A Just Wage

Hi all,

Thanks for your posts in today's online class. Michael Naughton's A Theology of Fair Pay article provides a nice wrap for our compensation and benefits discussion. In this article Naughton acknowledges the importance of the market (contribution) in pay philosophy, consistent with our study earlier this week of market-based pay systems. The market imperative carries with it the implication that a company can afford to pay the market rate (economic order). Obviously, if a company cannot afford to pay the market rate it will soon go out of business for lack of qualified employees. Then he introduces a new wrinkle: need. Need is essentially what is often referred to as a "living wage". Where all three imperatives intersect -- contribution, economic order and need -- we find a just wage.

While the idea of a living wage might sound extravagant to some, John brings us back to reality in his post as he considers his own living circumstances compared to a living wage in different regions of Pennsylvania. The living wage is just that: what does it take to have a roof over one's head (a studio apartment for single people), food on the table, access to basic medical care, transportation (which doesn't always mean owning a car), and the like. See the components of a basic needs budget in Dr. Glasmeier's original poverty in America work here. A living wage provides the necessities, and that's about it.

Naughton's story about Reell Precision Manufacturing paints a picture of a real company dealing with real issues (no pun intended), doing their best to honor and place equal importance on each component of the just wage. As Brent pointed out, Reell moved the conversation from "ought" to "can", then demonstrated how. Matthew's post and Ricky's question to Paul highlight the challenge this places before business people... is it really possible to pay everybody a living wage in all companies and all industries in the United States. Julie and James discuss this question, comparing living wage to minimum wage, with Rob taking the question further asking about the application of a living wage on a global scale.

Naughton might argue that it is indeed possible to pay all workers a living and just wage if his three-part formula is properly applied. The need component will vary from region to region (as we see in the MIT Living Wage calculator), as will the market component. The challenge is for business owners and managers to design their organizations and work in ways that increase the value added to the company's products/services by each position thorough creative job design. As we saw in the Reell case, this also happens to make the job more meaningful, which takes us back to Van Duzer's second intrinsic purpose of business, creating meaningful work that allows people to use their God-given creativity.

Most of you agreed with the decisions and actions of the Reell Precision Manufacturing leadership team. As Paul and Brent point out in their posts, this was a complex business decisions that involved not simply raising everybody's pay over night, but a complete redesign of the production jobs and organization design to be more productive and efficient, increasing the value of the work performed, and thus enabling Reell to increase pay over a period of years to finally meet the local living wage.

Several of you also noted the challenge in selecting the appropriate target living wage. The MIT calculator provides a number of benchmarks based on family size. So which one does a manger choose? Karson, Eric, Scott and Rob all wrestled with this question. While there is no one right answer, perhaps demographic knowledge of your target market for employees can be helpful in determining your benchmark. It's also important to note that U.S. labor law requires equal pay for equal work; pay may not take into account variations between employee commitments outside the workplace. So paying one employee more because they have a family to support would put managers out of compliance with labor law, not to mention be inconsistent with the contribution component of Naughton's just wage model.

So, no easy answers here, but Naughton's model does help us to explore the implications of our faith on a central aspect of human resources management: what will we pay our employees. Clearly this is an issue that requires careful consideration when building a business plan. We started our compensation and benefits module noting that compensation philosophy flows from our business vision, mission and strategy, which includes Van Duzer's purposes. Baking just wages into a business plan from the beginning will help ensure we're building a a sustainable business model for both owners and employees.

Benefits Philosophy

Hi all,

Thanks for your thoughts on benefits and reconciling the perspectives of Herzberg, Sartain, Chewning and Van Duzer.

Today's posts were essentially about benefits philosophy. This is an important question for any business to decide before they begin to offer benefits to employees. As Scatt, Lauren, Matthew and John note in their discussions, benefits are expensive. Herzberg cites the cost as 25% of a person's base pay. The cost today is up to 30%. Yet, as businesses have recognized from the early days of "welfare work" (remember that conversation & reading from the first week of the semester?), offering benefits beyond pay to employees has distinct advantages.

Libby Sartain offers a classic argument for the advantages of fringe benefits. They are a tangible demonstration of the company's care and interest in each individual employee. And at their best, benefits are a differentiator in a company's employment value proposition.

Chewning offers his benefits philosophy from Christian worldview; many of you appreciated his perspective. His argument would be consistent with that of many of the early welfare work proponents, including the Cadbury brothers in England, and Milton Hershey (at least based on his family background). Employers have a moral responsibility to help care for the whole person, not just the body that shows-up for work every morning. Of course, this was one of Henry Ford's frustration. He is famously quoted as saying, "All I need are a pair of hands, but I keep getting the whole person!" (my paraphrase).

Herzberg presents us with a view of pay and benefits through the lens of his motivator-hygiene theory. Those of you who are in or have taken BUSA 390 will recognize this theory.

Figure 1: Herzberg's Motivator-Hygiene Theory

The point Herzberg is trying to make in his article is that benefits keep getting more and more expensive because employers are using benefits to achieve the wrong purpose. Benefits in Herzberg's model are hygiene factors. Recall that hygiene factors can result in dissatisfaction if not present, but not satisfaction. Only motivators can bring people satisfaction on the job and result in intrinsic motivation (see Julie, Janine & Rob's posts for good discussions of Herzberg's model). As noted in figure 1 above, motivators include recognition, opportunity for advancement, challenging work, etc. These factors on the job result in intrinsic motivation. Extrinsic motivators such as benefits can never do this, though they can cause dissatisfaction if not present.

So what does all of this have to do with Van Duzer and creating meaningful work where people can use their God-given creativity? Rob offers that one approach to providing meaningful work might include designing work with Herzberg's motivators in mind. These characteristics of work do not fully define "meaningfulness" in one's work, but they might give us a good start. Second, leaning on Chewning's argument -- designing benefits to address family needs, or the needs of the "whole" employee -- certainly frees our coworkers from the some of the concerns of this life, enabling them to more completely dedicate themselves to their work and the organization, including using their God-given creativity.

And the end of the day, all of this still costs money, which means our benefits philosophy needs to be clear and then baked into our business strategy and plans.

We'll continue our pay & benefits conversation on Monday with some practical work on constructing a pay range. We'll come back to this complicated issue of balancing our moral commitments with market forces and the needs of the business next Friday in our online discussion of just wages.

Enjoy the weekend, and see you on Monday!

Designing & Measuring Training

Hi all,

Thanks for today's posts on the basics of training measurement and design, and your personal stories of training successes and mistakes.

Muller's (2013) three steps for developing a training program are a good place to start a training design effort:

1. Set program goals.
2. Determine instructional design/medium(media)
3. Establish success measures.

Meister and Willyerd's (2010) social learning ecosystem can be helpful in step 2, as can the 70/20/10 model. Step three is where Kirkpatrick (1998) comes in -- see Eric's post for a great discussion linking Kirkpatrick to Muller.

Your posts included a variety of interpretations on Kirkpatrick's levels, so let's try to focus on a common understanding here.

Level 1 - Reaction

This level measures how participants feel about the program. Did they enjoy it? Do they feel they learned anything? How did they like the training room or the instructor? All personal reactions to the program. Check out Paul and Derek's posts for a couple of guys who were having a less-than-positive reaction to their training; Derek with a computer-based module, and Paul with reading. How would their companies have benefited from a collecting data about their reactions? How could that data then be used to improve the experience of future new hires?

Level 2 - Learning

This level measures the learning -- in this case knowledge -- gained. Brian, Janine, and others talked about testing related to the training they went through. This testing checks on learner retention of facts, polices, etc., from the training session. This is an example of Kirkpatrick's second level of measurement.

Level 3 - Transfer of Behavior

Level three is all about how the new behaviors learned in training are transferred to the job. Again, Janine's post provides a helpful illustration here. She went through the training (in this case, sexual harassment prevention), took the exams (level 2), and then went back to the job. There she experienced no support or acknowledgement of the training she had received, nor was there any measurement of her behavior in regards to the training (at least that was visible to her), leaving her wondering about the importance of the training to the organization. This is a classic training problem. People go to training programs, but the learning in those programs is not acknowledged or supported by their managers when they return to the job. This limits the likelihood that the new learned behaviors will be retained and transferred to the job. And not measuring employees' new behaviors limits the organization's ability to measure the effectiveness of the training program.

Level 4 - Results

This level measures impact of the training on the business. This could be in terms of revenue generation, costs savings or avoidance, or more intangible aspects of organizational life (e.g., inclusive organizational culture, etc.). The more hard numbers that be applied at this level, the better. Rob provides us with an interesting example in his post. His training consisted of a lot of safety training (a good thing), but then the measures applied after training were all related to productivity. Rob's effectiveness in terms of workplace safety was not referred to again. This is problematic in two respects. First, the company doesn't know if their safety training programs have been effective at the worker-level (though they may have some store-level measures in use). Second -- and this is particularly important related to safety training, as well see in a another case in a few weeks -- the message to Rob and his co-workers is that production is of primary importance to the company. Safety is practiced in the training room, not on the retail floor.

Conclusion

The main thing here is to (1) measure training effectiveness, and (2) to link training measures to the impact it has on the business -- Kirkpatrick's level 4. Not measuring the effectiveness of our training programs means that we may be wasting people's time, the company's money, and hampering the organization's ability to meet it's objectives. We're also not taking our responsibility as "stewards of human creativity" (Chewning, et al., 1990) seriously.

The State of Social @ Work

Hi all,

A timely SlideShare on our topic of social media inside the organization. Check it out.

Appirio State of Social eBook from Appirio

Performance Management & Organizational Change

Hi all,

Thanks for today's discussion board posts on our poor performance case. We seem to have a good grasp on the seven key actions to take in planning and executing a performance warning meeting. Keep in mind that this meeting is in the context of Muller's progressive discipline (or my performance improvement) steps. Each meeting will be a bit different depending upon where you're at in that process.

Your questions to one another were profound and fascinating. Many of you touched on a common theme: what do we do if Barbara does not improve? Well, the fast answer is that we move to the next step in the progressive discipline process. It might also be helpful to understand some of the basics around change management.

Many of you noted that Barbara's performance problem seems, at least on the surface, to coincide with the recent reorganization. Now that the company has reorganized, putting Barbara back in her former role with former management team is probably not an option. So, how do we move forward if dealing with this change is at the heart of Barbara's problem?

I've put together a 3-part video on personal change management basics below to introduce you to a few tools that can be helpful in understanding the issues associated with how people respond to organizational change. Take a look and see if you find the info useful. I also recommend picking up the book the material is based on: Managing Personal Change, by Cynthia Scott (2009, Axzo).

One final note, just because Barbara's problem seems to coincide with the organizational change, don;t assume that's the problem. This is where step 3, mutually assess the situation, is of critical importance. It would not be unusual for the root cause of Barbara's performance problem to be something completely different from the organizational change.

See you on Monday!

Performance Management Systems

Hi all,

Thanks for today's online performance management system discussion. I appreciated your reflections on integrating and contrasting the views of Blanchard and Ridge (2009), Muller (2013) and Chewning (1990). Janine, Karson and Rob did a great job covering the bases on what each of these authors bring to the table.

Matthew and James, Laura and Julie, all have important discussions about how Muller and Blanchard & Ridge can be integrated. This is indeed the case. As James and Lauren discussed, Muller's rating system is often used in a situation in which you need to compare large groups of people. This is most common when you have a large number of people doing the exact same job... maybe on an assembly line, in a call center, or maybe even a retail store. This goes directly to a point Julie notes in her post regarding the importance of personalization. Recall that one of the marks of the 2020 workplace will be intense personalization (Meister & Willyerd, 2010). Blanchard & Ridge's model provides companies with the opportunity for that personalization in the performance management system.

Check out Courtney's post for an important discussion regarding hiring for skills vs. organizational fit/motivation. This choice made during the recruiting and selection process then has an impact on performance management strategy and execution. Successful companies have hired either and both ways. See Courtney's post for a discussion of how it works at her current employer.

Finally, Eric helps us reflect on the importance of love of neighbor -- and co-worker -- in the context of performance management. Check his post for a very thoughtful integration of Chewning's (1990) concepts with our performance management discussion.

Nice work, everybody. See you on Monday for a very targeted discussion of managing poor performance.

The $50,000 Retail Sales Job

Kip Tindell, CEO of the Container Store, has some not-so-typical notions regarding pay and performance in the specialty retail sector. Click on the link below to go his October 14 interview in the Wall Street Journal. (If the link doesn't give you the full story, do a new Google search for the article title, and you should get the whole thing.)

http://online.wsj.com/articles/container-store-bets-on-50-000-retail-worker-1413340639

Great pay, rigorous performance management, and no HR department. What do you think?

PS: there is a Container Store in KOP.  :-)

Asking & Responding to Behavioral Interview Questions - Feedback

Hello hiring managers!

Thanks for last week's online experimentation with asking and responding to behavioral interview questions. Overall, nice work with both the asking/responding, as well as the critique of your own work.

See the attached video for my six observations after reading last week's discussion board.

1. Asking follow-up questions.
2. Addressing the competency asked about in the interview question.
3. How much detail to provide in your STAR response.
4. Explaining technical terminology.
5. Turning a negative STAR into an illustration of how you learn on-the-job.
6. Telling your own story.

See you in class on Wednesday!

Responding to a Behavioral Interview Question with a STAR

Hello recruiters!

We begin our interviewing and selection module by sitting in the candidate's seat, responding to a behavioral interview question.

Before we get into the specifics of a STAR, let's go back to the core concept behind behavioral or competency-based interviewing:

Past behavior is the best predictor of future behavior. (Kessler, 2012, p. 22). 

Whether siting in the candidate's or hiring manager's seat, this concept is central to competency-based interviewing. We'll spend more time on the manager's perspective next week, so now let's discuss responding to behavioral questions from the candidate's perspective.

As you saw in the interview posed to the candidate in the Fisher College of Business video, a behavioral question asks candidates to provide a specific example from past experience. This example illustrates the candidate's level of effectiveness regarding a particular competency in which the hiring manager is interested.

From the candidates perspective, we always want to (1) understand the question (competency) being asked about, and (2) be sure to answer the question directly, speaking about our own experience.

The question asked of the Fisher candidate is both typical and well constructed. It asks for a specific example from the past. Note that the focus of the question is not to play "gotcha" with the candidate when he identifies a failure, but to understand how he learns from failure and applies that learning in future circumstances.

Many of you picked-up on this in your own responses to the question. Courtney, Janine, Julie, Karson, Lauren, Eddie, John, Greg, Matthew, Ricky and Rob all identified examples of goals not met, but then quickly went on to discuss how those missed goals (failures) were actually learning opportunities. Courtney does a great job setting this stage at the beginning of her post.

Keeping the STAR (situation, task, action, result) acronym in mind when responding to interview questions will help you to answer the question directly and provide a full response. Of course you want to do this when a behavioral question is asked, but doing so when a hiring manager is not asking competency-based interview questions is even better. Providing a behavioral responses in that circumstance will set you apart from the other candidates.

Overall, nice work with your behavioral responses and STARs. You'll have an opportunity to build STARs related to specific competencies next week, as well as examine how to design and execute a competency-based interview from the hiring manager's seat.

See you in class on Monday!

Unlimited Vacation Days!

We're not in our compensation and benefits module yet, but here's something to consider when designing a benefits strategy: unlimited vacation days! Richard Branson has implemented this policy at Virgin. Check out an excerpt from his recent book at the link below. (Note that Europeans refer to "vacation" as "holiday".)

Who's ready to intern at Virgin?! And for managers, what would be the advantages and disadvantages of such a policy? Lots of food for thought.

Sept 5 Online Class Feedback

Hello HRM friends.

I have read and commented on all of this afternoon's online class blog posts. I pose questions to most of you in my comments. Please take a few minutes to read and consider them. 

The questions I pose are rhetorical (you don't need to reply), but I do encourage you to think about how you would reply if you had to. Most of my questions have to do with specifically linking the HRM practices you identify from your personal experience to your company's strategy. How do the HRM practices you identify help build an execution-capable organization (or not)? To answer this, you'll first need to consider the company's strategy. Which of the four generic strategies is the company pursuing? 

Making this connection is not always easy; the connection between a company's actual HRM practices and their business strategy may not be readily apparent. And that's the point. Good companies that are setting themselves up for long-term sustainability will align their HRM practices with their company strategy; in other companies a lack of alignment may be the order of the day.

Considering this question now in the context of today's class will prepare you for one of the early tasks in your HRM case study assignment, which we will coincidentally be launching on Monday. Please read the assignment before class on Monday and come prepared with questions.

Until then, enjoy the weekend!

8/29 Online Class Feedback

Hi all,

Nice work providing the examples of scientific management, welfare work, and industrial relations from your personal work experience. As you saw when reading your classmates' post, all three of these schools of human resources management (and general management theory) are still alive and well in the workplace.

Scientific Management

Examples of scientific management abound today, perhaps most obviously in the fast food industry. We heard about examples from the design of kitchen or behind-the-counter work at Chick-Fil-A, Hershey's Chocolate World, Haagen-Dazs, and others. The division of labor into clearly defined prep stations, the training for each of these stations, and the fact that the design and training was carried out by "experts" in management are all classic characteristics of scientific management. And despite the bad rap that scientific management gets these days, many of you praised it for its efficiency in satisfying customer needs. Improved efficiency and productivity are the hallmarks of scientific management.

Recall that scientific management was applied not only to production jobs when it was first introduced, but to management jobs as well. In many ways, scientific management created the first clearly defined management roles. What we now term "human resources management" was born of scientific management in the form of the first employment (recruiting) and employee relations (shop disciplinarian) departments. The key point for us to recognize in terms of the development of HRM as a management practice is that rather than having line managers' and supervisors directly involved with hiring their employees and managing their performance, that work was split-out and assigned to other management roles. Scientific management's division of labor was applied both in production and management.

Welfare Work

Almost as many of you identified examples of welfare work in your posts as did scientific management. Just as scientific management provided the earliest personnel-related departments dedicated to recruiting and performance management, welfare work provided the first conceptions of what we might call today employee benefits (beyond pay). Meng Yao made an important connection between welfare work and efficiency. The same improvements in employee retention and performance she saw in her personal work experience were observed by early advocates of welfare work. Addressing employee needs beyond fair pay for work completed became an important part of the personnel management landscape. The first "welfare secretaries" were in many ways the earliest benefit administrators, a role that exists in companies today.

What works for One Company Doesn't always work for Another

Several of you also noted the wide variety of experiences across the class, including how one company can be effective seemingly based on scientific management, while another emphasizes excellent working conditions and benefits. If we examined these different examples in more depth, I suspect that most of them would include an effective blending of both approaches, emphasizing the best parts of each (e.g., efficient, happy and productive employees), while minimizing the downsides (e.g., treating employees like machine parts, or like children in need of parents). The right mix of management styles/theories and HRM practices depends on the company's external environment and its business strategy (including company values). This then is the challenge of HRM - to design HRM practices that serve to align employee effort and commitment to effectively execute the company's strategy, thereby achieving its mission and vision.

HRM as a Management Practice, not a Department

This brings us to a major theme of our course: HRM is a management practice, not a department. We can thank scientific management for separating the management practices we today label as HRM from the line manager's roles and responsibilities. Today, however, we are seeing an increasing trend toward re-integrating HRM into the line manager's job. Good managers want to use all of the tools in their tool box to recruit, develop, retain and promote excellent an excellent team and workforce. This makes HRM an integral part of that job (not the job of a group of people in another department). Yes, big companies will have HR departments for all kinds of good reasons that we'll discuss over the course of the semester. But we'll be examining HRM from the perspective of the line manager, providing you with the theories and tools you need to be a great people manager using effective HRM practices.

An Important Note About Unions

Finally, several of you reflected on the role of unions in today's workplace, most with very positive experiences. Unions play an important role in the development of the American workplace and labor law. As noted in your reading, HRM during the peak of the union movement was largely viewed as industrial relations, dedicated to negotiating union contracts and then working with union leaders to operate according to the terms of those contracts. The infrequency of your posts regarding unions, and the shift in HRM's focus as a discipline, speaks to the reduced role unions have in today's workplace. We'll talk more about that as the semester progresses.

Thanks again for the great observations and discussion. See you in class next week!

Welcome BUSA 340 Students!

Welcome to BUSA 340 for Fall 2014!

I'll use this blog to post comments on our online classes and periodically comment on HRM items in the news. Stay tuned for more.

See you in class!

Prof Jonsen