HC issue 7.4
Boost Juice Bars
Eye on the horizon Talent management in tough times Expert insight Allan Pease on becoming a ‘people magnet’
Reconnect Facing Australia’s employee disengagement epidemic head on
Top tips: How to handle difficult conversations OFC_Final.indd 2
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editor’s letter issue 7.4
EDITORIAL Barking up the wrong tree
t the end of March I received an e-mail urging me to check a story posted on the US website www.gaebler.com. The piece, which was furnished with economic jargon and quotes from academia, was supposedly written by a Harvard economist and blamed massive decreases in employee productivity on the Twitter phenomenon. It then took things a step further by blaming Twitter for the economic downturn. It was clearly intended as a bit of fun. In fact, two of the names in the piece are anagrams: one for ‘Twitter Satire’ and another for ‘This Is a Spoof ’. Judging by some of the comments posted, few people got the joke. Could it be they are not laughing because they are looking for something – anything – to blame for a disconnected, disinterested and unproductive workforce? If so, they are looking in the wrong place. Instead of blaming Twitter, they should be looking at employee engagement, as engagement and productivity are intertwined. According to the Gallup Consulting Biannual Australian Engagement Study, disengaged employees self-report that they are feeling less productive in the workplace. Only 73% of the average day is productive for the actively disengaged, verses 84% of the day for engaged staff. Disengagement is also costing Australian businesses between $33.5bn and $42.1bn a year, so it is certainly worth looking at in any organisation. Engagement is not the magic antidote to a poorly managed business or a business operating in a rapidly changing sector. Boost engagement and it will, however, have a positive impact on absenteeism, error and injury rates, customer satisfaction, even the health of employees. Somehow I doubt that removing access to Twitter would have quite the same impact – at least not yet.
Congratulations to Cheryl Rivers of the Centre for Organisational Capability at Canberra Institute of Technology and Adele Cunningham of Housing NSW for their top stress busting tips. They receive a copy of D-Stress: Building Resilience in Tough Times by Meiron Lees
Mike Shipley George Walmsley Iain Hopkins Daniela Aroche Tim Stewart James Schwier MatthewsFolbigg Merryck & Co Onetest The Next Step Chandler Mcleod Group Danielle Tan Jessica Lee Stacey Rudd Jacqui Alexander Freestyle Graphic Design Ben Ng Thilo Pulch Kevin Kim Storm Kulhan Colin Chan
Iain Hopkins tel: +61 2 8437 4703 firstname.lastname@example.org
Advertising enquiries Fiona Wissink tel: +61 2 8437 4746 email@example.com Sophie Knight tel: +61 2 8437 4733 firstname.lastname@example.org
In the first person…
tel: +61 2 8437 4731 • fax: +61 2 8437 4753 email@example.com
“This isn’t about creating Play School at work; it’s about creating an environment that’s supportive and also challenging. Most adults enjoy a challenge” – Melissa Dunn Lampe, principal consultant, global leadership, Gallup, talks about the misconceptions around employee engagement (page 12)
“We tend to react very quickly and automatically cut the bottom performers or cut specific divisions. It’s cutting with a machete rather than a precision knife” – Al Campa, senior vice president and chief marketing officer at Taleo, talks about smart cutbacks (page 24)
“Our view is that people aren’t going to stay because they’ve got a gym membership; they’ll stay because they’ve got a good job and a good boss – so that’s where our focus is” – James McKay,
HR director, Adecco Group, on retention strategies (page 48)
managing director chief operating officer editor journalist production editors contributors marketing manager marketing coordinator traffic manager design manager designers photographer senior web developers it/is manager
www.keymedia.com.au Key Media Pty Ltd, Regional head office Level 10, 1 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Singapore, Hong Kong, Toronto www.hcamag.com Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept as HC can accept no responsibility for loss.
“We are a solid company that invests in the right people as we plan for future success. We do not anticipate a cut in staffing levels” – Claire Wall, HR manager, Boost Juice Bars Australia, refuses to be bowed by economic pressures (page 52)
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12 Cover story:
The engagement rate of Australia’s workforce is deteriorating year by year. Organisations that get it right, however, are forging ahead. Iain Hopkins looks at how employee engagement can make good organisations great
20 Become a people magnet Known internationally as ‘Mr Body Language’, writer and motivational speaker Allan Pease shares how to build relationships and communicate effectively with people at all levels of an organisation
Eye on the horizon: talent management in tough times
As talent management strategies shift inwards to enhance productivity and increase cost effectiveness, Human Capital asks the experts where best practice organisations are heading
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44 The art of conversation
Difficult conversations are dreaded by most people managers – the subject is danced around or ignored, and the conversation is often delayed indefinitely. Jen Harwood provides some tips for doing it better
Regulars 04 In Step 05 HR Insight 06 Legal 08 Psych Corner
Letters to the editor Do you have a burning HR or people management issue you would like to share with others? Would you like to share your thoughts on the challenges you’ve faced and how you’ve overcome them? Want to kick off some debate about your industry? If so, Human Capital would like to hear from you. Send through your comments to firstname.lastname@example.org.
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09 Corporate Culture 48 Profile 52 T eambuilder of the month
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HR Career Experts
HR – not being tipped overboard…
here has been significant column space taken up in the general media about the increasing number of Australians being made redundant as organisations respond to the current business environment. Whilst HR has been significantly impacted, as a broad generalisation it would seem to date that HR practitioners are not being released into the supply market in large numbers. Why is this the case? What are some of the reasons for HR professionals maintaining their roles whilst other professions are being cut back?
HR is a diversified and decentralised profession
There has been significant growth in the number of HR roles over the past 5 to 10 years. This growth hasn’t been in the “big end of town” companies. Interestingly, many of the large traditional employers of HR professionals such as the banks, insurance companies and industrial conglomerates employ approximately the same number or less HR professionals than they did in the 1990s. So where has the growth occurred? The rapid growth in HR roles over the past decade has been in companies that traditionally didn’t have HR roles in the past, or in companies that have quickly grown over this period. These companies are quite often between 200 and 1000 people and are across all industries. Typically they now employ a lead HR practitioner with a small but focused HR team of between 5 and 12 people. There are many examples of this type of company across Australia. The obvious conclusion is easily made. Whilst the big end of town is where many high profile HR professional teams are employed doing “best in class” work, the distribution of HR roles is much less centralised than in the past. This diversification of the HR community through all types and sizes of organisations has no doubt contributed to HR roles being less vulnerable to wholesale headcount reductions of large scale functions.
No one wants to go backwards – hard won gains are easily lost
There is growing feedback in the HR market that whilst tough times exist in many companies, senior management teams are voicing support for HR and its place in the business. There is an overwhelming feeling that many of the strong people practices now commonly in place in many companies will be lost if there is a reduction in HR headcount. Management teams are clearly saying, “look, it was a big investment to get where we are – we don’t want to go backwards”. It is not just the people processes and systems that they are referring to, but the management capabilities that enable these tools to be fully utilised.
Change needs navigators
Clearly in any environment of substantial change where companies are looking at their people mix, structure and work practices, HR functions are naturally needed to be the forefront. The management of any change in any company is fundamentally driven by line managers, but more so than ever before, they are relying on HR to provide the tools, support and coaching to navigate the change.
Compliance and complexity has increased
Even if management teams were not internally focused on the continuation of high quality HR assistance for management of their businesses in 2009, there are real external pressures that will result in the need to continue to rely on high calibre HR assistance. External market pressures and changes will influence internal HR areas such as the following: Remuneration - The hot topic in 2009. There will be a continuation of increased scrutiny by a wide range of companies in the area of remuneration practices. Parties with intense interest in this area include shareholders, the media, politicians, compliance watch dogs and corporate regulators and public sector departments such as the ATO. Whilst executive pay levels are going to be under examination from last financial year, an even bigger focus question for HR professionals will be the future design of executive and general at risk pay. Industrial relations – At the start of 2009 the AFR commented that there were over 5,000 enterprise agreements up for renegotiation and a raft of arrangements that will fall outside of the Fair Work bill this year. Even if companies do not have agreements up for renegotiation, HR professionals will need to think through implications of the new bill post its July 1 implementation. Safety and workplace health - another area where external pressure will occur this year. Management teams are generally only too aware of their responsibilities in this area and the need to build a solid foundation and capability to match ever expanding expectations from the community.
HR in 2009 – weathering the storm
It seems HR is weathering the storm relatively well to date (which is great), but the future is still unclear in most markets. Whilst there has not been wholesale reductions of HR teams in Australia, the continued challenge for HR leaders will be to deliver even more focused and commercially viable HR solutions for the remainder of this cycle. One final storm warning is to those in HR that like to “skate across the top”. The devil as always is in the detail and business leaders’ and their teams will want the detail in 2009. Be operationally focused or risk being cast adrift is the message. Craig Mason is the founding director of The Next Step, a specialist consulting practice in the human resources market. For information call +61 2 8256 2500 or email email@example.com web www.thenextstep.com.au
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Recent HR Market Moves supplied by The Next Step
Vaughan Paul has been formally promoted to the role of HR
Director for Optus. Vaughan has been with Optus since 2005 acting in the HR Director role and before that as divisional General Manager HR. Prior to joining Optus Vaughn was with CSC and Westpac in senior HR roles.
Josephine Simeone has accepted the role of HR Director,
Pacific with LexisNexis. Josephine has a wealth of experience gained within organisations such as Campbell Arnott’s and Lucent Technologies. Sydney Ports Corporation has recently appointed Ian Grey as Executive General Manager HR. Previously Ian was with Donaldson Coal as General Manager HR and the lead HR roles with Australian Customs, Sydney Water and P&O Ports. AMP has appointed Cara Reil as Director, Talent and Leadership. Cara’s most recent role was Regional Head, Organisation Effectiveness for Royal Bank of Scotland based in Singapore for 18 months and prior to this with UTC for 10 years. United Group Ltd has appointed Michelle Seddon in the role of Executive General Manager, HR Asia Pac & Middle East for their Services division. Michelle previously held the role of Global Head of HR with Babcock and Brown and prior to that, senior HR roles with Lend Lease.
Innvocare has appointed Lyndall Jones as Head of Human Resources. Lyndall is an experienced practitioner, with her career spanning senior roles including Westpac, AOL and Veda Advantage.
Tammy Connelly has commenced as a Senior HR Manager
with the Coles Group. Tammy has extensive experience gained within organisations such as The Perfumania Group and The My Chemist/Chemist Warehouse Retail Group.
Tony Weston has accepted the role of Global Head of HR with
Aristocrat. Previously Tony has held executive HR positions with K-Mart and the Foster’s Group.
Sean Curtain has accepted the role of Vice President of Human Resources with AIA. Prior to this recent appointment Sean was with Sensis for over 6 years in lead HR roles.
Robyn Djelassi has joined Crown Entertainment as the
Recruitment & Employment Brand Manager. Prior to this Robyn was with Suncorp in the role of Executive Manager, Recruitment. Origin Energy has recently appointed Keith Wilkinson as National Remuneration and Benefits Manager based in Adelaide. Keith’s previous roles have been with AMP and Oil Search.
Helene Gordon has commenced as Head of People &
Performance with Foodworks. Previously Helene was with Coles Group in various roles and most recently with Stocklands.
By supplying Market Moves, The Next Step is not implying placement involvement in any way.
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Page Legal Experts
EMPLOYEE EMAIL AND INTERNET USE: IS BIG BROTHER WATCHING?
mployee email and internet abuse is rife highlighting the issue of proper workplace surveillance for employers. Employers taking disciplinary action against employees face the key challenge of striking a balance between monitoring employee breaches of company policies and complying with the law.
Rights of employers: What is acceptable monitoring?
Employers may monitor employee email and the internet use if they have an Email and Internet Policy in place. NSW employers must provide notice to employees of the type and duration of monitoring to occur. Once they have done so employers may legitimately: yy access an employees computer at any time yy monitor any emails sent and received by employees yy block access to certain websites such as Facebook, Twitter or YouTube yy implement procedures to block the receipt of certain types of emails or emails containing certain content yy refer the matter to relevant authorities if there is reason to believe that anything contained in an employeeâ€™s internet or email usage is criminal eg, drug trafficking or child pornography Compliance with the relevant legislation, clear communication and consistent enforcement of policies is vital so employers can use the information obtained via monitoring to discipline employees and as evidence in any legal proceedings the employee may commence. Equally as important are circumstances where employers obtain and seek to use as evidence information about employee breaches of confidentiality or restraint provisions in employment contracts. Never are employers so despondent as when they are advised they may not be able to do so because they have failed to implement a proper procedure or notify employees of such monitoring.
Dangers of getting it wrong
Misuse of email and internet in the workplace not only affects employee productivity, but exposes employers to discrimination,
harassment or workers compensation claims. In trying to minimise such exposure, employers should tread carefully to avoid exposure to unfair dismissal claims by employees dismissed for alleged â€˜misuseâ€™. There has been a raft of successful unfair dismissal claims by employees who have been dismissed, often summarily, based on misuse of email and the internet or due to alleged breaches of email and internet policies. These claims often involved employers who did not have clearly drafted, communicated and consistently enforced policies on email and internet use in place. Like always it is important to apply policies and procedures consistently. Employers face difficulties in seeking to rely upon selectively enforced policies by disciplining some employers while overlooking breaches by others. For example, it would be inappropriate to discipline an employee for forwarding an email received from a superior without also disciplining the superior.
What should employers do?
Develop Email and Internet Policy It is important for employers to implement an Email and Internet Policy prepared in compliance with the relevant legislation and which provides defined boundaries for limited personal use. Policies should explicitly define what constitutes acceptable and unacceptable use of email and the internet. Consequences of the breaches must also be clearly spelt out so employees are under no misconception when the employer seeks to rely upon the policy. Distribute Policy The policy should be distributed to all employees in a manner in which receipt can be proven if required. Modern technology and electronic acceptances of emails/dialogue box acceptances make acknowledgements of policies much easier to track. However, it is critical that employees all have their own confidential login details in order to be able to rely upon these acknowledgements. The requirement for confidentiality must therefore be reinforced with employees on a regular basis and disciplinary action should be taken against employees who fail to ensure such confidentiality. Consistently Enforce The policy must be consistently enforced. This includes the transparent investigation and management of complaints filed against all employees. Seek advice To ensure compliance with workplace surveillance requirements, Matthews Folbigg can tailor policies and procedures to suit organisational needs and train employees and/or managers in relation to compliance with such policies and their often conflicting obligations under various laws. In serious matters we can also assist by commissioning forensic investigation of computer systems. This may be appropriate if employees have engaged in serious breaches of policies warranting termination which may result in loss being suffered by the employer. Fay Calderone is a Senior Associate with MatthewsFolbigg Lawyers. For more information call: (02) 9806 7412 or e-mail: firstname.lastname@example.org
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Lack of experience: choose your battles
Building a solid business case for HR investment
ith economic conditions deteriorating, businesses are becoming even more discerning about what and where they choose to invest their money. For HR professionals, this means that the ability to build and present a strong business case for investing in new HR initiatives will become a business critical skill set. HR typically fails to get executive or board approval for new initiatives due to 4 main factors. Lack of direction, lack of evidence, lack of experience and poor communication and structure. Let’s take a few moments to explore each of these.
Lack of direction: set the objective The first step in building a business case is to clarify your objective; why are you asking for money? This underpins the case. For example, your objective might be to streamline the recruitment process for your call centre in order to save money or to reduce staff turnover in your sales team in order to improve ongoing sales results and reduce rehiring costs.
Lack of evidence: demonstrate proof Whatever your objectives are, you must be able to clearly demonstrate that the issue exists and that it really needs to be solved. Weak business cases use a lot of “I feel” or “I think” statements such as “I think we’re spending too much time processing applications and I feel that by implementing an e-recruitment system we could reduce time to hire and save thousands of dollars each year”. A stronger business case looks deeper into the issue. For example, “We’re currently screening 1,000 CV’s per month which each take 10 minutes to open, review and deal with – that’s 67 hours per month spent on the initial screening and is more than the capacity of one full time person. If we implemented an online system, 1,000 applications could be ranked and sorted in less than 30 minutes per week; saving of 165 hours per month. At $50 per hour in wages, that’s a total saving of $99,000 per annum.”
There are a myriad of things your business could spend its money on right now – but with limited resources, you must choose your battles wisely. Consider what will deliver the biggest positive return for the business. To determine this, talk to a wide range of staff and consider conducting surveys to add rigor to your case. Write a list of your challenges and rank them according to how important they are. Issues that will impact the decision maker will get more priority. If you’re inexperienced at presenting business cases get some smaller wins on the board first. Choose things that require a smaller investment and can be implemented in a shorter timeframe; pick easier targets to build your confidence.
Poor communication and structure: consider the target audience Before you get too far down the track in formulating the case, think about your target audience. Who is the decision maker and what are their drivers and behavioural style? These factors will influence how you structure your business case and how you deliver it. For example, the way you present to a typical CFO would be vastly different to the way you present to a Head of Marketing – in its most simplistic form, one would like to see the numbers in tables, the other might like to see the numbers represented in pie charts. Ultimately, your target audience will guide your use of statistics or cases studies, images or numbers, how long or detailed your presentation is, whether you need an agenda, if you should send a summary after the presentation and even where to hold the meeting. Sometimes a coffee shop or a restaurant will get the best results.
A strong business case: essential elements Ultimately, a strong business case must do one (or all) of the following: 1. save time, doing more with less is crucial in the current economic climate; 2. save money or make money; or 3. increase comfort or make life easier - for example, reducing stress levels by automating a process (but remember to tie “comfort” back to facts and figures). Consider these simple yet effective guidelines when building your next business case and you will hear the word yes a lot more often.
Steven Dahl is the CEO of Onetest. For more information about this topic, please call 1300 137 937, e-mail email@example.com or visit www.onetest.com.au
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Corporate Culture Column Evolving your Workforce
HOW TO maintain a healthy people resource and corporate profile
he last century has seen a significant shift in the importance of different kinds of resource to business. A hundred years ago, the key resource for business was the capital that bought the raw materials, land, factories and transport needed by businesses to thrive. People, although important to the whole process, made little difference to the productivity delivered by the machines that capital was able to buy. Today, up to 85% of the economy in developed countries is based on human interaction on a whole variety of new levels. Management today is about getting your employees to deliver the right service in ever more complex and confusing situations. People have become a big part of business and need to be at the heart of any strategy. Well skilled, experienced and ‘best fit’ talent is the essential resource in business today. Although we are facing the challenges the market is throwing our way, we need to be mindful of the importance of not only managing our people resources effectively but also maintaining a favourable corporate identity – both internally and externally. The most important brand relationship in an employee’s life is unlikely to be their choice of breakfast cereal, mobile phone or car, but the brand they work for – ie, your employer brand. Who you work for represents an extremely important brand choice. This is the brand relationship that takes up most of your time. It’s probably the brand with which you’re most intensely involved, the brand about which you have most to say (good and bad), and if you’re lucky it’s a brand with which you’ll proudly identify for a majority of your life. From the organisation’s perspective, the employer brand sums up the key qualities current and prospective employees identify with you as an employer, whether economic (compensation and benefits), functional (eg, learning new skills) or psychological (eg, sense of identity and status). Whether you’ve defined it or not, you already have an employer brand. The key question is whether you’re clear about the distinctive benefits you’d like people to associate with you (commonly described as your Employee Value Proposition), proactive in communicating and delivering against
this promise, or happy to live with an unclear and inconsistent employer brand by default. How people feel about their employer brand is increasingly critical to business success or failure – especially today. Leading companies realise their importance in attracting and engaging the people they need to deliver profitable growth. They also recognise that creating a positive brand experience for employees requires the same degree of focus, care and coherence that has long characterised effective management of the customer brand experience. The three major benefits of strengthening your employer brand identified in separate studies are cited as being: yy enhanced attraction yy retention yy engagement
Leading companies realise their importance in attracting and engaging the people they need to deliver profitable growth There is significant evidence to suggest that a strong employer brand associated with stronger attraction and higher than average levels of employee engagement will ultimately contribute to better financial results. In the current market we are all making strategic decisions that will directly affect our people resource and, inadvertently, our corporate profile. When making the tough calls in the name of long term survival, it is worthwhile remembering that people and your employee brand are critical in not only maintaining performance but also in retaining your talent. When things start to improve economically, those brands that have enhanced or maintained their employee brand and performance reputation will benefit in the long term.
General Manager Marketing: Specialist Recruitment & Consulting Services Tel: 02 9269 8879 Craig.McCallum@chandlermacleod.com
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An effective meeting with your mentor
ohn had been a client when he ran the division of a major listed company, and had moved on to become CEO of a large privately owned business, with revenues approaching one billion dollars across the group. Within 2 weeks of starting he had arranged for us to meet over breakfast. After the pleasantries and general updates I asked John how, in the limited time we had together, I could add value around the challenges and issues he faced in the new organisation. “I have a number of questions,” he replied. “Firstly, what are the common mistakes made by new CEOs? What should I watch out for, and where should I focus my time and energy?” “Secondly, I have some initial thoughts about my team and some changes we may need to make. I would like to test my thinking with you, particularly about the values we have – and want - and the culture we would like to create.” “Thirdly, working for a family owned business is very different to my last role in a public company. How should I manage this situation?” “OK John,” I interrupted, as he continued listing questions. “I get the picture – you have hit the ground running in a complex role and have competing demands for your time. Let’s start with your first point.” We began to explore the experiences we had each had when starting new roles, complementing this with observations drawn from our work with other clients in first time CEO roles. John also agreed to read some relevant Harvard Business Review articles that I would send him. The conversation continued over breakfast, focusing on the key challenges John was facing. Since John and I had worked together in the past, he came to our meeting well prepared, recognising that this was one of the keys to an effective meeting. When time permits, sending such questions out in advance, and hence preparing a broad agenda, will further add to the quality of the meeting. After ninety minutes together we had discussed the issues and identified some options for moving forward. I had given John some insights about his situation and agreed to read and comment on an email he had sent to his staff. I would also arrange introductions to the CEO of a firm they were having difficulties with, and to a member of our team who had considerable experience working for a
global family owned business. John agreed to start discussing values at every team meeting, and to create a framework for assessing the competencies and values of his team. He also recognised the need to avoid getting into too much detail, and allowing people to get on with their jobs.
“One of the benefits of talking to a mentor is that their agenda is focused on the client’s success, enabling the client to be completely open and honest. An effective mentor knows what it is like to sit in the leader’s seat and face their challenges. They have had the doubts and anxieties, the joy and satisfaction.” Agreeing next steps by each party is crucial to running successful meetings. We can leave a meeting with the best of intentions, and a clear idea of what we will do, but these are quickly forgotten unless written down. One of the benefits of talking to a mentor is that their agenda is focused on the client’s success, enabling the client to be completely open and honest. An effective mentor knows what it is like to sit in the leader’s seat and face their challenges. They have had the doubts and anxieties, the joy and satisfaction. Engaging a mentor represents a significant investment of money by the firm, and investment of time by the individual client, who is always very busy doing their job. In our column next month we will look at how to assess the value added by the mentor.
Anthony Howard, Chief Executive Officer +(612) 9231 8670 firstname.lastname@example.org www.merryck.com
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news issue 7.4
A tweet too far R
ecent media reports of employers sacking workers due to posts on social networking sites like Facebook and Twitter have revealed that employment laws regarding privacy and unfair dismissal are under new pressure in the internet age. Making seemingly private comments on social networking sites such as Facebook and Twitter is now a sackable offence for some professions. The NSW Department of Corrective Services, for example, is threatening to sack prison officers over posts they made to a Facebook group criticising the cash-strapped State Government’s plans to privatise Parklea and Cessnock prisons. The public sector union retaliated by accusing the department of using strongarm tactics to stifle dissent and invade the private lives of employees. In addition, in March a Telstra employee was disciplined
by the telco for comments he posted on Twitter. So, where do employers stand? “The challenge for courts is to ascertain how to apply the existing laws to new scenarios that arise due to such developments,” she Bronwyn Maynard, senior associate and team leader at Harmers Workplace Lawyers Even before the internet age, ‘out of hours’ conduct by employees was scrutinised by employers and, in certain cases, formed the basis for dismissal. “Unlike the US, there are no lifestyle protection laws in Australia which aim to protect employees from being disciplined by their employer for conduct they engage in after hours,” said Maynard. “As such, there are no general protections directed specifically at maintaining employee privacy. However, employers still
do not have an unfettered right to intrude into the private lives of employees.” “Employers should have certain policies in place regarding the rights and obligations of both employees as well as the employer. Ideally, employers should make it clear to employees in those policies that employees who engage in conduct in breach of those policies outside the workplace may still face disciplinary action due to that conduct if it affects the employment relationship,” Maynard said.
Slowing to a crawl: salary budgets and employer confidence
Contract work back in favour
wo recent reports paint a gloomy outlook for the struggling Australian economy. The Hudson Employment Expectations survey, covering April-June 2009, shows confidence among Australian employers has declined for the fifth consecutive quarter. Less than 20% of the 6,337 employers surveyed plan to grow their permanent headcount, 63.6% plan to maintain current permanent staffing levels, and 17.8% plan to decrease headcount. Meanwhile, Mercer’s 2009 Market Issues Survey shows that the economic cushion shielding many Australian workers from the impact of the global financial crisis has finally begun to erode. The survey reveals that national salary budgets look likely to continue to fall during 2009. The Mercer survey, carried out by 352 companies, reveals national salary budgets have rapidly declined from 5% to 4% over the past six months, and are predicted to fall further during 2009 based on current economic, business performance, and unemployment rate forecasts. However, where companies are taking actions in response to current conditions, the majority of companies (71%) are selecting a limited and targeted range of measures.
rofessionals in Australia are showing an increased interest in taking on contract work, according to a Robert Walters web survey. Professionals from around the globe were asked about their views on taking up a contracting rather than a permanent position. 4,288 respondents from 17 different countries took part in the poll. 59% of Australian respondents said they would be happy to take on a contract role, above the worldwide average of 55%. “It’s well known that employers can turn to temporary recruitment in tougher economic conditions. What is interesting is that candidates are also increasingly focusing on the flexibility that contract work can offer,” said James Nicholson, managing director of Robert Walters Australia. While contracting may not offer the stability of a permanent role, this is offset by higher pro-rata rates of pay and professionals can get back into the workplace much more quickly. Candidates are also attracted by the opportunity to broaden their experience by working in different functions across a business, Nicholson added.
David Abusah, broad-based performance and reward leader at Mercer, said Australian companies have quickly shifted gears in response to the crisis. “What’s interesting is that contrary to common perceptions, employers are not using broad-brush cost-containment measures such as blanket workforce reductions and hiring or wage freezes. “The immediate reaction by Australian organisations has largely been a cautious one with most companies resorting to low disruption and surgical cost-containment options, rather than a cost-crunching or slashing approach,” Abusah said. Mark Steyn, CEO, Hudson Australia/ New Zealand, added that the uncertainty within the business community has made it difficult for employers to make long-term strategic decisions – including hiring plans. “Nationally over the past year the number of employers looking to reduce staff has jumped three fold from 6% to 18%. This suggests many employers are continuing to focus on reducing costs while they would be better off looking for ways to drive productivity and identify opportunities to improve market share and revenue,” he said.
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people magnet How do you present yourself to colleagues, clients and even friends? Known internationally as â€˜Mr Body Languageâ€™, writer and motivational speaker Allan Pease shares how to build relationships and communicate effectively with people at all levels of an organisation
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expert insight issue 7.4
Is your organisation ‘smiling’?
That may seem like a strange question, but it could be the difference between a strong brand image and one that potential employees and customers avoid. Allan Pease, an expert in body language and author of several best-selling books on the topic, says a corporate culture is visible through the attitudes and actions of staff members at all levels. A negative culture can be deadly on the recruitment trail. That’s why body language is so important for HR professionals in particular. “HR’s business is people,” he notes. “They need to be able to reach one person or a million.” By improving communication skills and developing policies that incorporate Pease’s suggestions, HR departments will enhance not only corporate culture but also help employee attraction and retention.
Body language for organisations
Pease says effective communication and positive body language is something that can also be learned by entire organisations. Indeed, it can be the difference between a successful corporate culture and one that stymies progress. “A company just consists of people, and a corporate culture just consists of those people’s attitudes.” Pease sees examples of different corporate personalities every day. He is convinced that positive attitudes and friendly demeanors among staff of all levels can have a significant correlation with business success. It creates a brand
that people go out of their way to deal and engage with, he says. Getting an organisation to ‘smile’ is as simple – or as difficult – as getting all staff, from the CEO to the interns, to smile themselves. Pease says a person can tell if someone is smiling by the way they use their voice. They need to maintain the good cheer even on the phone. A smile puts energy into a conversation and means the participants are more likely to consider the organisation as one they want to be involved with. “[Smiling] is what opens doors in the business world,” he says. It’s something his grandmother taught him when he was a small child. “People must feel relevant. If you make a person comfortable, they will be open to hearing what you have to say and more likely to help you.”
The power of compliments
Energising the voice is just one way of improving communication in the work environment and making people feel important. But it’s only one of many possible steps. The power of a simple compliment can bring even the most hardened personality around. Pease cites research that shows a pleasant, positive conversation can help endear a person to someone’s cause. “When you pay someone a compliment, they remember you as taller, thinner and younger,” he claims. “If you make them feel important they’ll follow you wherever you want them to go.” People react instinctively to body language and the states of mind that it
expresses. Just as extending a positive demeanor can help win friends and influence, an angry or stressed state of mind will almost always fail to impress. “People will avoid that organisation wherever they can,” Pease warns. But changing a corporate culture in this way is much easier said than done. Pease has helped many organisations through the process but admits there is often an easier, if somewhat abrupt, way.
“A company just consists of people, and a corporate culture just consists of those people’s attitudes” – Allan Pease “Get new staff,” he says simply. And he’s serious. “The reality is that the culture must become the important thing – not the people.” Of course, not every organisation is able to conduct such a complete overhaul of its employees. The alternative is to hold some very intense training on people skills and body language. Changing someone’s natural demeanor and body language is never easy. Changing the attitude and image of a whole group or company takes commitment and determination from everyone involved. The first lesson appears easy enough but Pease says it can often be the most confronting. He takes a group of people www.hcamag.com
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through a role-playing scenario, using typical business situations. A week later, he replays the video and asks participants to guess what their colleagues may have been thinking at particular moments. The results, he says, can be astounding. Some people come across as mean or sneaky, he say, and that can happen even when they are speaking positively – the body language speaks louder than words. Pease says it is an important lesson that highlights just how much people might need to change their demeanor. “It’s quite
entertaining and fun,” he says. “But it is very powerful too.”
Body language as the peacemaker
Although HR spends quite a bit of time creating goals – and, of course, achieving them – resolving conflicts is also a crucial responsibility. When a conflict arises in the office, Pease says HR needs to try and resolve it before it has a chance to escalate. Body language is, again, vitally important to help ensure
About Allan Pease Having positive energy is essential for HR and people management. Pease states that not only does positive energy encourage others to pursue their goals but it also helps to promote physical health. It’s a statement that is hard to argue against given that Pease’s own positive attitude and determination has helped him to successfully fight cancer – not once, but twice. Today, Allan Pease is one of the world’s most successful international speakers and non-fiction authors. He has written 14 bestsellers including The Definitive Book of Body Language and the 11 million seller Why Men Don’t Listen & Women Can’t Read Maps. What makes Pease and his life story particularly interesting, however, isn’t just where he is now – but how he got here. Rags to riches Allan Pease began his entrepreneurial career at the tender age of 12. Realising that people were using rags to clean because there were no synthetic sponges available, he went to a local upholstery store and bought
their leftover foam, which he then cut into small squares and sold as sponges door-to-door. Through his experiences in sales and with the advice of his grandmother, Pease learned how to use body language to gain the trust of potential clients and make sales. Wanting to share this information, he co-wrote more than a dozen books with his wife Barbara and today they share their knowledge with people and organisations all over the world. Although Pease is known as a writer, there is one passion that has stayed with him even longer. Music has always been a major part of his life and guitar has always been his instrument. Back in 1969, Pease was a founding member of the ‘Trench Traveling Blues Band’ – a heavy metal outfit developed by him and his friends. Today, he owns an Australian recording studio and still plays as a session guitarist for various events. When he is not practising his music or travelling around the globe, Pease can be found on the Gold Coast playing with his two youngest children or lounging in the sun.
a neutral and fair process. “Ensure that the meeting environment fosters communication between parties so that it is as productive as possible,” he suggests. If you are in a meeting room, use a low round table so that no one can hide behind it or take a dominant and aggressive position. “Let the parties use chairs that swivel so that when people are feeling uptight, they can swivel and release negative energy.” Once you have the environment organised to promote optimal communication, there are also issues that the participants need to consider. Pease says the following steps can help ensure any communication – even in a conflict situation – is positive, nonthreatening and geared toward creating a resolution. Participants should: • Ensure that their head is tilted toward the person speaking. This shows they are interested in what the other person has to say. It is instinctual for humans to tilt their heads to the side when they are interested in something. • Smile and make sure their teeth are visible. If they have a tendency not to smile with their teeth – as many perfectly happy people do – they should drop their jaw so that the teeth are on display. Smiling shows pleasure and will enforce the interest shown by tilting the head. • Nod their head as others talk to indicate an affirmation of what is being said. Nodding is a universal symbol for ‘yes’ and will work to further enforce the head tilting and smiling. • Keep the body language in the room open. Watch the energy in the room and notice if anyone has crossed their arms or legs or is sitting far back in their chair. Participants or mediators can work to get rid of this negative energy by verbally
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Women leading the charge The unique challenges of modern business are forcing changes in the way corporate leaders communicate with each other and their staff. This evolution is bringing more women into management roles because, as Pease explains, the communication strategies required are those that women use instinctually. “Men are hunters and women are gatherers,” he says. “Women have the ability to know how people are feeling and what they might be thinking.” Pease says those instinctive people skills are a core part of a woman’s instinct – based on the need to
protect their children from strangers. As business moves away from the ‘win-at-all-costs’ ethos and becomes more about creating successful partnerships, those skills are becoming highly prized. “The skills women develop naturally and know instinctively are now vitally important to building business relationships,” Pease says. This is slowly being reflected in the gender makeup of boardrooms across the world. Some 40% of new management positions are being filled by women today, a far higher figure than even just a few years ago.
asking people to lean forward or by offering them something to drink or eat. A final tip: With the depleting supply of labour in Asian markets, particularly Singapore, employers need to do all they can to keep their employees and their business partners onside. Increasing employee communication skills is therefore no longer an elective but a vital tool of modern business. Although Pease believes that everyone can learn to use body language to improve their communication, he says it takes practice to understand the techniques and constant repetition to turn them into everyday habits. HC
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Eye on the horizon: Talent management in turbulent times
As talent management strategies shift inwards to enhance productivity and increase cost effectiveness, Human Capital asks the experts where best practice organisations are heading
udson’s Employment Expectations report for April–June 2009 presented a sobering reminder of the talent landscape in Australia. Confidence among Australian employers showed a decline for the fifth consecutive quarter. Less than 20% of the 6,337 employers surveyed plan to grow their permanent headcount, 63.6% plan to maintain current permanent staffing levels, and 17.8% plan to decrease headcount. Clearly this is a reversal of fortunes for employers, who just 12 months ago were in a bloody battle for skills. It may also signal a shift in the direction of talent management strategies. With some exceptions (employers in the utilities, healthcare and education sectors) few organisations will be hiring over the next 12 months, meaning the focus may revert to talent already in the organisation.
Demographic reality check
Despite the escalating unemployment rate and the rounds of job losses taking place, HR professionals should not be lulled into
a false sense of security. The skills crisis is far from over, and while there may be a temporary reprieve in the scramble for talent, once the economy picks up the same human resources issues will remain. Bruce Anderson, managing director Australia, Lee Hecht Harrison, believes the skills issue has been put on the backburner as organisations focus upon short-term survival and delivering on profit expectations. In addition, looking at a three to five year timeframe, some organisations may become complacent as Baby Boomers continue in the workforce beyond the age they originally planned to retire in order to rebuild nest eggs. “This will act to buffer the skills shortage, but the skills shortage will still be upon us and – though delayed – may be more pronounced than otherwise would have been expected,” Harrison says. Indeed, if there is a slower return to economic prosperity, organisations should already be considering some demographic forecasting and assessing the most effective ways to hold on longer to employees considering retirement. www.hcamag.com
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Whether the recovery is slow or fast, organisations need to have a number of scenarios built around their talent management. “The most money is on a slower return [to economic prosperity], in which case you must consider whether you need specialist skills, whether your generalist skills will suffice, and to what extent you’re taking a multi-skilled approach to filling roles. Organisations must look at job redesign as part of broader organisational redesign, but also need to be thinking about how they can get work done in different ways,” says Paul Leitch, segment leader for workforce strategies, Mercer Australia/New Zealand.
What matters most?
When it comes to talent management, business leaders should be asking questions about the business model itself: what has been required in the past, what does the current environment call for, and which parts of the business are likely to thrive and which will falter? “It’s difficult to determine which area to pay attention to in terms of talent management. That said, organisations should be just as vigilant in boom times as bad times concerning areas like cost, productivity and preparing for change,” says Leitch. If ‘cost’ is dissolved down to getting value for money investment in the talent pool, there are two essential components to consider: the extent to which employees are productive; and the amount of money paid to get the talent needed to get the job done. However, Leitch stresses that preparedness for change is just as important as cost or productivity. He argues that businesses must have in their stable of talent a group of employees who are flexible, agile, multi-skilled and multi-tooled. “People who potentially have been hired to do specific jobs may find themselves having to do different jobs – in
addition to or even instead of their original roles. If that’s the case, as a manager of talent you need to have your eye not only on cost, productivity and ability to change, but also the capability of workforce. If you don’t have a clear understanding of what the talent pool has in terms of the skills and knowledge you need against your business imperatives, that’s where you will come unstuck. “If you’re focusing just on cost and productivity you’re probably not getting the answer you need,” he adds.
Case study: Randstad
Most organisations are increasingly concerned about conservatively managing costs or maintaining growth without over-committing. When it comes to the workforce this means looking closely at the recruiting, training and support costs associated with human capital. The unfortunate side effect of this economy is lay-offs. Al Campa, senior vice president and chief marketing officer at Taleo, urges organisations to tread carefully with redundancies. “We tend to react very quickly and automatically cut the bottom performers or cut specific divisions. It’s cutting with a machete rather than a precision knife,” he says. There are obvious dangers to such a blunt blanket approach to cuts. For example, every division will have solid and high performers – should they be cut too, or can they be redeployed elsewhere in the organisation? Are those skills sets likely to be needed in the future? Is that division likely to become a centre of innovation or revenue growth in the future? “It’s expensive to hire and then train new people – if you can transfer and upskill it might be more cost effective,” says Campa. If bottom performers are being targeted across the board, it’s important to look at why they might be underperforming. They may be new to the role, or have just been promoted to a new area of responsibility, or personal
Human Capital talks to Victoria Bethlehem, director of people & development at Randstad, about her company’s approach to talent management Human Capital: Randstad pays special attention to employees as they enter and exit the organisation. Can you explain what you do? Victoria Bethlehem: It’s well known that people join organisations but leave managers. To maintain a strong corporate image throughout the onboarding process, employers need to show that the promises made during the initial job interviews are going to be kept. Formal induction agendas where organisations introduce the new staff to key personnel and provide a comprehensive company overview are ‘must haves’ for every new employee. Likewise during the exit process, respect and appreciation for the employee’s services should be shown throughout the exiting process. At Randstad we recommend and conduct exit interviews for every exiting employee. These exit interviews identify what’s working and what needs to be worked on.
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HC: You also conduct regular ‘temperature checks’ and retention interviews to ensure employees are engaged and happy in their role and in the workplace - how do you do a ‘temperature check’? VB: The benefits of conducting regular ‘temperature checks’ and retention interviews are many. At Randstad, we conduct online forums where our staff communicate directly with our CEO and the senior management team; we run employee satisfaction surveys; we use external engagement tools such as Hewitt Best Employer Survey; and we hold regular roadshows/Q&A sessions with our management in Australia, New Zealand and Singapore to determine where the hearts and minds of our people are. We actually use it as a good indication of where improvements need to be made and the key is to act swiftly to make those changes and then ensure employees are aware of it. For example, after going through our results in the Hewitt Best Employer Survey, we realised just how strongly our people felt about paid parental leave and within six months we implemented a paid parental leave policy – with much success. Our experience as a four-time winner of the Hewitt Best Employer Award is that engagement is the key to staff being productive. Productive staff generate profit, so the temperature checks are not only a feel good tool, but it’s an intrinsic tool to enhance the organisation’s bottom line. HC: Where do performance reviews sit within your talent management strategy? VB: We have a global target that 100% of employees must have one performance review conducted per annum. We are in the process of developing a fully automated online appraisal system where we will
distribute and monitor appraisals among all employees to ensure we reach this goal. The system will ensure that the performance reviews have been implemented, that they were completed and they were worthwhile. We aim to find out what our employees gain out of the one-on-one, and that each person receives a very clear review of what worked and what didn’t work in the past for both the employee and the employer. Each person needs to understand the goals set moving forward, the strategy behind each goal and the expected timeframes. We know that conducting a thorough performance review is connected to how valued an employee will feel. HC: Can you still offer cost effective L&D options to high performers? How? VB: Now more than ever, organisations need to show an ongoing commitment to tailored training and development to keep engagement and morale high. With all the restructuring that’s taking place in the market, employers are expecting more from fewer people, so employees must be equipped and motivated to take on more responsibilities. While it may be more cost effective, I don’t think that employers should take the easy way out and just offer online training in this current environment. Again, the Hewitt Best Employer Report shows that organisations that win Best Employer status provide three times as much face-to-face training as those who use online instead. We recommend that organisations use a combined approach, and where possible, favour face-to-face training. At Randstad, we also introduced an internal Trainers Network as part of our training and development program, which has saved us a lot of money, while also building the skill sets of our own people. It’s a very positive way of keeping our costs down.
HC: What happens to high performers if you can no longer offer them upward movement in the company? VB: To retain high performers in the company we created the Randstad Mentor Program as a way of providing that next opportunity and next elevation within the organisation. We offer three key training programs ‘Principles of Mentoring’, ‘Masters of Mentoring’ and the ‘Managers Associate Program’. Each one of these training programs takes our people to the next level of mentoring, coaching and managing. These programs are formally trained and recognised, and this has been a great way of offering our people more in their career paths without having to restructure or create another layer. We also do a lot of crosspollination of talent and move people across our divisions, and that allows career longevity with us. We have a company policy that 80% of our management vacancies must be filled internally. All of our positions are advertised internally on a weekly basis and these new job opportunities are available for anyone to apply for. We find that if you don’t openly offer these opportunities internally, then it comes back to hurt you. We also have a lot of special projects going on all the time, either at an office level or a corporate level. Involvement in a special project may be all that is required to keep people motivated, re-energised and to give them a new insight, without leaving the comforts of their own job. Employees may feel like their skills sets are being enhanced without actually changing their job. For example, Randstad is focusing on Corporate Sustainability in 2009, and we have a series of networking groups in this field where we are asking staff to become involved in running and implementing the project.
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issues may be to blame. “You need to understand the full performance curve – who has consistently delivered results? Who are potential leaders? Who is never going to be able to keep up with the pace? Good performance management practices should have weeded out poor performers regardless of the external environment,” Campa says.
Know the workforce
Unfortunately, knowing who to cut and where is handled poorly by many organisations. Leitch notes there are two primary reasons for this: leaders don’t know their business well enough or they don’t pay attention to the business fundamentals; and secondly, they do not understand or even measure the sources of the human capital value, including the talent capabilities, in their business. “Not having the facts about your business or your talent brings you greater exposure to risk in the immediate sense in terms of business continuity and viability, and certainly risk going forward when the current crisis diminishes,” he says. As organisations tend to organise themselves around function or workforce segment, Leitch says knowledge of the value of each function or segment is
crucial. For example, do you need all the people you’ve got in the HR function or the operations function? What are the critical functions or values that those roles bring to the business? “That should be the lens you look through to make decisions,” says Leitch. Once that knowledge is acquired the analysis can move to assessing the value and criticality of individual roles. Is there capacity to do without some of them? Are they ‘nice to have’ rather than fundamental? What will the ‘new look’ team look like? “There are some important issues here: for those roles in the function that are critical – to what extent are they overloaded or fully committed? Is there space to add other accountabilities or duties into an existing role? For roles which may not be fully committed, can you surgically remove that role and manage the risk of removing it by adding the duties to another role that may have some capacity to pick that up?” says Leitch. By approaching layoffs this way, two objectives are achieved: • organisations retain the value creation elements of their human capital practice to support the business success • organisations avoid creating new employment risks by ensuring the workforce they’ve got is the group that is well and truly aligned with business objectives
Those left behind
The frequently neglected element of downsizing is the impact of those left behind. These people find themselves in
the same role but are asked to do twice as much with no expectation of extra remuneration or assistance. Anderson maintains that this support for ‘survivors’ is the most important role managers and leaders can take on once reductions are implemented. “Changes are made in order to reach the planned financial results and this is heavily dependent on the staff whose roles have been retained. These staff want to feel confident in the future and the team who lead them. This will only occur when managers are consistent in explaining their plans for the future and also readily available to answer questions. Visibility of the managers after the changes and a consistent message as to how success will be achieved in the future is paramount,” he says. Following any change process – let alone one as seismic as job losses – it’s standard for productivity to plummet. Campa says two essentials for keeping productivity ticking over is employee engagement and goal alignment. “Taleo research shows that around 30% of the workforce’s efforts are not aligned to any kind of corporate goals, and you wonder how much more productivity you could drive through a workforce if everything was aligned,” he says. Leitch recommends giving employees a clear line of sight between what they’re doing today and the value it has, and as much certainty as possible about the future. “Give them real hope, not pie-in-thesky stuff. As much as possible, preserve their engagement in meaningful L&D and talent management activities. This is where your functional HR leadership needs to be
“We tend to react very quickly and automatically cut the bottom performers or cut specific divisions. It’s cutting with a machete rather than a precision knife” – Al Campa
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Top tips Finance and people management advisors Watson Wyatt provide 8 talent tips to beat the recession: 1. Focus on key talent Focus limited resources on keeping and rewarding your key talent. These are the people you need most now to get you through the difficult times and later when the economy recovers. 2. Be careful what and who you cut Don’t make harmful short-term cuts. Conduct strategic workforce planning to understand your current and future talent requirements, and ensure your business has the necessary resources and skills for the upturn. 3. Ensure performance management is understood Ensure your performance management process is effectively understood by
your employees and delivered well by line management. It should not be seen as simply a process for identifying and culling underperformers, but instead as a way to raise performance throughout the organisation. 4. Don’t abandon bonuses Don’t abandon performance pay and bonuses but instead target them on your top performers and refocus them on realistic but stretching targets that will promote the right behaviours in this new environment. 5. Look for cost savings A review of business processes, HR policies and tax and administration could reveal untapped efficiencies. Examples include shorter working weeks, changes to travel policies, and salary sacrifice for superannuation contributions.
6. Promote the total reward message Keep communicating the value of your total rewards. A tendency to focus on base salary means that employees generally underestimate the full value of their total reward package. Ensure employees know just how valuable their total reward package is to them. 7. Review executive reward Review executive compensation to ensure the package is aligned to shareholder requirements, but still retains key executives. 8. Keep talking Be as open as you can with employees about your current HR and reward strategies. Silence breeds fear and reduces engagement. Employees know you don’t have all the answers and cannot guarantee their future.
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very strong, very strategic, and joined at the hip with line management and the CEO to ensure those strong messages about change and business continuity and future business success continues,” he says. Indeed, if there is one certainty with change it’s that it needs to be led. The big risk in times of upheaval is that leadership goes missing in action. “Leaders become so besotted by having to pay attention to business fundamentals that they forget to pay attention to the workforce,” Leitch warns.
Reward & recognition
How about the other subsets of talent management such as reward & recognition and learning & development? In tough times, the ability to pay bonuses will decrease – or at least become highly targeted – as the pools become smaller. There needs to be stronger differentiation in compensation schemes and meaningful employee benefits. Organisations find it hard to differentiate in the market for benefits at the best of times, although most organisations have come to terms with the need to get the right mix of financial and non-financial rewards – a total rewards strategy. Those non-financial rewards can construe three areas: 1. Careers and L&D 2. Benefits such as financial advice and sponsored discounts from certain service providers 3. Lifestyle benefits The last area – lifestyle benefits – may hold the greatest interest for employees. Work-life balance is in danger of disappearing as employees spend more
time at work. They want to be seen working so there’s no risk the organisation could accuse them of not being around. There have also been cases of employees being afraid to take leave due to fear the organisation may get used to them being away for longer. Organisations offering time in lieu, flexible work hours and work from home options are likely to keep employees motivated and engaged. Leitch urges employers to review their benefits program not only from a cost perspective but also to ensure they are providing benefits that employees actually want and value. These might include access to financial and superannuation advice, insurance discounts, even internet plans.
Career development is a vital component of reward strategy but it can be tough to manage in troubled times – tough but not impossible. In boom times high potentials can be easily shifted around the organisation to gain exposure in new areas. In troubled times these opportunities may be less achievable, or promises can fail. It’s important all staff recognise that in the short term ‘career development’ may require an increase in learning on the job as compared to external development opportunities. Employers should be honest and open about the opportunities the organisation can offer. “The implicit agreement between employee and employer today should be to make people more employable. So even if promotion etc is not possible, skills and capabilities should be continued to be developed. This is in the interests of both
“Changes are made in order to reach the planned financial results and this is heavily dependent on the staff whose roles have been retained. These staff want to feel confident in the future and the team who lead them” – Bruce Anderson 30
the employee and employer. This applies to everyone, not just high potentials,” says Ken Sheridan, managing director of Acelero. Leitch acknowledges that the ‘nice to have’ L&D initiatives may disappear, and remaining programs will come under closer scrutiny, but organisations cutting L&D outright will do so at their own peril. “As just one example of why you shouldn’t be cutting budgets completely, if you are looking to redesign roles, you need to be sure the people have the capabilities required to do the new-look jobs,” he says. Career development can be undertaken by including staff in projects that utilise their current skills and knowledge while developing new capabilities. Crossfunctional team projects that are well led and have clear objectives remain great career development opportunities and provide real returns to the business and staff involved. Mentoring programs also cost little except time.
Preparing for change
While continuing to develop and engage the workforce, leaders need to prepare their organisations for change. Organisations need to be prepared for whatever tomorrow brings – it could be good news on the economy; it could be bad news. Perhaps the
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company will be acquired; perhaps it will expand into a new market; perhaps it will go offshore. Leitch believes leaders and change processes are intertwined. Any leader in the current environment who fails to understand what the impact of change might be on morale and engagement on their workforce is “just not getting it”, he says. “Communication efforts by leaders need to be open, frequent and consistent. The leaders need to join the dots: what’s the impact on our business, what are we doing about it, what does this mean for you as an employee, and what are we doing for you. That approach continues to engage the hearts and minds of employees and also provides the employer with greater collateral because employees will have a vested interest in bringing
to the table new ideas, innovation, and commitment around productivity and value,” he says. Not surprisingly, this is the ideal time for HR leaders to show their value. Mastering talent management in a down economy requires the ability to handle change and risk mitigation – in short, real strategy. “It’s easy to demonstrate value in boom times,” says Leitch. “That’s when you’re doing the fundamentals well – getting people through the door, ensuring the pay is right, retaining top performers. The real challenge comes right now when you’re faced with organisational redesign, job redesign, getting the talent and leadership pipeline right, and paying attention to the right things that are going to retain, engage and excite your workforce to prepare for the times ahead.” HC
Don’t forget temps and contractors Contractors and temps have always played a significant role in organisations either as stop gap measures or as seasonal workers. They provide a ready source of low risk and short-term capability. Although perceived as being the easiest roles to cut, temps and contract roles have their own challenges because the employee may not be onboard for long. It can therefore be tough to assess their skillsets and their contribution. “Managers should be clear about the skill set, experience and attitude required in the retained roles to be successful going forward,” Anderson adds.
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Performance write off How does your performance management system stack up?
As part of ongoing research into performance management in Australian organisations, Alan Nankervis, associate professor of HRM at RMIT University recently assessed the link between performance management systems and organisational effectiveness. He discusses the results with Human Capital 32
Human Capital: What was the objective of your research? Alan Nankervis: I’ve been looking at performance management systems [PMS] through surveys for 15 years and in the past they have looked at the kind of PMS that companies have from the HR point of view. Most of the people who took part in the surveys or were interviewed were HR professionals, who tended to be biased in terms of their approach to the systems because they usually design it themselves. This time I teamed with Peter Vlant from Peoplestream and Pauline Stanton (a professor at La Trobe University) to look at the relationship – or perceived relationship – between PMS and organisational effectiveness. One would presume that PMS would be about individual performance being related to sectional performance, in turn being related to department performance, in turn being related to organisational performance – at least in theory. This time we were looking at whether managers – that is executives, middle managers, line managers and supervisors – saw the relationship between PMS and organisational effectiveness. This survey, which was conducted last year, was focused on those managers. The survey was partly based on a similar one done in the UK by the Chartered Institute of Personal Development. HC: Can you provide some details about the study? AN: Over 300 people took part in Australia and the survey was replicated in Singapore with 100 people. Fifty-four per cent of respondents were male. Fortyone per cent were aged between 46–55. It was a good distribution of diffently sized organisations. For example, 41% of respondents came from organisations of more than 1,000 employees, while 23%
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came from organisations with 200–1,000 employees. Sixty per cent came from private enterprise and the rest from public sector. HC: Can you provide an overview of the results? AN: Results were decidedly mixed. I think the executives, middle and supervisory management levels are basically saying they all believe they have good mission statements and good core values which are clearly communicated, but there isn’t a great deal of inclusion of those in PMS. Secondly, we looked at some of the outcomes that you would expect from PMS like customer care or service quality,
82% of respondents had a formal PMS, but this time we also looked at things like employee or management commitment or ownership of the systems – we called it buy in – and we found most of the people who were actively in support of performance management in relation to desired outcomes are senior management and HR professionals. Mid managers and supervisors have less commitment to actually connecting with these systems. Senior managers and HR managers tend to agree about the strategic importance of PMS whereas middle and line managers disagree. You would expect that, because usually the people designing
Customer care seemed to be high on the list, but quality wasn’t high, nor was flexibility. Productivity, surprisingly, was low on the list of outcomes desired by performance management systems flexibility, competence, etc – and again we received very mixed results. While many systems looked at things like service quality and flexibility, contributions to teams and productivity, they varied in their applicability and outcomes. Customer care seemed to be high on the list, but quality wasn’t high, nor was flexibility. Productivity, surprisingly, was low on the list of outcomes desired by PMS. In the current context that was very surprising. HC: Were there any major disconnects between the levels of management and their perceptions of PMS? AN: Just about everyone uses them but there are different views on how effective such systems can be. In previous studies,
the systems are HR and the people who desire them are corporate leaders. In terms of satisfaction with the present PMS, previous surveys saw participants record a satisfaction level of just 69%, whereas for this sample it’s less than that – 62%. So satisfaction seems to be down. HC: How is performance management handled in most organisations? AN: This ties in with previous studies as well. Until two years ago the most common PMS was the MBO system – management by objectives – which is quite a simple system. Today we see more sophisticated systems being deployed. Balanced scorecard [BSC], for example, accounts for around 83% of systems.
However, that doesn’t necessarily mean it’s BSC according to the authors of BSC – it just means it’s a more complicated system that drives the link between individual and organisational objectives. They are also using things like Six Sigma which is 46% in this study, and SMART, which is a system of looking at objectives, sits at around 43%. Statutory compliance was around 65%. HC: Can you explain about BSC not being done ‘by the book’? AN: It seems that more complicated systems are now being used but that may or may not be a good thing. Certainly BSC seems to be very popular but judging from the qualitative material is it’s not entirely a BSC combining all four quadrants [financial, customers, internal business processes, and innovation, learning and growth], but rather two or three quadrants, customised or tailored to the organisation rather than directly from the book. HC: Any other trends in performance management? AN: I think we’ll see a renewed focus on this in the coming year, even in terms of retention and redundancy strategies. My experience is people don’t take it too seriously which is a pity. The other issue is training. I’ve looked at the training undertaken in PMS for supervisors, appraisers and also employees and it tends to be declining. In this case it doesn’t seem to be important for those being appraised – for example, only 61% of organisations train all staff. In addition, only 50% of direct appraisers, 11% of heads of department and 32.5% of team leaders are being trained in these systems. That means that in many cases not only are the employees unsure of how or what they are being assessed on, but direct managers are also hazy. HC www.hcamag.com
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Breaking the shackles: The pros and cons of
telecommuting Cutting back on office rent, maintenance and energy costs; saving on employee transport and parking costs; and helping to save the planet â€“ which organisation could say no? Sonia Kolesnikov-Jessop looks at the benefits for those companies already embracing telecommuting and asks why many others have been slow to take the plunge 34
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telecommuting issue 7.4
echnology company Sun Microsystems has been growing its telecommuting ranks through its Open Work program for more than a decade, and today nearly 20,000 employees worldwide (or 56% of its workforce) work from home at least one day a week. In Singapore, for example, about 50% of the 560 employees are on a flexi-work arrangement that allows them to work away from the office. Sun’s program involves an integrated suite of technologies, tools and workplace practices that enable employees to work effectively from virtually anywhere in the world. The company’s research has found that it saves employees both time (about 2.5 work weeks per year) and money (more than US$1,700 a year in fuel and vehicle wear). But Open Work also saves the company precious resources. Measuring how much energy was consumed while working in a Sun office versus working from home, a recent internal study found employees averaged approximately 64 watts per hour at home compared with 130 watts per hour at a Sun office. Sun has also seen a significant reduction in operating costs. Over the last six years, the company has saved about US$387m in office space and utility expenses. These results clearly show some of the benefits derived from adopting telecommuting policies. Yet Sun Microsystems’s embrace of the concept remains by and large an exception in Asia and Australia. Until now, very few companies have considered it a feasible alternative to traditional work arrangements. But the tide is slowly turning, and more firms are now embracing flexi-work models that will allow for limited telecommuting.
Security, productivity concerns
Adam Bowden, a senior consultant with Robert Walters, believes the biggest concerns for most companies remain security issues and the additional costs attached to them, along with issues of productivity. “Companies are still concerned about security in terms of losing vital information and system access,” he explains. “There is also a lack of trust, which is why telecommuters tend to be more senior employees. That’s unlikely to go away in the foreseeable future.” Another common obstacle limiting the reach of telecommuting in many organisations is the fact that many still measure work performance based purely on output. Seeing staff in the office reassures organisations that they are working diligently on their projects. It also allows employees themselves a sense of security that they are working as required.
But perceptions about productivity are slowly changing in the region. According to a recent survey conducted by consulting group IDC, a growing number of Asia-Pacific managers are coming to understand the value of telecommuting. They have found that contrary to the popular beliefs, telecommuting can actually improve productivity. The 2008 survey shows that 80% of managers in the region agree that telecommuting improves performance, up from 60% in a similar survey from 2005. The most recent research also found that 78% of managers believe their organisations trusted their telecommuting employees, an increase from 66% in 2005. Many respondents also viewed telecommuting as a means of improving work-life balance among their employees. Pete Baker, HR manager with Procter & Gamble Prestige Products, says telecommuting is an important part of the company’s employer brand, and it now allows staff to telecommute one day a week. “For us, telecommuting is a genuine productivity enhancement tool,” he says. “We believe telecommuting allows employees to concentrate on priorities, which can be more difficult to do in the office when you’re interrupted throughout the day. We’ve found employees tend to do their planning and more strategic work when they’re doing their work at home.” Other companies report that telecommuting has proven particularly useful for employees who are doing ‘individual work’ such as planning, policy development and writing reports or papers. In Australia, IBM has taken the lead with hotdesking and telecommuting. Robert Orth, HR director IBM Australia/New Zealand, says that although technology has been an enabler of
Where to start? To take full advantage of flexible work arrangements, organisations need to: • invest in technology to enable staff to telecommute and ensure your IT team can support them in the event of a communications breakdown • clearly set out work expectations so both employees and managers are clear on what is required. • ensure employees have the proper ‘office’ environment at home • educate line managers to allocate work flow and reward appropriately • ensure telecommuters are regularly involved in corporate activities so they remain part of the team www.hcamag.com
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what’s it’s designed to do,” Baker points out. “As a parent of young children myself, I’ve certainly learned that you can’t take care of kids at the same time as you are working from home. You end up not doing either well.” During their working hours employees must be available and in touch with colleagues, customers and other partners. For that to happen, the organisation must have the necessary IT support and other telecommunications infrastructures in place. Paul Greene, head of HR, UBS Singapore, believes there must be an alignment between the company’s flexi-work policies on paper and the mindset of line managers. “My advice is that we should focus not so much on the policies and official arrangements and opportunities, and focus more on whether managers are able to effectively allocate the work flow to staff who may not be physically present. They must also ensure employees are evaluated and compensated appropriately for their level of contribution. You cannot have a situation where the manager is not intimately aware of the work being done by the individual not working in front of his eyes,” he says. While telecommuting certainly should not be used against staff during appraisals, employees should also not abuse the trust that the employer has placed in them. For telecommuting to Robert Orth – IBM
this, it is just one colour in a bigger painting. “Look at the world today – kids can get any information at any time – they’re all used to it. So technology was the enabler but that didn’t necessarily give us the advantage. Instead it’s about changing how people manage, how they interact, how they network. It’s a tough road but I think we’ve done well and we have focused on it because we needed the skills, capabilities, productivity, and reach into the best talent. I can now talk to people wherever they are in the world,” he says.
Making it work
There are several important factors that need to be in place before telecommuting can be seriously considered. First and foremost, the company must embrace a culture of trust. “If you’ve got that, the other things will take care of themselves,” says Baker. Secondly, companies must ensure employees have the right working environment at home including a quiet space that is free of distractions. “Telecommuting is not a quasi-childcare arrangement. You can’t have a situation where you’re trying to take care of kids and work from home simultaneously. That’s not
Case study: Sun Microsystems At Sun Microsystems, the Open Work telecommuting program has proved so successful that even new hires are expected to work from home. Elizabeth Eu, HR director for the Asia-Pacific region, says managers need to justify why any employee needs a permanent desk assigned. “We have an assessment tool to enable managers and employees to determine whether their job is suitable for flexi-work or full home-based work,” she says. While employees who telecommute have no permanent desk assigned, they can ‘reserve’ space through a central system whenever they need to attend the office. Even the Sun HR team takes advantage of the telecommuting opportunities. Out of 10 HR department staff based in Singapore, all but one telecommute. For example, Brindha Bal, who is in change of talent acquisition and manages a team of recruiters and talent sources across Asia, has been working full-time from home since she joined the company 18 months ago. Bal’s day often starts around 7am with a call to her manager and can finish as late as midnight, in order to accommodate conference calls with the global team.
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telecommuting issue 7.4
work, it is important for both parties to adopt the right mindset and attitude. IBM has taken a pragmatic approach and has worked with both employees and managers to ensure the practice works. “We’ve educated employees about what we formally have available, what their responsibilities are, and how they can utilise these practices and still interact with their team and their manager. We work with managers because this is quite challenging for them – the old idea used to be ‘if I can’t see them how do I know what they’re doing?’ So we’ve done workshops with the management team and we’ve
“It’s about changing how people manage, how they interact, how they network. Take work to the people, not the people to work” – Robert Orth
Eu believes Sun Microsystem’s program enhances its ability to attract and retain the best talent available. “Attrition rates have been kept very low. We’ve reviewed attrition by category, and it is the lowest for those working from home,” she says. But many companies that are embracing flexi-work arrangements, including UBS, still believe that telecommuting should be mainly used as a ‘tool’ on a situational or periodical basis rather than as a permanent employment strategy. “In our industry, many jobs simply cannot be done from home. For example, private bankers cannot access confidential client information at home, and transactions are agreed upon and executed in the office,” Greene explains. “Most jobs still necessitate interaction between individuals in an office environment.” Baker also points out that there are still “a lot of benefits” for collaboration and team building that derive from the strong interpersonal relationships that can only be built in face-toface situations. HC
also developed practices and policies around productivity that don’t require people to be in the office,” Orth says. Elizabeth Eu, HR director, Asia Pacific Region, Sun Microsystems, says HR should not forget the social needs of employees who are telecommuting. “Behind the individual there is a natural need for social affiliation. You must supplement communication with formal town hall meetings, informal networking events, and volunteering,” she explains, “You have to look at alternative ways in terms of engaging and pulling in employees, including those working from home, to partake in company events. There is still a need for employees to feel they are part of the company through social activities.”
Pros and cons
One of the unspoken advantages of telecommuting is that it allows the organisation to be prepared and remain functional in times of national disaster. A pandemic or terrorist strike could force people off the streets but if staff are able to work from home, it can significantly reduce the business impact of such events. Telecommuting can also prevent smaller disruptions from having an effect. During the recent Singapore Formula One Grand Prix, UBS encouraged many of its employees to telecommute to avoid the traffic and access restrictions around its Suntec office. Telecommuting has also been found to improve staff engagement and commitment. Employees see it as an important employee benefit that doesn’t necessarily cost the organisation anything beyond the initial infrastructure and technical set up. “Take work to the people, not the people to work,” says Orth. www.hcamag.com
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Under the microscope:
Executive remuneration The rise of deferred incentives may go some way towards solving the issue of executive accountability but at the same time it is making the process of executive remuneration reviews increasingly complex and time consuming. Phillip Evans outlines a potential solution
ear of accusations about fat cats lining their own pockets with little regard for employees have haunted executive remuneration decisions in the past few months. Ever since last year’s spectacular falls from grace by just a few US financial institutions, Australian executive packages have come under increasing media and shareholder scrutiny. In April, the issue made national political headlines when the Federal Government announced a productivity commission inquiry into executive remuneration in Australia. While releasing the accompanying issues paper, commission chairman, Gary Banks AO stated, “The inquiry will specifically examine whether the current remuneration arrangements are effective in driving corporate performance or whether they have the potential to lead to undue risk taking or other actions that may not be in the best interests of shareholders or the wider community.” With the final report not due until December 2009, interest in executive remuneration is unlikely to disappear in the near future. Also in April, Insync Surveys released the study CEO remuneration – a boardroom perspective, in which 625 directors were asked for their views on executive remuneration. Only 55% of those surveyed considered that their CEO’s remuneration packages were appropriate. When it came to assessing senior management remuneration, that figure dropped to 50%. The business environment has changed. The economic situation calls for cost cutting, and fixed remuneration increases
and incentive programs make a good target for immediate dollar savings. From a public relations perspective a new, cautious approach to remuneration makes sense. The challenge is to be able to show direct benefits for the incentive payments being made. It’s about transparency and traceability. If a benefit isn’t demonstrable in the year the incentive payment falls due, defer the payment until the benefit has been shown.
A question of measurement
It seems obvious that executive remuneration has climbed well ahead of the consumer price index (CPI) over the last five years or so, but so too have the returns of the companies these executives are managing. Shareholders are not going to be satisfied with a CPI rate of return on their investments. How do you measure the contribution of a particular executive to a company’s overall outcome, and how should that be reflected in your incentive compensation strategy? Ideally executive performance bonuses should be structured to include both tactical and strategic elements. Just like key performance indicators (KPIs) for other employees, the mix of tactics and strategy offers a greater chance of deriving some measurable outcomes and provides a basis for evaluating executive performance. Even with this in place, however, it is important to realise that many of the real effects of executive performance may
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executive remuneration issue 7.4 not show up in a 12 month review cycle. There is still a need for medium-term incentives considerations. One trend that is starting to emerge and which attempts to resolve this problem is the use of deferred short-term incentive (STI) payments. These work by staggering performance measurements and payments over time. For example, a notional STI payment of $100,000 may be split into three payments of $10,000 immediately; $40,000 payable at the end of financial year; and the remaining $50,000 to be paid at the conclusion of the following financial year. Each of the deferred payments could be subject to further performance evaluation and validation against the executive KPIs.
Deferred STI leads to increased complexity
While deferring STI payments does much to resolve the need for a medium-term proof of benefit, it does raise another problem. We are well past the time of opaque executive remuneration. Each decision must be justifiable, repeatable and transparent. This increase in visibility of the decision-making processes necessitates deeper analysis of employee performance and more advanced performance modelling. In short, deferring payments complicates an already complex process. This increase in complexity has led to the emergence of a new class of transactional HR tool: enterprise compensation management (ECM) technologies. The aim of such tools is to automate compensation planning and administration. They support line managers as they make individual employee compensation decisions, and they instil a discipline and set of processes that are indeed justifiable, repeatable and transparent. Typically, ECM tools are based on a series of modules, including: planning which covers job pricing and budgeting; decision making including review work flow and manager self service tools; integration to existing HR information and payroll systems; and reporting. Together, the modules assist managers in their decisions and walk them through the complex process of allocating annual compensation increases, bonuses and even long-term incentives. They also provide a means of tracking and recording the process throughout the company, providing a ready record should decisions ever be challenged. Deployment of such solutions can become a form of proof that an organisation takes the question of remuneration seriously. It reassures staff that compensation decisions are carefully considered and take into account job performance and skills. Deployment also affirms to stakeholders and the public at large that executive remuneration follows a consistent and defensible policy.
submissions, the intensity of this scrutiny will increase. The rise of deferred incentives may go some way towards solving the issue of accountability but at the same time it is making the process of executive remuneration reviews increasingly complex and time consuming. For HR, what is already a difficult annual process is turning into a major management headache. Tools such as enterprise compensation management solutions can help. Good tools enable good decision-making processes and allow whatever level of remuneration your organisation pays to be unequivocally substantiated and justified. The right tools will also help to instil fairness, consistency and accountability into the remuneration review process. Make sure your next remuneration review cycle doesnâ€™t hit the press, or if it does, make sure it gets you there for all the right reasons. HC
About the author Phillip Evans established boutique software development company Evanscorp in 1999 and today he is the managing director. Evans also developed Remunerate, an award-wining employee compensation management solution. For more information visit www.remunerate.com.au
Keeping it reasonable and achievable
As stated at the outset, public sensitivity to perceived remuneration excesses has created a minefield, particularly for public companies that must disclose details of executive packages in their annual reports. As the economic environment puts more pressure on companiesâ€™ financial results as some businesses inevitably fail, and while the Federal Governmentâ€™s Productivity Commission Inquiry continues to receive www.hcamag.com
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legal – redundancies
Safe exits: managing redundancy Following best practice guidelines are crucial when it comes to redundancies. Shana Schreier-Joffe and Manoj Dias-Abe provide some legal tips for employers
he current economic crisis gripping world financial markets has been described by former Chairman of the United States Federal Reserve, Alan Greenspan, as “one of the worst by far” that he has witnessed. In this climate of uncertainty, redundancies are likely to become a major feature of the labour market as employers look at making savings by paring back labour costs within their organisations. The process of making a decision about the necessity for redundancies can be a difficult process for employers. Employers need to comply with all relevant legal obligations, manage the termination process and put in place a communication strategy to maintain workplace morale for remaining employees. Mismanaging this process has the potential to leave the organisation exposed to expensive legal actions, and may cause affected employees unnecessary psychological harm and
irreparably damage workplace morale as remaining employees are left feeling less secure. This article outlines several important aspects that should be addressed in conducting large-scale redundancies.
A change management strategy A company facing economic circumstances which require it to make a significant portion of its workforce redundant should ensure that the redundancies are treated as a part of a broader change management process. A change management strategy involves viewing the process in a holistic way and covers various aspects, including: investigating other potential alternatives, determining legal obligations, devising a communication strategy, undertaking risk minimisation and engaging in contingency planning.
The communication aspect of the process is especially important. A redundancy process which is badly handled in terms of the way communication is undertaken runs the risk of damaging the company’s brand in the marketplace as well as injuring the company’s relationship with remaining employees, which in fact may jeopardise the long-term health of the company.
Valid reasons for the redundancies
A redundancy occurs “not on account of any personal act or default of the employee dismissed or any consideration peculiar to [to the employee], but because the employer no longer wishes the job the employee has been doing to be done by anyone.” 1 It is important that prior to undertaking any redundancies, the employer establish that there are no other cost cutting measures that the organisation can
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legal – redundancies
adopt as an alternative to redundancy. In addition, establishing a valid reason for the redundancies that can be communicated widely to the organisation’s workforce will form an important element of a communication strategy to maintain employee morale. If there are financial pressures on an organisation, these should be communicated to the workforce well in advance of any notice of intention to make employees redundant.
It is fairly commonplace for an industrial instrument to prescribe that consultation must be undertaken before making a decision about redundancies. The relevant provisions may prescribe that consultation is necessary with any affected employees and/or relevant trade union. The Workplace Relations Act 1996 (Cth) (“WR Act”) also contains consultation requirements which may be triggered in certain circumstances. Where consultation has not occurred in accordance with the stipulated procedure, an organisation may face the risk of being in breach of an industrial instrument or the WR Act, which can result in civil penalties. Consultation generally means that an employer must provide information to the parties about the necessity for the redundancies, explain how the redundancies are to proceed and take into consideration the views of employees before any final decision is made. Consultation does not require an organisation to change its position on redundancies based on the feedback received. However, consultation must not simply be used to rubberstamp a predetermined conclusion. Even where a formal consultation process is not required under law, it is generally recommended that a proper consultation strategy be developed and that an employer discuss any proposed redundancy with employees before actually making a final decision on the issue. Consultation with affected employees is about ensuring integrity of the redundancy process and affording employees procedural
fairness. It is entirely conceivable that an employee may be able to make a persuasive case as to the necessity of their position to the business going forward. Arbitral proceedings which have examined redundancy processes have often looked at the level of consultation undertaken as a key criterion to establish that a redundancy process has been fair and reasonable. Finally, it is essential that employees who are not to be made redundant and are to remain in the organisation are given some form of information about the rationale for the redundancies. It is also important that those who remain as well as those that may be made redundant feel that although the redundancies were necessary and that they were carried out in a fair reasonable manner. This will go a long way to ensure that the relationship of trust and confidence between the employer and employees is maintained.
The employees who are to be terminated on the grounds of redundancy should be selected in a fair manner. As part of this, it is necessary for the organisation to establish fair selection criteria. The selection criteria should correspond to your business needs. The criteria should be weighted appropriately, meaning that fairness will allow certain criteria to carry greater weight than others. For example, the skill and expertise of individual employees carries more weight than length of service. It is preferable if the main criteria can be objectively assessed (such as length of service and employee’s skills, qualifications, training, level of experience). The criteria must not discriminate on unlawful grounds. These grounds include such characteristics as: age, sex, pregnancy, race, marital status, disability and union membership. It is also important that the basis on which employees are selected for redundancy does not have a disproportionate impact on any particular category of employees to avoid suggestions that the employer
has indirectly discriminated against a particular prescribed group of employees. For example, if the company chooses to implement a ‘last on, first off’ policy for selecting employees for redundancy, this may have a disproportionate, and thus, discriminatory, effect on females if newer recruits were mostly females.
Once a decision has been made to make an employee or group of employees redundant based on an assessment of the business needs of the organisation, the next step is to determine the organisation’s legal obligations in respect to any severance payments which need to be made. This step often belies a complexity that is not readily apparent and it is advisable to seek legal advice during this step. As a matter of course, employees who are to be made redundant are usually entitled to the following: • notice of termination • payment in respect of any accrued and unused statutory entitlements, such as annual leave and long service leave • s everance pay It will be necessary to consult relevant legislation to identify which statutory industrial instrument (such as an award, collective agreement or Notional Agreement Preserving State Awards) applies to the affected employee; the express terms (whether written or oral) and implied terms of an employee’s contract of employment; and company policies to determine the extent of these obligations. An employer can provide employees with a severance package which is more generous than their strict legal obligations at any point in this process. This should be especially considered where the organisation’s strict legal obligations fall well below industry standards. It is worthwhile noting that the current position is that there is no statutory obligation to provide severance pay where this requirement is not contained in an industrial instrument, employment contract and/or company policy. However,
1. R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-operative Limited (1977) 16 SASR 6 at 8. www.hcamag.com
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from 1 January 2010, the Australian Government will introduce a general requirement to provide redundancy pay in accordance with a specific scale which rewards length of service.
should cause employers to be a little more wary of the extent to which this exemption can be utilised. Where an employer intends to rely upon this exemption, the employer will still be required to produce
It is important that prior to undertaking any redundancies, the employer establish that there are no other cost cutting measures that the organisation can adopt as an alternative There are limited circumstances in which an organisation will be relieved of the obligation to provide severance pay. Further advice should be sought in relation to whether the organisation’s requirement to provide severance pay can be avoided on a number of legitimate grounds, such as: the procurement of suitable alternative employment for affected employees, financial incapacity to pay, or the existence of a transmission of business.
Major risks for employers
Employees who seek to challenge their redundancy, or the amount of the payment they have received in respect of their redundancy, have several legal avenues open to them. Unfair dismissal claims Before the Work Choices reforms, the most common means by which an employee challenged their redundancy was by bringing an application for unfair dismissal. The ability of employees to bring unfair dismissal proceedings has been severely curtailed by Work Choices. An employer has a number of grounds which it can rely upon to have an application for unfair dismissal dismissed, including, inter alia, “genuine operational reasons” for the employee’s termination; the organisation employs fewer than 100 employees; and the employee has been employed for less than six months. Employers faced with this situation often proceed on the assumption that the genuine operation reasons exemption has given them a carte blanche when it comes to making employees redundant. However, an examination of the case law in this area
evidence of the reasons for the termination and establish the existence of genuine operational reasons. Breach of contract claim A breach of contract claim involves an employee arguing that their dismissal was contrary to the terms of their contract. Importantly, the contract comprises not only express terms, but also a range of ‘implied’ terms, such as the mutual duty to preserve the relationship of trust and confidence as well as provisions contained in company policies which may have contractual force depending upon the particular circumstances. Another common legal claim used by employees in this situation is a claim for ‘reasonable notice’ upon termination. An employee may have an argument that they have an implied right to reasonable notice notwithstanding an explicit notice provision in a written contract of employment. An employee may be able to argue that the contract no longer validly covers their employment as a result of a number of promotions during the period of their employment. What constitutes reasonable notice will be assessed with reference to the employee’s particular circumstances, including seniority, age, length of service and employee’s profession. Discrimination / unlawful termination claim A discrimination claim is likely to a rise where an employee can establish that they have been dismissed for a reason protected by legislation, such as race, sex, age or disability. It is essential that employees are selected for redundancy on an objective
and fair basis to reduce the chance of a discrimination claim being brought against the employer. Trade practices claim Trade practices legislation prohibits employers from misleading or deceiving employees in relation to their employment, and especially when offering employment and during contract negotiations. For this reason, employers need to take particular care when making representations regarding job security or expected length of employment, or an employee’s entitlements. In the case of O’Neill v Medical Benefits Fund of Australia  FCAFC 188, Mr O’Neill was able to establish that his employment had been terminated contrary to a representation made to him about the security of his position. Due to the fact that Mr O’Neill had been enticed away from a previous position, damages in this case was calculated by reference to how long he would have likely remained employed in his previous position had the misrepresentation not been made.
The need to ‘downsize’ an organisation in a time of economic turbulence is an unfortunate reality. However, by ensuring the integrity of the process and respecting the dignity of those affected, an employer will go a long way towards reducing the impact upon employees. Furthermore, following best practice guidelines in relation to redundancy can have an enormous impact on maintaining employee morale in the organisation and help maintain a cooperative workforce united on achieving the organisation’s goals well into the future. HC
About the authors Shana Schreier -Joffe (right) and Manoj Dias-Abe are partners at Harmers Workplace Lawyers
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people management skills
Tough Conversations in tough times Difficult conversations are dreaded by most people managers – the subject is danced around or ignored, and the conversation is often delayed indefinitely. Jen Harwood provides some tips for doing it better
n any workplace, great communication is the key to good relationships and great business results. However, for many of us it is the tough conversations which cause us the most worry, grief and lack of momentum. These conversations usually centre around topics such as: • redundancy • staffing levels • board reporting • performance issues • conflict resolution • difficult personalities (rude people) • sickness and health issues that impact on the workplace • bullying in the workplace • terminations • gossip • downsizing As tough conversations are a part of our everyday life, we need to be in communication all the time and not just when we have a confronting situation. There are some excellent books on this topic listed at the end of this article, including Crucial Conversations, Fierce Conversations and one I would encourage everyone to read called Tribes. They encourages us to have a conversation with ourselves about being a leader. The way to handle tough conversations has mostly come to me by trial and error. There is no one right way to handle them. Here are some key strategies to consider when next you need to have a tough conversation.
How tough conversations work
A tough conversation is a discussion between two or more people where the stakes are high, opinions are different and
emotions are raised. These conversations occur in every area of life and business such as HR, sales, training, finance and management. All tough conversations are one of the three types: 1. W hat happened? Something happened and there are two or more different perspectives on it, and people are going to fight about what they think happened. This may be quite straight forward to deal with. The machine broke and production stopped – it is factrelated and two or more opinions and stories need to be worked through to get to a solution. 2. Feelings. Two people who have an emotional reaction to each other: one might be feeling angry and the other might be feeling scared. These people are talking through emotional filters. Feelings need to be addressed as a priority to allow communication to flow. 3. Identity. Two people are in conflict and the conversation is threatening their whole identity and how they perceive themselves or how others will perceive them. The challenge with these conversations is for each person to confront themselves as well as confronting the other person. For example, with a bully in the workplace you not only have to face a bully, you also must face yourself about having to confront a bully. Some personalities often like being difficult personalities, and they don’t want to change their identity as it works for them. Identities such as Bully, Helper, Fixer, Drama Queen, Introvert, Intellectual, Know it All are all identity strategies that work to various degrees. If you challenge their identity you challenge
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people management skills
who they are and what they believe about themselves. An identity conversation can knock you or the other person off balance. So knowing this, there are two dynamics to the identity conversation. The first dynamic is internal reflection. This is where they ask themselves three basic questions: 1. A m I competent? This is a basic human reaction. 2. A m I a good person? We all want to be good/liked/approved/acknowledged 3. A m I worthy of love? Again, this is a basic human reaction and a primary human need. For example: A colleague is diagnosed with a type of cancer, has medical treatment for a few months, they are in remission and they come back to work. Their productivity is not as it once was, they get tired more often and can really only do half days, yet their identity tells them that they must be back at work, doing the job and doing it well. A tough conversation to have with them might be: “Since your cancer diagnosis and treatment, your strength and endurance isn’t the same. I want you to be here as your contribution is fantastic. How can we design your job so that you get the rest and support you need? Have you considered a shorter work week or shorter days?” When you say this, they are immediately going to be internally reflecting with: am I competent, am I good enough, do they really want me (do they love me)? If you know this is where they are likely to go, it is easier for you to address these questions and also make you and the conversation a safe place for them to be. The second dynamic is Feedback Reaction. The person you are speaking www.hcamag.com
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people management skills
A tough conversation is a discussion between two or more people where the stakes are high, opinions are different and emotions are raised. These conversations occur in every area of life and business with is going to deal with the feedback in one of four ways. They are: 1. The All or Nothing – This person is hypersensitive to feedback. They will burst into tears, or get angry or say nothing at all and become emotionally unstable. They are an emotional cocktail and you need to watch their reaction and monitor it. You may need to take time out to let them calm down or let the emotion out. 2. Denial – This type of person clings to the positive feedback. It takes a great deal of mental energy to continue in denial, and they don’t accept negative feedback. This is tough for you and everyone around them. Be patient with them and help understand the feedback. 3. E xaggeration – This type of person will overplay feedback to the nth degree. If it is good they build themselves up; if it is negative they are destroyed. Again, be patient and don’t pander to the exaggeration, stay calm and focused. 4. Acceptance – This reaction is rare. This type of person is self aware and open to feedback and will take it on board. Note that even the most experienced and mature people will still sometimes do one or all of the above, depending on how tough the conversation is for them – and that is ok. Tough conversations are undertaken out of commitment and contribution. Many people don’t see it that way, and now you can see why. Here are some hints that may assist you when preparing for tough conversations: 1. You are going to make mistakes. So don’t expect to be perfect, and don’t get yourself tied in knots if you make a mistake. Keep going ahead with the tough conversation.
2. Y ou have contributed to the problem. In every case, there is a part of you involved in this problem, even it is only that you are having to deal with it. 3. L et go of trying to control the outcome. The board, or the manager, or the employee is going to be the way they are going to be, you don’t have control over their reactions to tough conversations. They are going to react, and you can still be there for them. If you are prepared, if you have thought through what to expect, it will make it easier for you and them. 4. M aking adequate time to have the tough conversations. It is no good to say: ‘I’ve only got five minutes, let’s get this over with’. You need to give the other party time to respond and also time to let the conversation unfold and get complete the first time you have it. 5. T ake a break. If you are in the middle of a conversation and it is not working take time out. You can say: ‘Let’s take a break and come back in five minutes’. It is important to put a time limit so the parties do come back. 6. C heck for distortions and exaggerations. Sometimes people get carried away and they start feeding on the story, dramatising it and bringing in irrelevancies. It is your job to say: ‘I think we’re off the track’. 7. Be the Conversation Champion. Here is something tough I’d like you to consider. You are the source of the quality of the conversations in your company. Because of your position in HR or your leadership role you actually affect way the entire company conversations goes. Pretty massive idea, huh? So even if you have a CEO or a management team with no people
skills who destroy possibilities and conversations all the time, your role is to transform their conversations. Conversation champions are in communication all the time, not just at performance reviews or when things are tough. When you build trust and rapport with people during good times it is much easier to have tough conversations with your team and keep the momentum of success going. HC
Recommended reading Crucial Conversations: Tools for Talking When Stakes are High. Kerry Patterson, Joseph Grenny, Ron McMillan and All Switzler. ISBN13: 9780071401944 Publisher: McGraw Hill Education
Fierce Conversations: Achieving Success at Work & in Life, One Conversation at a Time. Susan Scott. 2003 ISBN: 074992397 Publisher: Penguin Putnam Inc.
Tribes: We Need You to Lead Us. Seth Godwin ISBN 9781591842330 Published by: Penguin [USA]
About the author Jen Harwood is a business champion. She inspires business people to create great business results though quality conversations, networking and investing in key relationships. To find out more about Jen and her coaching and training services visit www.jenharwood.com
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profile issue 7.4
Few people can lay claim to being on the executive team of a Fortune 500 company at age 30. It’s just one career highlight for this month’s profiled HR professional
hen James McKay was promoted to the role of HR director at Adecco Group Australia/New Zealand two years ago, he was aged just 30. Most people at that age are still determining if they are in the right career, let alone mixing it up with the decision-makers of a Fortune 500 company. McKay remains modest about his achievements, but there is no denying his initiatives have helped Adecco Group ride out these turbulent times in the recession-ravaged recruitment industry. As always, results speak louder than words – Adecco Group currently has the lowest voluntary staff turnover it has had in three years and the company’s global financial forecast for this year remains on track. McKay jokes that the CFO might question his influence on the former statistic given the economic environment, but clearly he’s doing something right. “I’ve worked with Adecco for nearly seven years and I believe part of the reason I was given the HR director opportunity was because I had created a platform of credibility in the HR space. Rather than the executives being thrown by my age, it was more about persuading them that the HR strategy that I developed was the appropriate one in the suite that you can choose from,” he says.
From psych to IR
Like many HR professionals, McKay’s introduction to the profession stemmed from an early interest in psychology – specifically organisational psychology – which he studied at Melbourne University. From there he undertook a graduate diploma in HRM and directed his interests towards industrial relations. His first job in an HR-related role was working as an industrial officer for the Victorian Farmers Federation (VFR). At VFR, McKay was trained by one of Australia’s leading IR experts, Richard Calver (later senior advisor to Tony Abbott), and his experiences there “built a solid foundation to build the rest of my career on”, he says. McKay joined the Adecco Group as an employee relations advisor, followed by workplace relations manager and finally the HR director role.
HR at Adecco
McKay’s current role entails overseeing the strategic and operational HR requirements for Adecco Group. He has a team of 11 direct reports, including an internal recruitment team, an
L&D team, employer relations/IR advisors, remuneration and benefits advisors and generalist HR managers. Adecco Group has a workforce of 700 ‘internal colleagues’ across Australia/NZ and an on-hire workforce of 7,000 on any particular week. McKay has four major issues at the top of his agenda: employee engagement and retention, HR metrics, and employee benefits. Like most recruitment companies, Adecco Group has always had challenges concerning employee retention. McKay believes the catalyst for employee churn is that young people often try their hand at recruitment at the larger employers in the industry, but then realise that with some basic skills under their belt they can move onto higher-paying jobs or management roles at smaller boutique agencies. To counter this, the company has put in place a policy of only hiring people who are well established rather than giving recruitment a stab for the first time. Those employees are then given clear career paths, career objectives, and a broad spectrum of employee benefits to engage them. In other words, they are given a good reason to stay.
“Our view is that people aren’t going to stay because they’ve got a gym membership; they’ll stay because they’ve got a good job and a good boss – so that’s where our focus is” – James McKay “We received feedback from our managers that career progression was not being mapped out for everybody. This year we’ve implemented our Accelerated Talent Management Program, which is designed to identify the key talent and put them under skills gap analysis and match them with a mentor who’s typically on the executive team,” McKay explains. In selling the idea to the business, McKay was careful not to take anything away from the need for managers to have development plans and career progression paths for everybody – www.hcamag.com
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not just those labelled as ‘key talent’. However, McKay believes that many companies – Adecco Group included – have made the mistake in the past of only employing people who are ambitious. “Ambition is great but we need to make sure that everyone we employ doesn’t want to become the CEO. There are only so many spots available, and we often lose sight of that,” he says. With his psychology background, McKay has always been interested in the validity and reliability of any initiatives implemented – he admits his approach to HR has always been to “measure, measure, measure”. Employee engagement has been something the organisation has struggled to assess effectively in the past so McKay has put more rigour into the HR metrics of employees: when they join the company, when they are working via climate surveys, and when they exit – even three months after they exit from the company. “In years gone by if our retention journey was one from Melbourne to Sydney, we’ve been heading from Melbourne to somewhere in NSW. With the addition of these metrics we’re becoming a little more precise about where we focus our efforts,” says McKay. Whenever McKay and his team need to take the pulse of the organisation they are careful to ensure the sample size is large
enough to create valid data. Recent surveys have seen a 70% take up rate by the workforce and have included questions like: • Do you think the compensation and reward you receive is appropriate? • Does your manager and your manager’s manager spend time with you? Is it meaningful time? • Do you understand the high level strategy of the executives? • Do you have confidence in them? • Do you feel pushed or pulled to work?
Adecco Group has strived to be an industry leader in terms of employee benefits, but McKay stresses that benefits are something organisations simply need to get right; they are, he says, an HR hygiene factor. “It’s something you’ve just got to get right. It’s not a retention tool, it’s a fundamental. If you don’t get it right people will leave.” Alongside competitive performance incentive schemes, birthday leave, and ‘Better Work, Better Life’ days, the company introduced paid parental leave and personal income protection last year. “The paid parental leave is not particularly benevolent but it’s six weeks for new mums and one week for new dads. It’s a starting
In his own words… What has been the biggest challenge you have faced in your career? I would say moving into the HR director’s role at 30 was unequivocally the greatest challenge I’ve had. It’s taken years off me! The lesson I learnt early on was that as an HR director and being on the executive of a Fortune 500 company, you can’t approach the job simply as an HR practitioner. You must approach the job as a well rounded business person. This has been the dilemma for HR practitioners for 20 years or more, since it transformed from personnel management to HR – you’ve got to know all the arms of business that pull all the levers. It’s like a baptism by fire. Having people skills in the executive area, as well as being subject area expert, is critical. What do you consider to be your biggest career achievement so far? The introduction of paid parental leave last year was a coup. One or two others had done it in our industry but I believe Adecco has set the benchmark that a lot of other companies will follow in the future. For me it was an
achievement not just internally for Adecco Group Australia but I know it will have a cascade effect for other players. Where do you see HR as a profession heading? You could equally ask the same question – what’s the future of finance, what’s the future of accounts receivable? HR is important to any business this size. There was a trucking magnate in the early 1990s who said that talent was too important to be left to the HR department. I agree with that in a way but I think the value of HR will continue to be diminished if HR practitioners keep questioning our need to justify the relevance of HR to an organisation. I’m a strong believer in the idea that the most successful CEOs keep two people close – the CFO and the HR director. If you’re being questioned about why you’re at the table that’s probably one of two things – either the person who’s asking the question probably doesn’t understand the contribution that HR makes; or the person in the HR space is more operational than strategic.
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point, and we hope the rest of the industry will follow,” he says. “We don’t have a huge emphasis on things like gym memberships and airline lounge memberships – we offer it but we think it’s a little bit trite. Our view is that people aren’t going to stay because they’ve got a gym membership; they’ll stay because they’ve got a good job and a good boss – so that’s where our focus is,” he adds. Adecco Group has taken part in global surveys like The Great Place to Work survey in the past, but McKay is wary of being branded an ‘employer of choice’ simply because a few key elements are in place so they can be ticked off the list. “It’s easy to say that once you’ve done well in those surveys that you’ve become a best employer. Having that sort of endorsement from the likes of Hewitt and The Great Place to Work Institute is useful but in the same breath we don’t want to insult the intelligence of our employees – we think the substance will be measured in the everyday experience rather than from a survey,” he says.
Weathering the storm
McKay has also been trying to convince executives that redundancies – if handled well – can actually enhance the brand reputation. “The way we deal with people right now will potentially, and ironically, improve our employer reputation. We’ve taken a policy decision that anyone who’s made redundant who and has over a year’s service will be offered outplacement or career transition services,” he says. There is a bright side as well: although the recruitment industry is often the first hit in a downturn, it’s also among the first to pick up when things turn around. Those who survive will be well placed to capitalise on market growth. No matter what the future holds, McKay has no doubt that HR’s place at the sharp end of the business is assured. “I don’t think there’s any doubt HR will remain at the table in any company that understands the value that it brings.” McKay pauses and adds: “But it’s like any other profession – it has its challenges and you need to be contemporary and on top of your game.” HC
The recruitment industry has been battered by the economic downturn. Every day brings news of layoffs and agencies going under or swallowed by bigger players. Although Adecco Group has not come through unscathed – redundancies have been made – McKay notes that the HR strategy for the immediate future is to be as proactive as possible, and while his original HR action plan for 2009 has needed some adjustments, it is still in place. “The HR strategy I developed this year had a strong flavour of staff retention. I created three pillars for the HR strategy, including internal recruitment, talent management, and remuneration & benefits. Internal recruitment and talent management act as the retention drivers, and rem and ben is the hygiene factor that we just have to get right. The core of the strategy – and it really doesn’t matter whether there’s an economic crisis or not – is good leadership and ensuring people enjoy their job. That’s why people stay,” he says. The executive team is trying to right-size the business and adjust its cost base in accordance with revenue and gross margin, while McKay is simultaneously trying to configure the workforce so that the company is ready for the recovery. “The talent management side of the equation is really about ensuring that those people we have after the redundancies are the right people we can invest in so when the recovery begins we’re not going to be hamstrung. It’s actually been an opportunity to rationalise the workforce to our environment, and we can invest more time and perhaps even more money into individuals rather than dilute that across a broader group,” he says. www.hcamag.com
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Boom or boost? 52-54 Teambuilder.indd 52
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teambuilder issue 7.4
From a junior role to HR manager in just two years, Claire Wall knows a thing or two about career challenges. She also knows the strength of teamwork
he rise and rise of Boost Juice Bars has been nothing short of phenomenal. Just five years ago the idea of a chain of stores selling healthy, freshly made juices seemed entirely logical but just a distant pipe dream for consumers seeking alternatives to soft drinks or bottled juices. Now it is almost impossible to walk into a shopping centre without seeing the familiar bright Boost colours. It is no coincidence that the corporate colours, and indeed all of the company’s marketing efforts, present a fun place to work for consumers, employees and potential employees. Claire Wall, HR manager for Boost Juice Bars Australia, believes the HR department is the gatekeeper of the corporate culture. She strives to ensure that every new team member is another valuable piece of the puzzle. “If the candidate doesn’t present as a logical brand fit, we won’t pursue. After all, Boost wouldn’t be Boost without the energy, positivity and colour it exudes. We absolutely believe that our consumers are buying into the culture and experience that is ‘Boost Juice’ when they choose to purchase from us,” she says. “It’s not simply about the great tasting juices and smoothies!”
Indeed, much like a serene duck on a pond, there is a lot of hard paddling work going on behind the scenes at Boost. Wall has treated it as the ultimate in ‘learning on the job’. She undertook work experience in the recruitment arm of Spotless and then spent time in Boost’s HR department in 2006 while completing a business degree. In 2007 she became the HR coordinator and in 2008 the HR manager at Boost. She has witnessed first hand the company’s massive growth. The company currently employs 600 team members and has 155 franchisees within the network employing a further 2,000 team members throughout Australia. “I’ve always wanted to work with people and assist them closely in some way. In fact, as a teenager I was keen to become a paramedic but couldn’t stomach the thought of dealing with trauma on a daily basis. Throughout my business degree I learned more about HR and discovered that this area of work could
provide me with an equally great opportunity to work closely with people and their situations on a daily basis,” she says. Combining full-time work with tertiary studies had its own challenges. Although Wall completed her degree via correspondence, she acknowledges this as her greatest career challenge to date. “There are many people who combine work and study so I knew I wasn’t alone, but I still found it tough,” she says. Wall’s enjoyment of HR extends beyond the day to day operations of Boost, and she now has a say in the strategic direction of the company. “It’s an interesting area of business as the right people are the biggest asset to any company, and HR really does help to mould the future of an organisation,” she adds.
Learning from the best
In her current role, Wall is responsible for the recruitment and retention of all team members. This means ensuring there are effective performance plans, cultural initiatives and assessment procedures in place to keep all staff members inspired and motivated to do their best.
“We are a solid company that invests in the right people as we plan for future success. We do not anticipate a cut in staffing levels” – Claire Wall There are two HR initiatives that Wall is particularly proud of. The first is Smoothie School, which is a program designed to encourage support office team members to interact with store team members and customers. “Every team member – including the CEO – spends four days per year working in store. This is a true reflection of the culture we have at Boost and how passionate and proud our team are about the brand,” Wall explains. The other initiative was the recent introduction of a maternity leave bonus scheme. Wall worked www.hcamag.com
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teambuilder closely with the CEO in developing this HR initiative to support the women of the business during their time away from work. Indeed, Wall notes that she’s been fortunate to have great support from the head office to assist in the challenges of keeping all staff happy and fulfilled. In particular, Wall says that reporting to the general manager has been integral to the role HR plays in the business. She has also found inspiration working with industry leaders, including Boost’s international CEO, Jacinta Caithness, who was the PWC Young Business Woman of the Year in 2008.
Alongside Smoothie School, which fosters teamwork between store and support team members, there are a number of other initiatives to build successful teams across the company. At support level, Boost conducts team meetings on the last Friday of every month. Each department takes it in turns to run the meeting, and they need to work as a team to gather company highlights and news from the field to present it back to the support office. Each meeting must be themed so that there is a fun element to the meeting. “This is a great way for team members to be working together”, Wall says. An e-network also keeps the team communicating together, with open forums for employees to discuss any topic of interest, and a monthly publication called the 411 that is all about teamwork and stories from the field. “We have Boost nights that bring franchisees, team members and senior executives together, monthly store meetings, theme days, Boostie of the Month in the office and in each store, and a wealth of other tools to keep everyone engaged,” Wall adds. Employee engagement and an overall HR theme of ‘aces in places’ – the right people in the right roles – remains the glue behind Boost’s people strategies. Like any department within the company, Wall believes that HR will continue to strive and achieve better work practices, systems and processes no matter what the economy is doing. “At any stage, it’s important to run with a highly effective team, and in an environment such as this, we need to have our aces in places and continue to grow, develop and encourage.” Rather than being daunted by the current economic conditions, Wall sees it as a rare opportunity to find great people. “We are a solid company that invests in the right people as we plan for future success. We do not anticipate a cut in staffing levels,” she says. “I think it’s important to remember what purpose HR serves. No matter what the economy does in the future, the same skills will be needed in growth times as in a downturn. Talent management, organisation design, role definition, change management and building and delivering an engaged workforce is key to successful business practices,” she concludes. HC
See Claire Wall discuss the unique corporate culture of Boost Juice at HR Summit Melbourne, 16–17 July
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teambuilder issue 7.4
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16-17 july 2009
ASIA-PACIFIC’S LEADING HR and management EVENT
Do more with less
increase performance and productivity in a challenging business environment
Lead your organisation through economic instability with practical HR strategies:
NEW case studies from recognised global brands including: Boost Juice, Collingwood FC, AXA, Mars Foods, Hewlett-Packard, Melbourne Business School, La Trobe University
» Maintain employee morale in the downturn » Manage redundancies and terminations » Create a resilient corporate culture to take you through the recession
» Protect and develop your talent base » Ensure your HR metrics are still relevant » Prepare your workforce for economic recovery
New for 2009: Intense half-day executive workshop Developing skills for new and emerging managers Register before 15 May and receive a $100 redballoon days voucher
Register online now at www.hrsummit.com.au
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Fiona Wissink business development manager – HR email@example.com (02) 8437 4746
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