How HR Best Practice Customization Can Drive Better Results
By: Susan M. Cantrell and David Smith
Today's leading companies are tailoring their work experiences to employees' talents and interests. The reward? Greater productivity, higher levels of engagement, lower turnover and a better ability to attract top performers who produce outstanding results.
It only makes sense: when rewards, learning and jobs are customized to individuals, greater motivation and learning result and people’s work tasks become better aligned with their actual strengths.
Customization also improves companies’ ability to attract and hire top talent by customizing recruiting practices toward specific, desired individuals (and enticing them with a customized experience once they join.) It also increases engagement and lowers turnover costs because people who receive customized offerings often feel more satisfied in their jobs.
A Growing Trend toward Customization
Despite these benefits, few organizations today offer customized HR practices. Consider this shocking statistic: only six percent of the 557 employees we surveyed agreed that their human resources practices are highly relevant to them.
We think it’s no coincidence though that the same six percent strongly agrees that their human resource department significantly supports and improves their performance at work. In an age of increased expectations and fewer resources, generic HR practices have become increasingly hazardous to organizational health. Many organizations face their most diverse workforces ever, while they struggle to adapt to complex knowledge needs that no longer fit yesterday’s industrialized HR practices.
Research from our new book, Workforce of One: Revolutionizing Talent Management through Customization (Harvard Business Press, 2010) reveals how a few leading organizations are harnessing new advances in technology to do things differently.
Instead of treating their workforce as a single monolithic entity, they are treating each individual as a “workforce of one” by creating customized work experiences. And they are doing so in a highly structured, coordinated, scalable way that retains some degree of organizational control, consistency and manageability while meeting individuals’ needs.
Four Approaches to Customization
To achieve the benefits of customization in a scalable and manageable manner, a number of organizations are pursuing one or more of the following approaches to customization:
1. Segment the workforce. Straight from the handbook of marketing, companies are grouping employees based on shared preferences and needs, such as their value to the company, role, or generation and then tailoring people practices for each group. Advances in business intelligence and analytics have spurred companies to create altogether new and ever more meaningful segmentation schemes. Companies now also group employees by learning styles, values, personality, wellness profiles, mobility, behavioral patterns and even networking and communication styles. For example, Accenture segments employees in part on their overall well-being (e.g., the number of vacation days they have taken and length of time on a project) to identify those who might be at risk for leaving or who cope with high levels of stress.
2. Offer modular choices. Companies can also offer employees a predefined list of organizationally-defined options for them to customize and configure their own work experience. At Capital One and Microsoft, for example, employees get to choose from a variety of mix and match workplace options based on their individual needs and changing work tasks.
3. Define broad and simple rules. Alternatively, an organization can create a rule so broad and simple that it can flexibly be interpreted in many different ways. Best Buy, for example, sets a broad rule -- get results -- and lets employees determine how to accomplish it. The retailer allows many of its headquarters personnel to define when and where they want to work -- as long as they get the job done.
4. Foster employee-defined personalization. Consumers today can define and create their own content using the video-sharing site YouTube or the volunteer-written reference site Wikipedia. In the same way, today’s employees can define and create their own people practices. Instead of having a central authority to define employee learning, for example, individuals can define it in highly personal ways through wikis, blogs, YouTube- or Facebook-like applications or even with on-the-job experience. In yet another example at the US Navy, employees, not HR, set the compensation levels in hard-to-fill jobs through an online job auction website. Organizations deliberately decide which practices to foster, monitor and support via processes, technology and incentives.
Challenges and Solutions When Transforming the Workplace to Myplace
Sculpting work to fit every employee -- instead of requiring employees to conform to a standard mold of work -- is a more complex, sophisticated way of managing talent. While offering vast rewards, it requires organizations to navigate some tricky territory.
For example, fairness issues can crop up when people’s employment experiences vary from one another. Organizations that emphasize justice rather than equality and sameness can avoid this scenario. Our research shows that the vast majority of employees will support differential treatment if there are clear, logical, and well-communicated reasons as to why such differential treatment exists.
Likewise, as organizations collect more and increasingly personal employee data as a means of offering more relevant people practices, privacy may be challenged too. Yet evidence suggests that once employees understand how the collection of personal information will benefit them, what data will be collected and how it will be used and protected, they are likely to feel more comfortable sharing this information.
Companies that take a deliberate and thoughtful approach to customization for their own organization will have a significant advantage over competitors. By helping employees do what they do best, organizations can become the best they can be, while reaping significant business benefits in the process.
Susan M. Cantrell is a Research Fellow at the Accenture Institute for High Performance. David Smith is the Managing Director of the Accenture Talent & Organization Performance practice.