The title of this blog entry is taken from a song on one of my favorite David Bowie albums, “Scary Monster & Super Creeps”. If you own this album, there is a good chance you are a member of my generation (X). In my experience, knowledge of pop music and television shows is one of the single greatest differences between generations (at least in the United States). For example, most guys in my older brothers’ generation know the opening guitar riff from the song “Rock n Roll” by Led Zeppelin:

“hey hey momma say the way you move, gonna make you sweat gonna make you groove” – da na na nuh nuh nuh nuh, nuh nuh nuh nuch nuh nuh, da na nuh da na nuh nuh nuch nuh waaaaaaaaaaa!

In contrast, many guys in my younger nephew’s generation know the riff from Seven Nation Army by the White Stripes:

duhn, duh duhn duhn duhnnn duh, duh duhn duhn duhnnn duh duh duh duh!

But once you get past music and TV, generations tend to be far more similar than many “generational experts” would have us believe. By generational expert, I mean anyone who makes money selling books, workshops, or programs based on telling you how to manage different generations. Simply put, I don’t believe the hype that the work goals and expectations of the baby boom generation are somehow qualitatively different from generation X, generation Y, generation Z, millenials, or generation “insert the name of whatever book is next marketed on this topic”. This point was made quite nicely in a research book recently written by Dr. Jennifer Deal:

“Fundamentally people want the same things, no matter what generation they are from. You can work with or manage people from all generations effectively without becoming a contortionist”. From Retiring the generation gap: how employees young & old can find common ground, published by Jossey Bass, 2007.

I would argue that many supposed differences between the employee attitudes of generation Y and those of the baby boom generation can be boiled down to two basic factors.

Supply and demand: There are fewer skilled workers in today’s economy than there were in the 1970’s. If you graduated from college in 1978 you were competing against a lot of other people for fewer jobs so you had to put up with some pretty demanding requests from employers. The tables have turned for people graduating in 2008. Now the demanding requests are flowing the other way. Generation Y employees expect more from employers because they are more likely to get it.

People who are young act differently from people who are old. Here is a newsflash, people in their 20’s who are early in their careers, unmarried, without children, etc. just might be a bit more idealistic and optimistic than their older coworkers who have suffered more of life’s “slings and arrows of outrageous fortune”. Talking about generational differences without controlling for how people’s interests and needs change as we grow older is like talking about differences in fashion without taking into account the temperature where people live. Saying younger people have unrealistic expectations about work because they are more idealistic than older people is like saying people in Florida are more risqué because they wear skimpier clothes in the winter than people living in Minnesota. Its not about generational differences, its about differences between being young or old.

When putting together talent management strategies, don’t lump employees into broad generational groups and treat them as though they all want the same things from work based on some book you read. Ask them! You’ll probably learn that what employees want is remarkably similar regardless of their age: a challenging job where they feel appreciated and respected, have a reasonable sense of security and career growth, and believe they are making a difference in the world that they can be proud of. While there are some interesting generational differences in terms of people’s collective experiences, memories, and communication styles, when it comes to the basic things that make a job rewarding employees tend to be more similar than different regardless of the year they were born. But since I’m a member of Generation X you might just chalk my negative attitude toward generational differences as a result of the “fact” that people from my generation have a cynical, mistrusting attitude toward authority.

SuccessFactors Research is pleased to post this guest blog from our friend and Thought Leader Dr. Steven Hunt.

It is always surprising when people resist the idea that pay and performance are related. It is so logical – reward your best, and make sure that slackers aren’t hanging around being rewarded.

Why would a rock star keep performing if he or she were only paid as much as the guy who surfs the web all day instead of contributing? Ignoring pay for performance is a sure fire recipe for low morale and low performance.

Even Communist Cuba gets it! After decades of trying to run an economy where a doctor is paid about the same as the paper boy, they are acknowledging the obvious – if you want great people to do a great a job, they have to be recognized.

Vice-Minister for Labour Carlos Mateu says it best himself, “It’s harmful to give a worker less than he deserves, it’s also harmful to give him what he doesn’t deserve.”

While SuccessFactors Research does not endorse any government or political philosophy, we do endorse people performance, and recognizing great individuals – Viva pay for performance!

I’m happy to present this guest blog from our Thought Leader partner and my friend Dr. Jac Fitz-enz.

Predicting the future is a big business. Economists, financiers, demographers, pollsters and pundits are paid big money for their insights into what might happen next in their respective areas of expertise. If we can catch glimpses of the future of something as complex as the economy, why can’t we look into the future to predict our human capital needs? I started researching human capital metrics in the 1970s, when almost no businesses were really crunching the numbers on their people. Today, I am working hard to push the frontier of predictive analytics. Last year I kicked off a predictive analytics initiative, and partnered with SuccessFactors Research to find out what works.

In business, gathering and analyzing data is only a beginning. Managers want metrics that are actionable, metrics that support business decisions. They want a glimpse of their future. To answer that call, we have developed HCM: 21, a better way to collect, integrate, process, analyze and predict business results. It links external forces and internal factors, plans with it, processes it, analyzes it and predicts it within a single, integrated system much like FedEx does with small packages. The value add is compelling business intelligence about our most mission critical resource: human capital.

Most great advances in the information era have not revolved around new products. They have been about the distribution of something. Consider Avon in cosmetics, FedEx in package delivery, Amazon in books and USA Today in newspapers. In every case upon introduction adoption of the better method was condemned by naysayers. Innovation today is about efficient movement of data and products.

Just as other breakthroughs have been built on integration, HCM: 21 incorporates human capital information from many sources. But it is not about information technology in the sense of computers any more than Gutenberg was about paper and ink. Movable type launched the efficient distribution of information, which made possible widespread education and facilitated trade. HCM: 21 is the first successful method for combining mission critical, human capital data to manage risk and predict return on investments all within a single, comprehensive system.

You can find a preview of the HCM: 21 system in the whitepaper I wrote with Erik from SuccessFactors Research, Managing Tomorrow, Today. It is not a crystal ball for the future, but rather a blueprint for putting your data to work, not just to solve the problems you are facing right now, but to ready yourself for tomorrow. How integrated, actionable and relevant is your human data? Don’t get stuck looking backward and reacting, make sure your data is good enough to look forward to tomorrow.

It’s an old adage that you have to try and fail before you succeed, in fact entrepreneurs practically live by this code. But what about established organizations? A lot of businesses don’t feel this way, even though they should. The sooner an employee fails, the sooner the individual can move onto to the next task, and the sooner the company can act.

People can learn from failure – there is an upside to chances taken, but if a person knows they will fail, the sooner they do it the better. Take the case of a sales rep constantly dragging on with an opportunity that never will materialize – better to get to fail and move on, to free up time for other accounts.

When it comes to managing employees not only does it take some investment to get people fully productive as we’ve researched with Dr. Hallowell at PDI, but there is also a significant cost to keeping disengaged employees. Necessary separation is important to manage.

“I feel so good–I’m almost happy” – Al Bundy. It’s not just about the bottom line, people should work where they can be engaged in their jobs. One company, Zappos, really gets it. After the first week of work, they offer their new hires 1000 dollars to quit. They figure, if a person takes the money, he or she isn’t really engaged and didn’t belong there in the first place. This is what understanding human capital is all about, finding ways to maximize those factors, like engagement, that really impact performance over the course of an individual’s career.

Today, new hires have an average tenure of about 3.5 years, which is not a lot of time to get them up to the plate and hitting home runs. Don’t worry if your rookies make some mistakes – each mistake can provide valuable insight into setting the right course for your new hire, and accelerate successes . Opportunity is born from failure. Entrepreneurs get it. Zappos gets it. So could you.

Erik’s note: We’re happy to present another guest post by Chris Lozaga a Research Analyst in SuccessFactors Global Research team

We talk a lot about the future of work, borderless collaboration, as the war for talent drives businesses to look globally for the best people to get the job done. It is already happening. SuccessFactors Research has a unique window from which to draw insight – the data from our over 3 million active users. We recently studied 41 U.S. based companies that use our compensation module, and looked at how they pay their international talent (people on the payroll in a foreign currency). In an aggregate and anonymous way, we crunched the numbers on pay increases given to 239,000 individuals across these organizations and made some interesting observations.

First, companies are much more aggressive in pay for performance with their U.S. based workers. We found this out by comparing the standard deviation (spread) in pay raises, by percent of salary. This was not particularly surprising, given that the U.S. has very liberal attitudes regarding free markets and compensation. The insight that might surprise many came when we looked at the actual average raise given – the percentage was much higher in India and China than in the U.S. (see below). While there is less variability in these regions, they average pay increase is much bigger. Companies are paying to acquire, motivate and retain this talent.

The war for talent is real. Retention is a major problem in rapidly growing countries like China and India, and companies appear to be paying to keep their international people. Money chases talent.

Winning the war for talent is critical to success. Talent is now the ultimate differentiator for companies – people are responsible for executing the company strategy, generating the new ideas and IP that drives growth. This snapshot of companies and their 239,000 employees shows that U.S. based companies are aggressively implementing pay for performance inside the U.S., but less aggressively for their overseas people. Companies put their money where their talent is.

More details on our findings in International Pay can be found in this downloadable data brief: SuccessFactors Research Data Brief: International Pay for Performance.

Go on the offense in the war for talent when your competition is hurt. Yes you hurt too but winning in business or in bike racing is a relative game – very relative. Of course you are stronger and feel more confident in your ability to sprint and attack when you are warmed up and ready, but the problem there is that so is your competition. In tougher times when every company is hurt from a slowing economy there is no better time to go on the offense and focus on strategic talent management issues. You can recruit the best from your competition and develop your key talent – if you get some slack you should use it wisely.

Of course when the economy is putting the knife on your throat it is easier said than done, but most organizations get very inactive in a slow economy. They simply resist taking any action, hoping things will correct themselves. Well the economic climate will eventually recover – it always fluctuates – but your company will come out weaker than your competition if you don’t act. But can you marry cost cutting with going on the offense? Yes, but laying off people can’t be done by simply applying stupid rules such as last in first out (very common in Europe, sometimes forced by laws) or broad 10% cuts in everything. Doing it like that is just lame.

Make sure you surgically get rid of the people that do not perform, nor have the potential to grow into the future needs of the organization. Think not only in terms of cost savings, but also in terms of talent optimization, although this is probably something that most organizations should do all the time in any economic climate. You just don’t see nor face this problem in booming times. So attack on top of the hill when your competition is hurt and you have a great chance of coming out winning. Pain is temporary, victory is forever.

Recently Saugatuck Technologies released a study showing that SaaS (Software-as-a-Service) Human Capital Management software contributes at least 2-3% to top line growth – definitely good news for companies seeking more green. An article in this week’s San Francisco Chronicle made me start to think about another kind of green – the environment. Human capital management is key to driving a number of environmental initiatives. Paperless reviews save paper. Working from home reduces gas-guzzling commutes and slows the need to build new office space, and as the San Francisco Chronicle points out, employees love working from home. As an important part of the individual value proposition to the employee, working from home helps keep your employees engaged.

But, successfully promoting a paperless office and shifting people from the office to the home, requires systems that support these activities. Goal alignment, ensuring that people are working on the right things for the right reasons, is very important. People need to feel like part of the team, even if they aren’t physically present. Traction, not action is the mantra for successful execution. Goal alignment ensures that people are moving in the right direction downfield to score, and not just gaining yardage. In fact, if your players are moving in the wrong direction, they are moving farther away from the goal. Goal alignment helps ensure that this doesn’t happen. It is not a substitute for supervision from a manager, but keeps the team working toward the overall company strategy.

Human Capital Management is a critical to earning green, and going green, enabling people to work from home, in global teams, anywhere, anytime. How green is your organization?

I’m happy to post this guest blog by Doug Klein President of Sirota Survey Intelligence and one of SF Research’s Thought Leader partners. Doug will present findings from resent research on this topic with us in a webinar next week. Join us then to learn more.
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Well, not really. What employees truly want is the amount of work they have to do to match the expectations they had when they took the job. During the on-boarding process and throughout the early years, every employee continuously re-evaluates the “deal” between themselves and the company. When the “deal” is still fair, employees are satisfied (even enthusiastic), when the “deal” sours, they become highly attuned to dissatisfiers.

Part of most employees’ “deal” is to feel valued. This has a personal and performance component. They want to certainly be treated fairly and with all the common courtesies (like management not ignoring them, not being treated as a second class citizen, etc.) as well as having their current and future development needs met (so they can achieve their own personal work-related goals – whatever they may be).

Employees who are bored (reporting “too little work”) are often doing work for which they are ill-suited, or have jobs that are poorly designed. As a result, they have by far lower job satisfaction, sense of accomplishment, and pride in their employers compared to all other workers. All in all, they feel less valued.

Feeling overworked – a condition that could lead to job burnout – is far more prevalent than feeling bored and spikes during 2-5 years with the company. Employees who complain about being overworked often feel they are not receiving adequate support from co-workers. In addition, they contend that the quality of their work suffers (because of this inefficiency), resulting in greater stress and tension, and their feeling that they have sacrificed their personal lives for their jobs.

The complaints of both overworked and bored employees should be taken seriously, yet being bored has far more serious consequences for an organization than being overworked. Complaints about being overworked can be an indication of poor quality or work processes, and it can be difficult in certain circumstances to retain employees who feel they are overworked and out-of-balance with their work-life. But bored employees have an even greater negative impact on an entire organization, lowering morale and productivity, and draining resources.

One mechanism of action at play, as previously indicated, is employee perceptions of the “deal-delivered.” Work-life balance is almost an afterthought to people who feel their employers are meeting their end of the “deal” by being fair, providing interesting and meaningful work, and recognition or rewards for a job well-done. Work-life balance becomes a real issue when employees feel that their employers aren’t holding up to their part of the partnership.

However, when employee don’t feel valued (like when they feel bored) or feel overworked (because the company is being inefficient or cheap vs. dealing with an unexpected – or expected – rise in demand) issues like work-life balance, commuting, etc. become highlighted in their minds and become true dissatifiers.

I was preparing for a presentation about change management and how HCM technology drives results that I plan to deliver at an HCM conference when I saw this video. I must say that Sam Zell really nails it when addressing the staff at Chicago Tribune. This 6 minute video clip is so telling, inspiring and indeed entertaining.

Sense of urgency, attention, and understanding the reason for change are of course the ingredients required to help change something. It doesn’t hurt if you know where you’re going either to funnel the change in the wanted direction. I think Sam nailed it. Win or lose – that’s the game.

While the world is experiencing a war for talent, each region has its own, unique talent related challenges. Indeed there are local talent management phenomena, as Jason Averbook from Knowledge Infusion and I discussed in his recent blog.

In some European countries a lot of businesses carry a huge cost for people on sick leave. This cost in most European countries is a shared responsibility between each company and some kind of government funded insurance system (most employers must pay this insurance anyway – in many places it is mandatory).

How much of a burden is this for organizations? There are many consequences when employees overuse sick leave:

• Need to carry extra staff to cover for the absence levels
• Cover the absences with temporary staff that is both costly and not always fully productive in wider-scoped roles
• Lose business – which might be the worst of all alternatives since it will hit both the top and bottom line

Let’s look at this example from a financial service company in Holland:

The employer is legally responsible for paying 70% of the normal salary, after 2 sick days for a full 2 years. In a majority of industry sectors, this is legally raised to 100% through deals with unions. Our research indicates that the sick leave in Holland is about 6% (Sweden, Norway and the UK between 4-6%, France 3%, Italy, Ireland & Germany about 1.5%)

For a global financial service company with about 2 Billion Euros of labor cost and 35K employees there is an average cost per employee of 57K Euros. With 6% absent for sick leave that would mean that 2100 employees are absent at a cost of 120M Euro per year. If that sick leave could be reduced to 5% this company would have 350 more people working while directly saving 20M Euro. This example though showing significant cost savings is only looking at the direct cost of this absence, and not at the more strategic impact of lost business opportunities, or the individual human costs. Though there are arguments for fixing systematic problems caused by over generous sick pay, there is really nothing organizations can do about it in the short term… or is there?

To find the answer I turned to one of SuccessFactors Research Thought Leaders Ken Scarlett who has been researching this, and the conversation left us with some very real solutions.

Aggregately speaking, the higher the Engagement level (as measured by an engagement index) the lower the sick leave rates, and there is no better way to predict the likelihood of abusing sick leave than by the responses to the questions “Do you look forward to coming to work?” and/or “Do you feel you work is important to others?” Ken’s research shows that the group who answered negatively to those questions has the highest propensity to max out/abuse sick leave. With the specific questions above, you can actually create a highly accurate forecast within 10% margin of error.

In any country and any industry your job as a leader is to increase the likelihood that your people answer the question “Do you look forward to coming to work?” positively.