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.
Manager Personality Can Lead to Organization-Wide Performance
Is personality related to job performance? This classic I-O psychology question is still debated today, and thanks to the latest research, clearer answers are emerging. A new study (Oh, Kim, & Iddekinge, 2015) shows that the manager personality is related to important organization-wide outcomes. This finding has clear implications for selection of organizational leaders.
Past studies considered the relationship between personality and job performance at the individual level. For example, a study might investigate if outgoing or extraverted people perform better at their jobs. These studies only advance the field so far, say the current authors, because job performance is typically measured with supervisor ratings. Even when associations are found—say that extraverted people have better performance—there is room for organizational leaders to be skeptical: Even if extraverted people receive better ratings, will that really impact my company’s bottom line and make us more successful? An astute I-O psychologist would present a utility analysis showing the predicted financial gain for hiring each extraverted employee, but this might still be dismissed as confusing and overly speculative.
ORGANIZATIONAL LEVEL PERSONALITY MEASUREMENT
This current study does better than simple individual level-analysis, and instead measures many managers within the same organizations. This allows the researchers to ascertain two important facts. The first is the average level of a personality trait that the organization’s managers have, and the second is an estimate of the typical range (or “variance”) of that personality trait in managers within the organization. Once these two metrics are evaluated, researchers can determine if organizations with certain types of employees do better than others. For example, do “extraverted organizations” fare better than “introverted organizations”?
The researchers surveyed 6,709 managers in 71 different companies. Results indicate that when organizations had managers with high levels of emotional stability, extraversion, and conscientiousness, their organizations had higher levels of managerial job satisfaction and had higher levels of labor productivity (measured by revenue per employee).
When the average levels of personality traits were considered along with the variance or “typical spread” of the personality trait, several interesting findings were reported. Organizations with higher emotional stability had higher levels of job satisfaction, labor productivity, and financial performance (measured by return on equity), and this effect was even more pronounced when there was less variance among managers (in other words, managers were more similar on emotional stability).
Additionally, higher extraversion was associated with higher financial performance, and this effect was also more pronounced when managers were more similar on extraversion.
Openness to experience and agreeableness were related to labor productivity and financial performance, respectively, and these effects were more pronounced when there was more variance, in other words managers were more spread out on the respective personality trait.
This study shows that personality is related to organizational level success, specifically when managers are emotionally stable, extraverted, and conscientious. Results generally show that homogeneity is preferable, in other words results were better when managers had similar levels of the personality trait. This means, say the authors, that organizations might want to consider selecting employees who have these traits, and also try to create a singular organizational profile, which might encourage desired employees to initially join the company and subsequently stay as long as possible.
This study also advances the general theory and plausibility of selecting employees based on personality type. The evidence in this study may be more convincing than studies that investigate individuals and focus on performance ratings. By using aggregated organizational-level personality traits and connecting them with the most tangible measures of organizational success, the current authors make personality-based selection a more alluring proposition.
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.
Work Overload and Job Demands Lead to Lower Professional Standards
Work overload and job demands have been infamously related to many workplace problems, for both employees and employers. However, most research views work overload as something that builds over time, perhaps weeks, months, or years, and can lead to harmful effects that are measured over the long-term. New research (Dai, Milkman, Hofmann, & Staats, 2015) clearly shows that work overload is something that can accumulate over the course of a single workday, and have immediate harmful effects.
TYPES OF JOB DEMANDS
In today’s world of work, increased job demands are a common theme. Many workers experience extreme pressure to meet deadlines or to perform work of a certain quality. Other workers may experience role ambiguity, which is when they aren’t sure what they are supposed to do or which boss to listen to. Still others—especially in the service industry—may experience emotional strain from the constant need to regulate their emotions. Finally, “work overload” is probably experienced by most people at times. There is simply too much to do!
Researchers have usually found that when job demands are high, employees start cutting corners and focusing only on the parts of the job that they deem to be essential. Secondary duties tend to fall by the wayside in an effort by employees to conserve their remaining mental resources. Secondary duties are things that employees don’t get directly rewarded for, or aren’t viewed as contributing to the main purpose of the job.
WILL DOCTORS WASH THEIR HANDS?
The setting for this study was the health-care industry. Researchers used tracking devices to monitor hand-washing compliance among over 4,000 health-care providers in 35 hospitals. Hand washing is vitally important for reducing the number of patient infections, and it is also something that research shows does not occur as often as it should, as the overall rate of compliance has been documented at less than 50%.
The researchers also explain that health-care providers are a perfect sample for studying what happens due to increased job demands. Has anyone met a nurse or doctor who claims they have an easy and undemanding job?
RESULTS ARE IN – WORK OVERLOAD TAKES A QUICK TOLL
Results of the study show that as the workday goes on, employees washed their hands increasingly less often. This effect was even stronger for employees who experienced a high level of work demands. Overall, the rate of hand-washing was reduced by almost 9% from the start of a shift to the end of a shift. This may sound like a trivial amount, but it is not. The authors estimate that, based on the total number of hospitals in the US, this decrease in hand-washing could lead to 600,000 infections per year, costing $12.5 billion, and leading to 35,000 additional deaths.
The authors also investigated how time off in between shifts can help employees recover from high work demands. They found that when employees had more time off between shifts, they had a small increase in overall hand-washing compliance during the next shift. The positive effects of time off were also more pronounced when employees ended their previous shift with very low levels of hand-washing compliance. In other words, if employees had unusually high job demands, they benefitted more from time off than ordinary employees.
Finally, the researchers considered the amount of hours an employee has already worked during the week. Fitting with the overall theme, employees who had worked more hours during the previous week washed their hands even less than other employees as the workday went on. On the other hand, these overworked employees benefitted most from more time off between shifts.
This study clearly shows that the harmful effects of increased job demands and work overload can happen quicker than previously thought. Over the course of a single day, performance of important work-related tasks can suffer, especially those tasks that are viewed by employees as non-essential. Although this study presents a worse-case scenario by focusing on employees directly affecting life and death outcomes, the message applies to all jobs. All jobs require their employees to live up to professional standards, say the authors. These standards are readily compromised when job demands are too high. Which professional standards could be cast aside in your organization?
This study also displays the benefits of appropriate amounts of time off between shifts or workdays, and also makes a case against working an exceedingly high number of hours per week. Employees given time to replenish their mental resources seem to do better at maintaining the professional standards expected of them.
Generational Differences in the Workplace: Careers Aren’t What They Used to Be
With the plethora of stories in the media about generational differences in the workplace, a new study provides evidence about what these generational changes may mean for employers. Given the demise of the traditional career path, employees’ career patterns have shifted over time. The current study (Lyons, Schweitzer, & Ng, 2015) analyzed data from the four generations currently in the workforce to provide a greater understanding of shifting career patterns, and how different generations are handling some of the changes that modern employees experience.
THE EVOLVING NATURE OF CAREERS
Over the 21st century, the labor market shifted from the traditional linear upward career progression within a single organization to more non-traditional arrangements. In the new age, employers no longer provide the stability and job security that they once did, and the current workforce is not as loyal to their employers, changing not only employers but occupations and career paths as well. Additionally, say the authors, careers are affected by downsizing and growing disruptions to work-life balance. As part of the new career perspective, workers today are shifting career paths dynamically, sometimes moving upward, laterally, and even downward. With the advancement of technology and globalization, organizations are becoming “flatter” and they require increased flexibility in the changing economy.
Career mobility includes all of the changes in job, organization, and occupation, as well as status changes. Using new measures to precisely examine career mobility, the authors analyzed a sample of 2,555 professionals in the Mature (born prior to 1946); Baby Boomer (1946-1964); Generation X (1965-1979) and Millennial (1980 or later) generations.
Past research did not typically consider that several different generations of employees may be in the workforce at one time. In order to examine generational differences in the workplace, researchers must account for the varying career and life stages of the different generations in the workforce. The authors provide evidence of the social changes that each generation experienced to have an effect on their career patterns. For example, the Mature generation (born before 1946) was a smaller cohort that benefited from economic growth. With promotions available, individuals from this generation built their legacies based on tenure and upward progression within a single organization.
As hypothesized, the authors found a trend of increased career mobility for each successive generation. Millennials had that the highest level of job and organizational mobility: they were twice as likely to change jobs and organizations as generation Xers, three times as likely as the Boomers, and 4.5 times as likely as the Matures. Generation X had the next highest rate of job changes per year followed by Baby Boomers. The authors theorize that due to technology, globalization, and the need to respond to shifts in the economy, organizations are requiring that workers adapt and be flexible to change jobs.
While the rate of job mobility within an organization increased over the generations, the rate at which people leave organizations to take new jobs did not change much from generation to generation (with the Baby Boomers changing employers slightly more than other generations). In addition, the need for traditional career progression is still strong, with successive generations still desiring upward mobility within organizations.
The authors provide the following advice for human resource strategy:
- To combat the high job mobility, provide short term benefits to attract and retain employees.
- To appeal to the younger generations, provide shorter career milestones to appeal to their desire to progress quickly.
- If upward mobility is not possible, provide opportunities such as job rotation, rehiring of former employees, or partnering with other organizations to appeal to employees’ pursuit of individualistic goals.
This advice will better prepare organizations to adapt and succeed in the ever-changing world of work.
Human Resource Practices Influence How Employees Spend their Time at Work
Human resource practices are important, and so is the way in which employees choose to spend their time at work. Both undoubtedly impact organizational productivity and effectiveness. New research (Boon, Belschak, Den Hartog, & Pijnenburg, 2014) explores the ways that an organization’s human resource management (HRM) practices influence the time employees spend on certain tasks, as well as the effects on absenteeism.
TYPES OF EMPLOYEE TASKS
The article distinguishes between two ways that employees spend their time: core activities and contextual activities. Core activities are explicitly stated in a job description and contextual activities are not necessarily part of the job description but nonetheless add value to the organization. Core (or task) activities are short-term oriented with immediate payoffs for the organization. Contextual performance does not have immediate payoffs but instead has more long-term benefits for the organization.
TYPES OF HUMAN RESOURCE PRACTICES
Human resource management (HRM) practices affect employees in both positive and negative ways. There are three “bundles”, or types of general HRM practices:
- People flow bundle: practices concerned with developing employee skills and training.
- Employee relations bundle: practices that support employees such as work/life balance policies, job redesign, and facilitating team work.
- Appraisal and reward bundle: practices dealing with monitoring employees and directing their efforts towards organizational objectives.
These practices are communication tools for the organization, which are capable of sending various signals about what the organization values. Employees perceive these practices in different ways, which in turn affects their behavior. The study examined how employee perceptions of these HRM practices affected the time they allotted to task (short-term oriented) or contextual (long-term oriented) activities as well as the impact on absenteeism.
In general the researchers found that perceptions of the HRM bundles were related to employees’ time allocation. For example, employees who perceived that their organization was using the people flow bundle (development of employee skills), spent more time on contextual activities and less time on task activities. In this bundle, the emphasis on employee skills and training concerns long-term results, with employees similarly choosing to focus less on short-term task performance and more on long-term contextual performance.
Results also showed a relationship between certain perceptions of the different HRM bundles and lower job satisfaction and ultimately higher absenteeism. This implies that work situations perceived unfavorably due to organizational practices may lead to employee dissatisfaction, which ultimately leads to the employees being absent from work.
IMPLICATIONS FOR ORGANIZATIONS
This study shows how various HRM policies can encourage either short-term task activities or long-term contextual activities. Each has different relevance to different employee groups at different times and highlights how HRM practices can facilitate the strategic goals of the organization. Another important aspect for consideration is that organizations should be aware of the relative costs associated with certain HRM practices. For example, practices that encourage contextual activities divert employees’ time and effort away from task activities that have an immediate payoff, and towards activities that have more long term payoffs. Organizations may want to consider which is more important for their success.
Age-Inclusive HR Practices Lead to Improved Organizational Outcomes
Most industrialized countries are facing challenges posed by aging populations. Correspondingly, companies have to manage and engage a more age-diverse workforce than ever before. Sometimes, employees from three or even four different generations may work in the same company. Boehm, Kunze, and Bruch (2014) examined the effects of age-inclusive HR practices on organizational outcomes and found promising results.
WHAT ARE AGE-INCLUSIVE HR PRACTICES?
Age-inclusive HR practices may include, but are not limited to, age-neutral recruitment and selection practices, equal opportunities to training, promotion, and transfer, and promotion of an organizational culture that values employees’ contributions regardless of their age. Basically, the HR practices should consistently reflect the organization’s commitment to an age-diverse workforce.
HOW DO THEY LINK TO ORGANIZATIONAL OUTCOMES?
Age-inclusive HR practices impact organizational outcomes indirectly through age-diversity climate. Age-diversity climate is defined as “organizational members’ shared perceptions of the fair and nondiscriminatory treatment of employees of all age groups with regard to all relevant organizational practices, policies, procedures and rewards.” In other words, it refers to employees’ shared impression that the organization takes an age-neutral approach to recruitment, promotions, and other employment practices.
Age-inclusive HR practices serve as signals of an age-diversity climate to employees. Employees are likely to perceive the organization as more just, supportive, trustworthy, and having a long-term interest in employees. Therefore, employees will reciprocate with more work-related effort and support for their colleagues, which will contribute to improved organizational performance. Also, organizational commitment and intent to stay will increase, thus reducing turnover intentions.
Through a survey study with 93 German companies, the researchers found that companies with more age-inclusive HR practices enjoyed better age-diversity climate and better organizational outcomes in areas of company growth, financial performance, return on assets, employee productivity, and efficiency of business procedures.
WHAT SHOULD ORGANIZATIONS DO?
HR practitioners need to be aware of the demographic change of the workforce and be prepared to handle this trend. Age-inclusive HR practices that address equal access to employment, promotion, training, and opportunity to contribute may be a valuable tool. In order to further promote an age-diversity climate, HR practitioners should also make sure to communicate these practices to employees to increase their awareness. Lastly, age-inclusive HR practices are advantageous to all organizations, not only those featuring a high age-diverse workforce.
Restrictive Work Policies: Gaining Employee Buy-In
In this day and age, many managers are finding themselves in the tough position of enforcing restrictive work policies on their employees. For example, a company may no longer allow vacation days to be taken during a busy week or on specific days of the week. This can be a tough position. Getting employee buy-in on restrictive work policies can prove quite challenging. Yet, the manager has to enforce what is best for the company, while at the same time keeping the employees content with their job. So, when enforcing a restrictive policy is necessary, how can managers simultaneously keep their employees happy?
This article looks at four studies that examined enforcing restrictive work policies in different scenarios, and how they helped or hurt employees’ adoption of the policies. Ultimately, these studies suggest that employees can be more hostile to policies, when the policy is presented as restrictive. However, when employees learn of a similarly restrictive policy, but aren’t given any indication that the policy is restrictive, they will not respond as negatively.
For organizations, this means, when enforcing a restrictive work policy, careful phrasing and presentation is important. If the policy is introduced without indications that it is restrictive, many employees will justify the organization’s need for the policy.
The authors of this article did not specifically argue organizations should always use this tactic to enforce restrictive policies on their employees more easily. However, it a good tool, allowing management to do what is best for the organization, without triggering negative feelings in those affected. Of course, this tactic should be orchestrated in the background and not openly discussed. It is important to note too, that even if this tactic is employed, employees may still arrive at their own conclusions that a policy is restrictive. Rather than this being the go-to tactic for restrictive work policies, it may be a better fit for organizations having a difficult time with employee buy-in. If organizations are able to sell restrictive work policies to employees without identifying that the policy is restrictive, the employees may subconsciously justify the policy, allowing the organization to have an easier time putting the policy into action.
Implementing Creative Ideas at Work
Creativity is an interesting thing. It tends to strike people differently at different times. For me, I am most creative in the air; generally while enjoying my micro-pretzels from Delta.
But creativity is completely useless unless you can make your ideas a reality. In my job, I am lucky that I have a cool boss who lets me bring my weird, atypical ideas to life. (I’m also hoping I get props from my boss for calling her “cool” in print.)
Sadly, the implementation of creative ideas at work is not simple. Creativity challenges the status quo. Change can make people uncomfortable, even combative. People often resist creativity, because they aren’t sure the results will be worth the risk.
In this study, researchers wanted to learn what factors lead to creative solutions. Specifically, they found that individuals with many creative ideas were more likely to have those ideas implemented when they also possessed a high motivation for successful completion, strong ties within the organization (for buy-in), and robust networking abilities. But when the researchers dug a little deeper, they found some factors predicted implementation more than others. Overall, the findings suggest that the link between creative ideas and their implementation is very complex, and must take into account individual, relationship, and situational factors.
Creativity does not equate to implementation; just as micro-pretzels do not equate to being in first class.
What do you think helps get creative ideas at work implemented?
Good Stats Make Us Uncomfortable (IO Psychology)
In striving for profitability, companies often rely on key indicators of organizational performance. Common indicators like sales growth, customer loyalty, and earnings per share often guide strategy decisions and resource allocation. But sometimes key indicators may not be that “key” after all. They may have little or no true connection to profitability.
Organizations might not be aware of this and continue to rely on these same measures because they feel as though they matter. Their intuition overrides everything else and as a result they don’t do the due diligence to determine what actually leads to profit. They become overconfident, grab onto any numbers that are easily available, and rely on things they have always looked at in the past. They choose what they like and what feels comfortable. But they don’t actually analyze. So how can we know if something truly predicts value? We cannot leverage something we don’t know.
This article focuses on identifying indicators that serve as true statistical predictors of value. The author emphasizes that for an indicator to be truly connected to value it must be both predictive and persistent. Indicators that are predictive demonstrate a statistical link to value; a link strong enough that we feel confident saying there is a connection that has meaning and is not due to chance. Indicators that are persistent stand the test of time; they reliably show that that an outcome is controlled by applying skill or knowledge, and is not random.
The author advocates several steps in selecting the best indicators of organizational performance. These steps include defining a clear business objective, developing theories to determine what measures might link to the objective, and statistically testing the relationship between the measures and the objective.
As I read these steps they made complete sense to me, but my data-happy left brain went nuts, thinking about others questions that should be considered. Like: “What else do we already measure?…Could it matter?” and “What else can we measure?…What else should we measure?” and “What other viewpoints are we not taking into account?” and “What curveballs could come our way?”
Sometimes a meaningful statistic can push us out of our comfort zone. Actually, sometimes a meaningful statistic should push us out of our comfort zone. It might not make automatic, inherent sense to us, especially at first. If all statistics made complete, gut-happy sense to us we wouldn’t need them. We could always rely on our intuition because it would always be correct. But statistics are useful because they not only tell us how meaningful things might be related; they can surprise us with the sheer fact of what things might be related.
If a predictor of success isn’t pointing in the direction of success, it’s not a predictor. It’s simply a number. And a useless one at that.