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“Human Resources”

Your people are not your greatest asset.

They’re not yours, and they’re not assets. Assets are property. You don’t own your people. Many of them don’t trust you. Some don’t like you. Too many won’t stick it out with you. And the ones you need most have the credentials to walk out fastest if you treat them poorly.

Your employees are not “full-time equivalents.” No college graduate, upon landing her first big job, calls her parents to announce, “I’m now an FTE!” No hardworking employee considers himself part of the company’s “headcount.” “Headcount” is for cattle. Your employees are not “talent.” They are not “human capital,” to be saved, spent, or loaned like money. They are not “overhead.” They are not the numbers each is assigned when hired. They are not, as one staffing firm refers to them, “inventory,” or as one home improvement chain called them, “aprons.” They are not, as tech people sometimes call them, “meatware.”

Above all, employees are not “human resources.”

Money is a resource. Land is a resource. So are water, oil, trees, buildings, computers, gold, coal, cattle, and coffee beans. Resources are rarely unique. One load of two-by-fours is much like another. Resources are the raw materials from which a business creates a product.

Humans are not resources. No manager talks about having coffee with one of her “humans.” No father holds his young son and hopes he will one day grow up to be a great “resource.” It is difficult to have the right relationship between a company and its people when the corporate function responsible for doing so goes by a euphemism.

You might as well call them widgets, flesh-and-blood widgets. That’s what the term “human resources” means. That’s how they are too often treated. In trying to get a better seat at the executives table with number-crunching departments like Accounting and Operations and Marketing, the executives in charge of the hiring, culture, payroll, insurance, and training were seduced into using impersonal metrics for persons. Business lost its bearings in how to deal with people.

Once people are seen as widgets—as “human resources”— it’s much easier to apply to them the kinds of Operationspeak that should be reserved for raw materials. They are “downsized,” “attritted,” “onboarded,” “blended,” “change-managed,” “diversity-trained,” “e-taught,” “force-ranked,” “matrixed,” “requisitioned,” or “made redundant.” In the human resources machinery, people’s entire working lives too often are reduced to a series of clicks on an automated “selection system” and sorted by computer into “As,” “Bs,” and “Cs” for the hiring manager. They are stereotyped by their generation, rated on their “competencies” and their computer-calculated “strengths,” combined for a “group dynamic” designed by an “industrial psychologist,” tracked by a “human resources information system,” and tagged with a Myers-Briggs Type Indicator. They are analyzed for target “behaviors.” They are ordered to pee in a cup and hand it over.

The temptation to treat people like widgets is not new. Charlie Chaplin made a movie about it in 1936. Henry Ford is reputed to have complained, “Why is it that I always get the whole person when what I really want is a pair of hands?” More than a century ago, Frederick Winslow Taylor, the pioneer of time-and-motion studies, tried to engineer an optimal system where the employees best served the machinery around them. “It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone,” he wrote in his book, The Principles of Scientific Management.

Taylor would have been ecstatic to have the kinds of HR tools available now. He would have pounced on a book like The Brave New World of eHR: Human Resources Management in the Digital Age. “Electronic human resources,” says the book, is “a new world order for managing human resources in organizations—a world where scientists and practitioners in the industrial/organizational psychology field have much to say and much to offer in order to promote the effectiveness and optimization of eHR technologies and services.” It describes a world in which people are “e-recruited,” “e-selected,” “e-compensated,” e-trained, and e-managed, and where they don’t need to—maybe could not if they wanted to—talk to a real person for support. “Welcome to the new world of eHR,” says the book. “Things will look a bit different here. No longer will you deal with an HR professional to handle your HR needs. The HR portal will take care of you. Need to change your address? How about some online training? Want to check on your latest performance review? The portal is here to help.”

Too many corporations have become people-chewing machines, places where you are more likely to get an access code by which a computer gets to know you and spits out your top “themes” than you are to get a manager to take you to coffee every month and work with you individually, person to person. When people apply for a job now, they force-fit their unique selves into electronic boxes hoping not to run afoul of the secret algorithm that, because of the increased applications e-applying allows, must sift through hundreds or thousands of submissions.

No wonder one HR executive who had applied anonymously through his own company’s e-selection system got rejected, or the e-selection system of another took in 25,000 applications for a standard engineering position and reported back that not one person was qualified. “Job applicants have been changed into these bits-and-bytes kind of package for a software program that screens them as they apply for a job,” reported Mitchell Hartman on the radio program Marketplace Money. “These systems are persnickety. They’re software; they’re not human-ware.”

Few HR professionals meant for it to come to this. Most are highly principled people who want their companies’ employees to have a great experience at work. And there is compelling statistical science behind much of the machinery. But the road to treating people like widgets is paved with good intentions and great software.

An entire industry has emerged to help companies address their employee engagement and other “human resources” issues. The consultancies made more problems than they solved. Rather than addressing the issues, they complicated them. They created models and metrics, “team feedback” processes and “action-planning” systems, cold acronyms and catch phrases. They too often attacked the widget problem with more ways to process people as widgets.

As their answers to people problems, the competitors in the employee engagement business created a lot of shapes. One company based its model on a big Maslowian pyramid. Another created a model based on an endless four-stage cycle, each stage pointing at its neighbor. It looks like four boxes blaming each other. Another model looks like the distributor cap for a six-cylinder engine, or maybe a nuclear bomb, everything coming together at once to create a critical mass of fissionable employee engagement. Not to be outdone, another consulting firm made a model that looked a lot like a board game. Employees who landed on one of the squares were called “hamsters.”

Most people do not like to be compared with rodents.

There were other shapes as well. A flower. A thing that looked like an arrow shot through an orange. One that looked like a molecule, with labeled electron bubbles circling labeled proton bubbles. And many more. Each of these shapes and its associated survey and process is supposed to ensure employees are more engaged and therefore working harder for their employers.

But they don’t. And they won’t, until leaders and managers do better at treating each employee as an individual, stop ruling by fear, make pay a nonissue, and quit burning out their people. Performance won’t get better until leaders realize why making their companies cool places to work is good business, or at least stop doing things that are so uncool. Firms won’t match their potential until their leaders become far more transparent than in the past, stop snuffing out the meaning in their employees’ work, and plan for the futures for their people as much as they do for their companies.

Employees will withhold much of what they could do until they are better recognized for what they already do. Organizations will under-perform until leaders stop abusing tribal metaphors and unite their employees as the temporary team they are, until managers let their employees lead, until they better synchronize company breakthroughs with employee accomplishments.

Each of these aspects is a powerful driver of workers’ commitment to the company, the intensity of their work, or both.

Even the organizations that advise other companies on their employee engagement become widget factories. One of them rated a meager 2.7 on a 5-point scale among its current and former employees who volunteered assessments on Only 44 percent approved of the CEO, and only 40 percent would recommend the company to a friend. “Management are pure bullies,” wrote one former employee. One of his colleagues wrote that senior leaders there need to stop “believing that parts (people) are just interchangeable cogs in your big wheel.”

The company’s website insists, “Our people are our priority.”

Another major engagement player squeaked out a rating of 3.0, with only 50 percent approving of the CEO and 47 percent inclined to recommend the company to a friend. “Cost cutting, reduced hours with increased expectations, and management that, generally, has nothing to do with the minions,” wrote one consultant. “There are serious employee engagement issues, which (the company) completely disregards. They know. They just don’t care. Truly something you want to see from a human-resources-related service company.”

That firm’s website says he’s wrong. “We care about people and the role of work in their lives,” it asserts.

As they do at so many of those firms’ clients, the initiatives often backfire and make things worse because the company’s leaders can’t handle the truth. Their surveys are not confidential. “If you put anything less than 4 out of 5 on your biannual employee engagement surveys, then you should have your resignation ready to go,” cautioned an employee of one engagement consultancy. The supervisors who are worst at managing are the best at playing Find the Hamster.

Employee engagement is in a rut. It’s become hackneyed. It’s routinized. Commission a survey. Beg people to participate. Get the results back. Distribute scorecards. Train some trainers; unleash them on the company. Cajole the CEO into using the word “engagement” in his next speech. Ask managers to do some team sessions, which maybe half will do before tucking the forms in a desk drawer. Leave the way managers are selected, coached, supported, and held accountable untouched. Let the executives feel good that they checked the employee engagement box. Go quiet for 9 or 10 months until it’s time to start the Sisyphean cycle all over again. Lather. Rinse. Repeat.

Seeing the failures of traditional employee engagement methods, seeing companies struggle to keep up with a changing workforce, the team behind this book went into the field. We asked more pointed and predictive questions of employees around the world. We drew from our experience and distilled what we were seeing at hundreds of international companies, many of which shared confidential data and plans with us. We questioned fundamental assumptions. What emerged from the research, from the clear patterns inside those organizations, and from what we’ve seen work were 12 imperatives.

Call them the New Rules of Engagement. They address issues of individualization, fearlessness, pay, well-being, and enjoyment of time on the job. They reflect what leaders and managers need to know about transparency, meaning, employees’ perceptions of their future, and recognition. They distinguish real collaboration from platitudes about teamwork, and democratization from the old suggestion box. They show how crucial it is for employees to have the chance to do something incredible. They inoculate against widgetry. They are the company investments that create employee intensity.

The team behind this book asked employees around the world a hundred questions about the aspects outlined above. To statements such as, “I work because I love it, not because of the money,” or “My manager understands me,” we gave participants five possible responses: strongly agree, agree, neutral, disagree, or strongly disagree. The average response to the vast majority of questions falls just north of the line between neutral and agree. Ask someone about his or her job and the most common response is a statistical shrug.

Excited about your future with this organization? “Sort of.”

Are the top leaders of your company honest? “I suppose.”

Does your manager understand what motivates you at work? “A little.”

Not exactly what the company website said, and not the kind of energy levels that are most healthy for the business.

Average responses, of course, can mask wide ranges among individual responses. They do here as well.

For simplicity of explanation, our researchers divided employees into four groups. We did so cautiously, however, because in the past categorizing people made the widget problem worse. Grouping together a wide swath of people into a single description runs along the cliff’s edge of stereotyping. People have high or low engagement for various lengths of time and for many reasons. At some point in our careers, most of us will spend at least a little time in each of these categories.

With those caveats, the continuous range of New Rules levels can be logically divided into the following groups.

The demoralized group: Nineteen percent of the U.S. workforce answer neutral or lower, on average, to the key questions in the study. These are the people whose companies have most seriously failed them, those most consistently treated like widgets. “Every day at this job, a little piece of me dies,” said one person in this category a few months before he resigned. Only 4 percent of this group strongly agree their managers meet with them on a regular basis. Thirty-eight percent worry about losing their jobs. Forty-six percent say the managers at their companies use fear to get people to work harder. Many report getting yelled at. Nearly two out of three say they are burned out. “You are micromanaged here and treated like machines instead of people,” one demoralized person wrote in the survey. “There is no regard for your life outside of work.”

The frustrated group: The responses of 23 percent of American workers fall between neutral and halfway toward “agree.” Although not completely beaten down, and occasionally giving positive responses, this group regularly encounters gaps in how well the company is organized and run. “There are no thought-out ideas or plans by upper management,” said one person in this range. “I’m doing double work because one manager likes something one way and another likes it differently.” Asked if they love their jobs, 54 percent are neutral, and another 22 percent disagree or strongly disagree.

The encouraged group: Almost one out of three employees (29 percent) gives answers averaging from “agree” down to a point halfway between “agree” and “neutral.” They like their jobs. Things are not so bad that they are eager to get out, nor are they invigorated enough to deliver their best. This group talks a lot about how their jobs are almost great. Almost. For example, asked if their job brings out their best ideas, 60 percent agree, but only 7 percent strongly agree. They are motivated but uninspired. “My boss is extremely supportive and encouraging, but the hoops the main organization puts in place are discouraging,” said one. Because of these day-to-day obstacles, much of the potential of the encouraged group is untapped.

The energized group: Three out of ten employees have the kinds of jobs that the other seven envy. Their responses to the key questions average from “agree” to “strongly agree.” That doesn’t mean they don’t sometimes give a negative appraisal of some aspect, but those problems are exceptions to their overall experience, and they are happy to cut their employer some slack. “My work gets recognized and they understand how hard I am working for the company,” wrote one person in the energized category. Asked what gets in the way of their motivation, many say “nothing.” Seven of ten say their managers regularly meet with them. Nine of ten say they’ve received incredible recognition. Only 9 percent say they’re burned out. They love their jobs, and they return the favor to their employers. There are no widgets here.

For the better part of two or three decades, businesses have been enamored of Six Sigma, the improvement of processes and the fine-tuning of equipment to ensure that 99.99966 percent of whatever the company produces is free of defects. We’ve gotten used to the benefits. Smartphones, tablets, and computers work as well as they do because the most important components are built to microscopic specifications in conditions cleaner than a hospital operating room.

If executives obsess over product quality, shouldn’t they also obsess over the experience of working at their firms? What is the corresponding failure rate in creating the kind of workplace that best supports the Six Sigma processes, the innovations, the customer experience, and the financial performance the company needs? Without question, it’s at least 19 percent (the proportion of those demoralized). With little debate, it’s 41 percent (those demoralized plus those frustrated). And one could make a case it’s as high as 70 percent (all but those who are energized). No firm would countenance that kind of sloppiness in production, safety, technology, accounting, or brand standards.

People need better. Their companies could do so much better by them and through them if they only stepped back long enough to take stock of an incorrect view of human nature, wrong strategies, and bad habits that worked their way into “human resources” and the executive suite over the course of a century, punctuated by some serious blunders in the last few years.

The purpose of this book is not just to excoriate and warn. It’s a guide to better understanding human nature on the job and to understanding each of the New Rules that emerged from the team’s extensive research.

It’s a guide for ferreting out and fixing all the ways your company treats its people like widgets.

Excerpted from Widgets: The 12 New Rules for Managing Your Employees As If They’re Real People (McGraw-Hill, April 2015). Copyright © 2015 by Rodd Wagner.

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Widgets the Book

Widgets the Book

A leader’s blueprint. A manager’s guide. An employee’s benchmark.