HR Titles - Selected Excerpts by Palgrave Macmillan Professional Business

HR in PRactice a samPleR of HR books fRom PalgRave PRofessional business

Selected Excerpts from: future Work (2nd edition) the Worldwide Workplace the end of the Performance Review beyond the Job Description attracting and Retaining talent mental illness at Work

Contents 3 Future Work (Expanded and Updated) Alison Maitland & Peter Thomson 16 The Worldwide Workplace

Mike Johnson

23 The End of the Performance Review Tim Baker 31 Beyond the Job Description

Jessie Sostrin

46 Attracting and Retaining Talent Tim Baker 54 Mental Illness at Work

Mary-Clare Race & Adrian Furnham

Palgrave Professional Business books are written by the best minds in business, combining topical writing, cutting edge research and strong industry case studies. Essential reading for professionals in the field, these books help managers and HR professionals develop, retain, and inspire staff, and revolutionize the running of their businesses. To order any of these books, please visit www.palgrave.com and enter the promo code PM14THIRTY to receive a 30% discount.

9781137367150 | March 2014 ÂŁ18.99 | $28 | $32 CAN Hardback | 252 pages

The way we work is overdue for change. This newly updated edition of Future Work addresses the challenges you will face in the 21st century world of work, and sets out a compelling case for change in organizational cultures and working practices to boost output, cut costs, give employees more freedom over how they work and contribute to a greener economy. Order at www.palgrave.com. Enter code PM14THIRTY to receive a 30% discount.

4 • An Excerpt from Future Work

CHAPTER

How work has evolved

In a few hundred years, when the history of our time will be written from a long-term perspective, it is likely that the most important event historians will see is not technology, not the Internet, not e-commerce. It is an unprecedented change in the human condition. For the ﬁrst time – literally – substantial and rapidly growing numbers of people have choices. For the ﬁrst time, they will have to manage themselves. And society is totally unprepared for it. Peter Drucker, 20001

A historical shift With his usual prescience, Peter Drucker, the father of modern management, foresaw the really important trend underlying the information age. At the turn of the twenty-ﬁrst century, he recognized a historical shift in management and the place of work in society. He saw that people were faced with career choices unavailable to previous generations, and women in particular had opportunities that never existed before. Thanks to technology, we can now work in ways unimaginable 30 years ago. Social attitudes to work and life are shifting fast. Economic pressures are forcing employers to review the productivity and effectiveness of their human resources. The world of work is ripe for radical reform. 19

An Excerpt from Future Work • 5

Future Work

Yet, as Drucker said, we are unprepared for this shift toward selfmanagement, which is a central element of future work. Over a decade after his prediction, much of the mainstream world of work still relies on Industrial Age working practices, and management practices reflect this. There are hierarchies, career paths and compensation plans to meet corporate targets. The underlying logic is clear: management knows best. Direction is set from the top and managers transmit the orders down the line. Employees are a resource to be used by the business to achieve its aims, typically to maximize the bottom line. Companies refer to people as ‘human resources’, but in practice struggle to find ways to account for them as assets rather than liabilities. The last time work underwent a major transformation was the move from a world governed by the seasons and daylight to one ruled by the factory whistle and clock. In the middle of the nineteenth century, 90 percent of white men in the US worked for themselves as farmers, merchants or craftsmen. The biggest company in Britain in 1850 had only 300 employees. The next 50 years saw the rise of the first of the massive corporations that served us well during the twentieth century. Leaders perfected hierarchical, command-and-control management processes based on the examples set by the Army and the Church. Businesses improved efficiency by gaining economies of scale, standardizing work processes and introducing the production line. Work had moved from being an activity using an individual’s skill, producing an output of value, to a job performing a narrow set of tasks in exchange for a salary.

Henry Ford’s legacy The model of work that developed over the past century reflects the thinking of Henry Ford. Whether people are employed in a factory, office, hospital or school, they are part of a production process. If the same product can be obtained with fewer people or lower pay, unit costs are reduced and profits improved. Companies have worked hard at reducing the cost of labor and increasing output. They standardized jobs to make them easily repeated, reduced the variety of tasks to increase the reliability of output and studied activities to the finest detail to eliminate waste and improve efficiency.

6 • An Excerpt from Future Work How work has evolved

This worked for a while. The production line was the driver of industrialized economies, and people were prepared to carry out routine work for low pay. Large corporations thrived and nations prospered, as long as economies of scale gave some competitive advantage. But ‘Fordism’ produced boring work, reduced to the simplest tasks, with the minimum possible discretion exercised by the worker. This bred militant unions who defended powerless employees against exploitation and even led to deliberate sabotage just to relieve the boredom. ‘If there was a single question that obsessed twentieth century managers, from Frederick Taylor to Jack Welch, it was this: How do we get more out of our people?’ writes Gary Hamel in The Future of Management.2 ‘At one level, this question is innocuous – who can object to the goal of raising human productivity? Yet it’s also loaded with Industrial Age thinking: How do we (meaning “management”) get more (meaning units of production per hour) out of our people (meaning the individuals who are obliged to follow our orders)? Ironically, the management model encapsulated in this question virtually guarantees that a company will never get the best out of its people. Vassals and conscripts may work hard, but they don’t work willingly.’ In the age of what Hamel describes as the creative economy, knowledge work drives advanced nations. It is no longer necessary to gather people together in large organizations every day to ensure the smooth running of the wheels of commerce or the functions of government. Yet this is what still happens, because current management methods are based on an increasingly outdated model of work.

Technology is not a panacea The last 20 years have seen an explosion in the technologies available to support new ways of working. It is easy to forget how fast and dramatic these changes have been. The personal computer, invented in the 1980s, had limited use until the 1990s, when the advent of the Internet and the World Wide Web opened up the possibility of genuine personal computing. Yet today the PC has already become rather ‘last-century’ as it cedes territory to the touchscreen tablet and smartphone.

An Excerpt from Future Work • 7 Future Work

The first generation of cellular mobile phones was launched in the 1980s, but it was not until the 1990s, when digital networks arrived, that usage really took off. Then, in 2002, with the first 3G networks, it became practical to use cell phones for surfing the Internet and sending emails. Now we are into the era of 4G, and the technology continues to race ahead of our ability to change working habits. So we should not be too surprised that innovative working practices enabled by these technologies are still in their infancy, with a long way to go to reach their full potential. People have been able to work at home using dial-up technologies to exchange data since the 1970s, but it was not until the turn of the twentyfirst century that broadband communications arrived. In the 1980s, there were a few teleworking pioneers, mainly in the rapidly expanding IT industry, who were experimenting with alternative work styles. Computer programmers were able to work from home and send their coding across a standard phone line via a modem. Some saw this at the time as a forerunner of the way most people would work in the future. What has happened in reality has not lived up to the boldest predictions of the 1980s. The growth of full-time home-based work has been relatively slow, but the expansion of part-time teleworking has been rapid in some countries. This shows that home working is a very useful part of a mixed pattern of work but not a permanent solution for most people. According to the UK’s Office for National Statistics, the total number of teleworkers in the UK increased by 46 percent in the decade leading up to 2012.3 In the US, telecommuting by employees several days per week increased 73 percent from 2005 to 2011, though the rate of growth slowed during the recession.4 What has clearly changed from the early days of telework is the availability of technology to support a wide variety of jobs. Anyone involved in ‘knowledge work’ can now take advantage of affordable laptops, smartphones and broadband connections. We have moved rapidly from the pioneering days of computing, when the only users of IT were the technical specialists, to the age of universally available tools. People have also adopted the Web as a resource in their personal lives, for everything from finding information and shopping to organizing street protests. Surfing is done on the Internet as well as the waves, browsing on websites as well as in bookshops and chatting through social media as well as face-to-face in

8 • An Excerpt from Future Work How work has evolved

real cafés. Leading employers are now embracing social media and using applications such as Yammer to help their employees share ideas. Yet we are far from mastering technology, either in terms of workplace innovation or in the way our work is integrated with our personal lives. For one thing, communications technology in the home has advanced much more rapidly than in most workplaces. Look at the technology being used by the under 25s: at home they will be chatting to friends on Facebook, having live conversations with them via internet applications such as Skype, sending text messages, watching the latest uploads to YouTube and keeping an eye on the people they follow on Twitter. But when they go to work, they may well find that their employer is one of those where communications have barely advanced beyond email, that social media are discouraged or even blocked and that discussion forums are confined to the water cooler. There is a growing disparity between these organizations and those that are leaping ahead and adopting social media for the benefit of the business. The variety and choice of technology that has revolutionized our consumption patterns is now forcing the pace of change at work. An increasing number of employers are adopting a ‘Bring Your Own Device’ (BYOD) policy, realizing that individuals have their own preferences in the way they access data, collect emails or ‘chat’ to colleagues. Combining a BYOD policy with a ‘cloud’ based IT strategy gives employees freedom to work with technology in their own way and not be forced into a standardized solution based on outdated kit. These developments are further blurring the boundaries between work and personal territory, a trend welcomed by some but feared by others. Our ability to connect people at times and places hitherto out of reach has meant that additional working time has simply been layered onto what was already required. Customers can contact their suppliers at any time to demand a better service, just as employees can be tracked down at weekends or on vacation to deal with ‘urgent’ business. When email capability arrived on handheld devices, conventional working hours started to stretch. In 2006, the new term ‘Crackberry’, depicting the addictive qualities of BlackBerrys and other handheld devices, was nominated word of the year by the staff at Webster’s New World College Dictionary.5 The BYOD trend means employees have constant access to

Future Work

both work and personal communications at the same time, unless they choose to keep them separate on two different devices. The technology itself is neither the hero nor the villain in these developments. It can liberate individuals and give them more balanced lives – or it can extend work into times and places that people would prefer to reserve for leisure. It can be a catalyst for empowering new work styles, but it can also be an instrument for the employer to monitor and control employees more closely. It improves communications, speeds up business processes and increases efficiency – but it can also turn jobs into boring, repetitive tasks. Call centers, for example, can resemble nineteenthcentury factories where employees mindlessly follow instructions. So it is not the technology that changes our working lives for better or worse, it is the way people choose to use it. A lot depends on whose finger, physically or metaphorically, controls the ‘off’ switch.

Changing expectations The rapid development of technology has run in parallel with major shifts in society. Attitudes to work and careers have evolved dramatically over the past 30 years. For many employees, especially in higher-paid jobs in developed countries, life no longer revolves around work. Employers cannot just assume that people will accept standard conditions of employment and take working patterns as a given. If the job can be done without sticking to a rigid pattern of time and place, employees will expect ﬂexibility to be on offer. If it is not, they are likely to look elsewhere. A survey by PricewaterhouseCoopers found that the top benefit sought by professionals across the UK was flexible working, with almost half putting it at the top of their list.6 Interestingly, it was given fairly equal priority by men and women. Other countries are seeing similar trends. A survey of hourly paid workers in the US found that flexibility was an important factor in deciding to take the job for 83 percent of workers who had joined in the last two years. The survey by Corporate Voices for Working Families7 also found that 60 percent of the workers said it was likely they would leave the company if they did not have the opportunity to work flexibly.

An Excerpt from Future Work • 9 24

10 • An Excerpt from Future Work How work has evolved

Today’s workforce inevitably has different expectations of their employers than previous generations had. They know they are unlikely to get job security and a safe pension in exchange for lifelong service. If they are fortunate to have a choice of jobs, they are looking for fair rewards, flexibility and engaging work. Notions of what constitutes a successful career are changing too. The PricewaterhouseCoopers survey revealed disillusionment with the traditional career working for a major employer. Exactly half the respondents said they would prefer to work for themselves. Almost a third wanted to be employed by a company whose values matched theirs, while the remaining 20 percent said they wanted to work for an elite company that employed only the best. A survey of over 3200 Generation Y finance professionals in 122 countries found that lifestyle factors outweighed contractual ones in their choice of job. ‘Perhaps the preference towards lifestyle factors is in part due to a changing definition of success,’ says the report by ACCA, the professional accountants’ body, and Mercer, the consulting firm. ‘Our survey suggests the historical view of career success being defined by more money probably rings less true for this generation. This is a generation that seeks a much broader range of benefits from working life, and actively seeks out organizations that can deliver this.’8 The economic downturn that hit Western countries hard in the wake of the global financial crisis has shrunk the choices available to many people, particularly in the younger generation that has been saddled with high unemployment levels. For them, getting paid work of any kind has become the overriding challenge. Sarah Jackson, chief executive of the UK charity Working Families, which campaigns for greater work flexibility, describes the gap between progressive and laggard employers and managers. On the one hand, ‘the understanding has developed enormously that it’s not about compliance but about how you build a better business, where the needs of the employee and the business are aligned. There is also increasing recognition that it’s about the quality of leadership, that managers have to be trained, and that you need to keep communicating about it.’ On the other hand, some managers and organizations are trampling over employee rights, she says. ‘If you’re at the bottom of the food chain,

Future Work

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the state of the economy is having a very nasty effect on your ability to work flexibly. People phoning our helpline are having a miserable time. People are suffering from unilateral changes to their contracts and there is increasingly blatant maternity discrimination. People are being demoted, expected to take pay cuts, or losing their jobs.’ She notes double standards too: many callers to the helpline work for organizations with supposedly great policies on flexibility. What matters is choice and good management. Recession brought a growth in insecure ‘zero hours contracts’, which do not guarantee any work and only pay for actual hours worked. If they are managed well, and people have a choice, they can be a convenient form of flexibility for both individuals and employers. If they are forced on employees against their will, they amount to exploitation.

The role of gender A generation or two ago, the world was arguably a much simpler place. Everyone knew where she or he belonged. Men went to work, but rarely did women pursue careers outside the home. Despite the vital role played by women when they took many men’s jobs during two world wars, they were largely back at the hearth in the 1950s. Then came the Pill, the women’s liberation movement, a raft of equal rights legislation and women’s journey toward parity with men in the workplace. It has been a long road. In the UK, the 1919 Sex Disqualification (Removal) Act allowed women to become lawyers, vets and civil servants. Even then, only single women could get a job in the British Civil Service and it was only after the Second World War that they were allowed to stay once they married. It was not until 1961 that Barclays Bank removed its marriage bar and it was still perfectly legal in the UK until 1975 to dismiss an employee for becoming pregnant. Women in the US gained voting rights through the Nineteenth Amendment to the Constitution in 1920, but only in the 1960s were several federal laws passed improving the economic status of women. The Equal Pay Act of 1963 required equal wages for men and women doing equal work. The Civil Rights Act of 1964 prohibited discrimination against women by any company with 25 or more employees.

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How work has evolved

Within the lifetime of a senior manager, we have moved from a world where women were legally and socially treated as second-class citizens to one where they have equal employment rights and nearly equal representation in the labor force of many advanced economies. In countries with generous maternity benefits compared with paternity provisions, it can be argued that women have overtaken men in certain entitlements. Sex discrimination in employment is illegal in most Western countries and many have equal pay legislation to counteract the legacy of low-paid ‘women’s work’, although this has failed to eradicate the pay gap. The introduction of maternity leave and the right to return to work in the same or equivalent job is almost universal,9 even though some employers still blatantly flout the law. The US is one of the few countries in the world that does not mandate paid maternity leave, a fact that led the campaigning organization Human Rights Watch to publish a report in 2011 accusing it of ‘failing its families’. The US Family and Medical Leave Act of 1993 provides for parental leave for serious medical conditions, but this is unpaid and does not cover all workers. Many countries provide paid paternity leave, but the US does not. Yet countries that have paid family leave programs show productivity gains, reduced turnover costs and health care savings, according to Janet Walsh, deputy women’s rights director at Human Rights Watch.10 The 1980s and 1990s saw a series of legislative changes in most Western countries that made employment fairer and increasingly ‘family friendly’. These reflected changing attitudes in society toward work. No longer was it a male preserve. Women could have a career and a family. They could take their maternity leave and still return to their former position in the hierarchy. It seemed we were moving into a truly gender-neutral world of work. Sadly, reality has not kept up with the ideals. Ironically, the very legislation that was designed to ensure fairer treatment for women reinforced some of the old stereotypes. Women had to be given ‘special’ treatment so they could take time off work to have children. Men might have the right to a few weeks of paternity leave if they were lucky, but maternity provisions were longer and more generous. This has strengthened the notion that it is primarily women who have children, not women and men together. It has reinforced some employers’ beliefs that it is a disadvantage to hire women of childbearing age.

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Scandinavian countries such as Norway and Sweden are leading the way, with generous parental leave for both mothers and fathers. Introducing parental rights that are shared completely would go a long way to breaking through the remaining prejudices. It would encourage fathers to take an active role in childcare and adjust their work patterns to accommodate family responsibilities. Employers would in future have to assume that any employee, male or female, might need to take a substantial amount of time for parental responsibilities at some point in their (increasingly long) working lives. It does not help that maternity leave and flexible working legislation are often classified together as ‘family friendly’. Employees in the UK, for example, were given a legal right to request flexible working from their employers in 2003. Over the following decade, this right was confined to parents and caregivers, who were identified as needing special treatment and requiring the weight of the law to persuade employers to listen to their requests. In a welcome move, the government proposed in 2012 to extend the right to request flexibility to all employees, from 2014. We do not quarrel with the need for legislation to protect vulnerable employees from unscrupulous employers and to provide a baseline from which good employers can build far better practices. However, legislation that frames flexibility as an employee accommodation requiring a change to ‘normal’ working patterns reinforces the prejudice that regulation obliges employers to act against their best interests and interferes with managers’ ability to get their job done. As we shall see in Chapter 3, this is the opposite of what actually happens with new ways of working. There is such strong evidence that changing the way we work can benefit business, that governments should be selling this as a positive measure to boost economic competitiveness, as well as environmental sustainability and ‘work-life balance’. That should be a more powerful way to persuade laggard employers to change their tune.

Women are still underrepresented in many professions and in the ranks of senior management, despite over 40 years of equality legislation. It will be an uphill battle to achieve real equality as long as employment legislation and HR policies imply that mothers need special treatment and fathers do not. If societies stop assuming that ‘men have careers and women have children’, we will achieve faster progress.

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How work has evolved

We also need an urgent reframing of careers and career development, because women’s career paths tend to be very different from the traditional male model that still prevails in many organizations. Companies cannot afford to continue losing so much female talent. According to UNESCO, more than half of the students now in universities worldwide are women.11 In North America and Europe, a third more women than men are on campus. Latin America, the Caribbean and Central Asia also show high rates of female enrolments. In a number of countries, at least two females graduate for every male. These young women are going into employment and becoming well established in their careers before even thinking of starting a family. By then they may be earning more than their male partners, as is now the case in junior management positions in the UK, according to the Chartered Management Institute.12 Family patterns are shifting. Already in the UK, nearly one in three working mothers with dependent children are the primary breadwinners for their family,13 while mothers are the sole or primary providers in a record 40 percent of US households with children under 18.14 There has been a big shift in men’s attitudes to family and work, in parallel with women’s increasing participation in the workforce. In the US, employed fathers in dual-income couples are now significantly more likely to experience ‘work-life conflict’ than mothers, according to a report by the Families and Work Institute. Significantly, it found that the probability of this conflict increased with high job pressure, but decreased when men had greater autonomy in their jobs and greater support from their supervisors.15 Another study by the Pew Research Center found that about half of all working parents in the US with children under age 18 feel it is hard to balance their job and family responsibilities, and there is no significant gap between mothers and fathers. However, fathers are much more likely than mothers to feel they are not spending enough time with their children. Some 46 percent of fathers say this, compared with 23 percent of mothers.16 Far more is known today about the importance for children’s well-being of bonding with their fathers as well as their mothers. Sixty percent of parents in the UK think fathers should spend more time with their children, a survey by the Equality and Human Rights Commission found.

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‘The way we “do” family has changed – not only because mothers are more likely to go out to work but also because today both mothers and fathers want close relationships with children as they are growing up,’ says Dr Caroline Gatrell of Lancaster University Management School, who has researched the subject of fathers, work and family life for the charity Working Families.

Work and life across generations Awareness of the tension between work and the rest of life has grown in recent decades in parallel with globalization, women’s rising participation in the workplace and legislative developments. ‘Work-life balance’ was not in the management vocabulary until the 1990s. How people chose to spend their time outside work was not the business of their managers. Employees were used to ﬁtting their personal lives round the ﬁxed commitments of their jobs. For good employers, that has all changed. With the 24/7 demands of business, they know they have to make allowances for employees’ lives outside work if they want to attract and retain the best people. We live in a shrinking world. Telephone enquiries from customers in the US and Europe are likely to be answered by call center staff in India or the Philippines. We take it for granted that we can shop for almost anything at almost any time. The Internet has delivered services to the home and revolutionized the retail sector and personal banking. Totally new ways of buying and selling products have emerged through channels such as eBay. So it is hardly surprising that young people in particular expect the way we work to be different too. If I can shop any time I choose, why can’t I work any time I choose? Inevitably some views about work differ across the generations. The contrast in life experience between baby boomers and Generation Y is obvious. People born in the decade after the Second World War went through school, university and their first jobs without ever seeing a computer, except behind the doors of an air-conditioned room. Yet people

Asked if they spent enough time with their own children, 44 percent of men and 23 percent of women said they did not. Half of fathers, and nearly a third of mothers, thought they spent too much time at work.17

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born since 1990 have never known a world without computers, cell phones and the Internet at their fingertips. However, these ‘bookend generations’, as economist Sylvia Ann Hewlett and colleagues describe them, share some common views about work, apparently in contrast to Generation X sandwiched between them. Their research found that both generations are seeking a ‘remixed’ set of rewards. They prize meaning and choice over money. ‘They are shedding Industrial Age conceptions of work and demanding control over when, where and how work gets done.’18 The baby boomers include many people who no longer want to fully retire. It may be that they feel they are just not ready for retirement at 60 or 65. However, it is increasingly likely that the pension fund they hoped would keep them going through their old age is grossly inadequate. We are emerging from the ‘golden era’ of pensions that guaranteed a percentage of final pay. Individuals increasingly have to take responsibility for saving for their retirement. Employers and pension providers are slowly waking up to the fact that the traditional ‘cliff edge’ between full-time work and full-time retirement no longer makes sense. Why should someone who still has a wealth of experience to give to their employer not continue to do so, at least on a flexible basis?

Tapping into mature talent B&Q, the UK’s largest home improvement retailer, was an early mover in recognizing the value of older workers. Faced with the challenge in the late 1980s to recruit and retain talent during a period of rapid expansion, it recognized that an ageing population had a commercial fit with its business. Older workers were more likely to be home-owners with experience in DIY and likely to be able to work non-traditional hours. In 1989, it made a bold statement by opening a store staffed by over-50s and was immediately surprised by the results. The retailer had a phenomenal response for vacancies and found that assumptions about older workers needing more training or struggling with the computer systems were unfounded. An independent study by Warwick University showed that, compared with other stores, profits were 18 percent higher, staff turnover was six times lower and absenteeism was reduced by 39 percent. Now 28 percent of B&Q’s workforce is over 50 and its oldest employee recently celebrated his 90th birthday.19

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Life expectancy continues to grow rapidly, even without any major antiaging medical breakthrough. In the UK, there are now more people of pensionable age than under-16s, and the government estimates that 35 percent of the babies born in 2012 will live to be 100.20 As economist George Magnus points out in The Age of Aging, this is a phenomenon already felt acutely in Japan, Germany and Italy and soon to affect most Western countries as well as the economic powerhouse of China. He points out that the median age of the world’s population (where half the population are older and half are younger) will rise from 28 now to 38 by 2050. It will be 47 in Europe by that time, 45 in China and about 41 in North America and Asia.21 How can we provide for an aging population out of the taxation revenues from a shrinking younger generation? One answer is an increase in retirement ages, which is already happening. If people are fit to work into their 70s, then why should they expect to stop when they are 60 and live for 20–30 years on a combination of their savings and government support? This has been difficult to achieve in a world where work consists of fulltime jobs, but new work styles will make the idea of gradual retirement both possible and normal. In Australia, employers are being urged to ‘get flexible’ in order to attract and retain older workers, particularly older women who are severely underrepresented in the workforce. This is often because they cannot combine inflexible working hours with caring responsibilities, according to recent research.22 ‘We are ignoring the huge pool of talent and experience represented by older women,’ says Susan Ryan, age discrimination commissioner. ‘This is a terrible waste of human capital, undermines the national imperative of growing the economy and results in significant loss to businesses. It also impacts the financial, emotional and physical wellbeing of the many women who are consigned to unwanted early retirement.’

Future work for all sectors As we show throughout this book, leading employers have started to realize that modernizing their work practices is essential to running an effective organization. The high-tech sector started the trend, with some professional services ﬁrms following on, but we have found examples of

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future work leaders in many different industries and countries, and in both private and public sectors. One global company in the consumer goods sector that has embarked on the shift to future work is Unilever. It launched an ‘Agile Working’ strategy, driven by business objectives. ‘Agile Working is a simple but powerful concept,’ says CEO Paul Polman. ‘It affords everyone at Unilever the opportunity to work with maximum flexibility and minimal constraints, enabled by technology and specially designed office facilities.’ This increases productivity, reduces the need for travel and its associated costs and helps people to achieve greater balance in their lives, he adds. The company has made the connection between business success and new ways of working. It has recognized that this is a way to increase the diversity of its organization at every level, drive productivity and engage its people. It understands that this involves a change in culture. We look at how Unilever is doing this at its futuristic offices in Hamburg in Chapter 6 and we analyze the lessons of the agile working strategy in Chapter 8. Some sectors are more reluctant than others to embrace change. Manufacturing companies, for example, may think that new work styles do not apply to them. But as pioneers emerge in these industries, others will follow suit. In the finance sector, there is still an addiction to extremely long working hours. Law firms and investment banks, the pillars of the world’s major financial centers, are among the most conservative sectors when it comes to new ways of working. Post-financial crisis, anecdotal evidence suggests that the opportunities for flexibility in many firms have become even more limited, with teams stretched due to cutbacks and employees feeling under pressure to put in face-time to preserve their jobs. ‘Extreme hours are less about getting things done and more about showing commitment,’ according to Professor Andre Spicer of Cass Business School in the City of London. ‘Large firms need to ask themselves just how productive and healthy long hours actually are. If they hope to be sustainable and attractive to employees, they need to tackle the extreme hours culture.’23 Chris Hobbs, partner and deputy head of compliance at law firm Norton Rose Fulbright, is unusual in working four days a week, one of them at home, in such a senior position, and he is held up as a role model of

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If this 24/7 office culture remains the rule in the financial heartlands, there are signs of change, albeit tentative compared with organizations leading the way in some other sectors. External pressure, including from clients, is forcing the pace in the legal profession, says Denise Jagger of law firm Eversheds, who has worked on a three-day week basis as a partner since joining in 2004. ‘The hourly rate remains the basis of fee charging in the overwhelming majority of law firms, which results in a focus on input rather than output,’ she says. ‘Nonetheless, clients are adopting more enlightened and flexible working practices and therefore many expect their law firms to do the same, not least as they know that if they don’t they will not attract some of the best talent. ‘They are increasingly asking questions in pitches relating to diversity, and they expect their firms to be able to field diverse teams. Unless firms adopt more flexible working practices they will score poorly on diversity statistics, particularly relating to gender, which will ultimately affect clients’ purchasing decisions.’ She says that women and the younger generation of lawyers do not want to work to the exclusion of everything else. ‘To continue to attract the best and to retain and motivate a skilled team of lawyers, law firms are at last waking up to the need for flexible working.’ Despite this awakening, many firms still think flexibility is fine for some disciplines but not for others, she says. ‘Corporate finance still suffers from an image of long hours and inflexible styles partly, in my view, because people confuse flexibility with part time, which it is decidedly not. As a former corporate finance practitioner, I recognize the need during a particularly large or complex transaction for a senior lawyer to be available. But this doesn’t always mean in person. And, after a protracted spell of long hours on a deal, work could be allocated to ensure a lighter period of work or a sizeable break.’25

how things can be done differently. ‘Law firms tend to lag behind other parts of business and industry,’ he told a Working Families conference.24 ‘We’re pretty traditional and conservative in approach. There’s a culture, particularly in big City firms, of working all hours, being chained to the desk 24/7 serving clients.’

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How work has evolved

A Danish solution to long hours in law firms An example of how a new generation can change things is Sirius, an all-purpose Danish corporate law firm launched by eight young lawyers who left their firms to try to replace the conventional 60–70-hour weeks with a culture of fewer hours and greater flexibility for all staff. ‘There’s been an enormous shift in the approach of young lawyers,’ says Birgit Gylling Andersen, an employment lawyer and founding partner. ‘Now it’s both male and female lawyers who discuss over lunch how to handle the kids, and both who take days off or leave to look after the children. ‘If you go through our office at 6 p.m., it’s very rare that there’s more than one or two people left, and they are normally partners. If you do have to work long hours on a case, we say: “Take some time off”. It’s very important for our employees that they know it’s acceptable to have personal wishes.’ Clients understand, she says. ‘They also have their personal needs. And we attract clients that also wish to work in a different way.’26 There are other examples of how the legal sector is changing below, and in Chapter 5.

The events in recent years affecting the financial markets have ‘changed the way that people in this sector are recognized’, says Michelle Mendelsson, co-head of diversity and inclusion for Europe, Middle East and Africa (EMEA) at Credit Suisse, the global investment bank. ‘We have to look for other ways to motivate and retain employees and enabling them to work in a way that suits them can help to raise levels of engagement.’ The EMEA diversity and inclusion team used the 2012 London Olympics, when the authorities encouraged financial firms to let employees work from home to cut down on traffic congestion, as a way to demonstrate that ‘agile’ working was possible. ‘The feedback from the business areas was generally very positive. That was the tipping point from a cultural perspective for both managers and employees who then recognized that this can be done.’ With support from the CEO of Credit Suisse EMEA, a plan of action to embed agile working across the bank was agreed by the EMEA diversity council, which comprises senior managers.

Future Work

An Excerpt from Future Work • 21

New types of work contract The last decade of the twentieth century brought a rapid growth in the ﬂexibility of employment contracts. Part-time work, staggered hours, condensed working weeks and ‘ﬂexi-time’ spread. Remote and homebased working increased with the introduction of mobile technologies. But these were mainly just variations of the permanent, full-time job. The following decade saw an expansion of the ‘contingent workforce’. Organizations kept hold of a core of essential talent but contracted out peripheral activities to save costs and increase flexibility. This paid off during the recession when many businesses shed temporary staff but managed to hold on to their permanent staff ready for the upturn. The trend toward a more flexible model of work has raised the question of whether organizations need to be burdened with liabilities for ‘permanent’ employees at all. Even in the public sector a permanent job offer is no longer necessarily a lifetime commitment. The Internet has given birth to a new type of organization that can tap into the talent of individuals without taking over their lives. The network business, the virtual corporation and the e-enterprise are versions of this emerging entity. They contract with individuals to supply their services, but not through a conventional employment contract. They pull together collections of individual contributors to achieve a common aim. These individuals are ‘free agents’ who can choose a lifestyle without the ties and constraints of conventional employment. The world they inhabit has much in common with the pre-industrial era. They are more likely to be working from home, some perhaps in a rural setting, and building social relationships in their home community rather than in the office. As work evolves into a new era, future generations may reflect back on the 200 years of Industrial Age working practices and see them as a passing phase in our social history.

Implementation was set for autumn 2013, with training for managers and employees. ‘We have completely moved away from presenteeism and agile working is just another way for employees to find the most appropriate way of working for them and to be supported to do that,’ says Mendelsson.27

22 • An Excerpt from Future Work

How work has evolved

Here are three examples of these new types of business: Six years ago Simon Harper was a partner in a major London law firm and recognized that the profession was ready for change. Lawyers had been working the same way for years serving the business community and he felt there was a gap to be filled with an alternative structure. ‘I had a hunch that more and more lawyers were open to working in a different way,’ says Harper. ‘They were rejecting the options that were currently out there, whether that was the construct of a traditional law firm and moving into partnership or the hierarchy of an in-house team. For a variety of reasons they were open to doing things differently. Either they were in a job and were unhappy with the way it was working for them or they’d left the law behind, not because they hated law but they just couldn’t find a way to practice it.’28 So he set up Lawyers on Demand (LOD) as an alternative legal services provider. They now have over 100 self-employed lawyers who have autonomy to work the way they choose, and LOD acts as the link with the client. ‘It’s not an agency, it’s a different way of working,’ explains Harper. ‘For us it’s about being a hub between the lawyers and the clients. Our relationship with the lawyers is a business one. Half our energy goes into working with them and half goes into working with the clients.’ Initially, they expected the interest to come from female lawyers with young children, but they quickly found they appealed to a much wider group. Harper’s view is that having children is just one catalyst that makes people stop and think about how they are running their lives. ‘People used to need to have an excuse to work differently, now more and more people just want to work in a different way. I see it as a move towards the individual economy rather than the employed economy. People are doing their own thing and LOD assists them in doing that.’ LOD is not alone. Others, such as LawEvo in the US, are rejecting the traditional law firm business model and setting up as lower cost ‘virtual’ alternatives. Based in Santa Clara, California, LiveOps uses a dispersed workforce of around 20,000 independent agents, mostly working from their homes across the US, to provide virtual call center services on demand for businesses. The agents include a high proportion of women, as well as retired people and students, and many have caring responsibilities.

Future Work

An Excerpt from Future Work • 23

Pay depends on their performance and the volume of service they provide. Some clients pay a simple rate, generally 25 cents per minute of talk time, some pay a base rate in addition to a bonus for commission and some pay entirely on commission.29 Such ‘e-lance’ businesses are open to criticism over their pay rates and lack of employment rights, benefits and job security. However, LiveOps says that ‘an average agent can make well over minimum wage’ and points to the flexibility that freelance operators have. Agents can choose where they work, although calls can only be routed to their regular business line, not re-routed if they are traveling. They can choose when to provide their services, which can be in blocks of just 30 minutes, and it is up to them whether to develop their skills or not. The company says this work model does not replace existing models but creates opportunities for people who do not want to, or cannot, work in the traditional way. With a large dispersed and independent workforce, it seeks ways of building ‘a self-sustaining community’. It provides the contract workforce with access to resources to interact as a community, motivate each other and self-regulate their own businesses’ performance.30 At what might be considered the other end of the work scale, Eden McCallum is a UK-based management consulting firm that draws on a pool of more than 400 independent consultants and matches them to clients’ projects, but does not employ them directly. Launched in 2000, it has attracted highly qualified professionals who want more control over their working lives while maintaining their earning power. About half the consultants previously worked for big firms such as McKinsey, Bain and Boston Consulting Group. As founding director Liann Eden explains, strong interpersonal skills are as important as ever in managing the consultants, even though this network model is based on looser affiliations than the traditional employer– employee contract. They still need feedback, reinforcement and a sense of belonging. ‘Being very clear in our communications is very important in this network model,’ she says. ‘We’ve got very good at setting clear expectations about the frequency and nature of the work up front. They know exactly where they stand. They know our standards.’ To ensure effective communication, the firm uses a contact management system that records every contact with each consultant, every project

24 • An Excerpt from Future Work

How work has evolved

they have done and every client they have worked with. It also captures all the information about and feedback on the consultant from interviews, references and project debriefs. This means that the in-house team can interact knowledgably with the consultants, almost as if they were staff. The firm also runs regular information and training events for the consultants to meet, exchange experiences and stay on top of developments. ‘That’s where they get a sense of identity,’ says Charlotte Cameron, the partner leading the firm’s consultant-focused activities. ‘People say it’s great to feel part of something. We also get consultants together to tell them what we’re planning for the future of the firm. It’s about sharing information with them so that we as an organization are not a black hole.’ Trust is a big part of the relationship, as the firm’s founders discovered. After they launched in 2000, they were worried that some of their growing pool of consultants might bypass them and seek work directly from their client companies or vice versa. They required them to sign a contract saying they could approach the clients only through Eden McCallum. ‘Two to three years in, we realized that the consultants and clients aren’t interested in one-off transactions,’ says Eden. ‘The consultants want to work with us as a conduit to lots of interesting clients and projects. Clients want to work with us to solve many different issues, not just what one consultant can do. Over the past 13 years we’ve done over 1200 projects and I can count on one hand the number of times someone tried to go behind our backs.’31

In summary We are on the cusp of the next big transformation in the model of work. Today technology allows us to work very differently than we did even a decade ago, and the new generation joining the workforce is not the only one demanding a new deal. Demographic and social trends, particularly the changing role of women, all point to the need for a fresh approach to work. We are poised for a revolution in how work is done. Fabio Rosati, chief executive of Elance, an online employment platform, predicts, for

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The world of work is transforming at an unprecedented pace. Massive shifts in demographics, employment, technology and economies make predicting tomorrow a tough task. Through interviews with leading observers of the emerging world of work, The Worldwide Workplace provides a practical understanding of how the workplace is changing and how to prepare. Packed with global case studies, this authoritative and highly readable book highlights the pressing worldwide ‘people’ issues and puts them into a business-related context. Order at www.palgrave.com. Enter code PM14THIRTY to receive a 30% discount.

The Century of Uncertainty

There are a lot of people on this little planet of ours. In the time period it took me to write the first draft of this book (30 days), the number of people populating the Earth rose from 7,174,521,162 to 7,183,196,576.1 That’s 8,675,414 additional people! If you’d like another alarming statistic, despite famine, war and pestilence, we are incredibly good at producing people. From 1804 to 2011 we managed to increase the world’s population from one billion to seven billion – and it’s only going to take another 15 years to get to eight billion. The big issue is that a very large proportion of them would like a job. More than that, in even the most inhospitable spots, we are living a good deal longer. In Western Europe life expectancy rose from 47 in 1900, to 67 in 1950 and now it is 80. In mega-rich Monaco, citizens and tax exiles alike can expect to go on counting their coinage to a world-beating 89.5 years. There’s just one problem: in most developed countries the population is in decline. We of the industrialized nations live longer but have fewer offspring – we’re too busy working to have babies. In some places around this overcrowded globe of ours the decline is almost climatic as countries run out of people to do the jobs that keep society’s wheels in motion. United Nations Development Programme (UNDP), www.worldometers.info/worldpopulation.

ch ap te r

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The upshot of these developments is a massive and ongoing reduction in young people entering the job market (although youâ&#x20AC;&#x2122;ll have a hard time convincing the youth of Greece, Spain, Ireland and Portugal of this) and a storm surge of elderly people. Already over 50 percent of the population of the worldâ&#x20AC;&#x2122;s developed countries are in the two so-called dependent groups (under 15 and over 64). Look at this table as an eye-opener of where we are: Projected Change in Working-Age Population Region

1995

2010

2025

2050

Europe (millions)

486

496

452

370

World (billions) Europe share %

3.5 14

4.5 11

5.3

6.0

Source: International Conference of Population and Development

As the old-age population rises, the working-age group shrinks. By 2030 the European workforce will be around 280 million, compared with around 300 million in 2011. This means that the European Union (EU) member states will need to import a vast army of new workers (estimates suggest 150 million over 20 years, giving the lie to the idea of rampant, uncontrolled immigration as being a very bad thing) just to maintain the present levels of service and support tax revenues that keep the whole machine going. Into that mix goes the fact that countries will be forced to raise retirement ages for their citizens from the current average of 65 to around 70 and more. This is already happening in many countries, despite the squeals of protest from the citizenry. The demographic time bomb that is Europe, is mirrored in the US, where in 2013 labor-force growth was zero and expected to reverse (suggesting a shortage of working-age people of around 17 million by 2020). Some industries in the US are already in crisis. The medical profession has shortfalls of thousands of nurses and doctors.2 The problem is that if a country imports a large number of nurses and doctors from overseas there is a knock-on effect in the country these people come from. This was seen in the UK with an aggressive recruitment campaign of nurses from the Philippines, which spiked a nursing crisis back home as Filipino nurses leapt at the opportunity to earn higher wages.

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An Excerpt from The Worldwide Workplace â&#x20AC;˘ 27

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Just to get you in the mood for what comes next, here are a few more demographic facts and figures to illustrate that the world of work and the global jobs market is about to become very interesting indeed. Or perhaps that word “uncertain” would be more appropriate: – Japan’s population is falling off the proverbial cliff. Current estimates show today’s population of 127 million declining to 107 million by 2040 and shrinking dramatically further to just 87 million by 2060 Worse still, by then, just 50 percent of the population will be in the working-age category. This puts a country that has a fairly xenophobic attitude to foreigners seriously on the back foot. Population experts calculate that Japan would have to import over half a million immigrants every year just to maintain the current size of its working population. That shows no sign whatsoever of happening. – Despite some recent economic woes, China is short of 10 to 12 million workers. And in a mind-boggling statistic, the UN has predicted that by 2040 the Chinese will have 400 million citizens over 65, a group larger than the combined populations of France, Germany, Italy, Japan and the UK. – Across the rest of Asia, national governments are waking up to a maturing population and flatlining or collapsing birth rates. Soon they will face similar choices to the West. – Australians – always prepared to be different – are averse to working past retirement. Just 49 percent of workers between 55 and 64 work, compared with 59 percent in the US and 65 percent in Scandinavia. – The German Institute for Economic Research suggests that there may be as many as 50,000 of what it terms “missing” engineers. This is a direct result of a concern years ago that engineers were not needed and Germans chose to train for other occupations. This is

Engineering firms across the US have reported a need to invest in new, robotic machinery (not new employees) because they can’t get the skilled workers they need.

–

called getting the job pipeline very wrong indeed. Elsewhere, the small and medium-sized enterprise (SME) sector (the backbone of Germany’s economy) reports that four out of every five firms experience difficulties in getting the skilled people they require. Also, German SMEs are discovering that the current generation of the family are not that interested in going into the family firm (a situation mirrored across the EU and the US) and are creating a new uncertainty about how they will organize themselves in the future. The great Russian bear is bucking for cuddly toy status – shrinking before our eyes. From a peak of 147 million some years ago, there are now 143 million citizens, but this number is predicted to fall by a full 20 percent, to 111 million by 2050. Concerns that the once mighty Russian state will turn into a pipsqueak nation have prompted President Putin to call for cash incentives for couples to have more than one child. Germany faces the same population shrinkage as Russia. By 2050 the population is expected to reduce from today’s 82 million to around 70 million. Also, the population distribution will look very different in 2050 – mainly, much older. Whereas there are around 50 million people of working age (20–64) living in Germany today, this figure will drop to between 36 and 39 million by 2050. The average German by then will be 50 years old. While Japan, Russia and Germany face a shrinking citizenry, the United Kingdom faces the opposite – a population explosion. Current estimates suggest that the population is on course to reach 73 million by 2035. Just over two-thirds of the projected increase from 2010 to 2035 is either directly or indirectly due to migration. This will be due to people entering the UK, and also their future offspring. The UK is regarded as the most popular place in Europe to try and build a life and this shows no sign of diminishing anytime soon.

What all this clearly illustrates is that individual nations and whole regions are in a constant state of flux. More than that, to survive in

The Century of Uncertainty

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The Worldwide Workplace

anything like their present form, many countries are going to have to get a whole lot better at two things – immigration and outsourcing. Immigration because their ageing populations will force them to import talent to keep the nation-state alive, and outsourcing to other countries that can do many of the jobs that need to be done to keep the country operational.

The migrant mix Migration has been a part of human history forever. Whole populations, persecuted peoples and those seeking a better stake in life have constantly changed the make-up of the world. Today, economic migrants – those who make a choice to move somewhere, as opposed to those who move because they have no other choice – make up a broad group. They bring all sorts of needed skills to all sorts of places. When it comes to jobs, we tend to think at two ends of the spectrum: the so-called brain drain where scientists and highly qualified professionals move around the globe offering their services to the highest bidder; and, at the lower end, of the likes of Indian and Pakistani construction workers in the Middle East, working on possibly unsafe and unsupervised construction sites. But, despite all the media frenzy built around foreigners coming into our countries and taking our jobs, they are – in reality – a fairly small group of migrants, compared with those who choose to stay at home. Currently, there are around 200 million people (about 3 percent of the world’s total population) living outside their country of birth (accurate figures are difficult to calculate). This is about double the amount of 1985. Demographers suggest that most immigrants move to developed countries and that this will result in an average gain of around two million people every year until 2050. But migration is not confined to the one-way street of poor country to rich country. In the UK, 1.5 million graduates left to seek out opportunities in the US, Canada, Australia and the European Union.

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This compares with the 1.3 million graduates who came to the UK in the same period in search of better jobs. While the UK may be growing in population and is a real talent magnet for job seekers, it also exports one in six of its graduates. On the other hand, in France (which has the lowest migration rate of any OECD country), only 1 in 30 leave the home turf. This may have something to do with language – English being the lingua franca of commerce. It pays to remember that there is always a good reason for a statistic!

Massive shortages As we saw earlier with the Filipino nurses streaming to UK hospitals and creating a massive shortage in their own country, economic migration in search of that better job is plunging many emerging economies into deep trouble. According to the International Conference on Population and Development (ICPD), “poor countries across Africa, Central America and the Caribbean are losing sometimes staggering numbers of their college-educated workers to wealthy industrialized democracies.” Researchers found that between a quarter and almost a half of the college-educated nationals of Ghana, Mozambique, Kenya, Uganda, Nicaragua and El Salvador live in the 34 OECD member states.3 The ICPD report goes on to say that, “for Haiti and Jamaica the number rises to more than 80 percent. In contrast, less than five percent of the skilled nationals of the great behemoths of the developing world – India, China, Indonesia and Brazil – live in a member country.” Such is the impact of foreign workers doing jobs in developed countries that the health sector now employs 21 percent of all foreign workers in Norway, 19 percent in Sweden, 14 percent in the UK, 12 percent in the Netherlands and 11 percent in the US. ICPD report: “Employment Trends in the 21st Century”, 2011. The OECD is the rich nations’ country club, headquartered in Paris’s toney 16th arrondissement. Twenty countries originally signed the Convention on the Organization for Economic Co-operation and Development on 14 December 1960. Since then a further 14 countries have become members of the organization.

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32 • An Excerpt from The Worldwide Workplace The Worldwide Workplace

However, there is good news too. A World Bank report shows that immigrants repatriating money earned from these overseas jobs have substantially reduced poverty in countries such as Mexico, Guatemala and the Philippines. Indeed, Romania now receives more than five billion euros a year from workers employed in the EU. Again according to the ICPD, these are just the most visible parts of a reverse brain drain. They say that this diaspora brings four other key benefits to these emerging countries: – It spurs the transfer of technology and business practices back to the home country. – The immigrants ignite the growth of business back home. – Migration of talent overseas creates job opportunities in the domestic market, raises domestic salary scales and motivates others to upgrade their knowledge and skills. – In the next stage, foreign companies implant their operations in the migrants’ home country to access local talent without moving them overseas. But there is one other thing to keep in mind; in most developed countries the citizens don’t move very much at all. Indeed, according to studies in the EU countries, most European nationals are born, grow up, build a life and die within 100 kilometers of their birthplace.

The great visa question Such are the mixed messages surrounding the immigration issue that many countries – with very real talent shortages – are in danger of strangling economic opportunity, due to political and societal pressures about the number of “foreigners coming into our country and taking our jobs.” There is little doubt that governments need to take a much more pragmatic view of bolstering the talent pipeline if they dare (knowing how many votes it may well cost them if they do). In the US, the

chief executives of Facebook, Google, Yahoo! and others complain that they cannot find the talent they need within their domestic borders. But, with the US visa program to recruit foreign technical specialists capped at 65,000 people a year, it is hard to see how they can overcome the problem. The visa cap is exceeded within days of each year’s visa quota opening up. There are similar stories from other developed nations, pointing to a very real need to create new rules on these issues if countries are not to strangle the ability of companies to develop for the good of the national economy. Amazingly, one of our featured growth of jobs areas (see later) doesn’t have this problem.

Countries to work in It’s not only those smart, well-educated graduates from Africa, South America and the Caribbean who are flocking to the OECD’s member countries either. A new professional class, at home almost anywhere in the world, has also been on the lookout for the best places to work, especially those where there is an ideal work–life balance (of which more in Chapter 3). While regular surveys by magazines and polling firms that rate countries and cities regularly put New Zealand, Australia, Canada, Switzerland and the Scandinavian quartet at the top of their “Where to Live” wish lists, the global professional eyes up the possibilities in a way that balances a good income and good lifestyle with the challenges that work will bring. London-based recruiter Hydrogen polled 2353 internationally operating professionals,4 asking them where they would prefer to live and work. Remember these are members of the international business class, who want challenge, income and a lifestyle that meets their requirements. The choices explain a lot: 1. United States 2. Australia 3. United Kingdom 4

13% 9% 9%

“Global Professionals on the Move – 2012,” Hydrogen.

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34 • An Excerpt from The Worldwide Workplace

4. 5. 6. 7. 8.

The Worldwide Workplace

Singapore Canada Switzerland Hong Kong France

6% 5% 4% 4% 4%

Just 2 percent suggested China. These are interesting results when you consider where people want to go and where the right kind of infrastructure coupled to career challenge exists. Being honest, China may be the great new frontier, but it is just that – a frontier too far for those really sophisticated global managers who can choose where they live and how they manage their jobs. And international experience is seen increasingly by many industries as a key to success – more so than simply having good technical knowledge of your profession. According to the Hydrogen report, international experience was cited as a very important attribute by 76 percent of those in the energy industry, 73 percent in pharmaceuticals, 69 percent in law and 62 percent in finance.

Vocational skills in demand Demand for skills is everywhere. And when it comes to the kind of jobs, the variety is astounding. Global people provider Manpower report that the global top ten jobs that employers are having difficulty filling are, in order of scarcity:5 1. 2. 3. 4. 5. 6. 7. 5

Skilled Trade Workers (plumbers, carpenters, electricians etc.) Engineers Sales Representatives Technicians Accounting and Finance Staff Management Executives IT Staff

“2013 The Great Talent Shortage Awakening,” Manpower Inc.

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Obviously, these demands rise and fall depending on the country, but it still shows that there are a huge number of trades and professions where shortages are endemic. Göran Hultin, a global labor consultant and a former deputy director general of the International Labour Organization (ILO), adds emphasis to Manpower’s findings on talent shortages: “Globally, one employer in three cannot find the skills they need – and it is not only about university graduates. In almost all labor markets the most difficult to find professionals are the vocationally skilled ones.” This is an important point to take on board. We have created a society where academic paths are more valued by society than vocational ones. The few exceptions are countries such as Austria, Germany and Switzerland with their long-term belief in the apprenticeship system. If you compare unemployment and growth statistics in this triumvirate with those of other nations the results are most interesting and point to why others are now embarking on their own – but often less onerous – versions of the apprenticeship system.

Seeking out new talent With shortages of talent abounding, job industry experts are counseling that organizations large and small are going to have to look for the people they need in entirely new places. Manpower Inc contends that “87 percent of companies experiencing a talent shortage are not actively looking for new sources of talent.” Manpower add, “Women and young people, for example, make up a considerable proportion of the world’s population and untapped sources of talent, but only a tiny fraction of shortage-affected employers are actively seeking to recruit them. This makes little sense. Effectively tapping into these ‘new’ sources of talent will place an organization leagues ahead of its competitors.”

8. Drivers 9. Secretaries, PAs, Administration Assistants and Office Support Staff 10. Laborers

The Worldwide Workplace

They’re right. But sadly, most organizations suffer from what I have for decades labeled as the “different kind of Bob” syndrome. Many companies agree that they should diversify the employee mix, but culturally they are just unable to do it. French firms have French citizens in top positions, so do Germans, Swedes, Japanese and Brazilians. Firms hire headhunters with instructions to “scour the ends of the earth” for great talent. But when it comes to the crunch of hiring they fall back into the “safe mode” of bringing on board a clone of themselves. Yes, a “different kind of Bob, Miguel, Helmut, or Jaques.”6 Equally, when it comes to searching out new talent, organizations seem very reluctant to tread new paths, break new ground and explore different avenues of opportunity. Certainly we have US, UK and German bankers using Polish and Hungarian workers in Poland and Hungary for their back-office operations. But this isn’t much of a change. The people they use are just wannabe versions of themselves, who think the same things, dress the same way and have essentially the same training. But no one is looking outside these safe new corridors to seek out what would be regarded as the unusual and exotic. There is a lot of talent out there that would just love the opportunity. The trouble is it doesn’t know how to reach out and get that job and we don’t know how to get to these people. As one of the people who defined and described the 19th century explained: There are all kinds of employers wanting all sorts of people and all sorts of people wanting all kinds of employers – and they never seem to come together.

Dickens wrote these words sometime around 1840. The fact that we still struggle, 170-plus years later, to match people who need jobs 6 Back in the 1990s I carried out a study that tracked the make-up of a range of global corporations, using their annual reports as the base. Over a period of five years, less than 8 percent appointed anyone outside of their own comfort zone to a senior management position. The conclusion? White American, French and German managers etc. hired clones of themselves – it makes them feel safe. So, by the way, do the Russians, Japanese, Chinese, Brazilians … and the rest.

36 • An Excerpt from The Worldwide Workplace

The Century of Uncertainty

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with people who have them to offer shows that our inability to solve pressing problems has a long, long history. Solving the global talent equation is blocked by our own inbuilt habits and historical prejudices.

We have already mentioned how engineering firms in the US are being forced to rely on robotics to counter the shortage of machine operators. Well it’s not only in engineering that this is occurring. What’s really worrying is whether technical advances are having a real effect on the overall jobs market. Two Massachusetts Institue of Technology (MIT) / Sloan School of Management professors, Erik Brynjolfsson and Andrew McAfee, contend that major advances in computer technology (from industrial robotics to automated translation services) are one of the consequences of the sluggish employment growth of the last decade.7 And they affect a lot more than engineering jobs – clerical, retail, legal and financial services, education and medicine are all in the frame. “New technologies are encroaching into human skills in a way that is completely unprecedented,” say Brynjolfsson and McAfee, and many middle-class jobs are on the line. “The middle seems to be going away,” they add, “the top and bottom are clearly getting further apart.” That we are seeing the rise of a new society where the middle is missing is also noted by MIT economist David Autor: “Computers have increasingly taken over tasks like bookkeeping, clerical work and the repetitive production-line tasks.” These are the “jobs” that once provided respectable lower-middle-class employment. “At the same time,” explains Autor, “higher-paying jobs requiring creativity and problem-solving skills – often aided by computers – have proliferated. But so have low skill jobs that can’t be automated – waiters, cooks, janitors and other service workers. The result has been a polarization of the workforce Erik Brynjolfsson and Andrew McAfee, Race against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, Digital Frontier Press, Lexington, MA, 2012, www.raceagainst themachine.com.

And what of the robot?

38 • An Excerpt from The Worldwide Workplace The Worldwide Workplace

and a hollowing out of the middle class.” Certainly if you think about it, that’s exactly what we have been witnessing during this last decade – it’s just that no one has really drawn our attention to it before now.

In my promise to leave no stone unturned and no corner unswept in seeking out the future of the workplace, I would be remiss indeed if I did not mention two areas where employment growth is booming, one of which (at the very least) offers for the future the prospect of middle-class respectability, stability and career opportunities. The fact that these very different “industries” have a focus on the underdogs of our societies makes them a very strange pair indeed. They are also “industries” where a “frisson of fear” may be part of the package. In other words the work can have its hazardous moments, depending on which part you choose to play in it. The first of our new job creators is the global operations of organized crime – an employment sector that, unseen by most of us, is in the midst of massive growth. Traditional areas of “work” – drugs, gambling, prostitution and money laundering – have, of late, been eclipsed by electronic and financial crime. Today, organized crime operations fall into the “iceberg employer” category: only about one-eighth (the nasty bits) is visible. The hoodlums, gunslingers and cyber-terrorists are backed up by the many thousands of people who make their living from organized crime without – often – knowing who they are really working for. Hundreds of job categories, from accountants to lawyers, from chefs and waiters to pilots and drivers, doctors and nurses, derive their uneventful middle-class existence from the well-oiled machinery of organized crime. Lately, computer crime has been high on the agenda, employing thousands of programmers, many of whom got their training in the Russian and Chinese military. The leading group in organized crime at present (the Apple or Samsung of the underground industry) is the Russian mafia. Officially known as Russian Transnational Organized Crime (TNOC), it is suggested that it

New jobs: the mafia and aid workers

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In typical “iceberg employer” mode, the Russian TNOC has combined street-level visible crime (such as human trafficking and drug smuggling) with less visible white collar crimes such as the counterfeiting of goods (cigarettes are highly popular) and tax evasion on an industrial scale. The Russian mafia have turned organized crime into a global business model and make full use of the dual and multiple nationality status of its members – a direct result of the breakup of the Soviet Union. In addition there are over a million former Soviet citizens residing in Israel with citizenship there, free to travel to the EU and the US without visas (Israelis have visa-free access to Russia too). The mafia also make extensive use of ethnic Russians with EU passports. This amazing access to talent, where and when you want it, would seem to be a far cry from Apple, Yahoo! and Facebook going through channels and petitioning the US government for a few more visas for much needed technical talent! THE

WORLD

100

PEOPLE

Imagine planet Earth, not as a swollen mass of seven billion-plus bodies, but just 100 souls. To give you an idea of how our world stacks up, here is who they are: – Gender: 50 are male and 50 are female – Age: 26 would be under 14; 66 would be 15 to 64; eight would be 65 or older – Geography: 60 from Asia; 15 from Africa; 11 from Europe; nine from Latin America and the Caribbean; five from North America – Religion: 33 Christian; 22 Muslim; 14 Hindu; seven Buddhist; 12 believe in other religions; 12 have no particular faith – Language: 12 Chinese; five Spanish; five English; three Arabic; three Hindi; three Bengali; three Portuguese; two Russian; two Japanese; 62 speak other languages

numbers around 300,000 employees – that makes it one of the world’s largest corporations, even if it doesn’t publish its annual turnover in Fortune magazine.

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– Literacy: 83 can read and write – Education: 74 would have primary school education; 64 would have secondary education; eight have college degrees – Urban / rural: 51 are urban dwellers – Safe water: 87 would have access to safe drinking water – Food: 15 would be undernourished – Poverty: 48 would live on less than US$2 per day and one out of two children would live in poverty – Electricity: 78 would have electricity – Technology: 75 are cell phone users; 30 are active internet users; 22 would own or share a computer – Sanitation: 65 would have improved sanitation; 16 would have no toilets

The third sector The other big growth area is the international aid and development sector. As of 2013 it was estimated that there were approximately 75 million people around the globe in need of humanitarian assistance. Though figures are hard to come by, it is thought there are around a quarter of a million aid workers, comprising foreign aid workers and people from the countries directly affected. The largest organizations are several agencies of the UN and the Red Cross, but they are closely followed in numbers of employees by Save the Children, Oxfam, Caritas and World Vision. Over the last decade these organizations have been working hard at creating a much more professional management structure – modeling themselves more and more on the private sector. Moreover, salaries and fringe benefits (such as pension plans, medical cover and working conditions) have been evolving increasingly in line with the lower end of for-profit business. In addition, competition for aid-sector cash has been ramped up as big corporations in areas such as logistics (think FedEx and DHL) and the big consulting firms (think Deloitte, PwC and KPMG) have realized that they can make money from humanitarian

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But now the aid sector is poised for another boost in the numbers making up its ranks. In 2012 one of the leading aid organizations – Save the Children – carried out a study that showed that the number of people around the world who would be directly affected by climate change-driven disaster (earthquakes, floods, famines, tornados and so forth) was set to increase dramatically. Their thinking is that the number will change as follows: Population Affected by Climate Disasters 2004

2010

2015

110m

263m

375m

Source: Save the Children: Humanitarian & Leadership Academy 2012

Incredibly, the number of people affected just by climate change events more than trebles in a period of ten years. What’s got the aid business all excited (or worried depending on your viewpoint) is that they are going to need an awful lot of people to manage and care for all these people when the inevitable happens, somewhere in the world. Furthermore, these huge affected populations do not include those displaced by wars and other man-made disasters. What this means is that there will be two sorts of needs. First, for people to actually do stuff – everything from distributing supplies to finding new sources of water to securing the funding that makes it all happen. Second, for people to train those people to do the right sort of stuff. To make this happen, organizations such as Save the Children are putting huge resources into training and development, upskilling their existing people and looking around for new talent to help meet these emerging needs. As pointed out earlier, the aid sector has been moving quietly toward a sort of parity in terms of compensation and benefits with at least

aid. As one senior aid expert put it, “Let’s face it, if Procter & Gamble or Unilever can deliver UN food aid for less than a charity, who do you think will get the contract?”

The Worldwide Workplace

some of the private organizations. This means that it is now perfectly possible for a smart young graduate, or an experienced manager who wants to do something different, to join an aid agency and build a viable, rewarding career. So more job opportunities are going to open up and there will be more challenges and pressures on the private sector in the search for talent. Jobs in the humanitarian aid sector aren’t confined to sticking on bandages. Smart marketers, fund-raisers, logistics and finance experts as well as IT developers are all required – the same talents that the private firms need too. So another career opportunity opens up that will most certainly continue to grow as we seek to mitigate the effects of natural disasters on our global population. Don’t make your choice now – or whether you choose to join the ranks of the criminal underworld or an international aid agency – but these developments illustrate that whatever else, the opportunities for employment are very varied and forever evolving. Those pessimists who claim there are no opportunities are wrong – you just need to know where to look.

Educators have let down the NEXT generation Talk to any employer practically anywhere in the world and you’ll pick up a very strong sense of frustration when they talk about their hiring needs. Not only can they not track down the skilled professionals they need, but also they cannot find the right entry-level staff either. In the hundreds of discussions and interviews I’ve conducted in the process of preparing this book, it has become clear that the majority of young people leave school, college or university ill-prepared for a job in the real world. This is unfortunate. While we’ll go into some of the reasons in more depth and look at how to change that in Chapter 5, let’s now take a quick look at some of the issues. According to a report by management consultants McKinsey,8 over 70 percent of educational institutions claim that they turn out what 8

“Education to Employment: Designing a System that Works,” McKinsey & Company, 2012.

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And I find – based on my own interviews – that employers and young job seekers think this number is already far too high. In a study I developed for the FutureWork Forum and the Generation Europe Foundation in 2010,9 just one in every six of the so-called NEXT generation believed they were (or were currently being) given the required skills at school or college to get a job. This was a research survey based on a total of 7,062 responses from all over Europe. Employers I talked with agreed. Most said that they take in young people and have to completely train them from the ground up. More than that, employers complain that these young people are often also lacking in so-called life skills (simple things such as how to open a bank account and balance a household budget). In October 2013, while this book was being completed, automotive firm Jaguar Land Rover announced some good news for the hardpressed British economy. They were adding 1700 new jobs at one of their factories. The only downer was an interview with the Jaguar Land Rover CEO, Ralph Speth, who voiced concerns that the problem would be finding the people to do the jobs. He indicated that the firm would most probably have to train everyone they took on.

No career guidance There’s worse to come. While being work-ready is obviously a problem for most graduates from education, the fact that they got little, if any, career guidance while they were at school is a further indictment of the system. Where there was some career guidance, survey participants reported that it was either irrelevant or totally out of date. Most respondents said that they wouldn’t have used it even if it was on “Employing the NEXT Generation: The Right Skills in the Right Place at the Right Time,” 2010.

they term “employment-ready” graduates. This starry-eyed bunch of educators couldn’t have got it more wrong, because just 42 percent of employers and 45 percent of young people agreed with them.

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Having said that, many young people have only themselves to blame for facing a jobless future. Too many didn’t read the signs of economic meltdown and persisted in a “head in the sand” ostrich display. When they should have been taking practical courses that would land them a job (e.g. law graduates always get hired to do something even if it has nothing to do with the law, because they have demonstrated they can excel at certain “must have” abilities), they were doing a degree in ancient history or veterinary science (do you know how many unemployed vets there are? I’ve lost count, although in some countries they are seen to be in increasing demand). I recently met an angry young woman who was desperate for a career as a librarian. “That’s what I want to be,” she exclaimed. But in a real world of public funding cuts, with libraries closing rather than opening, is this really a sane career option? This attitude is sadly repeated in thousands of other “long past their sell-by date” jobs. The lesson here is simple – get real! Also at fault was the social trend (already referred to) of everyone aspiring to a university degree, when a vocational qualification would not only have been more appropriate but possibly have led to a stable and well-paid job. Many people I’ve talked to put part of the failure of this generation down to their parents: – Unrealistic aspirations that their children should go to university. – Failure to encourage them to find weekend and summer jobs to gain experience of real-life working. – The fear of letting young people out on the streets, so a refusal to let them do newspaper rounds or other deliveries that provide a basic sense of responsibility.

offer, as career counselors had no idea of the current job market. How educators can ever crawl back from this state of affairs, frankly, beats me. Their refusal to change their own status quo has had a huge and extremely detrimental effect on a generation of ill-informed job seekers.

While these could be contributory factors, the truth is that we have a generation that had more choice than any other, was linked up more than any other, but has failed to put it collectively together. While there are many young people with stellar careers ahead of them (and a lot of would-be entrepreneurs seeking to do it their own way), there are far too many who just don’t have the skills (especially amidst recession) to help themselves out of trouble.

The “most powerful” generation Not everyone agrees with the “it’s just hopeless” scenario. Chiara Palieri, a bubbly young Neapolitan who has become a one-woman booster for today’s youth, has a totally different take on where she and her colleagues are placed in the big scheme of things. Asked if she felt she was part of a “lost generation,” Palieri replied, “I strongly believe I am part of the most powerful generation that ever existed. A generation which knows how to reinvent itself and manage to survive amidst highly challenging times.” She continued, “Just take a look at all the amazing start-ups and social enterprises that have flourished even during this time of crisis.” As a vocal advocate for young people, who has spent many years attending conferences and seminars on youth issues, Palieri also has her view about who is to blame for the mess her parents’ generation have got the youth of today into. “The blame,” says Palieri, “has to be equally shared between business (which doesn’t have youth-friendly schemes for employment), government (which fails to address or implement policies to ensure young people meaningful work experience) and educators.” Of educators, Palieri says, “schools and universities do not equip students to become useful employees. Education should do a much better job of adapting to the reality of today’s marketplace. They need to educate students to work within an ever-changing environment and train them about essential tools like social media and entrepreneurship.” In the street speak of the US, the NEXT generation are referred to as “Generation Screwed!” In a more dainty European way we call it

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the “lost generation.” Either way, and despite the talent shortages, they are not finding it easy to get a job, mainly because they are not qualified to take up those on offer. As this book was being written, there were eye-popping levels of youth unemployment (over 50 percent in Greece and Spain). While politicians shake their heads and make grand speeches, this huge mass of unemployed are feeling deserted by authority. Perhaps the only bright thing on their horizon is that they are part of countries where the extended family is still a feature of the culture. In Spain and Greece, three and four generations live together. In both those countries the black economy (the one that doesn’t show up in the monthly statistics) is alive and well. How much it alleviates the problems is difficult to say, but somewhere out there it is keeping people in the one thing they need, whether it is official or unofficial – a job. In Ireland, where the 19th and 20th centuries had seen mass emigration, the Irish diaspora have been returning home in the past decade to feed the employment needs of the aggressively named Celtic Tiger. Now as the tiger sits whimpering in a corner, they are leaving again. The sad fact is that in countries such as Spain and Ireland, many young people left school as soon as they could and went into the then booming construction industry. When the crisis hit, the industry collapsed practically overnight. This left thousands of young people not only jobless, but without any formal training or educational qualifications to enable them to pursue other areas of employment. The level of desperation among young people in these countries to nail down a job – however ill-paid it might be – was all too neatly captured by the response to an advertisement in Spain for 11 low-level jobs as guards at Madrid’s storied Prado art gallery. Although salaries were just €13,000 a year, a mind-boggling total of 18,524 people applied for the jobs. The chances of landing a job in the European Union are put into stark reality by a Gallup / Debating Europe Poll that posed the question,

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“Will young people have more or fewer opportunities than their parents’ generation to have a secure job?”10

Fewer Opportunities (than your Parents) to Find a Secure Job Poland

62%

Germany

62%

63%

France

71%

Spain

78%

Italy

92%

Fewer Opportunities (than your Parents) to have a Secure Pension Poland

59%

63%

Germany

69%

France

73%

Spain

81%

Italy

93%

No one bothered to ask the Greeks how they felt about all this.

Welcome the wirearchy In much of this chapter we’ve taken technology as a given. It’s there, we use it. It helps us do stuff. But we cannot ignore the fact that today’s and tomorrow’s technologies are forging new business and management styles. Those who peddle organizational models and leadership classes for a living need to be aware that there is what they would no doubt term a paradigm shift that has created a need for new kinds of thinking and decision-making. It would seem there is a new 10

“Outlook for the Future of Europe’s Younger Generation,” 2013.

The pessimism is palpable:

The Worldwide Workplace

kid on the decision-making block – “wirearchy” has replaced hierarchy. The basics behind this are that today the social networks, which allow you to engage with the ideas and insights of many, trump the brilliance of any one person. Indeed, if you want to make sense of the complex world we live in you have to ask thousands for their input. The next skill is to be able to distil that into an actionable strategy. Essentially, it goes back to the clever thought that began with the mobile revolution a decade ago, which went, “Why would I ask my boss when I can ask the person who knows the answer?” This idea was predicated on the fact that in the past when you had a problem at work, you asked your superior. With mobile communication you ask who you think will give you the best information – even if it is your drinking buddy who works for a rival organization. Now, with the masses of information out there and so many people who can be easily asked for answers, the real winners – and the real 21st-century leaders – will be those who can take all this complexity, embrace it, make sense of it and distil it down to its simplest form. There’s also something about sharing collaboration and co-creation of value, which we’ll get to later. In a complex VUCA (volatile, uncertain, complex, ambiguous) world these are the attributes we need to see in those who guide our fortunes and generate our jobs.

Projects and the digital world dominate In the jobs we do in the future one form will dominate. Harking back to the concept of the wirearchy, we are already there. Digital will drive everything we do in terms of our jobs and the whole of our work–life environment. Susan Stucky is an expert on behavior at work. One of the founders of the Institute for Research on Learning in California, she now works for IBM at their research center in Almaden in San Jose, California, where she looks at the best, most productive ways to work. “I think that working digitally will be more pronounced than working remotely,” she says. “Similarly, I think that it is the emphasis on projects – planning

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Stucky continues her thoughts about work and the workplace: “One thing that won’t change is that work – despite all the new bells and whistles – is fundamentally social – whether you are doing something alone or not. For instance this book you are writing has to meet certain social norms and expectations. You have to interact collaboratively with those you interview as well as your editor and publisher in socially accepted ways, or it isn’t going to work – even if you then write the manuscript all alone. But much, if not all of this interaction is digitally mediated. We do this across time and space, whether it is with someone in the next room or on the other side of the world.” Stucky adds to this by suggesting: “In the myriad work arrangements I have been part of, the question behind the scenes has always been around how work actually gets done. Not how it is supposed to get done, or how people who are going to do it say they get it done, but how it actually unfolds in reality. Call that work practice or ways and styles of working. It’s where the rubber meets the road, so to speak. If you think about it, we are so often interested in the latest technology, the latest gadget or the coolest new workplaces that we forget they are all simply in the service of getting the work done – productively, efficiently, effectively and perhaps with a little sprinkling of creativity or innovation thrown in for good measure.” Yes, this is the key; technology assists – but it is people who make things happen.

The digital workspace By now Susan Stucky is into her stride and produces both examples and ideas about why we (still) go to work and why jobs for us humans This interview is based on a talk by Susan Stucky for the Workplace Strategy Summit in San Francisco in 2012. The IFMA Foundation, Houston, Texas, will publish the original presentation in book form, titled, Workplace Strategy Summit 2012, Research in Action. 11

them, managing and executing them – that will dominate.” She goes on, “That is to say business processes, which are getting more and more automated (as we already explained) will continue to recede from awareness.”11

The Worldwide Workplace

are still one of the only games in town. So here’s her take on work in the digital world we all now inhabit. “When the context of work changes, what changes in work practice take place – intended or not?” Here Stucky cites an example based on her own experiences of how this notion of inherently social, but digitally mediated, work plays out: “For several years, I led a team building work and learning environments in a virtual world (in this instance Second Life). I went to work most days in this digital space with my colleagues. The team included people on different continents, in different divisions, even different companies. And it also included people down the corridor from where I had plunged into the digital space we all occupied.” Stucky continues, “The sense – the sensation – was not of remoteness so much as that I was just going to work digitally, because I was working with other people on a project. We had a shared work context. The only difference was not that all the work was in the digital realm, but that virtual world supported rich social interaction. Now, wherever we look today, we have on our hands a huge wave of social businesses. In its simplest form it means trying to take direct advantage of social media by using it to get work done. What that really translates into is that people are expected (or just will) to shift more of their work from email to more collaborative, shared digital work environments. This is a dramatic change in work practice – both in terms of the kind of social interaction around work and its digital experience.” Stucky ends with a prediction, “This shift will most probably be as transformative of how work gets done as email was when it began, or,” she says laughingly, “the advent of instant messaging within the enterprise – if anyone can still remember that!”

The dominant factor But, in the final analysis, Stucky is adamant about one thing. Sure there will be this mega-shift to digital working, but it is the social aspects of work that will still be the dominant factor. As she points out, “People (lots of them anyway) like being around others when

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they are working – we are, after all, social animals. However much the digital working world frees us up to work wherever and whenever we like, we tend to herd together (think coffee shops, bars and the like). The sociality of people and the sociality of work (even if we are not doing the same work as the guy sitting next to us) will always prevail and will trump any attempt to move people out of their offices where they feel safe in a shared work environment.” There’s a huge amount in Stucky’s story that business leaders need to take into account as they plan the next steps in their organizational strategies. Moreover, there’s a huge amount we as individuals need to take from this in terms of the optimum ways to work in the future. Yes, in the final analysis, it’s all about getting work done. We could say that’s what the job is all about. So we may work smarter, but not a lot has changed very fundamentally underneath. The digital revolution and global reach may change the surface activity somewhat, but they are just tools. We still have jobs to do, outcomes to achieve and those get done by people. Chapter 2 will explain more about what those jobs are and how we will do them.

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9781137347497 | October 2013 £19.99 | $35 | $40 CAN Paperback | 256 pages

The End of the Performance Review is a thoroughly tested, distinctive alternative to the appraisal process that draws on well-established principles of organizational behavior. Based around Tim Baker’s ‘5 Conversations’ approach, and with a timely focus on fostering innovation, this book is practical and easy to use – featuring case studies, interviews and useful templates.

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Abolishing the Standard Performance Review

It’s 9 am on Monday and Bob is sitting across the desk from Terry in Terry’s large office; the early morning sun is streaming through the half-closed louvers and casting some shadows across Terry’s big, black shiny desk. It’s annual performance review time and everyone is on their best behavior. There is a degree of tension and apprehension around the office. Sitting in the chair opposite Terry, Bob looks as though he is sitting in an airport lounge, having just been told that his ﬂight has been delayed an hour and it’s already 10.30 at night. TerryBob’s bossisn‘t feeling his best either. He is a little apprehensive about appraising Bob’s performance. As Terry is reading through Bob’s self-appraisal behind his large, imposing desk, Bob sits with a look of disinterest on his face, chewing a piece of gum, arms folded and staring straight ahead into the distance.

With some variation this familiar scene is being played out in almost every office, production area, and worksite all over the world.

ch ap te r

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So familiar are we with this scene, the UK BBC sitcom The Office has a hilarious parody on the annual appraisal. The skit shows ‘David’ conducting the annual performance appraisal on ‘Keith’ in David’s office. This particular scene is readily available through YouTube; check it out if you have not already seen it, it is very funny. Like most good comedy, it has more than a glimmer of truth to it. In that skit, David struggles his way through myriad paperwork. Keith is completely detached, arms folded, deadpan expression, and less than helpful on the other side of the desk. David asks Keith why he has not filled in his self-appraisal form, and Keith responds by saying he thought David was suppose to fill this in as his boss. It goes downhill from there. In obvious frustration David moves on to the ‘Q and A’ section of the appraisal paperwork. Again this is not filled out. David uses this as an opportunity to ‘engage’ with Keith. ‘To what extent have you been trained to use the computer effectively?’ David reads from the forms, without making eye contact. With no reply from Keith, David reads out the suite of options: ‘One, not at all; two, to some extent; three, reasonably competent; four, competent; five, very competent; or don’t know.’ ‘Don’t know,’ comes the unconsidered reply from Keith, still staring into space. Plowing on, ‘To what extent do you feel you are given the freedom and support to accomplish your goals?’ ‘What are the options again?’ asks Keith. ‘Always the same. One, not at all; two, to some extent; three, reasonably competent; four, competent; five, very competent; or don’t know.’ ‘Don’t know’ comes the humdrum reply from Keith again. And on it goes in the same non-communicative pattern.

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The End of the Performance Review

Somewhat exaggerated perhaps, but nevertheless this is the kind of disengagement that happens in all types of industries for a high percentage of employees and managers once or twice a year. I am sure you have your own war stories, either as someone like David conducting the appraisal or like Keith, the person on the receiving end of the appraisal, or both. When something as serious as a performance review becomes satire, then perhaps it is time for a re-think about this long-standing organizational ritual. And when that sitcom scene becomes one of the most popular downloads on YouTube, you know that it is deﬁnitely time to take stock and re-evaluate the appraisal. When I mention the term performance appraisal or performance review, what comes immediately to your mind? Of course, I don’t know what you thought, but I am pretty conﬁdent that the thoughts you had were not favorable. By the way, I will use the terms appraisal and review interchangeably throughout the book. As you are probably painfully aware, performance appraisals typically come around once or twice a year and they are usually not something that everyone looks forward to. I have spoken to lots of people in organizations over the past decade, and the vast majority of people are not really excited about the traditional appraisal interview. In fact many people actually dread them. Yet, psychologists tell us feedback is important. We all need feedback, they say; we need to know where we stand.

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In the end David challenges Keith by asking, ‘If “don’t know” wasn’t an option, what would you put?’ To which Keith replies, ‘What was the question again?’

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Whether you coordinate the appraisal system, are a manager who conducts the appraisals, or are an employee on the receiving end of an appraisal, you probably have some reservations about the standardized process. Why? Is it the formality associated with the appraisal? Is it the paperwork? Is it the unexpected or unknown? Is it the apprehension of not getting or giving a pay rise? Is it giving or receiving criticism? It could be all these things and more. Of course, not everyone faces the performance appraisal interview with trepidation. Some enjoy it and even look forward to it. But they are likely to be in the minority. The majority of people ﬁnd the whole experience unproductive and stressful. Speciﬁcally, the idea of preparing to appraise someone’s work performance or being on the receiving end of an appraisal is not everyone’s idea of fun. If that’s the experience of most people, we have to ask the question: Is it worth it?

Performance appraisals originated from the military The traditional performance appraisal system is based on the military model. Like many things in the military, the performance appraisal has been adopted in modern organizations. In the old military environment, the superior gives the subordinate a one-way monologue on what they are doing wrong and occasionally what the subordinate is doing right. The recipient is usually a passive and unenthusiastic receiver. This traditional model is based on a power relationship.

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What the boss thinks, irrespective of whether he or she is right or wrong, carries greater weight than the recipient’s opinion. The appraiser has power over the person being appraised. What the boss thinks is more important than what the subordinate thinks. They are in control and the subordinate is dancing to the tune of the appraiser. It is not a constructive dynamic to discuss developmental and performance issues. Like most things military, the performance appraisal system has been modiﬁed for industry to some extent, but the modiﬁcation does not go far enough.

th an ere of im is s po ba till w lan er ce

For instance, the power imbalance has been somewhat equalized in the civilian (and military) workplace. Employees are now asked to rate themselves and discuss their own perspectives about their performance across several criteria. Good managers try not to do too much talking and attempt to adhere to the rule of doing no more than 50 per cent of the talking, encouraging the employee to talk by asking open-ended questions. A skilled manager, though, uses questions in an attempt to draw out the quiet employee. With verbose employees, these skilled managers attempt to summarize the key points made and move the conversation on. Irrespective of the skill of the manager, these meetings are still controlled by the manager. His or her opinion generally carries more weight and the conversation is based on discussing the observations the manager has made of the employee. So, in reality, there is still an imbalance in power. This power dynamic is based on the potentially ﬂawed assumption that managers know best: sometimes they do and sometimes they don’t.

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Abolishing the Standard Performance Review

There are several inherent problems with this conventional appraisal system. I know this after interviewing 1200 managers and HR professionals over the past few years across all industries. I simply asked them to identify any shortcomings the standard performance appraisal system has. Responses varied, but essentially I identified eight themes from my research. The eight shortcomings are: Appraisals are a costly exercise. Appraisals can be destructive. Appraisals are often a monologue rather than a dialogue. The formality of the appraisal stifles discussion. Appraisals are too infrequent. Appraisals are an exercise in form-filling. Appraisals are rarely followed up. Most people find appraisals stressful. We shall look at these deficiencies of the standard performance appraisal system in more detail in this chapter before looking at the alternative approach I am proposing in the next chapter.

Appraisals are a costly exercise I think in many cases, the traditional approach of appraising performance is a waste of time and can even cause more harm than good. It consumes enormous amounts of time with arguably little return.

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The problem with the traditional approach

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Consider this: An SME of 100 employees would devote approximately 200 hoursif done twice a yearto the interviews alone (assuming the meetings each last one hour). If you consider that two people are in these interviews, that is 400 hours of time taken up in face-to-face meetings that could be spent on other workrelated activities. This does not take into account the time the manager and employee take to prepare for these interviews. Let us assume that the managers and the employees take 30 minutes each to prepare for the interviews on average. That amounts to another hour per appraisal. With 200 appraisals that is another 200 hours. We are now up to 600 hours a year. While the manager and employee are spending time preparing for and conducting their interviews they are neglecting their core duties. Accountants refer to this as an ‘opportunity cost.’ In this example, that amounts to another 600 hours of time. So we are now consuming 1200 hours of time on this appraisal exercise. Working on a standard eight-hour working day, this means that approximately 150 person days are devoted to the exercise of appraising performance in an organization of 100 people. In dollar terms, and based upon an aggregate $65,000 wage, the average employee receives approximately $178 a day. $178 by 150 days equals $26,700. This figure, of course, is not listed in the profit and loss statement. But imagine if you were a manager and noted a line item in the expenses column of $26,700 with no explanation next to it. This is a fairly conservative figure and it is more likely to be higher than this, particularly for a larger business. At any rate, would you not query this and ask: What was this expense item? And what return did the organization get for $26,700? Other questions you may rightly ask are: Are we getting value for money from this exercise? Or could we spend this time and

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money doing something else? I think it is time we questioned this ‘investment’ in time. Is there a better way? For instance, if this SME devoted 150 days to directly improving its business processes and systems, would that make more of a difference? Or, what about devoting 150 days to improving the quality of service to customers? Would 150 days ‘working on the business’ instead of ‘in the business’ make a discernible difference in performance? You may argue that appraising people’s performance is in fact working on the business. But does it generate signiﬁcant value? The formal appraisal system is time-consuming and therefore costly. It is questionable whether it is worth the time, effort, and cost. Could that time be better spent elsewhere in the business? According to many managers I speak to, the answer is yes. So why do we do it? I think the main reason we go through this performance appraisal ritual once or twice a year is that it provides the organization with a legally defensible position. In other words, if and when an employee is not performing on the job, the organization has documentary ‘evidence.’ The written records provide substantiation that the poor-performing employee is not meeting standards expected of them. Courts of law and lawyers love written documents and what better way of providing that evidence than through a written appraisal signed by both the manager and the employee? But the reality is that it is not totally legally defensible since underperforming employees are expected to be given an opportunity to ‘lift their game.’ Consequently the appraisal needs to be followed up with a performance plan. In other words, there ought to be tangible evidence that the employee was given a fair and reasonable opportunity to enhance his or her performance

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Appraisals can be destructive Aside from the issue of cost, many managers I speak to tell me that performance appraisals can cause more harm than good. Consider a typical example: A manager neglects to give any feedback to a staff member throughout the year. Come appraisal time, the managerthrough necessitylets his or her staff member know that they are not happy with a particular aspect of their performance. Perhaps they do this in a tactless, destructive way rather than in a tactful, constructive way. The employee is naturally blind-sided and offended by what they perceive to be unwarranted criticism and a personal attack. They were not expecting this criticism and did not appreciate the way it was delivered. The recipient is unpleasantly surprised, is intimidated, or reacts negatively to what they think is unfair criticism of their work. This scenario is not uncommon. At the same time, the manager giving this unwelcome appraisal gets frustrated and annoyed with the employee because they will not contribute to the ‘discussion.’ The offended employee clams up. Or perhaps they lash out at the manager. Either way, this exchange in these circumstances is likely to be unhelpful and potentially detrimental. The manager cannot understand why the employee ‘doesn’t get it’ and is seemingly unaware of his or her shortcomings. On the other hand, the employee is angry that they have never heard this criticism before. Distrust sets in and their working relationship is temporarily or even permanently damaged.

before they are dismissed. That necessitates a process of consistent and persistent feedback.

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I observed such a situation recently. A manager was concerned about one of his colleagues and his capacity to write clear, concise, and mistake-free reports. This manager had never given this feedback directly to his staff member. But during their appraisal interview, the manager did mention it and his concerns about the team member’s report-writing abilities. Apart from not giving this negative feedback before the interview, the manager did this in a tactless way. He started the feedback with the words: ‘All your reports are poor and below standard ... .’ Predictably the employee reacted defensively and negatively. He criticized his manager for never pointing this out before and complained: ‘If it was such a big issue, why didn’t you speak to me earlier about this?’ In turn, the manager reacted aggressively and said that the employee should have been aware of the issue and that it was not his responsibility to point this out. ‘You should have known; it’s obvious,’ the manager retorted. Under these circumstances, performance did not improve; it actually got worse. And the professional working relationship was damaged to the point where the two were barely on speaking terms. At its most destructive, the performance review could permanently destroy the fabric of the working relationship.

Appraisals are often a monologue rather than a dialogue As I mentioned earlier, the concept of the formal appraisal is based on a power relationship; that is, the manager has the upper hand. He or she has a greater say in the appraisal of the staff member. The employee usually has a say, but it is often in response to the

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Although the power imbalance has been addressed, it is stillin most casesa lopsided arrangement. People on the receiving end of the appraisal are now typically requested to come prepared to the meeting. They are often asked to rate themselves against set criteria and their ratings are taken into account. Nevertheless, it is the appraiser who has the upper hand and his or her evaluation is assumed to be more important. The person being appraised is naturally aware of this and the general tenor of the review is usually guided by the appraiser’s judgment. The one-way nature of these appraisal meetings can be problematic for several reasons. If the manager is unfamiliar with the work of the employee, it generally means that the manager’s view is not challenged to the extent that it might be. The employee may feel the need to be more assertive than would normally be the case to equalize the imbalance in the relationship dynamic. On the other hand, some people being appraised may feel less assertive due to the power relationship and come away with the feeling that they have not been listened to, or that they did not challenge the appraiser’s viewpoint enough. Some managers complain that they cannot get the staff member to contribute enough to the conversation; that they feel they end up doing too much talking. Then again, some managers will protest that they couldn’t get a word in. A dominant staff member, who may feel threatened by this power relationship, can become verbose. Either way, it is less than an ideal situation.

manager’s observations. It is an appraisal, not a conversation on performance. Managers are encouraged by HR to have a conversation with each of their staff members, but in reality it is an assessment of performance.

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Closely aligned with the one-way nature of the traditional performance discussion is the issue of power; the boss holds the upper hand in these meetings. The discussions are often held in the boss’s office at a time suitable for the boss with an agenda designed by the boss. Employees canand often dofeel powerless and uncomfortable in this situation. In short, the appraisal is done on the boss’s turf and on his or her own terms. The result of this power relationship means that the discussion is often not as productive as it should be. For example, people on the receiving end of the appraisal may not prepare too thoroughly on the assumption that their boss’s judgment carries more weight. Also, the manager may not engage the employee in dialogue as much as they could. They may see their role as an assessor rather than a facilitator.

The formality of the appraisal stifles discussion These formal performance appraisals are not really conversations; rather they are official meetings between powerful and less powerful persons reliant on hierarchical position. Under these circumstances, the potential for a productive two-way conversation is limited. The formality of the formal appraisal system adds to the difficulty of stimulating discussion. Discussion is stiﬂed in order to get through the process. Employees may not always have the opportunity to fully express their point of view. Issues are therefore often dealt with superﬁcially. The exercise more often

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than not becomes a ‘box-ticking exercise’ rather than a meaningful dialogue. T

I recall speaking to an 18-year-old woman fresh out of school and nine months into her first job in an SME. She was quite distressed. Melinda had not received any feedback from her boss in nine months on the job. I asked Melinda whether she would like me to approach her manager on her behalf and ask him if he could let her know how she was settling into her first job. Melinda was quite enthusiastic about this prospect and I subsequently approached her boss, Ted. I proceeded to explain to Ted that Melinda was concerned that she had not received any feedback from him since she had started and suggested that he sit her down and explain how she was doing in her work. Before I could finish my sentence, Ted interrupted me and said, ‘No, I can’t do that.’ There was an uncomfortable pause in our conversation. I said, ‘May I ask why you can’t do this?’ I was thinking there must be some rational explanation. Ted retorted, ‘If I do that for Melinda, I will have to do that for all my staff.’ I was rendered speechless.

Appraisals are too infrequent Feedback in the formal appraisal system is certainly not immediate. And why is this a problem? Well, the more immediate the feedback the more likely it is to be perceived by the employee as important in the eyes of the boss. If feedback on a report is left until appraisal timepossibly several months laterthe employee is probably thinking to themselves, or may even say: ‘If this is such a big issue, why didn’t you raise it with me at the time I wrote

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the report?’ The result of this is that the delayed feedback is not always taken seriously by the employee. If the matter of a poorly written report is raised by the manager immediately after the report has been produced, the employee gets the idea that their boss sees good report-writing as a priority. Objective feedback means that the receiver understands that the feedback is not a personal attack on them. Raising the person’s report-writing weakness several months later can be interpreted by the employee as a personal attack. They may think: ‘My boss is attacking me because he doesn’t like my report-writing.’ On the other hand, if the feedback was immediate and specifically about a particular report, the employee may think: ‘He doesn’t like this report that I have written.’ The focus is on the specific report; it is not a generalization about the person’s ability to write reports. Perceived generalizations are not always well received by people. ‘You are not very good at report-writing’ or ‘You seem to be critical of everything that is brought up in our meetings.’ A scheduled performance appraisal is not the place to raise these matters. They can be taken by the recipient as generalizations, with no context, and therefore seem to be a personal attack on them as a person. What about the manager who does give specific, immediate, and objective feedback? This is great. But under these circumstances why do they need to repeat themselves at appraisal time? What benefit does this serve? I would say: Very little or none. And it is costly apart from unnecessary. For the manager who does not give regular feedback, the appraisal is the time to cut loose and let the employee know

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As we know, traditional appraisals are typically done once or twice a year. As such, they become an event. This is one of the biggest shortcomings of the system. When managers are preparing for their appraisals they often mistakenly consider the employee from recent observations. These observations whether positive or negativeare made from circumstances fresh in the mind of the appraiser. What happened three to four months ago is often not discussed or simply forgotten. So the discussions are often based on critical incidents that have occurred of late. So, what dominates these reviews are usually recent situations. The manager may therefore have a distorted view of the employee’s overall performance. For instance, an employee’s performance over the past two months may have been exceptional and in the previous six months may have been mediocre. And as a consequence, the appraisal is based upon the immediate past, which is not the total picture. Another problem with the once- or twice-a-year appraisal I have already mentioned is that managers may put off discussing important performance issues until the formal review. They rationalize that they will save this up until then and fail to discuss performance issues when they are current. By doing this, managers conceptualize performance management as an annual or bi-annual event rather than an ongoing process. Employees, on the other hand, do not receive important feedback until well after critical performance issues have arisen.

what he or she thinks of them. This is a forum to raise all his or her gripes. And if it is positive feedback, as I have said, it falls on deaf ears, so to speak. That is also unlikely to be effective.

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The formal, once- or twice-yearly approach is also open to manipulation. Employees knowing that they are about to be appraised lift their game to ensure a positive appraisal. This situation creates a distorted view of their overall performance. Once the appraisal is out of the way, the employee reverts back to sub-standard performance until the month before the next appraisal. Appraisals carried out once or twice a year are more likely to be a snapshot assessment of performance than a continuous performance discussion. Usually the appraiser invites the participant to rate various categories of performance on a scale from exceptional to very poor. The discussion inevitably becomes one centered round the score or rating rather than ways and means of improving performance, particularly if a pay rise is contingent on it. In preparation for the formal appraisal, managers will typically review the previous paperwork and use this as the basis for the appraisal. This evaluative process generally fails to take into account consideration of the employee’s performance over the past six months. Important learning opportunities are therefore lost in the assessment exercise.

Appraisals are an exercise in form-filling The emphasis on the conventional appraisal becomes an exercise in administration or form-filling. With pressure from the HR department, the manager becomes fixated on filling in the relevant paperwork; dialogue is devalued as a result of the administrative

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HR professionals are keen that the review process is a vehicle for successfully changing behavior. Understandably, they often ask the question of managers: ‘Have you completed your appraisal?’ This sends the message that the administration of the review is the critical factor, rather than sustainable changes in performance. Because of the reluctance to have the reviews carried out by many managers, the HR department often does not get around to asking the question: ‘How effective was your appraisal in terms of behavior modiﬁcation?’ In these circumstances, the documentation of the appraisal often takes priority.

Appraisals are rarely followed up Once the documentation and paperwork are submitted to HR, it is, more often than not, business as usual. Both the appraiser and employee do not have to worry about the exercise again for 6 to 12 months. The consequence of this attitude is that very rarely is anything followed up between appraisals. People move on and the key points are soon forgotten. As a result, nothing really changes. The fact that nothing really changes means that the formal appraisal itself is looked upon as a cynical exercise by everyone. People see it more as an administrative process than as a modiﬁer of behavior.

function of the appraisal. In other words, completing the appropriate forms becomes the central focus and therefore stiﬂes meaningful conversation.

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The focus of the ‘discussion’ is rarely about the constructive ways in which an employee’s strengths can be utilized and weaknesses overcome. As I mentioned, it is usually viewed as a ‘box-ticking’ exercise that bypasses what should be the essence of the conversation, which is behavior change. Questions such as ‘What are your strengths and how can we use them to best advantage in this organization?’, ‘What can I do as your manager to help you further develop those strengths?’, ‘What areas do you need to work on?’, and ‘What can I do as your manager to support you in these areas we have identiﬁed as areas for improvement?’, which go to the heart of an effective discussion on performance, are overlooked. There is too much emphasis on the appraisal and this detracts from the potential to have a meaningful conversation about an employee’s performance. Furthermore, instead of overcoming weaknesses, it is often more productive to capitalize on the strengths of the person being appraised. Our society teaches us from the beginning of schooling to work on our weaknesses and take for granted our strengths. Yet it is a far better investment to focus on taking advantage of our innate talents. If we devote as much time and energy to building our capabilities as we put into addressing our shortcomings, we would all be better off. This is what highly successful people do in all walks of life: concentrate on maximizing their strengths. They turn their talents into great assets by working hard on developing innate aptitudes. We all have a limited amount of time at our disposal. You and I will get a better return on developing our talents. I will have

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Most people find appraisals stressful

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At any rate, employeesâ&#x20AC;&#x2122; work performance ought to be appraised on the job on a regular basis, not once or twice a year. Employees need not be summonsed to a formal performance appraisal to hear what their manager thinks of their performance. It should already have been discussed day by day, task by task, moment by moment. If anything, this formal discussion should be about properly documenting that information, discussing how to build upon the strengths of the particular employee, and considering their opportunities for growth. This ought to be done collaboratively, consistently, and constructively. Not everything we do at work is enjoyable. A lot of the work we do is drudgery. But unnecessary drudgery is pointless. People rarely get energized around performance appraisal time. Imagine people jumping up and down in excitement about giving or receiving an appraisal! I think the opposite is true: Most people dread it and often delay it until the very last minute. That is not to suggest that some employees really look forward to feedback from their manager. In fact, one of the reasons a person may look forward to their appraisal is that they may have never received any feedback previously and they are curious to know how they are faring. In any event, the experience is usually not the highlight of the year. So these are the eight issues that my research indicates are the potential shortcomings of the standard performance review system.

more to say about this in Chapter 5ď&#x161;źThe Strengths and Talents Conversation.

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Abolishing the Standard Performance Review

I know I am painting a bleak picture. And I understand that not all appraisals are negative; that is, that they are poorly run or poorly received. But many are and hopefully you agree with me that it is time we took a new approach to appraising performance. Please don’t get me wrong; I am not against performance feedback. In fact I believe it is one of the most important things a manager can do in his or her leadership role. Organizational psychologists tell us time and time again about the importance of feedback and its link to performance improvement and motivation. You would be hard-pressed to ﬁnd a book on management and leadership that does not extol the virtues of timely, tactful, and speciﬁc feedback on performance. Performance management is central to the role of the manager. What I am critical of is the value of the conventional appraisal system and the faulty assumptions underpinning it. I am all for constructive feedback, but I just do not think this annual or bi-annual event is the way to do it efficiently and effectively. In my view, feedback should be ongoing, two-way, and developmental. The traditional performance appraisal system runs counter to these feedback fundamentals. With a formal performance appraisal system, managers are tempted to think: ‘I will “discuss” the staff member’s shortcomings in the annual performance appraisal interview. It will have more impact then. I will save it up until then.’ So under these circumstances, the feedback is not immediate and ongoing. And because the ‘feedback’ delivered during the appraisal interview is such a shock, the employee either clams up and does not enter into a

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The value of feedback

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Under these circumstances, the appraisal becomes a one-way street, often delivered as an unpleasant surprise to the recipient. It is therefore often perceived as criticism rather than constructive feedback. In the context of the annual performance appraisal it is received by the employee as an unfair evaluation. In this kind of situation, the opportunity to develop that employee is lost. This is not the way feedback should be delivered or received.

What about positive feedback? Here again, the manager may think that the appraisal is the most appropriate forum to deliver positive reinforcement. But once again, it is likely to be ineffective. The recipient of the positive feedback will undoubtedly be surprised, though at least pleasantly surprised. Nevertheless, the recipient maybe thinking to themselves: â&#x20AC;&#x2DC;If it was that good, why did my manager leave it until the appraisal to tell me? He or she could have told me at the time.â&#x20AC;&#x2122; The interpretation that the employee may have is that the feedback is not really genuine and, if so, not really all that important. So it is less likely that the positive behavior is reinforced and repeated. What if, on the other hand, a manager gives timely and relevant feedback? If feedback is immediate, continuous, cooperative, and constructive, why do we need to down tools twice a year and formally appraise performance? If managers are doing their jobs properly and discussing performance regularly and routinely, the

constructive, two-way dialogue or gets upset and becomes irrational.

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Abolishing the Standard Performance Review

You may be thinking: ‘Yes, but we have to rate and scale our employees.’ Once again, if we need to rate people, why can we not do it in the workplace, on the job, in the appropriate time and place? Besides, the ratings are not really the most important thing in terms of changing someone’s level of performance. It is what we do about the ratings that counts. In other words, how do we improve these ratings, if they need improving? Or, how do we build on these ratings in a sustainable way, if they are good? These are the key questions behind a productive performance management system. What can the employee do to improve his or her performance? What can the manager do to assist and support the employee in this regard? This is the essence of constructively managing performance. The annual performance appraisal is not the best place to raise these questions. Why? Because often the opportunity to discuss these issues is long gone. It may have happened several months ago. The critical incidents that can be used as examples to reinforce the feedback are often vague memories. Without doubt, the best way to give feedback on performance whether it is positive or negativeis to give an example or use a critical incident. This then becomes objective. The discussion centers round an incident rather than becoming a generalization about the person. This chapter has highlighted some of the pitfalls of the traditional performance appraisal system. In short, it is often costly and ineffective. There has to be a better way. There is. And I will outline a better way in the next chapter. I would encourage you to reﬂect

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formal performance review becomes redundant. In other words, it has all been said and done.

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on your own organization’s performance appraisal system and ask yourself these important questions: Is our system working? Could it be better? What are the attitudes around the office before, during, and after performance appraisal time? What are our good managers doing in terms of feedback and how is it delivered? Of course, there are many types of appraisal systems being used today that attempt to overcome the eight deﬁciencies I have found from my own research. Some of these include 360-degree feedback, management by objectives, evidence-based feedback, and a variety of rating scales. All organizations tailor their performance review system to suit their particular needs. However, the key point here is that they are all pretty much based on the assumptions of the original military model of the performance review. They are still essentially done with a degree of formality, often infrequently, with a lack of emphasis on dialogue and follow-up. The Five Conversations Framework provides a useful substitute for this outdated performance review process.

The traditional performance appraisal system is based on the military model.

The standard performance review system consumes enormous amounts of time with questionable returns.

Performance reviews can be destructive rather than constructive.

The concept of the formal appraisal is based on a power relationship and is often a monologue rather than a dialogue.

The Top 10 Key Points

The formality of the appraisal stiﬂes discussion.

The End of the Performance Review

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When work becomes messy and complicated, we stop getting good work done, we lose sight of the things that inspire us, and sometimes we disengage. Beyond the Job Description will help you translate your challenges at work into useful insights that boost learning and performance, accelerate your capacity to stay relevant in the workplace and enjoy a high-quality working life.

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An Excerpt from Beyond the Job Description • 77

INTRODUCTION

WORK IS THE INESCAPABLE OBLIGATION that defines our lives. However, it isn’t the organization we work for or the position we hold; what defines us is how we work. Whether you are an individual contributor, a manager, or the leader of an entire organization, you have to work well. Your current performance depends on it. Your access to better assignments and future advancement depend on it. And your quality of life depends on it. With careers that span more than six decades, it is an unmistakable truth that our lives are “working lives,” and the ability to work well is the scaffolding for a long, healthy, and successful life. However, anybody who has spent five minutes in the workplace knows that there is nothing easy about succeeding at work and that there are no shortcuts to reaching one’s full potential. And although the world of work has always evolved, solutions to the challenges of getting great work done are increasingly elusive. The economic stress of the last decade has only intensified the pressure. Retirement is delayed for most people, if it happens at all. The hypercompetitive job market leaves most people looking over their shoulders, wondering whether someone younger, smarter, and more talented is right behind them. And challenges from the inverse equation of increasing demands and shrinking resources are matched only by the demands of constant change and mounting complexity. For many people, this is the age of uncertainty in the world of work. “Seventy-one percent of American workers are ‘not engaged’ or ‘actively disengaged’ in their work, meaning they are emotionally disconnected from their workplaces and are less likely to be productive.”1

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BEYOND THE JOB DESCRIPTION

What are the cumulative effects of this tumultuous environment? For far too many people, surviving is the new thriving at work. This fundamental shift has resulted in chronic disengagement for so many who are overworked and overmatched by the challenges of meeting the full measure of their shifting responsibilities. Of course, there has been no shortage of resources offered up as solutions to address these workplace challenges. Whether targeted at leaders or individuals, these “new ideas” for reengaging and achieving better results at work reflect the conventional wisdom about what it means to work well. Unfortunately, the conventional wisdom has failed us. Beyond the Job Description reveals the hidden curriculum of work®— it provides a complete picture of the true demands of work and identifies the crucial success factors required for individuals, managers, and leaders to work well in an uncertain world.2 By introducing the ground-breaking concept of the “job-within-the-job” and by highlighting the related effects from the “hidden side of work,” Beyond the Job Description challenges the conventional wisdom about what is required to succeed in today’s fast-changing world of work. Working well requires a focus on creating value, solving the problems that reduce learning and performance, and doing these things in a way that merges individual contributions with team and organizational goals. Six questions are presented to help you define your purpose, value-added contributions, and hidden challenges. The result is the first glimpse of your hidden curriculum of work up close. Next, a straightforward and easy-to-use set of tools is introduced to help you identify your core barriers and transform them into opportunities to boost learning and performance. The system is easy to understand and flexible enough to meet the specific needs of managers and employees. The process is guided by the R-I-T-E Model, which includes four progressive stages that allow you to: Reveal Your Hidden Curriculum of Work; Identify Barriers That Mark Pathways to Learning and Performance; Transform Barriers and Navigate Your Hidden Path to Success at Work; and Establish Future-Proof Plans for Yourself, Your Team, and Your Organization. With a mix of related insights, guided coaching activities, and hands-on exercises, the R-I-T-E Model offers a reorientation to the true demands of work and delivers a lifeline for people who need to stand out, stay ahead of

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INTRODUCTION

the change curve, and navigate the everyday challenges to getting great work done. Beyond the Job Description will help you uncover your hidden path to success at work. This includes convenient tools for dealing with the everyday challenges that prevent your best work, as well as a complete system for creating a Future-Proof plan that will help you craft the working life you want. Together, the concepts and tools discussed here offer you a way to align your purpose with team and organizational goals, conduct a real-time analysis of your performance gaps, and show the true value of what you deliver to your team and organization on a consistent basis. If you are starting from scratch, Beyond the Job Description can be the centerpiece of your professional and leadership development efforts. If you are engaged in a process now, it will seamlessly blend with your existing commitments to learning, development, and performance improvement. This is one of those rare business books that not only lays out a researchbased argument for why we need a new approach to work, but also delivers a comprehensive set of solutions that readers can absorb and implement immediately. Are you getting great work done, or are some of your best efforts undermined by unexpected challenges? Are you staying on purpose and delivering added value to your organization, or do you find yourself struggling to make a positive contribution and stay relevant at work? Are you managing and leading in a way that brings others to their maximum contribution, or does your influence fail to make others better and impact the organizationâ&#x20AC;&#x2122;s culture and bottom line in positive way? These are unavoidable questions that must be confronted. Beyond the Job Description will lead you through an accelerated process to help you find your answers to these and other questions along your path to success at work. THE MUTUAL AGENDA: BREAKTHROUGHS FOR INDIVIDUALS = SUCCESS FOR ORGANIZATIONS

This is a book about making something better with your experience at work. It is about working well and it is about managing and leading well. If you want to manage others and lead well, you have to work well yourself. If you learn how to work well yourself, then you will likely create opportunities to lead

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BEYOND THE JOB DESCRIPTION

teams and organizations. Wherever you are on the continuum of your career progression—whether you are the CEO of a Fortune 500 company or just the CEO of your own working life—the bottom line is that your impact comes from your capacity to perform well over time. From an individual perspective, this means understanding the true demands of your work and developing the tools to effectively respond to those challenges. From an organizational perspective it means leading change in organizations and creating cultures that are responsive to the hidden challenges of work that undermine priorities and goals. However, distinguishing between individual and organizational perspectives is somewhat distracting. In reality, you cannot have an organizational perspective without individuals, and the role of individuals is to align their contribution with the intended purpose of the organization. Likewise, you ultimately cannot have success or failure in one without the other. This means that organizational leaders have no choice but to acknowledge that investments that help their people understand the true demands of their work and develop the tools to effectively respond to those challenges is an investment in the organization’s overall success. Likewise, individuals have no choice but to reconcile their own career aspirations and desired contributions in the world of work with the specific team and organizational goals they can directly support. It sounds simple, but there are a few problems with this. The first problem is that the team and the organization do not always know what they want or need from individuals. The position that you were hired to fill and the job description that both sets the trajectory for your overall role and provides you with day-to-day direction for your responsibilities may not reflect what is most needed or valued. The individual impact of this is exacerbated when things change rapidly and the inertia of your ongoing contributions may become irrelevant before they have even been fully realized. The other problem is that organizations have, by and large, abandoned support for individual professional development. While there are many outstanding exceptions to this unfortunate trend, the reality is that most people must chart a course for their own personal growth and career development. This can often lead to a free-agent mentality that creates inadvertent, unnecessary, and potentially destructive competition between the individual’s needs and the organization’s needs. You can see this play out in the words of these conflicted professionals:

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INTRODUCTION

“I know that I could do more here. I can see our inefficiencies and ways to innovate, but I honestly don’t know if it is worth fighting to fix because of all the cutbacks lately. We always talk about recruiting people who ‘go above and beyond’ and yet we don’t really have a culture where people can see why they should be motivated to do so.” —Middle manager at a midmarket retail company “I told my manager that I wanted to grow and that I would participate in the leadership development program that our company offers. She told me that the company stopped offering that program last year due to budget cuts and that it would likely not be coming back anytime soon.” —Associate at a software development company “We just finished a project that literally took six months of my time and lots of blood, sweat, and tears. The day I called my boss to tell him that we were ready to present the results, he said unapologetically that a decision was made to move in another direction. I argued that we potentially had something special with this project, but he flatly said he was sorry ‘things just change fast around here.’” —Project manager at an engineering firm

People holding back their good ideas and potential contributions as they wonder if their jobs will evaporate overnight . . . Future leaders willing to do what it takes to grow, but told to sit tight indefinitely . . . And, hard workers doing everything they are asked and then told that the work they produce is not needed. A central theme in this book, and a solution to these problems, is discovering the mutual agenda where individual goals and team/organization needs intersect.

The mutual agenda defines the powerful space where individual goals and desired contributions intersect with organizational objectives. Whether you are an individual contributor, manager, or senior leader, there is a mutual agenda where your own aspirations for your career and the quality of working life you seek will align with the specific needs of your team and organization. It is not the length of time one spends in a specific job with a particular company; it is the quality of their contribution during that time. Employees can maximize their investment of time in an organization by defining and pursuing their own long-term career goals while staying true to their team and organization’s needs. Likewise, managers and leaders can maximize their

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BEYOND THE JOB DESCRIPTION

contributions by clearly defining their team and organizational objectives in a way that accommodates individual hopes and goals. When there is a severe mismatch between objectives and no clear mutual agenda, employees often quit (and forget to inform their manager), or they take their valued contributions where they can flourish elsewhere. When there is alignment and a clearly accepted mutual agenda, momentum from this synergy can be the counterbalance to complacency and performance gaps among individuals and failed strategies and misaligned team efforts for organizations. It is in this middle ground where breakthrough performance can happen. THE FLOW OF THE BOOK

Beyond the Job Description unfolds one level at a time, and each successive layer is tightly packed, adding new levels of related knowledge, skills, and capabilities to reveal your hidden curriculum of work. The book is organized in five parts. Part 1 exposes the true demands of work and lays out the case for a new approach. It confronts the myth of our working lives and reveals the fact that we are all actually working two jobs, whether we know it or not. By contrasting both the “presenting side of work” and the “hidden side of work,” it sets the stage for what individuals and teams can do to get ahead of constant change and deal with the inverse equation of increasing demands and decreasing resources. Part 2 offers a hands-on process to reveal your “job-within-the-job,” which includes your vital purpose, value-added contributions, and the hidden challenges that threaten your success at work. Discovering your “job-within-the-job” is the first step toward taking back your working life from the uncertainty of today’s hypercompetitive job market and the down economy. Part 3 introduces a process to translate the everyday obstacles you experience on the job into opportunities to boost your learning and performance. Rather than following the typical response patterns that drain energy and resources, you will learn how to tap barriers for their teachable moments and actually make them work for you. Like a master class on issue resolution, these chapters introduce four essential questions that transform barriers, including: What is the root cause of my challenge? How can I see it from various perspectives to get the full picture? What underlying pattern holds the unwanted experience and outcomes in place? And, what action can I take to resolve this challenge? In order to answer these questions and fully reveal the character and complexity of

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INTRODUCTION

the hidden side of work, you will learn how to make data-rich visual depictions of performance barriers that objectively clarify your challenges and goals. After parts 2 and 3 get you on your unique path to success on the job, part 4 provides a variety of inspiring concepts and tools to help you stay on the path to success. It provides a daily compass for solo navigation that will facilitate your first 90 days of implementing the concepts and tools discussed in this book. It responds to realistic concerns about available time and energy to invest in your working life when your plate is already full. And it delivers an unequivocal response to the growing epidemic of a workforce that now includes a majority of people working in a state of disengagement. Finally, part 5 offers knowledge and practice guides to help you establish future-proof leaders and organizational cultures. With a guide to team navigation, a handbook for managing the hidden side of work, and a groundbreaking set of definitions and insights about the role of leaders and the process of culture change, the related tools and strategies offer an application of the book’s concepts and practices to the entire enterprise. At the conclusion of each chapter there is a summary of Key Takeaways, and at the conclusion of the book there is a set of appendices that offer a variety of assessments and additional resources to further deepen and sustain the application of the book’s insights and tools for going beyond the job description. THE BOTTOM LINE

To avoid all of the performance challenges that can derail our success at work we have to find all the holes in our hidden curriculum of work. However, even one crack in our resistance to barriers can undermine our achievements. This fact makes the discipline of navigating the hidden curriculum of work an urgent demand for everyone. By matching this sense of urgency with essential skills to increase individual, team, and organizational performance, Beyond the Job Description will increase your capacity to: ●

●

Discover the mutual agenda where your individual values and aspirations align with the needs of your team and the goals of your organization; Know what is most important right now and focus on the vital purpose and value-added contributions that can help you stand out and stay ahead of the change curve;

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BEYOND THE JOB DESCRIPTION ●

Establish a system to identify hidden challenges that undermine your performance and learn to transform those barriers into opportunities

●

for improved learning and performance; Develop a clear vision and plan to achieve the working life you want;

●

Create relationships and preferred patterns of communication and inter-

●

action that help you get your best work done, get collaborative decision making right, and make sense of complexity and ambiguity; and Learn simple ways to keep people engaged and on the same page during periods of intense change, increase levels of workplace trust and engagement, and change your organization’s culture from within. USE THIS BOOK TO DISCOVER YOUR PATH

The insights and tools in this book are versatile and can be used in a wide range of workplace circumstances. For time-starved and resource-strapped professionals who discern between substantive resources and the revolving “flavor-of-the-month” sound bytes that sound good but offer no useful treatment of the real issues, Beyond the Job Description provides a rigorous challenge. While there is real work to be done by the reader, the incisive concepts and useful practices presented in this book will benefit anyone with a stake in their own career success or the success of others. It offers the following advantages: ●

Individual contributors will learn how to open greater opportunities for advancement by revealing the hidden curriculum of work and turning obstacles into opportunities that boost learning and performance. If you are an individual contributor, you will be able to: ❍

Assess your “job-within-the-job” to gauge the true challenges of your

❍

work; Implement an innovative process of professional development and growth;

❍

Demonstrate increased learning and performance to your direct manager; Advocate for better assignments that are consistent with your purpose and values; Communicate clear evidence of your ongoing contributions to the team; and

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INTRODUCTION ❍

●

Gain valuable leverage during compensation and advancement discussions.

Managers will learn how to accurately diagnose and close performance gaps with proven tools and measurable accountability. If you are a manager, you will be able to: ❍ Assess your “job-within-the-job” to gauge the true challenges of your work and engage in everyday conversation with direct reports regarding theirs; ❍ Inspire greater levels of commitment and engagement from your direct reports; ❍ Rapidly identify team barriers and effectively resolve them in ways that boost overall learning and performance; and ❍ Support individual contributors’ efforts to align their goals with team priorities. Senior leaders will learn how to create the conditions for people—their organization’s greatest asset—to contribute their highest-valued contributions directly to the organization’s bottom line. If you are a senior leader, you will be able to: ❍ Assess organizational structure and capacity according to the realities of the hidden curriculum of work; and ❍ Create an organizational culture that values, rewards, and cultivates continuous learning and performance and openly acknowledges the true demands of the hidden curriculum of work. Coaches, consultants, and human resources professionals will learn how to support their clients’ growth and development with practical tools that are scalable in a variety of organizational contexts. If you are a coach, consultant, or human resources professional, you will be able to: ❍ Introduce stakeholders and partners to the hidden side of work; ❍ Cut through the clutter with research-based tools that reveal the true challenges of work; ❍ Comprehensively assess individual and team barriers to learning and performance; ❍ Deliver a proven system of personal and professional development that can increase performance effects on the organization’s bottom line, while increasing the quality of working life for individuals;

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BEYOND THE JOB DESCRIPTION ❍

❍

Evaluate and provide input to senior leaders about the successful workforce of the future; and Recommend changes to organization structure related to recruitment, selection, and performance management to more accurately reflect the hidden curriculum of work. TWO CHOICES

If you are someone who wants to do more than just survive at work, I want to help you remove the barriers that stand in your way to a great working life. In that regard, Beyond the Job Description offers you two choices: (1) You can continue confronting your hidden curriculum of work through trial and error, accumulating the bruises and scars to prove the lessons you’ve learned; or, (2) You can take the bold step of identifying your hidden curriculum of work and creating a Future-Proof plan that will accelerate your performance and help you stay relevant in the competitive world of work. On second thought, there is really only one choice: keep reading to uncover your hidden path to success and find your breakthrough . . .

9781137411730 | May 2014 £14.99 | $24 | $30 CAN Paperback | 292 pages

Many companies are starting to adopt an ‘employer of choice’ strategy. However, most are doing this in a superficial way. Attracting and Retaining Talent offers a practical roadmap for developing a new, more productive workplace culture; one that examines the employment relationship, reflects the changing needs of the modern employee, and – at the same time - the interests of the progressive organisation. Order at www.palgrave.com. Enter code PM14THIRTY to receive a 30% discount.

ch ap te r

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The Eight Changing Values

Businesses that don’t embrace and promote these new values are likely to become less and less appealing places to work for good employees who value this new way of thinking. I vividly recall training a group of professionals on the virtues of completing the ubiquitous “to-do list” many years ago. Sound familiar? As I passionately proclaimed the merits of doing this simple but powerful task to my audience, I noticed their eyes becoming glazed. They were tuning out instead of tuning in. I could see clearly from this that these leaders weren’t going to take my well-intentioned advice and make a to-do list. Why? Why wouldn’t you do something so simple and effective? I thought. Then it dawned on me … The power of what goes on outside the four walls of the training room has more influence than I or any other trainer could ever muster.

The workplace to which these leaders belonged had a “fly by the seat of your pants” culture. In other words, they weren’t convinced that being

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organized would work in their current organizational culture. It made me think, if I could change the culture of the workplace, I could change these leaders’ mindsets about a simple organizing tool like the to-do list and many other things. I truly understood for the first time that sustainable change is about changing people’s thinking. But, if I could change people’s thinking, I could change their behavior.

If you are an employer or manager, imagine for a moment if you had a million prospective employees knocking at your door looking for a job every single year. Surveys show that most people dread going to work every day. Imagine for a moment what it would be like to work in an organization that is often more fun than being at home with your family. Are these two situations a pipe dream? No, it’s not a dream, it’s reality. Google, the iconic Californian-based search engine giant, is such a workplace. Consistently voted one of the best places to work in corporate America, Google receives 3,000 applications a day—which equates to one million applications a year—from people wanting a job. They are all chasing about 4,000 jobs. Employees who are lucky enough to work at Google claim that they often have more fun at work than at home. Yet Google is posting record profits. These remarkable features are no accident. Eric Schmidt, Google’s executive chairman, believes that Google’s competitive advantage in the marketplace is not superior products and services: it is their workplace culture. Google is an employer of choice. Attracting and Retaining Talent is for anyone who is interested in fundamentally changing the culture of their organization. It does not matter whether you are working in a public or private-sector organization, or a small, medium-sized or large enterprise. If you cannot keep your best performers and at the same time recruit other stars to work with you, you are in trouble, or soon will be. In the modern workplace, this is the most tangible way to be—and remain— competitive in a climate of accelerated change and uncertainty.

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What is an employer of choice? In plain terms, employer of choice means an organization that is a great place to work. If companies don’t genuinely act to become an employer of choice, then good employees will simply vote with their feet and move to a forward-thinking employer that offers them what they want. Being an employer of choice is more than a marketing gimmick.

A ch n em cu oic pl pe sto e is oye or rfo mer a fl r of or ient rma -fo exib ga ed n cu ce se le, ni d, za tio n

An employer of choice is a flexible, customerfocused, performance-oriented organization, one that is more maneuverable and engages the hearts and minds of their people. This kind of workplace culture is characterized by great commitment from employees to achieve the organization’s vision. An employer of choice is continuously learning, developing, and improving. Employees are relentlessly encouraged to be enterprising and resourceful, and they respond to this challenge willingly and consistently.

The opposite characteristics can be observed in the traditional organization, based on the “them and us” mindset. These places of work are rigid and inflexible, are more focused on themselves than the customer, lack exceptional performance, are set in their ways and practices; workers leave their brains “in a paper bag at the door” when they come to work. Instead of learning from their mistakes, employees cover up their mistakes: they stop learning. Employees are directed to follow systems and processes and taught not to question the way things are done. Unfortunately, there are still many organizations operating like this today. From my research and observations in over a decade as an international consultant, I believe it boils down to the nature of the relationship between the boss and the worker. The “them and us” mentality is

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perpetuated by habit and tradition, some militant trade unions, and managers and employees who think this is the way it ought to be. Yet it is the backdrop for an inflexible and rigid workplace: one that has poor customer relations and that is more concerned about the start and finish time of workers each day than focusing on their real performance. Employees are disengaged and find their work meaningless. Companies of this ilk will not hesitate to reward a mediocre employee with a widescreen plasma TV for twenty years’ of service, but will chastise an energetic employee for showing initiative. Managers will sponsor training, but only if it directly affects the bottom line: personal development is non-existent and viewed as a waste of money. People who mindlessly follow systems are favored over others who want to do things their way. It is therefore not surprising that most people don’t want to work in this sort of place. This type of culture is entirely unsuitable for meeting the challenges of the modern marketplace. An organization with this traditional approach to the employment relationship is an employer of choice too. But the difference is that people actively make a choice not to work there—and those who do, do not have a choice. I recently read a great saying that sums up this predicament: the only rats that leave a sinking ship are the ones that can swim!

What does an employer of choice have to offer employees? Employees are attracted to employers of choice for a variety of reasons. People are encouraged and supported to grow on the job, and develop a broader array of capabilities. For example, people are often given the opportunity to master a variety of skills, and this gives them more scope to apply for other jobs in other enterprises. But, ironically, they often choose to stay because of the attraction of this wide-ranging approach to developing people’s capacities. An employer of choice will most likely have good support structures

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in place for dealing with customers. These superior systems reduce stress and focus employees on their primary task: to provide effective solutions for customers. Employees are rewarded and recognized for high performance. Many organizational members respond well to these incentives and consequently lift their performance. Cross-functional communication is encouraged. Departments and divisions are not as important in these adaptable structures. Most people are fully engaged in their work and committed to achieving the goals of the enterprise. They are encouraged to think and act freely and not be constrained and dependent on the organization. Employees are well informed and have complete access to all the information they need for do their work. These benefits are appreciated by employees and attractive to prospective employees. How many progressively-minded employees want to be locked into jobs with a restricted range of skills, mindlessly following internal systems and processes that fail to consistently address the immediate needs of the end user? Good employees want to be recognized and rewarded for exceptional performance rather than receiving pay parity, regardless of how they perform their work. They are not likely to want to work in a departmental structure with a silo mentality that separates them from the rest of the organization. Modern employees are generally happy to commit to achieving business goals, but don’t necessarily want to be subservient to a boss. People with the right attitude want to grow and develop from their work but not necessarily be dependent on the organization. It is natural for people to want to know what is going on and not be told on a “need to know” basis. Employees are quite capable and ready to express initiative in the right circumstances with the right information and encouragement. This old employment relationship mindset is increasingly less attractive to capable workers. The roadmap to become an employer of choice is based on a new mindset supported by eight values. Collectively, these eight shared values are what I refer to as the New Employment Relationship

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Model. This set of values forms the basis for a new working relationship that is diametrically opposite to the old employment relationship. Each value of the new mindset is the reverse of the eight values that have defined the “them and us” relationship we have observed since the birth of industry. Although this traditional employment mindset has been unraveling for some time, old ways of thinking are still entrenched in the workplace.

What is the traditional employment mindset? The traditional relationship between employee and employer has been in existence for over two hundred years since the Industrial Revolution. But this conventional relationship is under considerable strain. As the world of work evolves, employees and employers are increasingly unsure of what their role is in the relationship. This uncertainty is creating a lot of tension in contemporary workplaces that extends across all industries. For example, employees with a traditional mindset about their role expect their boss to tell them what to do. Assuming, of course, that it is not an unreasonable demand, the traditional-thinking employee sees their role as one of complying with the boss’s requests. These employees find it hard to cope with a forward-thinking manager who expects them to think for themselves. In reverse, traditionalthinking managers expect employees to follow directions and not question their wisdom. They do not cope well with employees who show initiative and enterprise. So, enterprising employees will undoubtedly be frustrated by an autocratic boss. These situations of role confusion are commonplace and create anxiety and misunderstanding in today’s workplaces. But fifty years ago, employees and employers were clear about their roles. For instance, a manager who invites employees to think for themselves would be branded weak and indecisive, and an employee who showed

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initiative may well be considered by their boss to be a troublemaker. The roles were clear-cut and respected. But now, more than ever, employees want and expect to think for themselves without always deferring to their boss. Similarly, an employer of choice wants and expects employees to be flexible, customer-oriented, focused on performance, engaged, committed, dedicated to their own growth and development, and to exercise appropriate initiative. This type of culture is likely to be threatening to an employee or manager with a twentieth-century mindset about their role in the employment relationship. This evolving relationship is now less clear-cut and may therefore create widespread confusion and frustration for managers and employees in the twenty-first century. Under the traditional “them and us” relationship, it was expected that employees work hard, cause few problems, and generally do whatever the boss wants. In return, it was expected that employers would provide “good jobs” with good pay, offer plenty of advancement opportunities, and virtually guarantee lifetime employment. In this relatively stable and predictable world, the employee would be loyal to the employer and in return the employer would provide job security for the employee. This unwritten agreement between the two parties came to be referred to as the psychological contract. Since the 1980s, the relatively secure and predictable marketplace has been replaced by rapid change, uncertainty, and global competition. The consequence of this swiftly evolving global economy has placed considerable pressure and tension on this old working relationship. It has called into question employees’ and employers’ preconceptions of their working relationship. Changes in the marketplace since the latter part of the twentieth century have altered forever the requirements of organizations and employees. As a consequence, expectations of what managers and employees should do and not do are entirely different to what they were. I refer to this rapidly

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changing psychological contract as the workplace revolution in my previous book, The 8 Values of Highly Productive Companies: Creating Wealth from a New Employment Relationship.1

Why is there widespread confusion and frustration today? As a result of this lack of role clarity, employees and employers now send and receive confusing signals from each other. Employees are increasingly unsure about what organizational leaders want or expect from them. Do managers want me to be a Jack or Jill of all trades or a specialist? Do managers want me to be customerfocused or to follow strict organizational policies and procedures? Do they want me to follow my job description to the letter, or do they want me to do whatever needs to be done to get the work done? Management wants me to be engaged in my work, but I’m disengaged. What do I do? Am I supposed to be loyal or committed to the company, or both? Am I supposed to develop myself technically or personally, or both? Does my manager want me to show initiative, or do I follow the system? And so on. Employees are currently faced with these dilemmas daily. At this time, managers are equally confused. Should I be giving employees specifically defined work tasks to do, or help them to become multi-skilled? Do I want my staff to show initiative when dealing with customers, or should they follow standard operating procedures for consistency of service? Are job descriptions worth the paper they are written on? How do I break down this silo mentality and promote communication between departments? How do I engage my people in their work? How do I find and keep good employees? Am I wasting money developing employees—won’t 1 Baker, T.B. (2009) The 8 Values of Highly Productive Companies: Creating Wealth from a New Employment Relationship. Brisbane: Australian Academic Press.

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they just walk out the door and use their training with our competitors? How do I get my employees to show initiative when I need them to, and how do I curb their initiative at other times? These are some of the daily predicaments facing managers. We are in a state of flux between two opposing mindsets. The current uncertainty about people’s organizational roles and responsibilities is because we haven’t yet made a complete transition from the old to the new. We are familiar with the roles and responsibilities of the old employment relationship, which is straightforward but unsuitable for the present. We are making tentative moves towards a new working relationship. Although it is being extensively discussed, there is no clarity around what employee and employer should give and receive in this new psychological contract. What does this new relationship look like, and what does it offer individuals and organizations? This is the central question I attempt to answer in Attracting and Retaining Talent. A new working relationship is the launching pad to becoming an employer of choice. This new mindset is good for business and at the same time addresses the needs of the modern employee. Like bees to honey, an employer of choice will attract the right employees and retain current ones. If you are an employee coming up to retirement, you will have firsthand experience of the conventional “them and us” employment relationship. More experienced employees will also appreciate that the traditional relationship is under pressure. In the same way, more mature managers will notice that younger workers have an entirely different outlook about their role: their expectations are poles apart from those of older employees. In these kinds of situations there is inevitably a clash of values. We all know instinctively that the employment relationship is evolving. Despite knowing this, we have no clear guide to assist us through this unfamiliar terrain. The odd seminar on how to handle Generation X or Generation Y is of little value. They can reinforce

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stereotypes. For instance, baby boomers who criticize younger staff for not being loyal won’t work, and employees crying out for more freedom and autonomy are likely to fall on deaf ears in traditionally-run companies. The majority of books on organizational development do not give a clear description of what this radically new landscape looks like and how to deal with it. The evolution of the employment relationship has affected the culture of the modern workplace. Workplace culture is really about the way we do things around here. All businesses, whether large or small, have a unique culture. Workplace culture can be created by accident or design. More than any other factor, the culture within an organization is the result of the relationship between managers and employees.

What does the New Employment Relationship Model offer? The New Employment Relationship Model offers people in the workforce, or starting out in employment, ways of integrating successfully in the forward-thinking workplace. It provides a path of certainty: a way forward. With a fresh understanding, employees— irrespective of how long they have been with a company—can shape their careers in a way that matches this new paradigm. Employees who respond to this changing employment relationship will reap the rewards of a prosperous working life. I will address several important questions about this new mindset throughout the book: How has the employment relationship—the foundation of industry—changed over the past thirty years, and how will this affect current and future organizational leaders and members? What are the eight shared values that support the radically changing employment relationship, and how are these values different from the old employment relationship?

The Eight Changing Values

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How do these changing values influence the way people should be managed and led in the workplace? And how do these principles shape employees and their careers? What do managers need to do differently to lead in this new reality? And what is the best way for employees to boost their career prospects? How can we successfully benchmark these new values in organizations? You may be thinking, I’ve heard all this before. How is Attracting and Retaining Talent different from the plethora of management and leadership books on the bookshelves around the world? Attracting and Retaining Talent is unlike other books because it looks at the development of the individual and organization from an entirely different perspective. In essence, the New Employment Relationship Model examines the role employers and employees need to play in the context of the shifting psychological contract. This is done by laying out a specific pathway to becoming a true employer of choice. It is based on a series of clearly defined benchmarks rather than generalizing about the new world of work. This roadmap is concerned with modeling the changing requirements of employee and employer, and how both entities should think and act in their own best interests and the interests of the other party. Essentially, I am offering a fresh agreement that benefits both partners in the enduring employment relationship. This provides a certainty that has been missing in the contemporary workplace.

What are the eight shared values of an employer of choice? Table 1.1 illustrates the changing values of the psychological contract.

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Table 1.1

The changing values of the psychological contract

Traditional values

New values

Specialized employment

Flexible deployment

Internal focus

Customer focus

Job focus

Performance focus

Functional-based work

Project-based work

Human dispirit and work

Human spirit and work

Loyalty

Commitment

Training

Learning and development

Closed information

Open information

You will notice that the eight new values on the right-hand side are diametrically opposite to the traditional values supporting the traditional employment relationship on the left-hand side. Managers who want their organizations to become an employer of choice ought to be instilling the eight principles on the righthand side. These eight values form the framework for being an employer of choice. They are shared values between the employees and management. The shared values of flexible deployment, customer focus, performance focus, project-based work, human spirit and work, commitment, learning and development, and open information are consistent with the changing requirements of organizations and individuals. Briefly, the eight values are defined as follows: Flexible deployment is the provision of a functionally flexible workforce. This means that employees are multi-skilled wherever possible. AÂ multi-skilled workforce translates into a flexible and maneuverable business in a rapidly changing marketplace. Customer focus means removing internal organizational obstacles to focus on the requirements of the customer. Everything that is thought of, said, or done in a company ought to be done with the customer in mind.

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Performance focus links rewards and benefits with performance rather than organizational dependency. “A fair day’s work for a fair day’s pay” is a mindset that is no longer relevant and is counter to developing a focus on performance. Project-based work means organizing work around projects rather than organizational functions. Project-based work encourages cross-functional communication and breaks down internal barriers. Human spirit and work is connecting the work that employees do with personal meaning. Finding meaning in work engages employees and contributes to greater productivity and lower staff turnover. Learning and development means shifting from a focus on a training culture to a broader emphasis on learning and development. A learning and development culture means that employees are continually learning and growing on the job, both professionally and personally. Commitment to and from employees is a more practical substitute for the outdated idea of organizational loyalty. A business that is committed to assisting employees to grow and develop and manage their work–life responsibilities is more likely to gain commitment from its employees to achieve business goals. Open information means communicating the necessary information about the company and its direction to employees so that they can understand and appreciate the business decisions that are made. Moving from a closed to an open information culture aligns the perspective of employees with the organization. I explain these shared eight values from the dual perspective of organization and individual in more depth in subsequent chapters. Businesses that do not embrace these new values are likely to become less and less appealing places to work for good employees, who are likely to believe in this new mindset and share its values.

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Companies holding on to the old mindset supported by a different set of values will struggle to keep and attract top talent. The old way of thinking illustrated by the set of values on the left-hand side of the table has been slow to change, and there are various pressures to hold on to this paradigm. As mentioned earlier, this time-honored mindset has been a very successful factor in the growth of industry since the dawn of the Industrial Revolution. This psychological contract has not come under scrutiny until the last few decades. What is more, the impressive expansion of the marketplace over a long period has deeply entrenched the virtues of the conventional â&#x20AC;&#x153;them and usâ&#x20AC;? employment relationship in our psyche. There is strong pressure from interest groups such as old guard trade unions, traditionally-minded employer associations and both left-wing and right-wing political parties to prolong the struggle for their own gain. Furthermore, because of the simplicity and durability of the traditional psychological contract, it is very difficult for employees and employers to let go of their dependency on the old conventions. After all, if it has worked for at least two centuries, why change it? These incentives to hold on to the conventional employment relationship make it tough to change the culture of an organization.

Is the challenge worth it? Challenging as it surely is, it is timely for people to revisit their thinking about the employment relationship. This means employees and organizational leaders questioning the relevance and effectiveness of the old mindset against the backdrop of a dramatically altered marketplace characterized by accelerated change and uncertainty. Without taking into account the shifting psychological contract, managers will continue to cobble together a series of unsustainable growth strategies. Outdated approaches to bring out the best in

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HR professionals are called on more and more to create productive workplace cultures, at least at the strategic level. Having a clear roadmap can only assist in this regard. As you will read in Chapter 3, the HRD profession—in my view—is at a crossroads. The profession needs to change its thinking and approach or risk irrelevancy. Having a methodical approach to changing an organization’s culture can therefore only be an asset. If you are an employee—and we have all been at some stage of our career—you will gain a better insight into how the psychological contract is evolving and how best to respond to improve your career prospects. Qualities like job security, qualifications, certainty, and organizational dependence were once critical to your career success; but no more. The traits for success are now employability, commitment to continuous improvement, flexibility, and independence: the paradoxical characteristics for a successful employee in the twentieth century. Understanding why and how this new mindset can be applied is likely to enhance an employee’s career in a global and dynamic marketplace. This information answers the question: what attitudes and qualities does an employer of choice look for in an employee? For managers, concepts such as paternalism, having ownership of employees’ development, offering clearly defined career paths, having secretive plans for top employees, minimizing the information flow on a “need to know” basis, and rewarding only vertical progression in organizations are now obsolete. These ideas are being replaced by empowering and enabling people, being prepared to partner employees in their growth and development, recognizing and promoting multiple ways for staff to move on and progress, accepting that employees are now ultimately responsible for their own careers, opening up the channels of communication, and linking compensation to contribution. These are some of the attitudes and qualities needed for managerial success. Again—as for employees— these features are diametrically opposite to the traditional employers’

The Eight Changing Values

An Excerpt from BAttracting and Retaining Talent • 103

response. This fresh approach to organizational leadership will be attractive to the growing number of employees who are embracing the new mindset. These features are not shallow observations. The eight value shifts illustrated in Table 1.1 have been thoroughly investigated and researched in organizational settings across industry groups, countries, and public- and private-sector organizations. I have used examples and anecdotes from some of the world’s best companies to show how they are coping with these changes successfully. This provides some context and practical illustrations of what you can do in your own organization to better reflect this emerging relationship between employee and employer. To begin this journey, Chapter 2 looks at the changing world of work and some of the global and economic pressures that have transformed the psychological contract. Earlier in this chapter, I referred to this transformation as the workplace revolution. This workplace revolution is largely responsible for profoundly altering, forever, the psychological contract between employee and employer.

The 10 Key Points … Attracting and Retaining Talent offers you a roadmap for developing a new, more productive workplace culture, one that is vastly different from the traditional mindset of the “them and us” employment relationship. An employer of choice is an organization that is a great place to work. The traditional “them and us” employment relationship has been around since the beginning of the Industrial Revolution and, while there is lots of pressure to hold on to this psychological contract, there is also increasing pressure to change it.

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Mental illness in the workplace is more common than many realize, ranging from stress to schizophrenia. If not understood or addressed appropriately, mental illness can present a considerable risk for both the individual and the organization. Written by leading psychologists Mary-Clare Race and Adrian Furnham, Mental Illness at Work explores the psychiatric classification of mental illness and offers practical and solid advice on the identification, mitigation and prevention of mental illness in the workplace. It will help managers to minimize risk and harmful effects to the individual and the business, and ultimately to develop a mental health literate organization. Order at www.palgrave.com. Enter code PM14THIRTY to receive a 30% discount.

ch ap te r

An Excerpt from Mental Illness at Work • 105

Introduction

Would you recognize if a colleague at work was having a serious mental breakdown? You may be able to see signs of stress or depression, but can you detect schizophrenia or alcoholism? Are any of the top people in your organization psychopaths? And does anyone have full-blown obsessivecompulsive disorder? What should you do if you recognize symptoms of a major mental health problem? Is this essentially an HR issue? Do some workplaces make you psychologically as well as physically sick? Are there pathological organizations which almost require you to be disturbed in order to work in them: the paranoid or psychopathic organization? Do certain workplaces cause mental illness? And are people with a particular propensity towards certain disorders attracted to certain jobs and organizations? This book is about mental illness in the context of the modern workplace. It deconstructs the mythology and misconceptions surrounding mental illness and offers a useful taxonomy for understanding how the impact of mental illness in the workplace can be managed, mitigated and prevented. One aim is to help people recognize a range of psychological problems for what they are and offer appropriate help and advice before the problems become too serious.

People are frequently physically ill at work. Over the course of a working life, people are likely to experience a wide range of physical illnesses such as the common cold, broken limbs resulting from accidents and chronic conditions like hypertension. Many are also likely to experience a range of ‘psychological issues’ and sometimes these may result in mental illness. Whilst physical

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O ch ne o st alle f t as igm nge he b m soc a th s is igg pr ent iate at the est ob al is d lem he wi sti t a lth h ll s

health and mental health are closely related, it is much more difficult to identify and deal with mental health problems in the workplace. One of the biggest challenges is the stigma that is still associated with mental health problems. People suffering from mental illness are among the most stigmatized and marginalized in society, and although a lot has been done in recent years to address this, there is still a long way to go before mental illness is regarded in the same light as physical illness. The stigma of mental illness is consequently one of the biggest barriers that people with mental illness face as the social distance and exclusion that they often experience as a result of other people’s prejudices can make it very difficult for them to integrate successfully with other people and maintain a normal life. Another negative side-effect can be that people suffering from mental illness are reluctant to accept professional help until a late stage because of the fear of being labelled if people ﬁnd out they are receiving treatment. In the workplace this often means that employees will withhold information from their line manager, HR professionals or other decision makers because of the perceived impact on their career progression. As a result, the very people who are in a position to help them manage and cope with their illness at work are often the last to know. Depictions of mental illness in the media do not help, with a typically negative focus on the link between mental illness and violence, failure and unpredictable behaviour. The formation of these stereotypes is normal and to be expected in situations where we are basing our assumptions on often very limited personal contact with sufferers of mental illness. For example, a 2002 study of over 200 students in Malaysia highlighted the impact of stereotypes about mentally ill people, with the results showing that students with knowledge of, and contact with, mentally ill patients were less likely to have negative attitudes than students who had no prior exposure (Mas and Hatim, 2002). But what if we told you that most of us have more exposure to people with mental health than we think? Current estimates suggest that one in four people will experience some form of mental illness in any given year and yet awareness of, and attitudes towards, mental health would suggest otherwise. Proper education to dispel these myths and exposure to people with mental disorders is therefore an important step in overcoming these stereotypes, and later in this book we will explore this further.

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Introduction

1.1

An Excerpt from Mental Illness at Work • 107

Deﬁning mental health

Mental health is a broad and complex topic and we will not seek to provide education on every disorder listed in DSM-V (the most recent psychiatric manual), but rather will focus on those conditions which can have the greatest impact on the business world. To a large extent, psychologists have thought about mental health as an absence of mental illness. Most psychologists accept that we are bio-psycho-social animals. Our health and welfare is not determined exclusively by our biology, our psychology or our social lives and networks, but by all of these. Abnormal and clinical psychologists are most concerned with mental health. However, the comparatively new discipline of health psychology is more interested in mental health and how it affects physical health (Seligman, Walker and Rosenhan, 2001). When a professional attempts to make an assessment of a person’s mental health, he or she tends to look at very specific features. Nevid, Rathus and Greene (1997) have listed 11 of these: Appearance: appropriate and clean. Behavioural characteristics: verbal and non-verbal. Orientation: knowledge of correct places, space and time. Memory: for recent and long-term past, people and events. Use of senses: concentration and awareness. Perceptual processes: sensing reality from unreality. Mood and affect: having an appropriate emotional tone. Intelligence: vocabulary knowledge. Thought processes: logic and coherence. Insight: self-awareness and psychological awareness of others. Judgement: rationality and decision making. It still seems rare for psychological textbooks to deal with mental health and wellness as not being anything more than an absence of signs of mental illness. On the other hand, there are lists of characteristics that epitomize mental health (Seligman, Walker and Rosenhan, 2001). These include the following: emotional stability and awareness; being able to initiate and sustain satisfying long-term relationships; being able to face, resolve and learn from day-to-day work, and personal and financial problems; being sufficiently self-confident and assertive; being socially aware, empathic and socio-centric; being able to enjoy solitude; having a sense of playfulness and fun; and showing signs of merriment, joy and laughter from time to time when appropriate.

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108 • An Excerpt from Mental Illness at Work

Mental Illness at Work

Mental illnesses can be caused by environmental, cognitive, genetic or neurological factors. Clinicians are concerned with the assessment, diagnosis and management of psychological problems. They are both scientists and practitioners who often specialize in the treatment of various disorders like anxiety disorders (anxiety, panic, phobias, post-traumatic stress disorder (PTSD)), mood disorders (depression, bipolar), substance disorders (alcohol, stimulants, hallucinogens, etc.) or complex problems like schizophrenia. Happiness is another widely discussed state that is essentially about mental wellness. However, it has been known for 50 years that happiness is not the opposite of unhappiness – the two feelings are unrelated (Bradburn, 1969). What this taught researchers was that absence of illness and unhappiness was not the key to understanding happiness, but that we need to know those factors that lead to stable happiness in an individual. The relatively recent advent of studies on happiness, has led to a science of well-being (Huppert, Baylis and Keverne, 2005). All the early researchers in this field pointed out that psychologists had long neglected well-being, while preferring to look at its opposites: anxiety, despair and depression. All the early writers in this area struggled with a definition. Eysenck (1990) noted telltale signs, both verbal and non-verbal. Argyle (2001) noted that different researchers had identified different components of happiness like life satisfaction, positive affect, self-acceptance, positive relations with others, autonomy and environmental mastery. Happiness also constitutes joy, satisfaction and other related positive emotions. Myers (1992) noted the stable and unstable characteristics of happy people, who tend to be creative, energetic, decisive, flexible and sociable. They also tend to be more forgiving, loving, trusting and responsible. They tolerate frustration better and are more willing to help those in need. In short, they feel good so do good. Diener (2000) has defined subjective well-being as how people cognitively and emotionally evaluate their lives. It has an evaluative (good-bad) as well as a hedonic (pleasant-unpleasant) dimension.

1.2 The incidence of mental illness The understanding and awareness of mental illness in society has improved dramatically in the last 15–20 years and at the same time there appears to have been an upward trend in its prevalence rate (Deverill and King, 2009), with the most commonly quoted statistic estimating that one in four

Introduction

An Excerpt from Mental Illness at Work • 109

people in the UK will experience a mental health problem in any given year (http://mind.org.uk). It is not clear if the rate of mental illness has truly increased or if the increase in understanding of the topic has led to more accurate diagnosis and therefore a greater frequency of reporting symptoms. Regardless, this increased prevalence of mental illness is quite alarming and particularly given the evidence that approximately three-quarters of adults with a common mental health problem are not in receipt of medication or counselling, including two-thirds of those who have been assessed as having sufficient a level of symptoms to warrant treatment (Deverill and King, 2009). The rate appears to be higher among women and in people in the 45–54 age bracket, and the prevalence rates are mirrored among working-age adults, with approximately one in six workers experiencing depression, anxiety or stress-related problems at any one time. This rate can increase to one in ﬁve when drug or alcohol dependence are included (Sainsbury Centre, 2007) and later in this book we dedicate a chapter to understanding the implications of drug and alcohol dependency.

1.3 Why we should care: the costs of mental illness to business We have all experienced the negative impacts when a colleague is off sick: increased workload for the rest of the team, disruption to the operations of the business, a drop in sales revenue, etc. Mental illness falls into this category and is a silent epidemic impacting the business world at an alarming rate. In the UK, for example, it is estimated that around 80 million days are lost every year due to mental illnesses, costing employers £1–2 billion each year, and in the USA, according to recent collaborative research by Harvard University Medical School and the World Economic Forum (Bloom et al., 2011), it is estimated that untreated mental illnesses costs the country at least $105 billion in lost productivity annually. The very nature of mental illness also means that absences from work are rarely characterized by the odd day here and there; instead, sufferers are likely to experience prolonged periods when they are not able to work, and when they do return to work, they can take some time to get back to their previous level of performance. Estimates for national spending in the USA on depression alone are $30–40 billion, with an estimated 200 million days being lost from work each year. Similarly, in the UK, depression is estimated to cost approximately £2 billion a year and, on top of absenteeism, can have a profound impact on reduced productivity, staff turnover, poor timekeeping and work-related accidents. In a study of US

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workers, Kessler et al. (2006) estimate that a single depressive disorder is typically associated with an average of over ﬁve weeks of lost productivity per person. Compared to other mental illnesses, depression would appear to be the most costly of all health problems to employers (Wang et al., 2003), although there is a vast amount of evidence to suggest that all mood disorders are associated with signiﬁcant costs, including absence from work and reduced functioning whilst at work. In addition, it is quite probable that a diagnosis of depression is often used as an umbrella term for some other mood disorders. Reduced functioning can take many forms, including poor cognitive performance, problem behaviour directed towards other colleagues, lack of attention to the core tasks of the job, poor interpersonal skills when dealing with clients and a greater need for frequent breaks and time off. In a recent study in the Netherlands, De Graaf et al. (2012) carried out extensive research to compare the effects of mental disorders on work performance. They found that drug abuse, bipolar disorder, major depression, digestive disorders and panic disorder were associated with the highest number of days of lost work (once co-morbidity had been taken out of the equation). At a wider population level, they found that depression, chronic back pain, respiratory disorders, drug abuse and digestive disorders contributed the most to lost productivity and days off work. Other research suggests that those with a psychiatric disorder (in comparison to the rest of the population) do not always have more days off work, but will certainly have a greater number of days during which they are either unproductive or unable to function at their full capacity (Boyle et al., 1996; Kessler and Frank, 1997). So, in other words, those with mental illness may be just as likely to show up for work as the rest of us, but they will need extra help in performing at the required level. This highlights the need for increasing the awareness of how to manage, mitigate and prevent mental health problems in the workplace. In order to get the most from workers who experience mental health problems, it is critical that managers and co-workers understand the nuances and respond appropriately.

1.4 The impact of the global ﬁnancial crisis on mental illness The report of the World Health Organization (WHO) in 1996 suggested that depression would emerge as the leading cause of disability by the year 2020 and the indicators seem to be that we are on trend for this to be true. One

Introduction

An Excerpt from Mental Illness at Work • 111

of the main catalysts contributing to this trend in the last decade has been the global financial crisis, with indicators that the economic crash of 2007 and the subsequent fallout has increased the prevalence of mental illness. The prolonged economic downturn has led to an increase in job insecurity, work stress and the helplessness associated with unemployment and redundancy. The mental health charity Mind found that one in ten workers in the UK visited their GP for support with mental health issues as a result of recessionrelated work pressure and in 2011 the BBC reported figures indicating that prescriptions for anti-depressant drugs such as Prozac rose by more than 40 per cent between 2006 and 2010. Economic recessions have numerous social and psychological consequences. Many people lose their jobs or are compelled to work part-time. Young people are often hit hard and struggle to find work. A sense of a lethargy and despair pervades many communities, industries and organizations. In some countries people take to the streets in protest, while in others they seem quietly resigned to their fate. There have been numerous studies of the psychological distress that unemployment brings (Bjarnsasson and Sigurdardotter, 2003), with the most extreme cases resulting in suicide. Redundancies in particular usually lead to two problems: first, affective or emotional consequences; and, second, cognitive consequences which impact an individual’s thought processes. Some of those ‘laid off’ from work genuinely experience all the symptoms of PTSD, experiencing anxiety and depression. Some cannot stop thinking about it (sensitizers), while others cannot bear to face reality (repressors), becoming withdrawn and soon falling into the vicious cycle of decline. Depression leads to withdrawal and low self-esteem, which lead to fewer attempts to find a new job or adjust, which in turn leads to a greater level of depression. Some see threats as opportunities, while others see them as disasters. Figure 1.1 below represents a typical, negative vicious spiral. People feel uncertain and anxious about their jobs. This distraction can lead to poorer performance as well as illness. This often leads to worse results for an individual, a group and a whole organization. This, in turn, threatens the individual’s work status which caused the problem in the first place. The most extreme impact of the recession is evidenced in the increasing rate of suicide amongst adults of working age in the hardest-hit countries. In 2011 the British medical journal The Lancet reported the results of a study from 10 European Union countries which indicated an increase in suicide rates in hardhit economies like Greece (up 17 per cent on figures before the recession) and Ireland (up 13 per cent). Research suggests that men may be more susceptible than women to suicide; a 2012 study published in the British Medical Journal

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Worsening results

Management warning

Ambiguity and uncertainty

Lower productivity

Anxiety

figure 1.1

The vicious cycle of job uncertainty

reported that each ten per cent increase in the number of unemployed men between 2008 and 2010 was signiﬁcantly associated with a 1.4 per cent increase in male suicides. Men may be more vulnerable to the adverse effect that unemployment and job insecurity can bring, particularly in households where they hold the traditional ‘breadwinner’ role. The nature of mental illness is such that symptoms can take many months to appear and so even though the signs of ﬁnancial recovery are there to be seen, the impact on human well-being is likely to be felt for many years to come. Indeed, at the time that The Lancet study was published in 2011, Bloomberg warned that increased suicides would be ‘just the tip of the iceberg’, alerting researchers to the likelihood of a mental health crisis and the spiralling incidence of depression across the world. This worrying trend highlights the need to invest in better systems to support people back into the workplace who may have lost their job as a result of the recession, to ensure that those in work who may be feeling vulnerable have the adequate support systems in place and to educate managers and the general workforce so that they are more able to spot the warning signs of mental illness.

1.5 A brief history of mental illness Attempts to understand and categorize mental illness can be traced back to ancient times where many cultures viewed mental illness as a form of

Introduction

An Excerpt from Mental Illness at Work • 113

punishment from the Gods. People were commonly assumed to have been possessed by demons and treatment included exorcism, physical punishment and treatment with balms and ointments. There was no clear distinction between physical and mental illness until the time of the early pioneers, including Hippocrates, who began to question this assumption. Hippocrates was one of the first people to start treating mentally ill people with techniques not rooted in religion or superstition and focused instead on making changes to the environment and administering specialist substances. Throughout the Middle Ages, the preoccupation with a religious connection persisted and priests and other figures of authority still thought of mental illness in terms of the person needing to be cleansed of evil spirits. Treatments during this era were of a harsh and brutal nature. These negative attitudes persisted into the eighteenth century in the Western world, following which a more enlightened and scientific approach began to emerge. In 1752 the first ‘lunatic’ asylum was opened in the USA at the Pennsylvania Hospital based on a model of care established at the famous Bethlehem Hospital in London (commonly known as Bedlam), where there are records as far back as 1403 of mentally ill patients being admitted. Treatment in these institutions was not much better than that doled out by priests in the Middle Ages and patients were often beaten, chained to walls and put in straitjackets for days at a time. Another cruel aspect of such institutions was that local people were often permitted to visit the asylum, pay an admission fee and subsequently observe patients and poke fun at them. Things began to change in the mid-1800s and activists such as Dorothea Dix lobbied for better treatment and living conditions for the mentally ill. Dix wielded considerable influence over state legislature and was eventually successful in persuading the US government to fund the building of 32 state psychiatric hospitals. During this time, new ideas about treating mental illness were also introduced and physicians became convinced that the act of physical confinement itself would go a long way towards treating the illness. Thus, the institutional inpatient care model, in which many patients lived in hospitals and were treated by professional staff, became accepted as the most effective way to care for the mentally ill. Asylums subsequently began to spring up in many countries in the Western world. By the mid-1950s, particularly in the USA, there was a push for deinstitutionalization as growing evidence had begun to show that this model was not working. Understanding of mental illness had progressed considerably and the focus at this time was on understanding and treating the psychosocial causes of mental illness. As a result, outpatient treatment began in many

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countries, accelerated by the development of a variety of anti-psychotic drugs. This international move towards a more community-centric model of care was based on the belief that people with mental illness would have a higher quality of life if they were treated in their own communities.

1.6 Modern treatment and cures for mental illness Psychiatry has gone in and out of fashion. One of the most famous antipsychiatry studies was done in the early 1970s. Eight ‘normal’ mentally healthy researchers tried to gain admission, through diagnosis, to a number of American mental hospitals. The only symptom they reported was hearing voices. Seven were diagnosed as schizophrenic and were admitted. Once in the hospital, they behaved normally and were ignored when they politely asked for information. They later reported that their diagnostic label of schizophrenia meant they had low status and power in the mental hospital. They then decided to ‘come clean’ and admit they had no symptoms and felt fine. But it took nearly three weeks before they were discharged, often with the diagnosis of ‘schizophrenia in remission’. So, normal, healthy people could easily be diagnosable as abnormal. But could the reverse happen? The same researchers told psychiatric hospital staff that fake or pseudo-patients pretending to be schizophrenics might try to gain access to their hospital. They then found that 19 genuine patients were suspected as bring frauds by two or more members of staff, including a psychiatrist. The conclusion was that it is not possible to distinguish the sane from the insane in mental hospitals. Though this famous study has received considerable criticism on ethical and experimental grounds, it added great impetus to the anti-psychiatry movement. There were three main origins of the anti-psychiatry movement. The first started in the early 1950s and was a result of the war between Freudianinspired psychoanalytic psychiatrists and the new biological physical psychiatrists. The former favoured protracted, dynamic, talking cures, but were losing power and were being challenged by the latter, who saw this approach not only as costly and ineffective but also profoundly unscientific. The biological psychologist treatments were surgical and pharmacological, and they had some important early successes. The second attack on psychiatry began in the 1960s with famous figures like David Cooper, R.D. Laing and Thomas Szasz becoming highly vocal in different

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Introduction

An Excerpt from Mental Illness at Work • 115

countries about the use of psychiatry to control those deviating from societal norms. Thus, people who were seen to be sexually, politically or morally deviant or different were subjected to psychiatric processing and control. The famous book The Myth of Mental Illness (Szasz, 1961) explains this position well. The third force were American and European sociologists, notably Erving Goffman and Michel Foucault, who saw the devious power of psychiatry and its effects on labelling and stigmatizing and hospitalizing people. The high point of this movement occurred at the time of the 1960s counter-cultural, challenging zeitgeist. Popular films (One Flew over the Cuckoo’s Nest) and radical magazines appeared that challenged the biological psychiatrists, state services and practices. The anti-psychiatry movement was always a loose coalition between social action groups who tended to focus on very specific problems like schizophrenia or sexual disorders. They talked of authenticity and liberation, of empowerment and personal management rather than pharmaceutical intervention. Many began to attack the pharmaceutical industry and, particularly, established psychiatric institutions like the great Victorian mental hospitals. The movements did share some fundamental beliefs and concerns. The first was that families, institutions and the state are as much a cause of illness as a person’s biological functioning or genetic make-up. Second, they opposed the medical model of illness and treatment. They believed those who were living by different codes of conduct were erroneously and dangerously labelled delusional. Third, they believed that certain religious and ethnic groups were oppressed because they were in some sense abnormal. They were pathologized and therefore were made to believe they needed treatment. The movements got and still get very concerned with the power of diagnostic labels. They see such labels as giving a bogus impression of accuracy and immutability. They have succeeded to a large extent such that ‘schizophrenics’ are now regularly described as ‘people with schizophrenia’ and ‘AIDS victims’ as ‘people with AIDS’. Diagnostic labels and manuals are rejected because people either meet none of the criteria or they meet multiple criteria and there is little agreement between experts. The movements against psychiatry also focused their opposition on very specific therapies, particularly drugs. This was especially the case with drugs designed to treat primarily childhood problems (like attention deficit hyperactivity disorder (ADHD)) and depression. They were attacked because of their cost and side-effects, but also because patients were not told the truth

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about them. Anti-psychiatry movement activists have focused on all aspects of pharmaceutical company behaviour, arguing that they fake their data and massively overcharge for their drugs. This in turn has led the industry to be carefully monitored and policed by legislation. Other targets have been electroconvulsive therapy (ECT) as well as very speciﬁc procedures like brain surgery (prefrontal lobotomies). Despite some evidence of success, critics argue they are ‘forced upon’ naïve patients and cause massive permanent side-effects. Although there are still a number of large inpatient psychiatric hospitals, particularly in Central and Eastern Europe, the deinstitutionalization movement has been fairly widespread and has changed the nature and perception of modern care. What was once the common has become the uncommon, with lobotomies being almost totally eradicated and the media branding psychiatry as a pseudo-science, not empirical and to many degrees a ‘sham’ (Kirk, 2013). Anti-psychiatric views such as these often focus on quantitative statistics rather than indepth rational inspection, e.g., that mental illness has grown, not shrunk, with about 20 per cent of American adults diagnosable as mentally ill in 2013 (Kirk, 2013).

1.7 The categorization of mental illness The classification of mental disorders is essentially the holy grail of psychiatry. Creating a parsimonious, efficient and universal classification system is something that has only really begun to take shape in the last five decades. Pushed by the deinstitutionalization movement, the International Classification of Diseases (ICD) produced by the WHO and the Diagnostic and Statistical Manual of Mental Disorders produced by the American Psychiatric Association (APA) were the first comprehensive systems. Both systems list categories of disorders thought to be distinct types and have deliberately converged their codes in recent revisions so that the manuals are often broadly comparable, although significant differences remain. The ICD is an international standard diagnostic classification for a wide variety of health conditions. One chapter focuses on ‘mental and behavioural disorders’ and consists of ten main categories:

1. Organic (including symptomatic) mental disorders. 2. Mental and behavioural disorders due to the use of psychoactive substances.

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Introduction

3. 4. 5. 6. 7. 8. 9. 10.

An Excerpt from Mental Illness at Work • 117

Schizophrenia, schizotypal and delusional disorders. Mood (affective) disorders. Neurotic, stress-related and somatoform disorders. Behavioural syndromes associated with physiological disturbances and physical factors. Personality and behaviour disorders in adults. Mental retardation. Disorders of psychological development. Behavioural and emotional disorders with onset usually occurring in childhood and adolescence.

Within each group there are additional specific subcategories. The WHO is revising its classifications in this section as part of the development of the ICD-11, which is scheduled for 2014. The Diagnostic Statistic Manual – Version 4 (DSM-IV) consists of five axes (domains) on which disorder can be assessed. The five axes are as follows: Axis I: clinical disorders (all mental disorders except personality disorders and mental retardation). Axis II: personality disorders and mental retardation. Axis III: general medical conditions (must be connected to a mental disorder). Axis IV: psychosocial and environmental problems (for example, a limited social support network). Axis V: global assessment of functioning (psychological, social and job-related functions are evaluated on a continuum between mental health and extreme mental disorder). As with any competing enterprise, there are always ongoing scientific doubts concerning both validity and reliability (Baca-Garcia et al., 2007), but also and more importantly concerning boundaries of normality. Studies reporting insignificant validities and reliability, while having important implications, need to be considered in light of what these manuals represent. Often mistaken for ‘rule books’, it is important to note that these are guidelines. Each person will experience mental illness in a slightly different way, with mental illness often being a vast combination of things that will never be fully understood. Thus, such studies may not always show such manuals to be useful. Their generalizability is of more importance. That being said, because there are no ‘rules’ as it were, natural boundaries between related syndromes or between a common syndrome and normality have failed. Many practitioners find this unacceptable as labelling inappropriately

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cannot actually lead to mental illness, but can cause significant problems in all other areas of life. When the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-V) was released at the American Psychiatric Association’s Annual Meeting in May 2013, it marked the end of more than a decade of revising the criteria for the diagnosis and classification of mental disorders. DSM-V serves as the universal authority for the diagnosis of psychiatric disorders and most diagnosis and treatment of mental illness is based on the criteria and guidance set out in this manual. The publication of a revised and significantly altered version therefore has significant practical implications. The manual is divided into three major sections: 1) introduction and clear information on how to use the DSM; 2) information and categorical diagnoses; 3) self-assessment tools as well as categories that require more research. Whilst DSM-V has approximately the same number of conditions as DSM-IV, there have been some significant changes in specific disorders. A summary of these is as follows: Autism: there is now a single condition called autism spectrum disorder, which incorporates four previous separate disorders including autistic disorder (autism), Asperger’s disorder, childhood disintegrative disorder and not otherwise specified pervasive developmental disorder. Disruptive Mood Dysregulation Disorder (DMDD): childhood bipolar disorder has a new name, which is ‘intended to address issues of overdiagnosis and over-treatment of bipolar disorder in children’. ADHD: this disorder has been modified especially to emphasize that it can continue into adulthood. The one ‘big’ change is that you can be diagnosed with ADHD as an adult if you exhibit one less symptom than if you are a child. Bereavement exclusion removal: in DSM-IV, if you were grieving the loss of a loved one, technically you couldn’t be diagnosed with a major depression disorder in the first two months of your grief. This exclusion was removed in DSM-V for a number of reasons. First, the implication that bereavement typically lasts only two months has been removed as most practitioners recognize that the duration is more commonly one to two years. Second, bereavement is recognized as a severe psychosocial stressor that can precipitate a major depressive episode in a vulnerable individual, generally beginning soon after the loss. Third, bereavement-related major depression

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Introduction

An Excerpt from Mental Illness at Work • 119

is most likely to occur in individuals with past personal and family histories of major depressive episodes. It is genetically influenced and is associated with similar personality characteristics, patterns of co-morbidity and risks of chronicity and/or recurrence as non-bereavement-related major depressive episodes. Finally, the depressive symptoms associated with bereavementrelated depression respond to the same psychosocial and medication treatments as non-bereavement-related depression. PTSD: more attention is now paid to behavioural symptoms that accompany PTSD in DSM-V. It now includes four primary major symptom clusters: re-experiencing, arousal, avoidance and persistent negative alterations in cognitions and mood. The condition is now developmentally more sensitive in that diagnostic thresholds have been lowered for children and adolescents. Major and mild neurocognitive disorder: major neurocognitive disorder now subsumes dementia and amnestic disorder, but a new disorder – mild neurocognitive disorder – has also been added. Other new and notable disorders: both binge eating disorder and premenstrual dysphoric disorder are now official diagnoses in DSM-V (they were not prior to this, although there were commonly diagnosed by clinicians). Hoarding disorder is also now recognized as a real disorder separate from obsessivecompulsive disorder (OCD), ‘which reflects persistent difficulty discarding or parting with possessions due to a perceived need to save the items and distress associated with discarding them. Hoarding disorder may have unique neurobiological correlates, is associated with significant impairment and may respond to clinical intervention’. There are and will remain many criticisms of this manual, and the psychology and psychiatry community has come out in unison to highlight concerns about the changes. In a blog post in Psychology Today (2 December 2010), Frances lists the ten ‘most potentially harmful changes’ to DSM-V: DMDD being used to describe temper tantrums. Major depressive disorder being used to for normal grief situations. Minor neurocognitive disorder being used for normal forgetfulness in old age. Adult attention deficit disorder, which could lead to greater psychiatric prescriptions of stimulants. Binge eating disorder being used to describe excessive eating. Changes to autism diagnoses, thus reducing the numbers diagnosed. A risk that first-time drug users could be grouped with addicts. Behavioural addictions, making a ‘mental disorder of everything we like to do a lot’.

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120 • An Excerpt from Mental Illness at Work

Mental Illness at Work

Generalized anxiety disorder being used to describe everyday worries. Changes to PTSD opening ‘the gate even further to the already existing problem of misdiagnosis of PTSD in forensic settings’. These criticisms are not new and are certainly not unique to DSM-V. Is the reliability of diagnosis improved? In other words, do psychiatrists and psychologists agree upon diagnoses? Is all this medicalization mainly for the beneﬁt of the big pharmaceutical companies? There is also the serious issue of cultural bias. It is argued that national culture affects the experience, expression, generation and management of symptoms. It also affects the management of symptoms. People in different cultures use different words and idioms to express their psychological distress and pain. National culture also reﬂects shame in different ways. Many cultures accept supernatural explanations for mental illness, while others try hard to medicalize it as soon as possible. What place does a universal diagnostic manual have in a multicultural and diverse world? And does it help to improve the mental health literacy of the general public?

1.8 Summary Many groups have called for a change in attitude towards and an understanding of mental disorders which cost individuals, families and organizations a great deal. It seems that we have been much more successful at changing attitudes towards physical illness than mental illness. The sooner we are able to increase mental health awareness, the sooner we can help people in distress. There are a large number of self-help groups and societies dedicated to helping people and their relatives with a large range of psychological and physical problems. Each calls for the better education of the general public, particularly those in educational and organizational settings. This is not only a humanitarian but also a business issue. The more mental health-literate manager should be able to make better hiring and managing decisions about people who are often the greatest asset but also the greatest cost to an organization.

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