David Anderson over at Agile Management has a series of posts about HR Myths. David blogs on software development, management, constraints, and agility. I come from a technology development and implementation background so I may be biased. But, I believe that the software industry is one where the impact of knowledge-based work, the transitional worker, outsourcing, speed, and unique customer requirements have all coincided over the last 10 years. Since many other jobs will begin to fall into this space over the next decade, I think it is critical to learn from what has worked in the software industry. Here are some HR policies that David has identified that make working in software development more difficult.
In HR Myths #1: Merit Based Pay, David discusses why it doesn’t make sense not to hire top quartile performers, something pay bands make difficult.
"We don’t care about productivity look at our cost control"
Top performers may be 10-20 time more productive than mediocre performers. Yet "companies which claim to be meritocracies, in fact, are not. They pay people in a very narrow band. In my example, you can be sure that everyone on that Level 56 grade is being paid between $27,000 and $28,500 despite the fact that some of them will be 10 times more productive than others."
Focus on "productivity first, investment second and cost last. Cost first generates mediocrity and mediocrity results in very poor performance from a software engineering organization"
In HR Myths #2: Divide and Conquer, David discusses how HR departments practice of negotiating pay down at hiring time, restricting the ability to reward performance after hire, and then hiding how much everyone makes to avoid conflict, may be counter productive.
"In almost all companies it is directly against company rules to discuss what you – the knowledge worker – are paid with your colleagues. Why? Simply put, it is a divide and conquer strategy by Human Resources. They believe that by enforcing silence with a threat of summary dismissal, they will save the company money and reduce complaints from disgruntled employees. In a few companies, it is also illegal to discuss your pay scale grade with other employees. This is the ultimate in Big Brother style control because it theoretically prevents employees from learning that someone doing the same work is on a higher grade than them. HR believes that this enforced silence reduces complaints, saves the business money and makes employees happier."
HR Myths #3: Performance Buckets
"The first fallacy is the concept of an equal distribution of performance across a team – someone has to get a 1 and someone has to get a 5. The idea is based on the statistical bell curve normal distribution. However, when your statistical sample is (for example) less than 20 then any statistician will tell you – you do not have a basis for a normal distribution.
The second fallacy is that all teams perform equally and that someone from every team deserves a 1 and that equally someone from every team deserves 5."
In HR Myths #4: Tribal Markings, David discusses how companies make temporary workers feel inferior and how it can impact group performance.
"Why do HR departments insist on issuing different colored badges to contingent contract labor and vendors on long term contracts? It’s clearly tribal. It clearly marks the individual as somehow less worthy. Why? The assumption is that temporary staff are less trustworthy. Hmmm. This feels that it belongs in medieval Japan’s early Edo period where Samurai without a master – ronin – were treated with suspicion."
In HR Myths #5: Pay for Performance, where David discusses the issues associated with pay for performance that can lead to reduced organizational performance.
"Pay for Performance can lead to dysfunctional behavior encouraging individuals to look out for themselves and discouraging team working that enables higher productivity from the whole team."
Read all the entries if you have the time. The issues facing technology development are people issues, not technical issues. Equitable compensation, temporary workers, and uniquely skilled workers are issues increasingly faced outside of the technology sector. It sure makes sense to learn from the really smart people in an industry that has begun to figure this out. It isn’t true that life is different in technology so those lessons don’t apply to us. We can apply the lessons throughout most organizations. Which of these myths are impacting the performance of your organization?