Human Capital Management objectives are quite simple - business needs skilled, available and engaged employees to fulfill the roles they are contracted to do.
However, achieving that objective is not simple and issues arising may be rare or complex; often too difficult for management to deal with and requiring third party intervention. Phoenix North provides businesses with such support.
Phoenix North operates under a system of beliefs. Click on any of the functions below this box to identify those beliefs.
If you have an issue and an affinity with the relevant belief, then support from Phoenix North will be the right cultural fit for your business.
Mission defines a business' reason for existence generally in terms of its products or services.
Often as a business grows or diversifies it becomes more difficult to encapsulate the mission in words. This must be done otherwise there is a risk of not being inclusive of everyone in the business and this has the potential for harm when it comes to stakeholder consideration and the allocation of resources.
Consider the following mission statement:
"The XYZ Corporation is a marketing-centred, professional service company that concentrates its efforts on providing services to satisfy the wants and needs of residential and commercial consumers at a value to the consumer superior to the competition."
Was it clear to you this is a Lawn & Carpet Care Company - No Way!
Not so with Jim's franchises. Each of the twenty or so franchises stand alone e.g. Jim's Mowing, Jim's Cleaning, Jim's Fencing, Jim's Dog Wash.
The key to defining mission is in the critical success factors for each business unit and the skills of the business leaders. If there is no synergy between these then beware the inherent risks.
Vision is just that - it’s a picture
Forget all about being the best of the best and drawing on other superlatives. If employees and others can't see what it is the business is aiming to be then it’s not going to create a focus or inspire anyone. Vision drives progress when it has sole and unwavering commitment from those in the business that control the business resources.
However, in our complex and changing business environment how realistic is it for a business to have a "vision" when managers continually need to monitor the environment and re-assess strategies for development. Perhaps a simple statement of ambition or strategic intent may be more useful. Whatever, businesses should set some direction to control the decisions of resource allocators.
Pepsi's vision - To be better than Coca-Cola. We get that.
Shared values are the glue that binds the employees of an organisation together.
When employee values are aligned energy is focused externally on business outcomes. When employee values are non-aligned energy is focused internally on conflict resolution generally at the expense of the business.
Value groups align with organization structure. Initial organizational structures had a management control focus, transitioning to service-oriented structures in the late twentieth century and now giving rise to team-based structures (see Management Through Relationships on this site for further information).
Values are motivators of people’s behaviour. Employee values should support the critical behaviours for success in an organization. It's critical for a business that its leadership group share the appropriate values and are a strong influence on employee behaviour. i.e. they walk the talk. Stating values (as many organizations do) is not enough. People live the same values differently - it's necessary to define how the values should be acted out. Nelson Mandela and Pol Pot both shared the value of changing their country.
Understanding the importance of values for business is a complex matter but it is manageable. Values are at the core of all your relationships with employees. It is also at the core of all your management systems. Principal Col Keily is an accredited values consultant with over twenty years’ experience in executive HR management roles. That is the experience available to you through Phoenix North.
Safety in the workplace is best managed when it is integral to task planning and continuous improvement processes. It must be owned by Operations however it can be structured as a support function (see Management Through Relationships on this site for further information).
Under Australian law there are significant penalties for managers responsible for accidents through negligence and it’s not just top management but anyone involved in the relevant decision making. Companies are wise to have safety as a core value and safety should be a regular agenda item on Board and executive leadership teams to ensure that management is fully aware of the functionality of their safety management system. Ignorance or delegation does not absolve leadership from safety responsibility.
Modern workplaces, equipment and work practices are quite safe. Applying the 80-20 rule it is often said that employee inattention and thoughtlessness are the cause of 80% of workplace accidents not that one would know this from statistics. To save face and embarrassment employees will generally attribute the cause of their accident to some external factor such as the equipment or environment etc. Since most supervisors are conflict averse (see Counselling/Discipline on this page) they will not challenge the cause but rather gladly spend money fixing a problem that never really existed.
The risk of this occurring can be mitigated by promptly conducting accident investigations. Phoenix North can conduct behavioural accident investigations where employee decision making pathways are examined and this can be quite revealing of the workplace culture.
Effective communication is vital in modern organizations as it is at the core of all relationships. (see Management Through Relationships on this site for further information).
Information is vital to effective communication in a business. Persons who control information control power. In traditional hierarchical organizations information is communicated on a need to know basis to empower employees in the leadership hierarchy. In modern organizations where employees are much more empowered to make operational decisions, reflecting the direction the organization is heading and the environment in which it operates, information should be communicated much more transparently on a "no harm in knowing" basis.
While information can empower leadership, lack of information can undermine leadership.
At any time, there is always a need for information in a business to be confidential. Confidentiality is a much admired and respected personal trait and is a challenge for many. A breakdown in confidentiality in a leadership group is the first outward sign of its dysfunctionality (c.f. political parties). In modern organizations where employees at lower levels are likely to be involved in multiple teams there is a challenge for them to retain confidentiality for team loyalty although the information they hold is not likely to be commercially confidential.
Half information in an organization can often be more damaging than no information. People have a natural tendency to make sense of half pictures by completing the picture for themselves inserting facts related to their own bias and prejudices. These completed pictures become reality for them - have you ever wondered where rumors emanate from.
The importance of communication for business is the subject of textbooks and yet many businesses give scant attention to managing it and just letting it flow.
A communication policy - who, what, when, how and to whom - should be a foundation policy of the business. It is good practice to make communication the last business agenda item on every meeting. Leaving communication to chance and unstructured has its risks but more importantly wastes the great opportunity to engage and inspire your employees.
Every employee communicates but how good are they at talking, listening, writing, comprehending and use of different media. Targeted across the board training in business communication skills can change your business culture and improve every aspect of your business operations.
Leadership is all about influencing others and it's seen as an essential quality in the management of groups of people however large. Early research on leadership focused on leadership in the military which by the second World War was seen as a tactical advantage. In the second half of the twentieth century psychologists and management gurus applied their study to the behaviour of successful leaders attempting to train people in such behaviours, much like tennis or golf coaches attempt to train aspiring players in the mechanics of the champions swing.
The military created trappings of office to denote leadership - rank, uniforms, epaulettes, gold braid, caps and other regalia, and industry followed suit with titles, clothing, office space, office furniture, cars, car parking, employment benefits, etc. The trappings of leadership worked well in military style organizations but doesn't "cut the mustard" in modern society and no amount of leadership behaviour training works either just as we can't make everyone a sports champion.
Its only followers that make a leader, it’s as simple as that and it can't be created. Consider this translation from the NZ Haka: If humility is beneath you then leadership is beyond you. Anyone motivated by the trappings of leadership won't make a leader.
To manage a business, we need managers and supervisors. Management and supervision is about controlling people and processes and people can be trained in these skills. If an organization can find natural leaders for these positions well and good but it won't always be that way. What business should do is identify, develop and exploit their natural leaders to get the best benefit from their standing and it doesn't always have to involve promotion to a management/supervisory position. There is a lot to be learned from the structure of elite sporting teams; a coach (manager) a captain (leader) or co-captains (leadership group) and skilled players (employees).
Training is essential for business success. If you are not training and only hiring skilled people you are not carrying your weight in your industry and you are destined for high turnover. If you are training you will attract and retain employees and that's good for business.
There are three entry levels to an organization - unskilled, trainees/apprentices and degree graduates. Trainees/apprentices have regulated programs giving them industry competencies, unskilled rely on your resources and degree graduates have broad first principled knowledge but little to no practical experience. Good employers of graduates will put them into a cadetship to expose them to as much experience in their discipline as possible before appointing them to a functional role. Making an appointment too early severely limits a graduate's career options and may drive turnover.
Training is about skills development, education is about knowledge acquisition.
Short course training programs (generally 1-3 days) are better described as accelerated learning - knowledge of 20 books made clear through anecdotal information. The knowledge should be immediately applied to the development of a policy, procedure or process for the program to be of value. Retention of that knowledge is short lived if not applied.
Skills development produces competencies if the skill is well grounded through repetition for long term retention. A skill is a competency when it can be done without conscious thought. Beware the short-term training provider that claims a trainee is competent at the time of assessment. It might be of value if the trainee goes straight on the job to build retention, but any significant break between these events will render the training useless.
No matter what training accreditation an employee holds, under safety legislation the business is always accountable for the competencies used by its employees.
Training in internal policies, systems and procedures is rarely well structured. Its often managed through a quick and intense induction program, by buddy demonstration or by being around and using one's initiative. There is significant benefit to be had by structuring this training more formally - it gets delivered to a standard, competencies can be ensured, it saves rework when things are done properly first time and every time, it builds a common language in the business and it promotes a culture of excellence. Phoenix North is experienced in developing such learning programs.
Employee Relations is about keeping employees on side and engaged with your business. To be engaged they need to be clear on what they are doing, know the boundaries in which they operate, know how they are contributing, and know they are valued - they need to belong and be proud of what they are achieving.
Business sustainability and security is important. When a business is profitable and sustainable employees can feel secure and focus comfortably on their work/life balance ensuring that the importance of work is in balance with their other life pursuits. When workplaces are in stress, employees are stressed and their work/life balance is upset. Ironically a business cannot stand still if it is to be sustainable so change in business must be a constant. Just as a person grows, develops and changes so must a business. A good workplace is one in which there is strong decisive leadership that sets clear direction, change is on-going and well managed and employees grow with it.
Maintenance of an employee’s self-esteem is critical to good employee relations. A good workplace will be fair and equitable. Reward and remuneration will be proportionate to an employee’s skills, qualifications and experience and the contribution they make to overall business performance.
Notwithstanding differences in roles and responsibilities, all employees should be treated with dignity and respect and valued for the role they play and the work they do, which if not done would cause the business to suffer.
Employee Performance Management gives rise to performance review systems which while noble in cause have a morass of conflicting purposes that usually guarantee they will not work. Performance Review systems are an American initiative - Americans love to talk, Australians don't. "How'd the job go." "OK" "Good" is about the extent of an Australian supervisor/employee job review. Formal reviews are loathed by both reviewer and reviewee and given any plausible reason, programmed performance reviews won't happen. If they are done they are done poorly.
To maintain one's self-esteem people usually attribute achievements to personal factors such as their skills and ability while failures are attributed to external factors such as their boss, their equipment, their budget, the weather - the list is endless; it’s not my fault. Interestingly, they are not so generous with their peers and as a consequence virtually everyone thinks their performance is above average. Any linear grading scale where the organization thinks statistically that employee performance should for the most part be in the satisfactory grading will cast a slur on most employees.
Job/task/project reviews should be on-going. Successes should be congratulated and inadequacies should be addressed and corrected. This needs to be driven into the work culture as Australians see reviews as time wasting - they just want to get on with the next job. Changing job/task/project priorities should be the subject of on-going negotiation between managers and subordinates,
Regular (say annual or half-yearly) performance reviews are best done if the focus is solely on enhancing the effectiveness of the job role. Employee performance is just one of a number of issues which could impact on the effectiveness of the job role and should be considered as such. Critical success factors in a job should be well understood by both parties and any framework for discussion should reflect the uniqueness of jobs in an organisation - reflecting on organisation generic traits as some systems do demeans the process from the outset.
A training plan for the reviewee and development plans for the reviewee and the business are achievable outcomes of such a review.
In modern organizations (see Management Through Relationships on this site for further information) the focus on job role switches to team role and employee performance needs to include consideration of team contribution.
Training in traditional organizations focus on "gap analysis". That is focusing on the employee's lesser skills and developing them to the level of the employee's strengths. This is unnatural. In multiskilled teams a person's lesser skills are compensated by another's strengths. Training should enhance strengths in these modern organizations to build the overall strengths of the team.
Decision Making has become a dominant activity for modern businesses operating in an increasingly complex and diverse world.
Pre-1980 organizations were hierarchical with decision making the sole responsibility of the top leader. Employees worked as instructed - any problems arising flowed up the organization with decisions flowing down. By the 1980s this process was too cumbersome and structures have evolved since to meet new challenges and now involving decision making at all levels of an organization.
In the decision-making process viz, problem identification, analysis, decision, communication, implementation and review, all too often in Australia little emphasis is given to the communication and review stages.
In this century with the advent of talk-back radio and social media, Australians have been encouraged to have opinions and make commentary much of which is ill-founded (fake news). In business where decision making is encouraged at all levels, employees are learning that there is a big difference between voicing an opinion about what should be done and making a decision about what to do and being held accountable for that decision.
Training may be valuable for employees to understand some of the steps and tools that can be used in decision making but coaching from seasoned managers should be the primary strategy to inculcate this skill in a business.
Enunciating company values together with clearly defined principles, morals and ethics is a necessary framework for employee decision making. No-one makes perfect decisions all the time. There will be many occasions when decisions will need to be made promptly to get on with business. Employees should be encouraged to do this so long as they operate within the business’ values framework. To go outside that framework can cause significant harm to the business and must be treated as a disciplinary matter.
Remuneration is fundamental to the employment relationship. Money is a measure of what one values and remuneration is a measure of how much the business values the employee - certainly in an employee's eyes. Fairness and equity in remuneration is critical to organization morale and yet most employees over-rate themselves in comparison to their peers.
There are 5 factors affecting what an employee should be paid, viz, 1. the size of the job (measured in terms of know-how required, complexity of decision making and impact on business bottom line), 2. minimum wages, 3. supply and demand (the job market), 4. industrial duress (strikes) and 5. productivity.
The size of the job is the one universal measure (there are systems that measure this) and this could resolve all fairness and equity issues however translating this information into dollar amounts is tainted by the last three factors. Raising annual salaries for short term industrial peace, short term lack of supply and short-term productivity produces not only inequities but everlasting overpayments which can never be reduced and only mitigated against by reducing overall employment costs through implementing labour saving technology, downsizing or outsourcing.
Remuneration unfairness and inequity might be tolerated in a tight job market but in a buyers’ market employees will leave and of course it's the most valuable employees who will be most attractive in the market. This problem is compounded if a business losing labour hires new labour at the higher rates without reviewing all salaries in the organization.
Business managers need to give utmost attention to remuneration management.
Recruitment is not an exact science. The process is about minimizing risk.
Past behaviour is the best predictor of future behaviour. I.e. if a person “has been there done that” then one can predict with reasonable confidence that they can do it again. Observing a person in the job or in a job simulation is the best way of measuring if a person can do a job. Generally, interviews are the most unreliable method of measuring future job performance. However, interviews can be strengthened if they focus on what a person has done (past activity questions) rather than what a person will do (hypothetical or “what if” questions).
In addition to determining if a person has the skills to do the job, their motivation to use those skills is important as well as their organizational fit - do their values match the culture of the organization.
Fairness in the recruitment process is based on an assessment of each candidate solely on the selection criteria and no others. Interviewers should explore the candidate's unique experience to make that determination. Each interview will be different. The exploration of responses is critical in developing an appreciation of the candidate's skills. Interviews should not be an oral examination.
When a decision to recruit is made the reasons for the decision (i.e. the candidate's experience) should be reference checked. It's not appropriate to ask some perfect stranger if they would hire the candidate again. Not all managers are good managers. Some other manager's support may ease the burden of a decision but it should be known that it has become a contemporary practice in dismissals for an organisation to agree to positive references and other terms to avoid unfair dismissal claims.
Motivation is best achieved when an employee can measure their own performance. What employees need from their managers is not to have their performance measured but rather to have their achievements recognized.
Setting Key Performance Indicators for jobs, identifying measures for those indicators, setting targets for improvements and rewarding achievement with monetary bonuses as a way of motivating employees is fraught with difficulty. At worst the business pays bonuses for employees just doing their job and the issues with the mechanics of the system (setting, capturing data and measuring) generally means the results are little better than that. Creating expectations that are not realised is demotivating not motivating. Managers are tasked with either rigidly managing the system and demotivating an employee or capitulating and retaining motivation. When it's not the manager's money that decision is a no-brainer.
Modern employees working collaboratively in organizations have shown a preference for measuring team performance rather than individual performance. When team performance is linked to business unit performance and hence the bottom line, data is generally already available in management systems and is much more meaningful and transparent in the business. Generally, the rewards don't have to be great in such systems because employees working collaboratively get their satisfaction from the comradery of working together and successfully developing their own initiatives to get results.
Compliance with local, state and national laws is critical to one's business. Non-compliance can close a business.
Business in modern society seems to be ever increasingly impacted by regulation in the important work areas of environment, discrimination, industrial relations, workplace health and safety, and construction, operating and manufacturing standards. Some might say there is so much compliance in legislation and that it’s impossible to fulfil the obligations imposed on business especially in the startup phase of a business. There is purpose behind compliance and generally it focuses on the welfare of people in both the workplace and the community. Where businesses are faced with a resource allocation decision to comply, a risk management approach using a risk calculator is a good approach to making sound, transparent and defensible decisions and prioritising actions.
Some areas of compliance come with standards and codes for minimal acceptable standards of compliance. Standards and codes reflect the values of the author and how the author believes compliance should be managed. Business should ensure that any introduced process of compliance fits the business culture and in so doing if changes are made ensure the changes satisfy the objective of the process. This applies equally well to the purchase and implementation of any proprietary product.
Industrial Relations is at the heart of employment contracts. Modern Awards define minimum rates of pay for classes of employees within vocations or industries. With one exception employees in a vocation not covered by a vocation or industry Award are covered by the Miscellaneous Award. The exception is for employees who were traditionally covered by common law contracts before the formation of the Modern Awards. These are seen as professional areas such as Finance, Accounting, IT, Marketing, HR etc.
Awards were legislated into existence through industrial commissions to resolve disputes between unions of employers and unions of employees. Awards also cover terms and conditions of employment. Terms and conditions do not apply to employees whose annual salary is above the "High Income Threshhold" which is reviewed annually. Further, employers can contract out of terms and conditions in employment contracts if the annual salary paid off-sets the monetary benefits of the terms and conditions of the relevant Award. This century, Federal governments have legislated some terms and conditions of employment known as the National Employment Standards and these apply to all employees and cannot be contracted out of.
Since the mid-1990s industries have been able to negotiate Enterprise Bargaining Agreements which are better off overall than the Award and with the aim of improving the productivity of the business and increasing wages accordingly. Employee Unions are the default negotiators for every Enterprise Agreement. Early agreements tackled union-imposed demarcation in the workplace and produced productivity gains through reduction in labour but this process has run its course.
Dispute Avoidance is vital for management. Disputes may be resolved but the emotions that go with disputes linger on leading to lack of trust and decline in morale. Unfortunately, because disputes involve perceptions, being logically or technically right in a dispute does not always satisfy those in dispute.
The key to dispute avoidance is open and transparent communication before events occur. This is not always easy when some matters are "commercial in confidence" and this is why confidentiality among decision makers is critical. Leaked information leading to perceptions being formed and rumors developing, destroys any chance of resolving ensuing disputes through rational and logical debate.
Change to terms and conditions of employment (a legitimate cause of dispute for employees) should be put as a proposal to employees inviting consultation. Issues raised by employees should be addressed and eliminated leaving "clean air" to affect the change. In the process employees will accept the vision of change eventually asking "when is this going to happen” There is no shortcut to the consultation process. The time it takes is minimal compared to the time it takes to resolve disputes which also leave lasting damage. It is human nature for people to resist change through finding concerns if change is thrust upon them.
Management often spend an inordinate amount of time analysing a position before coming to a decision and then when they do, expect it to be implemented immediately. Out of respect, employees should be accorded an appropriate amount of time also to come to embrace the vision before change is made. (See Decision Making in this set.)
Counselling / Discipline is a necessary role of management to ensure their workforce is skilled, available and engaged. Any decline in the expected standard of those factors must be dealt with immediately if the standards are to be maintained.
Australian managers are notoriously conflict averse. They will spend an inordinate amount of time discussing an employee issue with everyone and anyone except the one person who can resolve the issue - the employee with the problem.
Remember this adage "Never underestimate the ability of an employee to solve their problem when you share their problem with them."
Counselling is a process of bringing an employee issue to the employee's attention and supporting the employee to find ways and means for the employee to solve their problem. It precedes discipline. Discipline is a process of demanding solution to an employee problem with the stated consequence of further disciplinary action if the problem is not resolved. A progressive disciplinary model using performance monitoring is a most effective way of resolving an employee problem. It’s a system that leads to either appropriate employee behaviour or separation of the employee from the business, either voluntarily or managed. A progressive disciplinary termination will satisfy the requirements of unfair dismissal provisions.