No one knows exactly why Jill Abramson was fired as editor of the NYT. But one thing is clear: she was fired not long after she started asking questions about the amount that she had been paid, over the course of her career in NYT senior management, compared to the amount that her male predecessor was paid.
Very few people like to talk about how much money they make — especially not people who earn a lot of money. Since companies tend to be run by people who earn a lot of money, the result is a culture of silence and secrecy when it comes to pay. Such a culture clearly served the NYT ill in this case. If the salaries of senior NYT management had not been a closely-guarded secret, then Abramson would not have been shocked when she found out how much Bill Keller made before her, and Arthur Sulzberger would not have reacted badly to Abramson’s questions about pay.
Indeed, secrecy surrounding pay is generally a bad idea for any organization. Ben Horowitzhas the best explanation of why that is: it can’t help but foment poisonous internal politics. But there are other reasons, too.
For one thing, secrecy about pay is bad for women, who are worse at asking for raises than men are. If men secretly ask for raises and secretly get them, while women don’t, then that helps to explain, at least in part, why men end up earning more than women.
Secrecy around pay is also a great way to allow managers to — consciously or unconsciously — play favorites with their staff. When you’re deciding how much to pay your employees, you want to be as transparent as possible. A not-great way of being transparent is the civil service method: set narrow pay bands for every level of seniority, and then declare that the only way to get a substantial raise is to get a promotion. The problem with this kind of system is that it begets the Peter Principle: everybody gets promoted to a position of incompetence.
Still, there’s quite a lot to be said for a system, like the civil service, in which everybody knows what everybody else is making. It makes conversations around pay much easier, and reduces craziness like this:
He sat down opposite me and then he told me the job was mine. “Do you want it?” Yes, I said, a little startled. The job, he explained, came with a guaranteed salary for three years. After that, I would be on my own: I’d make what I brought in from my patients and would pay my own expenses. So, he went on, how much should we pay you?
After all those years of being told how much I would either pay (about forty thousand dollars a year for medical school) or get paid (about forty thousand dollars a year in residency), I was stumped. “How much do the surgeons usually make?” I asked.
He shook his head. “Look,” he said, “you tell me what you think is an appropriate income to start with until you’re on your own, and if it’s reasonable that’s what we’ll pay you.” He gave me a few days to think about it.
More generally, a system whereby salaries are set internally, according to the value of the person and the position, is a system which doesn’t find itself constantly buffeted by unpredictable exogenous factors.
We’ve all worked in companies, I’m sure, where the only way to get a substantial raise is to confront management with a job offer from somewhere else. That’s clearly a dreadful way to run a company, since it gives all employees a huge incentive to spend a lot of time looking for work elsewhere, even if they’re very happy where they are.
One of the problems is that virtually everybody in corporate America — from senior management all the way down to entry-level employees — has internalized the primacy of capital over labor. There’s an unspoken assumption that any given person should be paid the minimum amount necessary to prevent that person from leaving. The simplest way to calculate that amount is to simply see what the employee could earn elsewhere, and pay ever so slightly more than that. If a company pays a lot more than the employee could earn elsewhere, then the excess is considered to be wasted, on the grounds that you could get the same employee, performing the same work, for less money.
How is it that most Americans still believe in this way of looking at pay, even as we reach the 100th anniversary of Henry Ford’s efficiency wages? Ford was the first — but by no means the last — businessman to notice that if you pay well above market rates, you get loyal, hard-working employees who rarely leave. Many contemporary companies have followed suit, from Goldman Sachs to Google to Bloomberg: a well-paid workforce is a happy workforce, which can build a truly world-beating company.
Such companies are, sadly, still rare, however. That’s bad for employees — and it’s bad for the economy as a whole. We need wages to go up: they’ve been stagnant, for the bottom 90% of the population, for some 35 years now. We also need employee turnover to go down: employees become more valuable, in general, the longer they stay with a company — and it takes a long time, and a lot of human resources, to train a new employee up to the point at which they really understand how their new employer works.
There are two things I look for, then, in any company. The first is high entry-level wages. They’re a sign that a company values all of its employees highly; that it likes to be able to pick anybody it wants to join its team; and that it considers new employees to be a long-term investment, rather than a short-term source of cheap labor.
The second thing I look for is a system whereby managers regularly earn less money than the people who report to them. You shouldn’t need to get promoted to a position of incompetence just in order to earn more: you should get paid well for doing the job you do best, even if that doesn’t involve managing anybody. The whole “I work for you” rhetoric of touchy-feely CEOs is actually true, or should be true: value is created by talented workers on the front lines, not by middle management, and it’s management’s job to support those workers any way they can, including by paying them as much as possible.
If you have a company with high entry-level wages and where the front-line talent often gets paid better than the managers, then you’re probably in a pretty efficient industry with relatively low turnover. (One good example: professional sports teams.) On the other hand, if you have a company with low entry-level wages and where pay invariably rises the higher you go up the org chart, then you probably have a company where managers spend altogether too much time hiring and training people to do jobs they could probably do better themselves.
If you work for a company where everybody knows what everybody else is earning, then it’s going to be very easy to see what’s going on. You’ll see who the stars are, you’ll see what kind of skills and talent the company rewards, and you’ll see whether this is the kind of place where you fit in. You’ll also see whether men get paid more than women, whether managers are generally overpaid, and whether behavior like threatening to quit is rewarded with big raises. What’s more, because management knows that everybody else will see such things, they’ll be much less likely to do the kind of secret deals which are all too common in most companies today.
So let’s bring pay rates out into the open, where they belong. Doing so will create better companies, staffed with better-paid and more productive employees. Which is surely exactly what America needs, in a world where it can never compete by racing to the bottom.
And it’s a good thing that baby boomers and other older generations have embraced these tools, because using social media inside companies will be increasingly important in 2014 and beyond.
For one thing, this year we’ll see more forward-thinking HR leaders making the connection between having a solid social media strategy and finding top talent. After all, 47 percent of Millennials now say a prospective employer’s online reputation matters as much as the job it offers, according to a survey by Spherion Staffing.
The year will also see a new phase of what I call “the consumerization of HR,” wherein employees not only demand to bring their own devices to work, but also want to use these mobile devices to change the way they work with peers, communicate with their manager and even interact with the HR department.
Employees are requesting to view new job postings on their tablets, learn and collaborate with peers on their smartphones, and provide feedback on a team member’s performance with the click of a button. According to a Microsoftsurvey of 9,000 workers across 32 countries, 31 percent would be willing to spend their own money on a new social tool if it made them more efficient at work. This last finding is quite interesting as it shows the extent to which Millennial employees, who will make up 50% of the 2020 workplace, see the business value of using technology on the job.
2014 is the year HR departments must start creating “social media playbooks” to determine their game plans.
Looking at the big picture helps to determine those priorities. Here are seven social media trends to watch in the coming year as organizations leverage all forms of social collaboration to re-imagine how they source, develop and engage employees.
1. Big Data Lets New Jobs Find You Before You Even Know You’re Looking
Amid our nation’s legendary dearth of skilled workers, talent acquisition has risen to the top of the CEO agenda. According to PwC’s global CEO Study, 66 percent of CEOs say that the absence of necessary skills is their biggest talent challenge. Eighty-three percent say they’re working to change their recruiting strategies to address that fact.
Meanwhile, a host of big data recruiting firms are set to benefit from the newly emphasized value being placed on recruiting. These firms tout that they can find new talent before the prospective employees even know they are in the job market. Companies such as Entelo, Gild, TalentBin and the U.K.’sthesocialCV analyze not just a job candidate’s LinkedIn profile, Twitter feed and Facebook postings, but also their activity on specialty sites specific to their professions, such as the open-source community forums StackOverflow andGitHub (for coders) Proformative (for accountants), and Dribbble (for designers.) This approach to recruitment is creating a new technical world order where job applicants are found and evaluated by their merits and contributions, rather than by how well they sell themselves in an interview.
These companies, at the intersection of Big Data and Recruiting, have made a science out of locating “hard to find” talent. Gild does it by scouring the Internet for clues: Is his or her code well regarded by other programmers? Does it get reused? How does the programmer communicate ideas? How does he or she relate on social media sites? How big are their networks and who is in them?
Entelo and TalentBin take a different approach: Their search tools consider the experience and history mentioned in users’ profiles, but also their use of social networks. These companies can pinpoint users who have updated their bios lately or often, to determine which candidates are getting ready to enter the job market.
Getting this head start on head hunting is crucial as corporations’ search for top candidates becomes ever more competitive. The goal: finding talent invisible on widely popular social platforms before your competitor does.
2. Mobile Apps Are the New Job-Search Frontier
According to a study of Fortune 500 companies conducted by CareerBuilder, 39% of the US population uses tablet devices. A recent survey conducted byGlassdoor.com even found that 43 percent of job candidates’ research their prospective employer and read the job description on their mobile device just 15 minutes prior to their interviews. And yet, only 20 percent of Fortune 500companies have a mobile-optimized career site.
The rest of the 80% of companies are missing the fact that tablet andsmartphone users expect to see job listings and information in a visual way, one that reflects the visual approach they bring to their personal lives on the Web.
The food-services corporation Sodexo, the 20th-largest employer in the U.S., got a head start in that process in early 2012, when it developed both a mobile-optimized career site and a smartphone app to pull together all the information about the company’s recruiting efforts into one easy-for-Millennials-to-access place. Prospective employees could visit the mobile app to search and apply for jobs, join a talent community, receive job alerts, and get an insider’s view about what it’s like to work for Sodexo.
The results according to Arie Ball, VP Talent Acquisition at Sodexo, 17 percent of job traffic from potential new hires now comes from the mobile app versus just 2 percent of mobile traffic in early 2012. In the first year, mobile app downloads totaled 15,000, leading to over 2,000 new job candidates and 141 actual new hires, all while saving the company $300,000 in job board postings.
Organizations need to keep pace with the way prospective employees live their lives, and being able to access a mobile app in the job search process will become standard in 2014.
3. Companies Use Gamification In The Workplace
Over 60 percent of the Western world’s population plays video games, and companies are taking note of the huge numbers of future prospective employees who love to play Angry Birds, Fruit Ninja, Candy Crush, andWorld of Warcraft.
Gamification in the business context is taking the essence of games—attributes like puzzles, play, transparency, design and competition—and applying them to a range of real-world processes inside an organization, from new hire on-boarding, to learning & development, and health & wellness.
Video game-players are known for being singularly focused while at play. So naturally, companies have begun to ask how they can harness that same level of engagement and apply it to critical problem-solving, on-boarding new hires or developing new leaders?
With technology research firm Gartner predicting that 40 percent of global Fortune 1,000 companies will soon use gamification as primary method to transform their business processes, 2013 saw a number of them leveraging game mechanics as a tool to drive higher levels of business performance.
NTT Data, which I profiled in my previous Forbes column, Gamification in Leadership development, has been using gamification to develop leaders, and it is already seeing results. The company’s “Ignite Leadership” Game, aligned with its overall employee engagement framework, was created to develop five key skills for leaders: negotiation, communication, time management, change management and problem solving. To date, a total of 70 leaders have completed the gamified leadership program, and 50 employees ended up taking on team leadership roles – that’s 50% higher than had done so through traditional training and coaching methods. Plus, these “graduates” of the Ignite Leadership Game generated 220 new ideas in their roles as leaders, which led to a 40 percent increase in employee satisfaction and helped lower attrition by 30 percent.
Gamification in the workplace is not just about using badges, mission and leaderboards. Instead, the strategy is about truly understanding who you are trying to engage, what motivates them, and how gamification can change the way they work, communicate and innovate with peers and customers.
4. Re-think The Performance Review
The annual performance review is dead. When 750 senior level HR professionals were recently asked to grade their current performance management system, 60% gave it a grade of C or below, according toWorldAtWork. In another survey conducted Globoforceand SHRM 45% of human resources leaders don’t think annual performance reviews are an accurate appraisal for employees’ work. So what is happening in its place?
There are two innovations on this front. First companies are leveraging the wisdom of the crowds and discovering that by leveraging social recognition data managers are able to continuously collect information on employee performance. This result is an on-going dialogue rather than a once a year review.
Now that you have collected various data inputs, some companies are going one-step further to create a new process focusing on having a “Check-In. The software company Adobe now relies on managers controlling how often and in what form they provide feedback. The Check-In –is an informal system of real-time feedback, which has no forms to fill out or submit to HR.
Instead, managers are trained in how to conduct a check-in and how to focus the conversation on key goals, objectives, development and strategies for improvement and how to leverage the wisdom of the crowds to create a holistic view of one’s performance. And most importantly, employees are evaluated on the basis of what they achieved against their own goals, rather than how they compare to their peers.
According to Donna Morris, Adobe’s Senior V.P. of Global People & Places, the company has saved 80,000 hours of management time by replacing its old process, and voluntary attrition is now at an all time low of 6.7 percent.
The goal here is to make key HR processes more transparent, leverage the wisdom of the crowds and to democratize the flow of information throughout the organization.
5. Learning Will Be Social and Happen Anywhere & Anytime
In my book The 2020 Workplace, an entire chapter was devoted to how and why companies are adopting social learning. I then created the Social Learning Boot Camp profiling companies re-imaging learning.. All that research boiled down to one realization: social learning is not new; in fact, we have always learned from one another in the workplace. Only now that social media has revolutionized how we communicate in our personal lives, organizations are bringing “social” inside the enterprise and adopting tools such asYammer, Adobe Connect and Google Hangouts to make it far easier to find experts, collaborate with peers and learn both from and with colleagues.
The results have been impressive, ranging from increased employee collaboration to re-imagining face-to-face learning programs. Nationwide Insurance, for example, now has nearly all of its 36,000 employees active on its internal social platform, making it far easier for employees to find subject experts and solve business problems in one fell swoop, rather than sending copious emails or searching through hard drives.
At Montefiore Hospital, which has nearly 50 primary care locations throughout the New York metropolitan area, social learning was introduced in order to build a sense of community and connection among employees, while creating a shared mental model of leadership. One of the assignments during the leadership development program was to co-create a new behavioral interview guide using the hospital’s social collaboration platform. So rather than just talking in class about the new interview guide, the participants were able to actually co create a new guide using Yammer.
Finally, the consulting firm Accenture (disclosure: my former employer), which has over 260,000 employees in more than 120 countries, has gone so far as to add gamification to its social collaboration platform. Like other firms adopting gamification, Accenture studied what motivates people to compete while gaming, and then harnessed those principles to spur collaboration and enhance peer-to-peer networking, to solve client programs.
As yourself: are you thinking of social learning as another delivery mode rather than a new way of working and communicating.
6. MOOC’s Will Revolutionize Corporate Learning & Development
As noted in my blog post last year on “How MOOCs Will Revolutionize Corporate Learning & Development,” the buzz about MOOCs (Massive, Open, Online Courses) has focused on the disruption they will bring to institutions of higher education. But far from being limited to that sphere, MOOCs most important legacy may in fact be its impact on the world of corporate training – a $150 billion industry.
The early MOOC report card shows a few standout examples of corporate partnerships that use MOOCs to replace certain executive education courses. For example, Yahoo and Coursera have joined forces enabling Yahoo to fund employees for verified Coursera certificates in computer science, priced at under $100 each. This represents a huge savings compared to what Yahoo would normally spend on university-sponsored executive education.
But other companies are creating their own versions of MOOCs – within the company. Sometimes the courses exist to train prospective candidates in the skills they need to be considered for employment, as a sort of train before hire process. Aquent, a staffing firm with over 8,000 employees, recently launched its first in an ongoing series of MOOCs to teach creative professionals how to use emerging technologies. Aquent calls its program “Aquent Gymnasium,” drawing on the connotations of the gym as a place for fun, training and engaging in a series of “work-outs.”
Aquent offers an interesting example of a company developing a MOOC strategy that is an industry game-changer. Rather than search for job candidates based upon the spec’s given to them by their clients, Aquent flipped the process, instead creating a brand of MOOCs to help candidates develop the skills Aquent‘s clients will seek.
And importantly, Aquent is doing all this with real-world practitioners as instructors rather than university professors.
The results: after its first year of offering a range of MOOCs in Aquent Gymnasium, Aquent had a 10-times return on the program’s investment.
7. Capture Your Organizational Klout
Klout, which calls itself “the SAT score for business professionals,” measures each user’s online “influence.” A Klout score is a statistical score from 1-100, which ranks you on variables such as: how many people you reach through social media; how much they trust you; and on what topics you are perceived a thought leader.
To date, most users have focused on building and measuring their individual Klout hoping this will help in landing them a new job or promotion.
In the year ahead, the focus will also be on Klout for Business. That’s because in June of 2013, Yammer and Klout announced a partnership that allows Kloutto factor Yammer users’ data and activity into its social ranking algorithm, and also lets Yammer users display their Klout scores on their Yammerprofiles.
For employees, these data points can mean the difference between a raise, a promotion or staying in the same job. For employer, the ability to assess individual employee expertise at scale can enable companies to take a more strategic approach to what needs to be outsourced and what can be managed internally, based upon the identification of a company’s collective expertise.
Are you and members of your team ready for a year of Social HR? Readers sound off in the comments section and I will respond.
Jeanne Meister is Partner, Future Workplace, co-author of The 2020 Workplace book. You can follow Jeanne on Twitter, connect with her on Linkedin, learn more about the Social Learning Boot Campand sign up here to receive the latest Future Workplace newsletter here.