Why your leadership development efforts are not netting you more internal promotions…

Paradox Triangle

When perception creates a paradox

There are a number of paradoxes in the modern workplace but one that seems to plague a lot of organizations is leadership development and succession planning not leading to better internal talent or higher retention. And it befuddles HR professionals, senior executives, recruiters, and all employees.

A story (* = fictionalized…kinda)

Ryan* is a 28 yr old IT Jr. Project Specialist and has worked at Vector Resources* for 4 years. Starting as a departmental admin, Ryan proved her ability and moved into the coordinator role after 2 yrs. Since becoming a project coordinator, Ryan has received multiple recognitions from various stakeholders and completed a number of successful projects. She has also taken a few leadership courses and professional development courses as a part of her Individual Development Plan. Now Ryan is looking for her next career step which is to a Project Manager that would include up to two direct reports.  The regional office in New Mexico has an opening for exactly that position. Ryan has long-standing good relationships with the people she would be supervising and they are supportive of her promotion. Ryan’s direct manager feels Ryan would be great in her new role and has acted as an advocate for her promotion as well.

Sounds good, right? She’s got a great track record, recommendations from her boss, colleagues, and recognition from other stakeholders proving her ability to successfully lead projects. Additionally, she knows the company, already has established relationships, understands the strategic vision of Vector Resources, she’s willing to relocate at her own expense, and love’s the company. Seems like a no brainer.

But here is what happens. The position posts internally and Ryan goes through the process and everyone seems to like her…but rather than offer her the job, they decide to post it externally to get some comparisons. EVEN THOUGH SHE IS THE PERFECT CANDIDATE! And here is the kicker, the salary range they are targeting for an external is MORE than they would offer Ryan.

So here is where Ryan sits – capable, recommended, ready, internally knowledgable, and accepting of a lower than external market salary because she loves the company.  Yet, here is the message she is getting – external candidates are worth more AND might be more suitable for a role she is already doing. So regardless of the outcome, Ryan is starting to feel unappreciated leading to disengagement and cynicism towards a company she loved.  Not to mention, the time to fill this valuable position is just getting longer and longer with two direct reports having no manager.

Despite all the things going for her, Ryan is subject to two contributing factors that are roadblocks to internal promotions – her longevity in her position and a concept of internal equity.  Lets look at these individually because they are acting against internal promotions is different ways. One is leadership failure and the other is a cultural failure.

The Paradox of Longevity

Despite the high praise and desire for employee loyalty, it is harmful to your career progression. The culprit to this conundrum is a component of gestalt psychology known as “figure-ground.”  It is a concept of how we perceive things.

Faces or a vase?

Largely illustrated in visual form by optical illusions that show two or more objects depending on how you look at them, the concept of figure ground states that once something emerges from the background as a distinct image, it can no longer be unseen. So while you may see the vase first and then the profiles, you cannot “unsee” the vase.

Old woman or young woman?

How this works against an employee when it comes to longevity in a certain company, and more specifically in a certain position, is people sometimes have difficulty seeing someone as capable of doing something beyond their current position.

Take Ryan’s example, Ryan has been in a non-management role for an extended period of time and as such, the leaders around her (the hiring managers in particular), and unable to see her as a manager. In fact, she may even be told she is not qualified because she does not have management experience, which she will NEVER get in her current non-managerial role.

It is a Catch-22. You aren’t qualified to manage people until you manage people. And if she is not given the position for that reason, what leads her to believe she will ever attain her career goals at her current company. They are in fact sending a message that quitting is the only way for her to further her career.

Seemingly, some organizational leaders are more appreciative of the unknown potential with an external candidate, than with the known capabilities and internal knowledge of an internal candidate.  That is the leadership failure, failure to see your own employees’ potential.

The Cultural Issue

This one is more a fault of systems being designed independent of one another but it becomes a blind spot for many organizations. They pay internal candidates less than external hires. And while the basis of this might be rooted in good financial theory, the human message it sends is, internal experience is worth less than external experience.

The underlying principles at work on this one is from a financial standpoint this practice makes good fiscal sense. An internal will generally accept less for a promotion than an external might demand. But beyond the messages it sends to an internal here is something to consider. The reason an internal would take less is because there is less stress of learning a new organization. It is easier to stay with a company I know for less money, than have to re-establish myself and learn a new role at the same time. The inverse of that is where irony sits. For the external hire, they fully anticipate the stress of learning a new organization and establishing themselves. So in essence, you are paying MORE for someone to learn your organization before they can even bring benefit. You are paying MORE for an external hire’s learning curve before productivity kicks in.

There is also the concept of internal equity that many HR professionals cite saying they do not want to create an expectation of a high raise percentage for internals as they move up. But this tends to be a fallacious argument. It may make sense when it comes to performance or cost of living raises, but it should not apply when the nature of someone’s job changes in accordance to a promotion. The role is worth a certain range and adjusting it simply because someone is an internal candidate is creating a negative culture for internal promotions.

Ultimately, here is the message and culture this practice of basing salary on the internal status and current salary creates: quit and work somewhere else, then come back and we will not only be more eager to hire you, we will pay you more than if you had just been promoted. It encourages the exact thing you are working to prevent. And what is more, you have now taken a sincerely engaged employee and turned them into a cynical job-hopper.

Straighten Things Out

Much of what I encounter in organizational roadblocks to performance are a result of misalignment. Everyone to detours around the roadblock to continue moving forward. In this case, the roadblock is a misaligned compensation philosophy and leadership perception. The detour is exiting people out of your organization only to pay them more to come back.

A major argument I hear from many senior executives is “if we develop people into leaders, they just take that experience to another company.” To which I respond, if that happens more than 50% of the time then you are either not looking at your people with fresh eyes when it comes to potential promotions or your compensation philosophy tells them they would be worth more if they quit.

When leaders start bemoaning the talent shortage and worrying about leadership gaps (such as in this article from Inc.com) it is usually a good idea to start looking at your efforts. If you are not developing your talent, start. But make sure you look the environment you plan to grow them in. You might create great seedling leaders but if you don’t replant them when they need more room or water them as much they deserve…you could find your leadership crop dying off.


Work is not a “place”

The office set for Jacques Tati's Play Time an...

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There is “work” and then there is the “workplace.” Many people think they are the same or that one necessarily must occur at the other yet more and more studies are showing that the traditional office environment stifles creativity, reduces productivity, increases group-think, and can even deteriorate personal health. And while you may read some of my posts and think I advocate abolishing the workplace all together, that is not my stance. I think going to work, at times, is very necessary to getting the results you need. But equally required to achieve results is time somewhere else. Sometimes it is going for a walk, sometimes it is a hike, maybe the gym, maybe a coffee shop, maybe it’s at home.

My stance is: allow people to work where and when they are most productive. It is a sign of trust in your employees, true delegation on your part, and is empowering to you employee.  Not to mention, as this article in Psychology Science suggests, the metaphor “think outside of the box” has real physical significance. Sitting in your cube, office, or office building can constrain your thinking and narrow your perspectives.

I am not necessarily anti-office, I am pro-productivity. Don’t assume presence implies action.  Give people clear expectations, provide access to resources and tools to do their jobs, give them directional feedback, then leave them alone so they can do their jobs.  Your attendance policy may just be hurting your company in more ways than you realize.

Missing the Point

Work is NOT a place...it is an activity

There has been a buzz in the past few months about unlimited PTO, unlimited vacation policies, 4-day work weeks, flexible hours, etc. Companies including NetFlix, Best Buy, SpinWeb, RedFrog Events, WeddingWire, and yes, even the US government  get it: mainstream media and by extension the majority of the American public does not. This is NOT a policy, it is the absence of policy.

The Arguments Against

The primary arguments I hear are these:

  • how will we know people are getting their work done
  • won’t people abuse it
  • how is this impacted by FLSA (Fair Labor Standards Act), and lastly,
  • how does that work if someone quits or gets terminated

My responses in their simplest form are:

  • “attendance does imply performance”;
  • “no – and please refer back to answer 1”;
  • “it really isn’t”; and,
  • “it works just fine, probably easier (and cheaper) than it does now”

How will you know people are getting their work done?

If you are using attendance to judge people’s performance then I would say you need to focus on your performance management system.  I knew a lot of kids in grade school, middle-school, and high school that got a “perfect attendance award” and had crappy GPAs. Simply because someone if present does not mean they are performing. Furthermore, if you think watching over your employees increases productivity than I would say you either hired the wrong people or you are creating a negative environment for anyone who works for you.  In addition, control breeds counter-control so if people feel monitored heavily, they tend to look for ways to slack when you are not looking.

Won’t people abuse it

Numerous practical applications of this type of work environment show when people are given the freedom of when and where to work, they end up actually working more. The question itself also assumes that having control of your schedule is a perk or a benefit – that is not the point.  The point is focusing on what people accomplish or how they meet performance expectations, deadlines, etc. So when you think about it that way, the question is actually irrelevant because it focuses on the wrong thing.  It, again (similar to the 1st question,) assumes that people will not be in their office and therefore not working, which is a false assumption. The problem worth analyzing is not whether or not they are present, but whether or not they are getting their jobs done.

How is this impacted by FLSA?

It isn’t. There is NOTHING in the Fair Labor Standards Act that mentions vacation or time NOT spent in the working.  Here is the major misunderstanding of the Fair Labor Standards Act (FLSA) as it relates to time and the modern workplace. The FLSA, along with establishing a minimum wage,  outlines which employees are “exempt” from overtime pay after 40 hours/week, and which are “non-exempt” from being paid over-time. The easy piece is for exempt employees, or more commonly referred to as ‘salaried’ or ‘non-hourly.’ For this group of workers, there is zero legal ramifications for this person regardless of time spent working or ‘at work.’ They are paid a fixed amount regardless of whether they work 30 hours per week or 60. For non-exempt, or ‘hourly’ employees, the FLSA say nothing about paying people for time they DO NOT work. The ONLY legal ramifications are when people work OVER 40 hours per week. So the FLSA has nothing to do with vacation or time off, nothing – unless of course you have an earned PTO system where time off is considered an earned benefit…which ends up costing you when an employee leaves…because you still owe them the payment they earned.

How does this work if someone quits or gets terminated?

Here is a wonderful part of this shift. You owe them nothing in terms of earned or granted vacation. If you negotiate a severance package, that is totally different and has nothing to do with PTO or vacation.  According to Hotwire.com, the majority of Americans workers left 6.2 days of vacation unused last year. If you use the median income of a full-time worker of $39,416 – that translates into a savings of over $900 for every employee who quits or is terminated, on average. When you have no vacation or PTO policy, no one gets paid for unused vacation or PTO…there is no such thing.

The Point

This is not like bottom-less wings where when your basket gets low, someone gives you a finite number more. This is more like air. Rather than living under a scuba tank where you measure your breath and have a finite amount, you get to breathe normally. In the environments like I mentioned above, the point is there is no basket, or bucket, of PTO or vacation therefore, no concept of unused, owed, or earned time. And more importantly, there is no guilt, judgement, or criticism around how people use their time as long as they are doing their jobs. When you are judged on what you get done rather than how much time you spend in the office, people tend to find efficiencies, work faster, and be more productive.

Don’t try to rewrite the policy, that misses the point.  Eliminate it, shift your employees to focus on what people accomplish as opposed to just being present (see Presenteeism). Simply having people limited to the time they take will not make them produce more, in fact, as has been proven in all the aforementioned companies, productivity increased when they eliminated the vacation calendar and work-day clock. Stop talking about trust as if is something you have no control over – the more policies you have, the lower the trust you have in your employees (convince me otherwise if you disagree – and I am not talking about Quality procedures). Your vacation policy is one you can get rid of. Pay attention to what your employees do, not where they are.

Why your boss doesn’t trust you…

December 3 2007 day 53 - When stress does a nu...

My last post mentioned fear as a reason many change managers do not communicate well or soon enough. But fear is much more insidious than simply during change – it is the roadblock to trust in your organization.

It is amazing what the human mind and body can do. During times of distress it can shift blood from one area of the body to another more crucial area almost instantly, it can increase the effectiveness of our muscles and make us stronger for brief moments, it can focus our minds with laser like precision, and during times of extreme stress can make us completely forget nearly everything about experiences. And while many times these autonomous reactions serve us in very protective ways, they can also undermine positive outcomes. It can make us blind to other possibilities, unable to release a certain perspective, defensive in conversation, and illogical.

Whether they be physical stressors or psychological ones, the root of what causes these reactions is fear. In many physical examples, the fear could be of injury or even death.  In the psychological instances the cause of fear is much harder to pinpoint and what is more complex, sometimes the fear is self-manifested. Now, whether the fear is justifiable or not makes not one bit of difference to how our brain acts.  Fear, is fear, is fear; and our brains react the same way to fear regardless of the stimuli.

In a professional setting most fear is psychological fear.  The trouble is psychological fear is not external, so you can’t point to something and say “that is fear”.  Fear is internal, something causes fear in us and as such, is self-created.  Which is to say, when I am afraid there is something in me that fears the external stimuli. Perhaps it is the fear that I cannot handle what is about to come my way or perhaps it reminds us of something that contradicts our self-image.

That last one is important. This is often the source of defensiveness in most everyday professional conversations, a challenge to someone’s self-concept. As an example: I put forth an idea I worked hard on, someone says they think my idea is wrong, that means I am wrong, that my idea was stupid, that I was stupid, I do like to think of myself as a stupid person (self-concept), I am afraid I am stupid, I don’t like being reminded that I could be stupid, I don’t like that you reminded me I might be stupid, don’t call me stupid – issue your external response. Of course you can substitute any number of things you might be afraid of about yourself (unimportant, inexperienced, unlikeable, intolerant, disorganized, irresponsible, etc.) The fear no longer comes from someone actually calling you those things, but now comes from them reminding you of your fear that you are one of those things you do not want to be.

Defenses in and of themselves are not bad, at some point in our life they probably served us well, and if we encounter a tiger they may still serve us, but when we are defending ourselves from our own fears rather than a real threat, fear is our biggest obstacle. Without getting too technical, fear and stress produce cortisol in the body. Cortisol is like the lime to the tequila of adrenaline – it sets the stage for action. Contrary to popular belief, the “rush” we get from certain experiences (the tingly feeling, butterflies, taut muscles, etc.) is caused by cortisol, not adrenaline. The negative aspect of cortisol is it is VERY closely associated with stress – the more stress or fear you feel, the more cortisol your body produces. Cortisol also diminishes trust in our external environment, so it is a self-feeding loop in defensive situations. (This is the reason taking a break sometimes is a good conflict strategy.)

Oxytocin (no, not the pain-killer Oxycontin), on the other hand, is a stress relieving hormone that counteracts or suppresses cortisol production. Have you ever been feeling tons of stress and then someone gives you a warm hug or a sincere compliment and it seems to dissipate?  That is caused by the release of oxytocin. Oxytocin, in recent years, has become strongly associated with trust, love, compassion, and personal connectedness.mUnfortunately, professional behavior and love are not always things talked about in the same sentence. And let’s face it, hugging is not something a lot of environments encourage in the wake of sexual harassment possibilities. Most environments, in fact, are breeding grounds for stress and fear, and thus almost encourage distrust. The more stress or fear I feel, the less likely I am to trust – trust you, trust myself, trust my organization, trust my leaders, etc. If I do not have trust it is hard to respect others or be honest. And so the cycle goes.

Whether my fear is about me or about you, again, makes no difference in how we react.  It DOES, however, still elicit a self-protective response.  In stressful situations people rarely point to a fear they have about themselves. Enter the Fundamental Attribution Error. When things go wrong to me, I attribute it to reasons outside of me (it’s not MY fault)- when they go wrong for you, then we attribute it to a reason in you (it is YOUR fault). This is why sometimes the message is conveyed that your boss does not trust you, or perhaps, that you feel you do not trust others. Sometimes it might be a fear about themselves (or yourself) you are protecting yourself from. Maybe I fear that I am an incompetent leader and if something goes wrong on my team, that confirms I am not a good leader so I act in defense of that fear by not trusting my employees to do a good job…so I micromanage, require copious amounts of check-ins, over-monitor, over-meeting, over-reviews, over-discussion, overly rely on consensus (when it does not make sense), avoid delegating, etc.

Fear is the enemy of trust. Both practically and biologically. And if we are really being self-aware, how much of that fear is about us instead of about them? Are we committing the Fundamental Attribution Error? Are we simply protecting ourselves from our own fears of being incompetent? Insignificant? Unlikeable? Trust and Fear are not mutually compatible, you have to choose one or the other. And yes, you can choose to be more trusting, but that means confronting and challenging your own fear about yourself first.  What is it you really fear about yourself and how is that standing in your way regarding trust of others?

Dumping the water back in the pond

An analogy I often use when working with clients goes something like this:

“If you scoop a cup of water out of a pond and train it to babble, tell it to babble, convince it what a good idea it is to babble, and then dump the water back in the pond…don’t be surprised that it doesn’t babble.”

The underlying message is, if the underlying system or support means are not set up to facilitate a change in behavior, then chances are you spent a lot of time and energy training or coaching someone to do something that may never or very rarely ever happen.  It is not a question of chicken or egg in this case, it is more a case of make the batter? or put it in the oven? – If you want cake – you gotta do both.

Whether you are working to fix a problem behavior or develop new skills, the solution is the same.  Yes, coach and train IF they do not have the requisite skills AND look at your system and see if it supports new behavior (or old behavior).  The greatest way to inhibit change is to not support it. Not only do people do what is rewarded, they also do what they have the opportunity to do.  If they do not have opportunity to exercise new skills/abilities or are being rewarded to do it the old way, then chances are, no change will happen.

I see this most often in developmental training efforts.  People are sent, invited, voluntold, or in the rare case, seek out, training on a new or developmental skill deficiency.  They attend a potentially career changing training and are super excited to try some new stuff. They then return energized and with new skills/tools/awareness/or ideas and either no follow up happens from the manager or there is no support to do anything different. Imagine going to a photography class and then never being given the opportunity to use a camera when you got back. According to a University of Minnesota study, this is the number one reason training is seldom effective as a change method – no support from the direct supervisor to exercise new skills.

If you want change or you want training to be effective, you have to intentionally alter the bedrock upon which people are working, change the environment, give them support, and create opportunity (not just look for it, CREATE it) for them to do something different.  In BlessingWhite’s recent engagement survey, “opportunity to do more of what I am good at” is cited as a top driver for employee engagement.  Moreover, the same report cited that the number one reason people worldwide indicated they were looking to leave their current organization was “My career: I do not have opportunities to grow or advance here.”  People want to be good at what they do and increasing research is showing that not only do we want to be good at what we do, getting better is actually a motivational driver (Dan Pink, “Drive”).

If you want high performance, change, and people to do innovative things, you have to make sure your foundation supports it.  Are you building a pond that stagnates, or are you building a river to keep your organization current.

High Attrition and the Fundamental Attribution Error

I was recently speaking with a friend who noted that the turnover rate at his company was surprisingly high at 26%.  According to him, this was news to everyone as no one had been tracking it, there was just an assumption of good culture since most people seemed happy… at least outwardly.  However, a few departments had seen unusually high turnover, one of them being Human Resources at over 50%.  Now, I would hope this would be cause for alarm by some of the leadership but quite the contrary, many of the senior leaders seemed quite aloof.  My friend had heard them say such things as “they [those that left] just weren’t committed to what we are doing here” and “I’ve lost over half my staff in the past year…I’m trying not to take it personally.”  WHAT!?

I’m going to go in reverse order since the last one seems the most perverse.  According to my friend, this person, a senior HR leader, has lost 5 of his 9 direct reports within the past year.  Does this person not read any studies about why employees say they leave?  For that past 20+ years, the number one reason people leave a job is their boss.  That is not to say the ONLY reason employees leave is because of a bad boss but the law of averages has to catch up to you sooner or later.  I am reminded of a rather cynical quote I saw on Despair.com, “The only consistent feature of all your dissatisfying relationships is you.”  So how you could possibly NOT take over half your staff leaving, personally?  Now I could open up the flood gates to all the other external reasons why someone might want to leave but that just gets us into the second issue…or the first comment by senior HR leaders above.  The fundamental attribution error.

The Fundamental Attribution Error is a psychological principle that basically says we mistakenly confuse character flaws with situational causes.  It can most notably seen when we make observations about others in comparison to ourselves.  A simple example is: if you get into an accident, you are a careless driver and weren’t paying attention (character). When I get into an accident at that same intersection, the stoplights were messed up and there was ice (situational).  Moreover, we tend to seek external causes to our misfortune rather than looking internally.  It is always because of something else that bad things happen, not because of us.  So because [they] are not committed, they left.  I’m sure it has nothing to do with you. Right.

Here is another disturbing indicator, this company my friend works at, does not do exit interviews. Presumably, because they either don’t want to know why people are leaving, or they DO know why people are leaving and they don’t want it confirmed.  After all, a fair amount of our defensive responses surround protecting ourselves from things we do not want to feel, or be reminded of.  So if I  fear I am a bad boss and I do not want to feel that way, I will think of countless ways to avoid it (such as not asking, attributing turnover to external causes, blaming, rationalizing, etc.)

If you have high turnover, and it is a surprise when it happens, there is a good chance you are not paying attention to how YOU affect your employees.  Sure, there are other reasons, but YOU have control over most of them.  If you really want to know, find a good 360 instrument, ask your employees, and DO something with your exit data.

GenY and the changing paradigm of “work”

I think we are looking at a paradigm shift in how “work” is defined, due in large part to the social changes we created by how we raise our children.  I agree with Leanne in that Gen Y brings some wonderful strengths to the table and some long overdue changes.  Gen X had the same issue with the workplace as Gen Y but since we lack the collaborative instincts and networking to induce large scale change, most of us opted out of the dissatisfying working conditions that corporate institutions provided and became entrepreneurs or consultants.

The things that are changing all challenge the accepted wisdom of a 9-5 work culture and force managers to be better leaders (and people.) The 80s-00s saw very little value placed on leadership ability and more placed on technical ability, which is why many people were placed into management that did not deserve to be there…and ultimately created the negative environment GenXers fled.  I see that changing somewhat (though it is still not perfect.)

The other paradigm I see changing is the 9-5, be at your desk, in your office, mentality of how work gets done in a 24/7 global culture.  You can start to see the squeaks of it with ROWE and Dan Pink’s book “Drive” (vis-a-vis: Autonomy).  Gen Y can get work done anywhere anytime, which I think brings many of the ill-fitting paradigms to a central point.  Managers will have to get better at setting and coaching employees to produce results, not presence.

The whole notion of work/life balance is centered around this premise (the same one GenXers said when frustrated about promotions or new oppty) “if I am producing results, shouldn’t they speak for themselves?”  Gen Y, with the population size, has the collective mass to change the system in a way GenXers could not.  “Work” is being defined by what you do, not where you go or when.  GenY and their extreme mobility and portability fit the global, eCommerce, and 24 hour expectation of work.  And what is more, they lack the compartmentalization mentality of previous generations. They see work and life as intertwined, not separate so work gets done just as equally at 7:30pm as it does at 10:45am…and perhaps, depending on the person, it gets done MORE effectively since it fits that person’s style.  Concepts that are emerging to support this new paradigm of “work” such as ROWE and the Netflix vacation policy (or lack thereof) see higher productivity, less turnover, reduced recruiting expense, and higher employee engagement.

So whether you call it a generational shift, societal shift, paradigm shift, or culture shift, on thing is for certain; the expectations of both employee and employer is in constant progression – maybe this is the next evolution.