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Business

The cost of ignoring waste in HR

ELBONOMICS - Rey Elbo - The Philippine Star

When I give free management consultations to bankrupt companies, I feel happy and fulfilled, but my wife does not. We have lived in the same house for four decades, yet we live in two different worlds. She asks, “Why give it for free?” Without hesitation, I say, “It’s a charity gift wrapped with dignity for those who deserve it.”

I explain that I don’t want insolvent companies to close shop with hundreds of their workers roaming out in the street contributing to chaos. In my little way, my PSR (personal social responsibility) is akin to corporate social responsibility.

According to bestselling author Dan Ariely in his opus Predictably Irrational (2008), social norms must prevail when we deal with those who can’t afford to pay. That’s the logic of Patricia Non, the founder of open community pantries in Quezon City in sharing what she can to feed the poor during the pandemic.

Social norms are communal relationships where people give attention to the well-being of others without expecting anything in return, except for the beneficiaries to pay it forward to other people in need.

On the other hand, market norms are between and among money people and organizations.

Ariely extracted the idea from collaborative research on “relationship dynamics” by Margaret Clark, Judson Mills and Alan Fiske. It is based on exchange relationships, where people give something in exchange for something. In marketing, this is called ex-deal agreements.

Ariely explains it pretty well. “When we keep social and market norms on their separate paths, life hums along pretty well. Take sex, for instance. We may have it for free in the social context, where it is, we hope, warm and emotionally nourishing.

“But there’s also market sex, sex that is on demand and that costs money. This seems pretty straightforward. We don’t have husbands (or wives) coming home asking for a $50 trick; nor do we have prostitutes hoping for everlasting love.” In other words, it’s better to pay than be ruined by free sex, which in the words of American filmmaker Woody Allen is “the most expensive sex.”

Lean HR

Last week, I continued experimenting with the effects of social and market norms on a client who’s interested in making Lean Human Resources (HR) happen to his organization. Lean HR is about improving work processes by reducing wasteful or unnecessary steps or procedures so that greater value can be created.

For example, it means reducing the number of days in hiring a typical worker to two weeks instead of the usual one month, without sacrificing the quality of hires. You can understand the value if you compute the losses that the company may suffer in the event of an inordinate delay in securing a new hire. In general, it’s not exactly cheap at an average of $25 a day. Let’s start counting by using the eight types of waste commonly known as the acronym DOWNTIME. In HR, some issues include the following:

Defects. When a sizeable number of newly hired employees resign from their jobs within six months. One reason for this is poor employer branding or toxic management.

Overproduction. When some workers within a department are overworked while other workers have nothing to do. One reason is the lack of a multi-skilling program.

Waiting. When job applicants are kept waiting at the reception area to transact business with HR. One reason for this is HR’s wrong mindset that “beggars are not choosers.”

Non-use of resources. When employee ideas and other resources are routinely ignored or rejected. One reason for this is the lack of respect for people’s ideas.

Transportation. When HR hires an applicant who lives in a distant place rather than an equally qualified person who lives near the office. One reason is the subjective hiring process.

Inventory. When HR builds a database of applicants’ resumes without understanding that its value could degenerate in time. One reason is its wrong interpretation of empire building.

Motion. When HR forces all applicants to do in-person interviews with different executives when they could do an online panel screening.

Extra-processing. When an HR policy requires leave applications to be signed by multiple signatories in violation of an efficient one-on-one supervisory rule.

The list of issues could be endless. However, many HR people consider them as non-issues even in the midst of David Ulrich’s prescription that they must wear the four hats of an employee champion, change agent, administrative champion and business partner. Even if HR people know about it, they are often ignored, if not a waste of their time, talent and treasure.

Non-issues?

In psychology, such a situation is called the “region-beta paradox.” It explains the most common error of people when they treat issues as non-issues. They would claim they have better things to do. Anyway, they’re mild annoyances. We brush them off while thinking it’s not exactly bad and should not adversely affect their jobs in the long term.

It’s like having an apartment with rats, bed bugs and other insects. They’re not exactly bad. It’s not worrisome unless the landlord jacks the rent to more than ten percent. Or in the case of Lean HR, when militant employees and their union start making noises until you discover yourself in front of the chief executive officer nervously explaining yourself.

 

 

Rey Elbo is a quality and productivity improvement enthusiast. Email your story and get valuable insights for free to [email protected] or via https://reyelbo.com

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