Today many
organizations operate in a global environment and must be world class to
survive. Even if your organization doesn't operate in a global environment it
should have a goal of being world class for the benefit of its stakeholders.
The topics to be discussed for developing a world class organization include:
•
Recruiting to build strengths
•
Achieving low staff turnover
•
Developing your successor
•
Matching people to jobs
•
Managing the manager’s time and helping the workers
manage their time
The first
three topics are included in this lecture and the third and fourth topics are
covered in Lectures 18 -20.
Recruiting to build
strengths and Achieving Low Staff Turnover
Your recruiting objectives
should be:
•
To “raise the batting average” of the organization
•
To achieve low staff turnover
Your
organization deserves a “raise the batting average” objective. (Here the term
“batting average” refers to the average capability of the organization so that
to raise the batting average means hiring someone with skills and/or experience
that exceed the average of the organization.) It leads to a more successful
organization and thereby supports all stakeholders. People like working with
highly capable people so such people are generally welcomed into the
organization, which helps satisfy the new worker’s need for belonginess. People
are inspired and often mentored by highly capable people so that highly capable
people help lift performance beyond just their own contribution. If everyone is
treated fairly and there is a sound career development process there should be
few ego problems or career concerns over bringing in people that raise the
batting average.
I believe
building a world class organization by recruiting exceptional people that
strengthen the organization is a superior approach to Jack Welch’s approach of
firing those whose performance lowers the batting average of the organization.
(Jack Welch, the former CEO of General Electric required his senior managers to
get rid of the bottom 10% of their subordinate managers each year.)This is
because Welch’s approach promotes competition to survive, which inhibits
teamwork and diverts worker’s attention from their job to their survival. This
results in a fear environment, which appears to have high performance, but
actually has lower performance than the organization is capable of if fear is
removed and replaced with an environment of cooperation and commitment.
Let’s now
look at why achieving low turnover is important. Let’s take a very conservative
example of an organization where the average wage is $25 per hour. The
recruiting and orientation training costs for a knowledge worker is typically
about equal to one year’s salary. Figure 6 shows the costs for typical turnover
rates as a function of the organization size assuming the cost of replacing a
worker is equal to one year’s salary.
Figure 6 Annual turnover cost
for organizations with turnover rates of 2, 4, or 6%.
The difference between a
turnover rate of 2% and 4% for an organization of 100 people is $90,000 per
year. That difference is equal to spending $900 per person on training or new
software each year. This example is conservative because it ignores the hidden
costs related to disruption of work, the diversion of manager’s attention from
other critical activities and the diversion of workers attention associated
with people leaving and new people being assimilated.
An effective leader has a goal
of maintaining turnover close to the limit imposed by retirement, promotions
out of the organization and the occasional need to replace a bad worker. This
limit is usually between 1 and 2 % and it can be achieved if the managers are
truly effective as defined in this course. Turnover rate is also dependent on
effective recruiting. A low rate cannot be achieved if an organization is
growing and the recruiting process doesn’t add workers that match needs and
stay with the organization for the long term 80% of the time or more.
The recruiting process is
dependent upon the style of the manager and the culture of the enterprise so I
cannot claim to describe the only correct way to recruit. I can however
describe a recruiting process that has proven to work and to support low
turnover in organizations I have managed.
Example of Effective Recruiting Process
– Discuss
open positions thoroughly with human resources so that they can determine if
normal job applicants are likely to fill needs, or if new ads are needed, or if
help from professional staffing organizations (headhunters) is required
– Manager
must prescreen resumes provided by human resources to identify high potential
candidates
– Manager
or designee should prescreen high potential candidates via phone calls before
they are brought in for an interview
–
Does candidate understand job opening and local area?
–
Does the manager receive positive “vibes” from the
conversation?
–
Will candidate likely accept if ultimately given offer?
(e.g Can the candidate relocate if necessary or does a divorce decree prevent
relocation?)
– After
human resources meets the candidate begin the in-house interview with a group
interview to cover common questions- this should take 45 - 60 min and involve
all workers and managers scheduled to interview the candidate.
–
Responsible manager defines the open job for the
candidate and the group so that everyone understands what is expected of the
candidate
–
Candidate answers general questions about education,
experience, etc. so that these questions are ask and answered only once and
everyone hears the same answers
– Individual
meetings with at least four managers and likely coworkers
–
Typically 45 - 60 minutes each
– Lunch
offsite with two or three senior people
–
This is critical as it often leads the candidate to
reveal information that would never be provided in formal interviews
– Hold
a group discussion at end of day with all the interviewers to discuss what each
has learned in the private interview and make an offer/no offer decision
–
Reach consensus or don’t hire
–
The senior manager must be responsible for preventing
the group from only hiring clones of themselves. Diversity of many types is
necessary and the group will accept diversity if it is discussed and a
consensus is reached
– Human
resources verifies resume (e.g. Claimed education and former employers) and
references, works with the manager to determine an appropriate salary and makes
formal job offer or informs candidate of rejection
My experience
indicates that the group meetings at the beginning and after the interview and
the offsite lunch are critical for the reasons explained in the description
above. It is also essential that the interviewers not be working in a fear
environment. Otherwise they may provide the feedback they think the manager
wants rather than being objective and speaking up when they disagree with the
manager or each other.
The need for diversity needs further
explanation. Here diversity means diversity in thinking and working style as
well as diversity of race, gender and national origin. In general,
organizations of people that have similar cultural behavior work smoothly but
if there is no one to offer different views then the organization tends to be
restricted in thinking. Such an organization of cultural clones isn’t as
effective as an organization having a few members that provide alternative views
that are outside the bounds of the homogeneous culture. Hiring people whose
thinking and working style deviate from that of the rest of the organization is
always a risk. The wrong person can create dissention and some people just
won’t be happy being in a culture different from their own. The objective is to
find a few people that are able to work well with the group and yet offer views
divergent from the group’s usual thinking.
A key element in recruiting the very best people
over the long term is to develop a network of people that are always on the
lookout for exceptionally capable young people. The network typically includes
people in the organization with a wide circle of friends and associates in
other organizations, consultants (particularly university professors),
customers, suppliers and others that have the opportunity to interact with
young people having the skills needed by your organization. Developing and
tending such a network takes time but the payoff is finding the exceptional
young people that can lift your organization’s performance to world class
levels almost by themselves. Once you have attracted a few exceptional people
and provided them a positive environment for their work they attract other
exceptional people.
You must be well on your way to developing a
highly effective organization in order for people in your skills identification
network to feel comfortable in recommending exceptional people to you and for
you to be able to recruit such people. If your organization doesn’t have a good
reputation then it is difficult to recruit top talent until you have fixed many
of the organization’s problems. You can still attract top people by being
honest with them, convincing them you have a plan to fix the problems and
giving them an incentive to be part of your plan. Don’t settle for less skilled
people because your organization has problems; work harder to attract top
people that become part of the solution.
Developing
your successor
Demonstrating effective leadership of a
successful organization is one ingredient in preparing yourself for promotion
to more responsible positions. Another is having an obvious successor so that
your current organization can continue to be successful if you move on. An
effective leader is proactive and prepares a successor so that it is apparent
to others that the candidate is ready. A way to accomplish this is to give the
candidate leadership tasks once you are convinced they are ready and can
succeed in leadership tasks.
You can develop a successor via recruiting,
mentoring or the natural maturation of one of your subordinates. The path isn’t
important unless the culture of your enterprise favors one path over another,
e.g. some cultures prefer to promote only from within. If your enterprises has
such a culture and you recruit your successor you must be prepared to mentor
this person for the time it takes for the new person to be considered eligible
for promotion.
The most important advice I can give from my
experience is to make sure the person you pick is as capable of managing your
organization as you, or preferably more capable than you. Giving your candidate
leadership tasks enable you and others to evaluate the candidate’s capabilities
and readiness for promotion. If the candidate fails to meet your expectations
in two or more such assignments then review both the assignments and your
assessment of the candidate’s capabilities. If the assignments were reasonable
and if you decide the candidate was as well prepared as he or she is likely to
be then you must pick a new candidate and prepare them. Do not compromise in
hopes that the candidate will grow into the job after promotion. Whereas that
might happen you shouldn’t count on it. Remember that the failure was failure
of your judgment so do not punish the candidate.
Exercise
1. Without
looking forward, write a list of what is necessary for achieving a low turnover
rate besides an effective recruiting process.
2. Develop
a mathematical model to define the time required to recruit a new employee in
your group. Your model should include time for deciding a new employee is
needed, preparing, submitting and defending a requisition to hire, discussions
with the Human Resources people before they begin collecting resumes, screening
resumes, phone interviews, on site interviews, post offer discussion with the
candidate and orienting the new hire once on board. Assume percentages for
resume screening, other screening steps and offer acceptance rates appropriate
with your experience.
3. Assume
an organization of 100 people and a growth rate of 15%. Run your model to
determine how much time is required of top managers to grow their organizations
by 15% per year.
4. Review
your staff for candidates to succeed you. If one, or hopefully more than one,
is available then begin to develop a mentoring plan to prepare the candidate(s)
for your job. If none are available then look for the opportunity to recruit a
candidate.
Discussion of Exercises
If your experience with the
time it takes to be effective at the various steps in recruiting is similar to
mine you will have learned from exercises 2 and 3 that growing an organization
effectively takes a surprising amount of time. Inexperienced mangers often fail
to allocate enough time for recruiting and end up chronically understaffed for
much longer than necessary. In addition such failure can lead to an
organization not achieving the growth it could because there simply isn’t
enough staff to execute the work. If you have subordinate managers you must
make sure they are spending the time necessary for effective recruiting if your
organization is growing. Most mangers don’t like recruiting as well as their
other work and their other work always seems more time critical so they tend to
put off recruiting.
Your model also likely predicts
that there is a limit to the growth rate that can be accomplished and still
have time to execute other required work. Watch what happens when a new hot
shot CEO announces that his or her enterprise is going to double in three to
five years. Often such a strategy causes the enterprise to implode. There
simply isn’t enough time for the employees to win new business, execute the
high quality work that enables growth and develop the staff fast enough to
handle work well. (Exceptions occur in business areas that are very new and
therefore can tolerate growth problems better than a highly competitive
established business.)
Your answer to exercise 1
should have included such statements as:
Satisfy Maslow needs
Fair salaries, Security,
Fair treatment, Help belong to team
Opportunity for self-esteem
and self-actualization
Career development that is
constructive and meaningful
Managers that “removes
rocks from path” so workers can do their jobs (“Rocks” include poor processes, defective
equipment and oppressive policies and procedures)
Low Fear environment
Effective Time management; e.g. no long, non-productive
meetings
If so, you successfully
understand this part of the training.
If you find that the pace of blog posts
isn’t compatible with the pace you would
like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective
Leadership” at:
or hard copy or for nook at:
or hard copy or E-book at:
