As we look forward into 2014 it’s interesting to look at pioneering companies for examples of HR practice. These companies not only provide alternative examples of how an organisation might structure and manage its staff, but also perhaps, an insight into what organisations of the future might look like.
Towards the end of 2013, US companies Netflix and Zappos shared insights into their organisations. Netflix built their HR philosophy on minimising employee control and having a ‘context’ driven leadership model in order to encourage empowerment. Zappos meanwhile started a process to completely scrap their hierarchy, creating instead a ‘holacracy’, without managers and job titles. Going forward, employees will be allocated into semi -autonomous work circles. Zappos say all of this is in order to boost innovation, empowerment and reduce bureaucracy. Whilst all of this might sound extreme, Zappos arguably represent the logical conclusion of the employee engagement agenda. After all surely you engage staff by empowering them?
Within more traditional sectors, we saw GlaxoSmithKline scrap individual employee performance related pay. This was on the basis that their previous remuneration policies were driving damaging behaviour. Seemingly running contrary to many in the sector, Swedish bank Handelsbanken, got on with running their successful bank without short term bonuses and by devolving decision making to branches (progressive yet refreshingly old fashioned). Both examples were encouraging; I have long been a sceptic of individual performance related pay and the damage it has caused in the banking sector has been huge.
What does this tell us? The previous examples are a curious mix of companies looking for sustainability and innovation. Netflix, Zappos and even Handelsbanken have accepted that you simply cannot control every facet of your organisation and to try and do so is counter-productive. They are talking about terms such as empowerment but backing these words up with meaningful action. Crucially these companies make their decisions based on a desire to be a leader in the market place. Is 2014 the time for more companies to get on board with this philosophy?