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The Cultural Fit Factor
Creating an Employment Brand that Attracts, Retains, and Repels the Right Employees
By Lizz Pellet
Society For Human Resource Management Copyright © 2009 Lizz Pellet
All rights reserved.
The Foundation for Integrating Organizational Culture and the Employment Brand
"The man in black fled across the desert, and the gunslinger followed."
That's the opening line to Stephen King's magnum opus, The Dark Tower series, a seven-book series composed of nearly 4,000 pages, which took King more than two decades to complete. Why is the master of horror's work so fascinating that it should be used in the opening of a Human Resources book? It's all about the journey.
The main character, Roland, starts his epic adventure, which takes him through an experience of many trials and tribulations — love, landscape, loss, wonderment, adventure, danger, and, ultimately, the understanding of how difficult and triumphant values and the human spirit can be. The most fascinating piece of this epic tale is the culmination of Roland's quest, his journey, and his life's work. He reaches his final destination and finds the Dark Tower. He ascends the long staircase, identifies his final triumph, opens the door ... and the story ends the way it began: "The man in black fled across the desert, and the gunslinger followed."
How many times in our professional lives do we seek the pinnacle of our career, the job of jobs, only to discover that it wasn't what we thought it would be, that we don't really fit, and it really isn't the Holy Grail we've been searching for? That's the premise of this book. The cultural fit factor — how we can find the right fit in our professional experience; how the strategic thinkers in Human Resources can find the people who will fit in their organizations and have the ultimate authentic and congruent work experience; and how we can create an employment brand that will convey the real culture of the organization.
I've been assessing organizational culture for almost 15 years. In that time, I have seen a significant number of organizations with healthy cultures, some that are moderately healthy, and some that are unhealthy, yet successful. I noticed a trend emerging: Organizations with healthy cultures really know who they are. Their employees have a sense of belonging, identity, and esprit de corps. It's much like how the book Built to Last so prophetically pointed out that there is a "cult-like culture" within these organizations.
So, naturally, I was intrigued by these cultures. Was this a "Stepford Wife" situation in which the corporation stocks itself with pliant androids, perfect beyond belief? Had Human Resources moved down into the basement, far behind the boilers, offering up the same employee in a different skin, over and over again? Or have these organizations really banded together, honoring diversity, creating a sense of community and elitism above their competitors in today's war for talent?
It became time to infuse a new element into my approach for assessing organizational culture. By weaving in questions about employment branding, I could get a better sense of whether the organizations with healthy cultures also had created a significant employment brand.
I set out to learn more about branding, from various perspectives: recruitment advertising, marketing, consumer packaging, and companies that have well-known brands. I needed to learn more about branding so that I could incorporate branding concepts, philosophies, and methodologies into the cultural diagnostic process I had already developed.
Organizational Diagnosis Process: The performance objective represents the process' ability to guide organizational adaptability, stability, and innovation.
Structure. Division of Labor, Departmentalization, and Organizational Type
Strategy. Business Definition, Success Factors, Competitive Analysis, Business Plan, Succession Planning
Tasks. Skill Requirements and Competence
Decision Support Systems. Planning, Control, and Budgeting Information
Human Resource Systems. Demographics, Skills, Motives, Expectations, Recruitment-Selection, and Training and Development
Reward Systems. Compensation, Promotions, and Opportunities for Advancement as the Primary Source for Understanding Organizational Performance Outputs.
I examined cultural assessment findings in a new way — from an employment-branding perspective. As I reviewed client report data, I thought that if I was an employee of this company, would these results attract me to work at this company; get even the passive candidates to find interest in the company; retain me as a current employee; encourage me to stay employed by this company; or repel me altogether?
So, for the last few years, I've been talking about the Attract, Retain, and Repel concept. Sure, everyone understands the concept of attract and retain ... but repel? Isn't "repel" a dirty word?
Now, I've heard many HR professionals say, "We want to invite everyone to apply! We don't want to exclude anyone!" and "We have to let everyone apply; we are a union shop. Our doors are always open, and anyone who thinks we are not in compliance with EEOC can check our records." These may be true statements, but do you really want everyone to apply? These are the folks who, in Good to Great, say, "We have to have everyone on the same bus." But you don't want some candidates to even know you have a bus! Think about it. There are employees in every company who really just don't fit. You know who I'm talking about. The ones who you wish you could gather around the water cooler and then bring in Jeff Probst from "Survivor" to say, "George, the tribe has spoken. It's time for you to go." And, poof, out goes the torch and they exit the organization.
And it's never the same type of person for every company because every organization has a different culture. The employee who sticks out like a sore thumb in Company A fits seamlessly in Company B. So the real goal here is to repel the employees who just don't fit from even applying at Company A in the first place. It would be much more economical if they just submitted their resume right over to Company B. That's the beauty of a clear and definitive employment brand in the context of repel.
We all know what it can mean when you're not clear on your employment brand or candidate expectations — everybody comes in to apply for a job. Your recruiter's time and energy turns from a strategic placement specialist into a resume sorter. Retention is always important because of the investment you make in people. While people investments are different from one industry to the next — and greater from employer to employer — everyone can agree that the costs are great. You've heard the statistics of a bad hire, right? Statistics from the U.S. Department of Labor reveal that the average cost to replace a worker in the private industry is $13,996. In 2007, they show an estimated cost of a single vacancy for some jobs was calculated to cost anywhere from $7,000 to $12,000 per day. In 2006, Salary.com reported replacement cost ranging from nearly 29 percent of an employee's annual wages. How's that for the potential cost of high turnover?
It is estimated that one out of every four employees has been with their company less than one year. Less than one year? It takes 90 days to find your way around and gain entry into the intact social circles. Factor in another 90 days to figure out the 4 P's (process, procedures, protocol, and politics), and you have about four months of steady and reliable productivity from one in every four workers in your company. And that's frightening, especially if you're a recruiter.
Why do we continue to put the new hires through this meat-grinder process and weigh down our already overworked employees with the responsibility of being mentors, preceptors, buddies, or tour guides only to repeat the cycle of onboarding employees who really don't fit into the culture in the first place!
The bottom line with Attract, Retain, and Repel is that when you understand and embrace who you are and who you are not, as an organization, you will attract and retain the right employees and repel the ones who just won't fit. By incorporating this concept and repelling employees who don't fit into your culture, you reduce recruitment expenses significantly.CHAPTER 2
So What Is Organizational Culture?
Organizational culture has its theoretical origins in sociology and anthropology. These sciences are critical in helping us to understand societal groups. They also help us understand why people act the way they do, because culture has a significant effect on human behavior.
Culture is defined as a set of beliefs, values, customs, and behaviors that members of a society use to relate to their world and each other. It is also defined as the norms that we live by — the commonly held meanings and actions for a specific human gathering. In many respects, our values and beliefs are determinants of our behavior.
As a member of a culture, you learn that when you behave outside of what is considered acceptable or legal, there is a consequence that often involves a sanction or punishment. Although the threat of an unpleasant outcome serves as a deterrent to inappropriate behaviors for many, people in every society break the rules to some extent. Tolerance of actions that fall outside of the cultural expectations seems to vary with the number of people who violate those expectations. For example, when you're driving in a clearly posted 45-mph speed zone at 45 mph, but everyone is passing you, suddenly you notice that your speedometer is showing 51 mph and it seems reasonable. In fact, once you start going 51 mph and pass someone going the speed limit, you may even think there's something wrong with the other driver's behavior! The outcome in this case, a speeding ticket, is not universally applied because the police can only catch and ticket a fraction of the people who are speeding. In time, the posted speed limit might actually be changed, or speeders will be ignored.
The beliefs, values, and behaviors that are a part of an organization affect the individuals in that organization, the product or service that organization provides, and the organization as a whole. There seems to be an inability to define culture, which leads to a high level of frustration for you as a leader. How are you expected to manage something that you can't always identify or define, let alone measure? When I started assessing culture, it was as elusive to me as trying to nail Jell-O to the wall.
Often, there are subcultures within your overarching organizational culture. Stop perpetuating the same old way of doing things; rather than managing these two worlds, you must strive to eliminate the unspoken, hidden culture. The answer is not to learn how to manage the unspoken culture, but to eliminate it. Why? Because living under both the spoken and unspoken law gets confusing for your workforce, and it gets in the way of achieving profitable results.
The good news is that conducting a cultural assessment allows you to examine these two worlds. You will be able to identify what your unspoken assumptions are and learn how you can create the right type of structure to combine these two worlds, the hidden and the overt, and ultimately eliminate your hidden culture (see Table 2.1).
The concept of organizational culture needs to be simplified. A cultural assessment is the only vehicle that can help you reach that understanding. When conducting an assessment, examine what the unspoken assumptions are, why they exist, and how you work with them. The double standards that you continue to perpetuate in your business must stop. What you say on paper must reflect how you act and vice versa. Your words must equal your actions.
What Is the Cultural Health Indicator (CHI)?
This assessment tool was developed in 1999. It is one of the key assessment tools and, most often, the first step in the cultural due diligence process. The CHI is a validated, diagnostic instrument that focuses on the need for identifying organizational balance and alignment. The process of alignment and balance is what we term "congruence." Theoretically, management and organizational philosophies have focused on the critical changes necessary to enhance organizational structure, organizational operational processes, organizational environments, and organizational policies and procedures. The focus of these philosophies has been one-sided. The forgotten side often has been the human component of the organization. When dysfunction or frustration begins to develop, it is the human component that is most impacted, and it is the human component that is most misunderstood and forgotten. This instrument therefore looks at the health of an organization based on its balance and alignment of people and system issues. The instrument focuses on the governing principles, formal organizational systems, informal organizational systems, organizational characteristics, and organizational values that frame the direction and actions of organizations. It is not what the organization believes exists that drives the effectiveness of the organization's action; it is the perception and, ultimately, the actions or nonactions of the employees at all levels of the organization that determine the health of the organization.
If It Is Broken, Fix It
Let's work with some concrete examples from some of the dimensions you can measure. You have a company policy that clearly outlines how RFPs are processed. However, in talking with employees, you discover that they haven't followed that procedure for years. Why? Because it's cumbersome and their reaction is we'd never get anything done if we followed it. Or, you have an HR policy that states that all positions will be posted internally before going to the outside. Yet, many people know that a number of positions were filled that were never posted, or, worse yet, positions were posted after the external recruiting process had begun. These are blatant incongruencies between formal and informal policies, between the stated way of getting things done and the way things really get done. These incongruencies not only cause confusion in the eyes of your employees, but they also cause high levels of frustration and anger, and begin to eat away at your trust level.
So what does this have to do with bottom-line results? Excluding culture from your calculations is like ignoring warning signs you get from your doctor. Culture tells you how you are achieving your results, positive or negative. It tells you why you're in the red or why you're in the black. When you have a healthy bottom line and healthy profit margins, there is no reason to examine how you are achieving such great results. Or is that really true? If you don't have a basic understanding of how you achieve your results, then it becomes virtually impossible to replicate what is working and modify what is not working. Baselines must be established for any and all processes that you use in your day-to-day operations, and your cultural process is no exception. If you don't understand what is and is not working from a quantifiable perspective, you will just be shooting in the dark. And you know that as rapidly as businesses are moving today, you must be able to hit the target on the first try, by knowing what the target is and where it is.
A significant driver in fixing broken processes or transforming an unhealthy culture is that organizational culture is the foundation that supports profitability (see Figure 2.1). The ability of an organization to deliver on its strategic objectives depends largely on the employees' performance. There are hundreds of publications on employee satisfaction and energy levels, and the effect on productivity. The "happier" or more satisfied an individual is, the more they are willing to "give" or produce. If the right processes, products, resources, and support mechanisms are in place, satisfied employees deliver and have an energy level that allows them to meet objectives. We could also agree that having those processes, products, resources, and support mechanisms in place, or not having them in place, also speaks to the level of health of the organizational culture. Satisfied employees give off this positive energy, which manifests into higher levels of care for the organization, and which creates increased quality of products and, often, increased customer satisfaction levels. This all drives revenues, which drives earnings — and stakeholder value. Keep in mind, there are many external forces that can inhibit an organization from having a high level of employee satisfaction. The factors that can significantly affect the organizational culture, which has an impact on employee satisfaction are: determine what effect they are having on your business, and help you develop a plan to rectify the situation.
* No Structured Process for Change
* Senior Management Turnover
* Lack of a Clear Vision and Mission
* Uncertain Economy
* Lack of Involvement
* Management Behaviors
* Increasing Workloads
* Lack of Accountability
* Unclear Career Paths
* Poor Communication
* New Strategy
* Lack of Trust
* Competing Agendas
Organizational culture can be referred to as the glue that keeps an organization together. It is the silent code of conduct; it's more about how things get done, rather than what gets done. It can also be referred to as white noise, the background static that may affect you but goes unnoticed. When new employees are learning the ropes, they are learning the culture.
Excerpted from The Cultural Fit Factor by Lizz Pellet. Copyright © 2009 Lizz Pellet. Excerpted by permission of Society For Human Resource Management.
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