE FAIR WORK Commission (FWC) and higher courts are often critical of organisations and HR practitioners for their investigation and dismissal processes. Recent comments about company investigations include “appalling”, “scant” and “biased, incomplete and totally one-sided”. A number of these criticisms are directed at large organisations, where detailed policies and dedicated HR teams exist. Obviously no practitioner wants their name and reputation associated with these kinds of descriptions, so where are they going wrong? The key element appears to be a failure to follow a company’s own processes. Ironically, in some cases the organisation would likely have been better off having no detailed procedure at all with regards to conducting investigations and disciplinary matters. In light of this, and the FWC’s very procedural focus when considering dismissal matters generally, the current golden rule is ‘if it’s in your policy, ensure it’s done’. Another factor in these matters appears to be a lack of procedural fairness and objectivity. In our experience, issues are always far easier to rectify within a ‘live’ process as opposed to trying to defend decisions before the FWC – and more often than not, the concerns are known or raised before the time of dismissal. So, if there is a question about procedural fairness, our experience is this can usually be rectified – or at least mitigated to some extent – at the time. An unwillingness to reschedule a final meeting or extend a process to address these issues can ultimately cost employers dearly. Looking at the more general role of investigations in dismissing employees, VECCI recently analysed a 12-month period of unfair dismissal decisions to consider the relationship between the investigation
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process and final outcomes. While there is obviously a myriad of different factors involved in each case, the outcomes did reveal some interesting considerations with respect to investigation processes. By way of context, the last full annual report of the FWC showed that 48% of arbitrated matters resulted in a finding that the dismissal was fair. VECCI’s analysis showed that where an internal investigation was undertaken before dismissal, in 54% of cases employers successfully defended the claim. Where an external investigation occurred (taking into account that this applied to only a small proportion of cases), there was a 90% employer success rate. Not surprisingly, in instances where the Commission noted a lack of investigation prior to dismissal, an employer’s success rate was less than 20%. Our view is that an investigation can ultimately assist a disciplinary process and the more independent it is, the higher the
protection that may be delivered to your organisation. It is also worth employers carefully considering if their organisational policies and processes may be overly restrictive or detailed when it comes to implementing them. Something as simple as the use of terms such as ‘must’ or ‘will’ in your policy could prove detrimental if the true position is that you ‘may’ do something (such as putting all matters in writing or providing a certain amount of advance notice before interviewing an employee). VECCI can help employers assess and manage risk in disciplinary and dismissal proceedings, including delivering independent workplace investigations.
Lisa Burrell is the general manager of the Victorian Employers’ Chamber of Commerce and Industry (VECCI). VECCI is Victoria’s most influential employer group, servicing over 15,000 Victorian businesses per annum.
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Untitled
What are the strategic issues facing the HR profession in 2015? SURVEY OPEN NOW www.hcamag.com
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PEOPLE
IN PERSON
MICHELLE FARRAR-EAGLES
Merivale, owned by the Hemmes family for almost 50 years, has transformed the hospitality industry in Sydney. It now owns more than 50 restaurants, bars, pubs and hotels, including Ivy, The Beresford Hotel and Coogee Pavilion. HRD chats to HR director Michelle Farrar-Eagles Photo credit: Thilo Pulch, pulchphotography.com
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MELBOURNE 29-30 JULY
HRD: How did you first enter the HR profession and what was it that initially drew you to it? Michelle Farrar-Eagles: From a young age, I’ve always been passionate about bringing the best out of people. Although I enjoyed what I did as a lawyer, I wanted more. I wanted to be closer to the people within a business and working in a business I could relate to. I still remember vividly the day I applied for a payroll manager opportunity at [retailer] Beach Culture. As soon as I read the advertisement, I knew it had my name all over it. I had no payroll experience but thought, ‘I can interpret legislation – I think I can do this’. Once I had a foot in the door, given there was no HR function, it was really a blank canvas and I was given a golden opportunity to add value and make a difference to what people were doing and help bring the best out of them and their teams. I’d found what I was missing. HRD: How has your legal background helped you in your HR career? MFE: I didn’t know what I wanted to do when I left school so figured a degree in management and law would be a great foundation for any direction I wanted to pursue. A major aspect of HR is around compliance, so having a legal background definitely gave me a healthy respect for ensuring compliance is not neglected. It has also been invaluable for interpreting and advising employers on employee/employer rights and responsibilities. HRD: What unique HR challenges does the hospitality industry face? MFE: Given the seasonal nature of hospitality, it is only natural to have a casual employee turnover that reflects that, but it does actually work in our favour given we attract a lot of WHV [Working Holiday Visa] employees. I think the hospitality industry is not too dissimilar to the retail industry where perhaps people don’t initially realise they can have a really rewarding career. Historically and to a lesser extent today, the industry was viewed as one that people worked in while they attended uni and pursued other careers. Over the last couple of years we have increased the investment in our people to ensure they know they are valued. That breeds stronger engagement and
See Michelle Farrar-Eagles talk about managing large scale organic growth at HR Summit Melbourne, 29-30 July – visit hcamag.com/hr-summit-melbourne/
retention, less turnover and greater confidence in a rewarding career. HRD: Merivale looks like a fun place to work. How would you describe the culture? MFE: It is fun. But like any business, it’s only as good as the people. We have incredible venues but it is our people that make us truly amazing. I’ve always believed that your culture is really a reflection of the type of people that you work with. We look for people who are driven, engaging, honest, committed, passionate, intelligent, genuine… but also know how to have a laugh and have fun. You have to love what you do. People often ask how I balance work and my young family. I won’t lie, it can be tough, but I’m my own worst enemy. It’s so easy to get caught up in everything we have going on because we love what we do and who we work with. The fact we are a family business is also definitely a strong influence on our culture. Justin [Hemmes, CEO] is very hands on and involved in the business. The family is incredibly caring, but also have high standards – as Mr John always said “Whatever you do, do it well”. HRD: What’s the best piece of advice you’ve ever received? MFE: You have two ears and one mouth for a reason; use them in proportion. We should always listen twice as much as we talk. When we talk we are repeating what we already know; when we listen we are usually learning something new. HRD: Finish this sentence: ‘What I enjoy most about HR is…‘ MFE: Bringing the best out of people, and – can I have two? – changing people’s perception about the value HR can add to an organisation. We are not just about processes and systems. A true HR department is all about people and how we bring the best out of them each and every day. HRD: Finish this sentence: ‘What I enjoy least about HR is…’ MFE: The use of over-complicated language and jargon – for example, who refers to staff as human capital? People are people.
MICHELLE FARRAR-EAGLES CAREER TIMELINE August 2013 – present HR director, Merivale August 2012 – Jan 2014 Special projects consultant, National Retail Association July 2009 – August 2013 Founder, The People Playground (specialist HR consultancy)
April 2006 –
Dec 2010 – August 2011 Retail HR manager (NSW, ACT, QLD) – mat leave position, Country Road
Dec 2009 In-house legal counsel/ HR manager, Ksubi 2004 – 2006 HR manager, Beach Culture June 2002 – 2004 Lawyer, Gye Associate Lawyers QUALIFICATIONS
2004 – 2010 NSW Practicing Certificate (admitted as a solicitor) Supreme Court of NSW 1998 – 2003 Bach Law/Management MJ in HR University of Canberra
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PEOPLE
HEAD TO HEAD
GOT AN OPINION THAT COUNTS? Email hrd_editor@keymedia.com.au
Views from the frontline
Is there really a ‘skills shortage’ or are employers not effective in talent acquisition? What are you doing in your organisation or what have you seen in the market? How can employers improve their talent sourcing and recruiting ability?
Alla Keogh Head of people & performance, MYOB While there may be skills shortages in some segments, companies that have great brands still have queues of qualified talent lining up to work with them. Talent acquisition revolves around brand, culture and user experience. It starts from the inside, with employees acting as brand ambassadors – spruiking the EVP to their friends and acquaintances. Talent acquisition is transforming with the arrival of new technology. These days you can’t expect to compete for key skills unless your company’s web presence is optimised for mobile, you have a social recruiting strategy, and are able to effectively leverage data analytics. At MYOB we have developed segmented talent acquisition strategies to better penetrate and grow our best-employer brand in every market we’re in. The ‘post and pray’ approach to recruitment is a thing of the past.
Shanyn Payne GM of HR, Swinburne Online There isn’t a skills shortage per se – the market has become a two-way street. To attract the best candidates, companies need to offer a strong EVP. At Swinburne Online, we attract amazing talent because of our culture. We’ve achieved this through a whole person approach, creating a genuine workplace that nurtures both personal and professional growth. We encourage every member of our organisation to look at the big picture and understand how they contribute to the wider business goals. This has created solution focused, agile teams that work more efficiently and effectively rather than harder. To improve talent sourcing, employers need to get the benefits and performance balance right. Employees want to be challenged, part of high performing teams and, have meaning in their roles. For employers that get this right, talent will follow.
Peter Woodward APAC practice director – HR, Ampersand We’re in a classic cycle of over supply meets under demand. We have more candidates than jobs with a surplus of HR talent. We’ve seen HR talent trends emerge from structures centralising and organisational redesign driving greater productivity. With this, the talent market has shifted. Although we have strong candidate supply, it’s the calibre of the HR executive that determines our advocacy. What is their unique skill proposition that will create positive step change and sustainable impact for our clients? Be different. ‘Different’ for us means delivering value that hasn’t been delivered before. Align people outcomes to commercial growth, and provide business counsel to senior leaders. When organisations are hiring, they too need to be clear on their EVP and importantly, deliver their employer promise.
SKILLS SHORTAGE OR RECRUITMENT PROCESS FLAWS? The Australian government suggests a skills shortage exists when employers can’t fill vacancies in an occupation or in a specialisation of that occupation. The vacancies must reflect current levels of pay and standard employment conditions, and must exist in a geographical location that is reasonably easy to access. So, why do so many employers struggle to fill roles?
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