People and the Economy - What Deloitte has to say

Some very interesting debates from Deloitte.

Companies are expecting a surge in their voluntary turnover rates as the economy recovers. This would add to the already huge number of those who were left jobless when the recession started. The issue is not of HR Departments being piled up with Resumes, but the fact that a lot many of their own turnover would occur with Key Talent in Leadership positions.

This slow down has also shown prospective employees as to which employer is stable and which is not.

The manner in which companies handled the slowdown(especially on Lay Offs and Compensation) would also have an effect on their turnover rates. Companies which laid off indiscriminately would see loyalties shift to more reasonable (and stable) competitors.

• Deloitte on Resume Tsunami

"Once the recovery begins to take hold, business executives and talent leaders can expect a 'resume tsunami' as voluntary turnover rises with leaders and workers with critical skills seeking new opportunities. The depth and quality of retention planning today will likely separate the talent winners from the talent losers tomorrow."

• Deloitte on Managing Talent in a Turbulent Economy

"The Worst May Be Behind Us: For the first time in this longitudinal study, the number of surveyed executives who said the worst is yet to come declined - and significantly, from 32 percent in March to 18 percent in May. At the same time, the group who believes the worst is behind us doubled to 16 percent from 8 percent in March and 6 percent in January."

• Deloitte on Are People Our Real Assets?

CEOs often say that “people are their company’s most important asset,” and that it is the strength of their workforce that will carry the company through tough times. On the other hand, executives are taught that “cash is king” — especially in a business downturn. So what should business leaders do in the face of the current economic crisis? Should they focus on maintaining cash or people? What should they make their top priority?

The recovery would see the return of an employee dominated economy - where Talented employees would call the shots!

Performance Appraisal - To do or Not To Do

Performance appraisals can actually be counter-productive for employees who are in the greatest need of training and further development. This fact is highlighted by Professor Bård Kuvaas from the BI Norwegian School of Management, based on a new research study. ( www.innovations-report.com)

Its that time of the year where most organizations would go through their Performance Appraisal cycles. Every employee who is concerned with his own growth gears up with all the numbers,figures and qualitative statements (and whatnot) to support his/her cause.

There is excitement in the air with employees and managers bearing the burden of expectations and aspirations. This is the what everyone had been looking forward to. Or is it really?


Joel Spolsky in his article Incentive Pay Considered Harmful, April 2000, of provides an interesting contrary view of Performance Appraisals.

"The effect of reviews on morale is lopsided: while negative reviews hurt morale a lot, positive reviews have no effect on morale or productivity. The people who get them are already working productively. For them, a positive review makes them feel like they are doing good work in order to get the positive review... as if they were Pavlovian dogs working for a treat, instead of professionals who actually care about the quality of the work that they do. "

Appraisals are very painful and an unsatisfactory exercise for many. More often the bad effects of Appraisals are neglected. This is a period where more than half the workforce tread with fear and anxiety. Clearly everyone wants to grow but not merely through these mind wrenching exercises! One has to wonder if anyone has done a study to find out the psychological impact of Performance Appraisal processes on people.

Joel Spolsky states his own personal experience furthering the thought...

"Performance reviews were stressful for a couple of reasons. Many of my friends, especially the ones whose talents were very significant but didn't show up on the traditional scales, tended to get lousy performance reviews. For example, one friend of mine was a cheerful catalyst, a bouncy cruise director who motivated everyone else when the going got tough. He was the glue that held his team together. But he tended to get negative reviews, because his manager didn't understand his contribution. Another friend was incredibly insightful strategically; his conversations with other people about how things should be done allowed everyone else to do much better work. He tended to spend more time than average trying out new technologies; in this area he was invaluable to the rest of the team. But in terms of lines of code, he wrote less than average, and his manager was too stupid to notice all his other contributions, so he always got negative reviews, too. "

Negative reviews, obviously, have a devastating effect on morale. In fact, giving somebody a review that is positive, but not as positive as that person expected, also has a negative effect on morale.

According to Professor Kuvaas in Performance Appraisals - A Double Edged Sword May 2006, says

"Performance appraisals and other tools which involve feedback and target management should be adapted to the employee’s individual needs and characteristics. Otherwise, there is a risk of harming the good employees without being able to help the less good."

Clearly the Effects of Performance Appraisal on Employee Attitudes are still not known; making this a question worthy of Debate - Do we really need Performance Appraisals?

But if there are no Appraisals, how do we measure PERFORMANCE? Do we have a less painful alternative?

Why Should we Empower Employees?

Empowering Employees - The Need of Modern Businesses

I came across an interesting article at BizHelp24.com that I considered sharing with you. Its on Employee Empowerment. I am sure all of you would have faced a similar situation as stated below.


Taste this Case:

You buy a Television from an electrical store.

John the sales person advises you, and you go home with the TV.

When you arrive home the TV has a big scratch across the side.

You return to the store and tell John of your problem, and agree that for a partial refund you will accept the scratched TV.

John says this is a fair arrangement, but he needs to check with his line manager if this is ok.

(If John was sufficiently empowered you could receive the refund and leave satisfied now)

John comes back 5 minutes later with his manager, who asks you to explain the problem again. You go through the details of the purchase and the problem, and the manager agrees to the solution, but needs authorisation from the store manager.

(If the manager was sufficiently empowered you could receive the refund and leave now)

The store manager comes back after 5 minutes with John and asks you to explain the situation again. You go through the details of the problem, and the store manager agrees to a partial refund. However first he needs to get an authorisation number from Head Office.

(If the store manager was sufficiently empowered you could receive the refund and leave now)

After 5 minutes on the phone the store manager comes back and agrees to process the refund. Finally the problem has been solved, but at what cost?

To sort the problem the store has paid for:

1. John’s time
2. His manager’s time
3. The store manager’s time
4. The head office’s time

Not only that, but in the process of waiting and repeating yourself you may have (as most people would) decided not to bother shopping with their store again.

If John was given the power to do his job properly, the company would have saved the employee time costs, as well as kept a customer.

The answer in this case would be for John to know, and be able to enforce the company policy.

(E.g.: Maximum 10% discount or replacing the product)

Instead, you became a victim of un-empowerment disease, or “Run and check” syndrome.



Its indeed interesting to know that the same power and authority structures that HR built and protect are at most times responsible for restraining employees from giving their best.

Its time Organizations ( especially HR) show more trust on employees and empower them to face Business challenges. This is especially to those corporations that are so dependent on restraining power structures for their survival thereby crippling all chances of Innovation and Change.

One can see the following benefits of Employee Empowerment:

1. Freedom in Decision Making
2. Total ACCOUNTABILITY for the decisions taken
3. Customer Delight
4. Employee Satisfaction
5. Top Management is freed from Day to Day operational Decision and will have more time for Strategy
6. Gets Rid of Bureaucracy in the Organisation
7. Finally resulting in overall enhancement of Profits.

Do you think otherwise? Please leave your comments!

Five Things HR Can Do

A blogpost from John Summers throws interesting insight into what HR should Really Do.

1. Be curious about the business.
   
2. Measure stuff.
   
3. Stop focusing on cost cutting and expense
   
4. Free people to manage themselves
   
5. Plan, Plan, Plan

The HR fraternity has for quite some time now vehemently suggested that HR needs to move away from being passive support functions to more active Business Partners. But its disappointing to see that still a lot of CEOs, CFOs and so called HR Practitioners are stuck with the traditional roles of HR.

The blame can be squarely put on the HR fraternity for its failure to move away from redundant support activities which are predominantly administrative in nature. Until we project ourselves as those playing a serious role in the Business being run, we will always be sidelined and demarcated as the ones who are always Dispensable.

Are HR folks Listening???

News to Cheer About ! - Is this the End of the Recession?

The Federal Reserve has suggested that the worst of the US recession is over.


It said that while "economic activity is likely to remain weak for a time", it had begun to "level off".

Check out this Link

The US nears Recovery ( BBC Report)

Hope this is good news for the global economy as well!