Mark Moser - Davidson Group https://alliancestaffingus.com/author/mark/ Wed, 18 Oct 2017 23:08:12 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.5 https://alliancestaffingus.com/wp-content/uploads/2017/04/favicon-45x45.png Mark Moser - Davidson Group https://alliancestaffingus.com/author/mark/ 32 32 Make Better Hiring Decisions https://alliancestaffingus.com/make-better-hiring-decisions/ Fri, 20 Oct 2017 23:04:33 +0000 http://18.221.253.116/?p=2289 Many small companies choose their new employees based on a single interview. Unfortunately research shows that interviews have extremely poor validity when it comes to selecting the right employees. (In case you’ve forgotten, “validity” means an instrument measures what it’s supposed to measure). Interviews are supposed to measure the likelihood that a candidate will be […]

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Many small companies choose their new employees based on a single interview. Unfortunately research shows that interviews have extremely poor validity when it comes to selecting the right employees. (In case you’ve forgotten, “validity” means an instrument measures what it’s supposed to measure). Interviews are supposed to measure the likelihood that a candidate will be a good fit for our organization and our job vacancy. Casual interviews are pretty good at measuring interviewing skills, but they don’t do very well at measuring how well a candidate will perform in the job we’re trying to fill.

Studies show that we are subject to so many biases when it comes to a typical interview process that we are probably just as likely to pick a star employee from a stack of resumes, sight-unseen, than from bringing five people in for interviews.

So, how do we improve the validity of our process?

First, screen resumes against a predetermined set of KSAs (knowledge, skills and abilities) only. Consider having an administrative employee scrub information that might lead to biases from the resumes’ themselves. For example, as a Carolina grad, I might have a negative opinion about a resume from a Duke grad. Another common bias is unintentionally rating a resume lower based on the candidate’s name (assumptions rooted in gender, age and ethnic stereotypes). If you can’t see the university name or the candidate’s name, you are more likely to evaluate the resume on the KSAs alone.

Second, develop good interview questions! Write questions that have a likelihood of predicting the behaviors that you want. Use an interview guide and ask each candidate the same questions. Practice interviewing your current stars and see how they answer those same questions.

Third, use assessments! Utilize skills assessments – having them demonstrate skills they claim to have. This can range from taking a keyboarding test, to taking them out in the warehouse and allowing them to demonstrate their ability to operate your forklift. (There are some do’s and don’ts regarding “auditions,” so make sure you don’t cross a line). Behavioral assessments will show if their personality style is ideal for the demands of the position. Driving Forces/Motivators assessments will show if their motivators align with the rewards and demands of the position. Competencies assessments will show what types of core competencies the candidate brings to the team.

Small employers frequently tell me, “I’m not spending $50 or $100 on a test – I know how to hire!” Considering the high cost of a poor hire and the science that shows utilizing valid assessments increases the validity of the selection process exponentially, that might be a penny-wise, dollar-foolish commitment.

Fourth, check references! LinkedIn is a great resource to see referrals and endorsements on many of your candidates. It’s also a venue to conduct “unofficial” reference checks. If the candidate is connected to someone you know, you might be able to gain valuable insight. Many people dismiss the references the candidate submits – but I’ve gotten honest references from these in the past, so don’t neglect them either. The best predictor of future success is past success!

Fifth, make sure your background screening criteria match your risk profile. Some organizations screen too tightly here and miss out on potentially good workers due to invalid criteria. If your company provides residential services and a candidate has a recent breaking-and-entering conviction, that candidate clearly doesn’t fit your risk profile. But screening out a candidate who has a 12-year-old misdemeanor possession conviction might be an invalid selection criteria if you have an opening on a production line or on a commercial construction site.

Finally, if you’re doing all these things but you’re still losing people, it’s probably not your selection process. It’s likely something else, like job design, compensation, benefits and perks, or most likely, your supervision and management style. But that’s a subject for another blog!

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Assessing Talent Better https://alliancestaffingus.com/assessing-talent-better/ Wed, 18 Oct 2017 22:54:12 +0000 http://18.221.253.116/?p=2287 Sometimes I’ll get a call from a client because they’re ready to fire Bob. I’ll ask a few follow-up questions and discover that there is no major policy violation, they’re really just irritated with him for an accumulation of stuff that seems important today but is somewhat minor in the big picture. In most cases […]

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Sometimes I’ll get a call from a client because they’re ready to fire Bob. I’ll ask a few follow-up questions and discover that there is no major policy violation, they’re really just irritated with him for an accumulation of stuff that seems important today but is somewhat minor in the big picture. In most cases I’ll convince them that they’re probably better off keeping Bob than trying to replace him and recommend they just have a conversation with him regarding their frustrations and expectations.

Then I’ll get a call a couple of weeks later to be informed that Bob’s just been promoted to supervisor. “Since our talk, he’s been doing great!”

I call this the talent assessment elevator – the speed of movement between “the penthouse suite” and “the basement.” Some small to mid-sized businesses have express elevators. A worker can go from hero to bum and back to hero within a few days or even hours.

Organizational Behavior textbooks they call this “availability bias,” which is defined as our tendency to make decisions based on information that is readily available in our memory. Decision makers can easily overvalue information that we recently received. So when we get word that Bob screwed up, “Bob’s a bum. Fire him!”  When we get word that Bob pulled us out of a ditch with an important client, “Bob’s great. Promote him!”

One of my heroes, basketball coach Dean Smith, once said, “if you make every game a life and death proposition…you’ll be dead a lot.” He knew – he lost 254 games in his Hall of Fame career! The same applies to making important personnel decisions such as whom to keep and whom to promote, based almost exclusively on recent events. The problem is, the stuff that’s in your short term memory may not be the best information to base an important organizational decision on.

So when it’s time to decide whether to fire Bob or promote him, take a few minutes and consider:
1. What knowledge, skills and abilities (KSAs) does Bob add to the team and how easily will it be to replace those if we send him packing?
2. What performance metrics can we use to evaluate Bob’s performance over the course of a year (or longer), so that we don’t overvalue his most recent short-term performance?
2. What KSAs plus any intangibles does Bob potentially bring to an expanded role with the organization?

If Bob has solid KSAs and has historically been a solid contributor, don’t over-manage as a result of a recent wobble. Have a conversation, if need be, or even a documented disciplinary write-up, if warranted. But investing in getting Bob back on track is going to be less costly than replacing him, almost guaranteed.

If Bob has done something worth celebrating, consider a one-time bonus or some form of public recognition, but don’t rush to put him in that supervisor role that just opened-up based solely on this single victory or recent short-term success. Evaluate his KSAs and fitness for this new position separately from his recent star performance. Otherwise, you may have just taken a solid individual contributor and put him in a supervisor role where he’s miserable and might soon be underperforming.

When it comes to your talent assessment elevator, it should be like a slow freight elevator – faster than the stairs but doesn’t make your ears pop. Organizations with an express elevator seem to habitually lose good people that they needn’t have lost because of over-reacting to both short-term performance failures and short-term performance successes.

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Did Your Candidate Salt Before Tasting? https://alliancestaffingus.com/did-your-candidate-salt-before-tasting/ Wed, 18 Feb 2015 19:03:29 +0000 http://18.221.253.116/blog/?p=1748 A famous executive reportedly used to take prospective new hires out to lunch. If the candidate salted his food before tasting it, the exective wouldn’t hire him. This story has been attributed to Henry Ford, Thomas Edison, Howard Hughes and J.C. Penny among others. It’s really an urban legend, but there’s an interesting parallel between […]

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A famous executive reportedly used to take prospective new hires out to lunch. If the candidate salted his food before tasting it, the exective wouldn’t hire him.

This story has been attributed to Henry Ford, Thomas Edison, Howard Hughes and J.C. Penny among others. It’s really an urban legend, but there’s an interesting parallel between this story and what I’ve actually observed from hiring managers.

Some think they have found a similarly clever shortcut. “I won’t hire anyone who ever worked for Company X” or “I won’t hire anyone who wears loafers to an interview” or “I won’t hire someone who won’t look me in the eye when answering my questions…”

These witticisms sound clever, especially coming from a person who’s confident and believes this method works. But they lack both reliability and validity. Does the type of shoes a person wears to an interview accurately predict how they might perform in the job? I seriously doubt that any scientist would be able to prove a cause-and-effect relationship. And I’m sure, under scrutiny, we’d find that the clever manager isn’t as effective at hiring people as he or she thinks.

If I get on my scales each morning and they read 150 pounds (+/-), then the scales are said to be reliable. They provide consistent results. But if I go to my doctor, who has properly calibrated scales which tell me that I weigh 200 pounds, I’ve discovered that while my scales are reliable, they are not valid. I thought my scales were weighing me in pounds, but they’re not. Since I don’t know what unit of measure my scales are using (150 what?), they are pretty useless in helping me monitor and control my weight.

Interviews might also be reliable – we consistently hire people who have strong interviewing skills. But they can also lack validity – good interviewing skills may not be a valid predictor of success in the roles we’re hiring for.

Organizations that consistently make good hiring decisions try to increase the validity and reliability of the inputs in their decision making. Here’s what they do:
1. They ask well-designed, open-ended interview questions that offer a peak at how the prospect will behave when faced with challenges similar to what they’ll face in this job.
2. They utilize assessments that have been benchmarked to the job in advance, so they are not using intuition after-the-fact to interpret the assessment results.
3. They look at the candidate’s previous work history based on the skills that those jobs required, not on their impression of the organization that they worked for.

Good employees from Company X will likely make good employees for your company, even if you don’t respect Company X. Bad employees from the world’s most respected companies will likely be bad employees at your place, too.

Certain personality types tend to look up, down or to the side when they are thinking, rather than directly ahead. “Looking someone in the eye” may be a valid criteria when hiring an outside sales person or someone for a role that regularly interacts with the public. The behavioral profile for people who are successful in those roles tends to favor people who naturally behave that way, anyway. But is it a valid input for hiring a call center customer service rep, an accountant or a IT systems analyst? Doubtful.

So, don’t look for clever witticisms like, “did the candidate salt his lunch before tasting it?” to improve your good hire percentage. Build a system that gives you the best chance of hiring a winner based on reliable and valid inputs.

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These Kids Today….Managing Millennials https://alliancestaffingus.com/these-kids-today-managing-millennials/ Mon, 19 Jan 2015 19:47:41 +0000 http://18.221.253.116/blog/?p=1691 I was recently asked to lead a presentation on the topic of multiple generations in the workplace. I’ve heard several speakers present on this topic and the punchline is generally something like this: – kids today are selfish and lazy – baby boomers must adapt their behavior to accommodate them I have a slighly different […]

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I was recently asked to lead a presentation on the topic of multiple generations in the workplace. I’ve heard several speakers present on this topic and the punchline is generally something like this:
– kids today are selfish and lazy
– baby boomers must adapt their behavior to accommodate them

I have a slighly different take on the subject. Here are some thoughts:

1. Prevailing beliefs about the differences in the generations are mostly bunk.
No one would ever lead a seminar called, How to Get the Most out of Your ___ Workforce (insert Hispanic, African-American, Asian, Gay, Female or the subgroup of your choice). Most of us recognize that each of those groups is made up of individual human beings and that everyone in a given group doesn’t behave the same way nor is motivated by the same things. Yet, many consultants are perfectly happy lumping all millennials or Gen Xers into the same bucket, employing stereotypes based on age that are no more universally true than racial or gender stereotypes are. I’m convinced that they do this simply because stereotyping millennials plays well to audiences of full of boomers. We love to hear, these kids today….” (reinforcing to us that we were so much better…)

2. Kids today are as individually diverse as ever.
I teach at the university level. I have bright students who study hard and give the discretionary effort necessary to achieve academic excellence as well as students who do the minimum necessary to pass my course. I have extroverts and I have loners. I have mature 19 year-olds and I have immature 23 year-olds. My classmates in the 1980s were very much the same. As were my parents’ classmates in the 1950s and my grandparents’ in the 1930s.

3. The “Technology” thing is overblown.
Younger people in the 1920s embraced the automobile and the radio at a faster rate than their parents and grandparents, many of whom preferred to stick with the horse and carriage and were hesitant to bring electricity into their homes. I was the family “tech genius” in 1987 because I could program a VCR when my dad couldn’t seem to get the hang of it. 30 years from now articles will be written that the younger generation is better with emerging technology than the aging millennials who prefer to stick with what they know. Always has been true, always will be. That doesn’t mean there aren’t plenty of older workers who are early adopters and technologically adept. Assuming a 22 year-old candidate will be a whiz at technology is no different than assuming an Asian candidate will be better at math. It’s a stereotype.

4. Experiences differ but motivators don’t.
Yes, some millennials may have experienced a different type of parenting than many of us did. We love to talk about helicopter moms, bicycle helmets and how everyone gets a trophy. But when millennials join your organization, they are really looking for the same things that pervious generations were looking for. They want interesting, challenging work in an environment that is safe, positive and rewarding. The six primary categories of motivators that determine whether a job is “interesting” to an individual haven’t changed and these motivators can be measured in job candidates to ensure a good fit for your organization. Those motivators are:

  • Utilitarian – is this individual motivated by money?
  • Individualistic – is this individual motivated by the pursuit of power and influence?
  • Theoretical – is this individual motivated by a natural pursuit of knowledge?
  • Traditional – is this individual motivated by the desire to maintain unity, order and tradition?
  • Aesthetic – is this individual motivated by the pursuit of form, harmony and symmetry?
  • Social/Altruistic – is this individual motivated by an inherent love of people and helping others?

Rather than focus on what they need to do to attract and retain millennials based on age-based stereotypes, organizations should focus on simply building a great organizational culture. They should hire people whose motivators align with the position for which they are hiring them and the culture that they wish to reinforce. If an organization is built on trust, mutual respect, managerial credibility, opportunity and fairness, it will attract and retain great workers of all ages.

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The Evil Twin Syndrome https://alliancestaffingus.com/the-evil-twin-syndrome/ Fri, 12 Dec 2014 17:12:57 +0000 http://18.221.253.116/blog/?p=1635 It’s only been a week since your new hire started and you’re already wondering, Is that the same person I interviewed? I call this the Evil Twin Syndrome. You interviewed the good twin. The one with all the right answers to your interview questions. The one with the engaging smile and the firm handshake. But […]

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It’s only been a week since your new hire started and you’re already wondering, Is that the same person I interviewed?

I call this the Evil Twin Syndrome. You interviewed the good twin. The one with all the right answers to your interview questions. The one with the engaging smile and the firm handshake.

But who showed up for work on the first day? The evil twin. The one who is 20 minutes late. The one who has already asked off for next Friday. The one who doesn’t seem to have the skills the good twin claimed to have.

There are a couple of reasons why this happens:

1. Your interview process is designed to determine which candidate makes the best first impression and interviews the best, not which candidate will perform the job the best. The academic way to say it is the interview lacks validity. The practical way to say it is the way questions are asked and answered doesn’t accurately predict whether the candidate will actually do well in the role.

The solution to interviewing better is to ask better questions. Sounds pretty simple, but I’ve sat-in on many interviews with executives and I’m amazed at how poorly some of them prepare for and conduct interviews. Often they are looking at the resume for the first time as they walk into the conference room. One common mistake I see is providing the candidate the answer before they ask they question. Jane, I’m looking for someone who can do X, Y and Z. Can you do X, Y and Z? Jane responds, Absolutely! The next question is, Great, when can you start? The executive checks the box and moves to another priority. When Jane’s evil twin shows up for work, everyone is surprised when she is struggling with Y. After all, we asked her if she could do it and she said, Yes.

Really good interviewers ask probing, open-ended questions that don’t reveal what the interviewer is specifically looking for. Jane, tell me about a time you did X? What were the challenges you faced doing X? Which X-related projects are you most proud of and why? Have you ever been responsible for Y? Tell me about your experience with Y-related challenges?

For some roles, I recommend giving each interviewer a specific assignment and a list of questions. Interviewer number one might only be responsible for determining if Jane has the technical skills needed to perform the job. Interviewer number 2 might only be responsible for determining if Jane’s preferences regarding company culture, manager and peer relationships, and communication styles align with the realities of our organization. This is much more effective than having two or three interviewers in a row ask the same questions – Jane, why did you leave your last job?

In my experience, really good interviewers make good selection choices only about 50-60% of the time when they depend on their gut instinct alone. How can they improve on those statistics? That question is answered when we look at the 2nd reason we end up with the evil twin too often:

2. The interview is not supplemented with anything to highlight those potential discrepancies between what the candidate said in the interview and how they might actually behave.

A lot of managers skip the reference check because so many companies today are hesitant to give out any information beyond confirming the candidate actually worked there when they say they did. Even though some calls are non-informative, I still get some that are helpful. LinkedIn is an excellent resource for accessing people in the candidate’s network who might offer some insight into how a candidate might fit into your role.

But an even more important method is layering-on one or more pre-employment assessments. The right mix of assessments will show you how the candidate is likely to behave under pressure, what motivates a candidate to give discretionary effort, and what competencies they really bring to the team. To get the most out of an assessment, it should be benchmarked to the job in advance. Some managers use assessments, but review the results without a benchmark and having already decided they want to hire the candidate. They then rationalize-away any results that might suggest the candidate is not an ideal fit. This pattern leads some to lose confidence in assessments altogether. They used the assessment, but they still got the evil twin.

I haven’t made an important hire in the past 15 years without considering assessment results. And I can’t imagine making an important hiring decision without them! They have definitely improved my good hire percentage and cut down on the number of times I’ve experienced The Evil Twin Syndrome.

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Nobody Gets a 5 on My Reviews https://alliancestaffingus.com/nobody-gets-a-5-on-my-reviews/ Wed, 22 Oct 2014 20:33:24 +0000 http://18.221.253.116/blog/?p=1536 Ever have that boss who told you during your annual performance review, I don’t give 5s. Everyone has room for improvement? This is the workplace equivalent of the perfectionist parent: – Dad, I pitched a no-hitter!        But what about those two batters you walked? – Mom, I made dean’s list!     […]

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Ever have that boss who told you during your annual performance review, I don’t give 5s. Everyone has room for improvement?

This is the workplace equivalent of the perfectionist parent:

Dad, I pitched a no-hitter!
       But what about those two batters you walked?
Mom, I made dean’s list!
       But you made an A- in Chemistry.

This type of emotional manipulation rarely motivates. It typically just creates resentment. Kids who experience too much of this wind-up in therapy. Employees who have this boss become disengaged…or simply leave.

The flip side of the no-one-gets-a-5 boss is the everyone-gets-a-trophy boss. Everyone can expect a 5 unless they really screw up.

Under-praising excellence (yeah, but…) or over-praising mediocrity each leads to the same result – star performers becoming disengaged.  Telling a star performer that s/he earned the highest performance review rating possible because s/he achieved excellence is much more likely to lead to star performance again next year than telling a star they almost got a 5 this time, but if they work just a little harder, they might make it next year.

The best management approach is to define what excellence looks like and recognize and reward it when it happens. If a solid contributor is upset when they don’t get a 5, you must be able to explain what level 5 performance looks like. It must be achievable and they must understand where they are falling short.

And when a star is delivering star-level performance, give them a 5, (or whatever the top rating is in your organization), without hesitation! And thank them for the outstanding results.

I don’t remember a lot of my performance reviews, but I do remember the time that I received a meets expectations rating for profitability when my operation had tripled its budgeted profit goal. I asked my VP, what does it take to get an “exceeds expectationsin this company. He just chuckled. He didn’t want to be pinned down to any specific number, so he didn’t answer. And he didn’t change my rating. I guess he didn’t believe in giving 5s.

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Can I Fire Someone For a Facebook Post? https://alliancestaffingus.com/can-i-fire-someone-for-a-facebook-post/ Wed, 17 Sep 2014 19:32:06 +0000 http://18.221.253.116/blog/?p=1486 I have a Facebook contact who frequently bashes her employer on her posts. Does her employer have to take that or can they take employment action? Social media has been around long enough now that there is a decent amount of legal precedent. But as you might expect, the answer is, it depends. If the […]

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I have a Facebook contact who frequently bashes her employer on her posts. Does her employer have to take that or can they take employment action?

Social media has been around long enough now that there is a decent amount of legal precedent. But as you might expect, the answer is, it depends.

If the posts fall under the umbrella of protected concerted activity there is not much the employer can do from a disciplinary perspective (although there is plenty they can do to attempt to re-engage this employee – but that’s the subject of another blog post). Protected activity includes things like pleas to other employees to help her do something related to her grievances or comments about working conditions, wages, etc.

However, if the employee simply goes on a rant and says disparaging things about the company and her boss, threatens other employees, says things that aren’t true, or discloses confidential or proprietary company information, this may fall outside of the protected activity umbrella and may be actionable.

When I made my first effort at writing a social media policy, I found two distinct types of examples. The first were written by lawyers and risk managers who clearly didn’t understand social media. They were full ofthou shalt nots but were not particularly useful. Rulings by the National Labor Relations Board (NLRB) in 2011 and 2012 determined some of the provisions of these early social media policies to be illegal.

But the second group of examples I found were written by lawyers and marketers who do understand the power of social media to help a company, its brand and its culture. These policies encourage the positive use of social media but provide employees with some simple guidelines that will keep them out of trouble with the company.

Having a well-written social media policy can be a life-saver when faced with the inevitable situation when someone posts something that rubs the wrong way. Without one, management finds itself reacting to what they run across and potentially making a bad situation worse. And worst case, they run afoul of the NLRB.

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Misdiagnosing Organizational Aches and Pains https://alliancestaffingus.com/misdiagnosing-organizational-aches-and-pains/ Thu, 14 Aug 2014 17:44:17 +0000 http://18.221.253.116/blog/?p=1421 When our grandparents went to the doctor, they described their symptoms, the doctor conducted an exam, ran some tests, made a diagnosis and prescribed the recommended treatment. Today, patients come into the doctor’s office having already researched their symptoms on WebMD, diagnosed their condition, and researched the various drug alternatives. Before the doc even sits […]

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When our grandparents went to the doctor, they described their symptoms, the doctor conducted an exam, ran some tests, made a diagnosis and prescribed the recommended treatment.

Today, patients come into the doctor’s office having already researched their symptoms on WebMD, diagnosed their condition, and researched the various drug alternatives. Before the doc even sits down, they say, Doc, I have a case of Cooties and I need a prescription for Cootiebegone.

This is great when the diagnosis is correct. The patient is already well-educated on the conditon and their treatment alternatives and can carry on an educated conversation with their physician. But when the patient’s self-diagnosis is wrong, the doctor must both correct the diagnosis and educate the patient on their error.

I find that small and mid-sized business owners sometimes misdiagnose their organzations’ condition. They recognize the symptoms and they know where it hurts, but they often attribute the symptoms to the wrong organizational “disease.”

The most common misdiagnosis occurs when business owners tell me they have a recruiting problem. The pain or symptom they are experiencing is related to vacant positions that are costing them money or putting a strain on the rest of the team. The disease, according to the owner, is that they can’t find good people.

If they invite me to conduct an organizational assessment, I might find that a) they are growing rapidly and are having a hard time finding qualified people to fill newly created positions fast enough, or b) they have a handful of positions that are revolving doors.

If they are company a, then the owner may have properly diagnosed the problem as a recruiting problem. But most are company b, who don’t have a recruiting problem, they have a management problem. They’ve had and lost people who could have been good, but chose not to be. Unfortunately, company history usually records that every ex-employee was a bum from day one, so getting owners to admit they have a management problem is difficult.

Another example occurs when organizations think they need a new performance review form or platform. If the company has a low-trust culture, it doesn’t really matter whether they use a 4 or 5 point scale or whether the review is memorialized on-paper or on-line. They have diagnosed a performance management problem when they may have a organizational culture problem.

It is difficult to treat organizational “diseases” if they have been misdiagnosed. The first step toward the cure is taking an honest look at what is really happening.

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Half of an HR Department? https://alliancestaffingus.com/half-of-an-hr-department/ Wed, 16 Jul 2014 14:42:34 +0000 http://18.221.253.116/blog/?p=1368 I once called a prospect and asked for an appointment. He replied, “My CFO is a CPA, so we’re fine.” Another prospect responded, “we outsource our HR to our payroll company.” Both of those responses instantly told me that these mid-sized companies have half of an HR department, but don’t know it. The HR function to […]

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I once called a prospect and asked for an appointment. He replied, “My CFO is a CPA, so we’re fine.” Another prospect responded, “we outsource our HR to our payroll company.” Both of those responses instantly told me that these mid-sized companies have half of an HR department, but don’t know it.

The HR function to these business owners consists of risk management (compliance) activities and administrative (payroll and benefits) activities. And since that’s what HR is to them, they are confident they have HR covered. 

CPAs are generally good at risk management, so I’m confident that the first prospect’s CPA has made certain that the company is compliant with basic employment laws and regulations. Finance folks are also normally good at developing efficient administrative work flows, so I’m also sure that this company’s employees get paid accurately and on-time and their benefits are administered efficiently. In my experience, as companies grow from the bookkeeper stage to the controller stage to the CFO stage, they get better and better at this half of the HR pie – the “cost” side. 

I refer to the compliance/administrative side of HR as the “cost side” because there is no return-on-investment from compliance activities unless you make assumptions about the fines or lawsuits you “might” have experienced. Compliance is comparable to insurance – there are risks if you don’t have it, but no real benefit from having it until you need it. No one chooses to do business with a company because it has a great Employee Handbook!

Likewise, any ROI from process improvements comes from efficiency gains. Outsourcing portions of HR to payroll providers can be a legitimate way to generate some process improvement and compliance peace-of-mind. But administrative process improvements in support functions, like accounting or HR, don’t typically help a company win in its competitive space.

The real ROI from an HR department comes from strategic initiatives. Strategic HR includes:

– identifying who are the right people for the jobs in your organization.

– ensuring jobs are designed well. 

– measuring and improving employee engagement which impacts productivity and reduces unnecessary turnover.

– developing supervisors and managers before you need them.

– managing performance in a way that actually improves performance.

– getting people in the right roles.

– having an organizational structure that aligns with your strategic objectives.

– training and development programs that support stated strategic objectives.

CPAs, finance professionals and HR processes companies are generally not as prepared to influence organizations in these areas as an experienced HR professional is. The realities of growing a company require the addition of a capable finance leader earlier in the growth curve than a capable HR leader. However, the earlier a company commits to having a “whole” HR department, the healthier its culture will be. 

One effective strategy that many small and mid-sized companies are utilizing that is both scalable and keeps costs variable is outsourcing HR leadership. In some cases they are outsourcing processes, such as payroll, to one company and strategic HR leadership to another. This model has a lot of potential to make the right expertise available to small but growing organizations in the proper dosage.

 

 

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Three Mistakes to Avoid When Firing https://alliancestaffingus.com/three-mistakes-to-avoid-when-firing/ Thu, 19 Jun 2014 17:31:28 +0000 http://18.221.253.116/blog/?p=1318 In my work with small and mid-sized companies, I see three common mistakes related to terminating poor performers. The first, and most common, is waiting too long. Most small business owners and managers are basically nice people. They sometimes tolerate poor performance much longer than they should, hoping the employee will turn things around on their […]

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In my work with small and mid-sized companies, I see three common mistakes related to terminating poor performers.
The first, and most common, is waiting too long. Most small business owners and managers are basically nice people. They sometimes tolerate poor performance much longer than they should, hoping the employee will turn things around on their own. I know one CEO who is so conflict avoidant that when he’s finally had enough, he asks his HR person to handle the terminations of his direct reports while he’s out of town. Typically, when this type owner or manager finally decides to terminate, the rest of the team asks, “what took you so long?”
The second mistake is not waiting long enough. I remember complaining to a manager at a restaurant once about a service issue. He went to check on it, came back to the table and told us our server had been fired and introduced us to another server who would be taking care of us for the rest of our dinner.  I remember thinking, “I hope that server has made a lot of other mistakes, because the mistake he made with us was something that could easily have been handled through coaching or training and was certainly not termination-worthy.”
In my experience, there are many more “nice people” than “hot heads” in the world. “Hot heads” do exist, however. These owners and managers use termination as punishment for mistakes and as a way to signal to the rest of team team, his or her peers and sometimes customers, that errors will not be tolerated.  No doubt the restaurant manager thought he was impressing me with his quick action. Unfortunately the “hot-head” often fires people who could have been rehabilitated with good management practices. These managers wrongly assume that the cost to replace an employee is lower than the cost to rehab one, even in low-skill, high-turnover industries. And they overestimate the emotional capital they gain (or think they gain) from the rest of the team, peers and clients for the termination. Often, after this type of owner or manager acts, the rest of the team asks, “what was he/she thinking?”
The third mistake is not having sufficient documentation. This puts the employer at risk for charges of discrimination or retaliation as well as higher unemployment insurance premiums. Remember, employers are basically guilty until proven innocent when facing the ESC, EEOC or any division of the Dept of Labor. And the only way to prove your innocence is with solid documentation.
The best way to avoid all three of these mistakes is through early intervention when poor performance is noted. Make a legitimate effort at rehabilitating a poor performer, but document each step so that you can demonstrate that you were fair and consistent in your treatment of that individual.
When you decide that the performance is not going to improve satisfactorily, fire quickly!

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