Are Policies Really Required?

"Its the company Policy" 

How often have you used this phrase as an HR  pro?

When all logic and explanations fail, HR Pros are often found guilty of taking refuge under this clause or so does it seem. Most employees dread this, as it signals the end of a rational argument with their employers. 

Often, too well defined policies prevent employees from contesting its existence and rationale. The myriad maze of policies and the consequent multitude of procedures leave employees dazed. Though implemented with the right intentions, most policies do not end up doing what they were meant to do and consume significant organisational energies, lead to procedural delays in decision making and strengthen bureaucratic practices. 

So, the key question remains...

• Do we really need a policy for everything? Or Should they be considered only for the essentials?

To answer this we would need to understand the very purpose of their existence in the first place.

As organisations grew, so did the complexities related to their activities.

There were multiple things to be done and they needed to be done in a particular way to yield a desired result.

A lack of clarity on how things needed to be done often caused confusion. As a result, organisations began to document the preferred manner in which their activities could be carried out. These documents were referred to as the basic guidelines of employee actions and were tightly linked to their value systems.

Over a period of time, policies became the foundation of every action that an employee could take. They were intended to make employee accountable for their actions and enable clear decision making. Thus almost every conceivable action such as the number of hours to be spent at work, dressing, vacations, wage hikes etc etc were determined by the policies.

And so it did serve a purpose at least for a while.



Now the other side of the story...

With a more inventive, freedom loving and knowledgeable talent entering the workforce, the relevance of organisational policies is in question today. The present day employees want to be treated as responsible adults.

Rather than working in an environment filled with bureaucracy and predetermined procedures, they would love to spend their waking hours experimenting with their intuitions and creatively challenging the status qou.

Though we cannot arrive at a conclusion on this debate, it would be interesting to watch out how this space plays out in the future.


Change in Action

Certain firms have not just gone beyond just removing policies, but also made radical changes in the way they perceive their employees. Take for instance, Netflix which has decided to remove the vacation policy itself, giving employees the freedom to chose their time off.


Read the Harvard Business Review on How Netflix Reinvented HR for more details on their policy makeover.


Also Sir Richard Branson, made a dramatic change in Virgin Atlantic's Leave policies - rather he completely revoked the policy itslef - something called Un Policy.

Read the entire article on Virgin Atlantic's Leave policies here....


You might also like a more light hearted view on weird Employee Policies that rocked the world here...

Realliging The Workplace - Welcome to the GEN Y

The entry of Gen Y and the gradual exit of Gen X and Baby Boomers from the workspace is spelling the onset of a new league of policy changes across organizations which wants to keep pace with their employee's changing aspirations. Across the world, some significant changes are seen to be happening in this context. With the entry of Gen Y into the workforce, the rules of the game are beginning to change significantly. Most organizations and institutions have begun to realize how "Out of Sync" they are with their Gen Y workforce. With this dramatic change in the landscape comes several key challenges that today's workplaces need to deal with - most importantly bridging the ever thickening line of difference between the earlier generations and Gen Y ; and being able to deliver on the aspirations of both these groups.

Something Called Culture - An Interesting Viewpoint from NETFLIX

Culture

View more presentations from Reed Hastings.

Loyalty - Does It Really Matter?

The long-term success of any company depends heavily upon the quality and loyalty of its people. Few corporate executives would disagree with this idea conceptually.

More often than not, we have seen companies (especially the traditional ones) stress on Loyalty as an important value that employees need to imbibe. We have seen people spend a major part of their work life for a sole employer spanning over 3 to 4 decades. We have seen firms rewarding these employees through Lifetime achievement and Longest Player awards. We have seen them take up mentorship roles and act as the ones who will help in the inheritance of culture to the next generation of workers. They are the ones who have been with the company during the good and the bad times. They are the true loyalists – to be revered for their wisdom and the labour that they put in helping their company grow.

Ironically we have also seen that when bad times set in, these loyalists are the first in line to be shown the door! Firms that had been basking in the glory of the good times suddenly start talking about enhancing ‘productivity’ and reducing ‘unnecessary expenses’ (cost optimization) which had till recently been a mandate only on paper.

And it is also true that most employers treat the economic value of employees in enhancing customer relationships and company profits as "soft" numbers, unlike the "hard" numbers they use to manage their operations, such as the cost of labor.

So, Does Loyalty really matter these days?

Perhaps not if Loyalty is defined in its traditional sense.Times have changed dramatically and so has the relationship between employers and employees. Mostly these relationships remain transactional – “I would do this for you and you would reward me for what I do – nothing more nothing less”.

Perhaps this sort of an agreement is reached upon the very first day of appointment – when the candidate (or prospective employee) has already decided that he/she plans to stay with the organization for X years only – and the employer too who is well aware of this – plans and schemes things only for this X years that would be available to squeeze the maximum out of the employee. The burgeoning Job market has also meant that Loyalty derived from years of toil is today being transformed into mere commitment of a few years.

In light of such a transactional agreement, there are no chances of breeding loyalty. With the umpteen number of employment opportunities available these days, loyalty is not a necessary value that employees need to have – just minimum compliance to the rules and do what is required to gain the maximum out of the employer!( in terms of compensation, benefits and rewards).Moreover we are seeing the end of the lifetime contract with employers and the emergence of a generation who are more loyal to their careers than to their employers.

Hence there is fairness in the view of employers taking such a stand.

Loyalty, Performance and Profitability

Though Loyalty as a value is to be cherished – in a world riddled with competition – Loyalty without performance can do more harm than good. That would mean harboring those who refuse to leave their employer but at the same time are not being significant contributors to the growth of the organization. Loyalty then becomes a double-edged sword for employers! Some studies have shown that Loyalties' link to profitability, but most of these theories remain inconclusive and difficult to measure. More often these loyalists are the first causalities of a layoff.

The Resolution?

Welcome to the New Age Loyalty

The solution perhaps might lie in the way employers define and Rethink on Employee Loyalty.

It is essential to know that Loyalty is not a Either/Or proposition. Loyalty has to be mutual and not one way.

"Employees can give their employers 100 percent and provide great performance while furthering their own careers," says Joyce Gioia of The Herman Group, a consultancy based in Greensboro, North Carolina "The two aren't mutually exclusive," especially when the skills that a person masters to further her own career are also what the company needs.

• Matching Employee Aspirations to Company Goals

A key action would be strike a balance between the aspirations of employees and the needs of the organization. Most often employees feel that they have been betrayed by their employers by being refused a desired position or role. Whereas the employers are themselves constrained by the fact that they cannot satisfy every employee aspiration without significantly compromising on its own objectives.Its also vital that employees are communicated on why certain of their aspirations cant be met. This would bring a lot of things to the right perspective of those who are discontented. And every measure must be taken to ensure that such discontent is nipped at its bud. Remember these words of wisdom....

The best kind of loyalty is when both parties are benefiting.
— Scott Brooks, Gantz Wiley Research

• Build Relationships not Contracts

The world today is filled with contracts and agreements. Even personal relationships are based on Contracts with several strings attached. Though these contracts are good in the short run to achieve certain objectives, they rarely materialize into meaningful lifelong relationships.

Employers would have to go out of the way to gain employees' trust which will ultimately breed Loyalty - just as they would do with their own customers. Treating them as reliable, trustworthy and responsive individuals- who spend a good amount of their "awake" time working for mutual benefit (of himself and the organisation )- would do a lot in building employee loyalty.


Remember, healthy relationships last longer and don't carry an expiry date!

• Reward Loyalty - Show You Care
  

Rewarding Loyalty is one of the easiest ways to reinforce desirable values in the organization. Such recognition should be made in public. Apart from the generic rewards that get doled out as " Longest Player Award" or "Lifetime Achievement Award", it would also be desirable to praise them for their specific performances and achievements over the years.As an employer, one should place "Loyalty with Performance" as the most rewarded value of the organization.

One Final Word:

There's no doubt that for employers, committed, loyal and hardworking employees are their best asset. By learning how to retain high-value employees, you and your entire workforce can focus more on the overall success of your business.


I love contradictions and here is one on Why Loyalty Matters by Phil Gerbyshak posted on bizzia.com

Employee First - A Paradigm Shift in Business Philosophy

In an  attempt to understand some of the new age HR Strategies, I happened to stumble upon an interesting
read on Fortune which quotes " The World's Most Modern Management - In India".

The view refers to the Employee First initiative by Indian Software giant HCL Technologies which according to Vineet Nayar ( CEO & President - HCL Technologies)  is "empowering and pointing the way to the future of Business".

We have heard almost all business leaders at some point say "Employees are our greatest asset" which is often not backed by sufficient action. More often Customer Satisfaction takes priority over Employee Satisfaction. And more so that there have been very few research studies ( at least in India) which have focused on the link between the two.

Though the link between Employee Satisfaction and Productivity/ Profits seems like common sense, some Research have also shown contradictory results leading us to believe that though satisfied employees can lead to better financial health; good financial results may NOT necessarily mean satisfied employees. Hence the corollary of " Satisfaction leading to Productivity" may not always be true.

A study by Gallup ( with a Retail Store Chain) has made some interesting revelations on the link between Employee Engagement and Profits. The study statistically proves that engaged employees are key to greater productivity and customer engagement, and, by extension, higher profits.The Gallup Organisation states that companies with engaged staff have 38% higher customer satisfaction, 22% higher productivity and up to 27% higher profits.

"The dual focus on employees and customers was generally accepted as correct. All of the strategies had their conceptual foundation in the "employee-customer profit chain," a business model popularized in the early 1990s that maintains that better employees make for happier customers, both of which drive profits.

Ongoing customer research shows that stores with engaged employees also earn consistently higher scores for customer satisfaction and loyalty than their lesser engaged counterparts. A positive customer experience, in turn, drives sales and profits. In 2001, for example, stores in the top half of customer loyalty generated ₤3.4 million more in sales each year, and ₤1 million more in profits than stores in the bottom half. "

Hence the argument that Employee Satisfaction ( or more recently Engagement) does affect the bottom line has to be largely accepted to be true and companies may need to take extra efforts to keep their workforce highly engaged with the larger picture (of Profits) in mind.

In recent times there have been two notable publications about employee engagement, which prove beyond all doubt the economic case for creating engaged employees. These two reports are included here for you to download.

• Engaging for Success by David MacLeod and Nita Clarke (on behalf of the UK Government)
• The Economics of Engagement by The Human Capital Institute – an independent US research organization
  

I would cherish your views on the same.

Interested to know a contradictory view? Visit Kevin Wheeler's blog where he professes that Employees are not Assets. 

Innovate? Me? - This is a Recession!!

Trading Innovation for Survival:

Of all the steps taken to negate the impact of the slow down, perhaps the most significant ( in monetary terms)one remains the Cut in R&D expenditure. ( though Lay Offs are more popular due to their sentimental value).

While this seems like the ideal strategy for the short term, in reality such practices would actually put organizations at more risk than previously thought. Sacrificing innovation amidst the recessionary cost-cutting frenzy can leave companies vulnerable in the long run.

Firing Talent, Cutting back on technology expenditures, reducing risks,stopping new product development and replacing systems management over Innovation as Key Strategy for success are the Worst Mistakes that an organization can do during the bad times.

These actions are partly because of the misconception on what Innovation really means. Innovation is not Rocket Science. Innovation doesn't always refer to inventing new technologies or making drug discoveries!

Peter Drucker rightly points out the effects of innovation during recessionary time in his work : Management - Tasks, Responsibilities and Practices

"Innovation is a term of economics than technology. The most productive innovation is a different product or a service creating a new potential for satisfaction, rather than improvement. Typically this new and different product costs more - yet its overall effect is to make the economy more productive"

Also from Drucker Library: Peter Drucker and Innovation

Perhaps its time for your company to jump OUT of the bandwagon of needless layoffs and cost cutting and see the see the Upside of Recession - The Innovation Engine.

Other Interesting Reads: Innovation is recession-resistant
The Official Site of Drucker

Recession: How Flexible Compensation and Rewards Strategies Help

Recently, I met a HR friend of mine who works for a renowned IT services firm in India. As its so usual these days, our talk slowly drifted into the realms of the economic slowdown and its impact. In spite of the tremendous beating that the services industries had taken during the year, his company continued to make profits without resorting to any sort of extensive layoffs or fancy cost cutting measures.

More interestingly the company managed to dole out bonuses to all employees ( around 50, 000 of them) during the worst quarter. Apparently the company made some significant changes in its compensation structure just before the slowdown set in - i.by increasing the proportion of the incentive pay in the overall salary lay out.

This was followed by major changes in the job descriptions of all leaders in the organization - which included improving team performance, increasing the Utilization Rates ( a major parameter which depicts the exact proportion of employees engaged in software development work - closely linked to Productivity), and fostering Innovation ( Bright Ideas for Dark Days!).

The above is a good example of how an adaptive Compensation Strategy has helped organizations successfully tide over tough times.

Here are some lessons that the Recession has reinforced on Compensation Managers:

• Customer Value: A good compensation and reward strategy should inspire employees to enhance customer value ( and Shareholder Value). This, perhaps is the ultimate aim of such strategies.
• Performance Oriented: Organizations today are highly performance oriented; hence a compensation strategy that is not visibly Performance Linked would fail to attract, retain or motivate employees.
• Flexibility: Though compensation strategies are expected to be robust and closely linked to the organizational goals, its also essential that such plans are also flexible enough to handle external situations which may be totally outside the control of the firm.
• Communication and Trust: Also its important that employees are aware of their organization's compensation rationale and that they are taken into confidence before any significant changes are planned in the overall pay structure. Such Transparency will breed trust and avoid the unnecessary rumours that often make their rounds during tough times.

Saving HR - Step 3

Step 3 - Rebuilding a Positive Image through Empowerment

Jay talks about HR getting itself rid of the "Knucklehead Stuff". There exists a serious problem of perception among employees about HR. They always believe that all policies, rules, norms ( or whatever you call it) is the brainchild of the HR guy. And when these policies run against employee well being or end up being unduly restraining, they turn to the HR folks for a resolution - and the HR guy inevitably shows up with the I-swear-I'm-not-making-this-up response.

Employees are annoyed and dismayed by the irony ( or their perception) that if someone is not able to change the rules, then they just cant be in-charge of making them in the first place!

Such employee perception will go a long way in determining the image of HR.

Jay also posts an interesting experience in his blog supporting this view.

Saving HR - Contd1...

Step2 : Outsource the "personnel stuff"

Jay is Bang On! A lot of HR pros spend considerable time and energy managing trivial administrative stuff! While everyone seems to agree that HR should play the role of a strategic partner in Business. the same has not resulted in any concrete action on the ground. Jay has a solution which i cant refuse to agree : "Outsource"

"Outsource it. Send it to India. Offload it to companies who provide these services as an "outside personnel department." Clear your desk of the nickel-and-dime stuff. Then you can focus on developing, managing, and retaining the best talent your company can get."

Saving HR

That HR needs to move to the next level as a Business Partner is obvious, but how do we? In continuation to my post of "Five Things HR Can Do"; How do we save HR? - Post Courtesy Jay Shepherds.

Step 1 — Moving HR to "C" level - Bringing HR to the Spotlight

Most companies have a handful of executives who report directly to the CEO: the Chief Operating Officer, the Chief Financial Officer, the Chief Information Officer, the Chief Marketing Officer, and the Chief Legal Officer (usually called the General Counsel). But rare is the company that has its head of human resources sitting in the"C suite."

This makes no sense. Every company depends upon having the best people — the best talent — it possibly can to succeed. Without top talent, who actually does the operations, finances, technology, marketing, or legal stuff? Why do most companies relegate the recruiting and managing of talent to an administrative position that usually reports to the CFO? Even the term "human resources" — itself a euphemism for the drab "personnel" — demeans the role and its importance. HR professionals often decry not having "a seat at the table," and for good reason. Most companies fail to recognize the strategic role that HR should play.

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???