Cafe Classic: Stop Spreading the Peanut Butter and Start Feeding the Eagles

Editor's Note: Classic insights - and some great quotes - on risk aversity versus risk leveraging in pay management via Jacque Vilet.

"The difficulty lies not so much in developing new ideas as escaping from the old ones." ------ John Maynard Keynes

I wrote an article here six months ago on the need to differentiate among employee groups --- how companies should manage their workforce like a portfolio ofinvestments.  And how some employees, like investments, pay a much higher return than others.

This subject still bugs me.  I don’t think I hit it hard enough.  So I will try again using some head-whacking 2x4’s. Here’s a quote from Laurie Ruettimann --- the high priestess of “whacking”:

“Here’s what I’d love to know: At what point in time did it become common place for every freaking single person in business to believe that they had to treat all employees in their organization equally in every situation? Here’s the truth. That’s what was made up by lawyers and adopted by HR people as an easy rule of thumb to play it safe against the itty bitty possibility that you’d get your butt sued. Over the years it’s gone from a concept used to protect against gross discrimination of gender and race to a concept used to create policies for everything from bereavement leave to bathroom usage. It’s out of control.”

Laurie makes Richard Beatty --- HR thought leader ---look positively “genteel”. Here’s what he says:

"HR wants to treat most employees the same way, and they spend considerable time trying to defend or fix poor performers, taking on the St. Bernard role.  Low turnover isn't necessarily a good thing.  Think about where you might want to disinvest.”

HR is also behind what Beatty calls the "silly" idea that a company should try to be the "employer of choice."

“If you are the employer of choice, who's going to be applying for your jobs? Everybody and their dog's brother. You want people who are excited, enthused, and understand how to contribute to what you do, as opposed to those who simply want to find a good place to hide out."

WOW!  Is your head ringing from the 2x4s yet?

Much of the above boils down to HR’s penchant for risk avoidance and the need/ease of treating everyone equally.  HR needs to move away from risk avoidance to risk leverage. Just as top management finds it critical to balance the risk and reward of their strategic decisions, HR also needs to incorporate risk into their thinking. This new mindset will help them not only understand the full range of HR risks, but determine which risks are worth taking.

Mr. Jesuthasan of Towers Watson, in the Oxford Economics Global Talent 2021 survey, says:

“Being risk-averse is no longer a viable approach.  Risk awareness is not just about identifying the risks you don’t want to take, but also the risks you do want to take.”

It’s all about risk management.  Will doing X increase the likelihood of getting Y?   Is doing A too big a risk to take in order to get B?  Every day it’s about weighing relative risks against relative opportunities.  

Do we spread the peanut butter --- risk averse?  Or do we feed the eagles --- risk leverage?  There must be some HR programs that are "adequate" and that's OK.  There must be some HR programs which are "good enough" and that's really good enough. (I may hear about this one.)

HR needs to focus on equity instead of equality; on engaging the right employees, not necessarily all employees; on hiring choice employees, not becoming an employer of choice; and finally, on special rewards for certain groups of employees, not all employees. There’s not enough time, energy or money to do everything for everybody.

If top management sees HR as part of the team, someone who is working to grow the business and help them take smart risks, they’re going to be far likelier to run things by HR – and far likelier to listen when HR tells them “no”.  

Do you have an "equality" mentality — spreading the peanut butter?  Or do you have an “equity” mentality--- feeding the eagles?   

Head whacking is over.  I feel better now.

Jacque Vilet, President of Vilet International, has over 20 years’ experience in Global Human Resources with major multinationals such as Intel, Texas Instruments and Seagate Technology. She has managed both local/ in-country national and expatriate programs and has been an expatriate twice during her career. Jacque has the following certifications: CCP, GPHR, HCS and SWP as well as a B.S. and M.S in Psychology plus an MBA. She belongs to SHRM, Human Capital Institute and World at Work. Jacque has been a speaker in the U.S., Asia and Europe, and is a regular contributor to various HR and talent management publications.

Comments

[Chris Dobyns]

I vote that we go with feeding the eagles (and that comes from someone who flies with the sparrows . . .).

I thought this was a good article (including the predecessor article), particularly since I've read The Differentiated Workforce - and my organization has grudgingly acknowledged the need to make differential investments in our workforce (which I can assure is many, MANY times harder to do in government).

I got a laugh out of the sentence, "Many HR professionals have never learned that strategy is about differentiating products/services on the outside and resources (including people) on the inside.", not because I don't believe it's true - but because I suspect HR professionals are still coming to grips with this "harsh" reality.

[Joe Thompson]

Beyond the compensation aspects, I must say that other facets of the head-whacking resonated strongly with me. The ideas that having low turnover or being a place that employees love aren't ends unto themselves are still seen as outlandish in many settings.

So, given that people still seem to be missing the point Jacque, it may be time to put down the 2x4 and pick up an I-beam ...

[E. James Brennan]

Although the VP HR really wanted me as their comp consultant, the owners of the famous family business swiftly blew me off, saying, "We don't need a compensation consultant, because we have no turnover at all." As they showed me the door, I gave in to the impulse, turned and asked, "Did it ever occur to you to wonder WHY no one ever leaves?"

They looked at each other in shock. I left them with a smile. Before I went far, the Chairman rushed up, tapped me on the shoulder and said, "Do you ALWAYS have this much fun with your clients?" Responding, "I certainly try to," they became some of my most faithful clients for decades.

[Ann Bares]

Fun to see the response to Jacque's Classic thoughts by this threesome. This is probably a topic ripe for further insight, expansion and 2x4-ing if anyone is so inclined! ;)

And Jim, I love that story....