Leveraging Human Capital: Are Your Employees Getting Enough Sleep?
Human capital refers to specific employee characteristics that can make a business successful. Traditionally, industrial-organizational psychologists have used the acronym “KSAO”, which stands for knowledge, skills, abilities, and other characteristics, to classify an employee’s work-related capabilities. When these KSAOs are useful for an organization’s overall economic outcomes, they are considered human capital.
Organizations often use sophisticated selection systems, or elaborate training programs to make sure that their employees have the right type of human capital that can make them economically successful. But just because the employees have the “right stuff”, does not mean that business outcomes are determined. Organizations also must find ways to harness the power of their human capital and get the most out of it. For example, if an organization pushes employees to work harder, it might think that it is spending more of its human capital—getting more bang for its buck.
HUMAN CAPITAL LEVERAGING STRATEGIES
Researchers are aware of the tendency for organizations to try to squeeze more out of its employees, and ostensibly get more out of its human capital. They call these efforts human capital leveraging strategies. But do they work? An organization that pushes its employees to the extreme may be leveraging human capital, but is this really an effective strategy that will lead to better business outcomes? Researchers (Barnes, Jiang, & Lepak, 2015) have released a new model based on existing research studies that predicts what happens when organizations try to squeeze a little more out of their employees.
ARE EMPLOYEES GETTING ENOUGH SLEEP?
The authors discuss five different strategies that businesses use to get the most out of their human capital. While they agree that these strategies may initially enhance team performance and provide an initial boost in productivity, they caution that these same strategies may lead employees to get less sleep (in terms of time), and worse sleep (in terms of quality) at night. Sleeping problems are associated with many negative workplace outcomes, such as bad moods, “cyberloafing”, decreased productivity, and more unethical behavior.
These are the five strategies that may eventually lead to disrupting employee sleep:
- Extended shifts: With longer shifts, organizations get more labor out of their preexisting workforce. Longer shifts also mean less time off the job, and fewer hours to sleep. Long hours may also more readily contribute to irrecoverable exhaustion.
- Night shifts: When companies keep working through the night, they add to the hours of money making. Yet night shifts are notorious for disrupting circadian rhythms and employee sleep.
- Schedule instability: Organizations may rotate employee through different time shifts, especially if there are some shifts at undesirable times. These changes may help maximize working hours for the organization, but the changes can wreak havoc on employee sleep patterns.
- Norm for work over sleep: An organization might communicate the message that they value when their employees work long hours and forgo sleep. For example, an employee might be praised for work emails sent at 1am. Sleep will be compromised under these conditions.
- Norm for constant connectivity: Organizations might urge employees to be constantly connected to their work email or smartphone. Sleep will be compromised when work intrudes on an employee’s time off.
The authors expect all five of the above techniques to lead to short-term productivity. This is not surprising. After all, each of these techniques leads to employees working more hours and sacrificing their personal time. Any organization that works employees harder with disregard for their health and well-being will probably notice a quick uptick in business success. But in the long run, this strategy is doomed to fail. Human capital is just as much “human” as it is “capital”. Organizations that do not consider how their policies affect the health and well-being of their employees will not be able to get the most out of these employees in the long run. If your policies are making your employees sleep deprived, you can expect long-term failure.
The Future of HR: Bringing Human Resources into the 21st Century
What is the future of HR? A new article in Harvard Business Review (Cappelli, 2015) discusses some of the ways that HR can shed its bad reputation and prove itself a strategic business partner:
It’s no wonder that human resources functions have developed bad reputations in many organizations. It falls to HR to make sure employees complete their new hire paperwork, to penalize individuals who do not attend required training, and to remind employees to elect their health benefits for the coming year. Furthermore, human resources professionals who offer anecdotal evidence rather than solid business metrics to back their visions, may reduce HR professionals’ credibility as masters of personnel management and change leaders. However, many HR departments have recently made great strides in quantifying the value of people processes and in using people metrics to support their cases for HR programs.
Historically, top executives have relied on HR professionals the most when the economy is on the upswing. During times of recession, employees value job security and work their hardest to keep their jobs; turnover is down because employees know they are replaceable. When labor is scarce, sourcing the right people and retaining top talent becomes an ever more critical business priority.
As the economy continues to recover from the 2008 financial crisis, HR will increasingly be called upon for meaningful support.
STEPPING UP TO THE PLATE
Few CEOs have formal experience working in the “people” side of business. They must rely on their HR teams to keep a pulse on critical talent both inside and outside their organizations. Human resources professionals have valuable insight to impart on important people topics like layoffs, recruiting, flexible work arrangements, and performance management.
While most human resources professionals have a strong understanding of the people-side of the company, many lack financial acumen or business sense. In order to truly make the most of their people metrics, HR departments need to attract and cultivate analytical HR minds that can identify important relationships in HR data and interpret people trends. Companies like Microsoft and Google have had great success in using their companies’ personnel data to encourage better hiring decisions, and IBM has a long history of leveraging its employee data to create more effective project teams.
RETURN ON INVESTMENT
Bringing HR into the 21st century means HR will need to be able to prove the return on investment (ROI) of its people programs. Human resources is in a prime position to show the relationship between employee engagement and important business outcomes like turnover, sales, and profits.
THE FUTURE OF HR
Rather than reacting to immediate talent needs, HR can and should become a strategic business partner by predicting future talent trends and preventing problems before they arise. Human resources professionals must also take greater steps to study the impact of human capital initiatives, and to measure progress towards goals and intended results. For example, Comcast has decided to bring its IT capabilities in house rather than outsourcing IT needs. As a result, the company’s HR team must now source desired IT talent from the Philadelphia area, which is no small task. Frequent measurement of the success of talent acquisition and retention measures will enable Comcast and its senior executives to understand and assess progress towards desired targets.
By challenging long-held misconceptions about HR as a function, and by quantifying the impact people processes have on business, a new breed of HR leaders will prove themselves an invaluable asset to any team.
Effective Negotiation: When Does Expressing Sadness Work?
People are always claiming to know what factors contribute to effective negotiation, but a new study shows that expressing sadness can work in certain situations. The authors begin with a really interesting anecdote to illustrate:
“At the peak of the Cuban missile crisis, Robert F. Kennedy, a close aide to U.S.President John F. Kennedy, talked with Soviet ambassador to the United States, Anatoly Dobrynin. In this critical exchange, Robert Kennedy acted quite emotional by expressing sadness dramatically. He “was almost crying.” “I haven’t seen my children for days now,” he said almost breaking down in tears, in a sad way, “and the President hasn’t seen his either….I don’t know how much longer we can hold out against our generals,” according to the Soviet account (Allison, 1971; Divine, 1988; Khrushchev, 1970, p. 51). In response to the sadness conveyed by Robert Kennedy, Soviet Premier Khrushchev thought that “We could see that we had to reorient our position swiftly” and he “sent the Americans a note saying we agreed to remove our missiles and bombers” (Khrushchev, 1970, p. 51). Although many factors influenced Khrushchev’s decision, this anecdote suggests that expressions of sadness may be effective in securing acquiescence in conflict and negotiation.” (Sinaceur, Kopelman, Vasiljevic, Haag, 2015, p. 1).
As scientists are oftentimes inspired, but never satisfied with anecdotal evidence, the authors conducted three different experiments to investigate whether expressing sadness leads to more favorable negotiation outcomes. The experiments used simulated negotiation situations with easily measurable outcomes. One part was given training on how to act during the exercise, sometimes being told to show sadness, sometimes told to repress emotion, and in one experiment, told to show anger.
WHEN IS SADNESS EFFECTIVE IN NEGOTIATIONS?
Results show that expressing sadness was effective in gaining more favorable negotiation outcomes, but only if one of four conditions is met. In these specific four scenarios, the listener who was exposed to sadness was moved to feel more concern for the person expressing the sadness, and therefore made more concessions to that person during negotiation. These are the four situations in which sadness works:
- The person expressing sadness is perceived to have a low amount of power. People who are powerful don’t seem to need our commiseration as much as people who are more helpless.
- The listener knows that there will be future interactions with the person expressing sadness. It’s more likely that people will invest in interpersonal relationship-building through commiseration when there is a good chance of working with that person in the future. It’s easier to be cold and indifferent to someone when you don’t have to ever see them again.
- The listener believes that the relationship is collaborative. The interpersonal relationship aspects seem more important when collaboration (instead of competition) is supposed to be taking place.
- The listener believes that it is inappropriate to blame others. Sadness, say the authors, conveys the sense that nobody is to blame for the current situation, and sadness is the only thing left to do. When the listener agrees with this, the expression of sadness gains more sympathy.
The researchers say that sadness can be more useful than anger. The first three situations were specifically chosen because research shows that anger does not work in those situations. In the fourth situation, sadness was pitted against anger, and results show that sadness was more effective. It’s easy to think that displays of anger are useful during negotiations, if only for the intimidation factor. This study shows otherwise; sadness—which might be avoided because it is perceived as showing weakness—is actually more effective in multiple different scenarios.
This study shows that sadness can be effective in gaining more favorable negotiation outcomes. However, one of four situational conditions must be present for this to work. These four situations also happen to be times when anger does not work, providing a major advantage to the emotion of sadness. Does this mean that we should all “fake-sad” during negotiations? Should we teach ourselves to cry on demand? The authors caution against this tactic, arguing that it presents very real ethical concerns. However, if sadness is one of the things that we feel, repressing it to appear “tough” might be a poor strategy. By harnessing the natural concern that human beings feel toward each other, displays of sadness might not only be the natural thing to do, but also the effective thing to do.
Recruitment Tips: Highlight Person-Organization Fit
One way organizations can make recruitment more successful is by stressing person-organization fit. Person-organization fit is a term that I-O psychologists use to describe how compatible employees are with the organizations that employ them. If an organization and a specific employee share values or ideas of how work ought to be done, or if they fulfill each other’s work-related needs, then we might say that there is a high degree of person-organization fit. It’s easy to imagine some of the ways that this would be beneficial to the organization, and past research has indeed supported this idea. New research (Swider, Zimmerman, & Barrick, 2015) took a novel approach by measuring how the perception of person-organization fit fluctuates over time, specifically during the recruitment process.
PERSON-ORGANIZATION FIT DURING RECRUITMENT
This study tracked accounting students who were being simultaneously recruited by the “Big 4” accounting firms (KPMG, Deloitte, Ernst & Young, and PricewaterhouseCoopers), and measured the applicants’ perception of person-organization fit at several stages of the process. The authors wanted to investigate the relationship between the degree of person-organization fit for a certain organization, and whether or not employees actually accepted job offers.
Results showed that job seekers immediately developed a unique sense of potential person-organization fit with each of the companies that were recruiting them. That is to say, job applicants didn’t wait until late in the hiring process to carefully investigate this potential, but instead used the limited information available to them to develop these beliefs. As the recruitment process continued, the differences between competing companies became more pronounced. Some organizations seemed to “fit”, while others did not.
These early perceptions of person-organization fit were also associated with whether an applicant accepted a job from one of the companies. Those applicants who more strongly differentiated between companies, and those applicants whose degree of preference increased as the study went on, were more likely to eventually accept a job offer. Overall, when applicants had increasingly better assessments of person-organization fit with a specific organization, they were more likely to accept an offer from that organization. On the other hand, when the applicant’s assessment of the person-organization fit for a certain company declined over time, the chances of that person accepting a job offer from that company were reduced.
HOW ORGANIZATIONS CAN RECRUIT THE RIGHT WAY
This research highlights the importance of perceived person-organization fit when recruiting job applicants. Opinions about perceived fit with an organization do not seem to be slowly and deliberately formed only when an abundance of organizational information becomes clear. Instead, job applicants establish their views of person-organization fit from the initial stages of the process. Therefore, say the authors, organizations should make extra effort up front to highlight the ways that their organization would be a good fit with potential employees, for example via their website.
Additionally, the authors recommend that organizations find ways to increase the perception of person-organization fit throughout the various recruitment stages, as the research shows that this is important. Finally, the authors recommend that organizations find ways to demonstrate to job applicants that other competing organizations do not provide similarly adequate fit. Separation from the competition is not only done by demonstrating your organization’s strengths, but also by shining a spotlight on the drawbacks of other potentially enticing options.
How Corporate Social Performance Attracts Job Seekers
In recent years the topic of Corporate Social Performance (CSP) has become increasingly of interest to major corporations.
It’s becoming more important for organizations to have a social presence, display their dedication to the community and adopt positive practices that go beyond the company’s bottom line. Some may wonder just how important corporate social performance actually is to a company’s stakeholders.
A recent study by Jones, Willness & Madey examined several questions in relation to recruiting new talent: Are job seekers more interested in working for organizations that have a greater CSP presence and, if so, which aspects of CSP are they more drawn to?
THE INFLUENCE OF CORPORATE SOCIAL PERFORMANCE
The areas of CSP that Jones, Willness & Madey were interested in investigating included how an organization’s community involvement and pro-environmental efforts influenced job seekers. Community involvement was defined as philanthropic efforts and supporting employees’ efforts for volunteerism, while pro-environmentalism was focused on policies and procedures being put in place to enable a company to become more eco-friendly and sustainable.
To get more specific, the researchers wanted to see how these two factors influenced the applicants’ prospective pride in working with a CSP-conscious company, their perception that the company’s values matched their own due to CSP practices, and their expected treatment as an employee due to the company’s social/communal efforts.
They set out to answer these questions through two separate studies, presenting CSP information to research participants in exactly the same formats most of us would use to gather information when hunting for jobs. This practical approach means that their research can easily translate into real world applications.
The first study’s participants consisted of 180 senior undergraduate students with an average of nearly two years of work experience, each of whom attended two sessions scheduled a week apart.
In Session 1, participants were given a survey with questions focused on political beliefs and values. Embedded within that survey were questions directly related to Corporate Social Performance. In Session 2, participants were asked to look at content from three fictitious companies. The content for two of the companies remained the same for all 180 participants, but the third company’s content had three different versions– one focusing on community involvement, one highlighting pro-environmental practices, and one with no CSP-related content– divided evenly among the participants. They were then asked to rank the companies and give their feedback on each one.
The results showed that participants who received versions focused on community involvement or pro-environmental practices felt that these issues carried significantly more weight in their top company choices. Participants who received a CSP-focused version of the company’s materials were more attracted to that company than participants with the non-CSP version. The results also showed that exposing jobs seekers to CSP-related information increased their anticipated pride in working with the company, as well as the feeling that the company’s values fit their own.
In the second study, researchers sought out job seekers at two different job fairs, ultimately finding 171 participants to answer a survey. They also looked at booth setups for the majority of recruiters in order to catalog the amount of Corporate Social Performance content in their materials.
The participants were asked to identify the top companies they were interested in working with, and the survey also contained questions regarding community involvement and pro-environmental practices.
The results of this study found that job seekers had more favorable perceptions of companies that had CSP information. Community involvement had a much stronger influence than the environment when it came to factors like anticipated pride, perceived value fit and employee treatment.
BIG PICTURE TAKEAWAYS
In order for companies to attract a larger pool of talented job seekers, it may become necessary to include more Corporate Social Performance information on their websites.
The researchers found that many Fortune 500 companies did not have CPS information on their recruitment and job pages. Not having this sort of content could prove to be a missed opportunity for these organizations.
The study found that it’s beneficial for companies to have pro-environmental practices, but even more important to increase community involvement initiatives, which may be perceived by job seekers as reflective of a more “selfless” organization.
Outsiders are Better Negotiators than Insiders
In a series of four studies, Van Kleef, Steinel, and Homan show that status in a group, either as an insider (i.e., a group member) or as an outsider (i.e., not a group member) is related to the ability to negotiate. For example, if you are a woman in a group of four men, you are considered on some level you are an outsider; you are different in some aspect from the majority of the group. This status as an outsider relates to your ability to perform skills that are important in a negotiation process. Outsiders experience heightened sensitivity to social cues, increased motivation to process incoming information, improved recall of information acquired, and an ability to achieve win-win solutions. So, if you an in a situation in which you are outnumbered four to one, you can take solace in the fact that being on the outside makes you a better negotiator.
Given how complexity and challenging many negotiations between groups are in business, it is often vital to pick a highly motivated negotiator who will search for, process, and assimilate as much information as possible in order to achieve the most favorable outcome for your company. In the past, many of us have assumed that sending someone with strong similarities or ties to another group would yield the best, most profitable results. These findings tell a different story.
How to get Promoted: Lessons from the movie Office Space
In the movie Office Space, Peter Gibbons, a programmer at a software company, shows up late to work, takes his boss’s parking spot, and disregards requests from his supervisor. Despite this behavior, the human resource consultants hired to assist with the company’s downsizing promote Peter, because, by being frank about the company’s problems, he makes a positive impression on them. Thanks to Junqi Shi of Sun Yat-sen University, Russell E. Johnson of Michigan State University, Yihao Liu of the University of Florida, and Mo Wang of the University of Florida and Peking University, this type of promotion behavior is now scientifically supported. Supervisor rewards (or recommendations for rewards) were linked to the number of times an employee interacted with a supervisor at work, their political skills, or the ability to make a good impression on colleagues and supervisors. Specifically, a subordinate with greater political skill was likely to interact with their supervisor more frequently. Unsurprisingly, supervisors tended to recommend rewards more for those subordinates with whom they interacted with most often.
In their study, data was collected from 53 construction management team supervisors and 296 subordinates from a construction management company in South China. Among the subordinates, most were men in their early thirties, and for the supervisors, most were men in their late thirties. So, next time you try to get a promotion, you should maybe follow the brave steps of Peter Gibbons and get noticed.
When Retailers Screw Up: How Can they Win Customers Back? (IO Psychology)
Retailers aren’t perfect. When they screw up, how do they try to get you to fall in love with them again?
Science to the rescue! In this study, researchers investigated customers’ spending after filing of a customer service complaint to a grocery retailer. Some customers received a coupon after complaining. Some didn’t. Some customers received a quick response from the retailer. Others received a slower response. Overall, they found that those who received the coupon actually spent less after filing their complaint, and those who received a quick response spent more in the time following.
Upon further digging, they found that for customers who received a slower response, the coupon made a big difference; a slow response AND a coupon reduces future spending greatly. This tells retailers to respond quickly to all customer complaints. However, if you can’t respond fast, giving a coupon may hurt your bottom line even more.
When you think about a coupon versus a quick response solution, it makes me think of being in a relationship. Ladies, when your man screws up, he might immediately apologize. He might buy you flowers. He might do both. (He might do neither; let’s be real.) If he chooses to buy you flowers, but never apologizes, you constantly look at those crappy, unattractive flowers as the cheesy substitute “thing” you got… the thing that now represents his second mistake. The flowers represent what you really wanted but didn’t get: your man immediately owning up to his mistake and sincerely apologizing for it. The flowers become undesirable in your eyes. Unhappy customers see the coupon as a reminder of being treated like crap.
But when your man immediately owns up to his mistake, apologizes, and you talk it through, ladies feel better. They feel listened to; they feel their point of view matters; they feel understood, attended to, and cared for. (This is starting to sound like a Lifetime movie…) It’s the timing and the care that matters, and this treatment impacts how you feel and act going forward.
This is a common “how” versus “what” scenario. The “how” you treat me is much more important that the “what” you give me. Coupons don’t fix the mistake. When not apologized for in a timely fashion, they represent the mistake. And they don’t help.
So apologize. Quickly. (And white tulips certainly don’t hurt…!)
Keeping Your Business Model Afloat Before It Goes Under Water
At some point in our lives we’ve all had that nagging worry of being replaced or displaced by someone younger, smarter, better looking, or more talented. Well, navigating the business world is much the same. You’ve got to be vigilant and constantly on the lookout for new products or services that come to market and threaten to steal your client base.
The best way to protect your organization from a typhoon that could be heading your way is to accurately assess the current state of your business environment, and compare the pros and cons of the goods or services you provide against those of potential threats or “disruptions” to your business. Disruptive innovations are those products that possess technological or business model advantages over their competitors. These advantages enable them to gain traction and maintain their industry status as they become more advanced and continue to gain market share.
Wessel and Christensen provide a basic framework through which you can accurately evaluate whether a threat is looming on your horizon, and if so, plan a strategic response accordingly. First off, identify the strengths of your disruptors’ business model, or their “extendable core.” What are your competitors doing really well that is allowing them to expand their market share and gain traction? Next, identify what your organization’s strengths or areas of competitive advantage are, and why consumers turn to your company to meet their needs. What aspects of your competitors’ “extendable core” may enable them to develop better products or offer better services, but in what strategic spheres might you still have a clear advantage? Finally, look to the future. What conditions could enable a looming disruptor to subsume your business and what circumstances might thwart or hinder its hostile takeover within your domain?
Consider online grocers, for example. Consumers love that they no longer have to drive to the store, search for their items, stand on long lines and drive all the way back home again. With one click of a button you can have everything you need brought straight to your door. At the same time though, your local supermarket or grocery store serves its purpose for last minutes runs to pick up ingredients for dinner. Also, there’s something about being able to squeeze your tomatoes before you buy them that online grocers will never be able to compete with. Online grocers certainly have a clear advantage when it comes to nonperishable, staple items that people stock up on. However, the necessary changes to their business model that would allow them to meet consumers’ last minute shopping needs would destroy their competitive advantage.
Give ’em the One-Two Punch!
Topic: Business Strategy, Change Management
Publication: Harvard Business Review (DEC 2012)
Article: Two Routes to Resilience
Authors: Clark Gilbert, Matthew Eyring and Richard N. Foster
Reviewed By: Susan Rosengarten
Strategists at every organization worry about keeping their companies’ products and services relevant for the twenty first century. With new electronics brought to market before you can say the word “i-phone,” its no wonder companies are finding it harder to compete and maintain market share, yet alone dominate their industries. What’s the secret to not just staying afloat, but flourishing in this economy? Well, Gilbert, Eyring and Foster have the answer for you in their article “Two Routes to Resilience.”
You’ve got to take a dual-transformation approach and come at your competitors from both sides. Give them the “one-two punch,” if you will. “Transformation A” should focus on your presently existing core business, and strategies that allow you to adjust your current business model to accommodate shifting markets, technological advancements and an ever-changing business environment. “Transformation B” on the other hand should create a separate business that feeds and thrives off of “disruptions” in your environment. The trick to creating synergy and a competitive advantage for both businesses is a “capabilities exchange” through which the parallel businesses share resources without infringing upon the mission or operations of either company.
Take the chain bookstore Barnes & Noble for example, which saw a dramatic drop in sales with the rising popularity of the virtual mega-bookstore Amazon. Barnes & Noble responded by redesigning their business model and concentrating less on lower-margin high-selling books and more on higher margin children’s books and gifts. Stores were no longer merely places that sold books, but they now sold an experience; they became a place where parents could spend time with their children and customers could peruse through gifts for their loved ones (Transformation A). Barnes & Noble also became relevant for the 21st century with its release of the ‘Nook,’ which had an advantage over Amazon’s ‘Kindle’ because consumers could touch it in their hands and try it out before buying it (Transformation B). These transformations benefited from a number of shared resources including common branding and publishing relationships.
Now’s your chance! Take the next step in transforming your business and competing with the best of what’s out there. Best of luck! Knock ‘em dead!
human resource management, organizational industrial psychology, organizational management