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Monday, September 10, 2007

When HR is the Problem

I'm the Controller for a small, but, what used to be, rapidly growing firm, 135 employees total. We've always had weak HR, but our recently hired VP of HR seems to take the cake--or at least want to make cake. We have equity problems, no performance appraisal system, high turnover and low morale. His solution for turnover? Recruit more, through offering candidates wine and cheese. His solution for low employee morale? Inviting employees to the parking lot for a tail gate party that includes a keg of beer. His solution for equity issues? If you come and whine about your salary, you can--more often than not--get a raise. Sometimes this even occurs before I know about it, via verbal promises made to employees before I get the paperwork to approve the transaction. These actions seem to be the rule, rather than the exception. When I’ve posed the question to him about where to pull these additional monies he’s throwing around, his response is “You can always find extra cash.”

I'm the bad guy because I put the financial kibosh on many of his expensive alcohol fueled ideas. He makes people "feel good" and is a real cheerleader. Yet, none of the longstanding problems are getting solved. I’m looking out for the company by getting the proper insurance in place to protect us from his stupidity/increased exposure resulting from the above events. I don’t know what has to happen for the company to realize that our HR dept is paving the way for our ultimate downfall. I mean, HR is supposed to be the dept who would normally be expressing concerns about these types of activities, right?

Any thoughts or advice on properly handling, or at least, better coping with this situation would be much appreciated.

Somehow it hadn't occurred to me that I should be planning keg parties in the parking lot. Perhaps I am not ready for a VP position, like I previously thought.

Alcohol and business, in my humble opinion is a bad idea. Some people can handle a beer in a business setting. Others get sloshed, drive home drunk, crash and the company gets sued.

But, you know all this. Your problem is with the HR VP. I wish I could give you some secret "HR" words that you could say to this guy and have him go, "Ohhh! What I should be doing is working on pay equity issues!"

I am hoping my brilliant colleagues will weigh in on this, but in the mean time I'm going to give it my best shot.

You are the controller. You speak about dollars. Your CEO should be able to speak that language. The HR VP--hard to tell. Some can speak in financial terms, some cannot. (I suspect you have the latter.)

When presented with another one of his plans, ask, "What's the ROI on this one, Bob?" He'll probably look at your blankly. (Note, not saying all HR people would look at you blankly, but I suspect this isn't the guy's strong suit.) He'll defend his position. Say, "Sounds like fun, but what do you expect to get out of this?"

Make him come out with the expected result. "Everyone will have a good time?" will probably be the expected result of the tail gate party. You can counter, "It will cost us X for the added insurance, Y for the actual cost of the party and Z for taxis to get people home. Having a good time isn't enough. How do you expect this to reduce turnover? Have people been complaining about the lack of beer at work?"

Okay, so the last sentence is probably over the top. (Of course, yes, people have been complaining about the lack of beer at work. Not me, by the way, I don't drink.)

When he wants to give someone a raise (unless it's you, of course--we do have our priorities here) ask this question. "How are you going to make sure this is equitable? Did you know that males are more likely to ask for raises than females. Therefore, if our compensation structure is based on people asking, you're going to end up with skewed salaries--with men making more than women who are performing the same jobs. I'm not sure we have the financial ability to pay out on the inevitable law suits."

Stop trying to tell him what he can and cannot do. Just make him justify his position to you in financial terms. He'll either learn how to do it--and will start to see the folly of his ways--or the CEO will see that he can't justify his own projects.

It's HR people like this that really chap my hide. HR is supposed to support the business. There is a reason it's called "work" not play. Besides, who says that the employees want to spend their "play" time with people at work? I'd rather stick pins in my eyes than have a kegger.

Employees always want more money. This is true. But even more than that, they want to be respected. And trust me, you don't feel respected when you have to go beg for an increase. And even getting an asked for increase doesn't increase your warm fuzzy feelings for the company. It just leads to more negativity. (If you're willing to give me a raise when I asked, why weren't you willing to earlier? Are you just trying to pay me the least amount possible? This job stinks. I'm going to take my new salary and go apply for new jobs. Maybe I can get two increases within months!)

Don't be mean and don't be negative. Just keep asking questions. Demand explanations. And if that fails, cut his budget. (Just kidding on the last part. Ha! Ha! I love finance!)


Patrick Williams said...

Holy Cow!!! I don't even know where to begin on this. Given that there are ALWAYS two sides to the story, I will caveat that based on what you state, this guy is WAY off base. The boozey tailgate party needs to go right up front - too much risk, too little reward. Any decent HR person would have avoided that.

These are not HR issues, they are business issues - High Turnover, Competitive Salary Issues, low morale - these ALL impact the bottom line. You need to get your CEO dialed into these issues as business facts and risks then call the HR person to task on how they propose to solve the issues with a clear, accountable business case - eg. if you give me $xxxx to fix comp and equity, we will reduce turnover resulting in $yyy savings in recruitment and turnover costs....
If that doesn't work, send your resume to me... I'm ALWAYS looking for bright, talented people ;)

deb said...

i think i might work in your HR department, for your VP.

more later....

all the best!

Anonymous said...

Wine and cheese, keg at tail gate I see a pattern here? Sounds like Mr VPHR is very interested in how he can bring alcohol into the work place. I'm just sayin'...

Lisa said...

Where to start . . .I worked for a small, but growing family owned business and one of the biggest "pains" of growth I'd say were the shifts from the informal to formal (for lack of better words). Not taking the fun out of things, but being smart about the pitfalls, traps and areas of exposure out there. A company can only hide under the radar so long before they are seen.

Growth and continued viability of the organization are top on the CEOs agenda and should be for HR too. Obviously, it is not for HR, or at least not in a professional, business focused way. Where does the CEO stand on this? I am assuming he is either in support or neutral about the whole thing or the HR person would be shown the door.

I agree with Patrick above - get your CEO dialed into these issues as business facts and risks.

Stop being the "bad guy" and hold the HR person accountable. Do you have legal counsel you could conviently just happen to have come over for a presentation or manager training?

Let me think about this some more.. . .this is a company problem and we don't want it to be yours or have you coming out as the bad guy.

There are some pretty smart people reading so we can likely have you smelling like a rose!

Chris Young - The Rainmaker Group said...

I concur with your sentiments and particularly like Patrick's comments.

Surprisingly - this kind of thing happens a lot more than we would all like to acknowledge.

Even more surprising... A lot of CEOs know the full cost of problems such as this and put up with them anyways. I have seen senior leaders and CEOs review the costs of the "problem" and they still keep the problem team member on the bus.

Just another HR lady... said...

Wow, what kind of HR person is this? Sounds like he's just there for the party? As another HR leader, I don't really understand this, HR does have to build relationships with employees and management to get the job done, but you also have to stay somewhat removed to maintain your credibility and neutrality. It's a fine line to walk. I've definitely never walked right off the line and had a kegger with my employees. :-) What makes it even more shocking is that this is a "new" VPHR within the company, nice first impression.

Who sets the goals and expectations for your VPHR? If it is the CEO, I would likely sit down with the CEO and discuss the issues you would like to "work with" HR on resolving in the company. Point out the legal and financial ramifications of failing to address current issues (cost of turnover alone should catch his/her attention). After all, you are responsible for protecting the financial position of the company, you would just be doing your job to bring up these issues.

In an ideal world, the CEO would then set out clear expectations for the VPHR to work towards meeting (although this should have been done when he first started). Perhaps the VPHR also needs to take a basics of HR course? LOL!!

In the real world, I would be a little more cynical to say that the CEO probably already recognizes the issue, but is reluctant to manage the situation, probably because he/she hired this person for whatever reason.

Continue to press on the legal and financial ramifications of failing to address current issues, but if the CEO is this person's boss, the only person that can truly manage the situation is the CEO.

Did you ever think of suggesting that an outside consulting firm do an "HR Audit"? The VPHR should know how to do an HR audit, but if not (or if he chose not to when he first arrived), there are companies that will come in an audit the function/processes, and provide recommendations on HR moving forward effectively, efficiently, and in a financially responsible manner.

Wally Bock said...

Patrick said something in his post that seems to be getting lost in the discussion. These are business issues. They are also competency and performance issues. As Patrick already has, I say this with the caveat that we haven't heard the other person's side of the story.

With that said, if I were advising you as a coaching client, I would suggest that you need to consider three things. We'd talk them through in real life, but you can go away and contemplate them.

Consider having a chat with the HR person about how his actions are affecting your work and financial results. Come prepared with specific instances and issues.

Consider having a chat with the CEO on this. Given what you've said about company size, my guess is that you both report to the CEO. Have your homework done. Have specifics to talk about. Know what other companies are doing, especially other companies in your industry and especially companies that your CEO admires. Dollarize your analysis.

Consider that if the HR fellow is going to stay on, that company may not be a good place for you. Bringing bad news to the boss is often dangerous stuff, so if the CEO was instrumental in the hiring of the HR VP you may get defense instead of thanks. If there is a connection between the CEO and HR VP, such as family or pre-existing friendship this could be very dangerous.

Anonymous said...

Thank you for all your comments. All of the posts are excellent points and advice.

I think one of the main issues you all talked about is the CEO...and you hit the nail right on the head with that. I have already been using many of your comments in my dealings with VPHR and CEO, and will continue.

I think the VPHR will be sticking around for a while, because we have gone through 1 manager and 2 directors in 2 1/2 years (One left because they had a drunk driving issue - GO figure), so the CEO really wants this one to VPHR is a YES MAN and show me a CEO that does not love that.

I wanted to make one thing clear...the Wine and Cheese is being served at an Open house in which the Candidates and Managers will have the opportunity to consume before and after interviews. Would like to see more comments on that topic.

Also, 99% of our employees are considered Exempt, which I have brought up as an issue detailing the regulations and my analysis, but they see it as a non issue and not have made any strides in correcting employee classification if they really should be considered non-exempt.

Thanks again for all your comments. I can not wait for the Kegger in the parking lot so I can drink my worries away. (Just kiddn - I will not be attending the event because I have an out of town business meeting)

Anonymous said...

(If you're willing to give me a raise when I asked, why weren't you willing to earlier? Are you just trying to pay me the least amount possible? This job stinks. I'm going to take my new salary and go apply for new jobs. Maybe I can get two increases within months!)


This is exactly what happened to me over this spring and summer. $70K-->$100K, in four months.

Wally Bock said...

Your description of all the people who've been in the HR job in the last couple of years lead me to suggest that someone should analyze both the job and your company's hiring process for it. My experience as a consultant is that when a job has defeated several people in a row, it may be that the job is not doable in its current form. The other possibility is that you're hiring process is flawed and you're bringing in people who simply can't do the job or fit the culture.

One more thing. You say, "VPHR is a YES MAN and show me a CEO that does not love that." My experience of the many CEOs I've served under, worked with and studied is that none of the good ones like that. One challenge that every CEO faces is getting honest, accurate, and complete information. People who tell you what you want to hear don't help you do that.

The Engineer said...

I wasn't clear on your "what used to be" aside in your first sentence. Used to be small or used to be rapidly growing?

I think Patrick and Wally hit my two points. Business is bottom line. If an employee doesn't add profit then why are they there. A CEO who "loves" yes men is not a great CEO. If you are still growing, you will soon be hitting a plateau that your CEO lacks the skills to get past. Not that this can't be overcome.

Anonymous said...

This is the latest email VPHR just sent to everyone in the company -

Hello everyone –
If you have not heard, tonight’s tailgate event to kickoff the Eagles home schedule will include food and drinks… including beer. Hooray beer! After all, what’s an Eagles tailgate party without beer?

We are not asking people to sign a waiver for the event, and we are not issuing drink tickets. The expectation from the CMC is that you, as a responsible adult, will use your best judgment regarding drinking.

If you notice someone having even one too many (or if you do yourself), let’s make sure we react appropriately and take precautions to get the person – or you - home safely.

Remember, this is a work-related, social event, and we want all of our co-workers to relax and enjoy themselves. Please keep that in mind as you enjoy yourself this evening… have a great time, and please do not overindulge. Thank you all for doing your part to make this a fun and relaxing event.

Responsible adults drinking beer responsibly at a company event… Brilliant!


Just another HR lady... said...

"We are not asking people to sign a waiver for the event, and we are not issuing drink tickets. The expectation from the CMC is that you, as a responsible adult, will use your best judgment regarding drinking."

THIS is from an actual HR person?? No, you must be teasing us. :-) Sorry, but the employer is liable for any alcohol-related incidents if they are not managing the bar properly... i.e. issuing drink tickets, licensed bartender who will cut people off, offering taxi chits, etc. etc.

You should talk to your in-house or external counsel immediately about this.

P-NUT said...

Finance and HR need to be at the table with the CEO on business issues and you seem to have quite a few. Unless you have personal equity with the CEO going to him on these issues may come across as "complaining" and will antagonize him and the HR guy against you. Instead. I would recommend that you go back to the basics of your job i.e your job is to watch the numbers and highlight red flags etc. The beauty of your job is that numbers talk for themselves and if you have a budgeting process show where everyone is against budget, show how much of annual budget has been spent already and show the HR scorecard.e If you do not have a budget then recommend instituting a budgeting process and ask the HR guy how much money he needs for the rest of the year and how much he will save the company for the rest of the year. You should be doing this with all functions. In this case, do your analysis, show it to the CEO or leadership team, let them come to the conclusions you have come to by just looking at the data ( include cost of recruiting, cost of events etc and the ROI as someone mentioned). Get the HR guy to give you the data. This is much easier if you already have a process in place so work on getting the process down and run the process well. Talk to the CEO about process not about "joe" or "bob" or "jim". Then if nothing changes then you have 2 options - 1. suck it up
2. leave

If you win, then you would have gained a lot of equity with everyone and if you lose then you would have learnt something about yourself and others. either ways you would have added new skills to your portfolio such as change management, influencing etc. Until you push yourself you wont know what you are capable of achieving and this is a great opportunity to test your skills at managing this situation. All the Best

Dan Erwin said...

Sounds to me like you need to rethink your recruiting objectives. Admittedly, HR is a black hole in many organizations, but there is no excuse for such flagrant ignorance. I think you need to go back to the basics. What is recruiting? What are our strategic needs? How can we best achieve those objectives?

The post reminds me that HR can be a serious embarassment. The successful people in the field are tying their objectives to corporate strategy, sitting at the table with the CEO, and making certain that their recruits can deliver on business objectives.