Workplace Issues

What Do Your HR Practices Tell Your Employees?

Leaders and those they lead may have very different impressions about “how things work around here.”
John BoudreauOctober 31, 2011

Can your company’s employees make sense of all those human-resources programs they encounter? Do leaders and managers understand the impact of their human-capital decisions? How well do they communicate the logic and goals of the way employees are paid, developed, retained, and acquired? Does it matter, or is it enough to merely get the paperwork done?

Research shows that it’s not enough to have great human-capital programs. It matters how employees and leaders interpret and make sense of them. It suggests that HR practices, such as rewards, training, and development, must have distinctiveness to get attention, consistency to be relied upon, and consensus to avoid confusion.

That all sounds pretty straightforward, but organizations can easily fail to hit the mark on these dimensions, causing employees and managers to have very different or incorrect impressions about “how things work around here.”

For example, organizations give great credence to innovation, but they provide few opportunities for managers to reward employee ideas, assign heavy workloads that allow little time to reflect or create, and hire and promote with little regard for past creativity or innovation. A lament I hear often in organizations is, “Our strategy says that innovation is the key to success in these turbulent times, but we’re all doing two jobs after all the restructuring, so when are we supposed to be creative?” An oft-noted counterexample is Google, which specifically allows employees to use 20% of their time on the creative endeavor of their choice.

Or, organizations promote diversity as a key factor in their creativity and customer-centricity, yet when employees see only glacial progress in advancing women, minorities, and leaders from outside the home country, they may draw very different conclusions. A notable counterexample is Royal Bank of Canada, where diversity is not just part of the strategy but is measured and a part of leader accountability, and where the HR metrics system shows how diversity affects hard outcomes such as sales in regional bank branches.

At companies such as Gap, Shell, and AstraZeneca, the role of the top HR officer increasingly includes a large part of the corporate-communication agenda, because it is through communication that leaders, managers, and employees learn how to make sense of the company’s employment “deal” and their roles and options within it.

Even when HR and employment practices work well together and reinforce the goals and messages the company wants to send, it’s not a bad idea to consider how to shake things up to make them even more distinctive.

Shanda, the largest game-producing company in China, knew that the retention rate for its game players was above 90%, but its employment-retention rate for game designers and other technical professionals was much lower. The company asked, “Can we make our talent-management process as engaging, transparent, and goal-oriented as our games?” The result: a talent-management system in which everything from job performance to taking on special projects to helping out colleagues carries points. Employees can easily see what activities will amass the greatest points, which are allocated by a governance committee based on organizational priorities. Indeed, the design and improvement of the game-based talent-management system was allocated a high number of points, to motivate some of the best game designers to pitch in and improve it.

Impressions matter, no less at work than anywhere else. Do your HR leaders manage the impressions HR systems create, or are they just filling in the paperwork?

John Boudreau is a professor and research director at the University of Southern California’s Marshall School of Business and Center for Effective Organizations. You can read more about the cases of Royal Bank of Canada and Shanda in his new book, Transformative HR, co-authored with Ravin Jesuthasan. You can find out more about his research on HR excellence, with Edward Lawler, at the Center for Effective Organizations’ website:


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