Tag: leadership

  • 19 Traits of Bad Bosses

     

  • The Confidence Trick

    By Jules Goddard

    View original publication on London Business School

    Some of the saddest words that a human being can utter are these: “I wish I’d had the courage to live a life true to myself, not the life others expected of me.” Yet, according to Bronnie Ware, a palliative nurse, this is precisely the sentiment that, more than any other, sums up the main regret of people nearing the end of their lives.

    Confidence is the antidote to this kind of regret; it is the surest defence against the abdication of our sense of our own agency. When we give up authorship of our own lives, or resign ourselves to living through the eyes of others, we are effectively surrendering our personhood. It is a reflection of the notion that people are the product of their circumstances rather than the decisions they make.

    Avoid becoming a slave

    There are many forces in today’s world that are encouraging this kind of “second-hand living” to which Nietzsche gave the name “slave mentality”. For example, ideologues, whether of the left or right, have tended to view people as means to a utopian end and have therefore had a vested interest in encouraging people to think of themselves as subjects or victims, and to place their fate in the hands of others. A confident society is one that is immune to these dangers. Indeed, the late Lord (Kenneth)Clark, the art historian, defined civilization in a single word: confidence.

    “The most beautiful thing you can wear is confidence”

    David Bowie

    Confidence is more than self-assurance. It is a form of licence. It is the right that we grant ourselves to become the person of our own choosing. At root, confidence is the conviction that we are of most value to the world when we are true to ourselves.

    Confidence is the right that we grant ourselves to become the person of our own choosing

     

    David Bowie was the archetype of a confident person. In his 69 years, he exemplified what it is to be a truly autonomous individual. His versatility was prodigious. He excelled as a singer, composer, arranger, multi-instrumentalist, record producer, painter and actor. “I feel confident imposing change on myself,” he said. He didn’t believe there was a self to discover, only a persona to be endlessly re-invented. It was as though he imagined himself to be a work of art on which he never ceased working.

    But Bowie’s confidence did not come easily: “As an adolescent, I was painfully shy and withdrawn. I didn’t really have the nerve to sing my songs on stage, and nobody else was doing them. I decided to do them in disguise so that I didn’t have to actually go through the humiliation of going on stage and being myself.” Ziggy Stardust was perhaps his most famous disguise, but it was only one of many. He learned the art of confidence by treating it – at least to start with – as a façade behind which he could play at being confident.

    But Bowie’s confidence did not come easily: “As an adolescent, I was painfully shy and withdrawn. I didn’t really have the nerve to sing my songs on stage, and nobody else was doing them. I decided to do them in disguise so that I didn’t have to actually go through the humiliation of going on stage and being myself.” Ziggy Stardust was perhaps his most famous disguise, but it was only one of many. He learned the art of confidence by treating it – at least to start with – as a façade behind which he could play at being confident.

    Imagine yourself courageous

    This recalls Aristotle’s theory that if a particular virtue such as courage or confidence does not come naturally, then the solution may be to stop worrying about how it might be acquired. Instead, the individual should imagine what a courageous or confident person would actually do in the circumstances – and then do exactly that. In other words, act your way into becoming confident. No one is born confident. We acquire confidence as we mimic those whom we observe to be exemplars of this particular trait.

    This mimetic theory of learning – becoming a person we are not by imitating a person who is – was brilliantly applied by Bowie. He did not believe his mastery of artistic skills was an expression of innate talent; he preferred to believe that it was an act of will, a kind of continuously imaginative self-reinvention: “Create the kind of self that you will be happy to live with all your life”

    Bowie chose to see himself as the sole author of his own life. He recognized early on the dangers of living his life through the eyes and expectations of others: “I’m just an individual who doesn’t feel that I need to have somebody qualify my work in any particular way. I’m working for me.”

    Act your way into becoming confident

    He said: “All my big mistakes are when I try to second-guess or please an audience. My work is always stronger when I get selfish about it”. This chimes with one of Bronnie Ware’s epithets: “Self-love is essential to truly serve others well.” This is a powerful (and provocative) version of the oblique principle: namely, that society is stronger when individuals feel free to put their own needs first. It is a message that sits uncomfortably in today’s world of ideological posturing, virtue signaling, and other forms of what Barbara Oakley has called “pathological altruism”. Bowie was his own person: “Being cool is being your own self, not doing something that someone else is telling you to do.”

    Leaders liberate

    Leadership, a close ally of confidence, is not about creating followership or compliance or passivity. Quite the contrary. The leader liberates others to invent or re-invent themselves. Ralph Waldo Emerson wrote that “the only person you are destined to be is the person you decide to be”. Leaders encourage those they work with to make self-defining decisions.

    Thoughts on the life and personality of David Bowie – and the lessons that flow from them – sit uncomfortably alongside theories of confidence found in much social science research literature. Here are some of those findings, expressed as key factors in building self-confidence:

     

      • The company we keep: we are creatures of the expectations that others place upon us; therefore, we should surround ourselves with people who believe in us, and keep our distance from those who undermine our self-belief.

     

      • The effort we exert: in the pursuit of mastery, effort counts for more than innate talent; therefore, to strengthen self-confidence, we should measure ourselves by effort invested rather than result achieved.

     

      • The placebo we trust: lucky charms work. We ought not be so rational as to dismiss all sources of irrational assistance.

     

      • The wave we surf: success is rarely a solo achievement. It depends, at least in part, on being with the right people in the right place at the right time. Quoting Shakespeare, “there is a tide in the affairs of men which, taken at the flood, leads on to fortune.” We should take note of the tide.

     

      • The rituals we adopt: certain things “get us into the zone” and boost our confidence before, for example, giving a speech or taking an exam. So we need to invent habits that settle our nerves and enhance our performance.

     

      • The opportunities we seize: business is a numbers game, as Tom Peters used to say. The “more times at bat”, the greater the chance of getting lucky and stumbling into success.

     

      • The setbacks we experience: if we see mistakes as lessons in life, our confidence will be benefit. We should think of failure as intrinsic to a life of achievement.

     

      • The emotions we draw upon: to overcome fear when faced by a threatening challenge, getting excited works better than trying to calm ourselves down.

     

      • The expectations we form: we can adopt one of two quite distinct strategies for managing our anxieties once we’ve settled on a risky course of action: “strategic optimism” or “defensive pessimism”; strategic optimists allay their fears by hoping for the best and setting aside negative thoughts; defensive pessimists choose instead to confront their fears by envisaging worst-case scenarios and thinking through the ramifications.

     

    • Research suggests that when we’re fearful, the unknown is more frightening than the negative. Therefore we should adopt the strategy of the defensive pessimist.

     

    The trouble with rules of success – and all self-help manuals – is that they invite us to treat our own life instrumentally. We objectify ourselves, reducing our own behaviour to a set of responses to a mix of self-imposed conditions. In effect, we become the victims of the science we choose to believe in. For example, we may manage our level of confidence by purposefully associating with different kinds of people, wearing a lucky charm, cultivating a pessimistic philosophy and so on. In this way, we cast ourselves in the role of inert material on which different causes will have different effects. Life becomes a process of choosing those inputs whose effects we most desire.

    Take control

    The anthropologist Mary Douglas has made a distinction between passive and active voice theories of human behaviour . As an illustration of this distinction, she draws upon Roy Schafer’s interpretation of Freudian theory to imagine an exchange between a psychoanalyst and his patient. The analyst may say to the patient, “Your chronic sense of worthlessness comes from the condemning voice of your mother”. This is a quintessential case of passive voice theorising. The patient is seen not as an active agent with beliefs, intentions and will, but as a passive canvas on which external forces make their imprint. An active voice reconstruction of this diagnosis could be: “You regularly imagine your mother’s voice condemning you, and you, agreeing with it, regard yourself as being essentially worthless.” This approach uses the less deterministic, more explanatory concepts of agency, meaning, and purpose. Active voice theorising places individual responsibility where it truly belongs – in this case, with the patient.

    Society is stronger when individuals feel free to put their own needs first

    Whenever psychology reverts to the language of physics and explains human behaviour in terms of causes, determinants and effects, it risks erasing the subject matter of its own inquiry: the human agent. The practice of management should not allow social sciences to dehumanize the true object of its interest: individual human beings.

    Bowie had no need for self-help manuals or textbooks on creativity. He experimented. He didn’t try to predict outcomes or worry about possible reactions. He acted on the world and, noticing the result, he formed a theory. To borrow an insight from Matthew Parris: “How little we know of ourselves until we notice what we do.”

    In business practice, we typically operate the other way round. Before actually doing anything, we feel we first need a theory from which to act, or a goal around which to organize, or a plan on which to deliver, or some rules by which to conform. The social science of confidence, by adopting an essentially passive voice approach, provides us with many rules of success but in so doing subtly undermines the Bowie-like confidence that we need to become the invention of our own imagination and courage.

  • How new CEOs can boost their odds of success

    By Michael Birshan, Thomas Meakin, and Kurt Strovink

    View original publication on Mckinsey

    A data-driven look at the link between the strategic moves of new CEOs and the performance of their companies highlights the importance of quick action and of adopting an outsider’s perspective.

    The success of CEOs is deeply linked to the success of the companies they lead, but the vast body of popular literature on the topic explores this relationship largely in qualitative terms. The dangers of these approaches are well known: it’s easy to be misled by outliers or to conclude, mistakenly, that prominent actions which seem correlated with success were responsible for it.

    We tried to sidestep some of these difficulties by systematically reviewing the major strategic moves (from management reshuffles to cost-reduction efforts to new-business launches to geographic expansion) that nearly 600 CEOs made during their first two years in office. Using annualized total returns to shareholders (TRS), we assessed their companies’ performance over the CEOs’ tenure in office. Finally, we analyzed how the moves they made—at least those visible to external observers1 —and the health of their companies when they joined them influenced the performance of those companies.2

    The results of this analysis, bolstered by nearly 250 case studies, show that the number and nature of the strategic moves made by CEOs who join well- and poorly performing companies are surprisingly similar. The efficacy of certain moves appears to vary significantly across different groups of companies, however. What’s more, the sheer number of moves seems to make a difference, at least for CEOs who join poorly performing companies. Also, external hires appear to have a greater propensity to act.

    These findings have important practical implications for new CEOs and the boards that hire them: focus early on a few bold moves well suited to the context of your company, and recognize the value of the outsider’s perspective—whether or not you are one.

     

    Surprising similarities

    The starting point for analysis was a group of nearly 600 CEOs who left S&P 500 companies from 2004 to 2014 (identified in the annual CEO Transitions report produced by Spencer Stuart, the global executive-search and leadership-consulting firm).3 For each CEO’s first two years, we gathered information—from a range of sources, including company reports, investor presentations, press searches, and McKinsey knowledge assets—on nine strategic moves that chief executives commonly make.

    We expected that CEOs taking the helm at poorly performing companies, feeling compelled to do something to improve results, would have a greater propensity to make strategic moves than those who joined well-performing organizations. To learn whether this idea was true, we looked at how each company had been performing relative to its industry counterparts prior to the new CEO’s arrival and then subdivided the results into three categories: well-performing, poorly performing, and stable companies.4 When we reviewed the moves by companies in each of these categories, we found that new CEOs act in similar ways, with a similar frequency, whether they had joined well- or poorly performing organizations. CEOs in different contexts made bold moves—such as M&A, changing the management team, and launching new businesses and products—at roughly the same rate.

    Contextual contrasts

    Although new CEOs transitioning into companies that have been performing well and CEOs transitioning into companies that have been performing poorly make similar moves with a similar frequency, that doesn’t mean those moves are equally effective. We measured the performance of companies by excess TRS over a CEO’s tenure. At companies where chief executives made strategic moves early on, we found striking contrasts between organizations that had been performing well when the new CEO took charge and those that had been performing poorly:

    • Organizational redesign was correlated with significant excess TRS (+1.9 percent) for well-performing companies, but not for low performers.
    • Strategic reviews were correlated with significant excess TRS (+4.3 percent) for poorly performing companies but were less helpful for companies that had been performing well.
    • Poorly performing companies enjoyed +0.8 percent TRS when they reshuffled their management teams. But when well-performing companies did so, they destroyed value.5

    We recognize that excess TRS CAGR does not prove a causal link; too many other variables, some beyond a CEO’s control, have an influence. But we do find the differences that emerged quite plausible. It stands to reason that troubled companies would enjoy special benefits from major overhauls of management or strategy. Organizational redesigns are challenging for all companies and may, in some cases, be premature for organizations in significant flux.6 Also plausible was the finding that cost-reduction programs appear to improve a company’s TRS relative to those of its counterparts for both well- and poorly performing organizations, though the effect is strongest for weak ones.

    A final point on context is that the bar for top performance varies significantly by sector. In some, such as investment services and automotive, the TRS CAGRs of top-performing organizations with new CEOs are more than 16 percent above those of their industry counterparts. In other sectors, such as media and telecommunications, a CEO’s company must outperform the market by only a few percentage points to be classed in the top quintile. The implication is that new CEOs seeking to calibrate their starting points and to prioritize strategic moves should look beyond top-level performance metrics to understand what it will really take to beat the market.

    Bold bouncebacks

    We also sought to compare the number of major moves that new CEOs made in parallel at well- and poorly performing companies. Well-performing companies had no discernible pattern. But in poorly performing ones, CEOs who made four or more strategic moves at the same time during their first two years achieved an average of 3.6 percent excess annual TRS growth over their tenures. Their less bold counterparts in similarly bad situations could claim just 0.4 percent excess annual TRS growth.

    These findings are in line with earlier McKinsey research7 showing how difficult it is to reach higher levels of economic profit without making substantial strategic or operational shifts. That has also been our own experience working with new CEOs on turnarounds.

    Outside views

    When the time comes to appoint a new CEO, corporate boards face a difficult question: promote an executive from within or choose an outsider? We turned our own lens to this issue and found that the performance of outsiders and insiders differed significantly. Externally appointed CEOs have a greater propensity to act: they were more likely to make six out of the nine strategic moves we examined. The size of the gap in frequency—in other words, the chance an external CEO would make a particular move minus the chance an internal CEO would do the same thing—was much greater for the moves external CEOs opted to make.

    External CEOs almost certainly have a leg up when it comes to bold action. They are generally less encumbered by organizational politics or inertia than their internal counterparts. They may also be more likely to take an outside view of their companies. It’s no coincidence, in our view, that the strategic moves that have the largest gaps in the propensity to act include some of the most far-reaching ones: organizational redesign, for example, or geographic contraction.

    Poorly performing companies are more likely to appoint external CEOs, and corporate performance tends to revert to the mean. But the TRS edge of outside hires was substantial: over their tenure, they outperformed their internally promoted counterparts by a margin of more than five to one—on average, a 2.2 percent excess TRS CAGR, compared with 0.4 percent.

    Clearly, this performance differential is the result of multiple factors, and it’s important to note that new CEOs need not come from outside companies to cultivate an outsider’s mind-set—or to be successful in their role.8

    While our results are averages across multiple organizations and industries, they do suggest a few principles for new CEOs:

    • Adopt an outsider’s mind-set. On average, external hires appear to make more moves during their early years. This doesn’t mean that insiders are the wrong choice for boards. But it does suggest that it’s critical for insiders to resist legacies or relationships which might slow them down and that approaches which help insiders adopt an outsider’s mind-set have great potential. Equally, there is value in having outsiders who can lean into the boldness that their status naturally encourages. Some executives have done so by creating new ways to assess a company’s performance objectively—for example, by taking the view of a potential acquirer or activist investor9 looking for weak spots that require immediate attention. Others have reset expectations for the annual allocation of resources, changed the leadership model and executive compensation, established an innovation bank, and looked for additional ways to bring an external perspective to the heart of the leadership approach.
    • Don’t follow the herd. On average, new CEOs make many of the same moves, regardless of starting point. They will do better, however, by carefully considering the context of their companies and leveraging more scientific ways to assess their starting points. For instance, some new CEOs take stock of the economic-profit performance of companies relative to that of their peers and, in light of the starting position, assess the odds that potential moves will pay off.10
    • When you’re behind, look at the whole playbook. On average, CEOs taking the helm at underperforming companies do better when they make more major strategic moves, not fewer. That doesn’t mean they should try to do everything at once, but it does suggest a bias toward boldness and action. Plan a comprehensive set of moves that will significantly improve your company’s performance, and make sure that you aim high enough.11

    New CEOs take the helm with a singular opportunity to shape the companies they lead. The best ones artfully use their own transition into the CEO role to transform their companies. But this window of opportunity doesn’t last long. On average, an inflection point arrives during year three of a CEO’s tenure. At that point, a CEO whose company is underperforming is roughly twice as likely to depart as the CEO of an outperforming one—by far the highest level at any time in a chief executive’s tenure. During this relatively short window, fortune favors the bold.

     

  • How swapping life stories can make you a better leader

    Professor Nigel Nicholson on why executives should explore their own timeline and take interest in other people’s experiences
    By Nigel Nicholson

    View original publication on London Business School

    Did you ever tell someone your life story? If so, it was most likely when you were in the first warm flush of a new romance, with you and your beloved bonding by swapping narratives. Over the years, you’ve no doubt given friends and family edited highlights of the steps in your life journey. But it’s less likely that you’ll have told one or two attentive listeners whom you scarcely know the full story: the what, why and how of your journey to now. What would it feel like to do this? Why would your audience possibly be interested?

    You might be surprised on two counts. First, by the emotions you experience when doing this exercise. Second, by the positive impact your narrative has on your listeners, no matter how “ordinary” you think your story is. I see these effects regularly on the Biography Workshops I run for executives; the experience turns out to be remarkably powerful for both teller and listener.

    Let’s begin with the teller. Before you start talking, you’ll have drawn a Life-Line that maps out your key dates, events, relationships, roles and feelings over time. The mere act of doing this can be startling – you begin to recall sequences of events half forgotten. You see the drama, the highs and the disappointments with fresh eyes and are struck by how much has changed, including feelings that seemed indelible at the time. You’re also struck by how good eventually came out of what seemed like a disastrous situation, or how you slipped into negativity while scarcely aware of what you were doing.

    The landscape of your life is not proportional – some big things seem very distant while others continue to loom over you. Doing this exercise gives you a remarkable new perspective; part helicopter view and part re-immersion into the tangle of your past. The new perspective comes from the now and from your view of the future. It raises questions and clarifies choices.

    Some of these questions are important reflections for now and the future. You may find yourself asking, ‘Have I been making the same kind of mistakes repeatedly? What big decisions did I take too carelessly? What have life’s troubles taught me? How might I have undervalued these people or those processes? What might I have overvalued? What have I neglected that will help me in future? What have been the constant factors – visions, driving beliefs and reliable relationships – that have helped steer my course? What choices have come from the best part of me?’ These are important questions. The Life-Line exercise gives you an unparalleled opportunity to reflect and generate new plans and purposes for the next chapters of your story. In many cases, it’s a tool for thinking anew about legacy, an issue that looms larger as the years pass.

    Second, the listener. What effect does it have on them to hear your story? Far from being bored, judging you or failing to understand, you find people are drawn into your perspective, especially if they have similar backgrounds and experiences. This is a real eye-opener for cross-cultural insights. We often judge others and make snap judgements about their motives in ways that make us feel good about ourselves, without taking the time understand them. This exercise makes that kind of mental laziness difficult. It’s hard to judge when drawn into someone else’s narrative. You’ll more likely feel sympathy for the hard things that happened, understand their emotions and wonder how they coped with life’s challenges.

    Being a listener in this context is a gift as it allows us to do one of the things that self-centred humans find so hard: ‘decentring’. Self-centredness is the inevitable consequence of our strong sense of personal identity and the limitation of our vision. Yet, I find time again when coaching and consulting that we can transcend that limitation using our minds. Empathy – sharing someone else’s feelings – is easy with people we love but harder with those we don’t. It’s especially difficult with people who we have nothing in common with. They may come from a completely different background or culture; or we may not trust or like them much. Decentring – seeing the world from another person’s perspective – is unlike empathy. It’s more analytical, allowing us to understand the inner and outer forces that bear down on others. It’s almost easier to decentre with strangers and enemies. We can take friends and family for granted but tend to be more cautious with strangers and enemies.

    Empathy is easier with people we like or respect, as we find them. Decentring really helps as a “cooler” analytical process on the left side, but comes into its own as a really special technique on the right side of the line. It’s not easy, but there are various exercises I use that can help people decentre. The Life Line exercise is a superhighway to decentring. It is a vivid demonstration that it almost impossible for you not to develop a deeper understanding of how others really think, feel and act if you decentre.

    Deep insight into other is not just therapeutic. It is essential in management and leadership. It’s a powerful tool for negotiation, alliances, managing difficult people and outmanoeuvring those who might be obstructing us. With enemies, it can replace fear and anger with a more dispassionate intelligence, making it a tool for smart and humane Machiavellianism – know thine enemy!

    In summary, the Life Line provides us with two powerful benefits. One is to give us a fresh perspective on the relationship between the past and the future, and find renewal of purpose in the present. The second opens an escape hatch from our self-centred vision, giving us a deeper understanding of what it means to be another, different and remarkable human being.

  • Defy Gravity

    Defy Gravity

    How to break from convention and lead in an ambiguous business world

    by Susan Gilell-Stuy, Executive Coach, Trusted Leadership Advisor and Host of “Lead With IT“ podcast

    A reliance on conventional wisdom limits your ability to act in an ambiguous business world. A new generation of employees has redefined their expectations for top leaders and global organizations. And I’m going to tell you something your employees won’t: if you aren’t meeting their needs, they’ve already decided to jump ship and find a new team or company that will.

    Their lack of loyalty is a sign of your neglect. It’s a clear message that you can’t continue to tackle today’s challenges and opportunities with yesterday’s approach. You’ve got to change or lose them.

    It’s time you defy the gravitational pull for doing for what’s conventional: after all the only other option is staying stuck in the past.

    Here are 4 ways you can defy gravity:

    Raise the Bar for Everyone

    Everyone you add to the team should raise the bar for everyone else. That includes you. Only hire people you could see yourself working for one day. The goal is to constantly boost the talent pool, create ongoing intellectual diversity, and learn from each team member’s knowledge and ability.

    Give Up “Kitchen Sink” Meetings

    Stop holding catch-all weekly team meetings. Instead, switch to meetings driven by subject matter. For example: Mondays are project meetings, Wednesdays are budget meetings, and so on. Invite only the key players to keep things simple. A focused meeting makes for quicker and better decision-making.

    Think Big and Let Them Call the Cadence

    As the leader, paint the big picture for your team. Share with them where you’re heading, tell them that you expect them to get there the quickest way possible, and assure them that you’ll clear the speed bumps if need be. Then step back and let your trusted team members call the cadence, approach, and path they’re going to take to get there.

    Kill the Annual Review

    Only one thing matters when it comes to connecting with your people: putting them first. Spend more time focused on them and less time worrying about technical aspects of the business. Don’t wait for an annual review to share what you’re thinking; coach and develop them in real-time. Your investment in them will pay big dividends over the long-term.

    Once you’ve chosen to defy gravity and finish your transformational journey the organization and those around you have no option but to transform too. Fostering real change in those you lead and the organization itself makes you an unstoppable force as a leader.

    Susan Gilell-Stuy, Executive Coach, Trusted Leaderhip Advisor and Host of “Lead With IT” podcast

    Susan is a top-tier corporate executive coach, leadership strategist and speaker who helps millennial leaders and executives tap their genius by discovering the distinct skills and abilities that empower them to map out a plan for success – one that is perfectly suited to them. She is an executive coach for The Wharton School – University of Pennsylvania, a member of the Association of Corporate Executive Coaches and host of the Lead With IT™ podcast. If you’re wondering what your sweet spot is as a leader get your free copy of Susan’s Lead With IT Kit© at susangilellstuy.com and find out what you lead with.

  • MEECO™ (Measuring Excellence in the use of Corporate Executive Coaching in Organizations)

    MEECO™ (Measuring Excellence in the use of Corporate Executive Coaching in Organizations) is a designation that distinguishes organizations that have achieved excellence through weaving executive coaching into the fabric of their culture.

    Our goal is to recognize organizations that provide a benchmark and role model for other organizations that want to increase stockholder and stakeholder value, while experiencing overall success through utilizing mastery level executive coaches who understand how organizations work, and are determined to make a meaningful difference as “enterprise-wide business partners™”.

    www.meeco-institue.org

  • The End of Pay Secrecy?

    hreonline.com
    By Julie Cook Ramirez

    Employers are under pressure to divulge salary information. Could one of the last workplace taboos be going by the wayside?

    Thursday, February 4, 2016

    You are not to tell anyone how much you’re paid.

    It’s an unwritten rule at many companies, while other employers openly inform their employees they are not to share salary information with colleagues. A 2010 Institute for Women’s Policy Research/Rockefeller Survey of Economic Security found half of all workers were either “explicitly prohibited or strongly discouraged” from discussing pay with their coworkers.

    That may all be changing, as employees are increasingly seeking to discuss pay issues both inside and outside company walls. In large part, the trend is being driven by social media, coupled with the emergence of millennials in the workplace, according to Kevin Hallock, director of the Institute for Compensation Studies at Cornell University in Ithaca, N.Y., and author of Pay: Why People Earn What They Earn and What You Can Do Now to Make More. Younger employees, in particular, are comfortable sharing virtually every detail of their lives, he says, so divulging their salary doesn’t seem like a breach of privacy.

    It’s not just employees who are openly discussing compensation. A small but growing number of employers are making such information available, either internally to the workforce at large or externally, posting all workers’ salaries on their websites for the world to see. The most widely publicized example is Austin, Tex.-based Whole Foods Market, which allows employees to view information on pay and bonuses for everyone from the CEO down. The policy was introduced by then-co-CEO John Mackey in 1986, just six years after the natural-food retailer’s inception. The goal was to encourage competition by helping employees understand why some people are paid more than others. If workers understood what types of performance led to greater compensation, Mackey reasoned, they would be motivated to adopt similar workplace behaviors themselves.

    While Whole Foods is a notable exception, the trend toward pay transparency is almost exclusively limited to “small tech-y companies,” according to Ed Lawler, director of the Center for Effective Organizations at the University of Southern California’s Marshall School of Business in Los Angeles. For the most part, large companies have shied away from the idea, instead adopting a “what you don’t know won’t hurt me” attitude, says Lawler. That’s unfortunate, he says, because they have much to gain from sharing pay information with the workforce.

    “They seem to be stuck in the mindset of ‘If I don’t have to defend it, life is better and people are happier,’” says Lawler. “If you have a reasonably administered pay system that meets a certain agenda, like pay for performance, and it’s defensible, you are better off from an organizational effectiveness point of view of making that clear and visible to people. It’s a big credibility builder.”

    While Hallock sees more employers “experimenting” with pay transparency than ever before, he agrees that “most organizations are very reluctant” to divulge salary information. Usually, that’s because they fear the “chaos that might come with it,” he says, as employees learn they are making less money than colleagues they consider their inferiors. That bedlam can be avoided by adopting an approach in which salary information is accompanied by the opportunity to ask questions, learn more about the connection between pay and performance, and map out a plan for increasing their own earning potential, according to Sarah Moore, a partner in the Cleveland office of Fisher & Phillips.

    “To the extent that you can have a conversation with the employees and provide each of them a context for where they are in the scheme of things, that’s always a preferred approach, rather than just putting it up on the bulletin board,” says Moore.

    That’s the approach taken by Whole Foods. Rather than posting such data on the company intranet for easy access, the retailer requires employees to make an appointment with an HR manager to see others’ salary information. That enables the retailer to achieve its goal of bolstering employee performance through pay transparency.

    Even if an employer chooses not to officially divulge compensation data, technology is enabling employees to disseminate such information themselves via anonymous interoffice messenger apps like “Get the Memo” or websites such as Glassdoor.com, where current and former employees review companies and their management. One enterprising Google employee simply created an Excel spreadsheet where employees could plug in their salary information.

    While conventional wisdom may frown on such activities — and some employers might seek to squelch them — they could have no choice but to accept pay transparency as a component of the 21st century workplace. Legally speaking, says Moore, employees have every right to tell anyone they choose how much they make. Section 7 of the National Labor Relations Act makes it legal for employees to discuss the terms and conditions of their employment with each other. That includes salary and benefits.

    The end of pay secrecy is inevitable, says Moore. She advises employers to get in front of the issue and begin laying the groundwork for a smooth transition into the world of pay transparency.

    “The first step is to make sure the most-valued employees are compensated in a manner that is reflective of objective fairness so that when that information is rolled out, they don’t have a situation where a lot of angry people feel burned and ready to walk out the door,” says Moore. “The key is to make sure it’s done in a measured way, keeping an eye on retention of the most valued employees and recognizing you are going to have some people who just aren’t happy regardless.”

    Send questions or comments about this story to hreletters@lrp.com.

  • Terminating an Employee on FMLA Leave

    hreonline.com

    By Keisha-Ann G. Gray

    Question: My organization would like to terminate an employee who is currently on FMLA leave, for reasons unrelated to the leave. Can we properly lay off this employee?

    Wednesday, June 3, 2015

    Answer: Under the Family and Medical Leave Act (“FMLA”), which applies to employers with 50 or more employees within 75 miles, covered employees who are on qualified leave have a right to be restored to the same, or an equivalent, position upon their return. 29 U.S.C. § 2614(a)(1) (1993). Further, employers cannot use the taking of FMLA leave as a negative factor in employment actions such as hiring, firing and promotions. See Wage and Hour Division, FMLA Fact Sheet, United States Department of Labor. However, this does not mean that an employee on FMLA leave is immune from termination. To the contrary, “an employee has no greater right to reinstatement or to other benefits and conditions of employment than if the employee had been continuously employed during the FMLA leave period.” 29 C.F.R. § 825.216.

    Prior to terminating an employee on FMLA leave, an employer should consider carefully whether it would make the same termination decision even if the employee did not take leave. Indeed, if the termination is challenged, the burden will be on the employer to prove the leave was not a factor in the decision. Accordingly, it is critical to keep sufficient documentation that supports the business decisions behind the termination. Below we describe some of the applicable case law that provides employers with examples of situations that may provide legitimate, non-discriminatory reasons for terminating an employee on FMLA leave and underscores the importance of maintaining relevant documents.

    First, a corporate re-organization may qualify as a legitimate reason for terminating an employee on FMLA leave, provided that the re-organization is not merely a reaction to the employee taking the leave. See Yashenko v. Harrah’s NC Casino Co., LLC, 446 F.3d 541, 551 (4th Cir. 2006). Nonetheless, an employer still must be sure to document the specific business decisions and determinations behind a corporate re-organization in order to avoid potential FMLA violations if an employee on leave is terminated. For instance, in Brenlla v. LaSorsa Buick Pontiac Chevrolet, Inc., No. 00 CIV. 5207 (JCF), 2002 WL 1059117, at *2 (S.D.N.Y. May 28, 2002), an employer decided to consolidate two job functions, thus eliminating the position of an employee on qualified FMLA leave, three days after the employee formally requested to return to full-time work. The employer argued that the “re-organization” was motivated by legitimate business concerns. Id. at *5. However, the jury found, and the court upheld, there was no documentation or evidence showing any financial benefits from the consolidation or indicating how the employer chose which employee was best suited for the new consolidated position. Id. Instead, the temporal proximity to the employee’s request to be reinstated and the employer’s decision to consolidate the positions supported the conclusion that the restructuring would not have taken place had the employee not taken FMLA leave.

    Second, courts have held that an employee’s poor performance may qualify as a legitimate reason for terminating an employee on FMLA leave. See Mercer v. Arc of Prince Georges Cnty., Inc., 532 F. App’x 392 (4th Cir. 2013) (upholding employer’s decision to terminate an at-will employee for poor performance, despite the employee being on FMLA leave). Again, documentation, such as performance evaluations, likely will be instrumental to ensure that the termination is not viewed as retaliation for taking FMLA leave. See Richmond v. Oneok, Inc., 120 F.3d 205, 209 (10th Cir. 1997) (ruling that the employee was not terminated for taking FMLA leave, but instead was properly terminated based on 15 documented incidents of poor performance). A prudent employer should make sure that it has documentation indicating not only the reason for the termination, but also why the termination decision was not made prior to the employee’s request for (or taking of) FMLA leave. Even with sufficient documentation, some employers choose to wait until the employee returns to work before taking an adverse employment action to avoid the inference of retaliation. Simply waiting until an employee returns from work, however, will not insulate an employer from a retaliation claim. Even if performance issues are well-documented, an employer should evaluate the timing of a discharge of an employee who recently took FMLA leave to avoid even the appearance of a retaliatory motive. Of course, an employer might not become aware of performance issues or policy violations until the employee goes out on FMLA leave. In that situation, the employer likely will be within its right to terminate the employee immediately, even if the employer discovered the misconduct from the employee’s leave replacement. See Cracco v. Vitran Exp., Inc., 559 F.3d 625, 636 (7th Cir. 2009).

    Furthermore, a reduction in force is likely to be considered a legitimate reason for terminating an employee on FMLA leave. If a reduction in force results in the termination of an entire department or division, depending on the size of those groups, it will usually be sufficient to show that there was no discriminatory animus to eliminate an employee on FMLA leave. However, if a reduction in force is employee-based, instead of group-based, the employer will want to produce significant documentation indicating how and why each laid off employee was chosen. See Roll v. Bowling Green Metalforming, LLC, 457 F. App’x 458, 460 (6th Cir. 2012) (upholding the termination of an employee on FMLA leave because the employer produced significant documentation that the employee’s selection for inclusion in the reduction in force was based on objective criteria including skills, performance and work history).

    Overall, the main takeaway from the case law for employers is that it is not only important to have legitimate, nondiscriminatory business reasons for terminating an employee on FMLA leave, but employers should also make certain they have adequate documentation supporting the business decisions behind the termination.

    Patrick Lamparello is a senior counsel in Proskauer’s labor and employment department in New York. Proskauer Associate Ian Plummer assisted with this article.

     

  • Fostering Feedback

    hreonline.com
    Fostering Feedback
    By Maura C. Ciccarelli

    Organizations need candid feedback, yet it’s often not supplied as frequently as needed to make solid business decisions. Two experts discuss ways companies can improve their employee-feedback programs.

    Monday, February 1, 2016

    Getting honest employee feedback is a tricky prospect. What strategies we think are effective — having an open-door policy, establishing real or virtual suggestion boxes, conducting online surveys, etc. — are actually wasted efforts if an organization’s culture doesn’t make it safe from the very top for employees to give voice to their complaints and ideas.

    To understand the best ways to encourage and get employee feedback, HRE spoke with James R. Detert, a professor at Cornell University’s Samuel Curtis Johnson Graduate School of Management, and Ethan Burris, associate professor of management at the University of Texas in Austin. Together, they have studied what inhibits workers from giving feedback as well as what organizations are doing right — and wrong — in this two-way communication dance.

    Why is it so important to understand why feedback works or doesn’t work in an organization?

    JD: This world is simply too competitive and complex for anybody at the top to have all the answers and know what all the problems and opportunities are. Learning from people who have their ears to the ground and have more real expertise is crucial to performance. The second reason is simply that we live in a democracy. We say we believe in freedom of speech, ideas, and thoughts, but when you’re in most workplaces, you basically lose your First Amendment rights. When people feel repressed, it’s much harder for them to truly enjoy work, feel engaged and satisfied, and feel they are really contributing.

    EB: The irony is that organizations really need this candid feedback, yet it’s not supplied as frequently as needed for organizations to make good decisions. It’s a very personal thing to be engaged and excited about the work that you do and feel that you are [making] a difference. When your direct boss or someone higher up in the hierarchy doesn’t pay attention, ignores you, [or] doesn’t use your feedback in a way that you think is most appropriate, it’s hugely damaging to your relationship with that organization. It’s a strategic question around how organizations can best take advantage of their employees’ ideas and it’s also a very personal experience.

    How can HR leaders improve the process?

    JD: If you don’t send signals from the top down that [feedback] is safe, that we will listen and that we will do something with it, [then] it’s really an uphill and mostly losing proposition. We’ve been approached by HR folks who say, “We can’t get the CEO or the senior team or C-suite interested or the senior business unit level people, but we want to work with [a lower level of the organization].” My single biggest pushback would be: “Then don’t bother.” [Laughs] You cannot change the culture around speaking up from the bottom up. You change it by the senior people fundamentally changing behavior, policy and practice.

    HR can play a role in aligning how people are evaluated and promoted [if an organization says it] espouses honest communication. If people still believe that the way to advance in the organization is to be a yes-man or yes-woman, you simply won’t have a culture of honest input. People pay a lot of attention to who gets promoted and what they believe are the reasons for promotion.

    If you ask people and organizations to describe [what happens when people speak up], the majority of the urban legends we’ve heard are negative. For example, so-and-so spoke up and was gone a month later. That’s natural because people tend to remember bad stories longer and with more potency. That suggests that HR can play a really active role in celebrating [honest feedback] in formal and informal ways. [Ideas include publicizing internally that] this person shared this idea and saved the company this much money; this person is receiving a reward [for his or her idea]; or [top leaders can] start certain kinds of meetings with a thank you or recognition to an employee for specifically pushing and challenging them and giving them an important suggestion.

    What types of organizations are doing it right?

    EB: It’s a lot easier in very small organizations than in very large ones because of things like access to the top people and being able to influence culture more immediately. [However], a really large tech company in Silicon Valley that I’ve been working with has not only hammered out policies but has also tried to institute things about its culture to explicitly encourage [people] to speak up a lot. Now that [its leaders] have thousands of ideas, the challenge is in asking how do they prioritize them, what system will help with that, and how do they then communicate with employees so they feel that their ideas are heard and considered.

    What resources can help?

    JD: The book Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration by Ed Catmul, president of Pixar, has at least 15 concrete instances in which he shows tremendous insight about subtle barriers – changing furniture, redesigning entire office spaces and designing processes for periodic reviews of the films at various stages. As you can imagine, these are [projects] that people have massive identity invested in. He describes a really brilliant understanding of how ambient stimuli such as furniture and room layout [and] power dynamics can make a difference.

    Google has similarly understood that, if you want people to interact more freely, design your organization to have lots of common areas. Design your cafeterias to have long tables so people have to sit together rather than isolate themselves. Google, like other organizations, has used technology not just to collect ideas, but also to have people build on other’s ideas, by allocating points, or fake or real dollars [for] better or worse ideas and volunteering to become owners in those processes.

    EB: The other side of it is, if you are an employee who wants to pitch an idea, how do you tangibly set up those conversations, especially if some of them are a bit more difficult or challenging? Doug Stone and company from Harvard have a book called Difficult Conversations: How to Discuss What Matters Most. That’s an excellent introduction to [setting] the stage so that you can be more productive and not get killed in the process.

    Anything else HR folks should understand about the feedback process?

    JD: More often than not, voice problems are just the unintentional reality of people’s orientation to authority. HR can help managers understand that the challenges of getting your people to be honest with you has nothing to do with being a good or bad person or leader. It’s just the reality of human hierarchy. People are [often] unintentionally shutting others down. It’s really about awareness-raising rather than finger-pointing.

    EB: We have yet to meet a manager who says, “I have a closed-door policy. I’m just not interested in hearing my employees’ feedback.” For the most part, developing a policy is not going to fix the real issue. This is really about culture change. That takes a long time, a lot of effort and a lot of failure along the way.

    JD: Ethan and I have both seen occasions in which HR has led task forces or reviews and probably the net result was only to increase employees’ perceptions that it is futile to speak up because they collect more data, waste more people’s time on surveys or interviews asking about speak-up problems, and then basically do nothing. It’s worth it for HR folks to really consider whether there’s truly a commitment to doing something systemic and over a sustained period of time, because if not, they might actually make the problem worse by engaging in a half-hearted effort.

    Send questions or comments about this story to hreletters@lrp.com.