control – Page 2 – flowingmotion

Business-oriented HRM curriculum

I am teaching undergraduate and postgraduate HRM and for the last 8 weeks I have been walking the post-graduates, in particular, through a simple heuristic for understanding a business model and its HRM implications.

Of the many different businesses they have chosen to work on, two please me in particular: the first is Islamic banking and the second is insurance broking (in Cameroon).

Simple heuristic for understanding a business

I am grateful to Michael Riley of Sussex University for learning (via his writing) a simple heuristic for understanding a business.

Inspect the revenue graphs and understand how revenue varies

as a trend (increasing or decreasing)

seasonally

with events

and randomly in the short term.

Once we understand ‘sales demand”, we can look at the derived labor demand. In manufacturing, labor demand may be mediated by technology. In services, like banking and insurance broking, labor demand is far more direct. When we have a good feel about who we will need, when and where, then we can set about managing our labor supply.

Variability in Islamic banking

My Islamic banker, after shyly announcing he was an Islamic banker and taking the trouble to educate me on the principle of “no interest” and the products they sell, reacted as most people do when they talk about HR. He started describing the HR systems and described a business that was ultra-stable. Because Michael Riley’s heuristic had cued us to look for variability, we asked a few more questions and this is what we come up with.

Their long term growth or contraction depends upon reputation.
They have three Islamic festivals, such as the Eid which is coming up shortly, when as at Christmas, spending (and borrowing) is very high.
As with all banks, they are affected by weather, economic and political events which they monitor closely.
After 9/11, they came under suspicion even from Islamic customers.

Now that we understand how the need for service varies, we can imagine when line managers will be calling for skill and the skills they will call for. And we have a fair chance of matching labor supply to labor demand.

When we achieve this match (which will never be perfect), then we can contribute to the ‘bottom line’ of the organization.

How we do that is the technical skill of HRM. But to use our tools, first we must have a mental image of the match we are trying to achieve.

Insurance Broking in Cameroon

The insurance brokers in Cameroon, as far as I can see, are structured as any independent insurance brokers would be. They are a family owned firm. Their business peaks at the calendar year end and has a steady though variable stream of business throughout the year.

Once again, once we understand this pattern, we can easily see what is necessary to match the demand with supply.

Sales Demand and the Credit Crunch

Interestingly, the cause of the credit crunch seems to be some back-room sales activity: borrowing money on the wholesale markets. I think if HR Directors had fully understood the sales demand of their firm, they might (and this is speculative) have partitioned the business and noticed earlier that the non-wholesale parts could not sustain their payrolls. They might certainly have taken active steps to protect the pension funds which is a serious obligation if they are also Trustees.

I remember working with the HR Director of a combined investment, corporate and retail bank. She had noticed that their payroll exceeded their interest income (not relevant to an Islamic bank!) and they were being sustained by fees. On that basis, she had carefully structured her payroll into ‘columns’ beginning with the essentials (basic pay, state insurance, pension, health insurance, etc) moving across the page to luxuries. She then brokered a signed agreement with employee representatives that in a downturn, they would start removing benefits from the right hand side first. This is proactive, sensible HR policy.

As all the above is absolutely speculative, I wonder if anyone has information on the HR and the credit crunch? And if anyone else uses Michael Riley’s heuristic?

UPDATE: For an HR Managers perspective on the Recession, I have written a summary on a new post.

How is your business coping with the recession?

Are you taking a cynical view of less business, less of a talent shortage, less work for me?
Or are you being asked for ways to improve productivity and be more attractive to customers and employees?

Do we know how to design jobs to enhance productivity?

To coin a phrase, Yes, we do! And we have known for some time.

1. Hackman and Oldham (1976)

Before Gen Y were a gleam in their father’s eye, American psychologists, Hackman and Oldham published the Job Characteristics Model. It is a five point model which is handy for reviewing a job and for designing “events” such as lectures which must be comfortable for each of the 400 students in the audience.

a. Is the task a whole task? Is it designed to be started and finished by the same person or team?

b. Is the job important? How does it relate to the work of other people?

c. Does the person doing the job get feedback? Are they able to tell how well they are doing the work from the task and from the people who use the results?

d. Is the job contained? Does the person doing the job have control over the resources including the way the job is done and when it is done?

e. Is the job interesting? Does it call for a variety of skills and is the person doing the job able to learn new skills?

We are NOT talking about Taylor as you can see.

[A C F C V : Auto Connect Friends Responsibly & Variously]

2. Job design and Gen Y

I notice that much of the talk about Gen Y follows this very same agenda. So hats-off to the young. Maybe we will get well designed work at last!

Of course, Gen Y haven’t thought this model up for themselves. The model is embedded into two phenomena that older people love to hate.

Social media, like Facebook, allow

1. Autonomy: the choice of taking part on your own terms, personalizing your input, and managing your time and attention.

2. Competence: tasks that encourage deep engagement, flow, internal goals, internal feedback and intense concentration.

3. Relatedness: multiple ways to interact, collaborate, share, express gratitude, and expand one’s social network.

3. Computer Games develop similar attitudes

1. Bottom-line, results orientation: how am I doing and is the ranking fair?

2. Collaboration with dissimilar others: who do I need to complete this task with me and where and how can I work find people with the skills I need?

3. Problem solving in novel situations: experimentation to learn the rules, and to experiment with the rules.

Devil’s Advocate

If I am to play the devil’s advocate, I can ask: does every one respond well to a game-like environment. No ~ some people do like utterly repetitive boring jobs. I am sure you will recognize them if you meet them. But I suspect you might have difficulty finding them.

More importantly, people of the 21st century don’t like being “gamed”. They will play the game, but the game must satisfy their interests. If they feel “gamed”, they are likely to resort to passive aggression.

People like taking responsibility and if you ask them to do the impossible, you will stress them – visibly.

Benefits

What benefits might you expect from improving job design. These are benefits I have seen:

The burden of day-to-day management fell away and managers were able to spend their time on problems outside of the firm: negotiating power, fuel, major deals, etc.
Employees passed messages from customers to the right people. Customers satisfaction and sales shot up.
The percentage of work passing quality control increased by 12x and workers pushed aside deficient work which they fixed for free on Saturdays.
Production increased 3x and workers were able to go home at noon (an effective pay increase!)

Practical steps

Would you like a working heuristic?

One side of paper only

1. Require managers to delegate all the goals for all their subordinates on one side of paper. The brief should include the bigger picture (the boss’ boss’ goal), the boss’ overall goal, a goal for each subordinate, any non-standard resources, how they will coordinate.

Communication is in the mind of the receiver

2. Check that each employee knows how to reach their goal (and has done something similar before), and can list their resources, authority and main professional guidelines.

Concentrate on coordination rather than control

3. Check each employee knows when they should signal that they are ahead of schedule and could affect other people’s work, or behind schedule and need more resources.

Concentrate your efforts on redesigning the manager’s job

4. If the manager interferes with the work or does not respond immediately to requests for rescheduling, redesign the manager’s job! They have too much or too little to do!

Count & celebrate!

5. Record the group’s progress. And celebrate!

And then to fine-tune the system:

Order tasks on a 1, 2, 3 system. The first time we learn, the 2nd time we polish, the 3rd time we get bored.
Allow people to rotate. Someone might have to go to round 4 before a rotation comes up. Never mind! It is better than no rotation.
Allow people to set internal goals and improve their work. Someone may want to stay longer in job because they are working on a way to do it better.

Relatedness

Organizing the workplace.

Gen Y are savvy about modern media. Let them use it. Review your confidentiality policies with them, of course, and let them design security!
Give people private places to work where they control access to their desk, their time, and their attention. And communal places to meet informally and formally.

ROI

The return on investment depends on your starting position. Because the investment is minimal, we can look at improvements as our return.

Remember you will have constraints: machines go at maximum speeds and may be erratic too. Production may produce, but can sales sell. Do start in a sensible place and take into account the way sections feed into each other.

Collaboration

If you have done any job redesign, I would be really interested in collaborating with you.