Thursday, July 27, 2006

Teams Need A Swift Kick In The...

Someone started a discussion on "Joel On Software" about teamwork in distributed work environments based on my post a few days ago about the psychology experiment on group conflict.

One person wrote this:
I believe the success of such an undertaking is a function of management's skill and their own ability to define the parameters of the teamwork. I also believe that most managements are not clueful enough to work out such problems. They tend to believe that cooperation will happen organically when in fact one or both sides should get a swift kick in the ass in order to make the partnership a success.
I think that brings up a good point about how most managers just assume that the teamwork will happen automatically. In fact we know that the opposite is the case.

4 Weeks Into the Recruiting Blog Swap

The Recruiting Blog Swap has been running for a month now. It's been great fun having the opportunity to get to know other bloggers in the Recruiting and Human Resources field.

So far I've created 4 guest posts as part of the Swap.

The first was on "It's All About the Experience." This blog is about the hiring experience from the applicant's point of view. I wrote a post about the old fashioned "stress interview." You can read it here.

For week two I had the pleasure of posting on Amitai Givertz's Recruitomatic blog. Since Amitai is in the recruiting industry and has posted previously about the need for recruiters to pick up the phone from time to time instead of relying solely on the Internet, I decided to post about how we recruited back in the dinosaur days. My post is called The Top Five Things Recruiters did Pre-Internet and it's located here.

Week 3 was at David Kippen of TMP's blog. David is a branding expert so my post attempted to help bridge the gap between branders and HR. You can read it here.

Week 4's post just went up over at HR Guy's blog. HR Guy is an anonymous HR person. He writes about the things he encounters as an HR guy with a special emphasis on the staffing and employee relations side of the house. I decided to write on a topic that usually causes a lot of debate. It's called Why I Still Don't Like Job Hoppers. Take a look here and post your comments on whether you agree or disagree.

You can read all the great posts that are being developed by the various blog swappers by keeping your eyes on the official Recruiting Blog Swap blog. Enjoy.

What’s an Employee Worth? Not Compensation! But Value?

HR professionals often discuss the cost of turnover. Some say that the cost is equal to 150% of the employee's salary. The American Management Association uses the figure of 30% of salary. When I'm doing ROI calculations, I usually use a very conservative 25% so as not to oversell my case. But can you really come up with an average value of what an employee brings to a company based on their compensation?

Today's Blog Swap guest post looks at the value of employees in a very interesting way. Welcome David Perry, Managing Partner of Perry-Martel International, Inc.

What’s an employee worth? Not Compensation! But Value?

As an extreme example, entertainer David Bowie floated a personal bond issue a couple of years ago. He offered investors a portion of his future royalties from previously recorded material and receipts from future concerts. The "Bowie Bonds" were gone within an hour of the offer, for more than $50-million.

In an even more striking case, when Dreamworks SKG went public, investors immediately drove the value of it's bonds to $2-billion. Dreamworks was a film studio without a studio, a film or even a star. All it had was the intangible value of its founders: Steven Spielberg, Jeffrey Katzenberg, and David Getten.

The intangible value of being --- that's what the new knowledge economy is all about - Knowledge Value. Veteran information age guru Stan Davis confirms some insights into the increasing value of people in today's economy.

A person's "value" is just a measure of how much someone is willing to pay to obtain something from them.

In Blur, Davis and Meyer make the point that the boundaries between your work life and your home life are disappearing. In fact, today the rate of change and the depth of connectivity is so fast that every person, product, service and company are blurring together.

Computerization and communications have made us all a linked community. There are, for example, nine times more computer processors in our products than in our computers -- nine billion CPUs in item like phones, hotel keys, consumer electronics, day planners and cars.

As products are more driven by software, they become easier to link together. Intelligence and information become the key value being offered in a consumable (some 90 percent of the value of a new car is estimated to be in the computers and software it uses). And you are the value-adder.

Instead of resources or land, "capital" today means human capital. It doesn't take a shoe factory to go into the shoe business these days. Nor do you need raw materials or fleets of trucks. Nike became a shoe industry leader by concentrating on the value-producing capacity of it's employees, for design, marketing and distribution know-how. The real capital is intangible: the person's knowledge level, combined with an aptitude for application.

How you meet your company’s value requirements and those of the employee without overspending is the difference between creative and checkbook recruiting!
[Beth C.'s note: And creative retention too!]

Copyright 2006 David Perry


If you like David's post, check out the book Guerrilla Marketing for Job Hunters which he co-authored with Jay Conrad Levinson.

Monday, July 24, 2006

1954 Psychology Experiment Provides Clues for Cooperative Work Among Distributed Work Environments

Both large and small companies are moving toward more distributed workforces. A small juice company was recently touted in Business 2.0 Magazine for having growers in California and Mexico, processing in Washington, bottlers in California, warehouse in Wisconsin, customer service in Philippines, accounting in India and headquarters in San Francisco. I can remember back in the early 1990s when the then CEO of Verifone, Hatim Tyabji, was an early proponent of having employees working across the globe. He called his company a 24-hour a day organization because at any time of day or night there were employees working in one time zone or another. Of course today this is very common.

There are of course both benefits and drawbacks to this arrangement. Much has been written about both the pros and the cons. On the plus side you have local expertise and cost effective wages. On the downside you hear about problems related to geographic distance and miscommunications. One drawback to the distributed workforce that you don't read much about is the negative competition that is formed between workgroups that can literally destroy a company or project.

To better understand how competition plays out among groups, we can look to the 1954 experiment conducted by psychologist Muzafer Sherif. In this study, called the Robbers Cave experiment, two groups of 12 year old boys were sent to summer camp. The boys were of similar race, religion, temperament and socio-economic background. Each group was sent to a different part of the camp and each group did not know of the other's existence.

After a short time had passed, each group developed its own social structure and friendships were formed. The researchers then brought the two groups together and had them compete against each other in a tournament with various physical and mental challenges. Almost immediately, derogatory name calling began between the groups. Losses were blamed on unfair conditions. After one particular defeat the losing team raided the other team's camp while they were sleeping. The victimized group reciprocated "turning over beds, scattering dirt and possessions, and then returned to their cabin where they entrenched and prepared weapons (socks filled with rocks) for a possible return raid." Even after the tournament was finished, the boys continued their hostility toward each other (including a messy food fight) during non competitive interactions.

To try and reduce the friction, the researchers engineered some new tasks that required the boys to work cooperatively for their mutual benefit. The water supply to the camp was cutoff, a movie was offered that the camp said they couldn't afford and a broken down truck was left on-site that needed to be tugged out with a tug-of-war rope. The boys worked together to solve these problems and miraculously after a number of these cooperative tasks accummulated, the social structure adapted. The name calling ceased. Boys from one team formed pairs of friendship with boys from the other team. At the end of the camp session, the boys even asked if they could all travel home together on the same bus instead of on the two busses that they came in on. To top it all off, as the bus stopped for refreshments on the way home, the winning team used the money they had won from the tournament to buy milkshakes for everyone.

So how can we apply the message of this study to today's distributed workforces?

First we have to be conscious of the social order that is formed within each office, division and/or geographic location. These work silos as they are sometimes called have their own cohesiveness like the boys in the original team groups. When one work silo must interact with another silo, it is not unlike the two boys’ teams coming together for their tournament. A competition between offices takes place - one for prestige, recognition, leadership or future projects. Like the boys, the two work silos form an immediate (although unconscious) we versus them mentality. This plays out behind the scenes as name calling and finger pointing of blame when things on the project go wrong. This can deteriorate to the level where so much discomfort causes employees to quit or perform at sub par levels. The quality of work from the joint effort is jeopardized.

The second lesson is that there is a relatively simple solution to this work silo problem. If groups can be brought together first to work on cooperative, mutually beneficial projects this will plant the seed for future positive work relationships. The groups could work together on coming up with workplace improvements or maybe you could have the joint group work together on various charitable projects. It doesn't seem to matter much what the joint projects are as long as they allow the groups to work together successfully in a mutually beneficial way. This breaking down of silos through cooperative effort might be just the thing necessary to smooth the way for distributed work groups to successfully tackle more challenging projects.

For more information on the Robber's Cave Experiment click here.

Thursday, July 20, 2006

Is It All About The Towels?

Our second guest post from the Blog Swap comes from Tod Hilton. Tod shares with us an insider's view on a company and employee retention issue that I blogged about earlier. I don't want to give it away though so I'll just say - Welcome, Tod and thanks for the great post.


A quick little intro for those of you tuning in to the Big Bad Recruiting Blog Swap ... My name is Tod Hilton and I will be your host for this post. What I am: a software developer at Microsoft and a bunch of other things [father, husband, gamer, snowboarder, etc.]. What I’m not: a recruiter or hiring manager, although I do interview candidates and give the infamous ‘hire’ or ‘no-hire’ recommendation.

I seem to be driven by routines. They become easy to remember over time and comfort my inner need for order in the universe [well, at least my little part of it :-)]. With regard to the Big Bad Recruiting Blog Swap, I spend at least a good hour reading through the archives of the blog I’m about to swap with so I can get an idea of how they write and the topics they seem to enjoy. Beth has a penchant for taking current events out of the news media and then providing the readers [you and I] with her own well formed opinion on the topic or subject matter. Good stuff! While reading through her archives, obviously I had an instant connection with the post, Cheers for Towel Service in the Locker Room, because, well, I work for Microsoft. ;-)

Two years ago (May 2004) Microsoft made several hard-hitting cuts to our benefits package (Microsoft cuts some perks with an eye on bottom line by Kim Peterson) and many employees were very vocal about their criticism (Microsoft workers vent over cuts in benefits by Kim Peterson). There were several changes made, but the one that seemed to grab the attention of employees and the media was the one that saved the company the least amount of money... the removal of towel service in the on-site locker rooms. I think the reason this became the ‘benefits poster child’ was that it was a prime example of the thought process behind some of the cuts. If I remember correctly, removing this service saved the company around $250,000-500,000 per year. For a company with $50 billion in the bank that is even less than chump change...that’s like you or I bending over to pick up half a penny! It was the epitome of ‘cutting off your nose to spite your face’ and people (employees and the industry) latched on with a vengeance.

Fast forward a year to April 2005 and Lisa Brummel is appointed the senior VP of HR. I remember the first time I saw her at our company meeting in Safeco field later that September. She came on stage wearing shorts and a sleeveless sweater over a t-shirt (while the other execs were in typical business casual)! She spoke for 30-45 minutes about herself and the things she wanted to do for Microsoft, one of which would be her “listening tour” to every campus worldwide so she could hear employee’s concerns straight from them. I remember thinking to myself “well, that sounds good, but we’ll see where it goes.” Sure enough she stuck to her word and did the “listening tour.” Not only that, but she sent out several company-wide communications asking for direct feedback if you couldn’t make it to one of the sessions and, honestly, I think she really meant it.

Now fast forward to present day, May 2006, and big changes have been made once again (Under pressure, Microsoft fights to keep its workers by Benjamin J. Romano), but this time the pendulum has swung back the other way with many new benefits and old ones reinstated. I’m not going to go into the details of what was taken away 2 years ago and then given [back in some cases] to Microsoft employees this year because that’s not the point I want to make. So what exactly is my point? :-)

Companies need to listen to their employees AND react accordingly!

I don’t want to turn this into a Microsoft-love-fest, but this is one reason I really enjoy working here. Lisa Brummel and our benefits changes over the past few years are a prime example of a company that listens and then takes specific action based on the feedback. The second part is where most companies fall down. They say over and over that they’re listening to what employees want, but they NEVER do anything about it. You get the same old water-cooler conversations happening year after year with management giving the official ‘we are reviewing possibilities’ statement to appease the masses. People eventually get used to the status quo and accept it or they get fed up and head off to greener pastures. The company loses good people and the ones they retain aren’t necessarily happy, productive employees as much as they might just be getting by. That’s a lose-lose situation if I ever saw one!

Now that I’ve made my point, is there anything you can really do with it? Of course there is! :-)
  • If you’re a manager/employer then be sure to follow my advice and keep your people happy. Don’t just listen to your people...make changes based on the feedback to keep them around for the long haul.

  • If you’re an employee/jobseeker then look closely at your employer’s history and see if they follow this mantra. If they don’t then you might want to consider just how happy you are with the current state of affairs, because it’s not likely to change during your tenure.


Friday, July 14, 2006

It's Who They Know Not What They Know When It Comes To Employee Turnover

Have you noticed how the most effective employees are the ones who have the best relationships with other employees across the company? These employees with high "social capital" can speed a vendor contract through the legal department or get IT to fix a nasty bug in the HRIS without delay.

I have been thinking about this after reading new research on how the loss of social capital through employee turnover negatively impacts organizational performance and effectiveness. Management researchers at the University of Kentucky found that even in companies with low turnover, the loss of those employees with deep social networks had a much stronger negative influence on company performance than turnover among less embedded employees.

The study also pointed out that employees with high social capital are not always managers or supervisors as one might expect. Lower level employees who know a great number of other employees in the organization can hold much of the social capital that bind a company together.

It's a good reminder to both encourage the formation of social networks among employees and also to pay particular attention to retention of those employees that hold the greatest social capital.

Tuesday, July 11, 2006

Human Capital: Long-Term Assets, Short-Term Plans

I am participating in the Blog Swap, an experiment concocted by those creative folks over at and Job Syntax. As part of the blogswap, I will be providing guest posts once per week on other blogswap participants' blogs. Likewise, I will publish one guest post per week here on this blog.

The first guest post for the Nobscot Weblog has been written by Colin W. Kingsbury, Chief Evangelist for HRMDirect.

Colin shares some unique thoughts on truly managing employees as human capital. I'm not sure I agree with the tactic, but I'm sure you'll find his ideas thought provoking. Thanks, Colin!

Long-Term Assets, Short-Term Plans

Today the biggest and fastest-growing expense for most companies is people. Forget about the right person at the right price: in many industries it's a challenge finding someone adequate at a price you can bear. And as more job titles move into the "high demand" column, retention and cost containment will make this a two-front war. We're reminded daily that it's not getting easier, either. The economy continues to grow robustly at home and overseas, and the Boomers continue their inexorable march towards retirement. Indeed, it's a fair chance that in five and ten years we'll be looking back on how easy things were in 2006.

Businesses that depend heavily on inputs such as jet fuel or electricity have two choices: sign a contract to buy at a fixed-price over a long term, or purchase what you need as you need it at "spot market" prices. Which you choose will depend mostly on where you think prices will go. Southwest Airlines has remained profitable through the worst economic conditions ever seen in their industry in large part because they signed a series of long-term fuel purchase contracts back when oil was under $30, while most of their competitors were unwilling or unable to commit themselves to such a bet. You may not like their cattle-car approach but as a business they make pretty much every other airline look so incompetent it seems almost unfair.

How many people do you know that have a contract with their employer that obligates both parties to a commitment of a year or more? Almost certainly none below the VP level. In fact, many companies are trying to make the relationship even more arm's length by the use of contractors and project-based staffing. In other words, companies buy all their talent on the spot market.

Here's a crazy idea: What if you took the top 10-15% of people in the positions you know are only going to get harder to fill, and offered them a two-year contract that was binding on *both* parties? Take your top couple of software developers or salespeople, the sort of roles almost impossible to fill. Why wouldn't you want to guarantee that you'll have this person around for another two years, without having to give them a 20% raise?

But the truth as we all know is that very few companies would ever do this, because when it comes to understanding the deployment of human capital, most companies are close to clueless. We seek ways to make our staffing ever more "flexible" not because we are coming up with better ways to redeploy talent more effectively, but because it makes it easier to correct our failures.

Southwest was of course better-prepared to deal with an increase in fuel costs than any of their competitors. Delta, American, or United desperately needed that kind of break as the rest of their business came crashing down around them. And yet the way it played out, it was the strongest and smartest who were able to exploit the opportunity the market offered. Like oil, talent is a scarce resource that isn't getting any cheaper until we come up with a replacement for it.


What do you think? Feel free to leave a comment or you can reach Colin at:

Thursday, July 06, 2006

Planet of the Apes Recruiting

There's a funny post on HR Whatnot's blog (Whatnot at Work) about using bonobos, primates that are even closer to humans than chimpanzees, to fill workforce shortages. It includes a link to a video of a bonobo playing pacman on the computer. The post is located here.

Be sure to bookmark their blog. They have lots of interesting and amusing workplace related posts updated daily.

Wednesday, July 05, 2006

Physical Features and Racial Stereotyping

More disturbing news in the area of racial stereotyping. Researchers have recently concluded that when victims of capital crimes are white, black men are more likely to receive the death penalty if they have physical characteristics that are perceived as being stereotypically black.

The study was conducted by researchers at Cornell, Stanford, UCLA and Yale. Photographs of convicted criminals from 1979 - 1999 were shown to students who were then asked to rate the degree to which the men looked to be stereotypically black on a scale of 1 to 11. They were told they could base their judgments on "any number of features, including hair texture, skin tone and shape of lips and noses." Responses were then correlated with actual sentences to determine whether perceptions of racial features influenced dealth penalty decisions. Those who received the highest ratings for characteristically black features and whose victims were white received the greatest number of death penalty sentences.

This kind of unconscious bias seems to come up again and again. In the Human Resources area, we need to guard against this unknowingly affecting our hiring decisions, promotions and opportunities for employees to participate in various programs such as mentoring or high profile task forces. Of particular concern are the repeated studies that show that resumes with "black sounding" names are turned down for interviews more often than equally qualified resumes with "white sounding" names.

From a 2003 study by University of Chicago and MIT, resumes with white-sounding first names elicited 50 percent more responses than ones with black-sounding names.

The study on death sentences was published in the May issue of Psychological Science and is titled:
"Looking Deathworthy: Perceived Stereotypicality of Black Defendants Predicts Capital-Sentencing Outcomes."