People join an organization and they leave a boss.
Work matters. HRM would be easy, if it weren’t for the people.
Human Resource Management (HRM) refers to the functions in an organization that designs the jobs, recruits, hires, creates and administers the rules of employee conduct and the relationship between employer and employee, and manages termination through firing, severance, or retirement. HRM has become very sophisticated in the last several decades as a greater appreciation of the strategic importance of leveraging an organization’s talent pools has developed.
“Work keeps at bay three great evils: boredom, vice, and need.”
― Voltaire, Candide
What amount of tasks and responsibilities constitute a full time position? Like Goldilocks, the scope and requirements of a job need to be not too much and not too little work. In designing jobs and the requirements of a position, the challenge is to hit the sweet spot between full engagement and overload.
Designing jobs starts with an analysis of workflow and how products and services get made and are delivered, and the nature of the support services that are required. The tasks associated with a particular position are then delineated and a job description is developed. Skill sets are identified to fulfill the tasks and this information is then used to seek out qualified candidates and then to assess their performance once hired.
“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.”
Steve Jobs, Think Different (1997)
These were the kinds of people Steve Jobs was looking to hire; renegade talent that could think and act creatively and move things forward rapidly. He wasn’t afraid to hire smart people; smarter than him. Their challenging, probing questions, aptitude and attitude didn’t intimidate him. He knew that hiring mediocre talent would lead to a downward spiral.
When a company is small, it’s determined to hire only A players. But as the company grows, fear and politics set in. Some leaders fear that a new employee will be better at something than they are. They may even show them up or take their job. This fear leads to what Guy Kawasaki (who worked for Apple) refers to as the ‘Bozo Explosion’. The moment you hire a B player is the moment the ‘Bozo Explosion’ starts; the B player hires a C player, the C player hires D players, until one day you wake…and you are surrounded by bozos.
Hire the best. If possible, hire people who are better than you.
The human resources field is being dramatically reshaped as a consequence of the digital economy. The rise of LinkedIn as a nexus point for job seekers, recruiters, and employers, is an indication and consequence of this transformation.
The social networking site has transformed how employers and prospective employees engage with one another, becoming an indispensable tool for employers seeking the right person to fill a specific position. Employers use the site both to connect with active job seekers and also to identify desirable candidates to contact, court and hire.
LinkedIn is a great social media tool for business and professional networking. It is also the premier human resources forum for getting exposure to recruiters and employers and upping your chance of landing your dream job.
LinkedIn was launched in late 2002 and has grown to more than 433 million members in more than 200 countries. Professionals are signing up to join LinkedIn at a rate of more than two new members per second. It is your one-stop shop for career networking.
If you are in the job market, get on LinkedIn and polish up your profile ASAP.
The first tip of good management is: hire well. That is easy to say and really challenging in practice. Besides attempting to assess technical skills and work ethic you are trying to gain psychological and emotional insights of potential employees in order to asses if they will be a good fit and provide synergies to the organization.
Hiring a great HR director is one of the most important hires you can make. This isn’t the dusty back office job to which it was once relegated. People will make or break your enterprise and the person who interfaces with them is in a critical position.
A new hire is a big commitment. It is the beginning of a deeply complex and engaging relationship like marriage. As in dating, people tend to present a virtuous façade at first that may hide other, less attractive, personality traits.
There is an entire body of new work on how to develop a better initial assessment that might allow you to predict with greater certainty, which will be a good, great, or disastrous fit for a particular job. Also, just as in dating, mating and marriage, it is often easy to get into a relationship and very difficult to extricate oneself. In other words, front end assessment work in the hiring process to screen and select appropriate candidates is crucial.
Screening and understanding the psychological makeup of a potential employee before hiring is cannot be overstated. You want to know if this potential hire will flourish in your organization and help energize others, if they will be a toxic element that poisons and erodes the esprit de corps, or an unremarkable seat warmer somewhere in between. You are looking to identify a person that is a team player with talent, expertise, and experience to perform the tasks at hand. You also need to assess if they have the flexibility and capacity to learn and contribute as the environment evolves.
Hiring an employee is one of the most critical decisions you can make as a manager or entrepreneur. When interviewing, people are on their best behavior and often throw everything they know at you. Some are very smooth interviewees but may turn out to be all talk and poison to your business. The basic premise of the book The No Asshole Rule (love the title) is that even if someone has stellar talent, if they are an asshole: DO NOT HIRE THEM. A catty personality that develops cliques and participates in palace intrigues is toxic to an organization and its ability to function. They must not be allowed to enter.
I have personally been fooled many times both ways when hiring and assessing people’s potential. I have thought someone would fit in and be able to contribute quickly and substantially only to find myself shocked by their lack of performance and ability to disrupt and anger others. But I have also been more than pleasantly surprised by “bland” people who seemed earnest and capable, but grew quickly into stellar performers and inspired others to reach higher.
There have been a lot of recent developments in designing objective criteria for making hiring decisions. Testing and analysis has evolved to help guide the hiring process along quantitative, systematic and predictable criteria. This is especially important in fast growing companies that need to scale up quickly in order to remain competitive.
The author William Poundstone has chronicled the testing and hiring selection process at Microsoft in his book How Would You Move Mount Fuji and at Google in Are You Smart Enough to Work at Google? These two books detail interviewing tactics used by these companies in their attempt to separate the good prospects from the stellar.
Obviously, better screening processes and tools can help make better hiring decisions, but in most cases it still comes down to trusting your gut and to engaging your bullshit detector. And equally, if not more important, ask yourself whether you resonate on a personal level with the candidate.
When a company is growing rapidly hiring decisions are most critical. A formal system and process is necessary to acquire top talent quickly and ensure a good fit with the organizations culture and objectives. There is an adage: A people hire A people and B people hire Cs. Inferior hires can quickly devolve into a dysfunctional mess that cannot quickly be remedied.
Do not be timid. Hire people smarter than you and don’t be afraid. Steve Jobs considered hiring superior talent to be strategically critical. He said that top talent isn’t 10% better than the others; they are 10 times better. These are the people you want. You want super smart creative talent that can make an impact on your company’s destiny.
Here is what the legendary advertising executive David Ogilvy had to say on hiring:
“The challenge is to recruit people who are able to do the difficult work our clients require from us.
· Make a conscious effort to avoid recruiting dull, pedestrian hacks.
· Create an atmosphere of ferment, innovation, and freedom. This will attract brilliant recruits.
· If you ever find a man who is better than you are — hire him. If necessary, pay him more than you pay yourself. “
When hiring look for people who are genuinely humble. Brilliance and intelligence can breed hubris and cloud one’s ability to perceive and adjust for shortcomings and faults.
Aside from the brilliant hires you will also need dedicated stable workers; “Steady Eddies” that are superbly capable and can add incremental improvements and efficiencies. These people keep the trains running on time.
This dynamic between top talent and companies goes both ways. Top talent can work at any number of companies and add huge strategic value to the operation. Companies must create a work environment that attracts and intrigues talent. And recruitment is only part of the equation; retention is also a major concern.
Google encourages employees to spend 20% of their time, one day a week, working on personal projects. It is creative programs like this that attract and retain talent.
Employer and Employee Relationship
Once a new employee is hired the onboarding process begins. Onboarding is also known as organizational socialization. It refers to the process through which new employees acquire the necessary knowledge, skills, and behaviors to become effective members of the organization.
Performance management is the systematic process by which an organization involves its employees and managers in improving organizational effectiveness in the accomplishment of its mission and goals.
A performance review is a method by which the job performance of an employee is documented and evaluated. Performance review is a part of career development and consists of regular reviews of employee performance within organizations.
The Employee Handbook details the rules and relationship between employer and employee. This text should be reviewed in detail during orientation and an Acknowledgement should be signed by the employee and kept in their file. Training and Development
Human resource management regards training and development as a function concerned with organizational activity aimed at bettering the job performance of individuals and groups in organizational settings.
Training and Development
Training and developing employees is one of the most powerful strategic missions a company has. Developing employee’s skills also helps with retention. It is much more cost effective to keep good employees and develop them than it is to search, hire, and train new personnel. Many companies that used to outsource training are now developing in-house training and education programs that are more accurately tailored to their particular business.
Executive education has been viewed as a cherished perk to provide to up and coming talent. But many companies have recently realized that sending a star executive off to an executive MBA program is a double-edged sword. The newly trained executive became more attractive to other companies and would jump ship for other opportunities. To avoid this kind of attrition companies are developing germane in-house programs even at the upper echelon.
There is nothing more satisfying than helping develop the latent and innate talents and skills of employees. You can actually watch someone blossom and gain confidence as they successfully operate at higher levels. This is one of the greatest satisfactions of running a business and being a manager.
There are several ways that the employer/employee relationship ends:
· The employee chooses to leave for a better job, or quits because the job sucks. There is a saying: people join organizations but the quit bosses.
· They are fired
· There is a downsizing initiative and employees are offered a severance package to leave
· A long time employee retires
Hiring is so very important because once someone has joined your company, it is very difficult to get rid of them. An employee insinuates themselves into all kinds of aspects of the business and it is very disruptive to rip out those roots and replace them. But get rid of sad sacks who spread doom and gloom and who incurably spoil office politics. Do not tolerate phonies, zeros, bozos, or bastards.
There are rules and regulations protecting employees and they are important to ensure against abuses from bad management. But these protections can also become hurdles to making quick decisions about pulling the plug. Cynical or angry bad actors can use these protections as weapons to harm your enterprise if you are not careful.
It is incumbent on you to prevent these situations. But if you find yourself in such a situation fire them, do not to let them fester. Know the rules and regulations and focus your resources on hiring well and developing those new hires to be great individual and group contributors.
Automated Business Models
On the other hand, there are good arguments for reducing employees. Employees are the biggest cost line in a business and they can be a headache to manage. Aside from having to pay them, you have to manage their disputes and work around their needs for time off and being sick. A way around some of these issues is to implement a business model using web-based automation systems. There are web tools available to automate marketing, sales and payment processing. You can also outsource procurement and order fulfillment and delivery. In fact, if your product is a digital download, you can automate the entire business. This can remove a lot of potential headaches with employees and free up your time in addition. It also means great operating leverage. Without the expenses of employees, lots more money falls to the bottom line as profit.
Tim Ferriss has written a compelling book on the subject of getting yourself out of the loop of less constructive work by automating your business model and creating cash streams that require minimum amounts of your attention. The book is called The 4-Hour Work-week and I highly recommend it. It provides practical steps to incorporating his revolutionary ideas. These are great ideas to entertain and implement in any business in order to leverage your effectiveness and free up time to focus on other important activities.
Another great book that details these kinds of business models is Bold by Peter Diamandis and Steven Kotler. The authors discuss how to employ new methodologies of using web based assets like Amazon’s site, Mechanical Turk, and Freelancer.com to hire talent for specific tasks. On Freelancer you can hire engineers, marketers, computer coders and others to develop products and provide services that used to be only available by hiring employees and making long-term commitments. Integrating these online tools is a new way of thinking about and acquiring technical and operational assets to fulfill your business goals.
The Gig Economy
The Gig Economy is the term for workers who construct a career out of working for multiple employers as contractors and also have side hustles that may be business that evolved out of hobbies or other interests.
There is an explosion of new services using web and mobile platforms to match workers with jobs on a contract basis. One high profile model is Uber which matches people with cars with people needing rides, creating a flexible and efficient on-demand taxi service. Another example is AirBnB which matches bedrooms and homes with people who need a place to stay. These services compete with taxis and hotels and they rely on the powerful network effects of the Web and ubiquitous smartphones. Similarly, there are services connecting people with freelancers to solve their problems; companies like: Freelancer.com and Upwork. These new ways of delivering labor and services are challenging our basic assumptions of capitalism and the nature of the firm and the structure of careers.
Using these services and contracting for work with expertise all over the world has become feasible with real time internet communication systems like Skype and Facetime along with email. Soon real time translation services will make these systems even more useful as we will be able to communicate in multiple languages instantly.
This model has been useful for professionals such as lawyers, doctors, and consulting services. Another idea is using prizes as incentive for creative ideas such as R&D solutions, design concepts such as logos, or the creation of videos. These are ways to match specialization with need and tap underused capacity.
On-demand business models have an attractive set of capabilities and advantages such as reduced need for offices and full-time permanent employees. This can be an asset for people selling their services, as well as for the virtual organizations using them. Computers are used to package a set of particular needs into another groups set of tasks. This is a way to access spare time and spare cognitive capacity, and compensate people for it across the globe. Amazon’s Mechanical Turk is a great example for this operating model. It allows customers to post any “human intelligence task” on line and it allows workers to choose what to do according to the task and price.
In Economic terms, this is part of a revolution that is unleashing latent pools of resources. Ebay has monetized the latent value of our clothes closet, garage and basement; Uber and AirBnB have monetized the under-utilized value residing in out cars and homes; and these talent pool websites are allowing people with skills to moonlight or create careers and access demand for their services around the world. These tools are creating a new generation of supply and demand based markets.
Become familiar with these services and what they offer. You may use them to build your business in a flexible and scalable manner, or you may offer your services through them to others. This is all part of a trend toward self-reliance. The role of the firm in our lives, to order our careers and provide stability, continues to be reduced. Our relationship to parental-type companies is being irrevocably modified.
Race Against the Machines
There are other profound ways in which business and work are becoming automated. Soon they will have to change the name of the department from HR to HRR: Human and Robot Resources.
The rise of Robotics and Artificial Intelligence and other cyborg related workers is changing the fundamental structure of Management, Labor and business. We are moving into a future where many businesses can scale rapidly with non-tangible products and services can be infinitely replicated. Computer programs and algorithms can also perform the interface with customers more efficiently. This trend has profound implications for how we think about work and the nature of value and productivity.
How we relate to automation not only has implications for how we think about business models and operating leverage, but also about how we perceive ourselves and our careers developing over the course of a lifetime. These developments have profound implications for our sense of self worth and how we impute meaning to our lives.
Blue collar jobs in manufacturing have been impacted over the recent decades as robotic systems have replaced workers on factory floors and assembly lines. Repetitive tasks represent relatively straightforward processes and lend themselves to automation. Now entire factories are operated by a handful of workers monitoring computer screens. As the leadership guru Warren Bennis predicted: “The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.”
The replacement of manual labor by dexterous programmable machines was the first wave of worker displacement. Worker Displacement 2.0 is now underway as Artificial Intelligence is becoming more widely implemented in practical systems. The virtual personal assistant Siri is a good example of a system that interacts via voice and incorporates language recognition and response. Siri performs tasks by searching and retrieving information and employs a voice activated user interface.
White collar jobs are now being replaced in fields previously thought impervious to the encroachment of automation. Accountants, lawyers, and other professional fields; science and engineering jobs; courts and call centers are all affected. What we choose to train for and how we position ourselves and think of our strengths and skill sets will be tested as we are confronted with continually encroaching prescience of automation and computing power.
It will be our task to recognize, predict, and adapt to this inevitable change. We are going to be tasked with forging productive alliances with new itools and leverage a newly focused understanding of our strengths in fruitful ways. Put differently, our relationship to robots and artificial intelligence, and robots equipped with artificial intelligence will increasingly determine how happy, content, and satisfied we are in the future.
This Brave New World offers opportunities to delegate mundane repetitive tasks and even rule based thinking tasks to machines. Innovative and complementary pairing of machines and humans in hybrid models allows businesses to approach tasks in novel and productive ways. We already recognize that tasks that are difficult for us humans are often easy for machines, and conversely, tasks that are easy for us are often complicated to implement in software and mechanical systems. But I regard this situation as an opportunity to unleash creative and energies.