We hear from many CHROs or Heads of HR that the decision to invest and partner with an executive search firm is an added “cost” that should be avoided and that their internal talent acquisition teams should be able to execute the search. CCI recently conducted a webinar, “Why the Heck Should You Do a Retained Executive Search?” and one of the topics covered is the cost of a bad hire. This critical topic presents a challenge not only when it comes to direct costs but also the indirect costs and impact that hiring a bad executive means to an organization.

A study by renowned economist Eileen Appelbaum and sociologist Ruth Milkman found that a bad hire can translate to as much as 213% of a c-suite level employee’s salary. So if your company hires an executive at $300,000, the total direct costs of a bad hire could exceed $600,000! Those direct costs include the compensation loss of base salary, sign-on bonus, any incentives, benefit costs, expenses, etc. However, they also include the cost of labor paid to the TA team to find and hire the executive, the cost of labor to interview the executive, and all other internal recruiting technology costs (LinkedIn, digital ads, ATS, etc.). Suddenly, the cost of hiring the right executive search firm, typically 1/3 of the total of the first year’s expected compensation, seems like a worthy investment! Sure, you could get lucky, but why leave your organization’s success up to chance? The smarter strategy is to mitigate that risk by investing and partnering with a reputable executive search firm.

As companies face a turbulent economy and high interest rates, the need for resilient and dynamic leaders is even more vital to a company’s success. While the money lost from a bad leadership hire is a concern, the non-monetary considerations of productivity, time, and morale are even more impactful. Every bad hire comes with indirect costs. Those trickle-down effects cause your business to lose money in other areas. At the executive level, the costs are multiplied:

Lost productivity

A bad leadership hire can mean declining sales, missed deadlines, and costly mistakes. It’s bad decisions that keep making bad decisions. All of them cost time and money to correct. If other senior-level individuals end up picking up the slack for the weakest link, their productivity will suffer too.

Lost time

A recent survey of CFOs found that managing underperforming employees takes up one whole day every week. Those costs are increased if your underperforming employee is at the executive level. Think about it; we spend 80% of our time managing the 20% of the underperformers. Imagine how much time it takes to manage an underperforming executive.

Lost morale

Regardless of seniority, every bad hire comes with a loss of morale. When someone can’t pull their weight, it puts more stress on everyone around them and can even drive valued employees to leave. When your bad hire is at the leadership level, morale costs exponentially increase. It can lead to “quiet quitting,” turnover, and a total lack of engagement.

A bad leader puts your whole organization in danger. Their poor decisions could cost the company customers or even damage your company’s reputation. Furthermore, removing the bad hire opens you up to a new set of risks. As long as their role is vacant, your company will be more vulnerable to external forces. A lot can happen in three months, including losing market share and forfeiting your competitive advantage. Vacant roles add to the costs through the loss of time and productivity.

So now that we fully understand the direct and indirect costs of a bad hire, how does partnering with a reputable retained search firm prevent this from happening?

1. Reputable retained search consultants bring a search methodology, industry/functional expertise, decades of recruiting experience, and the dedicated resources required to map the market for talent.
2. They focus on building relationships with executives who are passive and not active in their search, ensuring the very best talent who may not be looking is considered.
3. They guarantee their work. If a search fails and the candidate does not work out, the search firm is required to conduct a replacement search.
4. CCI Executive Search offers assessments and an option for executive coaching to onboard new leaders to bring them up to speed faster. This program has increased productivity by 53% for new leader hires.
5. They conduct thorough references and have networks to confirm the experience of various candidates through back channels.
6. Most importantly, good firms seek to fully understand the cultural nuances of the companies that hire them. A good search partner ensures that the style and leadership of each candidate will fit into the organization’s culture. This is the number one reason that leadership hires succeed or fail.

In the end, their expertise could save you months of work and a significant amount of money, all while finding you the right person to help lead your business.

Jeff Harvey

Vice President, Executive Search

CCI Consulting

The post Avoid Costly Mistakes: Invest in Retained Executive Search appeared first on CCI Consulting.

Embracing succession planning as a strategic imperative is not just about preparing for the future; it’s about shaping it.

If you’ve been an HR leader, you’ve likely had your fair share of talks with leadership about who’s next in line. Maybe it’s because someone is retiring, there’s a reorg coming, or someone’s not cutting it performance-wise. But often, these conversations only heat up when they’re necessary. For many companies, succession planning becomes a checklist item: filling roles as they open up. What often gets overlooked is the stability factor – business continuity. A bit of planning can ensure businesses go steadily forward, grow, and thrive.

Surprisingly, even though it’s so vital, a lot of organizations take a reactive approach to succession planning. Deloitte’s research shows a whopping 86% of leaders see it as a big deal, but only 14% feel like they’re doing it right. That gap between words and action means it’s time for organizations to tackle the hurdles that can come with succession planning. As an HR leader, you know how important it is, but you may struggle to be heard and get a seat at the table. By taking a thorough and strategic approach to succession planning, and making a strong case for why it matters, you can boost your credibility and prove your worth in this key process. That means being able to clearly explain why it’s crucial and handle any objections that come your way. Let’s dive into how you can lead the charge for a more comprehensive approach to succession planning.

Prepares for the Future

Change is bound to happen in the workforce. Whether it’s due to retirements, unexpected exits, or shifts in the market, organizations need to be ready to fill leadership gaps quickly. A smart succession plan helps by grooming talent from within, ensuring there’s a pool of qualified people ready to step up when needed. If the talent doesn’t exist internally, you can begin recruiting well in advance. According to research from the Society for Human Resource Management (SHRM), companies with a formal succession plan handle leadership gaps better and have shorter periods of transition, which keeps business running smoothly.

Supports Growth and Keeps People Engaged

A good succession plan isn’t just about filling seats; it’s also about helping people grow. By giving employees clear paths for advancement and chances to develop their skills, organizations can boost engagement, motivation, and loyalty. Studies show that employees stick around longer when they see opportunities to learn and move up. A strategic approach to succession planning focuses on developing talent, which means building a team that’s ready to innovate and hit those business targets.

Reduces Risks and Keeps Things Steady

Being proactive pays off when it comes to succession planning. By having a plan in place, your organization can minimize the chaos that comes with leadership changes. When you identify and develop future leaders ahead of time, you’re less reliant on outside hires, which can be expensive and time-consuming. Plus, promoting from within keeps things consistent, since internal candidates already know the company culture inside and out. Research from Deloitte shows that organizations with solid succession plans are more stable and better able to handle leadership and market changes.

Even though the case for strategic succession planning is strong, you might hit some roadblocks in the form of resistance when pushing for its importance. Let’s tackle a few common objections and ways to overcome them:

Immediate Needs Take Priority

Objection: “We’re swamped with pressing tasks right now, so we can’t spare time and resources for succession planning.”

Response: Short-term goals are indeed crucial, but neglecting the future could put us at risk. Certain key roles, if left empty, could seriously impact our current priorities. A smart succession plan ensures we can transition without disrupting our core operations.

Tight Resources

Objection: “We’re stretched thin as it is; we can’t afford to invest in a full-blown succession planning process.”

Response: Setting up a solid succession plan can be a big ask in terms of time and money. But it’s not just about filling positions—it’s about safeguarding our business and staying nimble. A well-done plan will pay off down the line by reducing risks and making us more adaptable. Plus, developing our existing talent is faster and cheaper than hiring from outside.

Fear of Upsetting the Apple Cart

Objection: “Employees might see succession planning as a threat, and morale could take a hit.”

Response: Clear communication is key here. We need to explain the benefits of succession planning, emphasizing that it’s not about replacing anyone but ensuring we all have opportunities to grow and succeed. We can even involve some employees in the process and get their input to build buy-in.

In forward-thinking organizations, succession planning isn’t a nice-to-have—it’s a must-have for staying resilient and relevant. It’s gone from being a routine HR chore to a strategic cornerstone for navigating an always-shifting landscape.

As an HR professional, you’re instrumental in making sure your organization gets on board with succession planning. By highlighting its perks, addressing concerns with a focus on business outcomes, and tying it all back to strategic goals, you’ll be pivotal in setting the company up for long-term success and stability.

The post Succession Planning – A Guide for HR Professionals appeared first on CCI Consulting.

If investigative expertise does not exist within the HR Department, there is limited capacity due to timing or the complaint includes members of the HR Department, it may be necessary to consider hiring an external professional and unbiased expert. This ensures all parties involved are treated in a professional, legally compliant manner while ensuring impartiality which fosters a transparent and unbiased assessment of the situation. Integrity is equally crucial, as it upholds the credibility of the investigation and the HR department. These guidelines provide an overview of steps to consider when conducting an HR investigation. They will also be useful in your consideration when hiring an outside expert investigator.

1. Act Promptly and Confidentially

Upon receiving a complaint, act promptly to initiate the investigation process. Oftentimes it may be unclear if a complaint is considered a “formal” complaint vs. an “informal” comment or retelling of a story about how someone has been treated. When unclear, ask the person or witness to clarify. Regardless of the formality of how the complaint is made, treat all allegations with the utmost confidentiality to protect the privacy and well-being of the individuals involved. Assure the complainant, typically in writing, that their concerns will be taken seriously and

handled discreetly. Only involve those in the organization on a need-to-know basis. This may include your internal or external attorneys and Senior Leadership. If needed, separate parties from one another to de-escalate the situation.

Timeliness plays a key role should an allegation ultimately result in litigation. Courts will look at how promptly an organization took steps to mitigate the alleged problem, including conducting a comprehensive investigation.

2. Gather Information

Begin by gathering as much information as possible regarding the alleged complaint. Interview the complainant to understand the nature of the incident(s), including dates, times, and any witnesses who may have been present. Encourage the complainant to provide any documentation or evidence supporting their claims, such as emails. Gather this information sooner rather than later as it is important to have the employee recall as much of the situation as possible while it is still “fresh” in their memory. This also promotes a level of caring and understanding on behalf of the organization.

3. Identify, Prepare and Interview Witnesses

Probably the most crucial step in the investigation is the interaction with witnesses. Identify and interview any witnesses who may have observed the alleged harassment or have relevant information. Preparation is key when getting ready to conduct witness interviews. Questions should be prepared in advance to ensure that questions are open-ended, non-judgmental, and will be somewhat consistent for every witness. Determine in advance what information is necessary to prove or disprove an allegation. Allow witnesses to provide names of other witnesses if warranted.

Conduct interviews in a neutral and private setting, ensuring privacy and sensitivity to the concerns of the witnesses. These days many interviews can be conducted remotely depending on the type and/or culture of the organization. Consider what makes the most sense in this regard. While virtual interviews may be easier from a privacy perspective, it is often more difficult to read body language, facial expressions, etc. Depending on the extent of the allegations and the number of witnesses involved, it may be warranted to use multiple investigators to conduct the investigation. It will be important for all investigators to have the same understanding of the allegations and the goals of the investigation.

Active listening is a crucial skill that investigators must employ to gather accurate and comprehensive information. It involves not only hearing what the interviewee is saying but also paying close attention to their tone and any underlying emotions or motivations. By actively listening, investigators can establish rapport with the witness demonstrate empathy, and

encourage them to share relevant details more freely. Additionally, active listening enables investigators to ask pertinent follow-up questions and clarify any ambiguities, leading to a clearer understanding of the situation under investigation. Ultimately, active listening fosters trust and cooperation between the investigator and the witness, facilitating a more thorough and effective investigative process.

4. Interview the Alleged Perpetrator

Once you have gathered sufficient information, interview the individual(s) accused of the behavior. Conduct the interview fairly and impartially, allowing the accused to present their perspective and provide any evidence or witnesses in their defense. Remain objective, and unemotional and avoid making assumptions or judgments prematurely. Use active listening skills. Remind the person that information will be shared with those on a need-to-know basis only. Also, remind the individual that any threat of retaliation against anyone involved is also considered unlawful and can result in consequences.

5. Review Documentation and Evidence

Thoroughly review any documentation or evidence provided by both the complainant and the accused. This may include emails, text messages, witness statements, or surveillance footage, depending on the nature of the allegations. Evaluate the credibility and relevance of each piece of evidence carefully. If necessary, re-interview certain witnesses to gain clarity.

6. Assess the Credibility of Witnesses

Assess the credibility of witnesses by considering factors such as consistency, demeanor, and any potential biases. Cross-reference their statements with other evidence and witness testimonies to ensure accuracy and reliability.

7. Maintain Detailed Records

Maintain detailed records of all interviews, evidence gathered, and steps taken throughout the investigation process. Document findings objectively, noting any discrepancies or inconsistencies that may arise. These records will be invaluable in ensuring transparency and accountability.

8. Determine Findings and Take Action

Based on the evidence gathered and interviews conducted, determine if the claim is substantiated or whether the alleged behavior has violated company policies and/or legal standards. The details of the investigation, including summaries of witness statements, evidence collected, facts and analysis of findings that either support or refute the allegation should be contained in a written comprehensive report. Any relevant documentation should also be included. By maintaining thorough documentation throughout the investigation process, HR professionals can ensure accountability and compliance with legal requirements. Additionally, well-documented investigations provide a foundation for informed decision-making and will help mitigate the risk of legal challenges in the future.

If poor behavior is substantiated, take appropriate disciplinary action against the perpetrator(s) in accordance with company policies and applicable laws. Be sure to document this as well!

9. Follow Up and Monitor

Remember to follow up with the complainant and other involved parties to ensure that the behavior has ceased and that appropriate measures have been implemented to prevent a recurrence. HR and Management should monitor the workplace closely for any signs of retaliation or further misconduct and take swift action if necessary. In some cases, a predetermined sequence of follow-up meetings may be appropriate – perhaps in 30, 60, or 90 days.

10. Provide Training and Education

Finally, use the findings of the investigation as an opportunity to reinforce the company’s commitment to preventing harassment or discrimination and fostering a culture of respect and inclusivity. Provide training and education to all employees on harassment prevention, bystander intervention, and reporting procedures to empower them to contribute to a safe and respectful workplace environment. For Supervisors and Managers, know the requirements for providing training in their particular states.

While investigations are the last thing we want to think about as HR Professionals, how an investigation is managed within an organization can have widespread consequences. There is an impact not only on those involved directly with the investigation, but also on a company’s culture, reputation, and, depending on the outcome, potentially the bottom line. Conducting an HR investigation requires a careful and methodical approach to ensure fairness, privacy, and accountability. By following these guidelines diligently and with compassion, HR professionals can effectively address allegations and uphold the values of dignity and respect in the workplace while ultimately contributing to the overall well-being and success of the organization.

Melissa Dugan

Vice President, Consulting

The post Navigating HR Investigations: A Guide to Preparation and Resolution appeared first on CCI Consulting.

Interviewer: “Sharon, thank you for joining us today. To kick things off, could you share with our readers a bit about your journey to becoming the CEO of CCI Consulting?”

Sharon: In the year 1990 at a New Year’s Eve celebration, several friends and I wrote letters to ourselves predicting what we would be doing in the year 2000.  We sealed the letters and put them away barely remembering them as 10 years progressed. On the eve of January 1, 2000, I did not recall what I had written.  Two things gave me pause.  I predicted that I would have a baby girl which I did in 1993 and that I would quit my corporate career and work in the consulting world.  In December 1999, I began this journey.  I made the move just in time to fulfill my prediction.  But I assure you that that decision and that prediction were unrelated…I had no idea what I wrote.  What I am thankful for is that I created some sort of self-fulfilling prophecy.  It was meant to be and after many years of ups and downs, successes and mistakes, trials and errors I think we can say we made it.  What propelled that success?  Having the right people, the right plan, the right attitude, and someone up there looking out for me!

Interviewer: “Sharon, reflecting on your career trajectory, what are some of the pivotal moments or experiences that have shaped your leadership journey?”

Sharon: You need to manage your career and often that involves risk. My most pivotal moment was leaving the comfort of my corporate position and assuming the role here at CCI. It was a big risk. The company was small with a somewhat ill-defined path forward, yet I felt this sense of personal vision for what could be. At the core the work was good; assisting people to navigate their career opportunities because of job loss. When I truly looked inside my aspirations and assessed what motivated me, I identified my true passions. I loved building new lines of business, start-ups, and ventures.  Making this move checked off those boxes but challenged my confidence and comfort level.  To many that would cause angst but for some reason I found myself signing an offer and rolling up my sleeves. I never looked back.

Interviewer: “As a prominent woman leader in the consulting industry, what challenges have you faced along the way, and how have you navigated them?”

Sharon: In small business, every day, week, month, and year is a challenge, and you are truly managing at that level until you gain scale and momentum. You do not have a corporate trove of money to back you up… you are literally “eating what you kill.”  Managing a business at this micro level requires diligence and lots of patience!  Patience is not always my strength so learning to set reasonable goals and milestones so you can self-manage your tolerance level is critical. What really gets you through are the wins and successes. Happy clients, returning clients, clients telling other clients about you… that is momentum.

Interviewer: “Women’s History Month is a time to celebrate the achievements and contributions of women throughout history. Can you share some insights into how you’ve seen the landscape change for women in leadership roles over the years?”

Sharon: Sounding a bit cliché here but when I entered the workforce as an adult, there were very few women leaders and those at a “leadership” level were in a more supervisory capacity. But that was then, not now. So much is published about how many women are or are not in top positions at top companies or on boards, but I don’t measure the progress women have made that way.  Women own businesses, women run schools, women send people to the moon, women create life-saving drugs, treat patients, and adjudicate legal issues… we do it all and we are raising families while doing so… the big change for me is that we now recognize the shapes and sizes of leadership, count our accomplishments, and pat each other’s backs. Women have been leading for a long time… we now celebrate both that history and the “History in the making”.

Interviewer: “Diversity, equity, and inclusion are critical topics in today’s corporate world. How does CCI Consulting prioritize these values within its own organizational culture, and what role do you see them playing in shaping the future of leadership?”

Sharon: It starts with a commitment to the team and our clients.  We owe it to ourselves to ensure that we have the best and brightest on the team working to meet our goals.  To achieve that we need a strong diverse team able to both share and learn; we need to help each other grow in understanding the unique and diverse needs of each other and our constituents. DEI is not just a statement on a web page. A commitment to a diverse team is inherent in our practices, our policies, and our loyalty to that commitment. Culture is organizationally driven, and leaders need to nurture the respect and reverence needed to prosper in an inclusive and caring environment. 

Interviewer: “Mentorship and support networks are often cited as essential elements for career advancement, especially for women. Can you speak about the importance of mentorship in your  journey, and how do you encourage mentorship within your organization?”

Sharon: My mentor was named Vin… who better to help me navigate the world of work and the path to leadership than a great leader and champion of talent, regardless of gender, race, size, etc.; find your Vin!  A Vin is someone you trust and trusts you, has confidence in you even when yours may be waning, knows your capabilities, and expects you to live up to them.  It’s like a parent on steroids in your grown-up world.  Not all days are created equal.  When those bad ones creep in your mentor is your safe place to go vet the issue.  On the good days, your mentor is a great place to go for a secret pat on the back.  We all need those.

Interviewer: “Looking ahead, what advice would you offer to aspiring women leaders who are navigating their career paths in today’s competitive business landscape?”

Sharon: I am going to use one of those seemingly overused phrases… have confidence and be optimistic. Nothing blows up a path to success better than an “Eeyore” attitude and a posture of self-doubt.  Know where you want to go directionally but don’t be afraid to veer off course or take a twist here and there.  In no journal did I ever write that I wanted to find a small company where I could hang an entrepreneurial hat, make it grow, and learn more than one life’s amount of knowledge.  Whether luck, serendipity, or design, find your right path.

Interviewer: “Finally, as we celebrate Women’s History Month, are there any women leaders—past or present—who have particularly inspired or influenced your leadership style and approach?”

Sharon: So many… women like my grandmother and mother overcame tremendous adversity to be stellar role models for whom women should be… strong, kind, steadfast, and altruistic.  Imagine if all leaders embodied those attributes.  Women who led the way often did so behind the scenes, confident in their achievements, never needing public affirmation (e.g., the World War II code breakers or scientists on the Manhattan Project or the mathematicians who calculated our way into space). These were servant leaders offering intellect and inclusion. Imagine if all leaders embodied those attributes. Women who are confident in their purpose make history every day.

Sharon Imperiale’s journey to success serves as a testament to the resilience, determination, and vision that define women leaders who pave the way for future generations. As we continue to honor Women’s History Month, let us draw inspiration from Sharon’s insights and experiences, championing diversity, inclusion, and women empowerment in all facets of leadership and beyond.

The post Celebrating Women’s History: Sharon Imperiale’s Story of Success appeared first on CCI Consulting.

1. When to ask for references? This depends on the role and the confidential status of the candidate. In higher education, references are often checked before an interview, particularly for academic positions. However, asking for references from a CFO candidate who is gainfully employed before even interviewing would be inappropriate since it might alert their current employer and remove their confidentiality. We sometimes conduct “back-channel references” through our networks as a search firm. This has risks since it might alert others that a great candidate is on the market, or it can violate candidate confidentiality unless you are certain your sources are trustworthy. One of the values of working with a search firm is their ability to conduct proper due diligence. When dealing with a candidate who confidentially explores new opportunities from their current employer, we typically ask candidates for references when an offer has been presented. All offers are contingent on a successful reference and background check process.
2. What references should candidates provide? We typically recommend a 360 approach for all leadership roles to ensure we have data points from a former boss, peers, or subordinates. Depending on the seniority of the position, a good starting point is recommending candidates provide 3-5 references. One of the most critical parts of analyzing references lies not in the list supplied by the candidate but who was not offered. If a former boss is glaringly missing, there may be a reason for concern. It is essential to ask the candidate why they didn’t provide people just as much as why they offered others.
3. What questions do we ask? While this depends on the role and the management responsibilities, we tend to recommend open-ended questions that elicit a free-flowing response. Some examples we provide:
   • What did you learn from this executive?
   • How does this person perform in hiring talent?
   • How do they motivate their team?
   • How do they mentor and help promote employees?
   • How do they react under pressure or with deadlines?
   • What has this person done concerning self-improvement?
   • What are their most significant accomplishments?
   • Were there any consistent themes in terms of strengths?
   • What words would you use to define them as a leader?
   • Would you hire or work with them again?

   We work closely with clients to create a specific list of questions for the references tailored to the role. Again, preparation and research are critical.

4. If all references always come back great, why do we check them? People will be hesitant to provide a reference that they are unsure will give positive feedback. In our experience, about 90% of all references come back positive (10% are concerning, which is why we check them)! The key to cutting through all the glowing recommendations lies in a unique ability to ask open-ended questions and ask for the reference to provide an example. Typically, references confirm data and accomplishments on the resume and how the candidate performed in interviews. The references can provide reinforcing, consistent themes to be cognizant of, areas of improvement, ways to manage the candidate’s onboarding better, and how best to manage the new leader. If used correctly, references can help get the new hire up to speed faster.

While resumes and interviews provide essential glimpses into a candidate’s qualifications and demeanor, the true depth of their potential lies within their references. From a candidate’s perspective, the provision of suitable references is not just a formality but a strategic imperative, serving as a testament to their credibility and readiness for the role. Search firms or hiring organizations, must be well prepared to vet references and understand the context of the discussion. In addition, exercising this process with discretion and confidentiality is paramount when ensuring the integrity of the hiring process and the interest of both parties. Ultimately, references stand as an added pillar of truth and insight to benefit you during the evaluation process and to help influence your efforts toward retaining suitable talent.

The post Reference Checking Best Practices appeared first on CCI Consulting.

The Challenge

Job boards, most notably Indeed, are becoming the spokesperson for companies. Indeed leads the charge when it comes to highlighting salary ranges on their job board. While it helps companies attract top talent and build a trustworthy atmosphere, it also raises questions about the precision of the salary information they are utilizing. The most important question is, are these ranges accurate? The short answer is…they can be. They can also fail to account for variables such as experience, education, and market trends for the specific role advertised. All of these are incredibly important when considering a candidate’s compensation. Additionally, these should be some of the only factors for pay to truly differ from employee to employee when working in the same role.

How does Indeed gather data for its posted salary ranges?

Indeed gathers salary information from various sources to provide estimated salary ranges for job listings. These sources include employer submissions, third-party surveys, job postings, and user-generated content. Indeed uses algorithms to analyze and aggregate this data, considering factors such as job title, location, company size, and industry. While these factors can assist in pinpointing salary ranges, third-party surveys and user-generated content allow for too many biases to be considered the “end-all-be-all” of compensation information. Indeed’s efforts are commendable, fostering transparency and promoting fairness for job applicants is a step in the right direction. Yet, the responsibility extends beyond just disclosure of pay ranges; it delves into accuracy, precision, and internal equity. Think of it as not just revealing your hand but making sure every card is in its right place.

Accurate salary data becomes the key ingredient for companies looking to dodge pitfalls in their pay structures. Inaccuracies can lead to disgruntled employees, internal chaos, and, in severe cases, legal headaches. As for recruiting candidates, Jeff Harvey, VP of CCI Executive Search, wisely notes how posted salary ranges can help narrow down a candidate pool by reducing it to only those candidates whose salary demands fall within the established range for an open position. This becomes especially crucial in executive hiring, where pay may vary drastically depending on the size of the organization.

To ensure the precision of posted salary ranges, organizations, and job boards need more than a guess – they need meticulous strategies. One tool employers can use is salary surveys to ensure their compensation packages remain competitive, attract top talent, and align with industry standards. Salary surveys collect and analyze data on compensation across various industries and roles while providing valuable insights into prevailing salary ranges, trends, and market conditions. Survey data is a useful tool for companies to navigate changes in compensation, enabling them to align pay with market trends for specific roles.

But even with salary surveys, the accuracy lies in thorough reviews, while considering variables like experience, education, and market trends. The goal isn’t just fair compensation but a strategic positioning that puts companies at the forefront of attracting and retaining top talent. Think of it as not just playing the game but becoming the master of it.

Commitment to Compliance

As we progress through 2024 and beyond, companies can’t kick back – they need to flow with the ever-shifting dynamics and regulations surrounding pay transparency. Vigilance over state laws and local ordinances, especially those coming into effect in 2024, is crucial. Legislation changes will influence pay practices, and companies must show commitment to compliance while maintaining a positive employer brand.

The journey towards successful pay transparency isn’t just about embracing platforms like Indeed; it’s a commitment to the precision of salary disclosures. Leveraging insights from salary surveys equips companies with the tools needed to navigate the intricate landscape of compensation, ensuring a fair, competitive, and internally cohesive pay structure. As we step into 2024, let’s not just embrace transparency but take it in stride, armed with knowledge, and a dedication to staying informed about the latest developments in employment legislation. After all, in the realm of compensation, an open, fair, and informed approach benefits everyone. Allow precision, knowledge, and compliance to blend effortlessly into a fair and equitable workplace for all.

The post Pay Transparency on Your Terms appeared first on CCI Consulting.

Generative AI has been the ‘topic du jour’ in the media for some time now with reporting that it will be world-changing – everything from saving to destroying humanity. As a business leader, you may have likely formed impressions about it. Perhaps you have played with ChatGPT or similar tools like BARD or Claude. Here is a sample of impressions we have heard:

• “ChatGPT is great for personal use, but it doesn’t know about my corporate information.”
• “I can see Generative AI is a disruptive technology with the potential for major impact in the workforce and workplace, but is it ready for prime-time business use?”
• “There is so much change happening in the Generative AI marketplace, how do I find the signal in the noise? I am ready, but how do I begin?”
• “It makes up information and cannot be trusted.”
• “Privacy risks are too high since we don’t understand how the data is being used by the AI model.”
• “Is it anything more than just writing emails and automating job specifications?”

The concerns raised are valid, yet it’s important to recognize that generative AI is a persistent and evolving technology. 2024 promises significant developments and breakthroughs that may surpass our current expectations and we can anticipate that many of these issues will be mitigated as the technology advances.

Having worked in technology and specifically in the data world for over 25 years, and in learning and working with Generative AI for the past year, we hope to offer some useful guidance on Generative AI capabilities and uses, what happened in 2023, and how to get moving.

Generative AI Capabilities and Use Cases

You could be forgiven for thinking that ChatGPT = Generative AI. However, ChatGPT (and chatbots in general) are just the tip of the iceberg. A chatbot is an application of Generative AI. However, Generative AI has so many other potential applications that it can be difficult to draw a box around what is possible with the technology.

The unique capability of Generative AI is the ability to understand and generate language. Natural Language Understanding (NLU) enables software to interpret and comprehend human language, identify sentiments, and extract content and semantic meaning. Natural Language Generation (NLG) allows software to speak or write in a way that sounds just like humans. Together, natural language understanding and generation enable more natural and seamless human-technology interactions, as software can both understand and appropriately respond to human language.

At the heart of a Generative AI application is a Large Language Model (LLM). Think of an LLM as an artificial brain that “knows” about the world. An LLM is trained on vast quantities of textual data including books, websites, scientific papers, social media conversations, and creative works like poetry and performative scripts. The training process equips the LLM with the natural language understanding and generation capabilities just discussed. Don’t lose sight of the fact that an LLM is just software that runs on computer hardware.

It is important to separate in your mind two things; the natural language capabilities of an LLM and what it “knows.” Initial impressions from using ChatGPT may lead you to think it only knows about what it has been trained on. A variety of approaches are available to extend the knowledge accessible to an LLM to corporate data including documents and databases.

Before we examine specific use cases in the HR domain, let’s begin by reviewing five general uses of Generative AI.

• Writing – An LLM can assist in writing by generating coherent and contextually relevant content. It understands user prompts, gathers information, and produces well-structured content on a given topic in a desired format.
• Summarizing – For condensing large volumes of text, an LLM can summarize information, providing concise and relevant overviews. This is useful for quickly grasping the key points of documents or meeting transcripts.
• Translating – LLMs excel in language translation by understanding the context and nuances of phrases. It helps bridge language gaps by providing accurate and natural-sounding translations between various languages. This includes the ability to translate natural language into computer code.
• Extracting – When dealing with vast amounts of textual data, an LLM can extract specific information. It understands text and retrieves relevant details, making it valuable for tasks such as research or data analysis.
• Agents – An LLM can act as a reasoning entity that can invoke other programs to perform actions. This is particularly useful for automating repetitive tasks or interfacing with external systems.

It’s important to be aware that many of the vendors we collaborate with are integrating Generative AI into their core product offerings. This integration will continue in full force over the next few years. The real-world use cases presented below are designed to inspire and guide your thinking about this emerging technology. They are not specific to any vendor’s application but rather provide a broader perspective on how Generative AI can be utilized across various platforms and scenarios that you may encounter regularly.

• Use Case #1 – Personal Augmentation Assistant

Consider a scenario where you, an HR leader, are navigating unfamiliar territory in your role or industry. Your responsibilities could involve anything from implementing HR software to creating an extensive HR dashboard or integrating complex legal changes into company policies. In these situations, Generative AI tools can be a significant asset.

These tools serve as your personal augmentation advisor, granting you access to in-depth knowledge that’s often restricted to specialized fields like IT and Legal. For instance, you could use a platform like ChatGPT to draft in-depth project plans, define specific requirements, select the right vendors, and create critical inquiries. This method reduces your reliance on domain-specific experts, empowering you with the necessary knowledge and insights to lead in areas beyond your traditional expertise.

However, it’s important to note that while Generative AI is an invaluable tool for enhancing understanding and decision-making, it doesn’t replace the need for legal counsel or professional consultation. Rather, it helps you become more informed and formulate more effective questions in your role.

• Use Case #2 – Utilizing Generative AI for Meeting Insight Extraction

Generative AI is widely known for its ability to summarize meeting transcripts, but its potential extends far beyond just summarization. It can extract valuable insights from any meeting, which are often missed or forgotten.

Meetings between two or more people are often full of ideas and insights, but capturing their real value can be challenging. These valuable thoughts can fade from memory or remain unknown to those not in attendance. In the flow of conversation, many ideas and comments are lost because of our limited capacity to process information. While traditional meeting minutes offer a summary, Generative AI enables a deeper exploration. It can extract subtle details and overlooked ideas.

Consider the context of important project meetings. These meetings often involve complex discussions and decision-making processes that are pivotal to a project’s success. However, the full depth of these interactions can be challenging to capture and analyze. Generative AI offers a solution by analyzing meeting transcripts to uncover key insights that could influence the project’s trajectory.

By applying Generative AI to these transcripts, you can gain a clearer understanding of various aspects that are critical to project management and development:

• Communication dynamics among team members.
• Collective attitudes towards project goals and challenges.
• Problem-solving strategies employed during discussions.
• Creative solutions and innovative ideas proposed.
• Leadership and management skills displayed during the meeting.

This analysis can provide a richer, more detailed view of the project’s progress and the team’s performance, which might otherwise be overlooked in traditional meeting summaries. It ensures that valuable insights from these important project meetings are recognized and utilized effectively.

• Use Case #3 – Specialized Employee Knowledge and Know-how Transfer

Many organizations possess specialized knowledge, often concentrated in a few experts, or dispersed across the workforce. This includes knowledge about processes, products, customer interactions, or technical details. A significant challenge is the potential loss of this valuable knowledge due to factors like employee turnover or retirement.

Generative AI introduces a novel solution to this challenge. Consider a corporate knowledge base created to preserve and expand this intellectual capital. It begins with a collection of initial documents. A chatbot, programmed to interact with employees, asks targeted questions to draw out specific knowledge. Additionally, audio recordings of process walk-throughs or expert interviews can be incorporated as sources of information. This approach enables the organization to capture and retain knowledge continuously, turning it into a cumulative, strategic asset.

The knowledge base evolves as the chatbot, through regular interactions with employees and contractors, compiles and synthesizes information. Over time, this process builds a comprehensive repository of the organization’s collective wisdom.

This dynamic knowledge base can then be made accessible to other employees via summary documents or another chatbot interface, revolutionizing the traditional method of knowledge sharing, which relies heavily on human-generated documents. This AI-driven method not only protects an organization’s internal expertise but also makes it widely accessible to its members.

Regarding security and privacy, just like current practices, there will need to be protocols to ensure that sensitive information is secured and accessible only to authorized personnel. This ensures that while knowledge is shared and preserved, it is also protected from unauthorized access.

2023 in the rear view and what is next?

There is much to cover but here are the key developments.

Open AI broadened their offering. Open AI introduced the pay-for “Plus” and “Team” versions of ChatGPT. The Plus version offers individuals new capabilities including the GPT-4 LLM and the ability to upload files for Q&A and analysis of data sets. The Team version offers a collaboration platform for a team to share their use of ChatGPT. OpenAI also now offers “My GPTs”. This is a feature that allows users to create and manage their own custom instances of the GPT. This feature is particularly useful for those who want to tailor the GPT model for specific applications or to fine-tune it with their own data.

Competitors to OpenAI, both commercial and open source, have created many LLMs with different capabilities and cost models. OpenAI is not the only game in town. The best OpenAI LLM is the most capable but not all use cases require such a capable LLM. The main thing to understand is that there can be more cost-effective choices than what OpenAI offers. There is a lot of energy in the Open Source LLM space, and we expect organizations to leverage those offerings in their Generative AI solutions.

Point solutions appeared in the marketplace filling obvious product opportunities. The most obvious example is the explosion of note-taker solutions. Note-takers are AIs that join online meetings, transcribe the conversation, and then offer summaries of the conversation. The top-tier solutions distinguish speakers and offer the capability to ask questions about the conversation.

Existing Automation tool vendors added Generative AI capabilities to their products. Existing automated business processes can now take advantage of LLM capabilities beyond the chatbot type of use case. Lights out business processes can use LLM capabilities to skip steps that may in the past have waited for humans to perform.

These developments lead us to believe that 2024 will be the year of custom chatbots and AI automation.

Chatbots will be created with specialized knowledge and will provide a new way to interact with corporate data and external current events.

Organizations will rethink existing business processes and leverage Generative AI capabilities in automated processes. Human tasks that require the understanding and synthesis of spoken or written content will be replaced by LLM capabilities. People will still play a critical role in the review of LLM outputs. Keeping a human in the loop will be important to ensure quality. We expect the focus in 2024 will be dramatically improving the efficiency of business processes. Better, faster, and cheaper.

What is my strategy?

Every organization is unique. Different business models, resources both human and non-human, and of course, unique constraints. So, what we offer next is a broad and general approach, recognizing there is no one-size-fits-all approach.

1. The first and most important step is to educate yourself and your personnel about Generative AI capabilities, risks, and costs. While it may seem like a daunting task, adopt a breadth-first approach by surveying the entire scene first before you get too deep. Get an understanding of the key capabilities of Generative AI so that when new tools are announced, you can identify where they fit. Consider this a core competency your organization needs to develop.
2. The second step is to engage with your internal IT function to gauge their attitudes about and awareness of Generative AI. Hopefully, your internal IT function is up to date and has already developed a good understanding of Generative AI. If they have not, it will be difficult to implement a production solution without their involvement and support.
3. The third step is to create a list of potential use cases in your organization. We recommend you identify potential problems and challenges in your organization that you think Generative AI could help solve. Treat this as a first step in brainstorming a portfolio of potential projects. Focus on tasks that humans perform today that involve listening to transcripts, reading documents, and researching on the web. In most cases, there will be subsequent analysis, data extraction, or synthesis of the gathered information. Define the use cases as accurately as possible. This is the most important step in creating a solution using Generative AI. No idea should be excluded during this process.
4. The fourth step is to assess the feasibility of each use case. What is the potential value? What are the risks? Finally, what is the development and ongoing operational cost? A qualitative answer for each of these questions is a fine place to start. No need to do a detailed financial analysis at this point.

With a list of feasibility-scored use cases, implement a “Crawl, walk, run, fly” approach to one (or more) of the highest-scoring use case(s). “Crawl, walk, run, fly” is often used to describe the gradual progression or stages of development in various contexts.

• Crawl – Start with basic, foundational steps. Implement a pilot or prototype to understand feasibility. Gather insights and feedback to inform future stages.
• Walk – Expand on successful elements from the crawl phase. Refine processes and address any issues identified during initial implementation. Prepare for increased scale while maintaining a controlled pace.
• Run – Implement the initiative at its intended scale. Leverage refined processes for optimal efficiency. Establish mechanisms for continuous improvement based on real-world usage.
• Fly – Explore cutting-edge solutions and technologies. Embrace flexibility and adaptability to changing landscapes. Foster a culture of ongoing improvement and exploration.

Final Thoughts

You probably noticed that most of our discussion paints a rosy picture. We have focused mostly on the value of Generative AI for organizations. There are real challenges to adopting the technology though. Without much elaboration, here are the key challenges.

• Data Quality and Availability – Garbage in, garbage out applies to Generative AI too. Quality data is a key requirement for successful use of Generative AI. Expect that curation of existing data will be required before use in a Generative AI solution.
• Regulatory Compliance – Navigating the evolving regulatory landscape, especially concerning data privacy, is a significant challenge. Staying compliant while innovating can be a delicate balance.
• Talent and Expertise – There is a high demand for skilled professionals in Generative AI. Attracting and retaining talent and ensuring continuous skill development in this rapidly evolving field is essential for successful implementation.
• Managing Expectations – It is important to manage stakeholder expectations regarding the capabilities and limitations of Generative AI. Overpromising can lead to disappointment while underestimating the potential of the technology can result in missed opportunities.
• Cost Management – The financial aspect of implementing generative AI, from development to deployment and maintenance, can be considerable. Balancing the cost with the expected ROI is a significant challenge.

Addressing these challenges requires a thoughtful approach, involving not only technological solutions but also strategic planning, policy development, stakeholder engagement, and ongoing education and training.

We hope after reading this content that you can see that Generative AI has many applications in your business and you do not need to wait to get started.

To learn more about AI-driven solutions to empower your business’s processes, visit https://www.claritee.ai/.

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“We are excited to welcome Tony into the CCI family,” said President of CCI Consulting Brian Clapp. “Tony brings with him over two decades of broad experience in management consulting. He is the perfect addition to our team, and we feel confident that he will lead CCI Consulting to new growth,” said Sharon Imperiale, CEO and Owner of CCI Consulting.

In this role, Tony will oversee the company’s commercial strategy, including sales, marketing, and revenue management to drive profitable growth for the company.

“This is an exciting time to be part of the CCI team. More than ever, organizations require talent solutions from an expert and caring partner to tap the full potential of their people and navigate the new world of work,” said Tony.

Tony has over 20 years of experience in the consulting industry in sales, leadership, and product development. Expert in change management, business strategy implementation, and organizational development and design, he brings a proficiency that will complement CCI Consulting’s talent and offerings.

Tony holds a BA in Economics from Carleton College and a Ph.D. in Political Science from Indiana University. He is also a Prosci Certified Change Practitioner.

The post CCI CONSULTING WELCOMES TONY MATEJCZYK TO THEIR TEAM appeared first on CCI Consulting.

WORKFORCE TRENDS IN 2024

TREND #1:

Pay transparency is becoming the new normal – With the passing of pay transparency regulations in many states, there is increasing pressure to ensure that companies have considered their overall design and management of executive and employee pay. Currently, where required, regulations enforce the addition of pay ranges in job postings when looking for prospective candidates. Ultimately, pay transparency can affect an employer’s brand, reputation, and ability to attract and retain talent while ensuring some level of pay equity.

WHAT HR CAN DO:

Accurately represent pay ranges – When publishing job postings, it is important to look at the compensation strategy that currently exists within the organization. If none exists, now is the time to start the process. Start with well-written job descriptions. A job description is the driver for determining the worth of a particular role. Work in tandem with managers to update responsibilities, competencies, education, and job experience needed to perform the role. Using updated job descriptions, conduct a market study for each role. Compare your organization with others in your industry of similar size. Leveraging industry-leading compensation databases ensures the delivery of salary benchmarking, grades, and market pricing data that is directly relevant to your organization’s strategic compensation plan. Analyze current internal salaries against the market price for each role to determine how the current compensation for each individual employee compares and formulate a plan to address this. Determine the best way to communicate externally, for job posting purposes, but also internally for the benefit of employees.

Generally, the goal is to take steps to ensure a compensation strategy that meets the needs of the organization while being mindful of the regulations. Use this as an opportunity to build strong relationships, loyalty, and trust with your employees and future employees.

TREND #2

Hybrid workplace remains the mainstay – A couple of years post-pandemic, many organizations are still struggling to normalize the workplace. Recognizing what employees value from their employer is evolving and things like workplace flexibility, and remote working, remain a strong pressure. Many companies continue to struggle with the future of the physical workspace. There have been some big headlines recently on companies who have mandated their employees return to the office, but most companies have settled into a hybrid model.

WHAT HR CAN DO:

Offer development and team-building opportunities – Even though we have had a lot of practice working in a remote environment, collaboration, communication, and building relationships remain an obstacle for many. By offering development and team-building opportunities, individuals and teams are likely to work together more effectively.

TREND #3

Economic uncertainty and challenges attracting and retaining talent remain – “Changing Conditions Ahead” would be an appropriate caution sign for the talent market in 2024. The road ahead is shrouded in fog as traditional measures of economic health and the labor market have become more difficult to discern and have not been as responsive to levers pulled by governing agencies. The 2023 recession that was widely expected never materialized. The labor market demonstrated remarkable resilience throughout 2023, despite the Federal Reserve’s moves to increase interest rates and tap the breaks on growth; however, the inflationary pressures impacting business materialized. Employers were to be in the driver’s seat again, however, making changes to popular hybrid and remote working arrangements forged during the pandemic have resulted in employee discord and damage to the company’s reputation. Prognostications for 2023 did not play out as anticipated. Couple economic uncertainty with the ongoing challenge of attracting and retaining skilled talent, major demographic headwinds, and an election year on the horizon; uncertainty is the norm. It is tough out there for human resources professionals.

WHAT HR CAN DO:

Be prepared and mindful of changes to the labor market – The message to business leaders and HR professionals is to stay alert to shifts in the business and talent landscape and be prepared to act to mitigate risk to your organization. As the year has drawn to a close, there has been an uptick in layoff activity across a variety of industries, and unemployment data indicates that it is taking longer for displaced individuals to land their next position. If your business circumstances indicate a reduction in force may be necessary, a reorganization or merger has resulted in redundancies, or a single individual is being separated from the organization; being mindful of how your employees are treated in the offboarding process will make a significant difference in the preservation of your brand and your ability to attract talent in the future.
An important part of being prepared for changing business conditions is to proactively establish a relationship with a reputable Career Transition service provider before an emergent need occurs. Ensuring your departing employees are personally assisted in preparing for their next career opportunity will have an impact on their future success and perception of the organization. Harsh reviews on social media are a red flag to talent considering joining your team. Transparency, empathy, and direct support through Career Transition programs help minimize reputational risk to your business. It also allows remaining employees to stay engaged and productive by knowing their peers are supported in the exit process. In the ever-changing business world, the employees released today may be those you will need to return when the market shifts again.

TREND #4

Concern grows with effective hybrid leadership and the influence of AI technology – In 2024, the business landscape will undoubtedly continue to gain complexity. Given the increasing number of recent lay-offs and uncertainty in the market caused by geopolitical controversy and a precarious election, leaders will likely find themselves navigating the challenging terrain of the heightened anxiety and burnout of key members of their teams while also striving to maintain effective leadership in a hybrid model. In addition, leaders must keep their finger on the pulse of AI-influenced technological advances that they need to leverage to remain current and competitive.

WHAT HR CAN DO:

Leverage Executive Coaching services – In this environment, Executive Coaches will prove to be invaluable allies on the leadership journey, offering a unique blend of professional guidance and personalized support to leaders on the brink. This level of complexity can impede decision-making and compromise the overall well-being of leaders. Executive coaches specialize in helping these leaders regain balance by identifying stress triggers, clarifying priorities, and fostering a resilient mindset.

Executive coaches are the strategic partners that give leaders the edge they need to enhance their effectiveness and remain successful. From facilitating effective communication across dispersed teams to promoting inclusive leadership, executive coaches play a crucial role in helping leaders hone these capabilities. By offering a safe space for reflection and equipping leaders with tools to foster team cohesion, these coaches contribute significantly to the success of leaders in today’s dynamic work environment.

TREND #5

Top talent is reluctant to take on a new opportunity – Candidates, particularly passive ones, are becoming increasingly selective amid changing market environments. At the executive level, the quality of the opportunity from the standpoint of compensation, benefits packages, growth potential, company, and challenges are critical, as the costs associated with changing jobs are higher in today’s volatile market. Many companies are having difficulty “closing the deal” on their own. Even organizations with robust, experienced internal recruiting teams are facing a great deal of unexpected occurrences and surprises coming up during (and after) the offer process (e.g., extensive negotiations, counteroffers, etc.).

WHAT HR CAN DO:

Partner with a trusted executive recruiter – The intense competition for executive talent in today’s market has exploited another facet of the executive hiring process – the treacherous time between the offer and the start date. While losing a candidate to a last-minute competing offer was not previously unheard of, the frequency and aggressiveness of incidents happening in today’s market require CEOs, Boards, and hiring teams to respond strategically to compete.
To best mitigate risk, CEOs and hiring teams must change their mindset. Know the fight is still looming, understand how risks may manifest themselves within the hiring process, and deploy thoughtful, proactive tactics to meet the demands of today’s talent market. This is where a trusted executive recruiter can add a lot of value, shaping the perception of candidates and aligning a company’s value proposition with a candidate’s goals and requirements. A well-seasoned executive recruiter knows how to truly partner with organizations and candidates to ensure the best possible outcome for both, marrying together their mutual long-term success.

TREND #6

Defining your Employee Value Proposition (EVP) Statement – According to the Mercer 2024 Global Talent Trends© Survey, when asked “What are the top priorities for HR in 2024”, 61% of respondents said EVP. An EVP is a statement of the benefits, perks, and opportunities that an organization offers to its employees. The goal of an EVP is to attract, retain, and engage employees, and to help build your employer brand.

WHAT HR CAN DO:

Human Resources plays a huge role in defining an organization’s EVP. HR can take these three immediate steps to understand and drive your organization’s EVP. These include:

• Collect employee feedback. When employees feel like their voices are heard, they’re more likely to be engaged and invested in their work. Collect data through an engagement survey or focus groups to understand what is most important to your employees.
• Offer internal career development. It is estimated that 40% of employees in the US have changed jobs or roles since 2020. An internal mobility strategy will help your organization become more agile and efficient in moving and developing existing employees so that you can grow your business’s best asset: Your People!
• Offer development options. In addition to the search for better work-life balance, pay, and benefits, a big reason employee are quitting their jobs is a perceived lack of professional development and career growth opportunities. In a 2021 report by Monster, 45% of surveyed employees said they would be more likely to stay at their current jobs if they were offered more training. Employees respond with better performance and higher commitment when they know you care about their development.

The post Trends and Predictions HR Leaders Need to Know for 2024 appeared first on CCI Consulting.

So much has been tried, but in the end, other than technology, there is not much of a difference since social psychologist Douglas McGregor called for engaging employees in performance assessments and goal setting more than 70 years ago. Since then, innovations in performance management have been tried, but the experiments always seem to fail or take hold. In the early 1980s, GE’s infamous forced ranking system promised to revolutionize performance management and increase productivity by heavily rewarding the top performers and eliminating the bottom 10%. Many companies followed suit, but the process of forced ranking is broadly seen as ineffectual since individual performance is not on a normal distribution curve (also known as a vitality curve).

Coming out of the pandemic, we have seen a strong uptick in clients looking to update and modernize their performance management processes and systems. They all generally have the best of intentions and have three objectives:

• Make the process fair and equitable.
• Create consistency across all their business units.
• Simplify the process so that it is less painful for everyone involved.

Many organizations will start with technological solutions they hope will make the process less painful, but this may be a big mistake if there is no strategy in place first. If experience has taught us anything, it is that hope is not a strategy.

When done right, performance management is a relational experience between an employee and their manager and can be a motivating experience that increases engagement, fosters a growth mindset, and helps you retain the talent you want.

The reality is that there is no one-size-fits-all approach to performance management and an organization must design the system that best fits their goals and culture. If you are thinking about revamping your performance management process, consider the following five best practices.

Start with a Performance Management Philosophy

Typically, emphasis is placed on the appraisal forms, ratings (pass/fail, three-point scale, five-point scale, etc.), and electronic systems. While these things are important to help you document and manage the process, it is most critical to start with and clarify your performance management philosophy. A performance management philosophy is your organization’s belief in how to help your employees achieve the performance level needed for success. A cohesive philosophy becomes the foundation for the process you wish to adopt and helps employees and managers understand how they will engage with one another related to performance management.

Focus on both the “What” and the “How”

Competencies are the red thread of any talent management strategy. When incorporated into performance management, core competencies become the behavioral benchmark by which all employees are measured. When you have multiple employees who are meeting their goals and objectives, it is the “how” they approach their job that will differentiate them from each other. My favorite example of this is when a client was considering promoting a rainmaker salesperson based solely on their productivity. While this person received top ratings for many years, the organization’s concern was that this salesperson had, as they described, created a wake in her path. When asked if this person had received any feedback on their behavior, not surprisingly, the answer was no.

Annual conversations focused on past events are being replaced by continuous feedback and coaching

Today’s employees want ongoing conversations about their performance. This trend is driven by the desire for real-time insights, skill development, and an understanding of how their work contributes to the organization’s goals.

Continuous feedback allows for quicker adjustments, enhances employee engagement, and fosters a culture of transparency and trust. However, the challenge lies in creating a process that facilitates and formalizes these regular interactions without becoming a time-consuming burden for managers and employees.

Managers and employees will need training on how to engage in productive conversations that are focused on critical behaviors, goals, and development.

Meet employees where they are

We have heard much about how Millennials and GenZers are motivated differently and have unique needs than GenXers and Baby Boomers. Much of this is an over-generalization, but one area where they are different is the high value they place on continuous learning and development opportunities. Performance management systems must evolve to include more focus on employee growth, skills enhancement, and career mobility.

It is important to avoid generic development plans that do not address individual employee needs or aspirations. It is essential to tailor development initiatives to suit each employee’s unique goals.

Performance Ratings Reimagined

Many companies are contemplating moving away from traditional performance rating scales. The debate is the same everywhere. The opponents of ratings say they are demotivating and distracting from the performance conversation. Proponents say that the ratings are needed to maintain a watermark for determining merit and bonus increases. Both sides are valid. The issue is not the numerical rating, but how the rating is described. Standard descriptors like Consistently Exceeds Expectations, Exceeds Expectations, Meets Expectations, etc., are a disservice to the employee. They are overgeneralized descriptors that only 20% of your employees will not feel bad about. I recall a conversation I had with a manager, who rated me an Exceeds Expectations. In the hopes of receiving the top rating, I asked him what I must do differently next year to obtain the coveted rating. His response was, “I don’t know, but I will know it when I see it.” I should have left that meeting feeling good about my appraisal, but instead, I was confused and unmotivated.

Instead of general descriptions or numerical values, adopt more qualitative and narrative-based performance descriptions that include a balanced description of their performance. If your organization isn’t ready to move away from ratings, avoid language that makes 80% of the organization feel underappreciated.

While change is a welcome shift towards fairer and more meaningful evaluations, companies must ensure these new assessment methods are consistent and well-documented, so that employees still receive clear, constructive feedback. Emphasizing development and an eye towards the future, you will find performance discussions to be more motivational and a tool for maintaining an engaged workforce.

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