Through benchmarking the team set out to learn what comprises
"best practice" in both academic and for-profit entities which share
some common characteristics with MIT. The team, with the assistance
of MIT faculty and Hay/McBer, identified several appropriate
organizations with outstanding human resource practices. After
screening interviews, six organizations were selected:
AT&T/Universal Card, Genzyme, Lucent Technologies, University of
Pennsylvania, Johns Hopkins University, and Johnson& Johnson.
The agenda for the benchmarking interviews was again based on the nine human resource practices in our scope. We also tried to understand how the organizations' "best practices" had evolved.
The overall trend in the delivery of modern human resource
practices is to refocus the traditional orientation of the Personnel
Office from conducting transactions alone to combining service
delivery and strategic planning. For example, at Genzyme, Human
Resources (HR) is 70% a business partner and 30% a service provider.
Johnson& Johnson has organized HR into three segments: Thinkco,
Touchco and Serveco. Thinkco is a strategic unit providing direction
to individual areas; Touchco exists within the business unit to
deliver specific human resource practices; Serveco handles human
resource transactions across the organization.
In the aggregate, three key factors are necessary for high level
human resource practices: strong leadership, clear organizational
values, and ongoing measurement. Success requires faith in
administrative processes, use of technology, and high-level
involvement of HR in the overall strategic planning for the
organization. Every organization the team interviewed cited the
critical importance of high-level leadership to advocate for change
and to clarify the focus of future human resource practices.
To better define and clarify the values of the institution or
corporation, several organizations have specified human resource
principles that provide a basis for the development and
implementation of new practices. For example, one multi-national
organization developed a process to review practices world-wide,
after which it issued a statement defining seven principles of
leadership and appointed people to guide the subsequent
implementation of new human resource practices.
These organizations used employee surveys, exit interviews and cross-functional meetings initiated by HR to measure the success of changes in human resource practices.
Certain approaches to human resource practices were fairly common across many of the organizations interviewed.
In general, planning and appraisal processes focus on developing the individual; letter grades are not used. Several organizations use a "360" evaluation tool in which subordinates, colleagues, and supervisors contribute to an individual's evaluation. An important outcome of this process is a training plan that links both the needs of the individual and the goals of the organization. Positive, honest feedback is critical. Mark Melliar-Smith from Lucent Technologies emphasized this point by saying "Ninety percent are good people. Don't lie to the 10% who are poor performers."
The key to individual and team development is training. Characteristics of successful organizations include: budgeting training expenses and releasing individuals to attend training sessions; providing centralized core training appropriate for the job; training managers, coaches, and supervisors in work and family issues; and providing training specifically tailored to the needs of teams. These organizations also provide tuition assistance which may be applied to a wide variety of educational programs.
Consistently, career planning is described as being the responsibility of individual employees. Several organizations said, "the job belongs to the company; the career path belongs to the individual."
Technology is widely used by central HR for recruiting, hiring, retaining and assessing performance and competencies. Nevertheless, screening, interviewing and final decisions remain the responsibility of the business units. The documentation supporting these transactions is processed and stored electronically. The organizations believe this technologically enhanced hiring process is valuable to both the internal and external candidates.
This practice is linked to succession planning and is used to fill key positions in most organizations. Several invest money and time to identify and develop leaders.
Succession planning is of growing importance to organizations as they come to realize that professionals who have achieved a high level of success within a particular discipline have not necessarily developed all the competencies for leadership. Several organizations have taken specific steps to develop new leadership. For example, Johns Hopkins has established a Leadership Institute that may contribute to succession planning. Also, AT&T/Universal Card requires every manager to have a succession plan which identifies three professionals who can do the job immediately, three who could do it with training, and three who have longer term potential.
Successful job designs offer flexibility; are guided by what needs to be done; and meet the demands of the marketplace.
Job classification remains the responsibility of central HR. Problems occur when standards for classification are not applied.
Total compensation and rewards are being desegregated into base
salary, discretionary bonuses, and non-financial recognition. For
example, AT&T provides cash awards for ideas which lead to cost
saving. At Lucent Technologies, bonuses are based on a combination of
individual merit, the performance of the business unit, and the
performance of the corporation. Mark Melliar-Smith commented that
"recognition is almost as good as money in our environment."
Together, the experiences of these organizations offer guidance to MIT as it works to expand its human resource practices, to deliver base line services more efficiently and to develop the workforce to meet the strategic needs of the Institute.
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