Article 5.7

PERSONNEL SYSTEMS FOR HIRING AND KEEPING THE BEST

A top problem for all businesses is how to hire and keep excellent employees. And, two related problems are that both turnover rates and costs for most firms are steadily climbing.

Many firms could minimize these problems by improving both "the science and art" of good personnel management. If a wise, old manager has excellent luck with hiring and keeping good people, we might say that the person is a genius or "an artist." If we debriefed the person on how they recruit, screen, choose, orient, educate, and motivate good people, we might write down a number of techniques and guidelines that would be the beginning of a "scientific system."

If a rookie manager used the "system," they might consistently do better than before even without understanding the underlying wisdom. They would still fall short of the wise master's batting average, because they would lack the judgement and insight for spotting exceptions to the system's rules. And, because rookies would be so consciously preoccupied with the mechanics, they would be weaker observers and less spontaneous, creative responders to on-going people management possibilities. With practice, though, their artistry would grow.

Once we have a system and get imperfect results, we can use the poor results for rethinking and improving the system as well as the skills of the user. Without a system, we have no base set of practices to question and improve. Perhaps our judgement gets better by trial and error, but we cannot multiply our wisdom for the benefit of others without an improving system.

A CHRONOLOGICAL SEQUENCE OF PERSONNEL SYSTEMS

The diagram above illustrates six systems that every firm should create or rethink and improve to help managers do a better personnel job.

As a brief explanation, every firm should have a "hiring system" (#1) which guides users in how to recruit, screen, select, and up-front contract with new hires. The objectives of this system would be to:

    1. Generate enough applicants that at least one would have the right job aptitudes and attitudes to fill an initial spot well and be able to grow with and where the firm intends to go.
    2. Have multiple screens that filter out most of the in-appropriate candidates with minimal time and expense so that maximum time can be spent carefully considering the most suitable.
    3. Make sure a whole-brained team of managers and peers have a chance at some point to assess finalists and buy-in to any decision. One interviewer will always have blind spots that can cause misjudgments.
    4. If the firm is a high-pay, high-expectation outfit, then finalists must understand the great responsibilities that will be expected of them. An up-front contracting session would sell the employee on why they might not want to work for high pay in a self-managing, meet-the-standards-or-else environment.

Once someone is hired, they should immediately go into at least two weeks of a full-time orientation system (#2). A person might spend half-days in orientation sessions and half-days with on-the-job training, but orientation should be a demanding boot camp to see if the employee has the stuff for the long-term and to set a good learning and performance norms. The objectives of this system would be to:

    1. Make sure that the employee understands: the big picture; how they fit in; and how they can make a difference to overall productivity and customer satisfaction.
    2. Make sure with tests that the employee is fluent with: industry nomenclature; the names of the top ten most profitable customers; the names and positions of the 50 to 100 closest employees; electronic mail to be able to send, receive, and monitor; all important company philosophy, strategy, policy, systems memos videos, etc.
    3. Make veteran employees be the teachers for the training modules, because first-time teachers learn more than first-time students and get a necessary emotional recommitment to corporate culture from the experience.
    4. Orientation should insure that, thereafter, a new employee will absorb much more learning because they have frameworks to build upon and the fluency to understand what they are hearing.

Once orientation is completed, we must gear employees to life-time learning. Because the US has entered a slow-growth, post-consumer era, most firms will grow slowly if at all. Personal success for most will not be hierarchical promotions, but either cross-training at multiple jobs to give the customers perfection, variety, speed, and on-time performance; or, pursuing a path of mastery at one discipline to move towards, but perhaps never getting to, black belt 10th degree excellence.

We can achieve these learning goals with pay for knowledge systems for many employees (#3). The objectives are to eliminate annual raises for doing time at the firm and to make the employees responsible for certifying at more jobs or higher levels of excellence to earn merit raises immediately. The starting wage range and the merit raises are in turn set by the supply-demand forces in the local labor market and by the inflation in those market rates.

SYSTEMS FOR GROWING AND WEEDING THE GARDEN

If we have good employees, then an on-going challenge is to keep them and their productivity growing to feed their compensation expectations and have a profit too. Two systems that keep reminding all employees that they are responsible for growing themselves and their productivity are "monthly goal statements" (#4) and "database scorecards" (#5).

Instead of annual employee reviews, consider having the employees review themselves, their growth projects and the company/management every month with a one page form (#4). The top part states what and how they are going to improve in the months to come, and the bottom part summarizes progress made on past monthly goals as well as how the company can better help.

If the employee does not turn in a form every month, then they are not eligible for a raise. But, having a complete folder is not a guarantee of a raise, just a prerequisite.

When the employee turns in the form at the beginning of each month, this should trigger a 5-10 minute review with a manager who is there to help. Managers can add memos to file as needed. In time the achievers log some good commitments and successes which will deserve real raises. The coasters record weak goals and no follow-through in their own handwriting which makes wage freezes and terminations a lot easier.

Database scorecards (#5) are 4 to 10 measurements that each workteam self-loads into spreadsheet software on a PC to track long-term trends in graphic form. The measurements surround the job and include the areas of quantity throughput, quality measures, timeliness, consistency, and next department/final customer satisfaction rates.

The objectives of this measurement system are to:

    1. Make the employees responsible for their total measurable performance.
    2. And spark experiments for growing productivity. When teams see that the long-term averages are flat they start thinking.

Finally, the best gardens are weeded. We need a system (#6) which will help managers to terminate people sooner rather than later, and which will increase the number of "beautiful exits." Such exits meet two conditions and possibly a third: did the terminated employee's best friends on the job see the action as fair, if so they and others will still trust management; will we be able to defend ourselves in court; and if possible, can we outplace the person to another firm so that they don't miss a paycheck and unemployment insurance costs don't rise.

CONCLUSIONS

There will always be an art to picking, educating and motivating employees. But, if we can systematize the methods of the masters, we can make less experienced managers more successful.

The six chronological systems reviewed above are synergistic and compounding in their benefits. If a good hiring system increases the good hire rate by 20%, then that many more new people will get more benefit out of the rest of the systems. Terminating employees is expensive and psychologically difficult, but the rate of weeding drops with better up-front systems. And, with data scorecards and monthly reviews, the borderline people largely shape themselves up or out.

Merrifield Consulting Group, Inc., Article # 5.7