Can Wells Fargo’s New Plan Save the Day?

Based on research I have done in workplace dynamics, how employees are assessed is the single biggest determiner of an organization’s culture. Wells Fargo provides a classic case study, validating this assertion.

In my book From Bully to Bull's-Eye I describe how performance management systems can either motivate people to perform to full potential or create toxic environments where people are pitted against each other and or have to resort to unethical and illegal behaviors to meet expectations.

Wells Fargo in rolling out a new plan based on customer experience to replace sales goals, a good step in their initiative to regain the trust of their customers. But to be successful the new plan must be part of an overall initiative.

 The new plan should not be considered a magic bullet, but must be in agreement with everything an organization does, including how it is governed and its structure, decision making, risk management, communication, and intelligence gathering.  All of this determines the outcome of value exchanges with various stakeholders and aligns the company with values, beliefs, principles, purpose, visions and initiatives. 

Based on my experience, if Wells Fargo takes the approach I suggest they will regain the trust of their employees first—who will then become positive ambassadors to regain the trust of their customers. In this I wish them the best of luck.

Is Your Company’s Performance Management Plan Designed to Get Rid of You?

Performance management is all too often a wolf dressed up in sheep’s clothing. Touted as a path to self-improvement for employees, such programs are actually structured to get rid of people. And forget about employee review plans. They might as well come with a pink slip. This hard fact became apparent at the end of November when an Amazon employee survived a leap off a 12-story building at Amazon’s Seattle headquarters. The employee had previously sent a public email to CEO Jeff Bezos as well as hundreds of his colleagues. According to sources, he had applied for a transfer but instead was put on an “employee improvement plan.” In corporate speak this means: “you’re toast.”

I have written before about the toxic culture at Amazon, which was exposed in this New York Times article. Amazon isn’t the only company to take on this practice. Kimberly-Clark and Proctor & Gamble were also notorious for this. This sort of toxic environment doesn’t bode well for productivity in the long term—and it certainly has done no favors to national reputation for any company. 

Photo: REBusiness Online

OHIO: In The Twilight Zone

Last week I spoke at the Women in Leadership Conference at Ohio's Bowling Green University. The theme at this conference was Pathways to Promotion and Leadership. 

I agreed to speak at the event on the condition that it would not be censored and that it “may offend some sensitive ears and sponsors of the event.” I clearly indicated that if the organizers of the event were uncomfortable with this, then I was the wrong person to give this talk.

The reason for my caution is according to the World Economic Forum, Ohio ranks 40th out of the 51 States in gender diversity. Despite billions of dollars being spent across North America on diversity, harassment, sensitivity and performance management programs over the past few decades by organizations and corporations, the results have been beyond dismal. Given that fact, I did not, and will not, give a motivational speech full of human resource gobbledygook that only provides false hope.

During my speech, the event coordinator approached Patrick Mundt, the Executive Director of the Faas Foundation who was monitoring the power point slides, and demanded he hook me from the stage. She indicated that a few of the sponsors had walked out in disgust. 

However, Patrick and I observed an engaged audience, many taking notes and nodding in agreement. Afterwards, I received not one but two warm and enthusiastic ovations and many came up and thanked me for my frankness. One person said that those who came up to speak to me afterward were brave to do so because they were likely being watched by their co-workers or supervisors in attendance, and it could be a career-limiting move for them. This was particularly significant as Ohio is, an “at will” state where employees without a contract can be fired without cause – something that was repeated by a number of people at this event and two others I spoke with in Ohio. 

The event organizers did not come to me to express their displeasure—nor did they thank me for giving the speech. In response to a note we sent thanking the event coordinator for hosting us and allowing me to speak, we also asked her to confirm that sponsors were upset with what I said, which she did. 

Reflecting on this experience, it became obvious to us that Bowling Green University is more concerned about their financial sponsors than changing Ohio's dismal standing in gender diversity. Leaving the state, I felt I was leaving the Twilight Zone!

 Credit: Jessica Vailat/The Red List

Kimberly-Clark: How a Company Lost Its Soul

More and more companies seem to be instituting management software and scrapping their existing performance management systems, like Kimberly-Clark, under the premise that these new management systems are actually good for their employees. In principle, having more regular “check-ins” rather than yearly reviews sounds like an improvement for workplace culture. Having a digital system track employees’ feelings sounds like a substantive attempt at measuring workplace culture. All of these things “sound good.”

However, the truth is a lot more complicated than that, and a lot more troubling. Firstly, as documented in this article from The Wall Street Journal, the celebration of a high rate of turnover is a definite red-flag. Going from a family-type organization where employees didn’t have to worry about layoffs, to an organization focused on weeding out “dead wood” is not something to be celebrated. The turnover at Kimberly-Clark is approximately 10% annually, and that’s something they’re telling their employees is a good thing: “Among the employees whose work was rated ‘unacceptable’ or ‘inconsistent,’ 44% left the company voluntarily or were let go. [Chief HR Officer] Ms. Gottung said she is ‘pretty pleased’ that low-performer turnover has been rising.” Being proud of a high rate of turnover is a problem, and there’s no ifs, ands or buts about it.

Additionally, according to the article, only 25% of the comments received by Kimberly-Clark on their management software, Workforce, were considered “constructive,” with the rest being seen as “neutral” or mostly positive with no further breakdown. I would interpret the word “constructive” as “negative” in this context, and I would go even further to say that this is typical of the way most engagement surveys are seen by their companies. Most companies that use these types of surveys tend to emphasize the positives, rather than using the “constructive” criticism to actually improve their organization. The focus is placed on eliminating low-producing or unfulfilled employees, rather than trying to improve their productivity by making sure that the right people do the right tasks in the right way at the right time – or, as the rest of us call it, basic management. The goal becomes to lose what management sees as “dead weight,” without regard for these employees as people – relying exclusively on cold management systems to do most of the dirty work.

The argument for these kinds of management systems is that they can help managers weed out poor performers, which can cut down on costs. While Kimberly-Clark’s stock prices have risen since they started implementing their own management software, these HR changes aren’t really seen as the instigators of that change. As the WSJ article states, “Behind-the-scenes changes to human-resources practices are largely invisible to analysts… [who] attribute Kimberly-Clark’s rising stock price to declining commodity prices, aggressive cost-cutting, growth in emerging markets and a generous dividend payout.” If costs were such an issue for the company, and if excess employees are seen as the source of those excess costs, it begs the question – what have the managers been doing for all of these years? Long-term shareholders should have challenged Kimberly-Clark for not managing performance, if it was viewed as a problem serious enough to completely shift their HR outlook.

Fundamentally, what it comes down to is that these types of computerized management systems take the human element out of the way people are managed and assessed. They enable management structures to turn their backs on their employees without looking them in the eyes. At their base level, these systems are tools for deflection rather than tools for progress. Placing a low-performing employee on a “performance improvement plan” is the kiss of death. One bad review can cost you your job. These systems enable workplace bullying and mismanagement more then they truly help, even if they appear on the surface to be more regular than yearly reviews.

Here’s a suggestion: how about, instead of only speaking to employees once a year, or only receiving digital “check ins” from them somewhat regularly, managers try the radically advanced strategy of actually speaking to their employees? Far more can be learned about an employee’s work load, performance and perspective by just stopping by his or her desk and asking how they’re doing. It’s simple, but it can make a huge difference, both for workplace culture itself and for evaluating workers.

Photo: Liz Gottung, chief human resources officer, and Scott Boston, vice president of human resources, at Kimberly-Clark’s Roswell, Ga., campus. PHOTO: DUSTIN CHAMBERS FOR THE WALL STREET JOURNAL