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The East African : Sep 22nd 2014
48 The EastAfrican BUSINESS SEPTEMBER 20-26,2014 MANAG E R HR analytics: P≥edict what employees will do without f≥eaking them out COMMENTARY JOHN BOUDREAU “Effective predictive analytics depends on how real people react, not just on the elegance of the analytics.” I magine one of your managers walks into his subordinate’s office and says, “Our data analysis predicts that you will soon get restless and think of leaving us, so we want to make you an offer that our data shows has retained others like you.” Would your employee welcome the offer, marvelling at the value of your human resources analytics? Or, would that person see flashes of Big Brother, and be repelled by a company snooping on the data its employees generate as they work? Predictive analytics can en- able a customised employment value proposition that maximises mutual benefit for organisations and their talent; but at what point do predictive analytics become downright creepy? For example, predictive ana- lytics can reduce employee turnover costs. In 2009, the Wall Street Journal reported on Google’s algorithm that could crunch data from employee reviews and promotion and pay histories to determine which employees were most likely to quit. More recently, Google was lauded for pioneering the use of big data to predict employee turnover. This month, Credit Suisse said it calculates who is likely to quit and proactively offers them new career roles. But companies are looking be- yond cost savings to driving outcomes. Human resource predictive analytics is touted as transforming HR from retrospective and reactive administrative reporting to strategically integrated modelling to predict behaviours, attitudes and capabilities that drive tangible organisational outcomes. Some evidence shows a correlation between HR predictive analytics and organisational performance. This insight has produced a common mantra for HR analytics: “To know our employees as well as we know our customers.” It’s no coincidence that this sounds like consumer marketing. Marketing often influences consumers through unconscious habits, as described in Charles Duhigg’s book, The Power of Habit. Duhigg describes his own habit of buying a cookie in the company cafeteria at 3:30pm each day. He realised this was a combination of mid-afternoon boredom, and a desire to get away from his desk and to gossip. The cookie was incidental to the actual reward, but that made it no less a culprit in weight gain. Once he realised that, he could break the cookie habit. Suppose predictive analytics found such cookie-eating employees using your data on work schedules and cafeteria purchases, and you shared it with them, to help them be healthier? Would they be delighted or disturbed? Consider the following object lesson from marketing. In a 2012 article for The New York Times, Duhigg reported that Target marketing analysts had built a predictive algorithm to iden- behaviours in arenas such as employee benefits, health care and wellness. In the rush to ask “What can HR analytics predict?” perhaps the more vital question is “What should HR analytics predict?” Appropriate standards may vary across companies and demographic groups. Google employees have said to me, “As long as our data is held and analysed by our own HR department, we trust them.” PricewaterhouseCoopers re- cently reported in The future of work: A Journey to 2022, part of its “Future of Work” series, one-third of employees are comfortable sharing personal data with their employer, particularly millennials who will become a larger share of the future workforce. As Mark Berry, the vice president of human capital analytics and reporting at ConAgra Foods, told InformationWeek in 2013, “We want to know our employees as well as our customers,” adding that the company has safeguards for types of data that can and cannot be collected. How should those safeguards be constructed? What is the balance between predictive feasibility and predictive acceptability? These questions require artfully combining analytical rigour with sensitivity and insight into the humanity and ethics of work. HR is a discipline well-suited Predictive analytics can enable a customised employment value proposition that maximises mutual benefit for organisations and their talent. Picture: File tify pregnant customers based on their purchasing habits and other demographic information. They sent those customers ads for pregnancy-related products. Apparently, women responded negatively if they received pregnancy ads before they revealed their pregnancy. They responded more positively if they received “an ad for a lawn mower next to diapers.” Duhigg reported one executive saying, “As long as a pregnant woman thinks she hasn’t been spied on, she’ll use the coupons.... As long as we don’t spook her, it works.” Duhigg also reported that Target company executives said the article contained “inaccurate information,” so the story may exaggerate, but the lesson remains: Effective predictive analytics depends on how real people react, not just on the elegance of the analytics. Organisation leaders will increasingly confront such situations not only with their customers, but also with their employees. Consider the potential to influence employee to answering these questions, but are HR leaders prepared? Encouraged by constituents, product vendors and compelling stories, HR leaders understandably rush to increase analytic and data skills. But an even more vital and unique role for HR is to help leaders balance what can be predicted against what should be predicted. Harvard Business School Publishing Corp. John Boud≥eau is a p≥ofesso≥ of management and ≥esea≥ch di≥ecto≥ at the Unive≥sity of Southe≥n Califo≥nia’s Ma≥shall School of Business. C≥eating an ‘Us’ and seeing those instinctive ene≥gies kick in By GEORGE HALVORSON Harvard Business School Publishing Corp HUMANS ARE social creatures; we fall readily into group loyalties. We instinctively divide the world into “us” and “them” and treat others very differently according to which category they’re in. Activating us-versus-them energy is the oldest leadership tool in the box. In business settings, the effects can be wonderful. But they can also be terrible, giving rise to warring factions internally and cutting off collaborative possibilities externally. It’s surprising how many business managers are not very thoughtful about wielding this tool. In the 1970s, the social psychologist Henri Tajfel gave us the concept of social identity — the understanding that an individual’s identity is powerfully shaped by group allegiances. Researchers since have shown that when people in a work setting have a strong sense of being an “us,” morale and productivity rise. But of course it isn’t enough to simply declare to a collection of individuals that they are a team. If leaders want to see those instinctive energies kick in, they must give people a sense of why they exist as a group. So it’s instructive to consider the reasons that groups develop a sense of “us” on their own: Kinship, mission or a common enemy. Many workplaces default to a version of kinship based on function. A group’s shared identity reflects a common characteristic of its members — everyone’s an engineer, or everyone’s a radiologist. Doing similar work under the same conditions is enough to make an “us.” But it doesn’t provide much impetus for the group to align its energies and take bold action. If you want a group to move forward or to prevail in “When people have a strong sense of being an ‘us,’ morale and productivity rise.” competition, you’re better off communicating a compelling mission. Just be sure that the mission is persuasive and valuable enough to inspire team members to support one another’s efforts. Identifying a common enemy is the most potent means to get a group to snap together. But be careful with this one. When there is a clear loser in some setting, there is inherent instability; the loser often works doubly hard to reverse the situation and even to exact revenge. The energy of both sides can quickly turn purely destructive. The best of all worlds is when you can achieve a glorious sense of “us” without stoking animosity toward them. It’s tricky to accomplish, and it doesn’t happen naturally. That’s why as leaders we need to keep reaching for new tools. I am convinced that great leadership in the 21st century is a matter of endowing groups of individuals with a satisfying sense of “us” and channelling their collective energy productively toward noble ends. Will everyone agree? Maybe not, but for some it will make all the difference. More power to “us.” Geo≥ge Halvo≥son ≥eti≥ed as CEO of Kaise≥ Pe≥manente in 2013. He is the founde≥ of the Institute fo≥ Inte≥G≥oup Unde≥standing.
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