In order to encourage innovation and compete for top talent, some companies are making radical changes to their cultures and deviating from traditional business practices. With the speed and scale at which technology is evolving, the way people work and how they’re managed needs to change to keep up. Many companies still rely on the old tried-and-true talent management methods and policies of the past. But there are a few industry leaders who aren’t afraid to try something new when it comes to how they hire, fire, and manage their people.
Company #1: PricewaterhouseCoopers (PwC)
Pwc lets employees keep their side gigs.
In the past, professional services firm PricewaterhouseCoopers would require incoming employees to quit any technology ventures they were part of before joining the company. Now, the company has decided to allow its employees to start or keep their own side projects while still keeping their jobs at PwC.
“These days, more people have entrepreneurial ventures, especially in the digital space. We’d be cutting ourselves out of a fairly large talent pool if we wanted to own people’s heart and soul,” said PwC Digital Change Leader John Riccio.
Companies like PwC are creating more flexible work environments to keep up with the changing demands of today’s workers. Allowing their employees to maintain their innovative spirit not only benefits the employees themselves but the company as a whole.
Company #2: Netflix
Netflix doesn’t waste time on performance reviews or the wrong people.
Netflix, the inventors of binge-watching, are known for their innovative business model and award-winning original programming. But it’s what they’re doing internally that is helping transform the way their business is run and how they’re staying on top.
Patty McCord, former Chief Talent Officer at Netflix, talked about the company’s unique approach to HR in a Harvard Business Review article. McCord discusses the need to hire the right people with the right skills and remove people from positions where their skills aren’t a fit. As businesses evolve, the skills needed for different roles can change. At Netflix, if an employee’s skills are no longer a good fit in their current role, another role will be found for them; or they will be let go — with a generous severance package. Even if someone has been a good and loyal employee, and even if they’re a “nice person,” Netflix doesn’t believe in wasting time and resources on individuals who don’t add value to the company.
Another way Netflix deviates from “traditional” HR policies is by having no formal employee review process. A few years ago, Netflix made a decision to eliminate formal reviews after realizing the reviews were too “ritualistic and infrequent.” Netflix leadership decided to ask managers to have regular conversations about performance as part of their everyday routines. They feel it is better to organically track employee performance and keep communication open between manager and employee.
Company #3: Zappos
Zappos eliminates hierarchy and embraces radical self-management.
In 2013, Tony Hsieh, Chief Executive at Zappos, initiated a radical new self-management system called Holacracy. The goal of Holacracy is essentially to eliminate hierarchy and create a workplace where each individual employee has an equal voice, and where bureaucracy doesn’t stifle innovation. Workplaces that use this system are said to have a clear set of rules and processes for how teams break up work and define roles with clear responsibilities and expectations.
Since implementing the Holacracy system at Zappos, managers no longer exist. “A lot of companies talk about work-life balance,” Hsieh told the New York Times, “We’re more about work-life integration. At the end of the day, it’s life.”
Unfortunately, many Zappos employees appear to be unhappy with — or at least confused by — the new management structure (or in this case, lack thereof) and approximately 18 percent of employees have left the company since March. Many have accepted the buyout offered by Zappos after implementing the change. Despite the departures, Hsieh is sticking to his guns on the Holacracy decision; the jury is still out on whether he is a gutsy genius, or possibly making the biggest mistake of his Zappos career.
Talent management is about finding what policies and processes work best for your workforce. A radical new idea like Holacracy might work well in one organization and completely bomb at another. It’s all about knowing your employees and understanding what makes them tick. Learn more about creating an engaging Worker Experience in our ebook, The Future of Employee Engagement.
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