Featured in today's briefing:
- How to approach individual job performance in tougher times.
- Who’s not enthusiastic about pay transparency.
- Hacks for Zoom and Slack.
The latest virus forecast: The US has had a 19% decrease from two weeks earlier, with about 95,000 new Covid cases on Friday.
The business impact: Companies say it’s getting easier to hire and turnover is down, including in healthcare, hospitality, and retail where it’s been a struggle to recruit and retain employees. Though some 72% of CEOs say they’re still experiencing some difficulties hiring qualified people, down from 80% earlier this year. Just 30% of business executives and board members see recession as a serious risk, though 50% are reducing headcount and 52% are freezing hiring, according to a new PWC survey.
Focus on the Renewed Attention to Worker Performance
There’s been a significant shift in tone at many organizations over the past few months, amid heightened concerns about the economy. Executives have renewed their focus on individual worker performance, something that many had given lower priority amid concerns about retention, burnout, and adapting workplace practices over the first years of the pandemic.
Google recently instituted a “simplicity sprint” to improve efficiency, with Alphabet CEO Sundar Pichai telling employees to work with “more hunger.” At Meta, where CEO Mark Zuckerberg told employees on a call earlier this summer that he planned to “turn up the heat,” managers have been asked to identify and “move to exit” low performers. Goldman Sachs recently indicated that it plans to reinstate its infamous performance-review system, which historically has culled the bottom 5% of performers, after a pandemic pause. Swag is out. Layoffs are in.
And as short-term economic pressures rejigger company priorities, initiatives with longer-term payoff, like employee development, are taking a backseat. As one CEO recently told The Wall Street Journal: “In the good times, we want to focus people on the growth aspects… But when the economy appears to have the potential for that downturn, it’s fundamentals 101.”
To understand how companies can maintain a forward-thinking approach to worker performance, learning, and growth even in times of economic uncertainty, we reached out to Dr. Kenneth Matos, director of people science at the employee-feedback platform Culture Amp, which recently published a report on why human-resources leaders should prioritize development. Below are excerpts of our conversation, edited for space and clarity:
What advice do you have for companies that are newly or especially worried about productivity right now?
It really is, are you thinking long term or short term? A good example is manufacturing, which often obsesses about never stopping the assembly line. ‘Gotta punch out as many widgets as possible,’ versus ‘Let's take the longer-term perspective. It's better to stop the assembly line and fix something now for long-term productivity, than to make this one week's numbers but have the machine slowly break down, and then we actually miss a month's numbers.’ There has to be that open acknowledgement of, are we emphasizing this for just this quarter, or emphasizing this for the next year? What level of productivity are we investing in? That then leans you more towards one way or the other. If it’s, ‘We want productivity to last long-term,’ then you're going to do the coaching work. ‘If you're saying, I just need to make this quarter’s numbers,’ not so much.
Those aren't necessarily mutually exclusive. I think one of the things that a lot of organizations get wrong is they moralize business strategy: ‘Coaching is good, orders are bad,’ or vice versa. In reality, it's that you’re trying to achieve a goal in either a sustainable way or in a one-shot way. When you define what you're trying to achieve, then it's much easier to say, ‘All right, if you don't hit this quarter's numbers, we're going bankrupt. Let's just hit those numbers, and we'll flow coaching in later.’ On the flip side, you may say, ‘We're not in any danger of folding, so let's do the coaching process.’
What does the coaching process look like? Why is that valuable?
Culture Amp believes very strongly in having a good coaching culture, but sometimes it's coaching, sometimes it's advising. Just ask: ‘Do you want me to advise you in this moment, so that you can just get through a thing? Or do you want me to coach you so that this is a development moment?’ And the employee then says, ‘I'm really under time pressure. Let me just get advice. And then we can talk about this in our next call and that can be coaching.’ Others say, ‘I feel like I have some space. Let's coach.’
A lot of times, organizations get so focused on doing a thing that they lose track of the development and processes that enable people to do those things without being micromanaged. And so a good coaching culture shifts its focus away from just saying, ‘Do this. You don't need to think, just obey me,’ and starts saying, ‘This is what we want to accomplish. How do you think we get there?’ It pushes the employee to engage in the actual thought process of how things get done, which I think is a challenge for a lot of managers when it's all top-down, ‘Here's the order, just do it.’
You get a lot of resistance with that: ‘This seems stupid. Why are we doing it?’ Whereas if you prompt the employee to think through the process, very often they come to the same conclusion, or they reveal to you what information they lack, or they come up with a better idea. I think a good coaching culture approaches giving direction in that manner. It's curious. It enables people to understand why things are done, which ultimately allows you to spend less time managing them, because they're like, ‘Well, I understand how this decision gets made. I have all the information. I'm just going to make a decision you would've made.’ That's also how you get better leaders and managers.
There's been some reporting in recent weeks that as companies brace for this downturn, they're getting more harsh in their feedback. What do you make of this?
If you need to drop your performance review and put it back—if you’re saying ‘It needs to get harsh’ or ‘It needs to get soft’—then you're not really doing good performance reviews to begin with. You haven't communicated to your people what performance is for you. You haven't communicated clear enough goals and guidelines. You haven't invested in ensuring that you enable them and train them and develop them to be able to hit those goals that you're putting forward. And so it ends up wobbling back and forth. You get too harsh, you break people, they leave. You get softer to get people in, you keep them, but then the performance standards decline. And then suddenly you're like, ‘Oh, gotta get harsh again.’ If you have that well thought-out, consistent performance perspective, it doesn't wobble nearly as much.
In an economic climate like this, when companies might be downsizing or pausing initiatives, how can they make sure employees still feel like they have room to grow and advance?
The organization that's going to invest in development should also have some really clear thoughts about growth: Is there a place for me to go when I become really amazing? If you have a couple of leaders or managers thinking about organizational expansion, what are we going to do next? Because then the employee is like, ‘I'm super developed. Where's my promotion?’ Let's start talking about this new research area, this new market that we want to break into, that’s going to grow your company in tandem with the growth of your employees.
If organizations are doing a culture-first approach to layoffs, they are thinking about, ‘How do I make these moments meaningful for people?’ For example, when you're thinking about who's going to cover for a role that is now vacant, who does it actually benefit to cover this role?
What will usually happen is they'll throw all their best people at everything, and those people will burn out and leave as soon as the market changes. All the knowledge walks, and they have to rebuild everything. But instead you're focused on, ‘Okay, who here actually will be growing? If they're doing this work, let's get them to do some of that. Let's have the other person mentor them.’ And then it's a much more interesting experience for both of those employees, as opposed to saying, ‘You're super skilled. You just go do it, because then nobody has to think about it.’
Read a full transcript of our conversation, including more about why employees value career security over job security, what to do when workers outgrow their roles, and how performance reviews can backfire.
What Else You Need to Know
Senior executives are still wary of pay transparency. Only around a third believe that it leads to more equitable outcomes, compared to around half of individual contributors, according to a new LinkedIn survey.
- The survey also found that members of the c-suite and vice presidents were the most likely of any level to say they wouldn’t share their compensation with anyone, including family and friends, with just under a quarter saying they’d keep the information to themselves.
- Of the 58% of companies that conduct internal pay-equity audits, 83% have used their findings to make changes to employee pay, according to the Society for Human Resource Management.
- One potential challenge in implementing truly fair compensation systems: Pay transparency often leads to wage compression, or little differentiation between salaries regardless of role, tenure, or skill. This compression, in turn makes it likelier that employees will privately seek out individual, one-off perks and benefits from their managers. Other research has shown that gender-based inequality in compensation is driven more by benefits than by actual wages.
- Caryn Hubbard, VP of finance at Buffer, a social-media tools company that implemented pay transparency nearly a decade ago, previously told Charter that going public with people’s salaries requires some preemptive emotion management. “You've got to get the buy-in from your people and have real conversations to talk about the discomfort,” she said. “Talk about the benefits, talk about wage gaps. It's a lot of internal communication work leading up to doing that.”
Company support for childcare is a powerful tool for increasing diversity. That’s according to a recent analysis of benefits of more than 800 companies, which found that family-friendly policies such as childcare help and paid leave led to a higher percentage of managers being women and people of color. The researchers wrote in Harvard Business Review that such policies are “better than the most popular-racial equity programs” at creating more diverse leadership teams.
- The average family spends 13% of its income on childcare, while the Department of Health and Human Services defines affordable childcare as costing no more than 7%.
- Some 30% of parents with young children cut back their hours during the pandemic because of a lack of childcare, and 20% left or lost their job. Among those families that struggled to obtain care, more than half saw a dip in household income, with women and families of color experiencing the greatest loss.
- Black employees are likelier than their white counterparts to experience childcare-related job disruptions, such as needing to quit or significantly change their role.
- Roughly one in six large employers in the US has some form of on-site daycare. A recent Washington Post column argued that leveraging these programs could be a powerful tool to lure working parents back into the office, particularly as so many workplaces now have under-utilized space to spare.
In the eyes of the public, businesses are falling short on thinking beyond their shareholders. In a new survey from business-research nonprofit Just Capital, more than 90% of respondents said it was important for large US companies to build a more inclusive economy that allows all people to succeed and live meaningful lives, but just half said they believed companies were actually doing so.
- While 75% of survey respondents said large companies positively impact shareholders, less than a third said the same of their impact on low-income workers.
- The new survey was pegged to the third anniversary of the Business Roundtable’s Statement on the Purpose of a Corporation, a pledge signed by more than 250 CEOs to deliver value not only to shareholders, but to all stakeholders, including employees, customers, and the planet.
Return to workplace speed round:
- Hybrid work in practice means that many workers are going to the office just one day a week, with half of all office visits globally occurring just once weekly in the second quarter, according to data from workplace analytics company Basking.io. Fewer people were commuting four or five days a week in the second quarter compared to the first.
- Apple has set a return to office deadline for Labor Day, asking all corporate employees to work at least three days a week on site. They will be required to work from the office Tuesdays, Thursdays, and a regular third day decided on by their teams. Apple dropped an earlier plan for the third day to universally be Mondays.
- Working at the office might help workers in colder climates save on heating bills throughout the winter, according to an analysis from Bloomberg that estimates London-based workers could save up to $60 per week, provided that they use free modes of transport to commute.
- With over 6,000 signatures, an employee petition is urging AT&T leadership to make work from home a permanent option for workers as the company calls employees back to offices . Employees accuse the telecom company of reneging on a previous agreement that would allow them to work from home until spring 2023.
- Peloton announced that employees will have to return to offices at least three days a week starting November 14. In an email to employees announcing the deadline, CEO Barry McCarthy said that employees who disagreed with the policy should leave the organization.
- Some tech startups such as Merge and OpenStore are returning to the office full time, touting productivity and social benefits—though many taking that approach acknowledge it makes it harder to recruit new employees.
Here are some of the best tips and insights from the past week for managing yourself and your team:
- Push back against interruptions. When you’re interrupted while talking, it can be difficult to speak up again. One way to push back firmly is to stay quiet while making direct eye contact with your interrupter, wait a few beats after they finish speaking, and then ask, “Is it a good time for me to share my idea?”
- Turn on “soft returns” on Slack. In your user preferences, you can change your settings to make the Enter key trigger a soft return—starting a new line in the same message—rather than immediately sending the message. Doing so can help clean up your messages by turning a stream of one-line messages into one longer Slack. To access the settings, navigate to Input Options under the Advanced menu in user preferences.
- If the position doesn’t fit, say something. While applying for jobs, mention big hesitations early in the process. Though it might mean the end of your journey as a candidate, being open about your needs could lead to a hiring manager changing the role to make it a dream position.
- Make soft skills job qualifications. If social and emotional skills like collaboration, problem solving, and leadership are important to the success of your team, make sure you’re hiring for them. Include these soft skills in job postings along with technical skills, and consider them when evaluating candidates.
- Get personal on Zoom. The personal chat is where users can send messages only seen by themselves, and it often goes unused. Instead, use the personal chat as a scratchpad to take notes and track to-do list items, during and after meetings.
Workplace style is a lot hairier than it used to be. The definition of “professional appearance” is loosening as employees who let their facial hair grow wild during the pandemic force a change in office-acceptable grooming norms.
- One HR consultant says about 30% of her clients have dropped specifications that facial hair be “neat” or “groomed,” giving employees more latitude to sport wilder beards.
Employees are swiping right on using dating apps at work. To encourage users to spend time on the app even while back in the office, Tinder recently updated its “Desk Mode” feature, which allows daters to pull up a fake screen with notes and charts whenever a colleague walks by.
- Nearly one third of Tinder users admit to using the app during work meetings.
The handbook for this new era of business doesn’t exist. We’re all drafting our own as we go along—and now we’d like to start doing so together. You can sign up here to receive this briefing by email.