Hierarchy versus holacracy

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Before we delve into whether or not holacracy is right for your organization, how many of us know what holacracy is?  Holacracy is a social technology or system of organizational governance in which authority and decision-making are distributed throughout a holarchy of self-organizing teams rather than being vested in a management hierarchy.  In theory, holacracy empowers people to make meaningful decisions and drive change.

Instead of a traditional management structure where questions must go from the bottom to the top and decisions go in reverse, organizations that adopt holacracy empower agile teams of people to make and implement decisions.

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Self-organization models typically share three characteristics:

Teams are the structure

In holacracy, there are “circles” or many companies simply call them “teams.” Whatever they’re called, these basic components are not, individuals, and not units, departments, or divisions but they are the essential organizational building blocks.  Individual roles are defined and assigned in order to accomplish the work. As in more traditional hierarchical organizations, there may be different teams for different projects or functions like finance, tech, sales. But self-managing enterprises have a lot more of them. After Zappos implemented holacracy, 150 departmental units evolved into over 500 circles.

Teams design and govern themselves

Although self-organizing companies try to avoid the traditional hierarchy, the teams are a part of a larger structure, which they are actually able to shape and refine. Holacratic organizations have everyone sign a constitution—a document outlining the rules by which circles are created, changed, and removed. So the circles not only manage themselves; within those guidelines, they also design and govern themselves. The constitution doesn’t dictate exactly how people should do their tasks. It explains in a broad way how circles should be created and operate: how they should assign roles, what boundaries the roles should have, and how the circles should interact with one another. 

Leadership is constantly changing

In self-managed organizations, leadership is distributed among roles, not individual people.  People usually hold multiple roles, on multiple teams. Leadership responsibilities continually change as the work changes and as teams create and define new roles. Technology is essential for keeping all these changes straight. The information is accessible to anyone in the organization and each individual’s commitments are visible to everybody at the company. Supposedly, transparency enables cross-team integration.

Although it is becoming a buzz word, holacracy is not being adopted at a rapid pace. The organizations who have tried to adopt it run into a myriad of issues, including increased turnover and decreased productivity given the endless meetings.  While some look at it with interest, others simply say it does not work.  Next week we will delve into some of the issues that have arisen when organizations have tried to implement holacracy.

 

Putting Words into Action

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There is never a time more appropriate for putting our words into action than in the midst of unforeseen crises and disasters. We all speak of our employees being our biggest asset, of creating a workforce that is engaged and more productive.  We know that when we treat our employees well it builds loyalty, a great culture and better metrics at the bottom line.  But how many of us really show our employees, in a meaningful way, that we care about them as more than just employees? That we care about their lives and families outside of work?

I am proud to work for a Company that does just that in a bigger way than I have previously witnessed.  The unfortunate, recent, back to back hurricanes have devastated parts of Houston, Texas and many parts of Florida.  While many companies put out words of encouragement to stay safe, how many really went the extra mile, went above and beyond?

Here are just a few of the more meaningful ways you can show your employees that you care and, hopefully set an example for other companies to follow:

 

Full Pay

Ensure your workforce that they will continue to be paid full pay for all the hours/days they are unable to get into the office to work due to the storm or subsequent damage or flooding.  Many employees live very close to their paychecks and losing even 1-2 days of pay creates an undue hardship and stress on the family.

 

Insurance

Many employees do carry renter’s or homeowner’s insurance, as well as car insurance, but may not be able to easily afford the deductibles.  Some have purposely chosen policies with lower premiums and higher deductibles in the hopes that they would not run into a situation where they needed them.  Most of these deductibles are in the $100-$500 range.  Think about what it would mean to your employees if you were to offer to reimburse them for their deductibles?

 

Housing

We are fortunate enough to be a property management company with homes all over the US.  We offered all of our employees under evacuation orders, vacant homes to move into, on a short term basis, in other geographical areas out of harm’s way.  Even if you are not so fortunate as to have vacant homes to offer, you can offer to pick up the cost of hotels for the time that the employees are forced to evacuate.

 

Donations

It probably goes without saying that others want to help in times of need.  Set up a Red Cross donation through payroll deduction.   Make it easy for the rest of your workforce to assist those in need.  When we set this up last week, we have over 20% participation with 45 minutes.

Take this opportunity to put your words into action and show your employees that you do truly care about what they and their families are going through and you are here to help.  It’s time we learn to take care of one another out of and in the workplace!

Let leaders lead

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Most who enter the Human Resources disciplines due so out of a desire to help others and to help the organization to align their employee workforce with the goals of the company to further productivity.  Often times, however, we forget to let our leaders lead.  Especially as an organization grows, HR functions need to adopt a “train the trainer” approach more than a train everyone approach.  Although enlightened organizations put their full support and resources into HR functions, the team still has a responsibility to be able to scale the organization without adding significant numbers of HR team members.  Efficiency is key.

Train- the- trainer

A train-the-trainer model allows experienced trainers to show a less-experienced individuals how to deliver courses, workshops and seminars. http://work.chron.com/train-trainer-model-5463.html Usually, a new instructor first observes a training event led by the course designer. A train-the-trainer approach can build a pool of competent instructors who can then teach the material to other people. Instead of having just one instructor who teaches a course for a long time, you have multiple instructors teaching the same course at the same time. This ensures that employees get timely training to complete tasks according to company policies and procedures.

Identify SME’s

SME’s or subject matter experts exist in all corners of the organizations and at all levels.  It is a fairly good bet that your excel gurus are not sitting in the corner office.  Tap those resources!  Find out how has a skill set that the rest of the organization could benefit from and engage the SME to deliver the training. This serves two purposes.  One, it enhances your pool of trainers and two, it gives well deserved recognition to a group of people who might be overlooked otherwise, further engaging them in the business.  

Step out of the way

The inclination is to teach every class to every audience, but the real goal is to get the training out to a broad audience in a timely manner.  Like a proud parent, you need to teach your junior trainers your techniques, ensure that they know their material, do a few dry runs with them and then let them launch.  Will it be perfect, no. Will it improve with time, yes and will you gain far more by engaging your workforce then trying to do it all yourself, a big YES!

Training is not a one and done.  It is a process over an unending period of time that, done correctly, not only teaches a new skill, but also engages and inspires a workforce to do greater things both in their work and personal lives.

Health Insurance 2018

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PwC’s Health Research Institute (HRI) annually projects the growth of health insurance and more specifically, medical costs, in the employer insurance market for the coming year.  They also identify the major factors expected to impact the trend.  Moving into 2018, the healthcare industry seems to be settling into a “new trend” which is marked by more moderate fluctuations and single-digit medical cost trends

HRI projects 2018’s medical cost trend to be 6.5%—the first uptick in growth in three years.

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What does this mean for employers still seeking to get the most for their insurance dollars and provide the best benefits for their employee population?  In a labor market that is heating up and becoming more competitive, employers are looking for new cost containment strategies beyond shifting more costs to their employees.

Target Health and Wellness

Many employers are creating wellness programs and enlisting the employees in a partnership arrangement regrading practicing better health habits.  Although hard numbers are difficult to come by, many employers believe they are creating a focus on wellness that will pay off at the bottom line.  Employers are offering smoking cessation programs, health fairs populated by as many as 100 different vendors, offering everything from multi vitamins to massage, and healthy snacks, like fruit and nuts instead of candy, cupcakes and empty snacks.

Investigate provider arrangements

More employers are taking a harder look the health services they are providing and how those health services are being offered.  Some are considering more restrictive arrangements like EPO’s (Exclusive Provider Organizations)  where they can get better discounts by decreasing the size of the provider network.  Other options include offering 2 tier plans where the employer pays a sizable percentage of the lower plan, but gives the employees an opportunity to “buy up” if they want to choose the more expensive plan.

Evaluate the value of drug spending

Employers are banding together to put pressure on drug companies to moderate price increases. Similar pressures were enacted in the early 1990s and significant decreases in the drug price growth rate.

We are already seeing some pharmaceutical companies take action, limiting price increases, offering cheaper generic alternatives and proactively addressing questions of value in the marketplace.

Even though health insurance price increases have slowed over the past three years, they still outpace inflation and employers need to continue to pursue alternatives that will lead to a healthier workforce and, ultimately, to lower health insurance costs for everyone.

 

Organizational Value

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There are multiple ways a Human Resources organization can add value.  Too often though, there is a mismatch between the value that HR is bringing and the growth and maturity curve of a company.  Imagine, for instance, heading HR for a large, established, multinational corporation and believing that the value HR brings lies in the mechanics of setting up employee files, creating salary structures and running benefit programs.  Conversely, imagine a situation where there is a relatively small start =up company.  The company has grown to the size, maybe 100 employees, where they finally need an HR presence.  The person selected start out by talking about aligning the employees to the organizational objectives, but the organizational objectives have yet to be defined.  It is important to always keep in mind the match between the HR function and the organization.  There are three primary ways that HR can bring true value to an organization.

Mechanics

HR has the responsibility to provide the basic mechanics of the HR function.  This can include such basics as:

  • Running ads and hiring for candidates
  • Creating salary structures to ensure the workforce is paid correctly
  • Selecting and running health insurance plans
  • Keeping I-9’s
  • Running basic training programs
  • Legal Compliance

Processes

Moving along the continuum, HR should provide the processes that ensure that an organization can scale efficiently

  • Hiring becomes……. an on-boarding process with predictive capability
  • Providing benefits becomes ……..a well thought out approach to which benefits, how to create a benefit matrix and judgment applied to the types and cost sharing of benefits
  • Legal compliance becomes……an understanding of what we are trying to accomplish and how best to accomplish it
  • Basic Training programs become….. Training program that meet key corporate objectives where impact is measurable
  • Basic compensation administration becomes…..internal and external equity comparisons, creative approaches to a three pronged approach and the most bang for our buck, social performance management systems

Strategy

Where HR can truly contribute the most value is when the Mechanics and Processes are in place and we can step back and view the big picture strategy.  Where are we going and how are we going to get there?

  • Thoroughly understand the goals of the organization and get ahead of the curve- what processes, practices and strategies will be needed in 1 year?  3 years?
  • Communicate corporate goals that align the workforce to the vision and mission of the Company
  • Align processes and programs across the organization to create high performing teams
  • Continually monitor the pulse of the organization and make recommendations to solve small problems before they become big ones
  • Assist executive teams to make sense of the internal and external environments and the impact they have on the organization

What do we hope to Achieve?

Crafted effectively, we orchestrate the above to achieve:

  • Increased alignment between organizational objectives and employee population goals
  • Most value extracted from each hire
  • Greater employee engagement yielding greater employee satisfaction
  • Reduced turnover
  • Better hiring decisions
  • Better use of resources reflected at the bottom line

International HR – Germany

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There are significant differences when it comes to the Human Resources organizations in the US versus companies in Germany, and many other countries in the EU.

 

Managerial Discretion

Anyone who has worked in the US understands that managers and HR have a lot of discretion over who to hire and who and when to terminate.  Sometimes these kinds of decisions can be made in a few days or weeks.  In Germany, specifically, these types of decisions are months if not years long, with serious infractions needing to have taken place.  Germany has a co-determination practice.  Co-determination is a practice whereby the employees have a role in the management of a company. The word is a literal translation from the German word Mitbestimmung.. In some countries, like the USA, the workers have virtually no role in corporate management; and in others, like Germany, their role is more important.

 

Wage differences

In the US, many studies show that white collar workers can make as much as 20 times that of blue collar workers in the same company.  This is drastically different than in Germany. Germany  is known for its balanced remuneration system.  The average white-collar worker’s wage is only 20% over the average blue collar worker`s wage. In addition, companies are not allowed to hire skilled workers from other companies by offering higher salaries.

 

Company Loyalty

Here too, the perception differs.  In the US, workers are generally always in search of something new or better, and there is very little company loyalty.  In Germany, employees feel a much greater sense of loyalty to their companies and, general, will not leave.  They will look for opportunities within their current company or subsidiaries and the company will work hard to provide those. 

 

Management decisions

While the US is typically a very individualistic society, making quick decisions and reversing them if necessary, Germany, in stark contrast, tends to work like a democracy in their companies. It is important the whole team has a say and the whole team is bought into the decision.  While this can seem appealing, the trade off is time.  Decision making will take much longer with a group of employees when everyone needs to be in agreement. 

Both cultures have their pros and cons and neither is necessarily best.  The US, acting as an impulsive, decisive,  all knowing teenager and Germany as the wise parent, moving slowly with certain purpose.

International HR – UK

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Differences between the UK and US

Much like there are slight difference between states in the US, like the timing of final pay for an involuntary or voluntary termination, ranging from day of termination in California to next scheduled pay period in Georgia, there are greater difference amongst countries around the world. Many of these differences relate to working hours and leave.

 

Overtime

In the UK, for instance, employees cannot be required to work more than 48 hours in a work week, while in the US, there are companies that require, legally, far in excess of this amount, especially during peak seasonal times.

 

Vacation Pay

While most workers in the US get 10 paid vacation days per year, their lucky UK counterparts are enjoying more than twice that at 28 days. And, if you are in the UK, you are going on “holiday”, not on “vacation.”

 

Maternity Leave

In the UK you can take a year off for maternity leave without losing your employee rights. No matter how long you’ve worked for a company. Just let the company know 15 weeks before the due date. The official UK maternity leave policy – known as Statutory Maternity Leave (SMP) – means that employees will still earn money for up to 39 weeks. During the first 6 weeks they receive 90% of their average weekly earnings before tax.

Then for the next 33 weeks either £136.78 pounds sterling (about $225 US  per week) or 90% of their average weekly earnings before tax depending which is lower. Their employee rights, including holiday entitlements and pay raises, are safeguarded during the time they take off. Compare that to the 6-8 weeks that most US employees take and only receive 66% of their normal wages IF they have SDI.

 

 

Teach a Man to Fish

One of life’s conundrums is the choice of when to do something for someone and when to teach them to do it for themselves.  This is an age old struggle between parents and children, teachers and students, managers and employees and the Human Resources team and our internal customers.  We all want to help those in need whether it’s a child struggling to open a heavy door or an employee who needs a quick answer.  But are we really “helping” when we constantly rush in to be the hero or are we really fueling a need within ourselves?  Might it not actually be better to teach someone how to be self-sufficient and then step back and out of the way?  This would allow you to make a greater and more broad reaching impact.

Especially for those of us in HR who, generally, are in this function because we enjoy helping others, we might want to take a look at how to more effectively “help” others in the organization.  It would be beneficial to have a plan when someone comes to you with a problem.  A way to identify whether this is a crisis and an immediate need or an opportunity to teach someone to be able to do it for themselves.

Urgent or Immediate needs

HR gets bombarded daily with immediate needs or at least needs that the internal customer thinks are immediate needs.  A few examples of actual immediate needs:  Someone has fallen and you need to call 911, someone is making credible threats and needs to be escorted out of the building, access to systems need to be shut down due to an involuntary termination for cause.  These are the types of needs that you will always handle and are probably not teachable, necessarily, to someone else.

Important needs

Important needs are those that are important but not urgent.   Examples might be a question on an incentive plan and how it works or an update on a particular position you are hiring for.  Some critical needs can lend themselves to establishing SOP’s, Standard Operating Procedures.  Requisitions reports can be created and distributed so that managers can check statuses of their openings.  Webinars can be held to explain the nuances of the incentive plans.

Routine needs

Routine needs are those that someone will call you for every time they need the answer. Someone has an address change, or a title change or a change in the car reimbursement program.  Routine needs are wonderful teaching opportunities.  Offer to walk the person through the steps needed and then establish the SOP’s, standard operating procedures,  and let them know where to access them.

Un-needs

Occasionally, you run into those people, or they hunt you down, with on-going, what we will call, un-needs.  This is the desire to have someone listen to them by creating a perceived need.  In these situations, the best thing to do is to politely remind the person that you have a call coming in or must get back to your work.  You can train someone out of this behavior, but not necessarily teach them.

By defining the different classification of needs, you will work more efficiently, have a broader impact and be able to help others to help themselves.

Time management

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There have been copious articles written about time management and everyone no doubt has their favorite strategies. The below are a few that I have found to be helpful in the workplace and in life in general.

 

Know yourself

Part of being a good time manager is knowing what behaviors prevent you from managing your time effectively. The link below gives you a quick summary spreadsheet for determining what your behavior is to day and what your behavior should be in the future to maximize your time. It is helpful to know when your energy is at its peak- is that early morning, late night or somewhere in between. This will help you to plan critical activities for when your energy level is the highest.

 

Multi-task

I know this is contrary to many time management theories out there, but wherever possible, multi-task, especially when something does not require your full attention. When you give up the idea of doing only one thing at a time and look for ways to do two, you can get a whole lot more done. Some quick examples: If you’re on the West coast, schedule East Coast calls on your drive into work. Owe the Far East a call back, pop in your earbuds and make the call while you’re making dinner. 6:00pm pst is around 8:00am there.

 

Touch each e-mail or piece of paper once

This one is big. We all have a tendency to want to “think about” it for a bit and then answer which is likely the answer you would have given in the first place. Force yourself, unless there is truly research that is needed, to answer right away.

 

Start the night before

A big time saver is to lay out your next day the night before. This allows you to hit the ground running in the morning and not have to stop and get organized. Know what you need to accomplish that day, in terms of key deliverables and follow up items.

Get your follow up items out early so that it allows people time to work on them during the day.

 

Take a break

While this may sound counterintuitive, often times taking a quick 10 minute break will help you to re- focus and complete a task in a shorter amount of time than if you had stayed with it past your ability to really focus.

 

Determine what is urgent and what isn’t

Not every e-mail that comes in must be answered right away. Some of the best time managers only answer their e-mails 1-2 times/day. You would be amazed at how many strings of conversation there are where you are only peripherally involved and if you just let them play out, you can catch the last e-mail and be completely up to speed.

 

Everyone has strategies that work better for them than others. Don’t be afraid to try 20 or 3- and then pick the top 5 that really do save you time and increase efficiency.

Employee Testing

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Almost all organizations engage in employee testing of one type or another.  What many organizations don’t understand is almost all of them open you up to some type of potential liability should you be challenged.  Selected and administered well they can be valuable tools in your candidate assessment process, but handled poorly they can cause you a whole host of problems.

Pre-Employment Physicals

Few can argue that Pre-employment physicals or drug screens are a bad idea.  Even with many states, including California, legalizing marijuana, you may still preclude its use while at work, the same way you can insist that your employees not come to work drunk or impaired by the use of prescription drugs.  Just because a substance is legal, does not mean it is OK be under the influence while at work.  Give prospective candidates notice that you will require them to take a pre-employment physical.  Many will simply choose not to apply.

Background Screening

Background screening is another “test” that few will argue with other than those who feel they have some antiquated right to privacy.  Background checks will check driving records, misdemeanor and felony convictions.  How you use this information gets a little trickier.  While you can turn down a candidate who will be driving a company vehicle if they have DUI convictions because you can show a direct correlation between the offense and the job requirement, what about the person who is a 2 time convicted child offender and you have offered him/her a position within an development department?  Can you show a relationship between the offense and the job requirement?

Skills testing

Skills testing can fall into multiple categories.  There are on the job skills tests that are easy to validate.  If the job requires someone to install HVAC systems and you ask them to install an HVAC system, the relationship and applicability are clear.  This type of testing can also include basic grammar and math skills.  The reasoning is that those that can construct a basic sentence with proper grammar and understand basic math are going to be better at their jobs whether they are being hired as an AP Specialist or a Customer Service rep.  These relationships to job proficiency are fairly easy to understand, but be prepared to defend your decision, even with validated tests.

Aptitude Tests

Aptitude tests are a gray area and only a handful of companies are using them.  Their theory is that if they hire only those that score exceptionally well on the aptitude tests that they will be able to train them faster, they will catch on more quickly, they will be more creative in terms of finding efficiencies within their jobs.  If you use Aptitude testing, be sure it is only one aspect of your hiring decisions.  It would be easy to come under fire for adverse impact if you established a cut off whereby you would not accept applicants.

Personality Tests

Quite a few companies use personality tests and there are many different versions, Myers-Briggs, DISC, Predictive Index. Personality tests can be helpful especially when you choose one like Predictive Index where you can create the profile for the job and then compare the profiles of the candidates to the job profile.  These can be especially helpful when you have a team of people to hire.   You want variety on your team, but complimentary personalities.  There is no right or waring, pass of fail with a personality test.  Each personality has its own pros and cons.

Define your testing strategy up front and ensure that you understand what you are hoping to accomplish with each one and how you will use the results.