A Human Capital Management Field Guide for Uncertain TimesPamela Stroko, Vice President, HCM Transformation and Thought Leadership at Oracle

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I have long been a fan of Tom Friedman’s work, so when I heard his new book, Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations, was launching, I read all of the prepublication excerpts I could—and I was not disappointed. Two powerful ideas emerged from Tom’s book that served as a rallying point for this field guide. The first idea came from the title: “Thank you for being late.” In his book, Tom describes arriving for meetings, luncheons, and appointments, and for whatever reasons, the people he was meeting would arrive late. So he ended up with a window of time for reading and reflection while he awaited his appointment. During this time, he put ideas together, often through writing when inspiration came, and new thinking emerged.

Why was this remarkable? Because it highlights something we all experience: We are so busy that we have little time for reflection, for thinking, for the novel idea to come forth. We are overscheduled at work, perhaps believing that if we aren’t scheduled every minute, something is wrong. High demand is a sign of effectiveness or even popularity—and who doesn’t want to be popular? We’re under growing pressure to be available 24/7. A friend of mine mentioned that she consistently receives emails from her boss in the middle of the night, and the expectation is that she will answer. So she gets up in the middle of every night to check email because she doesn’t want to be “caught sleeping on the job”!

We live and work in an always-on age, and the downtime in which we actually have space to think, to learn new things, and to innovate is in short supply. Yet having time to connect with ourselves and the people around us, to ponder ideas and connect our thoughts, and in doing so gain new insight—this is crucial to our own growth and renewal, and it is essential to living in disruptive times.

This leads me to the next idea from Thank You for Being Late that I want to discuss. We live not just in an age of acceleration—but an age of accelerations. Things are changing on multiple fronts at an unprecedented rate—politically, economically, socially, environmentally, technologically, and in the volume of information available anywhere, anytime, to anyone. As I write, we are heading into 2017, and people are already talking about “the age of disruptions,” indicating a wave of change that will hit on multiple fronts.

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In the midst of all this change, we still need to run our organizations. These disruptions and accelerations are altering the talent landscape more than ever, pushing it toward a major shift in the next 12 months. We have known this shift was coming since 2014 when Hay Group research predicted that more people would be in job transition in 2018 than had been in 2012. Then, at the end of 2015, we learned from Universum that by 2018, 192 million people globally would be in transition— 49 million more than we saw in 2012. The number of open jobs is growing but the pool of qualified candidates is shrinking. The market is more competitive than ever.

Why a field guide? Historically, field manuals are meant for people working in the trenches every day. They provide help on what to pay attention to and how to get things done. If you are working in an organization every day to implement better human capital management (HCM) practices, the suggestions and ideas in this field guide could be helpful to you and your organization; it gives ideas, best practices, and current trends on what your colleagues and leaders are doing and how they are effecting change.

We struggle to create compelling cultures where people connect with our mission and values—where they feel they can make a contribution and stay for the long term. We need to make technology decisions that support mobile and social ways of working, building connections throughout our organizations, inspiring collaboration, and creating real and virtual communities of work. Every disruption and acceleration has an organizational impact. How do you respond? How do you do HCM in this age of accelerations?

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Begin by listening. In 2016, Oracle HCM undertook a global survey to look at the following dimensions of organizational life:

Culture and values

Commitment

Communication and collaboration

Learning and development

Talent acquisition and onboarding

Career development

Performance

In North America, we had over 1,000 participants from small, midsize, and large organizations. What we learned from their responses gave us a glimpse into what people care about at work and how well we are delivering a compelling value proposition that withstands the onslaught of disruption and change.

Highlights of our findings.Here is what people told us:

51 percent of people are inspired to give extra effort to hit their goals, yet managers only see 45 percent of people on their teams going above and beyond. Have we lost half of our workforce? What does this say about our organizations? The fact that half of our people aren’t inspired isn’t a referendum on them—it’s on us. What kind of cultures are we creating? Do we live our values? And for that matter, do people even know what our values are?

51 percent of people report having a career conversation with their manager in the last 12 months. (Perhaps this is the same 51 percent that are inspired to give extra effort!) Years of Gallup research have proven that having development conversations and getting positive feedback drive engagement.

It’s interesting to note that while slightly more than half of the people reported having the career-development conversation, only 38 percent reported that their learning and training were actually linked to their development plan. The fact that these numbers hover around 50 percent is concerning, because Deloitte has found that 86 percent of people leave a job today due to lack of career development.1

We have a long way to go when it comes to using social and mobile tools to facilitate communication and collaboration. Only 35 percent of people reported that communication is facilitated by social and collaborative tools. 33 percent reported that their organization has collaborative tools to support development. What is surprising about this finding is that across all generations, 34 percent of people don’t even want to join an organization that doesn’t support social and mobile working.2 This is critical: we live social and mobile lives, and we expect the same convenience at work that we enjoy in our private lives. In a world where we can buy something online with a single click, clicking a dozen times to apply for a job is no longer acceptable. The marketplace/customer experience needs to become the employee experience.

1 Deloitte, “Talent 2020: Longitudinal Survey Series,” 2012. 2 CEB, “CEB Benchmark 2013, IT Performance Benchmark.”

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We have room for improvement when it comes to recognition. 42 percent of people report receiving recognition for a job well done. Recognition can be a game-changer when it comes to organizational performance. Research conducted by Globoforce and SHRM found that organizations with formal recognition programs reported powerful results:3

increase in employee productivity

increase in engagement

increase in return on equity

increase in employee retention

increase in customer retention

Investing in recognition can be a significant differentiator in today’s highly competitive talent marketplace. Recognition contributes to a more positive work experience and creates an environment where people are more likely to recommend your company to their friends.

39 percent of people reported that their organization promotes flexible working arrangements. The fact that this number is under 40 percent is surprising, given recent reports on the impact of flexibility on business performance and culture. In 2015, Vodafone researched the impact of flexibility and found that 61 percent of companies surveyed reported increased profits and 83 percent of companies reported improved productivity.4 58 percent of organizations said that offering flexibility had a positive impact of their reputation.

In February 2016, a SHRM global study on flexibility reported similar results. SHRM reported that 86 percent of US companies and 83 percent of global companies reported an improvement in employee productivity after introducing flexible working arrangements. 77 percent of US companies saw a rise in employee morale, and 61 percent of US companies reported that teamwork had improved. 60 percent of US workers are using flexibility at work to balance the demands of work and family. In many cases, people value flexibility over more pay.

Historically, we have seen a pattern of people opting for more flexibility, and in some cases, over pay.

Back in 2009, when the economy was in the midst of a recession, Tammy Erikson reported that 56 percent of people across all generations would have chosen more flexibility over $10,000 more pay.5 Fast-forward to 2015, and we see that 45 percent of millennials would always choose a job in a company with flexible ways of working.6 Wharton finds that not having options for flexible ways of working is a missed opportunity to attract and retain talent in this competitive market.7 Flexibility brings with it accountability. Rather than being monitored closely, people are held accountable for the end result of their work, but how they get there is really up to them. That autonomy is something people look for when taking a job, and the lack of it could also be a reason people leave.

63%

61%

50%

51%

52%

3 Globoforce, “Benefits of Strategic Recognition,” 2016.4 Vodafone, “Flexible: Friend or Foe?” 2016.

5 Tammy Erikson, conference presentation to HRPS, April 2009.6 CNN Money, 2015.

7 Wharton, “Better Pay or More flexibility: It Doesn’t Have to Be a Tradeoff,” 2016.

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When we looked at dimensions of performance, we found that 60 percent of people reported that their performance review was fair. 31 percent had reviews that included peer feedback. 55 percent participate in a regular dialogue with their manager. 39 percent have reviews more than once a year. Only 31 percent believed that they would be rewarded for their performance. 41 percent of people see their performance process and tools as agile enough to adjust to changes throughout the year.

How does this data stack up against recent performance trends? Research by Career Systems International found that people preferred more frequent feedback—feedback in real time rather than in an annual or quarterly review.8 Across all generations, people want real, honest dialogue with their managers and peers, where they can ask big questions that allow them to learn new things and explore development opportunities.

Beverly Kaye has insightfully identified the new career path as a climbing wall rather than the traditional career ladder.9 Growing in place is the new norm—using the role that you are in currently as a way to broaden skills and capabilities.

A great debate is raging in the market about whether organizations should drop employee performance ratings altogether, and whether calibration should be eliminated.

A 2015 HCI report offered some insight into market trends: 12 percent of organizations have eliminated employee rankings or ratings, 26 percent are considering doing so, and 62 percent are not considering eliminating rankings and/or calibration.10 As HBR highlighted, Deloitte is eliminating ratings and calibration in favor of asking focused questions about each employee, like: “Given the opportunity, would you hire this person again?” or: “If it were your money, would you give this person the highest possible raise or bonus?”11 The questions don’t eliminate the differentiation that comes with calibration or ratings; they are just a new way to look at the performance of a team or individual team members within a more holistic landscape. It forces managers to look at the reasons a person is perhaps the wrong fit for a role, and then look at how they can develop the individual so they can be successful.

The next wave of performance practices is already here. Here are the highlights of what some organizations are already implementing, and what is on the horizon:

• The crowdsourced performance review: drawing on many sources of feedback using social tools. Feedback is not limited to an annual event; it is ongoing and in real time.

• Social/mobile tools embedded in performance-management technology: People can share progress with their teams on goals, and get peer feedback, recognition, and kudos in real time.

• Recognition strategies are embedded in the culture: Recognition is not limited to a once-a-year (or less frequent) pay increase. Peer recognition is social- and mobile-enabled.

• Expanding individual performance to include enterprise performance: Performance considers not just how well individuals meet their goals, but how they affect the performance of their team and the enterprise as a whole.12

• Frequent feedback—anywhere, anytime, from anyone: Performance reviews are no longer an event. Performance feedback is delivered through conversations with many people in the organization, not through scripted checklists.

• Decoupling the rating/money conversation from the development conversation: Development conversations are taking place at different times of the year instead of just at the year-end performance review. Focusing on development allows more time to be spent creating the development plan and connecting it to any learning or training that might be recommended through the year.

8 Career Systems International, 2013/2015.9 Beverly Kaye, “Help Them Grow or Watch Them Go,” 2012.

10 HCI, “Making Talent Decisions Without Ratings,” September 2015.11 HBR, “Reinventing Performance Management,” April 2015.12 CEB, “Managing for Enterprise Contribution,” 2012.

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• Using positivity to coach and inspire people: Positivity focuses on celebrating success as a team. It encourages meaningful conversation and feedback where leadership identifies moments in which an individual’s behavior mattered. As Michelle Gielan puts it, “Change your story, change your power.”13 By shifting what we say and how we react, we can change a situation or environment. Using positivity as a leadership and management style has real business impact: Organizations using positivity report 25 percent better performance scores. They have seen 31 percent higher productivity and reported 37 percent higher sales. Employees report 23 percent lower stress. (For more information or tools on how to use positivity, visit broadcastinghappiness.com.)

• The power of saying “Thank you”: Expressing gratitude is a simple act that can change performance. Let appreciation be reflected in your culture. People want to be valued and appreciated, and sometimes when we are designing performance processes, checklists, and rating tools, we forget that most basic human need. Employees want to be valued for who they are, not just for what they can do for you. Saying thank you makes a huge difference to the energy and culture of your organization. People are twice as engaged. People are 86 percent more proud of their work and have a 35 percent more positive view of the culture.

Your organization is 34 percent more likely to be voted a best place to work. 86 percent of people feel happier at work, and 92 percent feel appreciated.14 (For more information on this, see The Power of Thanks by Eric Mosley, March 2015.)

• The employee-driven performance review: In most organizations, the manager does all the work to prepare for the performance conversations. The employee’s role is rather passive—sometimes they fill out a self-review, but that’s usually about it. In the employee-driven performance review, the employee takes the initiative to prepare for the review—they meet with peers and others across the organization to gather feedback, they do the first draft of the review form where one exists, they provide data to their manager on their goals and what they have accomplished. Managers coach and guide employees in this process in a collaborative way, even though the manager does have a final say in giving the rating (where one is used) and providing the written feedback.

13 Michelle Gielan, “Broadcasting Happiness: The Science of Igniting and Sustaining Positive Change,” 2015. 14 Work Human, May 2016.

32 percent of people reported that their onboarding set them up for success. 43 percent report that once in the organization, their experience lived up to the brand promise and reputation. 68 percent report that they know what is expected of them in their role.

We all know how important it is to get hiring right—turnover is costly. Recent data released by Bersin by Deloitte tells us that the cost of voluntary turnover begins at $6,976. (Average cost per hire of $3,976, plus orientation and training costs for the first year of $3,000).15 But that is only a very basic estimate—if you look at cost of churn fully loaded, the numbers are daunting. Calculating the cost of voluntary turnover is not just about direct replacement costs. To get a true picture, you also have to look at lost productivity. You get to that number by taking into account the average time to hire, which is running at about 52 calendar days right now. Then, factor in that it takes about 60 days for the new hire to reach the same level of productivity as the lost employees. So from time to hire and time to productivity you have already invested 112 days out of the 365 days in the year. Average annual revenue per employee is $390,000—so when you do the math, the cost in lost productivity for replacing one employee is $120,900.16 Multiply that by the number of people that leave your organization and you have a significant cost impact to the organization.

Two really simple things will make the onboarding process more effective and improve your overall performance and retention. The first thing is ridiculously simple: Tell people what you expect of them in the job! Be clear about what good performance in the job looks like—tell them what behaviors deliver great performance. Communicate as much as you can about the job and how to be great early in the person’s tenure in the organization.

This brings us to the second thing: You need to connect expectations to the performance and goal-setting process within the employee’s first 90 days. Being clear on goals and how to achieve them helps deliver better performance. When you connect onboarding to performance right from the beginning, it makes a big difference in retention. According to Aberdeen Group, 96 percent of employees were retained in companies where onboarding and performance were connected, as opposed to only 18 percent in companies where that connection was not present. Further, 82 percent of people met their first-year performance goals when there was an onboarding/performance connection, as opposed to only 3 percent in organizations where that connection was not present.17

15 Bersin by Deloitte, “The Cost of Voluntary Turnover,” September 2016.16 Ibid.

17 Aberdeen Group, “Welcome to the 21st Century, Onboarding!” 2014 and “Onboarding 2012: The Business of First Impressions,” Aberdeen Onboarding Study, 2011.

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34 percent of people reported that their organization was concerned with their overall wellbeing. Whether it is through fitness tracking or sports competitions, wellbeing is emerging as an area for opportunity in organizations. It has been proven that wearing a fitness-tracking device can improve overall heath and lower healthcare costs. Competitions can also be connection points in the culture—creating another avenue for building belonging in the organization.

Culture is everything—it determines who will join your company and how long they will stay. It is why your company may be identified as a great place to work—or the place people tell their friends to run from. 51 percent of people reported that they are proud to work for their organization. 49 percent of people see a long-term future in their organization. Equally, 49 percent see themselves as a positive advocate for their organization. 35 percent report that their company supports causes they believe in, while 34 percent of people are allowed time to volunteer for causes that are important to them.

Talent-magnet companies—those that attract and retain top talent—are characterized by having a culture where the company’s values are truly lived. Talent-magnet organizations focus on creating great employee experiences, using their talent processes to translate their values directly into the culture.18

What we call the beginning is often the end. And to make an end is to make a beginning. The end is where we start from. (T.S. Eliot, Four Quartets.)

We began by looking at ideas from Thank You for Being Late and their implications for HCM in a time of disruptions. In listening to our survey voices, we learned what people care about at work, and connecting that information to recent research helps us see the impacts actions and practices can have in organizations. How you create the best culture for your organization begins with what you value, what your mission is, what you have to deliver to the market, and your strategic pathways for getting there. What kind of experiences do you want your employees to have? Many organizations say they want higher engagement, so that’s what they measure. But here’s the secret about engagement that we often seem to miss: Gallup’s years of studies measuring engagement find that people aren’t actually any more engaged. Every year we learn that roughly 73 percent of the workforce is “disengaged” or “highly disengaged,” so something isn’t connecting. With all the surveying and all the time and money spent on action plans and training, you would think we would see signs of improvement, but we haven’t. So maybe aiming for engagement is not enough. After all, engagement itself isn’t a goal—it is the result of passionate people doing work that they care about, in places they want to belong to, with people they connect with and respect.

18 Stroko & Adamsen, “The Four Keys to Becoming a Talent Magnet Company,” 2016.

1.8 Miles

1.8 Miles

4:59

120

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Going beyond engagement to passion.Keith Ayers really got it right when he said engagement is not enough.19 People want passion. I have always thought that the Passion Pyramid is a great way to think about creating a vibrant culture, because you begin with what employees need. These needs are universal, whether you are part of a small company or large enterprise. Everyone wants to be respected. Across all generations, people want to learn and grow—and if they can’t do that in your organization, they will go somewhere where they can. There is a lot of competition in the market and companies are offering development as a way to attract talent. Everyone wants to feel connected—they want to understand the business and how they fit in. The connection between how they can contribute and how they impact results is essential. Keith calls this “being an insider.” Belonging is a basic human need in organizations. People want to know that their work matters, and that who they are and what they can do are essential to the organization. Finally, I don’t know of anyone that doesn’t want to win—to have their company be a top performer. We all want success for ourselves and our organizations.

So that’s what people want, but what does it take to get there? It takes leaders who know how to build trust.

Do your leaders know how to connect with people one-to-one? Do they approach people with respect? When they have performance conversations, are they a natural outgrowth of their ongoing relationships with employees, or do they need a script from HR just to sit down and talk? Leaders need to know how to coach, counsel, and mentor. With employees wanting great development conversations and frequent feedback, it is essential that leaders have the ability to coach in the moment. Everyone needs to feel that they are a valued part of the team. It is destructive when leaders play favorites or exclude members of the team. You will never get great results without the value of inclusion. What makes high-performing teams work is alignment. What people do every day must be aligned with the vision and values of the organization. People need to be clear on their purpose and how they contribute to the whole. Putting all these elements together in a cohesive way helps build high-performing teams.

What organizational outcomes can you expect when you care about—and deliver—what people want from work? Yes, you do get engagement, but engagement is the natural outcome of doing many things right—it is not an end in and of itself. When you focus on coaching and developing people, you get more-talented employees who also take responsibility for building their skills and capabilities. When leaders are inclusive, employees feel emotionally connected. One of my favorite excerpts from

19 Keith Ayers, “Engagement Is Not Enough,” 2008.

Good to Great by Jim Collins, October 2001, is: “For no matter what we achieve, if we don’t spend the vast majority of our time with people we love and respect, we cannot possibly have a great life. But if we spend the vast majority of our time with people we love and respect—people we really enjoy being on the bus with and who will never disappoint us—then we will almost certainly have a great life, no matter where the bus goes.

The people we interviewed from the good-to-great companies clearly loved what they did, largely because they loved who they did it with.” When people are passionate about the organization and what they do, you see higher levels of discretionary effort—they are highly engaged and you get all the benefits that come with that: great customer satisfaction, personal accountability, higher retention, and higher productivity.

What can you do that can begin having an impact on your organization starting today? Michelle Gielan offers some great advice. Begin to transform your company in just two minutes a day. Every day, send an email message praising or thanking someone. (Yes, you need to do it every day!) In a short time you will see the impact go viral in your organization.

Being inclusive

Coaching, counseling and mentoring skills

People skills to build trust

Employees feel emotionally connected

More-talented, skillful employees

Basic level of employee engagement

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The Passion Pyramid™

5. TO BE ON A WINNING

TEAM

4. TO DO MEANINGFUL

WORK

3. TO BE AN INSIDER

2. TO LEARN AND GROW

1. TO BE RESPECTED

LEADERSHIP SKILLS

EMPLOYEE NEEDS

Building a high-performance team Passionate employees

Aligning team with purpose, values, and vision

Increased commitment and engagement

Being inclusiveEmployees feel

emotionally connected

Coaching, counseling and mentoring skills

More-talented, skillful employees

People skills to build trust

Basic level of employee engagement

OUTCOMES

Final thoughts.Tom Friedman is right. Multiple accelerations hitting at the same time can be challenging for individuals and organizations. We can either react frenetically or with thoughtful action. Taking a critical look at your organization is helpful—you’ll discover what you will need to do to engage your people, to live your values, and to translate those values into great employee experiences. If you find yourself always in a reactionary mode, remember to take the time and space to contemplate the issues that lie before you and your teams. My best inspirational ideas have often come to me when I was thinking of something else, or reading a book, or engaged in great, connected conversation with someone I care about.

The inspired idea comes to us when we let our thoughts collide to create something new. In the age of accelerations and multiple disruptions, having the time and space to assess what is going on, to consider thoughtful action, to respond in unique ways that are personal, yet have a collective benefit is critical to remaining authentic. It begins by listening to your people and then understanding what actions will create a passionate, vibrant organization. So when I meet you in my travels, if we are going out for coffee or lunch, it’s OK to be late. That may be where my next great idea comes from.

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