Wednesday, 25 November 2015

ATD Talent Management Handbook - Pay Ratios

A new provocative report has been published by the High Pay Centre - Pay Ratios: Just Do It.

The report argues that companies should report the ratio of CEO pay to that of those in the middle of the organisation and that this would help understand their attitudes to pay.

That would seem to be quite important, particularly given John Cryan's remarks that as the CEO of Deutsche Bank he "doesn't understand the way additional excess riches drive people to behave differently".

"I promise you I will not work any harder or any less hard in any year, in any day because someone is going to pay me more or less."

Perhaps Cryan should check out the ATD 's new Talent Management Handbook where my chapter focuses on reward and tries to provide some of the missing understanding.

Here are my comments from the handbook on pay ratios:

Reduced Pay Differentials

Organizations have increasingly recognized the differentiated performance of their employees over the last few decades.  Some organisations suggest that their high performers are worth several tens or even several hundreds of times their low performers.  The result of this is that pay differentials, in Anglo-Saxon cultures at least, have increased substantially. For example FTSE 100 CEOs are now paid around 180 times as much as their average employees.  However, and perhaps because of this, there is also a growing belief, supported by the points raised earlier, that we have gone too far in incentivizing and rewarding talent and high performance and in increasing executive compensation disproportionally compared to other employees.  There are also rising society demands for increased equality and these are likely to grow stronger if we see more pay transparency.

However the most important reason to reduce differentials is that this can improve overall business performance.

High pay differentials make perfect sense from a perspective which emphasizes the contribution of individual employees, which is the case with most talent management practices, particularly those that might be described as being focused on human capital management (HCM) ie which are concerned with creating and accumulating human capital as an outcome of talent management practices.

However these activities can also destroy the social fabric of our organizations.  This can be shown by reviewing one of the other findings  of the Edelman Trust Barometer which suggests that one of the few relationships which has seen an upswing in trust over the last decade is what Edelman call a Person Like Yourself, or PLY.  This is somebody you have a personal connection to that brings you together as humans, for example you come from the same home town, you have a similar taste in music, or you support the same football team.  The concern about high differentials is that if your CEO is paid 180 times as much as you are then you are very unlikely to see them as a PLY and you are less likely to trust them as a result.

Organizations might therefore be much better off with a less well paid CEO even if this person creates less dazzling business strategies since at least people will be more committed to support the strategies they do come up with and a well implemented average strategy is much better than an amazing one which is left on the shelf!

This is the reason that Whole Food Stores limits the reward of its highest paid executive to just 14 times that of its average employee.

It is also why increasingly organizations need to take not just a human capital based perspective to talent management but a social capital based on as well.  In this perspective there is no point undertaking reward or any other talent management process which increases human capital if it destroys social capital in the process.  This does not negate our increasing understanding of a growing gap between the contribution of high and low performers  but recognizes that this difference is often the result of relationships with and the support of other people.

As well as reducing pay differentials I would expect to see the coverage of benefits and share schemes being extended so that all staff including executives are rewarded in the same sorts of ways, even if the proportion of these, compared to other total rewards, varies according to position.

I'll be featuring more comments from my chapter on Reward and reviewing chapters from the rest of the book covering over areas of Talent Management over the next few weeks - check back soon.

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Tuesday, 17 November 2015

Innovation and the Future of Work - Milan

Last week I was in Milan speaking about HR Innovation:

I shared some examples of innovated practices but also emphasised that innovation generally comes from understanding what we need to within a particular organisation, breaking free of traditional best practices and understanding new best fit opportunities.  Once we have developed this new mindset, it’s generally fairly obvious what we need to innovate.  (Of course coming up with the right innovation is still difficult, but it’d be no fun if it was easy!)

Supporting this idea, we need to get away from the idea that there’s a set and predictable future of work.  For one thing, this would just be replacing one set of best practices with another, and that’s unlikely to be useful.  Secondly, the main shift that’s take place over the last couple of decades is that people are now the main source of competitive success.  This means that we need to create new business strategies based upon our people (not just using our people to execute new business strategies!).  But it also means that we need to differentiate our strategies from our competitors and other organisations since if a strategy isn’t differentiated it’s not really a strategy.  So a strategy that aims at helping us prepare for the future of work isn’t really a strategy either.

So instead of innovating based upon the future of work, we need to understand the tools and approaches which can help us innovate the way we manage people, and perhaps some alternatives which we can pick from or tailor to support what a particular organisation requires.

An example I’ve been thinking about recently relates to the way we respond to digital business and its impact on jobs which I posted about on Friday, and also in this post on Symposium Event’s blog which reviews Tammy Erickson's inputs at the Drucker Forum in Vienna the previous week. 

Erickson also made some observations about how we need to respond to this environment which I thought were quite smart:

  1. Increasing our ability to change organising by tasks and projects rather than individuals in roles - and therefore removing job titles etc.  I don’t completely agree with this - also options for developing around people (creating value)
  2. Enabling us to take action in real-time rather than planning and co-ordinating in advance of actions.  The key for this is understanding humanity (and that real value will only come from discretionary effort from people - the stuff you can’t command them to do) and creating an environment which will stimulate this.
  3. Understanding people and the way they want to relate to work - developing multiple relationships with people in your portfolio, including contingent workers, in a sophisticated way.

These are all good ideas but they’re not the only options, or even the only good options.

Eg organising around tasks makes sense but its not very people centric.  An alternative, and perhaps even better idea is still to organise around people, but to sculpt jobs around the people rather than fit people into existing boxes in the way we tend to do now.  After all, anything which can be organised into standard tasks is going to be better performed by robots.  So the areas that we need to concern ourselves with are those based on relationships, values and change.  And these can all get done best for focusing on the whole person, not just applying part of that person to a specific piece of work.

I think some organisations will want to do this, but many won’t, which is fine.  And it is why innovation always need to be focused on what a particular organisation has to and needs to do.

See my blog post on career partnership.

And also see this post at HR Zone about preparing for the futures.

Sketch notes from SketchandTweet /

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Friday, 13 November 2015

Business Partnering and Workforce Technology

I posted a few week's back about Symposium's HR Business Partnering conference this week but wasn't intending to be participating in it this year.  However a slot came up and I stood in to talk about technology enabled business partnering.

It'a topic which was well suited for me as I speak, train, write and consult a lot about this area but I was also able to take some time to think through what I wanted to include in the session during the 7th Drucker Forum in Vienna which focused on Managing in the Digital Age which I attended virtually.

This was the result:

It's interesting to see the theme about job losses taken forward in Management Today today.  They've used a picture of Robocop who I didn't think about including, but as well as opening up with James Bond, I did close with a picture of Arnie, and finished the presentation with a quick "Hasta La Vista!"

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Friday, 6 November 2015

Speaking on HR Innovation

I'm looking forward to speaking about HR Innovation next week at Business International's European HR Director Summit in Milan on 10 November.

I'm really looking forward to this as it's one of my favourite topics - yes, technology is important but boosting innovation is most fundamentally about understanding people, and it's us that can help people and therefore their organisations get better at it.

So it's a shame that HR gets associated with blocking innovation more often than it does with enabling it.  Particularly as there are some fairly simple things we can do to make a difference to that...

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Thursday, 5 November 2015

HR: more Geeky and Feely

I provided the editorial for this month's edition of's Strategy and Planning Excellence which focuses on workforce planning and analytics.

You may be interested in having a read of this or of the other articles contained in the publication.

Remembering that this month marks a year since the Artof.HR conference in Croatia, I also took the opportunity to emphasise the need to complement HR science with an increased focus on artistry:

"To me, the shift is not art to science, or feely to geeky. It’s a move to science and art, geeky and feely. There will always be things which algorithms can’t transform and these areas are often the most valuable aspects of what we do. But there’s also no doubt that analytics are rapidly increasing the scope of HR they can inform, and that therefore geeky HR needs to take a more central role in most companies people management strategies, processes and operations."

It does, but I wish I'd see more in's and other publications on HR's role in relationship management and intuition.  Some of the authors would see this as more evidence of a supposed fear of analytics, but I think I"m starting to see more signs of a return to a more balanced view across the main part of HR.

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Friday, 30 October 2015

#GCETD - Miguel Lobo on Relationships

Human relationships were also a big focus of the Global Conference on Training and Development in Saudi Arabia last week.

I talked about them in my session on talent and noted how bias can lead to poor identification of these people as well as the passing over of those whose contribution is more social in nature, ie though other people rather than directly relating to their own objectives.

George Houston from CCL noted the importance of relationships within the Arab States and Sardeek Love reference the idea of unconditional trust (or love!) which I think is a measure of the quality of relationship.

Arthur Shelley and David Gurteen both talked about the social nature of learning and knowledge management.  I think they made important points but to me, the real value of these social processes is the social outcomes - relationships - they create.

But the most in-depth focus on relationships was provided by Miguel Lobo from.  He suggested that as information, knowledge and coordination all flow through relationships that these are the source of creating value in a complex economy.  We therefore need to talk about intuition and emotion.

The focus on intuition means we need to be careful about our own biases.  Lobo provided some good examples of anchoring bias though to me, it's the way these biases impact on the way we identify and treat particular people which is most interesting and important - see also my recent post on the gender pay gap.

The focus on emotions means that we need to pay attention to people as well as to content eg people will naturally collaborate with people they most like, not with those who have the best ideas.

Whether we like someone is based largely on reciprocity, and on homophily, or 'like of same'.  This doesn't have to mean cloning - a good leader creates new group identities rather than reinforcing existing categories.  Diversity is essential for performance.

Leaders also need to create excitement as the activation of our emotions is more important than their tone.  A positive tone based on homophilly leads to an enjoyable experience but potentially an over confidence bias too, so it doesn't do much for organisational performance.  High excitement predicts whether you'll want to work with someone later on and is much more important for performanve.

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Photo credits: Al Harkan, Aisha Foad, Arthur Shelley

Thursday, 29 October 2015

Credible Activist / Friend in Business / HR as Human Relationships

Building on my post on Dave Ulrich's new HR competencies yesterday you might be interested in this recent post on relationships (at Symposium Event's blog) - the core focus of my Friend in Business, or Dave's Credible Activist competency.

Dave is writing a lot about our relationships with our business colleagues at the moment, but as the post suggests, it's the relationships between our business colleagues we need to focus on this most.

It was interesting seeing the above tweet from HR Tech World yesterday as well.  Yes - HR needs to be framed much more about Human Relationships than Human Resources these days.


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Wednesday, 28 October 2015

#HRCS2016 Dave Ulrich HR Competencies for 2016

So after a couple of false starts, Dave Ulrich's new HR competencies are out (presented on a webinar by Dave's son, Mike.)

I was pleased to see, first of all, that the competencies did somewhat resemble my own predictions, made when I had thought Dave was going to presenting on this in Australia.  I don't have anything regarding compliance and he hasn't got anything on organisation design (why not? - wasn't it asked about or has the research shown it not to be impactful?).  But apart from these two competencies the frameworks are very largely the same.

As normal, the competencies seem to do a good job of articulating changes I see taking place in the HR world, although I regret the absence of anything to do with Innovation in the new framework.  Having said that I didn't use the word in my suggestion either.

Other than that, the interesting thing about Dave / Mike's analysis was the difference they have identified between what makes a high performing HR professional and a high performing HR function.

Individual practitioner performance is well explained by their level of competencies:

  • Strategic Positioning provides the main source of value for customers, investors, external communities and regulators but not line managers or employees
  • Credible Activities is the main source of value for these two groups.

Value provided by the HR function is well explained by the activities undertaken but not by individual HR competencies.  But when looking at the competencies:

  • Strategic Positioning is still most important for customers and investors
  • Credible Activist still tops out for employees
  • Line managers are most swayed by Human Capital Curating but there's a negative relationship between this and customers. communities and regulators.  Mike suggested that the problem is you can't differentiate using this competencies - all organisations do it fairly well.  Personally I don't think that's true and put the problem down to Mike's comments at the end of the presentation - that  we're business people in HR, and business drives HR not the other way around.  I think Human Capital Curating needs more ambition than that!
  • Regulators get most value from the Compliance Manager competency which makes good sense.
  • Communities get their value from Total Reward Steward - I've no idea where that comes from.
  • And a couple of other interesting findings - Analytics Designer has a negative impact for investors - why?
  • And Technology Integrator has a negative relationship for line managers and employees.  This I do understand.  These groups believe HR tech is reducing rather than increasing the humanity of HR.

More importantly, the most valuable activities are HR information management and for managers and employees in particular, integrated HR, ideally with all of these based upon the use of organisational capabilities.

So to me, the most interesting issue raised by the research is whether it is worth continuing to review and write about individual HR competencies.  Business leaders care about the effect of the HR team not the performance of individuals.  So perhaps Dave now need to start focusing on high performance HR activities instead?  But that's more difficult if these need to be best fit.

Or perhaps an even more important question is whether it makes any sense to review the performance of an individual HR professional when what matters is their impact on the team, or their contribution to the HR activities delivered by the team?

And actually, extending that up a level, does it make any sense for HR to continue individual performance management as one of these team activities when what matters in other functions is also very likely to be an individual's contribution to their team, and the team's activities, not their own individual competencies? 

Lastly, I think there's going to have to be more thought about the impact of competencies for different stakeholders - eg the importance of HR practitioners and teams about outside in etc.  For example, regulators may care most about compliance but that doesn’t mean it’s a good decision to put HR's main focus on it.

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Monday, 26 October 2015

Training & Development in Saudi Arabia

I was keynoting at the Global Conference on Training and Development in Riyadh last week.  It was my second conference there this year, this time being at Princess Nourah's womens university - built by a team of 25,000 people over the last two years and occupying a vast campus site towards the edge of Riyadh.   The conference provided another amazing experience with lots of good conversations with (at least the male) delegates and some great inputs from other presenters.

There seemed to be a heavy focus on leadership and talent - which I also presented on - as well as one less expected area, which was the importance of relationships (and which I'll post on again separately.)

On talent, I think I'd have liked Mary Crannell's session but unfortunately was delivering a workshop at the same time.  Plus the women presenters were speaking off stage and though I understand why that was the case within this culture, to me it would have reduced the quality of the learning experience so I traded in most of these sessions for more time sitting by the hotel pool.

I did see Mark Allen speaking about talent and thought he made some great points about some of the challenges and requirements for talent management, particularly the need for capable line managers.  And I think (hope) he was only joking about a 27 box grid!

In my keynote I built upon some of these challenges and added on the issues around bias which I think make it much harder to identify and develop clear and discreet talent groups in the way we sometimes believe.  I mentioned the role of nationals and also of women as talent groups and it was great to have so many women national students and practitioners in the audience.  I hope their learning experience wasn't too badly impacted by sitting so far away from the stage.

I concluded my presenting my recent thinking about talent slicing.  You can find out more by checking out my presentation on Slideshare (below).

You can also check out the slides from my sessions on evaluation, and integration:

 And you may also be interested in my posts from my visit to Saudi Arabia:

Or contact me for more details:

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Photo credit (Talent Slicing): Al Harkan

Saturday, 17 October 2015

Gender Pay Gap in Bonuses

I’ve been back on BBC News discussing some of the highlights of Glassdoor’s latest Employee Confidence Survey as well as some earlier research by XpertHR and CMI.

Firstly, the research broadly supports the government’s Labour Market Statistics released this week, with generally very positive employment figures.  Glassdoor’s respondents also seem generally positive although there are concerns about the ability of unemployed people to find work, and of potential redundancies

I talk about these findings in this article in HR Grapevine.

Secondly, the research also supports the LMS findings on pay with the UK receiving a 3% pay rise over the last year as Glassdoor respondents are also generally positive about receiving a pay rise over the next 12 months.  However once again there are concerns as this splits into 44% of men but just 28% of women thinking that they’re going to get a rise.

This quarter, Glassdoor also asked about bonus payments and their seems to be a gender pay gap here too.  44% of men vs just 29% of women have access to a bonus programme and for women 37% of that programme is connected to company vs individual results, as against this being the case for just 27% of men.  Maybe partly because of this only 61% of women think they’ll actually get a bonus payment, compared to 75% of men.

I’m not really very sure what lies behind this.  Is there a stereotyped assumption that men will be more motivated by individually focused bonuses whereas women will be more interested in making broader contributions?  Or do men push harder for more individually focused bonuses? 

There are differences in male and female brains and differences in our expectations of and reactions to bonuses as well as pay rises may be due in some part to our distinct roles as hunters and carers in our evolutionary history.  However the bigger factor is almost certainly the way boys and girls are socialised differently during their development in childhood and beyond.  So even in the working environment, adult women can be seen as pushy if they ask for an individually focused bonus when similar behaviour in men can be labelled more positively as things like ambition or assertiveness.

However this works, it contributes to the broader lack of fairness in pay, and may mean employers are missing out on ways to keep women motivated and perhaps even retained and progressing within their organisations.

I talk about these findings in the BBC interview and my comments about them are also quoted in this article in the Evening Standard.

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