Mistake #10: Ignoring the impact of your performance management systems on your employees’ engagement and productivity

Ensuring good performance management is like a maestro conducting a symphony.  In order to make everything sound harmonious and beautiful, you must manage all of the individual parts. But each part will need something different from you in order to achieve the right sound. And taken as a whole, everything must work together in order to sound beautiful. 

So it is with performance management. It is important to have the right systems in place but the devil is in the individual implementation. Each employee will need something different from you and you must structure your systems so that each employee is incented and encouraged to work as part of a team to achieve greatness together. Sounds easy, right? 

Well, if it were easy then every company would be wildly successful and, we know that’s not true. But wildly successful companies have indeed cracked the code on how to best manage their employees’ performance, with an eye towards both the short term and the long term. Continue reading

Mistake #9: Engaging in infrequent or cursory workforce planning

Once you’ve hired the right folks into the right culture that sufficiently engages and excites them, you’ve done good work and your company stands to reap the benefits that come from an engaged group of potential star performers. But part of ensuring that each of your employees can become stars (or at least live up to their full potential) requires that you provide these employees with the tools, training, and support needed to do their current jobs and to prepare them for future jobs, as well. This is a crucial part of fulfilling the implicit and explicit promises made to employees when you hire them into your company:  the chance to grow, be challenged, and develop new skills.

There are many ways to do this and even more ways not to do this. Simply hiring people without the necessary support mechanisms or growth opportunities will cost you both in short-term productivity and long-term retention. Additionally, hiring with only an eye for skill sets you need today without thoughtful consideration for the future will equally cost you in having to manage through later terminations or reductions in force.

The key, as in any HR program or process, is to look at the issue holistically and in the context of your business needs and strategies. What skills do you need now? What skills will you need a year from now? Three years from now? Answering these questions and preparing to meet the challenges they pose is the essence of good workforce planning. 

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Mistake #8: Attempting to create employee engagement based solely on money

I once worked at small start-up company during the dot-com heyday whose basic implicit recruiting pitch was, “Join us! You’ll make a lot of money when we go public!” And join employees did, and make a lot of money they did, as well. That is, until the stock dropped and all the money they made went away and the employees soon followed suit.

The CEO began complaining to his executive team about the lack of cars in the parking lot before 9:00 a.m. or after 5:00 p.m. He also felt the low energy in the office and the lack of excitement within the company. He was concerned that people had become disengaged from the company and no longer cared about the product. 

He was, of course, absolutely right. Employees weren’t engaged and they did no longer care. The job had become just that: a job. No more, no less. Very few people were putting in the discretionary effort that is so prized by companies and which can truly make or break an organization. 

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Mistake #7: Failing to understand the importance of employee engagement

Once an employee has agreed to join a company, they will have expectations about what it’s like to work in that company. These expectations will be based on your external brand promise, as well as the implicit and explicit promises made to the employee during their interview process.

You must work hard to meet those expectations in order to retain that employee. According to TalentKeepers, Inc, “59% of all attrition is occurring in the first year of employment and begins declining only after the 1-2 year period.” That is not an HR issue.  This is a serious business issue. And a costly one, at that.

There has been a lot of discussion in recent years about “employee engagement”. In 2006, The Conference Board published “Employee Engagement, A Review of Current Research and Its Implications”. In that publication, they defined employee engagement as “a heightened emotional connection that an employee feels for his or her organization, that influences him or her to exert greater discretionary effort to his or her work”.

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Mistake #6 (Part 2): Not creating the right culture to support the business

In my last blog post, I spoke about the importance of a CEO paying attention to culture creation and the role that the HR Leader plays in helping this to happen. All of these actions I described previously, however, can only validly take place in an environment where the culture has actually been discussed and agreed upon.

There is a lot of power in simply having the conversation to discuss culture. The conversation alone demonstrates its importance and sends the signal to the company that this is a matter that you take seriously. Employees will also be more likely to adhere to the standards of conduct and behavior that the culture requires of them. Not having the conversation and simply letting the culture develop haphazardly sends the opposite signal.

There is no one right culture for every company.  When thinking about what culture is appropriate for your company, there are many factors to consider.  These factors include such things as industry, product cycle, expected growth, and geographic location, to name just a few.

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Mistake #6 (Part 1): Thinking a good culture is something that just “happens”

The hiring of an employee is a huge investment for a company. And an obligation. Some CEOs think that by providing someone with a paycheck, they have dispensed their obligation. This couldn’t be further from the truth. In fact, a paycheck is just the jumping off point if you truly want to create a successful company.

An organization spends a lot of money to hire superstar employees and it should make the most of it. A CEO’s goal should be to motivate and excite employees about both their role and the company at large. She needs to truly engage them in a meaningful way such that the company is  making the most of their skills, talents, and abilities. And an organization needs to lock their employees into the company so that the investment in them pays off.

To do this, you need the right company culture. You can hire all the superstars that you want but if you put them in the wrong environment, they’ll quickly become liabilities. Successful HCM means not only getting the right talent with the right skills but it also means getting it in the right place at the right time. By “right place”, I mean both the right culture and environment, as well as the right organizational design.

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Mistake #5: Delegating all oversight of the recruiting process to your Recruiting Leader

The leader of your staffing organization bears a large responsibility for the success of your company. He is the one who must not only create the overarching recruiting strategy but must also oversee the tactical implementation of all of the processes that ultimately make up a satisfying hiring experience. In the absence of doing these things well, an organization will fail to hire the people it wants and those that do join may do so with some hesitancy. This is not exactly starting things off on the right foot.

Accordingly, the CEO needs to be aware of her company’s recruiting process and must emphasize to her team the importance that she puts on flawless execution of this process. This includes prioritizing interviews on her schedule, showing up on time to the interviews, and being prepared in advance for each candidate.

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Mistake #4: Using contract recruiters to hire your employees.

As noted earlier, the most succinct definition of human capital management (HCM) is how an organization gets the right people, with the right skills, in the right place, at the right time. This is trickier than it sounds, however. It requires an understanding of all of the factors at play that can impact this including, among others, the economy, the business cycle, the competitive landscape, and a company’s processes, procedures, and strategies. These things affect both the company as a whole, as well as an individual employee and their “lifecycle” within a company. By “lifecycle”, I mean the end-to-end process by which an employee joins a company, grows within that company, and then exits the company.

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Mistake #3: Having a robust Corporate HR group with minimal (if any) Line HR support.

In business, there is never one “right” way to organize your people, your work, or your processes. Much of how you organize depends on your size, your business cycles, your industry, and your expected growth. And what may work for you in one year may not be optimal the next.

Good leaders will experiment with different organizational structures to see how they can maximize the talents of their employees. This results in a dual win, of sorts. The business wins because it has harnessed the full talents of its people. The employees win because everyone likes to be in a role where they can fully utilize their smarts, talents, and capabilities. With that said, there are some basic guidelines for how to organize your HR organizational structure to help you reap the benefits of having HR as a true strategic partner.

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Mistake #2: Failing to hire a senior HR person early on in the company’s growth

For many small to mid-size companies, however, investing in anything more than “tactical” HR seems like a luxury. When your goal is to simply get a product to market or even just get a product to work, this lofty talk of “organizational development” or “change management” seems misplaced. Justifying an investment in these so-called “soft” skills when the opportunity cost is the non-hire of a quality assurance engineer can be difficult.

I’m not arguing, however, not to hire the QA engineer. If you critically need one, then hire one. But I do believe that most companies wait entirely too long to invest in “transformational” HR, as opposed to simply “tactical” HR. CEOs intuitively understand and value the role of Marketing or Sales or Engineering within an organization. Typically, they may have spent time in one of these departments as part of their career path. When creating these departments at a start-up company, they hire VP’s or SVP’s to head each of these divisions from day one.

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