Wednesday 15 July 2015

Glassdoor findings on the Gender Pay Gap

I was interviewed on Radio 4’s Today programme speaking about the gender pay gap this morning.

The context was Glassdoor’s UK Employment Confidence Survey results released this morning suggesting ongoing increases in employees’ expectations about the future, with 39% of respondents feeling confident about the future of their business (up 3% on the last quarter) and confidence in keeping their job, receiving a pay rise, and being rehired if they do lose their job all remaining at about the levels reached last quarter, and significantly higher than we found last year.

The issue is the wide variety in expectations of male and female employees.  In particular whilst 40% of men believe they’ll receive a pay rise within the next year the figure falls to just 27% for women.  That’s a problem - for women, businesses and the UK economy.

In the budget last week, George Osbourne suggested we want a high skill, high wage economy.  This was reinforced in the UK productivity report published on Friday.  The need to give UK a pay rise is something I’ve written about recently too.  Reward is important because whilst most economists seem to think pay is something that happens after an increase in productivity, my belief is that the link applies in the other direction too.  But for me it’s not the absolute level of pay which is most important (though that will have an impact, in terms of people having funds to spend, stimulating the economy) but the relative differences within organisations, and employees’ expectations about their pay.  If women don’t think they’re going to receive a pay rise, and particularly if they believe that their male colleagues will, then this is going to reduce their engagement, discretionary behaviours, and reduce the impact of Britain’s pay rise on business and national productivity.

I think that's the reason behind David Cameron's recommittment yesterday that companies should be required to report on their gender pay differentials.  As I noted on Today, I think this is a good thing.  As I've posted previously, I’m not generally in favour of quotas or even mandatory reporting but something needs to be done.  The pay gap has been reducing and has pretty much disappeared up to age 40 when it still kicks in, suggesting that much of the problem is about maternity leave, hence the importance of one one of the previous coalition government’s initiatives - shared parental leave (which I talked about on Sky News.)  We’ve also seen a big increase in women’s participation on Boards, with this doubling to 25% over the last 5 years.  But we wan’t wait decades to achieve equality in progression or in pay, so more nudging is required.

Part of the solution will be gaining a better understanding abut why the pay gap exists.  I don't believe there is any conclusive evidence here but as well as a number of other probably more important factors including bias and inertia as well as work preferences and periods of maternity leave, some research studies have suggested that women are less prepared to ask for pay rises, at least when there's no obvious opportunity for them, and they also seem less likely to receive rises even when they do ask for them.

I'm not aware of any research linking men's expectations of a pay rise to these other findings about what actually happens, but it wouldn't be a surprise that that these expectations existed, and there is probably a reinforcing, positive feedback loop between the two things - men are more optimistic of a rise and this acts as an enabling belief when they do ask for one.  Their success in being given a rise then acts to make them more confident the next time they ask for one.  And so on.

Of course that still doesn't explain where either the expectations or actual patterns of pay rises originate from.  But there are differences in male and female brains and differences in our expectations of 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 a pay rise when similar behaviour in men can be labelled as proactiveness.

I think this was also what was behind, and annoyed people so much when Satya Nadella’s suggested that Microsoft’s women employees leave their pay progression down to karma when he spoke on this last year.

I was asked on Today what women should do if they’re feeling unfairly treated and ignoring the karma suggestion!, recommended they should speak with their manager, HR and if necessary their employee representatives, though they should perhaps check out the useful advice at ACAS first too.  Or of course they can benchmark their salaries more deeply on Glassdoor.  But I’d also encourage organisations to think about the requirement to equalise pay as an opportunity rather than just to meet the intended new regulations.

That encouragement extends to internal pay transparency as well.  Given reduced trust in business we can’t just expect women to believe they’re paid as well as men - we need to show this to them too.  Particularly as increasingly all these salaries are publicly available on Glassdoor’s site.  And it need not be as big an issue as many organisations might believe.  For example in Glassdoor’s research on this earlier in the year, 60% of respondents suggested companies should be forced to be more transparent about pay.  52% thought this would create more trust between employer and its employees, 48% said it would create a more level playing field and 45% suggested it would help eliminate the gender pay gap - you might also be interested in Glassdoor’s great report into salary transparency.

So to me, external reporting is only the first part of a more radical change organisations are going to have to undergo over the next few years (I don’t believe it will take as long as a generation.)  For one thing, business is rapidly becoming a woman’s world - it can’t be that long before men will start to become the less well paid.

I'd be interested on your comments on what I think is a quite complex area.  I'd be particularly interested in hearing the views of women readers - it's obviously not ideal to have two men discussing women's lack of confidence - though as a regular Today listener, it was great to appear on the programme.

Also see my other posts on Glassdoor:

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Thursday 9 July 2015

HR Analytics - Six things you never knew about your employees

I'm speaking on this HRZone and Fairsail webinar on HR analytics on Tuesday 21st July at 3.00pm BST.

We're still working out what six things we're going to be talking about, but it sounds like it's going to be a very interesting webinar, and will dispel a few myths about analytics.

Do join us if you can.

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Wednesday 8 July 2015

Talent Disrupt

I'll be chairing Syncota's new Talent Disrupt conference in the Autumn - taking place at Heathrow on 25th & 26th November.

Talent Strategies Are Powerful.

Although faced with a continually changing, diverse environment, talent strategies have the ability to heavily impact organisational success for the better or the worse. Talent is changing, and now is the time to use your talent pipeline to create a company-wide competitive advantage.

At Talent Disrupt you will learn best practices and strategies from large organisations, become inspired by case studies and great success stories, as well as hear about what not to do when it comes to our three key themes for 2015.

If you want to join me, you can book here.

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Monday 6 July 2015

Symposium Events - Analytics for Employee Engagement

My own presentation at Symposium Events' Critical HR Analytics conference was on Engagement.  The topic was Symposium's suggestion but I was happy to respond, having recently contributed along with Dave Ulrich to this article in HR Magazine about new engagement tools.

And understanding engagement, like lots of things in HR, is increasingly about smart use of tools and technologies.

Rather that just list the tools mentioned in the article (though I have added to them) I attempted to use the levels of value in the value triangle (see my last post) to help explain how organisations can best use all these different tools.  I think this is important as the consequence otherwise is likely to be one of two things, neither of which are helpful!
  • Either we pick tools at random.  For example I hear a lot of claims these days that we don't need to run engagement surveys any more as we can either just do mini pulse surveys or rely on semantic analysis of our enterprise social networks.  But actually whilst these tools are useful, it's important that we understand they're not direct alternatives to an engagement survey, they're complementary to this, acting at different levels of value.
  • Or, we just add more and more tools to our portfolio of measures.  This tends not to give us any more insight and reduces the chance that we'll see the real signal in all of the additional noise.

The key to making best use of the available tools, in engagement, and in other areas of HR, isn't about understanding the levels of value in the technologies (though this is important), or in the data and analytics, but in the attributes we want to understand ie the type of engagement.

This is why I used Gary Hamel's triangle about different types of engagement on slide 5.

As I explained in my last post, if we're tying to measure the sorts of things that will give us value for money at the bottom of the triangle - eg compliance, diligence and obedience, we'll probably be able to get lots of objective, reliable data, and can use appropriate analytical tools to explore these.  Eg this is where big data fits in.

And as I explained at the conference, the main issue with value for money big data is the trust factor - that employees probably won't want you using their data.  The key here of course is therefore to give the data to them.  So I like the idea of I am Not a Widget (which I cam across in the comments to the HR Magazine article.)

In contrast, when we're dealing with Creating Value at the top of the triangle - eg passion and pride, creativity and zeal, we're more likely to need qualitative measures, and richer types of analytics and tools that help us understand these things.  Nick Kemsley talked about this at the conference suggesting that strategic workforce planning would involve qualitative measures a bit like is often the case in marketing.  So the best thing to do is to go and talk to people.

That's true in employee engagement too. Focus groups still have a lot of value, particularly before or after an engagement survey.

But you can get similar levels of creating value insight from social recognition tools like Workstars (which sponsors this blog,) or from tools like Alan Watkins' Universe of Emotions (which he demonstrated at Changeboard's conference recently) or Michael Silverman's tool from Unilever (links are in the slideset.)

In summary, the tool we pick to use needs to depend upon the insight we're trying to create, which will depend upon the type of data we can access or generate, which depends upon the way we're trying to engage our staff.  Understand the value of this and the rest follows.

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Friday 3 July 2015

#seAnalytics - Levels of Planning, Measurement and Analysis

Yesterday was Symposium Events' Mission Critical HR Analytics conference.  There were a couple of consistent themes I will blog on into next week, however the main (and very positive) one was the use of three level triangles!

Peter Reilly from the IES kicked off the event.  His triangle shown at the top left here was about moving from data to analytics.  He described how the triangle builds up with each layer building on the layer below, ie that you need good quality data before you can do reporting before you can do analytics (well yes, partly, but actually you can do a lot with shoddy data and technology - see my post on roadmaps next week.)

Paul Smith from LV= had his own version, dealing again with the analytics agenda at the top of Peter's triangle, but shown the wrong way up (so I've rotated the photo so you get to see it the way it's supposed to go!)  In case you can't read upside down, this triangle moves from operational to tactical to strategic.

They're both interesting models, that both relate to my Value Triangle, but the key issue which both Peter and Paul's models miss is that it's not analytics we need to worry about, it's not even the data we analyse, but the insight we're trying to provide.

In fact quite a few of the speakers sort of referred to this, suggesting it's not the data or analytics which are important but the question you're trying to answer.  Also see Peter's blog post for the conference:

"It is important to note that HR analytics reverses the approach that characterises so much HR work of producing data then trying to find a problem to solve; instead, you start with the problem and look for the data to answer the question."

Yes, exactly (though not all of the time), so let's put the question in the triangle!

This is what the Value Triangle does which I used in my own presentation and you can out more about here.

Anyway, just before me, Jo Taylor spoke about TalkTalk's approach which used the categories of value for money, adding value and creating value to identify the type of talent the company was trying to develop.  Not actually a triangle but clearly the categories from the Value Triangle!

It turns out that TalkTalk's consultant was previously a partner in another consultancy working with a guy who used to work with me and where we first developed this model.  I think that TalkTalk's version has been corrupted slightly since then though as Jo suggested the idea of Future Back(starting with the end state in mind) requires thinking about the business whereas Creating Value is actually a very people centric perspective ie it looks at what people will be generating for the business, rather than what the business needs its people to do.  But that's a relatively minor quibble in this context.  In general, what better introduction could I possibly have got?

This is the value triangle from my own session (thanks Jo) which I also linked to one of Gary Hamel's models to illustrate the approach I recommend in the context of generating employee engagement.

I'll explain what I discussed regarding engagement in my next post, but the point I'd like to make now is to explain that it's not the level of data or analytic we need to worry about, it's the nature of the thing we're trying to measure.

So if we're tying to measure the sorts of things that will give us value for money at the bottom of the triangle - eg compliance, diligence and obedience, we'll probably be able to get lots of objective, reliable data, and can use appropriate analytical tools to explore these.  Eg this is where big data fits in.

In contrast, in we're dealing with Creating Value at the top of the triangle - eg passion and pride, creativity and zeal, we're more likely to need qualitative measures, and richer types of analytics and tools that help us understand these things.

Nick Kemsley from Henley talked a bit about this in his session on workforce planning, suggesting that if we want to create organisational capability (which is a great example of creating value), we can't look at WFP in a transactional way.  We need to deal with the ambiguity which will exist at this level and be prepared to make subjective judgments about it.  But actually this applies to anything we deal with, across the full range of HR and OD activities, which support creating value.

It's something we still forget far too much (or perhaps sometimes don't realise to begin with.)  Yes, we will generally want to start with the question we're trying to answer.  And the nature of that question will influence the nature of the data we need to collect.  And this will impact the nature of the analytics we need to perform.  And as you'll see in my next post, this also influences the nature of the technology which can help us performance the analytics, visualise the insight and answer the question!

And all from using the right triangle!

By the way, the triangle also explains why I've been slightly hedging my comments about starting out with a question. For adding and creating value that's absolutely the right thing to do.  But for value for money, you may be able to access big data.  And that gives you the ability to probe the data and see what answers it will give you (even if you don't know the question!)

If you want to know more, the above slide from my presentations highlights one of the training courses I run for Symposium - on planning, measurement and analysis, where I cover all of the ideas I outline above, and a lot more!

I can run it in-house as well if you'd be interested!

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Wednesday 1 July 2015

Performance Snapshots at Deloitte

Buckingham dealt less with the more formal aspects of performance management but it’s this that was covered extensively in the Harvard Business Review.

This project at Deloitte started with simple counting of hours - which for Deloitte added up to 2 million hours completing performance reviews and ratings.  I know Adobe’s project started like this as well but in general, it’s unlikely to be that helpful for most organisation as it’s only the time and costs of performance management which can be measured so objectively - you’ve still got not basis to compare the benefits in the same way, so you might as well stick to a high level subjective comparison.

The second input was a review of research in the science of ratings.  A free this is useful and would extend it to the science of feedback and coaching etc - which is all part of the evidence based approach HR needs to take on board (though I’ll also be commenting on ‘evidence based HR’ shortly.)  The key piece of data for Buckingham and Deloitte was that 62% of the variance in the ratings could be accounted for by individual raters’ peculiarities of perception. Actual performance accounts for only 21% of the variance.  So traditional performance reviews are clearly very unlikely to work.

The third input was a carefully controlled study of their own organisation - this is the critical piece for me.  And Deloitte did do what I recommended in my last post which is to develop clear objectives for the project and their performance management process or practices.  Their objectives were to be able to recognise (pay) for performance, to truly understand that performance and to fuel or develop the performance (which they do through their check-in process).  These are fine, and all organisations will or at least should have different objectives, but they do need to recognise that rewarding and developing for performance are largely irreconcilable and find a way around this, which I’m not sure they have.  And in fact the case study notices this suggesting that Deloitte wanted to tell people what they’ve been rated (to help development) but couldn’t do so as this would inflate the ratings (and hence reduce the ability to make good decisions about pay.)

I’d also argue that at the very least, even if you’re not going to separate the assessment and development sides of performance management, that reward shouldn’t be the top priority objective.  Organisations can generate a lot more impact on performance by developing their people to perform than they can from the potential but complex impacts on motivation that might but might not follow from bonuses, incentives and salary increases.  At the very least it is putting the cart before the horse.

The most interesting part of the case study is the way Deloitte has tried to neutralise the idiosyncratic rater effect by having raters rate their own actions, rather than the qualities or behaviors of the ratee (it’s also interesting that Deloitte still uses the terms rater and ratee even if it wants to get away from the importance of the rating!):

“People may rate other people’s skills inconsistently, but they are highly consistent when rating their own feelings and intentions. To see performance at the individual level, then, we will ask team leaders not about the skills of each team member but about their own future actions with respect to that person.”

So in their annual, performance snapshots, they ask managers to provide four ratings - for pay, talent identification, poor performance and readiness for promotion.

Doing this may be better than providing just one rating but I’d be interested in the correlations between them i.e. whether they’re all measuring the same thing, or at least whether the halo effect means they all end up wit the same level of assessment.  In addition, my own experience is that often the higher the number of assessment scores, the higher the potential for disagreement and conflict, pulling people down into debate over the numbers rather than enabling good conversation about the real things the numbers represent.  It’s why I’m also not overly in favour of deletion’s desire to use big data to provide some of these ratings in future:

“And these conversations are best served not by a single data point but by many. If we want to do our best to tell you where you stand, we must capture as much of your diversity as we can and then talk about it.

We haven’t resolved this issue yet, but here’s what we’re asking ourselves and testing: What’s the most detailed view of you that we can gather and share? How does that data support a conversation about your performance? How can we equip our leaders to have insightful conversations? Our ques-tion now is not What is the simplest view of you? but What is the richest?

We want our organizations to know us, and we want to know ourselves at work, and that can’t be com- pressed into a single number. We now have the technology to go from a small data version of our people to a big data version of them. As we scale up our new approach across Deloitte, that’s the issue we want to solve next.”

Please note I’m absolutely not against using big data to inform the conversation between the manager / team leader and employee, as this helps reduce the inherent bias in the process, but that’s different to arguing the overall assessment be based upon big data.  The main problem with this is that by its nature the information contained in the big data is likely to be very transactional in nature, highly reliable but with low validity and meaning.  So it’s not what you want your performance assessments to be based upon.

I’d also question whether Deloitte really need its four ratings.  Wouldn’t it be easier just to discuss each individual and if someone needs a higher salary, to pay them; if they need to go on a talent programme, then develop them; if they’re not performing then exiting them and if they need a promotion then promoting them?  In his SHRM presentation Buckingham argued that big complex organisations will always need ratings as otherwise how does the HRD sitting in HQ make decisions about all their talent?  That’s a pretty easy question to answer - they shouldn’t - at least for everyone who isn’t in a form of corporate interest group, all of these decisions should be taken locally where managers know the people they’re discussing.  No form of rating is ever going to make the HRD doing this for all their locations etc a valid way of managing their talent.

More importantly, I don’t get how Deloitte thinks assessing the rater’s actions rather than the ratees themselves will be an improvement.  Managers may assess their own future actions objectively but these actions will still be based on their inconsistent and biased interpretations of their people.  Deloitte try to get round this by suggesting that as team leaders are closest to the performance of ratees and, by virtue of their roles, they must exercise subjective judgment.  Deloitte are therefore interested in what these subjective judgements will be.  As Buckingham explained: “We want to know this.  It’s called judgment.  So how do we measure their inherently subjective judgments about one another.”

But the change hasn’t really shifted the dynamics of the way people are paid and promoted etc, it’s just got rid of the single rating of the rater’s performance as a stepping stone towards these ends.  But the whole process is as riddled with bias as a more traditional approach.

My final criticism of the approach is that Buckingham is at pains to stress leaders need to act in ways which suit their strengths (“there is no perfect profile there is only practice which fits your profile”), but recommends check-in as a one-size-fits-one approach within an organisation.  I suspect that when businesses have developed the right best fit approach for their company, this will still need to be tailored and adapted by different teams and potentially individuals within the organisation.