Thursday, 3 September 2009

HRbots and the false comfort of quantification

One of my favourite cartoon characters is the evil HR director Catbert, from the Dilbert series. Catbert epitomises the Machiavellian intrigues and Catch 22s that epitomise the HRarchy. The character would be funny if she wasn't so accurate.

Catbert immediately to mind when I read a Netflix presentation on their corporate values (hat tip Felix Salmon - who seems to have subsequently deleted the longer laudatory post about these slides). To precis hugely, Netflix say that they want the best people, they reward them at the top of the market so that they don't want to leave, and they get rid of the merely mediocre.

A moment's inspection of course reveals this to be an utter crock, in best Catbert tradition. First, it assumes that the firm's internal mechanisms can tell if a person is any good or not. Second it assumes that being good is invariant over time: if you are good today, you'll be good tomorrow; and if not, not. And third it assumes that a company full of good people is somehow a good thing. All of these are false.

Appraisal mechanisms, 360 feedback (or 720 or whatever) and the like are fascinating and important (from a financial standpoint) games. But I have never come across ones that do not simply validate manager's prejudices. They often bear essentially no relationship to job performance.

The second point is even more important. An employee can be useful in some situations and less so in others. They can sit around for ten years doing nothing much useful, then save the firm. Or they can make a reasonable contribution every year without ever being a star. They can (and in the case of star executives often do) perform wonderfully for years then suddenly screw up massively.

The most pervasive HR lie of all, though, is that somehow it is in the company's interests to have 'the best' employees. Have you ever tried managing a team of star performers? It makes herding cats look easy. They get bored; they all want to know what their career progression is; they fight. I'd much rather have one or two good people and a leavening of average performers. More will get done.

Furthermore, firms need diversity. They need it for the simple business reason that conditions change. If you staff up to optimise for environment X, and then suddenly find you are operating in environment Y, then you are likely to fail. But if you have a bunch of reasonably OK people who are willing to put in a decent day's work for a decent day's pay, then they will probably change what they do to help you out. Their self worth is not tied up with being the best person in the world at their job, and so they will probably not get depressed and sulky when it turns out that they aren't any more.

No, meritocracy is a very dangerous concept. It assumes you can identify the meritorious, and that it is in the firm's interests to have more of them. The more I see of firms, the more convinced I am that neither of those two things is true. Hire some reasonable people. Pay them reasonably. But don't whatever you do ever make the mistake of believing anything someone from HR tells you.



Blogger JoAyoubi said...

Hi David

Loved your blog about HRbots and was intrigued that you assumed Catbert (my favourite Dilbert character) was female...I always thought Catbert was a boy...!

But moving on to your specific points:

1. Appraisals and 360 Degree Feedback: these are systems that provide some consistency over how people's performance and activities are measured and rated . The results of their work need to be checked from time to time, as does their capability of working with others, customers, etc.

And without some kind of consistency (and feedback from multiple sources), how can you, indeed, overcome individual managers' prejudices...?

A good appraisal or 360 Degree Feedback should be very clearly linked to the individual's job performance...

2. I disagree entirely with your second point: people tend to behave and respond in fairly consistent ways over time. I have never seen someone who sits around suddenly become a start performer - it just doesn't happen. They sit around because of a combination of personality, motivation and skills. You can't change the first two, only the last one, and only if you know what skills are required...thus measurement is important.

3. I tend to agree with your point about 'star' performers. Have to say though, aside from the stars, a company still needs everyone else performing at their best. Not sure average is something we should be aiming for...!

And finally, if not meritocracy, then what?

Thanks for giving me something to get my thinking going on a Friday afternoon!


4:23 pm  
Blogger Cognitive Overload said...

Oh boy...

1. 360 appraisals can be rigged with selective interviews, biased questioning etc. I've seen this happen. Bad managers can and do hide by flattering or frightening (as appropriate) their staff and managing their external image.

2. I've experimented with this. If you give someone the right environment, they can change their behaviour dramatically. Sometimes it's just enough to know that the company cares about them; other times it's a more complex environment change, but it can be done.

3. People should perform at their best, with an equal responsibility on the company to care about those people too. And although everyone is good in their own way, not everyone is the sort of superstar that companies appear to be trying to stock themselves with right now. This is dangerous, not just because you risk having an ungovernable team, but also because the definition of star is almost invariably set by HR and linked to easily- measured quantities like A level results. Think about your favourite band. Think about how they sounded when they were 18. Would you base your opinion of them on this?

12:20 pm  
Blogger Dave said...

I agree with many of your points, but what have you got against meritocracy? That term just means that each person gets an equal opportunity and ends up in the position that they are best suited to. If not meritocracy then what? Draw lots?

11:43 pm  
Blogger David Murphy said...

@Dave: I'm not against meritocracy in theory; but I've found the practice often severely wanting, so much so that I'm in favour of fewer rather than more incentives for merit because I think that will end up fairer in the end.

9:36 pm  
Blogger David Murphy said...

@Jo: I apologise in advance for the crude characterisation, but I do rather fear that you might drunk some of the HR koolaid. Catbert probably slipped it into your coffee...

My experience is different to yours on 2. - I have found performance rather variable. Some of that is life driven - people with troubles in other parts of their lives often do less well at work. And some of it is business environment: change the environment, and their performance changes. Everyone performing at their best is an impossible dream, and claiming you are working towards it just endengers cynicism from much of the workforce.

If not meritocracy, then what? Well, rather less meritocracy rather than rather more, I would suggest. A factor of 20 pay difference between top and bottom of the firm, rather then 300. Variable comp as 25% of salary, not 200% or more. But more than anything, an acknowledgement that all employees are valuable in some way, and that everyone is doing something useful. (Well, OK, most people. But you take the point. Morale is not enhanced by claiming most of the firm is essentially useless.)

9:44 pm  
Blogger Vandy said...

This is an interesting perspective, and a thought provoking post. But I can't agree with you on the subject of appraisal mechanisms. 360 feedback is predominantly a tool for the individual. Organisations that use the tool thoughtfully (and that does happen), do not simply use them to validate the manager's prejudices. We have worked on programmes where the tool is used extremely effectively as part of an L&D programme, rather than as you suggest.

Without some sort of outside perspective of how we are performing, how are we to accurately judge the impact of our habitual actions on those around us? Self awareness is one of the key components of emotional intelligence, but without the ability to gain insights from others in the form of good feedback, its pretty tough to see our performance as others see it.
And in my experience, those who say feedback is unnecessary are often doing so because they are either too arrogant to accept feedback, or afraid they will receive some they don't like.

Vandy Massey

11:55 pm  

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