Posts filed under ‘Human Capital Management’

In defense of HR Best Practice

The concept of ‘best practice’ is so yesterday. So I am told. Although I fully understand where the critics are coming from, I think they are too negative on the concept. Let me expand…

Yes, ‘best practice’ has come under some criticism lately and quite frankly also with some justification. It is impossible to go to a conference, read a white paper or just look through the blogosphere today without being overdosed with best practice by consultancy companies (such as yours truly), who are trying to make their products and services sound better than it really is or are selling it to their customers as ‘this is how all the best are doing it and see how much money they are making’.

Jane Watson formulates it well when she says:

“Best practice” has become a largely meaningless label an individual applies to one or more business practices that they hold in high regard; practices that they, or their industry or profession, consider to be ‘best’, presumably in comparison to other practices previously or currently in use. There might be theoretical underpinnings or research that illustrate the efficacy of these practices, but quite frequently there is not. It seems to me that in cases where such supporting data is lacking, the evidence used to justify the labeling of a practice as ‘best’ is the degree to which it is popular amongst similar organizations, especially if those organizations are successful (e.g. profitable, recognized and positively viewed). Often these practices are advanced as ‘best’ by the very organizations that employ them, or by consultants, thought leaders or professional bodies that champion the adoption of the practices in question. Given these questionable motives, it can be difficult, I think, to assess whether a ‘best practice’ is effective, or simply the latest craze.”

Spot on Jane. I totally agree.

As I see it, best practice can be criticized from five angels:

  1. Lack of evidence. Frankly most of the so called Best Practice are hailed as such without any real evidence, research or anything substantial to back it up.
  2. You will not be better than your competitors. By adopting best practice (assuming it is), you will still not be better than your competitors. Indeed all you are doing are imitating them and probably doing it worse than them.
  3. Lack of context. Because something is working in a young start-up in Sillicon Valley does not mean it will work in your old mid-western production company.
  4. Based on (very) few cases. It appears that a best practice often is the result of one or two companies doing something which works for them. Also, it seems like it is the same few cases which are doing the rounds.
  5. Illusion of simplicity. Reading best practice cases – such as Zappos and Google – it gives the illusion that it is actually quite simple to replicate. What they do is smart and easy to do. Wrong. The best practice cases never seem to capture how long time and how much effort it has taken to make it work.

BUT BUT BUT wait a minute before you discard best practice all together. It is easy to criticize but instead of saying that we can’t use best practice cases at all we should recognize it for what it is (and importantly also for what it is not) and then use them intelligently.

There is nothing wrong with listening to what others do, be inspired by it, adopt it to your particular context and use it how you see fit.   Let me illustrate my thinking:

15 years ago I decided to run a marathon. I didn’t know how to prepare for such an event as I had never run long distance before. I decided to buy a book. It was written by someone, who had completed more than 50 marathons. In the book he gave details about nutrition, running program, do’s and don’ts, equipment and advice on what to expect. As I was travelling quite a lot at the time, I had to adapt the training program significantly. Also much of what he suggested I should eat was not easy to prepare while travelling, so I had to adapt that as well. I know there are many ways to prepare for a marathon and his was only one way. Indeed many successful running experts may even had disagreed with some of his advice. Who knows. Also, he was not the best in the world. His fastest time would not have made the top 50 in the world. But he was pretty good and certainly better than I was (and still am). But I learned a lot from the book. I improved and most importantly I completed the marathon. Along the way, friends gave me advice which contradicted the advice in the book but by and large I stuck to his advice.

I guess my point is: don’t think that best practice is the only or even the best way to do something. It is not. And what works for one company will most definitely not work in exactly the same way for another. But best practice cases are about companies and people who have done something with success and are passing on some key learning points. Take those learning points. They can be a source of inspiration. Listen to it, adapt it, use your common sense and see what you can learn from it. There may be value in best practice after all.

26/02/2013 at 16:50 6 comments

Let Hell Week inspire your recruitment process

HR Recruitment lears from Hell Week

The “war for talent” has made many companies change their recruitment processes and practically beg talents to come and join their company. The processes have been made as friendly, warm and inviting as possible partly to signal that it is a friendly and open company (nothing wrong with that) but also to convince talented people that they should apply.

There is however an argument for doing the exact opposite. In his book “Influence”, Robert B. Cialdini present compelling evidence that people who goes through a hard (and sometimes physical painful) recruitment experience actually is more engaged and dedicated to the organization they join.

One of the best examples outside of organization life is probably during “Hell Week” held each year on college campuses across US. Here young students make their fraternity pledges through a variety of activities some of which includes social embarrassment and sometimes physical pain. Why do young people go through such a recruitment processes?

A similar example is known in most countries. Just before getting married it is a tradition the groom-to-be (and increasingly also the bride-to-be) goes through a day of social embarrassments often held by their best friends. Why would someone go through this? Why would best friends/colleagues/fellow students put them through this? Why would society allow this? And why does it work?

The conclusion comes from two researchers Elliot Aronson and Judson Mills who observes that “persons who go through a great deal of trouble or pain to attain something tend to value it more highly than persons who attain the same thing with a minimum of effort”. Interesting. In their research they saw that their participants rated the groups they joined more interesting and valuable if the access to the group was harder even though the groups were identical.

So if you actually make it harder to get recruited to your company, perhaps you will experience that people will value their job more, which in turn increases their commitment and engagement. I am certainly not saying that recruitment should resemble “Hell Week”, but perhaps companies are sucking too much up to talented young people today?

29/01/2013 at 21:21 1 comment

The paradox of HR

HR represents something of a paradox. On the one hand, management gurus suggest that HR should be central to the strategic thinking in most organisations. Jack Welsh – former CEO of GE – suggests that the HR executive should be hierarchically second only to the CEO, and at least on a level with the CFO. Jim Collins writes that the best companies understand that they must get the right people on the bus, get the right people in the right seats and only then find out where the bus should drive i.e. the people stuff comes before strategy.

And survey after survey show that people and talent related issues are top priorities and concerns among top executives across the western world.  Also, more and more evidence show that the companies with the best people processes and ability to attract the best talent consistently outperform the rest across all industries and countries. It is also near impossible to open a management book or a magazine today without reading that “people is the most important asset” for companies today. This all suggests that HR should be the most important department in any organisation.

On the other hand, most people – including most top executives – often perceive HR to be an administrative function whose purpose is to make sure that people are paid on time, that employment contracts are signed and that relations with unions are good. Stuff that does not add much strategic value. When asked, CEO’s and CFO’s reply that they do not believe that their current HR function is delivering or is even able to deliver the value which is expected of them. HR is still not the strategic partner it wants to be.

HR paradox

So on one hand CEO’s say people stuff is important and on the other they don’t regard HR as important. This is a paradox.

This gap between the theoretical added value of HR and the perception that HR is not adding much value is in large part down to HR practices. Perhaps the best way to describe the current state of HR is to say that it is an area where practice lags behind knowledge quite a lot. There is a lot of evidence that shows that HR can add customer and shareholder value, but it is also fair to say that that practice is different.

I am not sure why. From my chair, I see a lot of improvement; improved practices, new mind-set and focus on value creation. That is why I am surprised that the latest surveys have not improved the picture of HR. Perhaps there is a fixed bias against HR, perhaps it is true that HR really does add no value, perhaps this is changing or perhaps HR is adding a ton of value but it is just not possible to prove it (and therefore other people take the credit). I don’t know. I am just a bit sick of hearing all the time how poor HR is. It is not what I am seeing.

01/10/2012 at 11:46 Leave a comment

HR should measure against the pacebo effect – you will be surprised…

I believe HR can learn a lot from psychology – not just in terms of how to develop and manage people but also how to think about its own existence, which activities to do and approach to take. For example, I have recently argued that the concept of cognitive dissonance could make us understand why we (HR) make poor decisions even face with good data and what implications this may have on HR analytics.

Another psychological concept – the placebo effect – is useful to consider. I believe it should be the benchmark for all HR activities, and that HR should measure some of its activities against the placebo effect once in a while.

Measure HCM against placebo effect

The placebo effect can be defined as “the physiological or psychological response to an inert substance or procedure”. This means that you can give somebody an inactive stimuli or treatment and it can have an effect. For instance, if you give a sugar pill (which has no effect) to a person with a headache and tell him that it is a pill which relieves pain for headache (such as aspirin), he is likely to experience no or a lower level of headache despite the fact that the pill has no physical impact.

The placebo effect has been proven in many experiments and not just medicine. One experiment measured the response of humans when under the influence of alcohol. Some subjects were given successive doses of alcohol and their responses were measured after each dose. Other subjects were instead given a placebo meant which mimicked the taste of alcohol and they were told that they were drinking alcohol. As expected, the group that was given actual alcohol exhibited signs of drunkenness and lack of coordination. What was surprising was that the placebo group exhibited the same signs, with some even seeming drunk. It seemed that the mere suggestion of drinking alcohol produced inebriated behavior.

Why does the inactive pill, the fake alcohol and other placebos work? First of all, for the placebo effect to occur, the subject must believe that he/she is given effective treatment and that it must be suggested that the treatment is effective. It works probably as a result of classical conditioning – people are conditioned to associate a particular stimulus with a particular response. Another reason may be that they are more motivated to feel better and which to cooperate with an experimenter.

Placebos are highly used in medical research. In fact the FDA will not approve any new drug unless it can show a significant effect over and above the placebo effect – something many consider to be the biggest barrier for the approval of new medicine. Why not set the same criteria for HR? Why not test HR activities against the placebo effect before they are approved internally?

Let me propose a few examples

  • Recruitment – an expensive recruitment process with multiple tests and many rounds of interviews must produce a better job/person fit, higher performance and lower new employee turnover than a placebo recruitment process
  • Coaching – an expensive coach using the right techniques must be able to deliver a better result than a placebo coach
  • Teambuilding – a teambuilding program promise to create better performance, fewer conflicts and lower employee turnover. But such an event is expensive. It should be evaluated against a (very cheap) placebo event

The problem with experiments like these are of course the ethical aspect – you just cannot do experiments on people without their consent. However you can do experiments and tests which are ethical, easy and valuable.

HR activities should be effective, they must be measured and their performance/effectiveness must be better than the placebo effect. Lets measure smarter.

22/06/2012 at 12:01 1 comment

Does HR kill innovation?

Forbes has just published an article called “Why does HR too often kill innovation?“. The thrust of the article is that whenever a line-manager has a great idea and wants to try it out, HR kills it through silly processes and requests seemingly because  HR “tend to treat experiments with considerable distaste” because they “want to protect their own turf”.  In short, HR kills innovation.

I disagree. I do not see any evidence that HR dislike experiments and only wants to protect their own turf per se. I simply don’t see that. My experience is that HR support this idea of doing things differently (they may just not know how to do it). That is not to say that (many) company policies work against innovation and that HR may be the source of some of these policies, but that is a different matter altogether.

However – and there is a big however – I also don’t see HR promote, support and encourage innovation. Not in HR and not in the rest of the business. And here I agree with the author of the article; HR must adopt a new mindset towards innovation. And this new mindset springs from an understanding of the business and thinking strategic .

Dave Ulrich identifies six competencies in his 2012 Global HR Competence Framework. The fifth is “HR innovators and integrators“. This is very much focused on being able to innovate the HR services and deliveries to support the business. It does not extend to the point from the Forbes article about policies standing in the way of innovation but perhaps they should.

When you search literature and blogs for ‘HR’ and ‘Innovation’ it is  not a lot comes up. A notable exception is Jon Ingram’s Strategic HCM blog where he has several blogs on innovation in HR. And perhaps in his blog title is the clue; for HR to support innovation it must be strategically focused – it must have a focus on Human Capital.

I think what the Forbes article is really saying is that company culture (and too many policies) is killing innovation – not HR. And on that point I totally agree.

26/01/2012 at 13:57 Leave a comment

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