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New Labor Ethic

08November

New Labor Ethic

2017 Disruptions – New Labor Ethic

 

What is a disruptor? Why does it get bandied about so frequently and so easily? Disruptors are convention busters. Disruptors make people ask awkward questions. Disruptors build upon their character, competence, and courage. But when has HR been known to be convention busters? Only in organizations where the CEO wishes to usher in a people revolution. And such an organization constantly has to cope with myths and realities of their HR policies, programs, and conventions.

 

What is disruptive and not a disruption? When a CEO and when leaders do nothing about violations of values, when the incompetent believe they are competent, when Politics Rules Performance, when Values are Published But Not Practiced, when having passion that resonates with your corporate culture is not the same as showing passion, manifested as whimsical and arbitrary, that causes fear and resentment amongst your staff and whimsical leadership is not a gift. It is a curse. If you are also seriously prone to mood swings and eccentricities and the worst of all when CHRO is rewarded for Loyalty to Boss as against People

 

Look at some examples,

 

Disrupting Labor Reality – When HR lacks a seat in the power dynamics to influence positive change.

Demystifying Labor Myths – Competitive Compensation does not matter to high performers.

Disrupting Labor Reality – When HR imposes meaningless policies and are controlled by staff functions,

Demystifying Labor Myths – Engagement Surveys – Acts as a lead indicator. It’s at best a Lag Indicator

Disrupting Labor Reality – When HR is far too busy to respond to people & their questions.

Demystifying Labor Myths – Leadership behaviors differs sharply within an organizational culture.

Disrupting Labor Reality – When HR connects more with your boss than with you.

Demystifying Labor Myths – Larger Workforce leads to greater performance & profitability.

 

People Disruption – Global Influences & Mobility

 

Corporate hierarchies now turn into “intellect hierarchies”, positions of leaders and managers held by those with a know-how, know-what and the know-why, rather than an upgraded position in the hierarchy made available through a corporate career plan. Dan Schawbel, the Founder of Millennial Branding states, “One specific technological trend that has a direct relevance to where, when, and how people work is the emergence of mobile communication and productivity tools. The problem is that most workers grow impatient with their current roles and think that the only solution is to move to another company. In a new study in partnership with American Express, we found that 73 per cent of managers are very willing or extremely willing to support employees who want to move within the corporation and 48 per cent of millennial employees are interested in making these moves. Employees need to look left and right not just up if they want to be successful. At the higher levels in an organization, you need to have a firm grasp on how different groups operate or you won’t be able to manage them properly”. How many organizations have attempted to seek smart talent from its labor workforce? Every first generation white collar has its roots in unorganized sector.

 

KPMG research focuses on how enterprises driven by globalization and trade agreements, both employees and employers are now expecting greater mobility within and across the organization. They have seen trends such as increased recruiting at a global level, greater number of international mobility, choices and how employees face a vast array of options with respect to geographic, political, and social-conditions attributes of their employment. Both employers and employees now expect greater mobility within and across organizations. In today’s world, employees are willing and often seeking to broaden their range of employment and career opportunities by making request transfers to a different city, region, country, or continent. In the Country, full labor mobility across the continent is now the norm. In, “How Social Tools Can Help Your Company Avoid Strategic Failure – Big Idea: Social Business Interview, Nilofer Merchant, interviewed by Robert Berkman “In a conversation with Robert Berkman, contributing editor of Innovation Hubs at MIT Sloan Management Review (2012), Merchant talked about findings from her work and books and expanded some of her views on the advantages that occur to businesses that embrace the social era and talks about three conclusions”.

 

People Disruption – Work is freed from jobs

 

This means that human resources change when most of the people who create value are neither hired nor paid by you. And competition has changed so that any company can achieve the benefits of scale through a network of resources: for example, designing a product from anywhere, producing it through a 3-D printer, financing it communally and distributing it from anywhere to anywhere. The value chain has changed. The customer is no longer just the buyer but also a co-creator. Things like co-creation and crowdfunding and customization can lend a deeper value to the pricing. For example, when Burberry or Etsy lets me co-create a product, to design something the way I want it, then the value of the product fundamentally changes from “shirt” to “my shirt.” With, not at. It used to be that capturing value was about hiding price or appearing perfect when, in reality, we return to a truly social construct of how connection happens. Instead of sales and marketing, exchanges follow the arc of relationships: romance, struggle, commitment, and co-creation. Connection supersedes control. Capitalization changes when a community invests in an idea; it also co-owns its success. In other words, it’s not just socially funded; it’s socially meaningful, which of course changes the value proposition”.

 

People Disruption – Impact of Labor Force

 

An often forgotten reality that is unlikely to ever go away is the presence and impact of labor force and their trade unions. The nature of labor unions can differ by geography and industry but their role, values and purpose at a broad level continues to go on and on. In some geography they have managed to adapt, work their way constructively with their employers to obtain a fair status for their constituents and in other geographies the degree of militancy and unreasonableness continues unchanged. Of greater degree of frustration is the trend of governments managing business enterprises and unable to deal with trade unions to make their support productivity and performance. KPMG Human Capital Practice Report seeks to focus on the need for HR strategists to tailor their strategies to reflect their own organized labor circumstance, that HR strategy should not neglect organized labor, even in jurisdictions where it is not an immediate risk and how HR strategy should paint a long-term picture of the nature and risks of organized labor in their operating jurisdictions, and possibly even those of their suppliers. McKinsey Consultants, Julia Brüggemann, Et All, write, in McKinsey Quarterly, write, “In People and talent management in risk and control functions risk management has become an increasingly challenging endeavor for corporates and financial institutions alike. Unprecedented regulatory demands and increasing complexity have placed steadily growing requirements on the risk-management function and the individuals within it. The rising complexity has not only aggravated the detection and control of risks but also increased the damage in case it materializes. A survey on enterprise risk management conducted by McKinsey in 2013 among 50+ global banks and 15 global oil and gas companies revealed that people and performance management are perceived as critical issues for the risk-management function. Current risk and control functions require not only employees with technical skills but also staff who are creative, assertive, and flexible in fast-changing business environments. In addition to individual talent management, which attracts and develops individuals, collective talent management ensures that an appropriate balance of talented people cooperate in the best way to realize effective risk management. Nevertheless, the buildup of talent-management capabilities within risk and control functions has often struggled to keep pace with the new demands. The misperception that enterprise value is only generated by the revenue-generating front line and not by the loss-preventing risk function has led to far stronger talent-management initiatives and capabilities in frontline units. Furthermore, recent regulatory and compliance changes have demanded high levels of senior-management attention and often shift the focus away from longer-term topics, such as setting an agenda focused on strategic talent and people. Hence, strengthening the talent in the risk and control functions has not been sufficiently in focus in recent years. Consequently, this is now a priority to ensure that risk and control functions can cope with the more challenging and ever-changing environment as well as oversee and challenge the front line”.

 

In 1985 authors, Michael Beer, Et All, in “Human Resource Management” (Free Press 1985) predicted these trends, “Historically, unions have served as a mechanism to provide a collective voice for nonsupervisory workers over such HRM matters as due process, the distribution of rewards, transfers and promotions, and working conditions. Even where employees are not unionized, unions can influence HRM policies. The perceived threat of unionization can lead employers to adopt HRM policies and practices that they might otherwise avoid. Within a company, wage increases negotiated by the union create pressures to increase wages for nonunion employees by a similar or slightly greater amount in order to avoid dissatisfaction that might lead to further union organizing. Firms without any union may feel forced to pay close attention to pay, fringe benefits, employment security, working conditions, promotion practices, and termination practices. If a corporation operates in a heavily unionized community, it must establish some degree of parity between its policies and those of unionized firms, or risk unionization. Nonunion firms have human resource policies and practices (including grievance procedures, open-door policy, and employment security) that are more generous and costly than those of many unionized firms. Undoubtedly, the desire to stay nonunion was a major factor in designing these policies. Furthermore, unions influence HRM practices of nonunionized firms indirectly through their political influence. Legislation that has come about, in large part, because of the political clout of unions has imposed certain human resource standards on employers”.

 

Michael L. Corbat CEO of Citigroup to Rik Kirkland of McKinsey Publishing, espouses his views on Retaining talent and leading in a regulated age. “I’m going on 32 years at our company today. For the average employee in the financial-services industry, it’s four or five years between jobs. What we have to do is not only bring in the right talent but also keep the talent. And from Citi’s perspective, what we’ve got the ability to do is to offer multiple careers within the same firm. We pay attention to whether the employee has a geographical preference or a product preference or whatever those things are. And that’s caused us to really engage in a very different way with our employees, asking them to really take ownership and be vocal about their careers. Our commitment back to them is if they get it halfway, we’ll meet you more than halfway in terms of being engaged. The response around that so far—it’s still early—has been positive. One of the big challenges is that regulation has been evolving. And, like anything in life, it’d be great if somebody came in and said, “Here are the rules. Go to work.” What we’ve seen is the evolution of regulation, capital, increasing capital, liquidity, stress testing, resolution. The good news is I think we’re getting toward the latter stages of definition and implementation. So I’d hope in the next couple of years we get those largely finalized. I probably spend somewhere in the order of 25 to 30 percent of my time on regulation and on historical issues. I’ve been very conscious of making sure that even though the institution needs to spend a lot of time on regulation, only the people who absolutely need to spend time on it do so. Our other people have the ability, then, really to be focused on customers and clients”. This cycle of life will be back as disenfranchised staff members no engaged into the digital world are likely to organize to fight for their survival in a world that they no longer understand.

 

People Disruption -New Labor Ethic –Changing Attitudes

 

What about company cultures that responds, albeit reluctantly, after five mail reminders to get them to do what they are supposed to (Because they have read that people respond only after five reminders?) Leaders cannot build trust with their labor pretending to use the charade of open door culture & listening/contributing to gossip. What a joy is it to hear that the future of HR is more appropriate content/theory HR but all of Technology enabled HR for labor engagement and management. Its culture & change as it appears to become effective in an organizational context. Some use “performance”, some “use” people to climb the corporate ladder. Leaders are expected to not believe what they see; Not believe what they hear too; Don’t believe what you say; But believe what you investigate/prove. In data, you trust and leave the rest to God. Tough. But what choice? Leaders’,only job is to defend integrity in each of the actions of their institution & its members. But when they don’t then you have just one recourse. How many popularity seeking leaders have the integrity and courage to not bad mouth their predecessors and get on with fixing things? And it is literally only those leaders who are political or popularity seeking styles, who cannot get on with the job mandated to do. Mouthing governance, preaching ethics, advocating value based practices & breaching all in letter & spirit is a corporate breakdown and more so when it is led from the top. When bad things are said about your firm, do people take pains to tell its leaders? If not be sure that your people believe in those bad things – be it gossip, fact or folklore. When good things happen to your team members are you the first few to know. If not ask yourself why not? There could be many revealing answers. Board should check this first. Measure the commitment of leaders towards her labor by the number of reminders and follow ups they do before their issues are resolved. Measure why leaders use appeasement to win popularity. Perhaps, we now know one answer, at least. They are insecure! Can’t be a greater joy than to see your team rise above to come together to do what is right. Reinforces faith that teaching your team values is more important than training them on simply to be competent. Praise in public. Reprimand in private. Exaggerate the good in people. Downplay their weaknesses. Small world short life. It’s worth it. It is great governance when best of leaders would either not take up or step down if they feel they are not competent/ready to do the job or when knowledge, skills, behavior, wisdom needed to run corporate enterprises. Or when you take responsibility for organizational crisis without being asked to take responsibility. This is not a political issue. Don’t negotiate everything. Find ways to engage labor to seek their best. Not all labor of the 21st century is seeking organized settlements, political solutions, escapism or against performance, productivity or hard work. They are seeking trust, mutuality, dignity and respect. It is the new labor ethic.

 

Dr. Ganesh Shermon is a Managing Partner for “RforC Talent Management Solutions” (North America) & earlier Partner, Country Head and Global Steercom (P & C) – KPMG LLP.

Posted by ZuzukiSX4  Posted on 08 Nov 
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