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Ch 9 – Lisa Wilkinson an Organisational & HR debacle

While the Channel 9 – Lisa Wilkinson case has raised the important issues of gender equality and pay equality, the real issue of “human capital management” procedures and processes has largely been overlooked.  With the methodology and systems available today this situation should never occur and the way it has unfolded is a true debacle – a complete failure, especially because of bad planning and organization.

The NSW Premier Gladys Berejiklian and Opposition leader Bill Shorten have allowed themselves to become caught up in the media frenzy, but blinded by the gender equality aspects they did not address the real issues.  Australia supports the ILO Convention recognising equal pay for equal work, but even so there is a lack of accountability and reward for true contribution.  Despite this support, Governments and many private sector organisations in Australia still utilise incremental pay approaches to base pay.  How can this be equal pay for equal work?  Maxumise has assessed people on the extremes of a “level” and it is not uncommon to find a competence reversal i.e. the most competent contributors being paid the least.

In modern organisational and HR asset management, remuneration is made up of the following three (3) elements:

  1. Base salary for a fully competent person delivering on the expectations
  2. Performance pay i.e. at risk, variable pay linked to contribution above normal expectations
  3. Legal and business based benefits as well as adjustments and “perks”.

In the Lisa Wilkinson debacle, real “business” issues started to emerge when Channel Nine CEO Hugh Marks said: “Today Show is one of the biggest roles there is in Television…”.  Did he mean that it has potential to contribute to revenue, profit, channel 9 image etc.?  “Biggest” is probably not the best term to describe [...]

Trumpism needs a structured response from Australian organisational and HR professionals

Trumpism

Article by Max Underhill

Maxumise Consulting Pty Ltd

www.maxumise.com

www.HRmonise.com

Writing an article on a Trump topic is like trying to send an SMS on the Manly ferry crossing the heads in large seas – you are trying to hit a moving target. Experiences with the Trump administration to date indicate we need to get used to that element of surprise. However, the longer-term response to “Trumpism” requires a more structured and independent approach to management. Overall this may be good for Australian organisations provided the “surprises” do not embroil us in events we would prefer not to be part of.

 

Organisations need to address the Trumpism effect at three levels:

  1. At the strategic level, a reviewing the past and determining the immediate and likely long term impact of Trumpism on the organisation going forward – good and bad as well as commercial and social. Trumpism comes at a time of increased change; the next wave of real technological change is probably larger than that of the 1990’s. Monitoring the strategic or organisational surprise element is established as part of a rolling strategic plan and monitored through “trigger event analysis”
  2. At the operational level organisations need to be vigilant, establishing a monitoring and response mechanism to deal with surprises that are likely to continue to “pop-up”. Surprises can result in operational impacts such as supply, market changes or financing where organisations need to take advantage of the good impacts and respond to the negative impacts.
  3. Employees and even organisations can respond to behavioural messages so we need to be prepared for the unexpected and unacceptable behavioural responses. These “people risks” will need to be monitored through the performance measures especially employee surveys [...]

The most vulnerable impacted by poor outsourcing of government services

IMG_1570

We need to address the cause rather than just band-aiding the symptoms.  Update on earlier Blog on Outsourcing

ABC 4-Corners has reported on many cases of privatisation or outsourcing of government community services including:

  1. November 2016 ABC 4-Corners reported on the abuse and neglect of displaced children in residential care which I am sure left a number of the viewers feeling angry and disgusted.
  2. Prior to that we saw the report on the outsourcing of some tertiary “TAFE” level education courses to the private sector referring to rip-off’s and abuse that negatively impacted vulnerable people’s lives.  Whether these abuses where legal or illegal is not for me to judge but regardless, it was immoral and left me feeling disgusted.
  3. 27th March 2017 4 – Corners again reported on abuse and neglect but this time it was in disability group homes a similar story to the children in residential care and again was disgusting and sad.

The common threads in each of these stories is the outsourcing government services to providers where some were taking advantage of vulnerable people in the community not to mention the waste of tax payer’s money.  The worrying thing with this is that the outsourcing systems, as they exist, seem to accommodate the unethical and abusive activities without accountability.  I am sure there are also the ethical providers doing the right things.

In the 1990’s we reviewed a portion of the government disability services where abuse and neglect was common place, which may have contributed to the outsourcing of the disadvantaged and disabled assimilation into the community.  However, the “outsourcing” or “privatisation” needs fundamental controls as if these services were provided in-house so there [...]

Let’s Outsource – Out of Sight Out of Mind

Outsourcing, if not managed correctly, can be a major disaster.  IMG_1570

There seems to be a perception that outsourcing is a euphemism for “out of sight out of mind”.  How wrong this is as we have recently seen in relation to some government outsourcing.  In 2016, the ABC 4-Corners reported on the government outsourcing of some tertiary “TAFE” level education courses and more recently on the residential care for displaced children.  The lack of diligent and planned oversight of these programmes has cost the government dearly, but the price paid by the so-called recipients of these services may last a lifetime.

Why do government and private sector implement so many outsourcings, privatisations, sub-contracting without the basic checks and balances?  If the 4-Corners alleged neglect and routing of the system has gone undetected for long periods, even years, then the organisational checks and balances are obviously not in place.  Unfortunately we also see the same lack of monitoring and control in the private sector, not-for-profits etc.

In Australia we tend to provide the “recipe” which specifies how it is to be done rather than define the “outcome” which specifies the end result.  The outcome based approach empowers the deliverer, encourages initiative and innovation while ensuring we get what we needed and at the standard required.  The recipe approach is prescriptive and often provides an opportunity for the contractor/deliverer to interpret the recipe as suites them and therefore enables the system to be manipulate in their favour – “but I just followed your instructions”.  The outcome approach is easier to specify especially the inclusion of quantifiable checks and balances as an assurance of the delivery.

Does the Human Resources department have [...]

Today’s technology – tomorrow’s wipe-out or opportunity?

When robots design and build robots to service robots, humans will know they are obsolete. In the meantime people need to manage organisations by optimising all available resources; current and future.  Experience tells us this is not a new issue but the predictors are estimating that technology will take over 40% of the current positions over the next 10 years.  The fundamentals of organisational and human resource design need not change, but stakeholder expectations will change as will the measures of success.

Historical Pressure Points In the 80’s when the PC emerged as an affordable tool, computers were programmed to emulate the activities humans undertook rather than capitalise on their potential.  At the same time many Australian industries became uncompetitive, lagging behind in technological change.  This was not helped by Australia’s economy of scale which also contributed to our lack of competitiveness, for example, it took seven weeks in Battle Creek USA to produce the annual corn flake output of the Australian factory.  Today so many services can be provided on line and from anywhere so the tendency will be for the cheaper costs. Australia’s competitive position requires us to become smarter as we plan for the future. Organisations need to monitor their progress in meeting the future needs of their stakeholders; identifying and measuring outcomes and integrating smart technology. At the global level, our government signs trade agreements with countries where Australia has little competitive advantage.  Maybe some great Australian iconic businesses would still exist in Australia had cooperative deals promoting companies headquartered in Australia been promulgated.  The manufacturing or processing could be located off-shore exploiting their critical mass and better proximity to markets.

Dynamic Planning for the Future – what we should be doing [...]

Goldman Sachs joins HR lions club with a squeak!

Navel Gazing larger Goldman Sachs joins a long chain of icons that are shaking up their performance appraisal process – wow, probably 15 to 20 years late and even then they are just tweaking them around the edges when there are real quantifiable and empowering solutions available.

Where would we be if we managed our other assets like these companies have been managing their people?  Maybe the better question is where would we be now if we had been managing our people assets effectively for the last 20 years?  What if we had included proper position definitions, quantitative measures and empowerment not to mention placing HR assets on the balance sheet?

As the Human Times Monday 30th May 2016 edition (humantimes@humantimes.us.com) reported Goldman Sachs “experimenting with an online system” joins Accenture “more frequent check ins between management and employees”, General Electric (similar to Accenture), Gap, Abode and Microsoft “abolished numerical ratings” with J.P Morgan, Chase & Co and Citi Group making “management changes focussed on retaining junior bankers”.  PwC and Delloite are also changing their performance appraisal system, jumping from one subjective system to another.  These prides of lions are squeaking not roaring.  Just imagine if we managed our finances or stock or physical assets like we do our HR – let’s sit down at the end of the month to casually discuss how we feel about the revenue and profits, what about the cost and how do the stock levels look like to you?

There have been human capital management methodology and tools around for 20 years that define the expectations of positions including measurable outcomes that empower the employees to understand how they are performing and [...]

Is qualification a meaningful measure of an organisations capability needs?

Obtaining a qualifications is a significant milestone for many people.  But how does a qualification impact the employer?

Maxumise finds that qualifications are, at best, a guide and not a meaningful measure of an organisations’ capability needs.  Moreover, it does not indicate the capacity of the employee to contribute.  We find that a focus on qualifications can, in fact, be a hindrance to innovation, progression and organisational development especially with the current academic approach to learning and development.

The UK Office for National Statistics (ONS) Labour Force Survey, reported by the Guardian, found that around 15% (1 in 6) of workers are over-educated for their jobs while 13.9% are under-educated i.e. having a lower than average education level for their occupation.  The survey therefore concludes that 28.9% of the UK workforce are in “jobs not suited to their skill level”.  It was also found that the younger employees fall into the “over-educated group” while the 50 to 64 year olds made up the majority of the under educated.  The question is, would we have got a different result if we were looking at the competence of the people against the organisations requirements rather than qualification?

While we have no problem with the report findings, we question the relevance of qualification as a meaningful measure of an organisations’ capability needs.  In fact we would go further to say that qualification can be a hindrance to making real change in organisations as the tendency is to retain traditional “jobs” rather than define new and innovative positions around stakeholder needs.  The blinkered traditional “qualification” approach may be a significant contributor to the productivity issues in the UK and other countries like Australia as we are still teaching to old out [...]

A Sugar Tax or Social Responsibility on the Balance Sheet

Is there a company out there that doesn’t promote itself as a socially responsible company.  These companies also work hard on increasing their market capitalisation (value), so where does sugar fit in?

 The gap between the book value and market capitalisation is largely unquantified but in reality it is made up of the employee value, often called HR asset value, intellectual capital and the socio-economic contribution.

There are tools to value the HR assets so this is possible, the accountants say they can value the intellectual property (although those innovative inventions are thin on the ground these days) which leaves valuing the socio-economic contribution of the organisation.  This is where the “rubber hits the road” and with some companies the socio-economic value may be neutral or even negative for example tobacco companies, heavy polluters, some alcohol promotions and maybe foods that contain ingredients that the medical profession tells us is “damaging” like excess added sugar etc.  We have been down the path of putting a value on the carbon footprint including pollution, carbon “miles” but did we transfer this to the balance sheet as a socio-economic value?

 I am not an accountant but we are all governed by accounting standards for reporting through standards like GAAP, IASB (IFRSs) and FASB which appear to prevents us from putting these values on the official book value (but they will allow goodwill which can now be impaired to make up for losses elsewhere).  However this should not prevent us from advocating for it, nor does it prevent us putting these values in as a balance sheet notes.  This has been done for [...]

Is Australia’s Economy of Scale Adequate for the Future?

Turnbull team cartoon low

Australia has an increasing imbalance between the economic contribution from its “residents” and the cost of providing social services and government administration.   Are there lessons we can learn from the past and how do we move forward?

In the mid 1990’s Australia lost most of its manufacturing base.  Not only were jobs lost, but the need for highly specialised skills, together with the problem solving expertise to create unique innovative solutions in these industries evaporated.  The car industry limped on under the “Button Car Plan” with government incentives to share components such as body pressings.  Entities like Kellogg, with raw materials on its door step, changed structures and redefined traditional “jobs” to outcome based contributing elements (positions), empowering their employees.  Whilst Kellogg’s workforce nearly halved at the time, some manufacturing was retained and survived a further 20 years.

Government reviews at the time considered what options could be adopted to retain some of the exiting manufacturers as competitive businesses.  The findings in each sector were similar; firstly the need for investment in new technology including robotic processing, and, secondly the production and processing scales for efficiency were many times the Australian domestic demand at that time. 

I remember being at a presentation for new piece of equipment for a communication company.  When a slide showing the optimum output for the smallest model was displayed the CEO thought there was a misprint on the capacity as the minimum recommended output was 10 times what they required and they thought they were big a player.  The equipment supplier then suggested they [...]

When the only certainty is uncertainty

Human Resource Professionals can contribute to the socio-economic change in Australia.

The overwhelming availability of media, both social and formal, make it is easy to get distracted by the political “ping pong” and perceived waffle we are constantly bombarded with.  However, now organisations need to deal with the uncertainties of a budget delivery in the next few weeks and a protracted looming federal election.

We live in a time of political optimism with a current PM who sees the issues facing Australia as opportunities.  We clearly have deep-seated issues like an ageing population, high costs of doing business and providing services, relatively few value-adding sectors like manufacturing, a slow economic growth and an imbalance between revenue and expenditure levels.  Governments must rely on their own planning and service delivery departments while considering the impact on the private and not for profit sector.  We all have a role to play in maintaining our standard of living and assisting in closing the gap between the haves and have nots leading to a more sustainable society. 

As HR professionals we need to make that transition from narrow HR focus to a broader and more methodologically driven approach to organisational issues – often referred to as human capital management (HCM).  This approach commences with the development of a dynamic strategic plan that addresses the historical trends, where we are today as well as projecting forward with a dynamic quantifiable rolling strategic plan that defines the corporate accountability.  Other than the corporate statements that we are all familiar with the strategic plan must define how we intend to measure the success of the plan as well what capability will we need to [...]