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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?

This past weekend I helped chaperone a trip of 11 and 12 year old girls to the State basketball championships in Griffin, GA. We ate at a few fast-food restaurants while we were there. There was a striking difference in the quality of the service at Chick-fil-a and at Wendy’s.  Even though the prices are higher, the coaches and parents agreed that when they go to a fast food restaurant they will drive out of their way to go to Chick-fil-a.

What leads to this striking difference? I don’t think it’s the processes. I’m sure both companies have well documented processes for all aspects of their stores. I don’t think it’s the technology. While Chick-fil-a’s technology may be better, it can’t lead to this striking of a difference. I went out on the Internet to do some research.

Dan Cathy is the president of Chick-fil-a and the son of Truett Cathy, the founder. He says that Chick-fil-a’s exemplary service begins with hiring the right people. Same small town, same talent pool to draw from, they must have a much higher cost to get good people. It probably eats into their profitability to attract better talent. So is it good business to make sure you select people that will help your business set itself apart. According this article over at Fast Company, between 2001 and 2004 sales increased 40%, to $1.53 billion, and the number of locations jumped from 958 to 1,160.

Employee selection and placement requires defining the qualities of the right people for your business, then selecting for candidates based on these qualities. Don’t underestimate how critical this is or people may be driving out past your store to pay a higher price to your competitor. What steps is your business taking to make sure you are getting the best people for your business?

At a time when competitive forces have forced Pfizer to reduce its workforce by 10%, it is also facing pressure to move faster than before with less than before.  They are responding by moving to a "just in time" approach to talent. Instead of hiring for specific jobs descriptions, they are establishing an employee selection and placement system based on competencies. Travis Sinquefield over at Disorganizational Behavior points to a recent article from Workforce Management.

"In recruiting, this means Pfizer, which used to hire candidates according to job descriptions, now evaluates what competencies the candidate demonstrates

…

Similarly, Pfizer is focusing on developing employees based on competencies rather than grooming them for a specific role, he says. "

Travis points out that:

"When you hire a person based on the job description to be filled, you will probably end up with someone who has the skills to do only that job. Instead, Pfizer is taking a different approach, creating a flexible workforce where people with the skills and competencies needed can be moved into a position where those skills will be of value."

Without a clear understanding of the competencies needed in your organization, your employee selection process will select based on job skills and hope for a good fit. If you based your employee selection, employee placement, and employee development processes on competencies, you can develop a more agile workforce. This interchangeability increases the businesses ability to respond to the market without having to add as much overhead. Do you have a clear picture of the competencies needed in the jobs in your organization? How could you implement this concept in your business?