Human Capital magazine Issue 7.9

human capital

HC issue 7.9

PROFILE:

teambuilder:

Georgiou

Unilever

sustainable

change Experts share their top tips

Performance management: HR fundamentals for high performance

Dispute resolutions: War at work

Score! Building high performance teams

editor’s letter issue 7.9

EDITORIAL Riding the wave

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uthor Di Worrall, who has been interviewed for this month’s cover story, has a knack for bringing broad concepts of social change and applying those concepts to the business world. Her excellent book, A Climate for Change, uses global warming as the springboard into analysis of what does and does not work in many corporate change initiatives.

Worrall also talks about ‘ages’ and warns that not only is the ‘industrial age’ a relic of the past, but so too is the ‘information age’ (which you might believe we’re right in the middle of, given the Twittering, social networking frenzy we seem to live in). She believes we’re heading into a new age that will herald even more change: an ‘age of awareness’. “It’s an expectation that I want more balance in my life, more humanity, and I don’t want the dehumanizing effects of the industrial age. And of course this is demanding more from our leaders and the outcomes of our change programs. Failed change programs are not an option anymore, because they leave blood all over the wall. It must be more accountable, and leadership must have integrity,” she says.

Despite a real desire by executives to deliver successful restructuring and process improvements, research shows that 66% of all change initiatives fail with only one in three transformations succeeding. Change and transition outcomes are clearly achieved by more than hard-metric results. It is how people get those results. “If you’re not riding the wave of change into the 21st century, you’ll find yourself drowning beneath it,” Worrall adds.

Turn to page 16 for some tips on riding the wave, and capturing both the hearts and minds of employees when it comes to change initiatives.

In the first person…

“Change is too often an event, not a pattern. People go on diets, but don’t change their lifestyle” – change and leadership guru Dave Ulrich on why so many change initiatives fail (page 16)

“We put the work in to ensure we would be financially stable enough to withstand any dips” – Robyn Ivankovich, organisational development manager at Georgiou, on her company’s resilience (page 48)

“We have to stay close to our customers and consumers, and we want our people to remain connected to the markets they are serving” – Steven

managing director chief operating officer editor journalist production editor contributors

marketing manager marketing coordinator traffic manager design manager designer photographer senior web developers it/is manager sales director

Mike Shipley George Walmsley Iain Hopkins Daniela Aroche Tim Stewart MatthewsFolbigg Frontier Software Chifley Business School The Next Step Chandler Macleod Group Danielle Tan Jessica Lee Stacey Rudd Jacqui Alexander Ben Ng Thilo Pulch Kevin Kim Colin Chan Justin Kennedy

Editorial enquiries

Iain Hopkins tel: +61 2 8437 4703 iain.hopkins@keymedia.com.au

Advertising enquiries Fiona Wissink tel: +61 2 8437 4746 fiona.wissink@keymedia.com.au Sophie Knight tel: +61 2 8437 4733 sophie.knight@keymedia.com.au

subscriptions

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Key Media

www.keymedia.com.au Key Media Pty Ltd, Regional head office Level 10, 1 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Singapore, Hong Kong, Toronto www.hcamag.com Copyright is reserved throughout.

No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept as HC can accept no responsibility for loss.

Gross, vice president – HR, for Southeast Asia and Australasia, Unilever outlines the keys to success (page 52)

“If you do it right you can change behaviour. But if you do it wrong, nobody changes and it’s a waste of time” – Lyle Potgieter, CEO, PeopleStreme, on effective performance management (page 28)

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this issue

inside 16 Cover story:

Change management

Organisations that never try anything new when the market is transforming around them are almost certain to perish, but the process of change is often fumbled. Iain Hopkins gets some pointers on implementing change

28 Avoidance tactics

Australian managers dislike performance management so much that poor performance is often left to fester. Human Capital provides some tips on how to do it better

contents features Score! Building high performance teams 38

Author Bill Lang outlines a five-step process for building skills, teams, and businesses

42

War at work

From boss-nappings to peaceful protest, the financial crisis has put industrial relations back in the spotlight internationally. Human Capital takes a look at examples of dispute resolution from around the world

Letters to the editor Do you have a burning HR or people management issue you would like to share with others? Would you like to share your thoughts on the challenges you’ve faced and how you’ve overcome them?

Want to kick off some debate about your industry? If so, Human Capital would like to hear from you. Send through your comments to editor@hcamag.com.

instep HR Career Experts

Page 4

Take a walk in their shoes

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usiness acumen in HR means different things to different people. At a recent HR seminar, senior HR professionals explained what ‘business acumen’ meant to them. In this month’s Instep we look at how HR professionals can elevate their level of business acumen.

What is business acumen?

According to Wikipedia, a simple explanation is that “business acumen is a concept pertaining to a person’s knowledge and ability to make profitable business decisions”. Wikipedia states that the term originated “within corporate learning and development circles.” However, there is no consensus about an exact definition within academic ranks, but most recognise the link between improved financial performance and leadership development.

Although there is no agreement about what ‘business acumen’ means, the term has been on the rise in most areas of professional work endeavor, and particularly in HR. One definition that relates to HR emphasises an improvement in business acumen through an enhanced ability to interpret business data. This definition maintains that HR professionals can make strategic decisions by examining integrated data and therefore improving their “Business Intelligence”. (1) But this seems limited. The view from many experienced HR professionals is that business acumen is not only enhanced by understanding the business numbers, but also by combining this knowledge with time in the business to understand its issues – along with a number of other simple and easy strategies.

Walking in the businesses shoes …

The Next Step’s early HR career specialist group, The Next Gen, held a seminar recently with a panel of senior HR professionals.

These professionals represented brands such as AstraZeneca, Cannon, and Deloitte. The panel described a number of practical and worthwhile ways for HR professionals to build their business acumen and bridge any gaps that may exist. These included: yy Spending time in the business – Whilst it sounds like an obvious comment, but there aren’t many HR professionals that have truly taken this advice to the extent it is intended. The general approach taken by many HR professionals in relation to spending time in the business is just visiting sites or walking the

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floor occasionally. While this is laudable, it doesn’t go far enough.

One of AstraZeneca’s senior HR leaders, Kimberly Elliot says there is nothing like “walking in the shoes” of the business by working with the people that are delivering services to the customers. An example of this in AstraZeneca’s environment involves spending a day working with a Sales Representative as they drive all day from one GP’s office to another. It’s a tough day. In Kimberly’s view, there is nothing like spending a day with employees to understand what the real business issues are.

In other environments, this may mean working a shift on a delivery run with an FMCG or distribution company; working on the floor in a retail or manufacturing environment; or working on a client site in a professional services business. Spending time working within the business, can at the very least, improve a HR professional’s empathy with line staff. It also provides credibility when discussing the business issues with line managers. yy Be involved in business projects – A clear way for HR professionals to be involved in the business is to play a role in business projects, not just HR related projects. This exposure will help the HR professional understand the business drivers. yy Understand the businesses clients – There are business-tobusiness relationships that can be assisted by the HR leaders’ networking between organisations. A good example of this was the head of HR for a business insurer networking with his counterpart in a major construction company. This contact has enhanced the business relationship. It is a powerful example of HR enhancing its business acumen and adding value. yy Read the financial press – There are many ways for a HR professional to be aware of what is happening in the business marketplace and therefore improving their business acumen. But few match the opportunity provided by reading The Australian Financial Review daily.

Simply understanding business metrics will not lead to a full understanding of the business environment. By undertaking a number of simple strategies, HR professionals can experience the business themselves.

The final word

HR professionals who have comprehensive experience of working in their business have a better grasp of the issues. This is also essential to persuade HR’s ‘customers’ to make the right decisions.

If business leaders make the right decisions with HR’s assistance, then obviously the reputation of HR is enhanced and better work opportunities will result. It’s a ‘spiral up’ that can build a HR professional’s career opportunities. While it is not easy taking time out of a busy day (with shrinking HR resources and increased challenges), HR professionals should demand time in the business – even if it is just to boost their career development!

1. Michael Tindall, Product Manager at ExcellerateHRO, and Roselyn Feinsod, Human Resources Consulting Principal at Towers Perrin.

Craig Mason is a Director with The Next Step, a specialist consulting practice in the human resources market.

For information call (02) 8256 2500 or email cmason@thenextstep.com.au website: www.thenextstep.com.au

Recent HR Market Moves supplied by The Next Step

MLC has appointed Rod Edge as Head of Learning & Development. Rod was previously with Unisys where he held the role of Practice Leader – Asia Pacific, Unisys University.

Robyn Nejaim has joined NAB Technology as People & Culture

Scott Taylor has been appointed to the role of Employee

Elizabeth Mullins has commenced as Senior HR Manager for

Relations Manager, Baking Division, for George Weston Foods.

Previously Scott was General Manager, HR & Employee Relations Advisor, for Tabcorp at Star City Casino.

Darlene Winston has accepted the role of Manager People

& Culture with SNP Security. Previously Darlene held senior Organisational Development and Talent Management roles with IAG and Boehringer Ingelheim.

Toby Poore has joined Worley Parsons as Head of

Remuneration. Prior to this Toby was Head of Remuneration and Rewards with Woolworths.

Angela Trent has been appointed AU/NZ Safety and HR

Manager with Electrolux. Previously Angela held various HR generalist and specialist roles with McDonalds.

MSS Security has appointed Martha Travis as State HR & Industrial Relations Manager. Martha brings to the role experience gained in organisations such as Swisslog Australia and Arvato Digital Services.

Business Partner. Prior to this appointment Robyn was with AAPT as Human Resources Manager.

Dimensional. Prior to this Elizabeth enjoyed a successful career with AMP in the UK and Booz & Co in Australia.

Catherine Dekker has accepted the role of HR Manager with

Urban Maintenance Systems. Catherine’s HR experience has been gained within Australian and New Zealand organisations, most recently with Australian Arrow.

Michael Neal has commenced with NAB Technology as HR

Business Partner. Prior to this Michael was in the role of Human Resource Project Advisor with BHP Billiton.

Dallas Mann has joined Tabcorp as HR Business Partner. Prior to this appointment Dallas was with Westmill Foods in the UK as HR Manager Commercial & Organisational Development Manager.

Fiona Kellington Murphy has accepted the role of Director

HR, Western Region with Uniting Care Ageing. Most recently Fiona was with The Just Group as HR Manager NSW/ACT.

By supplying Market Moves, The Next Step is not implying placement involvement in any way.

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news

Page Legal Experts

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Managing Employee Performance in the World of Fair Work

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he expansion of the unfair dismissal jurisdiction under the Fair Work Act 2009 (the Act) from 1 July 2009 means employees are able to make unfair dismissal claims in a wider range of circumstances, and have quicker access to a decision maker than ever before. Reinstatement after an informal hearing is now the primary remedy available under the Act, making the consequences of getting performance management wrong more drastic then ever.

Counselling and discipline procedures are crucial to minimise exposure to unfair dismissal claims, and mitigate the potentially damaging consequence of reinstatement of an underperforming employee.

Develop Key Performance Indicators (KPIs)

Developing fair, objective and achievable KPIs is important in order to manage employee performance and enable objective and constructive feedback in the event of poor performance.

Employers should discuss with underperforming employees: yy what is required yy precise issues and deficiencies in performance yy examples of poor performance in the workplace yy adverse affects of the current performance yy improvements that are required yy options and plans for improvement Employers should ensure KPIs and associated discussions focus on actual performance, rather than personal characteristics of the employee to minimise potential allegations of discrimination.

Discussions should be documented so that a trail of evidence is available if required.

Clear Counselling Procedures Crucial

Employers with more than 15 full-time (or equivalent) employees should develop clear counselling procedures which all line managers are trained to use and follow. These clearly are distinct

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from discipline procedures, which must be followed in the event of serious and wilful misconduct which could result in the summary termination of an employee’s employment. As part of this counselling procedure, employees should be provided with an opportunity to respond to underperformance issues, and clear written warnings should be provided to create a physical record of the circumstances leading up to the dismissal. Written warnings should explain the nature of the problem, how the problem should be addressed, the time frame for the employee to address the problem and the consequences of continued unsatisfactory performance.

Employees should also be provided with any training or resources they reasonably require to improve their performance, and the opportunity to have a support person present during formal counselling meetings. The employer should also have a witness present to take notes, and ensure that more than one person is available to give evidence if required in relation to the process that was followed.

The new laws make the procedural requirement of having a support person vital, as a dismissal may now be unfair if the employee is denied the opportunity to have a support person present during a meeting which could result in the termination of his or her employment.

Code for Small Business

Ensuring compliance with the short and simple Fair Dismissal Code (the Code) will act as a safeguard for employers with less than 15 full-time (or equivalent) employees (small business).

The Code sets out the circumstances in which summary dismissal (without notice or warning) is warranted, namely in the event of serious misconduct including theft, fraud, violence and serious breaches of occupational health and safety guidelines.

A small business can also dismiss an employee for unsatisfactory conduct or performance if the following simple steps are followed: 1. Issue a clear warning that the employee is not performing his or her job properly and must improve to avoid dismissal. Preferably, this warning should be issued in writing.

2. Offer the employee training and support and give them a reasonable amount of time to improve performance.

3. If the employee does not improve, explain the grounds for dismissal in a meeting with the employee’s support person and give them a reasonable opportunity to respond.

What should employers do?

In light of the increased exposure to unfair dismissal for a large number of employers, it is recommended that: yy Small businesses comply with the Code. yy Employers other than small businesses review current counselling, disciplinary and performance management procedures to ensure compliance with the Act. yy Employers consider appropriate training for managers at all levels in relation to implementation of the procedures and management in accordance with the procedures or Code as appropriate.

Fay Calderone is a Senior Associate with MatthewsFolbigg Lawyers.

For more information call: (02) 9806 7412 or e-mail: fayc@matthewsfolbigg.com.au

Introduce theoretical principles

Organisation structure, systems, leadership behaviour and symbols are the tools line managers have at their disposal to assist in the job of building a new culture. It is the human capital managers’ role to ensure the principles are understood by the executive team.

Training & Development

Page 8 Professional Development Experts

THERE CAN BE NO CHANGE WITHOUT BEHAVIOURAL CHANGE

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he process of improving business performance – a fundamental element of line management work – is often referred to as ‘organisational change’, ‘culture change’ or in the past ‘re-engineering.’ Whatever you choose to call the process of efficiency improvement, there will be no sustainable change without altering some behavioural aspects of the people involved.

All effective change processes, whether they are commercially or technically driven, depend on people doing things differently.

MacDonald, Stewart and Burke sum it up perfectly in their book, Systems Leadership (Gower 2007) when they say that “any discussion of organisation change needs to address how behaviour is influenced”.

This is where the human capital manager gets to add value to the bottom line. Their ability to outline the principles of human behaviour, to show how hierarchical and cross functional relationships should work, and to explain how cultures are built produces instant credibility with the line managers. The human capital manager must introduce common principles and develop a shared language to allow line managers to gain a shared understanding of what is required to influence behaviour.

Building a new culture

Cultures grow when groups of people hold the same perceptions of their organisation and its leadership. A common understanding of the systems that impact their work or differentiate them from others is also important. People will form new perceptions if circumstances change. Old perceptions are never far from the surface, but they will fade with consistent management practice.

Cultures cannot be changed, but new cultures can be built. As with anything that is built to endure over time, a plan is required.

Conduct a review of organisation structure

The process by which roles are ordered into a hierarchy is paramount. Each role must be designed to add value to the work of the direct reports, and there can be no blurring of accountabilities. In any group of people where authorities are not clear and accepted, power will become the principle through which the group organises. The organisation’s structure must be effectively designed. Never assume your chart is functional, no matter how tempting. You must interview people to determine if your structure is producing unintended consequences.

Conduct a cultural health check

In order to reach a destination, it is important to know where you are. A cultural health check is a structured confidential interview process that provides the executive team with a picture of how people at all levels view the organisation systems, symbols and its leadership. This process will immediately indicate priority issues.

Formulate a program for change

Based on the information gathered, the accountable line manager must formulate a program for change. The program may include the following steps: 1. Training: people must receive an overview of what is expected of them to improve the business.

2. Restructuring: make necessary changes to the structure to enhance accountability and ensure all roles add value.

3. Systems changes: prioritise poorly designed systems for redesign.

This is not confined to people systems – include all possible systems producing negative outcomes.

4. Leadership assessment: ensure leaders at every level have the capability to improve the condition of their teams.

5. Continued training: ensure all new starters receive training.

Conduct regular reviews

Building a new culture is not a one-off exercise—it requires sustained management practices over many years. Effective measures such as audits and reviews are necessary.

Contributed by Bruce Highfield on behalf of Chifley Business School Bruce was a former founding executive team member for Virgin Blue Airlines.

Build relationships with line managers

Change programs start in the human capital department, but until a line manager is seen to own the program, slow progress or failure will be the probable outcome. Articulate what the manager is trying to achieve – describe what the end state will look like and what people will say about their organisation, their leaders and themselves.

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Phone 1300 CHIFLEY | 1300 244 353 Visit www.chifley.edu.au

Corporate Culture Column Evolving your Workforce

Page 09

Accountability creates self-managed achievement in an organisation

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inger pointing, unclear expectations, poor communication, ineffective teamwork and difficulty retaining quality employees occurs in nearly every organisation. But when customers, competitors or internal changes apply pressure, these problems can inflict serious damage on productivity.

It’s not surprising to see headlines about the ‘tried and tested’ strategy of ‘sacking staff’, particularly when the corresponding articles discuss huge drops in profit and widespread store closures.

As an alternative to stripping out talent, imagine if your staff were self-managing their achievements and hitting goals, despite the market situation. This is one result of an ‘accountable culture’.

Accountability has been an ‘in focus’ idea for many years. Certain sectors of the business world had become so unaccountable that the US government stepped in to force the issue with the Sarbanes-Oxley Act of 2002. But can personal accountability be legislated? Sure, you may follow the rules to avoid going to prison; but true accountability comes from within, not through legislation. You can’t impose genuine long-term accountability on others through fear. But you can foster a longterm accountable corporate culture. The best way to do this is via a grassroots effort.

What is accountability?

The development of a thorough understanding of and a mature relationship with one’s accountabilities in the work place is an essential competency for success in any organisation. Yet despite the fact that accountable behaviour and fostering a culture of commitment are prerequisites to organisational success, the word itself is still widely misunderstood and misapplied.

You can’t force accountability on others – it has to be chosen or accepted by the people within your organisation. People must ‘buy into’ being accountable and responsible. For many, this is a new, unfamiliar way to work. Most importantly, individual purpose and meaning come from assuming responsibility and accepting accountability.

With accountability comes a measure of discipline.

Accountability is the opposite of permissiveness. Holding people

accountable is really about the distribution of power and choice.

When people have more choice, they are more responsible. When they become more responsible, they can have more freedom. That’s what company-wide accountability is all about.

So, how do you build company-wide accountability?

Companies that can clearly identify, articulate, and execute their strategic goals are well positioned to create organisational accountability. To effectively achieve these goals, companies must measure and manage actual business performance against these goals in a highly coordinated manner. Building companywide accountability doesn’t only require a framework or a systematic methodology based on proven best practices. It also needs technologies that make the framework practical to use and implement on a daily, weekly, monthly quarterly and annual basis.

In addition, it takes an external culture and strategy advisor to help you align the culture to the company’s strategy, as they are external to the cultural traditions and will be able to recognise behaviors that will not facilitate the shift required.

Finally, it takes an organisation that is ready and able to accept accountability, along with the freedom that comes with that new mindset. Accountability and organisational change come through a new set of conversations.

When you get to an accountable culture, the feel or ‘flow’ associated with working within such an environment empowers the right individuals to maintain and sustain peak performance and deliver outstanding results. There is a sense of fulfilment gained that makes them want to stay and continue achieving, which in turn causes the organisation to achieve stellar results.

This ensures long-term success.

Building a culture of accountability is a journey, not an event; and accountability is a mindset, not a skill. How people relate to circumstances and one another reveals their level of accountability.

Coaching and holding people accountable are two significant elements of an accountable culture, but they are not the only ones.

The most important message a leader can send is that building a culture of accountability is not about telling people what to say – it is a journey and a way of doing business.

Craig McCallum

www.chandlermacleod.com

General Manager Marketing: Specialist Recruitment & Consulting Services Tel: 02 9269 8879 Craig.McCallum@chandlermacleod.com

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issue 5.10

international

HR TECHNOLOGY

Page 10

Outsourcing payroll and HR Question:

I am considering outsourcing my payroll. What types of things should I consider before selecting a provider?

Answer:

In the current economic climate, outsourcing key functions such as payroll and HR makes excellent financial sense for many organisations. Payroll is an ideal function to outsource, as it is a time-consuming and process-driven task required by all organisations that employ staff.

No matter the size of your organisation, payroll and HR outsourcing offers enormous benefits including risk minimisation, cost savings, reduced exposure to payroll errors and ongoing legislative compliance. Outsourcing payroll and HR can enable small companies to grow, as resources are freed up to perform the core functions that are driving business expansion.

There are several key points to consider which will ensure you are able to maximise the benefits provided by this model and ensure your transition is smooth.

Consider which elements you want to outsource. Do you require a fully managed service where the provider handles all data import, as well as payroll processing and management of enquiries? Is your preference for a provider that performs the processing, with your organisation managing the rest? A provider that is flexible with their service options will allow you to exploit the benefits offered by the solution as your needs change.

Another important aspect to consider is the availability of your data. Do you require access to your data 24/7, including immediate access once payroll is run? Consider the level of employee data you require, and how frequently you will need to access it to ensure the provider is able to meet your needs. Your workforce is one of your most valuable assets, and having access to data such as skills frameworks and leave calendars may be crucial to maximising workforce effectiveness and your investment.

Security of your data is also extremely important. Payroll data is particularly sensitive, and it is important that this information is protected and secure at all times. Some organisations like to store their payroll database on their premises, while others prefer a secure data centre to house their payroll data – whatever your preference, ensure your provider can meet your needs.

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System maintenance and administration should be conducted regularly. You also need to find out how quickly system access can be granted to new users. Auditing is another consideration, and it is a good idea to identify your audit requirements with the outsourcing provider in the early stages to ensure compliance.

The transition to a new system can be troublesome, and working with a provider that has a proven implementation methodology will ease the changeover process and ensure it is as smooth as possible. Depending on the size of your payroll, project management may be required. If your provider is able to provide a dedicated project manager, it will certainly help minimise problems and ensure the project is delivered on time.

Reporting is a key function of any payroll system – whether in-house, hosted or outsourced. Consider the types of information you need to report on regularly, and prepare a wish list of additional information that will ease your reporting burden. To ensure all of your reporting needs are met, it is a good idea to pinpoint how you would like the reports delivered. Specify your layout or formatting needs (for example, PDF or spreadsheet) and how frequently you will need the reports.

The need for historical information also needs to be considered when reviewing outsourcing options. If you decide to migrate your historical data, you will need to ascertain the complexity of the mapping task to convert your old codes into the new system – as well as the volume of data to be migrated into the new system.

Flexibility and scaleability are two key requirements to consider in a payroll system. A system and provider that can grow and change with your needs will eliminate the need to change systems in the future. The uncertain pace of business in 2009 means most organisations require an agile workforce management platform that will support their needs today and into the future. A system that scales well – without any loss of performance as your employee numbers increase – will ensure longevity and protect your investment.

If your payroll extends offshore, a single vendor that can understand your obligations on those foreign shores and can support payroll in other currencies will streamline your global payroll processing.

Vendor reputation and longevity should also be reviewed. The length of time a vendor and product have been operating in the market, along with the size of their client base, are a testament to their suitability and appropriateness to the market in general.

Finally, you must know what your functionality, service offering and ongoing support requirements are. By taking the time to outline your requirements up front, you can fast track the selection process.

Nick Southcombe General Manager Frontier Software Pty Ltd 03 9639 0777 www.frontiersoftware.com

advertorial – right sizing

Right sizing a business A successful ‘right sizing’ process is more than just a reduction in headcount or costs. It is dependent upon improvement to structures, processes and productivity that aim to meet strategic objectives in both the short and long term

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hen it comes to the right sizing of your business, the planning, implementation and change management aspects are critical. Downsizing might deliver short-term savings, but it may not help your business in the long term.

Right sizing allows a business to consider alternatives by reviewing and utilising the strengths of people, products and systems. So how do you right size a business? Here are three areas to review.

Current and future activities

Consider the affect downsizing would have on your KPIs. Research has shown that less than half of businesses that implement downsizing experience improvements in productivity, efficiency and profitability. yy Rather than simply reducing headcount and expecting more output from fewer people, review activities and services currently performed. Compromising on services to clients and stakeholders is a costly, yet common response. Consider which activities can be stopped. What would be the impact? Are there internal dependencies? Would it affect core elements of your business like service levels future revenue generation? yy Review your external spending. Could suppliers provide more without an increase in cost? Suppliers will be keen to keep business relationships prosperous, giving greater incentive to bargain. yy Consider how technology can help. It can be a source of long-term cost saving and

a way of driving efficiency, offering new services and attracting new customers. yy Always ensure safety is not compromised by any reductions.

Current and future organisational structure

Consider how the review of activities and any subsequent changes will affect your organisational structure. yy Understand each role, and identify those that are core to your business – operational, revenue generating and service providers are often critical, so consider other reductions first. Which roles would be hardest to backfill, such as highly-skilled or scarce resources? yy Consider broadening the responsibility of some management roles. Can you increase their number of direct reports, or reduce the number of decision-making levels currently in place? yy Assess the levels of back office operations and support staff. Identify improvements to systems and processes, within functions that do not directly impact business relationships. yy Are there peaks and troughs in business workload? Consider costs over the long term, with better utilisation of downtime through multi-skilling, or possible overtime during peak periods. Consider voluntary flexible work practices. yy Before implementing redundancies to permanent employees, look at costs elsewhere in the business, for example, contracts or temps. Consider the ‘payback’

issue 7.9

time of a severance package. How long could you have employed someone for at the cost of the redundancy package?

Current and future resource requirements

Consider how changes to the activities and organisation structure will affect your resource requirements. Decisions to retain, retrench, retrain or redeploy will be easier with future plans in mind. yy Ensure you have the right number of staff, skills and talent to deliver current and future company goals. yy Assess the risks associated with downsizing, like a loss of a knowledge base or specialist skills. yy Look at the possibility of multi-skilling people to avoid gaps in capabilities.

Assess the transferable skills of your people – can you retrain or redeploy?

Do you need to recruit and bring in new capability? yy Consider how a new structure will impact roles, responsibilities and job grading, and how it may affect those employees you wish to retain.

Conclusion

Right sizing is a less risky exercise than full downsizing. A well thought out process seeks improvement in organisational productivity and effectiveness. While reducing the numbers in your business may initially improve the bottom line, right sizing considers future sustainability. It focuses on areas of your business that provide the greatest return on investment in the current and anticipated future economic environment.

About Astor Levin Astor Levin Pty Ltd is a human resource and management consultancy firm that provides services to a range of private and public sector clients throughout Australia. The team consists of highly qualified consultants with a mixture of human resource management, business analysis and organisational psychology backgrounds with global experience.

Their client base ranges from small business to ASX/LSX listed companies.

Visit: www.astorlevin.com www.hcamag.com

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newsthe experts ask

Need advice?

Ask the experts! We would all like to have experts on hand when we need information. This month, Ari Kopoulos from EmployeeConnect explains how an HRIS can deliver a competive advantage

Q

We have successfully implemented an HRIS over the last 12 months and have obtained some clear cost and efficiency benefits from automation and workflow. We keep hearing how a good HRIS strategy can deliver competitive advantage. How can we get there?

A

It’s good to see you have capitalised on the benefits of workflow and automation. This is a key milestone in your HRIS strategy and signals your readiness for the transformation into a strategic decision making organisation. By that, I mean you are ready to make decisions based on the information collected in your HRIS grouped into major elements. This is the key to gaining a competitive advantage.

Let’s begin with turnover, which is a dynamic process in any business. It is costly, disruptive and can affect your ability to compete – especially when it means the loss of specific competencies affecting design, production and service.

Understanding turnover and its drivers can provide you with key information about managing staffing needs and the associated costs. Find out why people are leaving; whether certain teams, locations or positions are turning over more employees than others; and whether the turnover is seasonal. This will help you streamline your recruiting and retention policies.

You should look at turnover KPIs by company, by position, by location and by team. These KPIs can also be benchmarked against industry and national statistics to assess whether the turnover is acceptable in the current market. Furthermore, you can

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overlay this data on top of demographics such as age, gender and length of service to assess any potential diversity issues.

Employee development can also deliver competitive advantage both by enhancing the skills and knowledge of the workforce and by increasing retention rates of key employee groups. Specific areas of analysis include looking at training costs, usage and effectiveness. Make sure you measure these elements before and after training.

Training also has an impact on retention and performance. So you should correlate the training data with turnover, length of service and performance for individuals, teams and positions.

Measuring training will allow you to build effective career paths, succession programs and facilitate competency gap analysis.

Competitive advantage can also be achieved by ensuring you have the right talent to execute your business strategy.

A fundamental process is needed to establish and maintain positions and job descriptions, including the key competencies, education and experience necessary to successfully perform a job.

Easy access to information displaying the competencies and skills of employees will help you find candidates without the cost of recruitment. Leveraging data within your HRIS can also provide valuable gap analysis, thereby fuelling development plans and the identification of individuals ready for succession. This is a key element to ensure you are never left vulnerable due to the resignation of a top performer.

Recruitment metrics play a key role in identifying successful strategies and

ultimately to determine where to invest recruitment dollars. By looking at historical data you can ultimately direct recruitment investment to the most successful sources and channels. The effective attraction, selection, and retention of candidates will assist in your journey towards remaining productive and competitive.

Controlling costs and maximising the use of dollars spent is a key element in achieving competitive advantage and one that should be tracked in every HR process – but let’s also consider payroll, bonus and reward schemes. These usually represent your greatest expenses. Instant access to this information is critical in determining not only allocation of resources, but also whether your HR policies and practices are delivering a good return on investment.

The right technology, mapped against the right processes and in the right hands, will deliver the maximum benefit toworkforce performance and efficiency.

But having a system that gives instant access to reports and analytics will build a foundation of data-driven decision making and give you the competitive edge that you need. HC

About the author Ari Kopoulos is national sales and marketing director for EmployeeConnect. For more information on EmployeeConnect, visit www.employeeconnect. com

news issue 7.9

Stressful times: legislation will see increase in discrimination claims S

tress-related claims by employees have increased over the last decade. This may become a liability for employers as a result of new disability legislation. The new rules state that the burden of proof is on employers to show they have taken all necessary and reasonable steps to adjust their workplaces so that employees suffering from a disability can work safely.

Lesley Maclou, partner at Harmers Workplace Lawyers, said the Disability Discrimination Act – which was first introduced into Federal parliament last year and passed last month – holds implications for employers of employees dealing with stress-related illnesses and disorders.

“Over the past few years, there has been an increase in the number of stressrelated claims in the workplace in Australia and abroad. Typically, the issue of stress baffles those within an organisation who have responsibility for managing absences due to illness. Stress is difficult to identify, because its effects can be either physical or mental,” Maclou said.

“There is no specific ‘stress’ legislation, but an employer has obligations under health and safety legislation. The new legislation imposes greater obligations on employers when dealing with employees with a disability, and could lead to an increased focus on how employers manage stress-related illnesses.”

Maclou said that employers are now required to prove that they have made all reasonable adjustments to make amends and arrangements for a stress-affected employee to return to work.

According to government statistics in Australia, the total cost of workers compensation claims for stress-related conditions is estimated at over $200m every year. Maclou said that in order to implement practical measures to assist an employee with a stress-related illness to successfully return to the workplace – as well as minimise an employer’s legal risks – it is important for the employer to identify the cause of the original stress or the reason for its exacerbation at work.

An employer must then decide if the contributors to the employee’s stress are within their control. They should also have various strategies and processes in place to accommodate and manage these situations.

Many employers offer their employees access to confidential help via independent third parties. Given all the potential legal risks, and to ensure the safety of all of their employees, an employer must consider undertaking risk assessments and ongoing monitoring. They must also be committed to adjustmenting these circumstances.

Maclou said that employers faced with claims of discrimination from employees who suffer from a stress-related illness will only be able to defend their inaction if they

Getting ahead of ourselves?

R obert Walters’ recent Employee Insights Survey (EIS) of over 400 Australian professionals showed that nationally, 77% of workers expect to receive a salary increase once the market recovers.

The survey, the third in the EIS series, also revealed that workers in NSW were the most optimistic, with 84% expecting

a pay rise. Of all the mainland states, Victorians had the lowest expectations with only 69% of surveyed workers expecting a pay increase once the economy turns.

Of those expecting salary increases, HR professionals were the most modest with 62% expecting an increase in the smallest bracket (1%–5%). Those in sales and marketing were the most optimistic,

NEWS

can prove that the required adjustments to their workplaces would place a significant burden or an ‘unjustifiable hardship’ on that business and its ability to operate.

“Any time an employee takes stress leave, employers should be prepared to take all necessary steps in order to help that employee rehabilitate themselves into the workplace. Failure to do so can mean the employer is exposed to a claim under the new Discrimination Act, or is in breach of its common law and occupational health and safety obligations,” Maclou said. with 57% expecting to receive a pay rise of 6%–20% once the economy recovers.

Bankers weren’t far behind with 50% holding out hopes for a 6%–20% pay rise.

Almost a quarter of IT professionals do not expect to receive a pay rise, but 7% of them expect their salary to increase by over 30% once the economy recovers.

Nationally, 54% of respondents said their employers had instituted a freeze on pay rises, while 46% of respondents said their employers were allowing pay rises. www.hcamag.com

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Don’t be fooled by ‘cheap labour’ L

eading recruiters have urged employers not to take advantage of the flood of candidates into the market by offering substandard remuneration and benefits.

Peter Gleeson, EGM Executive & Professional Recruitment at Chandler Macleod Group, said that good people will always be able to command good salaries – and most employers are willing to pay them. But he added that some employees may compromise in the short term and take roles that they might not normally consider.

Nevertheless, he believes the medium term upswing will see many of these employees leave those roles for opportunities more aligned with their experience and skills.

Some may also take up contract roles they wouldn’t have considered in the past.

“The bottom of the downturn has already passed. We’re not seeing the candidate shortage we experienced a year or so ago, but good candidates are still in short supply and can command a

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premium. Adverts run by companies are pulling greater numbers of candidates, but not necessarily better ones. In fact, a lot of company time is being spent reviewing many unsuitable résumés. So I don’t see companies feeling they are controlling things to a large extent. But candidates feel there is far more competition for roles than there was, so I’m sure they’re feeling less confident when it comes to applying for jobs,” he said.

Jane Adams, group director of Randstad, added that often the industry sector dictates where the power balance between the employer and the employee sits. There are skills shortages in many markets – in the areas of IT, engineering and finance - so some candidates are still in a position to negotiate.

“Certainly it’s true of some industries that pay rates have reduced, and if the economists are correct in their belief that we will recover very slowly from

this downturn then employers can take advantage of the reduced salary costs in their business for the foreseeable future.

In light of the economic environment we’re in, you would expect candidates to have lower wage expectations. Yet many people don’t seem to think the downturn has had a significant impact on business.

It’s about managing their expectations.

Offering incentives – financial or otherwise – may help attract quality candidates to a role if a higher salary is not an option,” Adams said.

workplace flexibility – best practice

issue 7.9

Making flexibility work Human Capital talks to Sharon Caffel, HR manager at Pfizer Australia, about her organisation’s move towards a culture that recognises the value that flexible work practices bring to Pfizer’s 1,700 employees

Sharon Caffel

Human Capital: How far along is Pfizer in terms of offering flexible work arrangements to employees?

Sharon Caffel: We’re looking to implement a long-term cultural change. At Pfizer we’ve had a flexible working policy in place for a number of years, but we found it wasn’t widely accessible. So in fact there was a large gap between policy and practice.

That realisation, together with the feedback from employees and our goal to provide a great place to work, told us we needed to do something about it.

HC: Where was the interest coming from, and what did you have in place?

SC: Initially the interest came primarily from mums returning to work following maternity leave. We provide paid maternity leave, which is great, but it was becoming clear that we needed to offer support to colleagues upon their return. Interest was also emerging from other groups in our workforce, including those with carer and other family responsibilities. It also came from others who wanted help to balance work with other aspects of their lives. The existing

policy was used effectively in pockets of the organisation, and not all employees found it accessible. Furthermore, the policy was quite prescriptive, which meant most people ended up doing job sharing or part-time work.

HC: How did you overhaul your flexibility programs?

SC: Last year we set about trying to reinvigorate our approach to flexible working. Firstly, we recognised that in order for this to be successful it was going to take some time. And secondly, our 150 people managers had to be the main audience, given that they probably have the greatest impact on the day-to-day culture of our organisation.

We wanted to make it easier for people to access flexibility, and importantly, give everybody equal access to it. So instead of providing a ‘one size fits all’ approach, we kept in mind that a person’s needs change throughout their career. This is not just for working mothers but for everyone, irrespective of where they work. So we now encourage people to talk to us about their needs, and together the manager and the employee work out a solution.

Having said that, it is not open slather!

We also built guiding principles regarding its implementation. Each arrangement must be a ‘win-win’ – it’s got to work for the individual as well as the business.

Arrangements will often be subject to trial periods, and the solution must be compatible with Pfizer’s business goals.

HC: How did you convince your people managers this was the best option?

SC: Some people jumped on it and instantly ‘got it’. Other managers found

the approach a little more challenging.

The strategy was to build the competence and confidence of our people managers to deal with flexible arrangements in the workforce. With the help of Aequus Partners, we customised their Flex-e online tool and also introduced new conversation tools, checklists and templates to help managers have the conversation and look for solutions. We use other tools for assessing the impact it has on the business, what communication is required, what extra technology we need, etc. We then designed a blended learning experience and deployed that to the HR business partners to roll out the program to their client groups.

HC: How are you measuring effectiveness?

SC: We’re looking at a long-term proposition to change culture, but we are already starting to track effectiveness through engagement surveys and take-up rates. The groups I’ve worked with have seen increases in requests – part-time arrangements, working from home, job sharing, nine-day fortnights, etc. We’re also looking at retention rates, and the associated cost savings HC: How well prepared are you for the introduction of the National Employment Standards on 1 Jan 2010?

SC: We knew that was coming, but it hasn’t really been the driving force behind our new flexible working program. Our goal is to have a sophisticated, best practice approach to flexible working. What we’ve found, happily, is that we’re well ahead of the game in terms of the NES. HC: How did you work with Aequus Partners?

SC: We’ve been working with Aequus for over a year and we’re very pleased with the results. I like how they work, I like their style, and I hope we will have an opportunity to work with them in the future. www.hcamag.com

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cover story

Everything

must change Organisations that never try anything new when the market is transforming around them are almost certain to perish, but the process of change is often fumbled. Iain Hopkins gets some pointers on implementing change

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W

hether it’s corporate mergers, technological updates, layoffs, new products and services, or even moving headquarters, change often fails. Given that employees and business leaders have been downsized, rightsized, outsourced and insourced within an inch of their lives, the failure rate is hardly surprising. People are suffering from change fatigue.

Is there a way to avoid this weariness?

Human Capital talks to a number of change experts to find out.

Thinking broadly

Di Worrall, author of A Climate for Change and principal of Worrall & Associates, believes there are interesting parallels to be drawn from change on a much larger scale: global warming. Worrall notes that global warming is an example of change that everyone knows about. She believes it provides some important lessons that can address everything that does and doesn’t work about change. “As an example, the first area where we fall over is in the mindset of the people who are leading change. They are not adopting the new ‘sustainable leader’ role that’s going to work in this day and age. The second stumbling block is in the systems we use. We’re caught up using industrial age systems that have been out-of-date for at least 30 years. We’re struggling with what makes for a sustainable business system,” she explains.

The third area, which Worrall maintains is where most of the change will come from, is what’s going on around us. Environmental sustainability is a major issue and affects the way businesses are run. “What’s going to sustain our businesses in the future? We need to look carefully at things like accountability, trust and the environment. How do we make our relationships, our environment and our businesses more sustainable?” she says.

“These are massive areas, with one common thread: we need a new model of sustainability if our change programs are going to work.”

Sustainable change

At this year’s Wharton Leadership Conference, Fiona MacLeod, president of convenience retail in the US and Latin America for BP Products, spoke about why change programs often fail. According to MacLeod, the corporate world is “addicted” to serial change management programs that consume massive resources but ultimately fail to solve the problems they aim to address. She was struck by how many of these change management programs fail, only to be followed by similar initiatives – often before the original program is completed.

MacLeod urged her fellow leaders to ask themselves: “How can we ... free ourselves from our addiction to episodic

issue 7.9

change and move to the much more healthy habit of continuous business improvement?” She compared the phenomenon to a ‘yo-yo’ dieter who loses weight only to put it back on. The reason for this is because he has not come to understand what’s causing his weight gain, or has failed to adopt a healthy lifestyle that would keep the weight off.

Many change management programs are doomed to failure because “the change we are putting in place is not sustainable – and sustainability is absolutely crucial,” she says.

Dr Tim Baker, managing director of local consultancy WINNERS-AT-WORK and author of The 8 Values of Highly Productive Companies: Creating Wealth from a New Employment Relationship, says it is tempting for new managers to look for instant gratification or point scoring. He adds that managers need to be “hard on the change and soft on the people”.

This means that they must demonstrate long-term, unwavering commitment to the change process but empathise with their staff in the adaption needed for the change.

“Unfortunately it’s often the other way round,” he says. “That is, managers are soft on the change and hard on the people.

This means that they can be flimsy on the change project and too tough on people, thereby not committing to the process.”

HR and change Dr Tim Baker outlines the crucial role that HR plays in organisational change: “HR needs to provide the necessary support and expertise to assist line managers to implement successful change management processes – particularly with regard to the human dimension. HR should be the expert in the background, in much the same way as the accountant provides guidance to line managers in formulating budgets. But too often it is the HR department that gets involved directly in the change process. I think this explains the lack of rigour in change implementation for many managers. They need to be accountable and more engaged in the change management process than they are at the moment.”

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How have cover story you handled change?

issue 7.9

We asked some of our previously profiled HR professionals how they have navigated change in their organisation

Sean Edwards, national manager, people, culture and legal at Nissan Change point: Nissan organisational restructure.

“We’ve recently undertaken a significant organisational restructure. We effectively burnt the business model to the ground and rebuilt it from scratch. The focus point is now the end user – the people that buy the cars at the dealerships. We started by looking at our people: what skills and competencies do these people have, what skillsets do we need, and what knowledge will we need for the future?

“I’d suggest HR were the architects of change. Automotive is a very conservative industry.

It doesn’t like change. The best way to integrate change is to make sure you have key stakeholder engagement. You build it ‘out to in’. To overcome that conservatism, we’ve inverted that and built it from ‘in to out’.

So we built the architecture of the business, we identified key stakeholders (for example the managing director and the COO), we got buy in from them, and then we built outwards. It’s not a textbook way to change, but we had to be flexible and adaptable to get it through.”

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Leadership thought leader Dave Ulrich tells Human Capital that in order to achieve sustainable change it is useful to separate events from patterns. “Change is too often an event, not a pattern.

People go on diets, but don’t change their lifestyle. Changing patterns requires stable and sustainable actions that are woven into the daily actions of employees and organisational practices – for example, staffing, compensation, communication and training. Sustainability comes when there are new routines,” he says.

Establishing – and following through on – new routines is easier said than done.

Old (and sometimes subconscious) habits die hard. “There are things that new CEOs will automatically do. They know what the ‘right things to do are because that’s what they’ve learnt. As opposed to saying, ‘hey, I’ve got the opportunity to question absolutely everything’,” says Worrall.

Worrall advocates a new model of sustainable leadership, but this too faces serious stumbling blocks. Part of the problem, she suggests, are the high expectations placed on leaders to perform in a certain way. “Our traditional education tells us we need to control everything. We’ve always been told that the leader is the one who is supposed to have the vision and make the tough decisions. It’s very much a top-down bureaucratic approach,” she says.

The new model of sustainable leadership mindset involves a move away from the ‘controller’ to the ‘enabler’. If a leader is not controlling, what do they do?

They enable things to happen, and they tap into the creativity of the workforce.

They also remove obstacles. “By removing obstacles you allow counter-intuitive change to start to take hold within the people. The key to sustainable change is that it sustains itself,” says Worrall.

There are new leadership models emerging, which break free from what Industrial Age thoughts of what a leader was and how they should act. Worrall cites an Indian company called HCL Technologies (see page 22), which is

following in the footsteps of Brazilian company Semco.

“Semco is questioning the need for one person or one CEO in particular to lead the business. It’s questioning the traditional role of the manager having to know everything, to control everything.

HCL won a Hewitt Best Employer award, so it’s producing impressive results. They are getting the change they want. They are shifting from the need to have a leader with a vision, to something that’s shared.

They are deconstructing the hierarchical structures to allow the creativity, innovation and ideas from within the company to emerge,” she says.

Managers as coaches or enablers ask employees: What is your vision?

What is your answer to the problem? Can you manage yourself? Can you set your own targets?

Indeed, many change programs fail because they are so dependent on the leader – to the point where if the leader takes a leave of absence the whole program comes crashing down. Why? They have tried to control it, rather than spending the time upfront to give people the opportunity to connect with it themselves, and find their own meaning and importance.

“The amazing thing is that when you release the reins, somehow it works.

People do in fact self-organise, and they will generally organise into who does what the best. The old notion of the CEO having to direct something – that’s not necessarily the case. A leader can also emerge naturally. Or, in the case of Semco, a leader can be elected via the people so there will be a number of them throughout the year,” says Worrall.

Leaders without followers

Organisations often revert to old habits because employees do not understand why change is needed, or they lack the tools and training required to sustain the new approach. Leaders may be effective at identifying what is wrong and how to fix it, but less effective at the ‘soft side’ of

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change management – that is, capturing people intellectually as well as emotionally.

“When people know the why they accept the ‘what’ and ‘how’,” says Ulrich.

“But many leaders focus on what to do and how to do it, not why to do it. The ‘why’ or rationale for a change requires both cognitive and emotive cases for change.

The intellectual comes from data and showing what is wrong or could be better.

The emotive agenda comes from capturing feels through experiences or stories.”

Dr Baker adds that managing change is as much about managing the emotional stages of change as it is about the change process itself. Staff go through four emotional stages of change – denial, resistance, exploration and commitment.

Therefore, leaders must design their change management around these four emotions. “One of the challenges for managers is that they do not readily recognise and empathise with their staff. They need to put in strategies to help employees move through these four emotional survival instincts,” he says.

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Ross Miller, general manager, human resources, St.George Change point: Westpac/St.George merger.

“One of the keys has been good communication throughout the business. The St.George communications team is part of my unit, and we ensure our communications are consistent right across the Westpac group and within St.George. We provide employees with good up-todate information about what’s affecting them. Another important thing is that for a large number

Vision and values

Worrall notes that a significant error of judgment made by many leaders is to assume that everyone is somehow aligned with their vision and values. They aren’t – the only vision and values they are aligned to will be their own. “Everybody has the capacity to have a vision. Industrial age structures told us that there were only a few people specially ordained to have vision. It’s not true. If we use the counter intuitive 21st century way of thinking, if I’m actually doing something that’s aligned to my personal vision, I’m 100% into it. All those lovely things we want

“ When you release the reins somehow it works. People do in fact self-organise, and they will generally organise into who does what the best. The old notion of the CEO having to direct something – that’s not necessarily the case” – Di Worrall

of employees at St.George, we wanted ‘business as usual’ during the merger. We gave them the confidence to be able to talk to their customers, but at the same time not get distracted by the merger.”

from change, like discretionary effort and the cultural volunteerism, actually happen if what I do every day is aligned with what I actually want to be doing – however I define that,” she says.

“Step number one, in terms of the leader trying to get everyone heading in the same direction, is to step back and say, ‘here are the facts and figures, here’s where we’d like to go, where do you sit with that and is it something you can connect with?’

Together you develop a common vision.

Creating the opportunity to get that buyin process is the first step in any change program. Let people connect with the change on their own terms,” she adds.

An example of inviting people to make their own connection with change – described by Worrall in her book as a ‘masterclass in the message of change’ – is Al Gore’s film An Inconvenient Truth.

The message in the film is carefully constructed. Despite the controversial subject, the film does not say, ‘this is how it’s going to be and this is how it is’.

Instead, it presents the situation of global warming and potential consequences from many angles. It presents the facts and figures but then asks the viewer the right sort of questions to get them thinking about where they stand. It suggests a potential way forward but invites the viewer to make up their own mind.

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“Invite people to make their own connection and you’re 70% of the way there,” suggests Worrall.

Tips for better change

Many change programs also fail because ownership of the change program rests with an external team of consultants, rather than the leaders responsible for running the business. Leaders only have a superficial understanding of change leave it up to the consultants to take charge – often with disastrous consequences.

“Consultants are not owners of change, but architects,” says Ulrich. “Until leaders feel and personalise the changes, they won’t likely be sustained. People become committed to a change when they understand it intellectually, feel it emotionally, and act on it behaviourally.

Consultants who want to create longterm change need to build intellectual, behavioural, and process agendas within the company so that leaders are fully committed. Consultants are effective when they are not in front of the change, but behind it: coaching and advising leaders to make the changes happen.”

Urlich has identified three levers of change: information, behaviour, and reinforcement.

• Information: surround people with information about the rational for

Robert Orth, director of human resources, IBM Australia/New Zealand Change point: business renewal.

“We’re two years away from being in business for 100 years, and we’ve transformed a number of times – not just in the early 1990s.

As a services and information technology business that’s quite some achievement – you must have resilience to be around that long. I think it’s a fact of business – dealing with changes in the marketplace, and handling the demands and needs of clients, communities and governments.

Clearly you have to set a strategy – what are the needs of your

the change from legitimate and credible sources.

• Behaviour: get people to behave as if they are committed to the change in a public way.

• Reinforcement: when people make the changes, reward them publicly for what they have done.

Open communication is crucial. Basic psychology reveals that people comprehend information in different ways. Some people like facts and figures; some like stories; others prefer the person speaking to them to really know their subject; and some people like to know the other person cares about them. Others need to blurt out their opinion without thinking about it, other people need to digest the information and perhaps share their opinion anonymously later on.

“If you construct every piece of communication this way when you’re trying to communicate to large numbers, then you’ll hit most of your population – or at least most of the population will have the opportunity to connect with the information in the way they know and can hear,” says Worrall.

At the same time, leaders must accept that there will always be people who will never be onboard. The role of a leader or change agent is to decide early on who’s in their environment. Worrall suggests doing

marketplace, what are the needs you have as a business, and what do you have to build as a capability?

“It sounds simple, but I think one of the key tips about change is that sometimes strategy can be simple.

Once you’re clear about that, you must execute quickly and flawlessly.

You need a sense of urgency to drive the change forward.

“The piece that goes with that is you must have your employees with you. How do you engage employees throughout change? No one is comfortable with change.

To harness all their energy and ideas we approached them early in a collaborative discussion about where and why are we going

a stakeholder analysis test: who’s with you; who’s not, who’s on the fence. She goes further: who are the people who are really well connected, who are the people that people listen to, and who’s likely to be a saboteur?

“As a leader, it’s getting back to removing obstacles. A naysayer might just snipe – that could be because you’ve annoyed them somehow. That’s repairable.

But active saboteurs can cause actual or potential damage to programs, processes, or releasing information that shouldn’t be released. You don’t need that,” she says.

A new way of tracking progress

For any change initiative, people like to know which direction they are heading and how progress is being measured. While stakes in the ground are important, Worrall believes the concept of performance management needs to be reassessed. She feels the term performance management literally translates to ‘I’m managing your performance’. It means the manager is controlling the employee, and also harkens back to the industrial framework. “If anything needed an overhaul it’s that. But it takes a big effort to do so – it means the leader is letting go of a lot. This is their traditional stronghold.

Why do I need that control? It’s because

somewhere. A number of years ago we had an online ‘jam’, a term which relates to jazz musicians who all get together and play, and we’ve used that to improve employee engagement. Thousands of people around the world ended up discussing the challenges, issues and directions we were following. Once they’re onboard it’s much easier to move quickly.”

cover story I haven’t led properly in the first place,” she says.

Worrall cites a US-based ‘super coach’ Marshall Goldsmith. Instead of feedback, which is the traditional notion of performance, Goldsmith turns this around into ‘feed forward’. This allows employees to participate in their future, not only once a year but as frequently as they like.

The employee talks to everyone in their surroundings – managers, colleagues, clients – and they develop ideas about how and what they need to work on.

“It gives me more control as an employee. You can tell me ‘I need to achieve this, this and this’, but what motivates me? Where does my energy and creativity best come from? Also, what are the two or three things that I’m going to improve upon?” says Worrall.

Returning to the message of change, this new way of thinking about performance introduces the notion of collaboration. It removes the third party structure and helps to increase personal

accountability and responsibility. “That’s why things actually change – because I’ve got my personal motivation to get up in the morning to actually change something.

I’m energised to change because I’ve got control over it,” says Worrall.

What drives your business?

The past 12 months have been an acid test for businesses. Worrall believes it has forced leaders to question what the driving forces are behind their businesses.

“Are you a business that’s actually being driven by the competitive model – which is the industrial age model? In which case what will you do first? Competition says resources are scarce: ‘I must lead, I must do everything to protect myself and massacre my competitors’. Whereas if my basic model was a bit more current age thinking, it might be that my business is more about creating and innovating. Can I wait for a moment and see if more options emerge instead, of cutting everything to the bone immediately?”

issue 7.9

Book giveaway To receive one of four copies of Di Worrall’s book A Climate for Change, simply answer this question: What is the number one obstacle to achieving your current goals for change?

E-mail responses to di@ humanresourceschange.com.au

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Case Study: change leader

HCL Technologies has embraced change to the extent that the traditional maxim of ‘customer above all else’ has been turned on its head. Now it’s all about the employees. Here’s how they did it The service industry, from fast food to business consulting, has long lived by the mantra that serving the customer is the only thing that matters. The IT service industry is no different. The customer need is often placed above all others – often at the sacrifice of employees and managers. And when economic times grow tough, that same hapless staff member is the first to go in corporate ‘right-sizing’ operations.

Anecdotal evidence suggests that by sacrificing employee welfare to satisfy customer needs, the level of employee cynicism toward their employers has grown and loyalty has diminished. Some attribute this to Gen Y attitudes, but there is no doubt there has been an overall drop in the level of trust between employers and their staff.

Employee engagement consultancies such as Hewitt and Gallop agree that this drop in trust ultimately leads to more disengaged employees and lower customer service levels.

Tackling this issue directly, Technologies, a global IT services company, has embraced a new philosophy: Employee First, Customer Second. This seemingly counter-intuitive strategy has provoked a sea-change at the company, and (believe it or not) greater customer loyalty, better engagement and higher revenues.

Given the pace of industry growth and its dependency on headcount, attracting, retaining and motivating talent is the top challenge for the industry – even in the current economic climate.

The traditional approach viewed employees as commodities and

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placed emphasis on a factory-like approach to project execution. There were no engagement strategies centered on the employee.

New automation-based technologies have emerged to challenge the need for mass labour and, as the outsourcing market has matured, both suppliers and customers are seeking to achieve innovative and transformational value that goes beyond simple cost savings. In many cases, outsourcing customers no longer view IT service providers as mere vendors, but as business partners whose work is intimately tied to the their success.

This shift in the working relationship requires a new kind of IT service organisation – one focused on value and innovation, not just bodies to fill seats.

The Employee First strategy encompasses a variety of elements with the objective of providing a truly unique environment to employees. By treating employees as partners and participants in the company’s success, every individual within the company becomes responsible for providing value to customers.

To make the Employee First concept work, HCL launched a variety of internal initiatives designed to give employees more personal responsibility for the company’s service offerings, and a voice with upper management.

HCL’s enlightened approach to employee development focused on giving people whatever they need to succeed: be it a virtual assistant or talent transformation sabbaticals; expert guidance or fast track growth; inner peace or democratic

empowerment. HCL has developed the Five Fold Path to Individual Enlightenment. This ensures that every employee is given Support, Knowledge, Recognition, Empowerment, and Transformation to help maximise their potential.

Here are some of the initiatives taken at HCL to make Employee First a success: Smart Service Desk HCL implemented Smart Service Desk (SSD), a ticket-based online system that decreased resolution times and provided more transparency across all functions.

Any employee can submit a ticket electronically, which will chart its journey to the related support executive, to the manager if required, and back to the employee with the answer/solution. Over 30,000 tickets are raised and sorted every month.

360 Degree Feedback HCL management instituted reverse accountability – holding the management accountable to the employees as an essential for building a transparent work atmosphere. 360-degree feedback ensures that all managers go through the mechanism regardless of their level in the organisation.

HCL is recognised globally for its ‘Happy Feet’ concept, which means anyone in the organisation can give feedback to senior leaders at HCL, which are published on the intranet for everyone to see. This unique way of bringing transparency and accountability has brought upon a change in attitude and created an environment of trust within the organisation. Currently, over 1,600 managers have made their report public on the company intranet.

Directions As an organisation, HCL believes that it does not get any better for an employee than hearing about

cover story

the company’s policies and visions directly from the CEO and the senior leadership. ‘Directions’ is one such platform to ensure that the leadership is accessible to all employees across the organisation, where strategic decisions are discussed and debated. The annual company-wide event gives employees the opportunity to share their anxieties and raise any issues.

U&I Initiative Launched at end of 2006, U&I is an online forum for employees to interact directly with the CEO. The microsite on HCL’s intranet empowers the employees to pose questions and raise concerns directly with the CEO. Initially, transactional issues such as compensation packages and delayed appraisals dominated the questions, but now the questions have became more strategic in nature, ranging from new opportunities in the IT industry to process innovations within HCL. Over 90% of the questions raised are answered by the CEO himself. Now the CEO has also started the process of reverse questioning, where he poses a question or a problem and the employees respond.

Career Power It is a comprehensive career planning and development program portal, which provides a framework where each employee is empowered to plan a desired career

path/option for him or her. Enabling processes are integrated, providing support to the employee in attaining their career goal.

XtraMiles The unique reward & recognition portal called XtraMiles is an empowerment tool in the hands of HCLites to recognise extraordinary efforts and sterling performances and encourage a ‘Thank You’ culture.

Uniqueness lies in the fact that it allows employees to applaud anyone in the organisation at the click of a button, be it team members, cross functional colleagues – or even the boss. innovation@HCL In a month-long innovation contest held in 2008 to recognise innovations created by various project teams, a company-wide contest was held for project managers and higher ranked staff associated with customerdelivery projects to submit entries to innovation@HCL. The line of business (LOB) heads evaluated ideas on a set of metrics that included cost savings, innovativeness, effective usage of tools, and unique differentiation from the competition. From the 235 entries that were submitted by project teams trying to showcase their abilities across the organisation, 18 of these were rewarded for implementing innovative practices in their projects. iGen was an idea-generation

issue 7.9

portal that allowed an employee to submit an idea aimed at either improving an existing business or rolling out a completely new process. By July 2008, out of 355 ideas posted, 98 had been accepted in areas such as business development, project management, product development, tools, human resources, and finance.

Conclusion While the attrition rate at HCL has been declining over eight consecutive quarters (from 15.5% in December 2007 to 13.4% as on 31 Dec, 2008), the employee/revenue ratio and employee utilisation rate have increased over the same period.

In its most recent quarterly results, HCL Technologies had its biggest quarter ever, recording over US$1bn in revenue and acquired Axon, which is the biggest acquisition by an Indian IT company.

HCL was rated as ‘Leaders’ in North America Offshore Application Services in Gartner’s magic quadrant and listed among ‘the top five emerging companies globally’.

‘Employee First’ is now a recognised philosophy. Fortune Magazine has articulated it as ‘The World’s Most Modern Management’.

The Harvard Business School has written a case study on the transformation at HCL, which is being taught under the Strategy and Leadership curriculum at HBS. And finally, Shiv Nadar, chairman and chief strategy officer, HCL Technologies, in commenting on the results said, “HCL’s growth is founded in the trust that we have earned over years from our employees, customers, investors and other stakeholders which we are committed to uphold.” HC About the author J. Kalyanaraman is head of Asia Pacific operations at HCL Technologies Ltd

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issue 7.9

office moves

Move anxieties

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office moves

issue 7.9

Property and facilities management teams face huge challenges in delivering quick and efficient relocations with scant resources.

HR professionals need to encourage staff engagement during the planning process. Michelle Morss makes a call to arms

I

n a period of economic uncertainty, moves and changes within an organisation often need to happen quickly and discretely. In this market, there is less demand for the showboat relocation extravaganza. In Spring 2009, it would be rare (and some may say distasteful) for an organisation to launch large staff welcome parties, provide celebration t-shirts, free mugs, vouchers and branded goodies to celebrate day one in a new office. With few flagship HQ relocation projects in circulation, moving staff and businesses is all about the bottom line and how the organisation can make its space more cost effective.

However, for most HR professionals, news of staff moves will sound alarm bells. How can this move work in the organisation’s favour without demotivating staff, reducing productivity and ultimately (maybe not today, maybe not tomorrow – but some day) increasing staff attrition rates?

The business

The ever-expanding responsibilities of the project manager and wealth of activities to be coordinated mean that the major office move is rapidly becoming one of the most daunting tasks in modern corporate life.

Whether due to streamlining, restructuring or barefaced retrenchment, legislation and sensible space utilisation require rapid reshuffling, often made with the responsibility of a depleted

and pressurised property and facilities management team. When given the task of project managing an office move, the team will brainstorm a wide range of practical issues that will need to be taken into account. They will rapidly become embroiled in the detail of the move, focusing upon operational requirements, health, safely, environment, filing, storage, IT, telecommunications and all of the numerous services that support the organisation on a daily basis. Planning an office move is notoriously time-consuming and changeable, but these challenges can be multiplied ten-fold for complex organisations that require absolute uptime – such as hospitals, airports, laboratories, trading floors and emergency help centres.

Without denigrating the central importance of such arrangements, it can be easy to lose sight of the ultimate goal. It is not just an office that is being moved, but a whole business. Filing cabinets and IT hardware will be relocated, but so too will the people who bring that infrastructure to life. In this climate, it is their input and welfare that is so often overlooked.

In recent years, move programs have had long lead times and a healthy budget to carefully manage staff through the process – but this is mostly no longer the case.

The individual

As with moving home, moving the workplace can be a stressful and disorientating time for the general

staff base. The effects of this will be to destabilise the productivity of individuals and, by association, their departments.

When a familiar working environment is disrupted, seemingly insignificant issues (printer layout, chair provision, storage allocation, etc) can become highly emotive.

The subsequent staff reactions can become a considerable drain on management, HR and relocation team time, diverting all parties from critical activities.

Some fears may be based upon the memory of a bad experience: previous moves where equipment was lost, filing muddled and workloads increased. Others will approach the move pensively. Even in a buoyant market, staff are often suspicious of a change in their working environment; and in the current economy, staff are terrified about the reasons behind it and what the move means for the organisation.

Current relocations are more likely to be symptoms of perceived ‘negative’ factors: mergers, acquisitions, downsizing and reducing rent often result in a move.

Reluctance to adapt to newly synthesised corporate cultures and bitterness if facing redundancy are common themes that need to be addressed in these cases.

On top of these broad fears of current job security, staff can feel as though they are entering the unknown: Where is the nearest bus stop? How will I get my kids to school? Where’s the nearest bank?

Will I need to move home and who will cover my costs? Very often, a change in www.hcamag.com

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office moves

Relocation tips for HR professionals • Secure a position on the relocation team or be copied in on the minutes. Make sure you are on top of contentious issues before they come to your office door.

• Champion the creation of a communications strategy. Work out what needs to be said and when. Liaise with your internal communications team and promote the idea that even a GFC-driven relocation can be a positive experience.

• Look at the move in the context of your historical data. How will this affect long-term attrition rates? What does the empirical evidence from previous moves suggest? What can you do differently this time?

• Place the move in the context of your retention and succession plan. Who is in your talent pool, and how do you intend to keep them during this process?

• Prepare your HR team to be supportive of and anticipate the personal staff anxieties that may be exacerbated by the move program, as well as the increased workload for the facilities management and property team

location is taken as the opportunity to initiate new working practices such as hotdesking or home working. Even the shift from cellular to open-plan office layouts can cause great consternation, with staff morale plummeting at the thought of a loss of space and privacy.

Often the most emotive issues addressed in a move concern the availability of coffee and the parking strategy for the new site. But the third issue that follows closely is the fear of the undefined role. Most staff will be concerned that a move will increase their daily stress levels. A few may even be concerned that aspects of their daily job will be usurped by the move project team.

The solution

Staff engagement and communication are the most effective methods available to the HR team to combat move anxiety and reassure staff. The move must be presented as an accessible and transparent event, with no hidden surprises or shocks. But it’s important from an HR perspective to know who to target, when and how. Most organisations will have existing communications channels and tools through which messages can be delivered in a controlled, measured fashion. However, many organisations fail to recognise that they need to be marketing the move to their most valuable

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employees: their talent pool. In line with HR’s staff rankings and ratings, the move is a fantastic opportunity to ask for involvement and feedback from the people within the organisation you are most keen to retain ongoing.

Communication is the single most effective way to combat move anxiety and reassure staff. The move must be seen as a transparent event with no hidden surprises. Inevitably there is a political element to most moves, but by voicing and addressing concerns diplomatically, staff can be reassured and morale lifted.

Communications do not need to be expensive or a drain on time and resources.

They can be a GFC-appropriate, simple set of bulletins, posters or an intranet page. The composition of a strong communication should explain who will be required to do what and be honest about any additional tasks that may need to be undertaken (such as filing reductions).

The plan must be designed to manage expectations at each stage. If people are prepared in advance, they are much more accepting of the challenges.

The most best staff communication structures typically involve a combination of formal and informal methods – both personal and impersonal. A strong, accountable, decision-making body should be created to lead the project, with representatives from FM, HR, IT and

other key business areas. Underneath this team, a network of knowledgeable move coordinators across the business can act as a conduit for move related information, both upwards to the relocation team and outwards to their colleagues. Such coordinators bridge the gap between the relocation team and other employees, cascading information and helping to prepare each department for the move.

There are numerous formal communication formats that can be utilised, but fundamentally the current climate dictates that swift and efficient approaches will probably be the most appropriate. The aim is to generate enthusiasm for the program, and to ensure that the move itself is a positive experience despite the gloomy economic outlook.

Avoiding the pitfalls

It is not the responsibility of the HR professional to undertake move management activities, but all too often the fallout of such a program settles upon the HR team. These ramifications can be pre-empted and potentially avoided with gentle involvement in the process, promoting careful communication and staff engagement as required. Every organisation, every sector and every location will have a very different set of concerns and reactions to relocation.

Different working environments, cultures and structures will heavily impact how a move is planned and managed.

However, HR professionals can and should demonstrate similar tactics and manoeuvres irrespective of their organisation. Support the relocation team, engage with staff, communicate clearly and the ensuing malaise of the negative move experience will be delicately avoided. HC

About the author Michelle Morss is the general manager of MoveCorp. E-mail: mmorss@movecorp.com.au

diversity awards

issue 7.8

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issue 7.9

performance management

Avoidance Australian managers dislike performance management so much that poor performance is often left to fester. Human Capital provides some tips on how to do it better

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tactics I

n Human Capital issue 7.7, Ben Deverson, an experienced HR practitioner and now COO of BDO Kendalls, commented on the significant capability gap that exists for many people managers. He noted that organisations, and especially HR teams, need to do more to ensure that authentic performance discussions are taking place in the workplace.

“Performance reviews are tough to do, especially if you have to manage underperformance. However, it’s a gap we need to continue to fill as part of our leadership and succession planning,” he said.

“I often find people will not address the issue. Annual review time will come around, and it’s swept under the carpet. The person is given a solid review, and then we continue to be concerned about their performance when it could have been addressed. This means firstly the person does not know the critical issue they should be addressing; and secondly, there are probably effective and strong performers around that person who are picking up the slack.”

It sounds so simple doesn’t it? Meaningful conversations, open dialogue between employee and manager (and possibly others), detailed feedback and clear objectives. Yet when was the last time you heard of someone actually looking forward to their performance appraisal?

Don’t let it slip

Back tracking slightly, is it possible – given the difficult business conditions at present – that performance management has taken a back seat? Or has the opposite happened (ie, the push for more productivity has resulted in a greater focus on individual performance)? David Fox, principal, The HR Practise, believes the latter is true.

“I think it’s actually become more focused, particularly because businesses are trying to get more productivity out of existing staff. In our business we’ve implemented online goal management and we’re using that to identify what people are working on, and to ensure they are working on the right things.

It highlights where there are any gaps in resources. Other businesses are looking for efficiencies, so they don’t have to cut the headcount but can still save time and get other pieces of work done.”

There are statistics to prove that Australia’s productivity levels are dropping. Research conducted by PeopleStreme indicates that over the last three years sales per employee, and earnings before tax and interest per employee have declined.

“Some of this is being recognised in corporate Australia today – they recognise they aren’t getting the productivity expected, so they’re looking closely at performance management and aligning people to business goals,” says Lyle Potgieter, CEO of PeopleStreme.

Earlier this year PeopleStreme teamed up with RMIT and La Trobe University to gauge perceptions of what performance measurement can Lyle Potgieter and can’t do for an organisation.

The conclusion was that most people don’t have the skills to undertake performance management effectively, and there are also divergent views about what’s expected from it (see table on page 30).

“Executives believe it will get results, but when it gets down to mid-level managers they don’t have the skills and they don’t know how performance management is linked to customer service or sales effort or anything like that. People write a lousy objective and they expect a great outcome, and the employee interprets that objective in 15 different ways,” says Potgieter.

“If you do it right you can change behaviour. But if you do it wrong, nobody changes and it’s a waste of time,” he adds. www.hcamag.com

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performance management

How effectively is your performance management system linked to the following outcomes?

Executive/ senior management(%)

Middle management (%)

Line management/ supervisory (%)

HRM professional (%)

Quality of goods & service

61

12

7

20

Innovative capacity

70

7

8

15

Cost

54

15

10

21

Market share

54

12

13

21

ROI

52

12

15

21

Profitability

53

13

13

21

Efficiency

59

11

9

21

Quality of workforce

62

10

8

20

2007/2008 study by PMIA, RMIT and La Trobe University

Organisational strategy

Goal/objective setting is the most important element of performance management, yet this is an area many managers struggle with.

Rebecca Cross, talent & organisation consulting leader at Hewitt, believes goals should cascade from the organisational strategy. “Even with the current environment, if we’ve accepted we’re not going to get the sales we need, how are we going to ensure we’re best positioned when the economy turns around, and what are the goals associated with that? Goals should be recalibrated to reflect reality. For example, if sales people are struggling to meet targets there’s absolutely no point leaving them at unachievable levels,” she says.

Cross adds that it’s surprising how many organisations have a strategy that is not aligned with the goals they give to their employees. “The disconnect is there to begin with, and because the performance process in many organisations is a once- or twice-a-year activity, it becomes a compliance activity rather than something meaningful. Also, because the organisational strategy may change, particularly given the current circumstances, none of the goals are being recalibrated to fit what the organisation is trying to do.”

The end result? Disconnected employees doing their own thing because they don’t know how they fit in with ‘the bigger picture’. Hewitt research confirms that employee engagement and performance increases when people are connected to the vision of the organisation.

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Step by step

But with so many organisations tightening their belts, or even in survival mode, long-term planning can often fall by the wayside.

How does this affect an individual’s objectives and goals, and are long-term goals even important? Potgieter suggests that most people do not necessarily deal well with long-term goals. “If I say to someone, ‘our five-year plan is X’, they may say ‘that’s great but how does it affect me tomorrow morning’? Organisations should still do their long-term planning, but the people should be tied to what they can do effectively in the short-term. Otherwise the five-year plan sounds good but how do you create concrete steps towards it?” he says.

Indeed, employee goals should be aligned to overarching organisational goals, but this does not mean personal motivations should be discarded. Meaningful conversations with employees will reveal what that person’s skills and attributes are, and where their motivations lie.

One of the challenges Cross and her team at Hewitt have faced in recent years has been related to the talent shortage in certain industries. In their efforts to attract the best candidates, some organisations have attempted to be everything to everyone.

That creates challenges because not all employee individual goals can be met.

“It’s part of the employment deal, the give and the get,” says Cross. “It needs to be managed from the moment the person joins the organisation. Make it clear what they should expect and what the company should receive in return. For example, if the employee wants the opportunity to work abroad – how does that

performance management sit with organisational strategy? Can the two parties meet in the middle?”

SMART goals

Goals should be SMART – Specific, Measurable, Achievable, Realistic and Time-framed. Given the tough economic environment, Potgieter believes now is the time to be calibrating goals. “The start of the financial year should be about the strategy – and the strategy will differ from last year or previous years. Last year the target may have been $150m in earnings before interest and tax, but now people are being more realistic. They’ve told the market they will be doing $100m and the share market has accepted it, so therefore the goals should be recalibrated to meet that. Set realistic expectations; don’t live in a dreamland,” he says.

Success can mean different things to different people, so it’s also important to be clear about expectations. “We advocate setting the goals and calibrating the objectives so that everyone is very clear from the beginning about what ‘outstanding’ means, what meets expectations, and what doesn’t meet expectations. The calibration is as important as setting the goals. Increasing sales by 30% may sound fine but what does outstanding look like? 40% or 31%? We want to take that ambiguity out,” Potgieter says.

Goals should also have some inbuilt ‘stretch’ in them. “A trend we’re seeing in a lot of organisations is rewarding over achievement of moderate goals rather than rewarding achievement of ‘stretched’ goals. That indicates we’re rewarding caution regarding goal setting and not having the courage to stretch people,” says Cross.

Balanced objectives

An objective may be to raise sales by 30%. What stops someone throwing ethics out the window to achieve that objective? In the interests of assessing not just what work is done but also how it is done, many organisations use some form of scorecard approach to performance. Potgieter finds this approach is effective because it can be balanced to take into account values, behaviours and the organisation’s business objectives. “It’s a balance between how I behave and how I execute. It might be called something other than balanced scorecard – but the fundamentals will remain the same,” he says.

The buzz of several years ago – ‘360 degree feedback’ – is also still being used, but in a slightly different way. Now peers, subordinates and managers will be canvassed to assess the employee’s skills gaps for further development. “I’ll ask my colleagues how I went on communication or teamwork or some other capability, and that determines a gap which can lead to a development outcome,” explains Potgieter.

Part of this involves self-assessment, which serves to benefit both the employee and the manager. The employee benefits from the self-reflection of their own achievements, and it assists the manager in their conversation with the employee. “If you’ve got someone coming in who’s a poor performer and knows they’ve had issues, verses a poor performer who thinks they’re great, obviously there’s a different approach you’d take for that conversation,” says Cross.

issue 7.9

Appraisals

Once goals are set and success defined, best practice is not to ‘set and forget’, or for the manager and employee to meet once a year.

Instead, a one-on-one meeting with the manager should occur every month. Potgieter warns that these should be succinct 10 minute meetings, “not War and Peace”.

“There are still many organisations that do a once-a-year appraisal. We tell them to throw those systems in the bin. They are a waste of time. The higher frequency meetings will be where you’ll change behaviour,” he adds.

Fox, who advocates online performance management, says that once constant dialogue is established between employer and employee, the actual performance review should only take place twice a year. “It’s time consuming and if you’re in a business with a call centre with hundreds of employees, for example, it becomes difficult for managers to do it more than twice a year. At the same time, goals need to be continuously updated. If you embed it in the business in tools that employees use and that managers use, there shouldn’t be a need to formalise it,” he says.

Poor performance

With research from Kaplan and Norton indicating that just 7% of people understand their organisation’s strategy*, the environment is ripe for disengagement and poor performance.

Poor performers will challenge any manager but there is a specific process to follow – known as strategy mapping – that realigns employees with corporate goals and gets them re-engaged on their piece of the strategy. Potgieter uses an example: “If I’m sitting down with a graphic designer I should be able to illustrate to them how their work contributes to the department, and then how the work of the department contributes to the organisation, and thereby I can help that person understand their work is important. Strategy mapping links people back to the organisation but it’s important to do it right – otherwise you get people who are disengaged and they become an island of effort.”

Fox notes that the performance review becomes an issue where formal steps need to be taken to improve performance. “If you identify though a performance review that there is a clear performance issue, there should be a development plan in place for the individual that clearly marks outcomes and time frames involved. If it doesn’t improve, it needs to move onto a formal disciplinary approach. The key is to ensure it’s documented, that you’ve given them a chance to improve and they’ve been supported and are warned that continued lack of performance could lead to dismissal,” he says.

Poor performance needs to be nipped in the bud as quickly www.hcamag.com

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performance management

as possible – yet another reason why the once- or twice-a-year appraisal is not sufficient. Hewitt developed a scenario to illustrate this point to clients. The scenario takes an employee in a call centre who has a slight performance issue: they are not explaining a product in a way that allows them to convert a $25-a-month customer to a $55-a-month customer. When the numbers are added up per call over the time, it turns out the manager has delayed in giving the employee feedback. So it’s clear how deep the business impact of poor performance can be.

“For many organisations it’s not as easy to measure that tangibly, but the longer you delay on performance feedback the greater the impact will be. Plus, it’s terrible as an employee hearing about something you’ve been doing wrong at the end of the year when you could have changed it easily six months ago,” says Cross.

“It comes back to manager capability to be able to have the tough conversation. If you’re not engaged, if you’re not motivated, if you’re not connected to the business, why are you still here?” she adds.

Aiming for high performance

Many organisations claim to be ‘high performance’ but what does this term actually mean? Hewitt believes building high performance depends on four key factors: accountability, trust, reward and opportunity.

• Accountability is about setting high achievement goals, providing performance coaching and feedback.

• The rewards piece is about differentiating rewards via performance, and making performance-based reward decisions.

It’s also about delivering ratings and reviews that send the right messages: if you’ve got underperformers you want them to leave the performance conversation feeling motivated to improve; for solid performers you’ll want them to feel successful; for high performers you’ll want them to feel special. “In many

organisations they have a five-scale rating and the middle score is ‘meets expectations’. That means if you get that middle score you feel average, but actually you’ve done everything you were asked to do. If you’re a mountaineer, the goal is to get to the top of the mountain, and if you get there, how do you exceed that goal? Goal setting should be like that. If you meet expectations, it should be a high achievement,” says Cross.

• The trust piece is ensuring the process is transparent, and that the organisation is communicating openly with employees.

• The opportunity piece is building development into every job – directing people towards skills that are going to be critical to future strategy and actively seeking opportunities for people.

Two-way street

More than ever, it’s a two-way street. Employees should be able to drive their performance as much as managers. “Current practice is about cascading from top down, but I think the future will be about bottom-up goal setting as well as top-down,” says Fox. “For HR, it’s a good time for them to prove how they can link the business plan to the people and the HR plan.”

The key to good performance management lies in its execution. Cross notes that an organisation can have the fanciest process and the best systems to support it, but the execution is what matters. “Managers need to have the capability to set goals that are meaningful, to provide feedback that is meaningful, to have the tough conversations, to have the skills to really drive that process regardless of the systems,” she says. HC *Robert S. Kaplan and David P. Norton, ‘The Strategy Focused Organisation’, Harvard Business School Press, 2001

Further information

Read Human Capital’s legal column by MatthewsFolbigg on page 6 for more information on the legal ramifications of poor performance management.

Symptoms of a lack of alignment Lyle Potgieter, CEO, PeopleStreme, outlines the danger signs: • many meetings, no outcome – managers don’t know what to ‘back’ and what not to • lots of organisational noise but nothing gets done, with things move very slowly • employees and managers not engaged – staff turnover increases, low employee engagement scores • overall organisational performance declines – initiatives are slow, projects are late, innovation dies, staff become cynical Why there is little alignment: • appraisal – waste of time but still prevalent • managers set objectives in isolation – do not tie or align to the plan • managers set low quality objectives – eg, ‘improve morale’, or ‘get Dept A working with Dept B’. No objective writing methodology • optional performance management – partial compliance, lack of follow through, no flowdown from the top • no consequences or outcomes attached to performance processes

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performance management

issue 7.9

Case study: Bupa Australia Human Capital talks to Penny Lovett, director of HR at Bupa Australia, about her organisation’s performance management practices Human Capital: Why is performance management important?

Penny Lovett: A strategically designed performance management program drives business outcomes and underpins future success.

Our core program has been designed to motivate and reward our people, while ensuring their effort and direction are aligned functionally as well as within the broader organisation.

Or put more simply, it guarantees everyone is ‘rowing in the same direction’.

One of the most important aspects of performance management is that it embeds organisational goals and cascades them throughout the business.

And while this may seem simplistic, it’s not. For any business to continue to prosper, regardless of its size, it’s essential both business and individual goals are aligned.

Therefore, a good performance management system will channel effort appropriately and reward people in accordance with their delivery.

HC: How does Bupa achieve this?

PL: We achieve this by directly linking all aspects of employee rewards – including base salary increases, bonuses and promotion – to the achievement of specific, pre-determined goals and demonstration of the right behaviours.

Being part of a high performance culture, our strategy in this area resonates with our people. And importantly, it provides them with clarity about their roles and responsibilities – the value of which cannot be understated, given ambiguity can leads to demotivation.

Our performance management system also incorporates a structured approach to developing the skills and performance of our people, which delivers positive business outcomes.

HC: What makes a good performance management system?

PL: In order to truly harness your workforce, you need to channel their

energy and focus. Therefore, an organisation’s ability to set reasonable and achievable goals will inevitably determine success or failure of any performance management system.

We achieve this by setting overarching business goals and objectives that incorporate ‘stretch’ potential, through differing rewards for the achievement of targets at three different levels.

Equally importantly, we incorporate ‘team goals’ to facilitative people working together to achieve functional goals. Frequent individual and team discussions also ensure there is buy-in to these goals, which are the driving force of their output and behaviour.

The importance of this approach cannot be overstated, given the Achilles heel of many performance management systems is that they are underpinned by ambiguous, unachievable or unsupported goals.

At Bupa, we also agree all goals at the start of each financial year, and design them with enough ‘flex’ so they can be updated as the year progresses to accommodate any economic or business changes.

Regular formal and informal discussions with employees are also pivotal as they enable the business to help manage, and provide feedback, on how people are travelling. We achieve this via a number of mechanisms including monthly one-on-ones, annual self-assessment and organisational survey feedback.

Importantly, this approach underpins a forward-looking culture that engages and informs staff, while providing realistic targets for them to strive towards.

HC: How do you measure success?

PL: Measuring success is the easy part of the equation – it all comes back to the original objectives.

We achieve this by establishing ‘SMART’ objectives early in the performance period and thoroughly communicating them to all stakeholders.

HC: What performance management system do you use? Why? PL: Bupa uses the balanced scorecard approach, which is an appraisal system that incorporates SMART goals and links individual behaviours to the organisational vision and values. Behavioural measures are also incorporated to measure the ‘how’ in conjunction with the ‘what’.

Living the values, or ‘walking the walk’, leads to more handsome rewards via the application of a multiplier – positive or negative – onto actual achievements.

And while all of our people have organisational goals built into their scorecards, the weighting of these goals increase as you progress through the hierarchy, reflecting the reality that our managers have direct ownership of driving our key organisational results.

Importantly, this reduces silo thinking, encourages a high level of crossfunctional cooperation, and breeds a high-performance culture focused on organisational success – or ensuring everyone is rowing in the same direction.

About Bupa Australia Bupa Australia is a leading health and care provider, and covers over three million Australians. It operates in every state and territory under the brands MBF, HBA and Mutual Community. www.hcamag.com

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HRIS – performance management

Implementing a performance management system? Avoid these mistakes!

Choices, choices

Australian companies are adopting performance management systems to help optimise their workforces in this tough economy. Here are some tips on how to do it well – and the traps to avoid

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n efficient and effective performance management system provides benefits for organisations from greater workforce productivity and retaining top talent, to increasing operational efficiencies and lowering HR costs.

Here, Taleo Australia’s consulting services director, Ian Wood, lists the 12 biggest mistakes companies make when implementing such a system. He offers guidelines on how your business can address these pitfalls – or avoid them altogether.

Mistake

#1

Keeping managers in the dark

Organisations that struggle with user adoption often haven’t taken the time

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to adequately tell their managers about the decisions that went into selecting the performance management system and the benefits of using it.

Fix: Often, managers will perceive a new performance management process or system as yet another burden or distraction. They think it’s something happening to them that makes their life more difficult. Communication and training that focuses on the benefits to the manager of using the system can help turn resistance and fear into acceptance and excitement.

Mistake

#2

Introducing too much change too quickly

Transforming a performance management system touches nearly every aspect of the organisation and can take years to accomplish. Introducing too many changes quickly runs the risk of overwhelming managers and employees.

Fix: Focus efforts on a few key outcomes (eg, reviews completed on time and all employees receiving them) and show success in those areas. Performance management systems can be configured with hundreds of options and features that

aren’t used because their value is neither established nor understood.

Mistake

#3

Creating complex performance review forms

Performance management systems have been designed with ease of use in mind but, too often, HR is so enamoured with the bells and whistles available that they configure review forms with too many options which end up confusing (and losing) users.

Fix: Keep it simple. Just because the online review form or system has a particular option, button or drop-down menu doesn’t mean you need to include it for everyone in every circumstance.

Approach system configuration with the specific end-user in mind. Most performance management systems support role-based workflows, forms and processes.

Mistake

#4

Underestimating change management

Configuring the software is only one part of the work needed to successfully implement a new system. Understanding the change management issues for both managers and employees is just as important. If you ignore the ‘people issues’ users will resist change because they don’t see the benefits of changing their behaviour.

Fix: Develop a solid communication and training plan for senior management, HR, managers and employees. Don’t be

opposed to fielding questions, complaints, resistance and excuses for why things won’t work. Dialogue is critical to understanding what could be sabotaging the project, and offers an opportunity for users to take ownership of the process and avoid feeling as though this new way of doing things has been thrust upon them.

Mistake

#5

Failing to adequately plan

No organisation would attempt an enterprise-wide rollout of a performance management system without a plan. Often, however, the things that are not planned for can stall, delay or even kill a successful implementation. Have contingency plans in place for delays, technical issues and end-user resistance.

Fix: Get together with peers who have gone through an implementation.

Ask your vendor to connect you with a community of successful users willing to share their experience. Plan to roll out functionality in phases that can be monitored and adjusted and expect the full solution implementation to take months, not weeks. Consider what would happen if the system was not fully operational for the next review period.

Mistake

#6

Keeping end users out of the configuration process

One of the biggest challenges organisations face when selecting and

implementing a new system is balancing the wants and needs of the managers and employees with the needs of HR and the business. However, cutting managers and employees out of selection, evaluation and set-up processes can have serious effects on a later adoption. Allow end users to experience the solution and be open to their criticism. Too often, HR falls in love with the ‘back-end’ functionality and shuts out the concerns of end users.

Fix: During the evaluation process ask vendors to stage a demo site geared specifically for managers and employees.

Often, vendor demos focus on what the system can deliver to HR and management.

None of those features will deliver value if people aren’t using the system.

Allow a select group of managers and employees to use the system as they would when implemented, and incorporate their feedback into your selection and configuration decisions. During implementation, allow a representative team of managers and employees to participate in the configuration of the system.

Mistake

#7

Failing to ask questions and uncover issues

Configuration and implementation of a new software system is often the highest point of disruption. Often, there is a time crunch and an impending review cycle approaching creating a stressful environment. Once completed, HR often breathes a sigh of relief, thankful that the implementation ‘issues’ have been resolved. www.hcamag.com

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HRIS – performance management

But this is a critical time to continue to gather feedback and uncover hidden issues.

The technical and functional issues will have been easily detected and solved; it is the people issues that now need to be uncovered and addressed. Some users may only use the performance management system a few times a year, so it is critical to continue to ask for feedback and uncover user issues – as those who are frustrated will most likely not speak up, and will simply stop using the solution.

Fix: Create a feedback survey that can be sent via e-mail or completed online to regularly solicit responses.

Establish an ongoing, regular forum that allows managers and employees to offer suggestions for improvement. Creating an environment where managers and employees don’t feel as though the system or process is being ‘forced’ upon them will turn nagging and resistance into problemsolving and solution-building.

Mistake

#8

Not establishing links to business objectives

Establishing and communicating the business objectives must continue as you move through phases of implementation and adoption. The business objectives may change over time (phase I - process efficiency; phase II - reviews for all employees; phase III - competency gap analysis for career development) but the need to clearly establish, communicate and measure the results against those objectives will not. Too often, organisations lose sight of the business objectives (ie, improving the employee experience) and users become unclear as to ‘why’ they should make the effort to use the system.

Fix: Like any goals, the goals of the performance management system must be specific and measurable. It is equally important that the objectives be defined and communicated in terms of specific business outcomes. Completing all reviews on time, or reducing the number of transactions between HR and managers due to incomplete or inappropriate reviews,

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may be primary goals of automation.

But those objectives alone don’t rally the users around a meaningful cause and almost always carry punitive, rather than inspirational, motivation. Consistently strive to communicate how the performance management system supports the success of the business. In the example of completing accurate and comprehensive reviews on time, there are a number of outcomes that support the goals of HR. To inspire users (and your CEO) also include the outcomes that support the goals of employees (career advancement), managers (more effective teams) and executives (winning against the competition) every time you talk about the system.

Mistake

#9

Unclear roles & responsibilities

Often, organisations assume that automating the performance management system simply means transferring the responsibilities of those administering and executing a paper-based process to ‘users’ who will perform the same basic tasks on a computer. It is important to understand that implementing, administering and utilising an enterprise performance management system will require new roles and responsibilities, not just in HR, but throughout the organisation. Even the most basic deployment may require jobcompetency development, form design, approval process design, and a host of other system configuration decisions that influence the efficiency of the system.

Fix: Create a project plan that goes beyond indentifying IT and HR resources needed to implement technical parts of the system. Identify those in other parts of the organisation who will be needed or affected by the new system. This can include: organisational development resources which address change management issues;

managers or employees needed to help define the job competencies; compensation resources that may need to review market data on current positions; senior management who may want to define the approval processes; and recruiters who may be need to describe job opportunities with the organisation in a completely new way. One thing is certain: automation will require more participation, not less.

Mistake

10

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Lack of buy-in from senior executives

Executive sponsorship is often a necessary first step in moving the organisation to an enterprise performance management system.

Buy-in from key executives is frequently needed for budget approval and to get organisational attention for HR projects.

But that doesn’t mean senior executives are necessarily brought into the concept of creating a performance management culture (see Mistake #12). Until senior executives participate it is just lip service.

Fix: Senior executives may not care about the specific features of the performance management system, but they will most certainly care how performance management impacts the bottom line.

Create a set of reports that show trend data relating to important business metrics such as reduced costs, faster time to market, or improved customer service scores due to improved employee performance across the organisation. Before the system is implemented, ask your vendor to put your CEO or other senior executive in touch with other C-Level executives who can explain the benefits they’ve experienced.

Mistake

11

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Ambiguity about what to measure

Measuring performance can mean many different things, even

HRIS – performance management within the same organisation.

Evaluating skills, competencies, goals, and outcomes for both individuals and teams are all valid methods of measuring performance. However, it is crucial that whatever performance metric is chosen, employees and managers must understand how to observe, measure, and improve performance. Inconsistent and contradictory measurement can lead to confusion and mistrust as employees may feel the system is unfair or biased.

Fix: One of the first steps in rolling out the performance management system will be to examine your existing job descriptions.

This can be a major undertaking, but a critical step that will pay major dividends.

Every employee needs to understand the duties and responsibilities of their job and on what basis their performance will be measured. This forms the basis for subsequent decisions affecting compensation, advancement and career development.

Mistake

12

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Failure to establish a culture of performance

A culture of performance means more than implementing an enterprise performance management system or completing employee performance reviews.

Creating a culture of performance often requires a dramatic shift in the attitude of an organisation towards its employees from one of a ‘workforce’ to one that values unique contributions, recognises strengths and invests in developing weaknesses, and understanding the value of each individual. As noted, executive buy-in is an important ingredient – but the critical element needed to influence the culture is the development of the manager-employee relationship. Too often, managers are not given the tools, training or support they need to be successful in this new relationship with their employees.

The result is the abandonment of a process that doesn’t seem to be

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working, and employees who are left wondering what happened to their performance management.

Fix: Without a cultural change, performance management may never evolve from the annual performance review. Managers need to meet with each of their employees and discuss performance expectations, goals and objectives, career development, and more.

Managers need to become mentors, coaches, and teachers with the employees’ performance top of mind. Invest in manager training and development and provide support for those who are uncomfortable with these types of conversations. HC

About the author Ian Wood is Taleo Australa’s consulting services director. For more information on Taleo, visit www.taleo.com

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teambuilding

Score!

Building high performance teams

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teambuilding

issue 7.9

Author Bill Lang outlines a five-step process for building skills, teams, and businesses

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uzzwords regularly come and go in HR, but one term that is never far from the thoughts of HR practitioners is ‘team-building’.

The reason is simple: you can have the best people and give them the best training possible, but if they don’t interact effectively then they will never achieve their full potential.

Why do teams exist?

Sport is a great analogy for the success (or otherwise) of business teams. As the old saying goes, ‘a champion team will always beat a team of champions’. Something magical happens when you unite individual, disparate parts into a collective whole. If it is done well, the whole can achieve far greater outcomes than the individuals could on their own. And being social creatures, people are naturally happier and more engaged if they feel like a part of a team of like-minded colleagues.

The ultimate team-building aim of a team leader or manager is to get all of the team members working towards one common objective. It gives the team a clear sense of purpose. It provides the carrot which motivates the team to continued improvement. It reduces wasted effort, as the team is able to focus on the most important activities. It helps team members appreciate the importance of their role – and that of the others in the team – in achieving the objective. All of this builds team unity.

Throughout my career as a business improvement consultant, entrepreneur and business owner, I’ve grappled with how

to improve team performance. I’ve also been fascinated by recent neuroscience breakthroughs that provide greater insight into how individuals can improve their effectiveness in developing new skills. The two are closely linked – if your team is going to continually improve, individual members need to build skills. This is far easier to achieve (and, importantly, embed into changed behaviour in the workplace) if done within a supportive team.

Simple systems work

To help others benefit from my leadership and team-building experience, I set about condensing the concepts into a set of practical, repeatable steps that was broad enough to serve the needs of as many people as possible.

The result is my new book: Scores on the Board™– the 5-Part System for building skills, teams and businesses (see boxout below).

‘Scores on the BoardTM – the 5-Part System’ The book came about as a simple way to illustrate how people can utilise the system – predominantly to build a skill, a team or a business. It’s written as a life and business fable that can benefit everyone – from front line employees through to the CEO. All employees will benefit from learning about the system, wrapped up in this entertaining and easily digestible tale.

One of several key themes within the book is creating a high-performance team. This theme is explored in a number of contexts: • A Gen Y character who becomes a first-time manager and teacher of an Under 11s soccer team.

• An HR manager helping a senior executive make major behavioural changes.

• A senior manager that is trying to become a more engaging leader and better role model.

• A small business owner that is building a business and a small team.

Other themes covered throughout the book include: • Improving employee engagement – simple tips for employers and leaders.

• Leadership effectiveness and team improvement.

• The implication of neurological breakthroughs for leaders, and the concept of emotional leadership.

“Why the soccer ball?” I hear you ask. As mentioned earlier, sport is a great metaphor for business. As the executive coach character points out, top line professional sport is one of the most scrutinised activities today. In particular, there are lots of correlations between a coach trying to get the most out of individuals and harness their collective power, and a business leader trying to do the same.

Download your free chapter at www.scoresontheboard.com/thebook

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teambuilding

Case study: the best team in the world Contact centres are one of the hardest team environments to foster employee engagement. Team members are often casual, paid a basic wage, and under constant pressure to reach targets.

And team leaders can be quite inexperienced in people management, and often learn their leadership skills ‘on the job’. But forward thinking HR leaders understand that if employee engagement is high, performance and profit follow. Attrition is the major problem for employers of contact centre staff. Significant resources go into recruitment campaigns, selection and training, but attrition is inevitable due to limited career paths and shortterm attitude of many employees.

Key issues Kevin Page, head of contact centres at National Australia Group Europe (NAGE), is in charge of three call centres housing 800 staff, servicing the Clydesdale and Yorkshire Bank brands. Two years ago its operating costs were 25% higher than the market average, with an occupancy level (how busy customer service agents are) of just 50%, compared to an industry average of 85%.

Despite these statistics, the greatest influencers on performance were employee engagement, attrition, absences and employee satisfaction.

Up to 12% of employees were absent on any single day. Annual attrition rates were at 65%.

What they did Organisations that have turned around their call centre cultures have one thing in common: they stopped treating their people like cogs in a big machine and started treating them like valuable members of a team.

NAGE’s contact centre introduced a new people program. Page also implemented a people performance improvement tool called Scores on the Board™ in the call centres. The tool is based on the business theories known as the Service-Profit-Chain and

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the Balanced Scorecard. In summary, if employees feel valued and involved, customers have a great experience dealing with your organisation, which results in higher profitability.

“Scores on the Board™ has been the backbone of our program,” says Page. “The program is designed to improve a team’s motivation, selfmanagement and performance.”

The system encourages individuals to run their part of the company like a small business. Team goals are based on four main KPIs: engaged staff; satisfied customers; decreased expenses or increased productivity; and increased revenue.

The team analyses staff and customer feedback and tries to identify the reasons for any performance gaps, then devise action plans to close the gaps.

NAGE are passionate about listening to their employees. “Our staff started to treat their jobs more seriously. They felt their role was important and felt better about themselves,” Page says. NAGE saw improvement in its retention and absenteeism statistics within three months, with a dramatic turnaround over 12 months.

Results NAGE’s spectacular turnaround in productivity, profit, engagement, absenteeism and attrition over the last two years is attributed to improving employee engagement. Within 12 months, recruitment and training costs had plummeted. Attrition dropped from 65% to under 40% and absences went from 12% to 5%.

Page says that a 10% decrease in staff turnover would have saved him £20K (A$40K) in recruitment fees alone. “The cost of the program has been inconsequential when compared to the benefits we’ve derived from it,” says Page.

The turnaround culminated in NAGE being named the best call centre (250+ seats) in the world.

There is a close correlation between the steps individuals should follow in order to develop a skill, and the steps a team should take to improve its performance.

In fact, these steps can be applied to just about anything.

The case study (see boxout, left) demonstrates that when such a simple system is used at all levels of the organisation – from casual employees through to the CEO – amazing things can be achieved. If senior management use such a performance improvement tool, it signals to the rest of the organisation that the company is committed to continual improvement – and that no one is above bettering themselves.

I’ve refined the process into a simple five-part system: 1. Vision 2. Goals 3. Feedback 4. Gap analysis 5. Actions The system can be implemented in different ways depending on whether you are building a skill, a team or a business.

(The book goes into greater detail about each step, and provides specific examples to help you implement the system as part of a team-building program.)

Let’s look at each of the five parts when the system is used to increase team performance.

Vision

As stated earlier, the ultimate teambuilding objective of any leader is to get the team striving for a common objective or a common purpose. Just as organisations have a vision which they aspire towards, so too do high-performing teams have a common team vision that drives all actions within the team. A vision provides a compelling picture of the future that teams can work towards. It should be concise and emotionally meaningful to the team. It should also be aspirational, representing a ‘team utopia’ that will be difficult to reach.

Team members should drive the creation of the team vision to ensure each team member has an emotional investment in striving to reach it.

teambuilding

Using the vision as a focus for developing goals and action plans ensures the team will remain focused on what is relevant and important.

Goals

An individual or team can get closer to its vision of ideal performance by targeting smaller and more attainable milestones along the way. Teams will always have targets thrust upon them, but it is more empowering if the team can also set themselves bite-sized, attainable goals that help motivate and provide a sense of achievement.

Goals also provide clarity about what the team will focus on in the short term.

Goals should be SMART: specific, measurable, attainable, realistic and timely.

The right type of team goals maximise the probability of the team achieving its organisational targets set by senior management.

Feedback

Feedback is a vital component of the system. It provides external information that enables the team to objectively assess its performance. The team should gather feedback from both internal and external stakeholders in a regular, systematic fashion. Get a rating of your team’s performance from these stakeholders, and always ask what you could do to improve the score.

There are a range of options to help you gather performance feedback, depending on your type of team.

Feedback mechanisms range from simple feedback cards, to wireless touchpads in retail outlets, to online surveys which provide both qualitative and quantitative assessments for team members Teams require more than 360 degree or pulse check feedback – they require specific and very regular feedback on their progress towards their goals.

Gap analysis

Periodically, the team should compare where it is now (determined by the feedback received from internal and external stakeholders) to where it wants

to be (the team goals). The team then needs to identify the causes of any gap, and determine possible solutions. In the Scores on the Board™ system, we suggest separating the causes into two groups: those within the control of the team to fix, and those outside its control. It is important to only focus on the causes the team has control over, to avoid wasting the team’s energies on futile activities.

Gaps within the control of the team can be used to form the basis of your actions.

Team leaders should refer factors outside the team’s control to those who can help deliver a solution.

Action

Having sought feedback on team performance and identified gaps between current and desired levels of performance, the team can now develop an action plan to tackle the causes of the gaps that are within its control. Typically these action plans are developed, discussed and agreed to as part of a regular team meeting. Action plans should be simple and pragmatic, and designed specifically to bridge the gap between the team’s goals and their current performance.

Clearly denote what the task involves, who is responsible, and by when it is to be completed (be sure to set realistic time frames). Tasks should be displayed prominently to remind all team members of their obligations.

Scores on the Board™ is guaranteed to work if you stick to the system.

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Neuroscience and the New Leader

I’ve been captivated by the steady stream of neuroscience breakthroughs that have revolutionised the way we understand ourselves and others. The implications of many of these insights into interpersonal interactions are particularly applicable to leaders. Throughout the book, I explore several brain functions that science now recognises govern hitherto vague, intuitive aspects of being human: the importance of empathy; the contagious nature of emotions within a team; the way the minds of truly engaged team members can fuse together as one entity, like a flock of birds in flight; and the implications of body language and ‘mirroring’ behaviour.

Team performance improvement starts with you As the wise, Yoda-like mentor Fred says to David in my book: “Sometimes you act so loudly that I can’t hear what you’re saying.” Actions speak louder than words.

HR departments should lead from the front and set the standard for the rest of the organisation. Challenge your people to become a high-performing HR team of world-best-practice standard (your team vision). Implement a simple cyclical system to drive continual performance improvement. Role model your team on the attributes of a high-performing customer service team – this will help you set effective goals and actions to drive your progress. HC

About the author Bill Lang is the author of Scores on the Board™ (Jossey-Bass, $29.95).

He is the CEO of Bill Lang International, which provides business improvement solutions to organisations operating in over 50 countries.

More recently, the team at Bill Lang International has helped thousands of business teams around the world increase their performance through implementing the Scores on the Board™ system.

The Scores on the Board™ system is licensed to individual teams, usually as part of an organisation-wide performance improvement initiative. For information on Scores on the Board™ workshops, or to get your Learning and Development people accredited as Scores on the Board™ consultants, visit www.scoresontheboard.com, e-mail info@ scoresontheboard.com or call (03) 9473 3688.

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international IR

War

at work From boss-nappings to peaceful protest, the financial crisis has put industrial relations back in the spotlight internationally. Human Capital takes a look at examples of dispute resolution from around the world

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B

eing the boss of a firm isn’t easy.

The job has become even harder in today’s economic climate, as employers across the world are forced into job cuts and salary reductions.

This can be risky business – especially if you’re a boss in France. There, workers are using kidnapping as a leverage tool to demand better pay-offs and conditions.

Luc Rousselet, director of 3M’s French operations, was held captive for two days and two nights in his office after announcing a series of retrenchments.

Angry workers only withdrew their blockade after the company agreed to renegotiate their severance packages.

He has so far been the most famous ‘boss-napping’ victim since the economic downturn took hold, but he’s certainly not the only one. Others to feel the industrial relations war on a personal level include the billionaire boss of the Gucci fashion brand Francois Henri. His car was surrounded by angry workers as it tried to leave Paris earlier this year. French riot police were eventually forced to clear an exit path for him.

So-called ‘boss-napping’ is not a new phenomenon. It has been a part of union negotiating tactics in France since as early as 1968. The Henri example is one of the few in which police got involved. More often, there is a tacit acknowledgement that the incidents are part of the negotiating exercise. That is true to the extent that there is rarely any violence involved.

Typical or otherwise, it is clear the global downturn has brought about an increase in worker militancy in several countries. The most extreme examples are possibly taking place in Europe, but Asia is by no means immune to the rise.

On the streets in China

China’s economy has continued to grow throughout the downturn, but that growth has been segemented. Many industry sectors, particularly the export-driven manufacturing industry, are shedding workers. And with many migrant workers returning home to China’s cities, unemployment – and the threat of it – has become a significant issue.

international IR

Luc Rousselet, director of 3M’s French operations, was held captive for two days and two nights in his office after announcing a series of retrenchments Across the country, China saw more than 58,000 strikes, street protests and unauthorised road blocks in the first three months of this year. Hong Kong agencies monitoring political stability on the mainland say 2009 is likely to be a record-breaking year in this respect. If the trend continues, some 230,000 incidents are likely to be recorded. That’s a massive increase when compared with the 120,000 reports last year and just 90,000 in 2006.

A large majority of the actions have involved workers protesting employmentrelated threats and decisions such as salary cuts and retrenchments.

There are very few independent trade unions in China. The All-China Federation of Trade Unions (ACFTU) governs the officially recognised bodies.

The ruling party bans independent operations. The ACFTU acknowledges the downturn may be cause for unrest, and it is working closely with the government to minimise the fallout for workers. It has provided employment training and other services to nearly 10 million workers since the downturn first hit.

It has also benefited from new labour laws, introduced last year, which force most employers to create an ACFTUaffiliated union on site. The umbrella body expects to gain an extra five million members this year, up from 66 million at present.

Authorities hope the tougher body will be able to represent workers fairly but peacefully. Yang Zhiming, Vice Minister of Human Resources and Social Security, says increased mediation and arbitration in labour disputes will help businesses “ride out the hard times”. He does, however, advise that safeguarding workers’ interests is also a priority.

Hong Kong’s guarantees

Away from the mainland, things are a little different. The Hong Kong Federation of Trade Unions (HKFTU) offers workers a channel to air their grievances.

It led this year’s Labour Day processions in which thousands echoed calls for employers and the Hong Kong government to directly protect employment and the rights of workers.

Matthew Cheung Kin-chung, Secretary for Labour and Welfare, says the Hong Kong government seeks to forestall excessively low wages and to criminalise the non-payment of Labour Tribunal awards. His Minimum Wage Bill and Employment (Amendment) Bill are scheduled to be debated in the Legislative Council within the current session.

Cheung says continued employment and new job opportunities are high on the government’s agenda. To reduce the impact of the financial turmoil, it is now implementing a series of measures to stabilise the financial system, support enterprises, preserve employment and create jobs, he said.

Singapore style

Singapore has been quick to tackle the economic crisis in its own way. Its ‘tripartite’ approach to labour-management relations provides a consultative platform for industrial relations issues to be addressed, with employers, unions and government all taking an active role.

This has helped employers to implement alternative ways of managing excess

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manpower during the downturn.

Retrenchments can only be made as a last resort.

“I would say that it is the close cooperation and working together with the government, unions and employers that has helped to stabilise and strengthen industrial relations in Singapore,” said Koh Juan Kiat, Executive Director at the Singapore National Employers Federation.

Freezing of headcounts and annual leave clearing have been more common approaches in Singapore. These less drastic strategies are also easier and cheaper to implement.

In this way, organisations looking to reduce headcount allow for natural attrition in the first instance: non-renewal of contracts or non-replacement of resigned positions.

Other strategies have included shorter working weeks, wage reductions and the redeployment of staff around the organisation.

“In implementing any of the costcutting measures, management is urged to lead by example and adopt the principle of equal sacrifice,” says Koh, reiterating the cooperative nature of industrial relations on the island-state. If even the heads of employer groups are calling for calm and measured responses to the tough business environment, it’s clear the tripartite approach is not just a polite theory.

The National Trades Union Congress (NTUC) says having employer groups and unions represented in the government also helps engender a cooperative approach at the firm level. These include NTUC Secretary General Lim Swee Say (also a Minister in the Prime Minister’s office) and Deputy Secretaries General Halimah Yacob and Heng Chee How. “Our labour MPs share our workers’ voices so that their concerns can be heard and appreciated,” said Cham Huifong, the Industrial Relations Director of NTUC. HC www.hcamag.com

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good faith bargaining

Good faith bargaining Lessons from the United States

The centrepiece of the new Fair Work legislation in Australia are the collective bargaining changes. At the heart of these new laws is the obligation to bargain in good faith. Chris Gardner outlines what this means for local employers

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he US has had a good faith bargaining law since 1935. So, what can we learn from the US? I recently travelled to the US to talk with experts in the area.¹ The US provision is cast in quite general terms. The Australian provision is quite specific and covers (to paraphrase): yy attending, and participating, in meetings at reasonable times yy timely disclosure of information yy responding to proposals in a timely manner yy genuine consideration to the proposals of the other bargaining representatives and providing reasons for responses yy no capricious or unfair conduct that undermines freedom of association or collective bargaining yy recognising and bargaining with other bargaining representatives² These requirements are exhaustive but potentially broad in their application. So what lessons are there from the US experience?

Beware of ‘direct dealing’

In the US, an employer that deals directly with its employees in a negotiation can fall foul of the good faith bargaining requirement.

So too in Australia where there is an obligation to recognise and bargain with the bargaining representatives. Indeed, the first good faith bargaining order made by Fair Work Australia bears this out. In the Queensland Tertiary Admissions Centre Limited case, the employer was ordered to stop putting an agreement to a ballot of employees. This was because the employer did not involve the relevant union, the ASU, in meetings and discussions about the proposed agreement.³ So when employers are bargaining, they will need to be mindful of the way in which they engage with their workforce. In

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good faith bargaining

some circumstances, such engagement will amount to them not bargaining in good faith. The capacity for Fair Work Australia to intervene and influence ‘direct dealing’ is further illustrated by the recommendations of Senior Deputy President Drake in Transfield.⁴

You must intend to agree

As is the case in the US, there is no obligation to make concessions or agree. That said, good faith bargaining is likely to dictate that you approach bargaining with an open mind and with the aim of reaching agreement. This is certainly the case in the US and was the interpretation given to Australia’s previous incarnation of good faith bargaining in the 1990s.⁵ So once the obligation kicks in, there needs to be the requisite intent.

In the US the failure to exhibit this intent is called ‘surface bargaining’. This occurs where a party is ‘going through the motions’ of bargaining. As with the US law there is an inherent tension between a law which on the one hand requires bargaining, but on the other hand does not require agreement or concessions.

It raises the question: at what point does the failure to make concessions amount to an absence of good faith bargaining?

Put another way, when does hard bargaining become surface bargaining? Is the tactic of ‘goal post shifting’ acceptable? How about a take it or leave it approach? All the circumstances of the bargaining will be analysed to make this assessment. What is clear is that such tactics will be open to scrutiny as will others – such as communication to a workforce about what is happening at the negotiating table. It needs to be remembered that these obligations apply to unions as well as employers.

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Bargaining is more sophisticated

The high level of regulation dictates a high level of sophistication from negotiators. As a general observation, employers in the US tend to spend more time planning their negotiation strategy and tend to have more resources on hand than is often the case in Australia. Australian employers will invariably increase the time and investment made in collective bargaining. Greater controls over the negotiation process and bargaining underscore this. HC With Henry Skene, Arnold Bloch Leibler and Stuart Wood, Barrister.

2 See section 228(1) Australian Fair Work Act 2009.

3 ASU v Queensland Tertiary Admissions Centre Ltd [2009] FWA 53. There is a question mark over the power to make such an order in light of s.255(1)(c) Australian Fair Work Act 2009 (which does not appear to have been raised in this case).

4 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Transfield (Australia) Pty Ltd [2009] FWA 93 5 Public Sector, Professional, Scientific, Research, Technical, Communications, Aviation and Broadcasting Union (Australian Broadcasting Corporation) (AIRC, Full Bench), unreported decision, 31 August 1994, Print L4605.

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About the author Chris Gardner is a partner in the employee relations area at Freehills. He is one of Australia’s leading enterprise bargaining and workplace change lawyers.

Positioning claims and defending claims is vital

Good faith bargaining demands that proper consideration be given to claims and responses provided.

Employers may need to explain and attempt to justify why claims cannot be met. If the reasons provided are without proper foundation, concessions are probably inevitable.

In the US, finance experts are often called upon to analyse claims by respective parties to support or challenge them. If an employer says they cannot afford to meet a wage claim, this can be open to challenge and may need to be supported by documentary evidence. Data is important here. In the US, a lot of the wrangling about good faith bargaining focuses on the request by unions of employers to produce documents relating to the bargaining.

Expect to see such wrangling here as well. There will be questions about the relevance and use of certain documents requested.

Preparation is paramount

We now have a law which effectively scrutinises what happens in the negotiating room. Negotiators will need to work hard in advance on what will be said, when, and how. Of course any negotiation demands this. But the need is elevated in an environment which is open to regulatory scrutiny: here the potential for Fair Work Australia to be involved in the negotiation and test and challenge the respective positions of the parties. www.hcamag.com

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issue 7.9

migration

Here at last 457 visa program overhaul Significant changes to Australia’s 457 visa program will require organisations to adapt their migration policies. Jane Goddard reports

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weeping changes to the obligations of businesses wishing to sponsor overseas employees came into effect on 14 September 2009. These changes to the Migration Act and Regulations mark the conclusion of a series of extensive Federal Government reviews conducted over an 18-month period into the integrity and efficiency of the 457 visa program.

Despite the long lead time, details of the intended changes have been released gradually with some of the key aspects of the new system not finalised until a week before the commencement date.

It is expected that after 14 September Immigration will also publish a raft of policy guidelines which will further clarify various practical aspects of the new system.

By aligning migration law with the principles enshrined in the Fair Work Act, the new system is underpinned by the principle that overseas employees should be treated in the same way as Australians performing similar work. It includes a strengthening of the obligations owed by employers to sponsored employees, and a revision in the processes required to obtain a 457 visa. All business sponsors are now subject to a range of legally enforceable obligations to their existing and future population of overseas employees. A failure to meet an obligation could result in an administrative sanction such as being banned from use of the program, the issuing of an infringement notice for up to $6,600 or a court ordered civil penalty of up to $33,000 for each breach.

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Sponsor obligations

yy To ensure that the terms and conditions of a 457 visa holding employee are no less favourable than those provided to an Australian in an equivalent position. yy To cooperate with immigration inspectors. yy To employ a 457 visa holder only in the nominated occupation. yy Not to recover any costs associated with recruitment or sponsorship. yy To pay on written request reasonable and necessary travel costs from Australia. yy To pay costs of up to $10,000 associated with detaining or removing a sponsored person from Australia. yy To notify Immigration of specified events, including cessation of employment, payment of travel costs, a change in work duties of a sponsored employee, and specified changes of the sponsor (including address and contact details, new directors/partners, winding up, bankruptcy, liquidation or the appointment of an administrator). yy To retain, and produce on request, specified records including those relating to the payment of travel costs, the tasks performed by a sponsored employee and the work location or locations, money paid and non-monetary benefits received, and the most beneficial terms and conditions of employment of employees in equivalent roles to that of the 457 visa holder.

These obligations apply not only to new 457 visa holders granted after the 14 September 2009, but to all existing 457 visa holders.

New Criteria

As before, a business wishing to employ an overseas person will be required to obtain sponsorship status. The new rules for sponsorship approval require the business to meet specified training benchmarks and attest in writing that they have a commitment to employing local labour and non-discriminatory employment practices. Immigration will have greatly expanded powers to refuse a sponsorship, the position or visa application if there is adverse information that would affect the suitability of a business as a sponsor.

Adverse information in this context could include investigations, convictions, findings of guilt or contravention of a law relating to discrimination, immigration, industrial relations, OHS, or taxation.

Unlike the old system, the sponsorship approval will not be for a finite number of positions but will last until a specified date or event. Generally the term of approval will be for two years, but there is flexibility for either a shorter or longer term to be specified. The policy guidelines which are not yet available will shed light on how these changes will work in practice.

The requirements for approval of the nomination (that is the process of position being approved as being suitable to be filled by an overseas person) have also expanded. The occupation must appear on a list approved by Immigration for the purpose of the 457 visa program, and the employer must certify that the duties of the position include a significant majority of the duties of the occupation as described in the Australian Bureau of Statistics publication Australian Standard Classification of Occupations (ASCO). The candidate must have the qualifications and skills specified in ASCO for that occupation. Typically ASCO specifies

migration

a minimum qualification or in some circumstance a period of work experience as a replacement to formal qualifications.

Unlike the former process, the nomination application must specify the nominee and detail the location or locations at which the employment will be carried out.

Market rates

Importantly, as a replacement to the requirement to pay at least a minimum salary level, Immigration must be satisfied that the terms and conditions of employment will be no less favourable than those in place for an equivalent position occupied by an Australian in the same workplace. This is in keeping with the ongoing obligation to maintain these terms and conditions throughout the employment.

If there is an Australian performing the same role in the business, this will be determined by any relevant industrial arrangements (for example an award, award conditions with above award rates or a collective agreement) or contractual agreements with existing staff. If an Australian is not in the same role, then any applicable awards or collective agreements may be used as a reference point. In the absence of any of these, earnings data or remuneration surveys may be used.

The requirement to demonstrate that the position is being paid at a market rate does not apply if the annual earning are over $180,000 per annum.

If the base rate of pay (exclusive of incentives or bonuses, loadings, monetary allowances, overtime or penalty rates, or any other separately identifiable amounts) that an Australian would receive for the role is below the temporary skilled migration income threshold (TISMIT) which is set at $45,220, then the nomination would not normally be approved, regardless of the amount offered to the overseas person.

Transfer of employee and occupation

The terms of the work limitation imposed on all current and future primary 457 visa holders have been altered to facilitate the movement of 457 visa holders between

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sponsoring employers. Provided that a fresh nomination is approved, a 457 visa holder will be able to move to a new employer without making a further visa application. However, all visa holders will be restricted to working only in the occupation listed in the nomination. This means that if a person changes roles within a business and the ASCO classification no longer applies, then another nomination will be required to be made.

Shift in health cost obligation to visa holder

One of the major changes to the new system is the abolition of a sponsor’s obligation to meet public hospital costs of its sponsored employees and their family members. This obligation has been transferred to visa applicants who are required to provide evidence of acceptable arrangements for health insurance as part of the visa application process, and to maintain insurance for the duration of the visa period. One area for consideration is whether your business will pay for these costs despite the changes, or keep records of the health insurance of your 457 visa population (and their families) during their employment with you to ensure compliance with their visa condition.

What should your business do now ?

These changes will have a significant impact on a sponsor’s management of its foreign population. All business sponsors will need to review their current practices and record keeping, and have a sound understanding of the new obligations to ensure that they are fully compliant. A failure to do so could compromise future use of the 457 visa program. HC

About the author Jane Goddard is special counsel, accredited specialist in immigration law, at Fragomen.

For more information visit www.fragomen.com www.hcamag.com

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profile

o

Western st r This month’s profiled HR professional has ridden the crest of Western Australia’s wave of success, but has been smart enough not to follow its subsequent dip. Iain Hopkins talks to one of the state’s best employers

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n July 2009 Insync Surveys, a customer, board and employee survey provider, in conjunction with WA Business News, announced the inaugural winners of the 2009 Best Employer Awards in Western Australia.

Over 350 business leaders attended the awards ceremony, held at the Hyatt Regency Perth. The Best Employer Awards recognised WA employers who are performing well in areas that are critical for their employer brand. Insync Surveys conducted the research, which included feedback from 2,169 employees.

Taking out the Best Employer in the large category (for organisations with more than 200 employees) was Georgiou, a company that delivers projects in civil engineering, building, infrastructure, mining services and precast manufacturing.

The common theme for all winners was the dedication shown towards attraction and retention. Job security emerged as the top attraction driver for WA employees with less than six months under their belt.

“As a standout organisation, Georgiou is not only managing to assure staff of their job security in tough economic times, they’re excelling,” said Tracie Dawson, Insync Surveys’ WA practice leader.

Hard-won accolade

The driving force behind Georgiou’s award and the company’s people strategy has

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been organisational development manager Robyn Ivankovich. With an extensive career in training and development and generalist HR roles in the finance and retail industries over the past 20 years, the Best Employer award is an added bonus for Ivankovich – but she is quick to credit all employees of Georgiou Group.

“We were keen to have the progress we’ve made as a company through the last couple of years acknowleged,” she says.

“We thought it was appropriate, given that our own internal survey results were very strong. We had extremely strong advocacy from our people, and we thought it would be nice formal recognition for the way the business is being run.”

There was even closer alignment with the company’s ‘new-look’ brand and vision.

For many years Georgiou’s corporate vision was to be the contractor of choice in the civil construction industry. After review and feedback from employees, this has been updated. The company vision is now to be “the best people to work with” for employees, clients and industry partners.

“When we first launched the vision, some people questioned whether we should make that claim.’ Now we can – with some confidence,” Ivankovich says.

Although Ivankovich makes the rebranding and values relaunch sound easy, it was far from a walk in the park.

As a people and change exercise, it was a significant undertaking.

“It was initially driven by the executive team – and rightly so I think – as there was a recognised gap in terms of what our clients were seeing as the company was growing and what our needs as a company were. We needed to lift our employer profile, ensure we were attracting better candidates and keep the good people. We also needed to appeal to a broader range of clients and bring existing clients with us.

We wanted to retain elements of the old brand as well, because we are extremely proud of where we’ve come from as a company. People were proud of the old logo, and even the mention of changing it was quite emotional,” she explains.

The answer was to engage the company’s 400 employees throughout the process. Georgiou undertook internal surveys, its business leaders talked about the values of the company and where they saw the company going, employees were asked their thoughts about the direction, and checks were made against the company’s values. Employees were then asked to vote on their desired values, which turned out to be safety, teamwork, excellence and pride. “I managed to get an acronym, [STEP], which helps,” laughs Ivankovich. “The top two values voted by staff were safety and teamwork, and the excellence and pride came out of consultation with senior executives, managers and the marketing company in terms of feedback from clients.”

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profile

“We put the work in to ensure we would be financially stable enough to withstand any dips” – Robyn Ivankovich Rapid growth

Georgiou, which commenced operations in 1977 as Direct Drainage, remains a family run company. Founder Peter Georgiou still gets out on-site every day, and son John Georgiou is the current CEO. Although the company is not publicly listed, it does have a board of directors, which was set up by John so that the company could have the same rigour, structure and due diligence as a public company.

“We’ve been growing at around 30% every year for the past four or five years – and that’s people as well as revenue and scope and scale of projects. The scope of projects is phenomenal in terms of where we were five years ago. The base of the company used to be infrastructure or land sub-division work, but we’re now getting involved in more complex wharf projects and desalination projects – the more technical engineering side of things. This was a conscious decision. We wanted to have a bit of insurance and not have all eggs in one basket,” Ivankovich explains.

It has also positioned the company well for the ups and downs of the economy.

Although it’s true to say the fortunes of Georgiou have risen with the fortunes of the WA economy, the same cannot be said for the recent dip in the state’s fortunes; the company has held its own. “We put the work in to ensure we would be financially stable enough to withstand any dips,” says Ivankovich. “We’ve come through this better than many of our competitors.

We’ve not had any redundancies, so from an HR perspective it’s a massive relief.”

But Ivankovich acknowledges they’ve had to be “responsible” with budgets and also instigate a recruitment freeze. “A recruitment freeze sounds bizarre given that we have 160 vacancies. But most of those vacancies are project-related, so we

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have jobs that we need to put people on.

What we have put a freeze on is overhead recruitment spending. The push to recruit so many people, while not having the resources in place to be able to do it, makes things very difficult. We will need to review the internal service we provide to our clients – our internal departments – and work out what a good level of overhead spend is based on what the requirements of the company are.”

Given the company’s solid financial performance, Ivankovich does not believe such a review will be a tough sell. It also appears the company’s leaders ‘get’ the value of HR budgeting. “Even from the training side of things it can be easy for executives to say ‘we just won’t do that, we’ll cut training, or we won’t do leadership development’. But I think you lose something in your company if you do that. It becomes just a functional place, not a place that people want to come and work in. The first thing employees will say is, ‘my mate down the road is off doing this course so I’ll go work for them’. It’s part of the retention strategy, to give people the opportunity to develop if they want to,” she says.

L&D focus

Although Ivankovich’s role covers all HR functions – recruitment, graduate development, IR, culture and change management – she has a special passion for L&D. Her industry and the structure of the company present special challenges.

“It’s hard to get away from the project management way of thinking. Sometimes it can be very bottom-line focused and we need say to the project managers ‘let’s think about this from a people point of view. If you want to keep your teams together let’s talk about their development and their skills’,” she says.

Georgiou is directly employing the people who work on projects, rather than sub-contracting. “We see value in making them feel part of the company and not just a resource that gets hired in and out.

Rather than hiring a new workforce we try to re-utilise them across other projects,” she says.

Given that shift in employee engagement, there is a strong emphasis on cross-skilling and upskilling. The majority of training comes under the banner of safety training – primarily ensuring employees have the capability and competency to operate machinery and equipment safely. But Ivankovich notes the industry is also becoming focused on the leadership and management capabilities of workers. The Building and Construction Industry Training Fund, which is contributed to by all players in the industry, helps to subsidise these skillbuilding initiatives.

She also says that with a wide ranging workforce, including everything from onsite labourers to project managers, the training needs of employees also had to be closely monitored. Ivankovich and her HR colleagues carefully assess what level of leadership capability or specific skills are required for each job role. “When we first thought about it, we assumed that a person who works as a technical officer or estimator probably doesn’t have the same level of responsibility for safety as a person who works on-site. Then we questioned exactly what that meant. Just because they are not in the field does it mean they have any less responsibility for safety. We found the competencies and capabilities needed for leadership around safety were actually not that different,” she explains.

General business leadership and people management skills – so crucial in times of doubt – are often the first victims of cost cutting. Not so at Georgiou. “I’ve fought too hard to make sure things aren’t squeezed too much,” laughs Ivankovich.

“Often my colleagues in other companies talk about their whole recruitment departments being slashed and training being cut back to nothing. We haven’t done that. We’ve just invested in a two and a half day workshop, branded to reflect our values called “STEP Up”, for our senior managers which we could have cut. But we view strong leadership as being important right now, and we want to give our people some tools and ways of identifying how their leadership actually drives the performance of the business.” HC

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issue 7.9

Bringing the team together How do you move people from all around the world to a new regional office in Singapore? According to this month’s profiled HR professional, it’s about ensuring service for every member of the team

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espite offering some of the world’s most celebrated brands and being recognised as an employer of choice for a wide range of professional-level staff, Unilever works hard to practise the HR philosophies it preaches. So much so, that even the senior HR team of its new Asia, Africa, Middle East, Turkey, Central and Eastern Europe (AACEE) super-headquarters represent the ideals it is hoping to instill throughout the entire 65,000 strong staff across the region.

Steven Gross, vice president – HR, for Southeast Asia and Australasia (SEAA), says the Regional HR Team that he leads changes regularly, but always aims to unite around its goals. “We bond very quickly,” he tells Human Capital. “We’re evolving as the business evolves.” One thing that stays constant is the diversity of the local team, and the organisation in general.

Gross, an Australian, leads a group of senior HR professionals from Singapore, the Philippines, Hungary, India and

South Africa – as well as from his own homeland. Together, they coordinate and provide for an organisation-wide employee base that features 34 nationalities in total.

Gross says this diversity is no accident.

It’s a deliberate policy that helps keep Unilever connected with consumers, customers and markets. “We have to stay close to our customers and consumers, and we want our people to remain connected to the markets they are serving,” he says.

Diversity also ensures the company remains at the top of its game. “It’s about having diversity of thought and mind and bringing ideas to the company as well.”

Building a superheadquarters

Maintaining that diversity has been one of the key challenges as Unilever develops its super-regional office. Leading its efforts in the AACEE region, the new regional headquarters is currently spread across four different office spaces in Singapore.

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Who’s who in HR?

1. Steven Gross, vice president HR – SEAA and Regional Functions

2. Dinesh Biddappa, HR director – supply chain, AACEE

3. Ashley Farren Dickinson, HR director – IT, AACEE

4. Natalia Kovacs, HR business partner – SEAA and HR

5. Ong-Jin Tan, HR director – customer development, AACEE

6. Tricia Duran, HR director – marketing, SEAA

7. Julie Hudtohan, HR business partner – finance, AACEE

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of staff; including the relocation of some 250 employees from around the globe, and the hiring of 150 individuals from the local market to give Unilever a presence in Singapore of over 800 people.

Gross says the task was one of the biggest he has undertaken in his career.

He tackled the process from the planning through to the implementation and feedback stages, and he says the team worked hard to ensure the operation went smoothly at every level.

“Our vision was about overwhelming people with service,” he said.

That began with a higher-thanexpected take-up rate. “One of the challenges was about business continuity,” Gross says. “We had quite a dispersed organisation, and there was a concern about how many of those people would move to Singapore.” The business had predicted a modest 60% acceptance rate, but about 80% of the key staff that Unilever made offers to relocate to Singapore accepted the invitation.

Still, Ong-Jin Tan, HR director customer development – AACEE, says there was a lot of emphasis placed on those not making the move. “We also focused on those who weren’t being relocated. We had a program in place for them in their home countries, to make sure they would be supported throughout the transition.”

Back in Singapore, the team adopted a ‘war-room’ approach to the relocation task.

While never losing sight of the big picture, Tan says the move was successful because of the focus on individual needs.

“We had someone who was here to receive every single person. We spoke to every person to say ‘how are you doing?’ and ‘what else do you need?’ ” he says.

Unilever also brought in outside partners to take care of the little things that relocation exercises often miss, including school, banking and phone services.

Many of these meetings occurred on Unilever’s premises.

Gross says this had been another early concern from the wider business.

With Singapore already a hub location for many multinational businesses, would the existing pool of housing and schools be

able to cope with additional expatriates, all arriving around the same time? The Unilever intake included 55 school-age children, making education a make-orbreak factor in the project.

The team and its partners made sure they engaged each transferring employee early. Many were able to visit Singapore ahead of their initial arrival, where Unilever and relocation partners were able to guide them through both home and school inspections.

Tricia Duran, HR director marketing – SEAA, says feedback from participants has been overwhelmingly positive. “Survey results have been very high,” she says, noting that the positive attitudes and enthusiasm of relocating staff also played a big role. “The minute they make that mindset shift, it’s all about making it work.”

Gross says the business has also had high praise. The regional HR team received a local business award for its successful efforts over the past year.

An international agenda

International experience is a key part of Unilever’s wider talent development strategy. Once again, the regional HR team represents a snapshot of the organisation as a whole, with each member experiencing a variety of roles and positions over the history of their career.

“It’s not just about getting exposure for the sake of it,” says Dinesh Biddappa, HR director supply chain – AACEE, taking his own recent career path as an example.

He says the ideal talent has a depth of knowledge in one area or market, but also an understanding of the broader needs of the organisation.

“I’ve worked in a country as an HR director – I’ve now moved to a regional role where I look across policies and markets,” he says. “It’s a combination of both of these that are building the stepping stones into a career.”

“It’s really important for our country resources to come into regional roles, to better understand the ways we are

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working,” says Ashley Farren Dickinson, HR director IT – AACEE. “They can then take that back into their countries and be able to engage in regional and global agendas in a more effective way.”

A global graduate program

One key strategic tool in this regard is Unilever’s Future Leaders Program, a pilot graduate recruitment scheme that aims to create an organisation-wide global benchmark for sourcing, attracting and developing new blood. Eight new graduates took on the challenge in June, with another 30 to sign on before the end of the year.

Tan says the new scheme is attracting people throughout the region, with only around half of the first year’s intake expected to be local Singaporeans.

“We’re specifically targeting developing and emerging economies to get that cross-border flow of talent,” he says.

“We’ve got, and will continue to need, a

very diverse range of people to be filling Unilever’s talent pipeline for the future.”

Unilever aims to use the same scheme in other national markets as soon as it is perfected.

One challenge with regard to that is maintaining an acceptable standard of education, enthusiasm and potential across each intake. This can be particularly difficult when the expected applicant numbers are so much higher than the available positions.

1,200 applied, of which Unilever interviewed 100. The company then aptitude-tested 50, and took 36 through an assessment centre. From those, only eight were offered and able to join the company.

It’s at the assessment centre that Unilever really sorts candidates according to its specific criteria. “We had line managers doing the activities,” Tan says, noting that those actually doing the jobs must have an important say in recruiting the next generation. “It may be an HR-

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driven initiative, but it is run by the managers – and that’s the way we make sure that the quality of candidates coming is high because we want these trainees to be managers in two to three years.”

The scheme requires graduate recruits to work hard for that privilege. In line with the regional HR team’s research into the youngest generations now entering the workforce, the Future Leaders program promises real responsibility from day one – with accelerated development and international exposure.

“They know what they want,” says Tan. “We promise to meet them on those things and we’re going to develop and pay them better than the market.

“The flipside to that, which they’re all more than happy to accept, is that we’re going to review their performance every six months,” says Tan. If they’re not meeting the level required, we’re going to ask them to leave the program,” he adds. HC

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