Policy and Practice is Rarely Aligned with Values

Far too often, companies make great statements at a corporate level about what an amazing culture they want or have, and then they tolerate or create procedures and practices that directly contradict those statements. You can't operate an authentic culture with a value of “trust” or “integrity” if your expense or benefit policies are based around the assumption that every employee is a potential fraudster.

I'm afraid that HR and legal departments have caused so much damage here—they've been so focused on protecting what they perceived to be the company's best interests that they have become the expert at the one‐sided agreement. I realize this will sting for some readers and I share the pain—we've struggled to meet the standard here, too.

The problem with one‐sided agreements is that while employees often sign them without vocal complaint, they have a huge hidden cost. Employees see the “us and them” relationship encoded into the actual fabric of the company, and the cost is the trust and therefore potential engagement we have with our workforce. If we want our staff to be engaged and on our side, fighting our battles and winning for the customer, we have to start with the premise that we're not adversaries, but we're actually on the same team.

The standard employee handbook is a prime example of this—I've never seen an example of a document with such a misleading title. Any employee who thinks it could be useful to help them navigate their company and make a success of their role and career is in for a shock. Like so many of our management policies and procedures it was never written with the intention of inspiring, motivating or engaging the people it was written about. Many were never written to be read at all!

I fell afoul of this myself at Reward Gateway when, in 2013, I stumbled upon our US employment contract. We have a company value called Be Human and we preach trusting your staff and doing the right thing as an employer, but our US operation was tiny at the time and we'd bought an employment contract off the shelf. Not tailored to our values, it was so harsh—at every opportunity, it skewed the game completely to us as an employer, fighting battles that had no value for us, reserving for the company privilege that we did not need and would never use. It felt nothing like us and made us look inauthentic.

When I asked the recruitment team how people felt signing it, they told me it often raised issues because it felt so out‐of‐context with the candidate's recruitment journey up to that point.

I remember feeling ashamed that we'd asked anyone to sign it, and went and apologized to every person we'd hired in the US. I re‐wrote that contract personally, removing every single one‐sided protection for the company before tearing up all the old contracts and signing new ones with all of our US team.

Are We All Interims Now?

The heart of management malpractice might actually be the myth of the permanent job. We all know that companies can't afford to offer lifetime employment now, but even if they could, who would want it?

Imagine: You apply for a job because you think it's a great fit for your skills, interests and abilities—you're excited by it and you want to put your all into it. But once you've chosen it, that's it; it's the only job you're going to have because you've signed a lifetime employment agreement. In 18 months' time, when the needs of this role have changed or we've found a different way of doing it, you're going to stay here at the company because you signed a lifetime employment agreement. Who would actually want that?

You should do a job for as long as you love it, as long as the job loves you and as long as the customer needs it to be done. When that time ends, there might be another great job in the same company or there might not. But your job is too important to your long‐term happiness to be doing one that you don't love—so never settle.

The problem is that all of our language and process is caught up in a fantasy world that doesn't exist any more—anyone who leaves us is “disloyal” and we've failed to “retain” them. When it's the company's choice it's assumed that the individual let us down, did something terrible or was defective in some way. But is the truth not often just that someone did a great job and the job that needs doing next is a different one?

The person who can get your product team from 10 people to 80 might not be the person who can develop it from 80 to 200. It's a mistake and fails both sides when you keep people in jobs because of what great work they have done for you in the past. Surely the only reason to keep people in jobs is because of what they can do for the mission in the future.

I get questioned about this all the time. “Oh, Glenn, I hear so‐and‐so has left, what happened? What did they do wrong? I thought you liked them. Did they let you down?” I often answer, “They were amazing, but their job is done now—the person who would get us from here through our next phase needs different skills and ability.” This is an approach often done only in desperate times, but surely it should be routine. How can we move to a world where people are able to do their very best work, in companies that they love, in jobs that make them feel alive and energized, if they or half the team around them is there primarily because they did good work in the past?

The Myth of a “Family‐Doesn't‐Fire” Culture

In Leaders Eat Last, Simon Sinek argues that “being a leader is like being a parent” and makes the case that the ultimate role of a leader is to provide safety to their people and that, from safety, trust will grow and results will follow. He advocates a “no‐fire policy,” saying you'd never fire a member of your family, so you should do everything you can to avoid firing a member of your team.

This, I feel, misunderstands what makes great cultures. A no‐fire policy means your teams will be filled with people who aren't right, who aren't able to do the job that needs to be done, which will damage team and company performance. Just think through how that feels to the rest of the team.

Great cultures are not about perks and foosball tables, and they are not about an easy ride. Great cultures are made by the achievement of great things by teams of great people, working based on a compelling mission in an environment where you can do great work. Being surrounded by people who are there out of a misplaced sense of family loyalty destroys that and prevents those people from being in a job that they love.

“The idea of the permanent job is one of our cruelest lies––there are no permanent jobs. We do people a terrible disservice letting them think things will last forever. The biggest epiphany I had in my career was the day I decided I didn't want to try to keep people forever anymore; instead, I wanted to make Netflix a great place to be from.”

—Patty McCord,
Former Chief Talent Officer at Netflix and author of Powerful

We need more honest management practices that accept that we're all interim now and that we all deserve great jobs that we can excel at. If we had that, then maybe we could plan and navigate career development within and outside the company without the emotion of disloyalty and fear that hampers those conversations now.

Key Outcomes Rebels Strive For

Key Rebel Behaviors

Rebels work hard to create great alignment through the company—from leadership through all levels of management. Key things we see include the following.

1. Write HR and finance policy for the many, not the few

   Rebels accept that most people are good and trustworthy, and they develop HR policy and practice that is respectful of their people and honors their good intentions. They deal with people who go outside this rule quickly and efficiently, removing them from the team without hesitation.

2. Align HR practice with Mission, Purpose & Values

   Rebels review HR and management policy and procedure ruthlessly to make it live up to the company values and cultural statements that leadership make. This shows that the organization is serious about, and committed to, following through on its culture.

3. Have adult equal relationships with employees

   Rebels accept the new reality that both employers and employees have choices and they chart a more equal relationship, acknowledging this and making ethical promises on work and career.²

4. Ignore established HR best practices

   Rebels are unafraid to be different and say goodbye to established “best practice” if it doesn't fit their goals. One way to do this is to ditch the annual performance review—12% of the Fortune 1000, including GE, Deloitte Gap Inc and Accenture, have abandoned the traditional performance review, recognizing that the process looks backward rather than forward and is primarily concerned with grading people, rather than helping them achieve their best.

5. Love their lawyers but manage them carefully

   Rebels form great relationships with their legal teams to make sure they comply with local laws and protect the company against real threats. They also use great measures and constantly weigh up—how often will something happen, when it happens, how much will it cost and the method of protection—to assess how something will sound and feel to other staff and whether it's worthwhile.

Making a Start

Situation

Like many companies, Zappos, the online shoe and clothing retailer, believes it's important that employees truly embrace their company culture and values. But how many companies do you know that are so committed, they have a program where new hires are given a choice to stay with the company or take a sizable payout (one month's salary) and leave the company?

Are they mad? Why would a company throw money at people to leave? Zappos doesn't see it this way, believing it provides new hires an amount of money that will allow them to make the right decision, rather than stay in a culture that doesn't fit them just because they need the money. “Culture fit has to be a two‐way street, so we want to make sure new team members don't feel that they are ‘stuck’ in a place where they won't really be growing. We understand that it's not for everyone and want to give them the option of being honest about the fit from their own perspective,” says Jon Wolske, Insights Culture Evangelist.

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Only 2% of new hires take the money and leave Zappos, which is down to what they do before the new hire is given this choice. Beginning with the application process, culture and values are displayed front and center, with candidates having to go through pages talking (and singing) about them before they can even get to the page where jobs are posted. Next, instead of cover letters, applicants are encouraged to submit videos to show who they are, helping the company understand whether they are the right fit. Finally, the interview process, from initial screening to team‐based interviews, centers around culture and values‐based discussions, getting to know the candidate, and in turn letting the candidate get to know Zappos.

You'd think the “culture fit” process would be complete once the robust selection processes ends. However, they see this as the first leg of a rather long trek, with a month‐long orientation process completing the cultural immersion. It “welcomes new hires into the Zappos culture and helps them to see how serious we are about our culture, which helps them get fired up about what they will get to be an active part of,” says Wolske.

This novel approach has worked for Zappos, with one month's salary of “walking money” representing the final part of the process used to protect the Zappos culture.

Situation

Gap Inc., the fashion retailer, had a traditional performance review process, but it simply was not delivering results—not for the business and not for employees. “It was complex, time‐consuming and expensive. At our company's headquarters alone, it was estimated that people were spending 130,000 hours a year and significant payroll on the process.” To add to this, managers and employees disliked the process—as one employee complained, “I think it's a waste of time, causes unnecessary stress, and is really an old way of thinking in this modern day and age,” says Rob Ollander‐Krane,³ Director of Talent Planning and Performance.

All of this, combined with a growing consensus among HR and performance thought leaders that traditional performance management had had its day, led Gap to decide to radically overhaul its approach. The new philosophy and process was rolled out to headquarters' employees worldwide, and to one of their five brands in 2016, bringing it to store employees. It's been such a success story that the Harvard Business School uses it as a case study for its MBA program, and it won Gap Inc.'s prestigious Founders Award for Innovation—the first for an HR project.

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The new performance management process is called “GPS”, and stands for “Grow. Perform. Succeed.”—an analogy for what Gap wants its managers to do. “A GPS in your car lets you set your destination, and if you make a wrong turn as you're driving, it recalculates in real time and gets you back on the right path. We wanted managers to be like a real GPS—course‐correcting employee performance throughout the year,” says Ollander‐Krane. Coincidentally, GPS is also the company's stock name, so the name of the internal measure of performance now matches the external measure of performance.

The five components are:

1. Performance standards replace the rating scale by giving a broad overview of employee behaviors expected. “It embodies every aspect of our new approach—having a growth mindset; delivering and learning from feedback; and just having regular, open and honest conversations. It puts the focus as much on the ‘how’ you have achieved your goals as on the ‘what’ you have done,” says Ollander‐Krane.
2. Goals focus on outcomes rather than tasks, with a maximum of eight to ensure employees focus on a smaller number of important objectives. “Driving performance is not about ticking off all the things you have on your ‘to do’ list; it's about thinking about how the world will be different if you achieve them all,” says Ollander‐Krane.
3. Touch points replace the single annual review meeting with 12 informal discussions. Taking place anywhere and at any time, they focus on three questions: What went well? Where did you get stuck? What would you do differently next time?
4. Rewards have been revolutionized. With no ratings or forced distribution curves, managers have been forced to rethink how they allocate merit and bonus payments. “It's a much simpler exercise, and more similar to the way we expect our managers to manage our products. If a product does well, you reinvest in it, and the concept here is the same—you give more money to the person who is delivering the best results,” says Ollander‐Krane.
5. Learning includes several modules developed to provide help and support with the new process, from feedback conversations to how to allocate bonuses.

The GPS process has delivered phenomenal results, positively affecting HR metrics; saving HR, managers and employees time; and helping to improve employee performance. They are definitely onto something here, showing you can drive performance and engage employees without ratings and reviews.

Situation

Xero, which makes accounting software for small businesses, is all about connections: connecting clients with the right numbers and connecting the workforce with the company's strategy and vision. This was easy to do when the company started out but, as the workforce grew, it got harder to maintain this essential connection.

As Anne Allen,⁴ Director of People Experience, explains, “We believe it's important that our employees are all pulling in the same direction, with our key operating priorities demonstrably living and breathing outside of the boardroom.” For Allen, this meant looking again at the challenge of goal setting, beyond the mere “ticking of a box” (checking off a list). To achieve this, she set about persuading managers and leaders to apply motivation techniques and psychology to what is normally considered a pure business exercise.

The result is a new goal‐setting process that helps drive a deeper connection with the individual and the organization—essential if people are going to have the opportunity to do the best work of their lives. It's still early days, but Allen says, “There's an energy and buzz as conversations and discussions occur and true alignment takes shape.”

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Xero's new goal‐setting process is called “SMARTA”, adding to the traditional SMART goal‐setting process. The new “A” stands for Alignment, and includes two key messages.

1. The first emphasizes alignment with the company's strategy, with managers helping employees set goals to fit in and drive key operating priorities. This is important so employees are “pulling in the same direction,” says Allen, but also so employees can understand how they contribute to the overall success of the company. With so many employees motivated by having a sense of purpose, this is critical for employee engagement.
2. The second part, and the part which Allen believes is the most exciting since it adds a new dimension to goal setting, is an emphasis on personal alignment. It encourages managers and employees to discuss and uncover personal motivators and drivers, and explore the ways work might help individuals realize their purpose and achieve their dreams. The sense of individuality and purpose are absolutely key parts of the discussion so each employee can “bring his or her whole self to work.” Allen believes this type of alignment discussion drives a much‐deeper connection with the business and is well worth exploring. Time invested by the manager in understanding an individual's true aspirations provides rich returns in terms of trust and connection—critical elements for both an employee and organization to thrive.

Xero has found this change in the process and how to think about goal setting is helping create a greater sense of meaning and purpose within teams. Employees engaged in these types of conversations have a clear opportunity to understand the connection between what the company is trying to achieve and their role in that achievement. Great for bottom‐line results and great for inspiring a fantastic employee contribution.

Situation

Vitsoe is a British furniture manufacturer. It has a single‐minded determination to design furniture that lasts for generations, supporting it with the very best customer service, being in it for the long run. The same can be seen with the company's recruitment approach and process, similarly driving the result of hiring employees to enter into long‐term relationships with the company. Does this take more time and involve more resources? Yes. Is it worthwhile? Absolutely. For just as Vitsoe doesn't sell disposable furniture, the company doesn't hire “disposable” employees.

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There are three very important parts to Vitsoe's comprehensive recruitment process. The first part is a telephone screen, which is done intentionally over the phone so “we aren't distracted by appearances,” says CEO Mark Adams.⁵ The call takes from 20 to 40 minutes, just enough time to form an opinion about whether the person should be taken to the next stage. The second part involves bringing the person in for a face‐to‐face interview, and again, assessing the fit.

The final step, and what makes the process unique, is that candidates are brought in for a full trial day, showing the commitment to the process. The candidate spends half the day where the furniture is made, and the other half of the day in the shop where the furniture is sold. The aim is to see the “real person” in a variety of environments and situations, both formal and informal, whether in the locations, traveling to and from, or grabbing a bite to eat. At the end of the day, everyone who has had contact with the candidate is brought together to discuss and debate their observations. If anyone has any doubts whatsoever, the decision is made not to offer the candidate a job.

The entire process is built around assessing candidates based on character first and skills second, and “not getting distracted by the great résumé,” says Adams. “We want to put candidates in situations where we can see the ‘real person’ and not the ‘interview person,’ making sure that, as the expression goes, what we see is what we get.” The result is a truly long‐term relationship, with the average length of service standing at 15 years.

Situation

Talon Outdoor, a media agency, has a people‐first philosophy. The organization prides itself on hiring smart, enthusiastic and driven individuals, and then taking it that one step further and treating them like adults. This has certainly worked for the agency, proven by accolades such as ranking first in their second year of entry in the UK's Sunday Times “100 Best Small Companies to Work For” after being in the top 10 the previous year.

As part of the company's health and wellbeing strategy, it was important to find ways to support employees and improve work–life balance/integration. As Mapara Fernandez, Head of People, says, “In a world where we're constantly bombarded with information and reachable through every means possible, it's important more than ever to be able to take time out to switch off.”

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The result was a bold new approach to e‐mail called “Seven to Seven”: Guidelines that encourage employees not to send non‐urgent e‐mails between 7 p.m. and 7 a.m., all seven days of the week. “The aim of the initiative is to get employees into the habit of not monitoring e‐mail once they've left the office, so they can focus on those important and grounding non‐work‐related areas of their lives, be it their families, hobbies or just unwinding,” says Fernandez. They also wanted to ensure that employees were aware of the impact of e‐mails on themselves and their quality of life, as well as their colleagues, and then let them make the best decision.

To support these new guidelines, they did three things. The first was helping employees think through the impact of e‐mails sent outside windows—that is, how it feels when you receive an e‐mail at 8 p.m., and how it affects your home life and your state of mind.

Second, the company provided practical tips on how employees could continue to work effectively, such as by delaying the delivery of e‐mails.

Finally, the approach was shared with clients through a press release. “Clients respected what we were doing, seeing that we genuinely cared about the wellbeing of our staff. They also saw that the initiative didn't undermine the quality of work and high level of service we provide as a business,” says Fernandez. This new process has resulted in the company improving its Best Companies Wellbeing score, ranking third‐highest in this category in 2016.

Situation

Dunelm, a home furnishing chain in the UK, is a company that's been built around strong relationships—with its customers, its suppliers and its more than 9,000 employees. One way the company has maintained a relationship with its workforce is through an annual employee opinion survey. However, they began to question it, asking themselves, “If we survey our customers constantly, why are we surveying our employees only annually?” and “Does this really align with our culture of fast and honest feedback?”

The team set out to create an employee survey that mirrored its customer survey—one that was “always asking and accessible at all times.” It's early days, since the survey was rolled out only a year ago, but the feedback received from employees so far has already helped make a positive difference to the business, and with lines of communication between managers and employees.

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Dunelm's “always on” employee survey is based on a net promoter score (NPS) and asks two simple questions: “Would you recommend Dunelm as a good place to work?” and “Tell us what is going well, is not going well and could be improved.” The first question returns a net promoter score which gauges the engagement of employees. The second question returns free‐form responses, which allows the company to analyze employee trends and sentiments based on key words or phrases that are used in these responses.

“We've been surprised by the balance of feedback received, with employees sharing the good, the bad and the indifferent, it's been a real mixed bag,” says Wayne Hall,⁶ Reward Manager. On average, the company receives 50 comments a week, with the majority of employees answering all three parts of the second question, covering an average of six topics. These rich and frequent data have become a useful management tool, with managers being able to see and act on feedback immediately, helping them make better decisions for their stores day in and day out. Examples have been concerns over the vacation request and rota processes which, when raised, could be acted on swiftly and effectively. “We've been able to nip things in the bud quickly through this survey, not having to wait until the end of the year when it may be too late or things may have already moved on,” says Hall.

The “always on” survey has become an integral part of Dunelm's three‐part “Keep Listening and Looking” program for collecting employee feedback. The other two parts are the annual employee engagement survey, which provides annual benchmark data, and pulse surveys, which are used for targeted and specific feedback. Together, these surveys ensure that employees have a variety of tools to be heard, and for managers to act.