Article and Book Reviews

Published by Scott Neilson on 04 Dec 2012

From the worst comes the best…

This is an article written by a friend about the tragedy she experienced at the hands of Sandy…and the response that came from within many people to reach out and lift each other up.  The article appeared in the Ocean Star.

Kind Acts Abound with Sandy

It is in adversity that good intentions are transformed into acts of kindness. I often wondered what it would take to act on my inner voice often speaking to me to reach out to those less fortunate. Although I have always been an empathetic and kind person, I seldom actively sought out volunteer opportunities or exercised that desire to help others.  Sandy taught me a valuable lesson.

I, like so many others east of the tracks in Point Pleasant Beach, as well as up and down the east coast suffered life altering consequences from a powerful storm. The emotional, physical and mental damage seem irreparable.  For those most impacted, the struggle to face each day with a positive attitude turns quickly as more disappointments and disheartening news filters through. 

 If it were not for the superhuman efforts from organizations, and individuals alike, the horrific burdens shouldered by property and business owners, tenants and their families, would seem insurmountable.  But we are encouraged and our burdens lightened by stories and personal accounts of truly heroic acts and tremendous outpouring of generosity.  From the family who drove up and down our neighborhood streets in their RV days after the storm to provide food and nourishment where needed to those who volunteered from surrounding counties and states to offer their skills, prayers and donations of money, food, clothing and shelter… our encounters and experiences with evidence of love and caring reminds us of all that is good in this world.

But this is not a story of defeat, but for me, rather one of lessons learned and good intentions which have been transformed into incredible acts of kindness! God bless you and thank you.

Toni Capodano

Some good examples and lessons to think about…particularly at this time of year.

Published by Scott Neilson on 21 Oct 2012

Good article by Richard Branson

Check out this post by Richard Branson…about the use of social media in business.

I totally agree that execs should be making better use of communication technology, but I do not agree that the lack of it is due to lethargy.  It is more due to not being well versed in HOW to use it, the sense that it is “frowned upon” by employers, and also the uncertainty of where your pictures and posts may end up.

http://www.linkedin.com/today/post/article/20121019130632-204068115-why-aren-t-more-business-leaders-online

Still it is a good read and one we should all be aware of.

Published by Scott Neilson on 30 Nov 2011

The Art of Leverage in Management Negotiations

© Howard A. Matalon 2010. Strategic Advantage Series. All Rights Reserved

Leverage. One of the most commonly misunderstood and underappreciated concepts in executive and managerial negotiations.

Part of the problem with the use of the concept in employment negotiations lies with its overused primary definition: to increase force on an object. (As an aside, many older dictionaries used to carry an image of a man using a lever to move a  boulder.)

The secondary meaning of leverage, however, and arguably what the concept really  stands for, is something quite different, and far more compelling.

Positional Advantage.

Leverage in business dealings is all about finesse, not force. It is about recognizing and appreciating your negotiating posture from all angles and knowing when and how to change the dynamic of a negotiation to influence the other side. All career veterans understand this concept. And yet it is very difficult to apply in employment negotiations, particularly for high-level employees negotiating their first executive employment relationship with a new employer or at an internal promotion stage.

 The most illustrative example of this problem lies with the executive’s effort to translate the terms of an employment relationship into a beneficial written agreement. Remarkably, many executives remain reluctant despite the sophisticated corporate environment in which they themselves conduct business to seek written employment agreements because of preconceived notions about the relative leverage each side brings to the table in negotiating the employment relationship itself.

Understanding leverage in negotiations can quite literally make the difference between obtaining a successful position and sustaining it in the long run.

There are two competing dynamics that often discourage executives from either obtaining a written employment agreement or securing favorable terms in such agreements.

 When executives secure new positions, no matter how seasoned they are, they invariably regard their hire or promotion as a vindication or validation of their personal worth. (This is, of course, not how executives should view the matter but always do because of the personal investment of time and resources in their careers). By extension, an executive’s perception of an employer can, in certain situations, be heavily influenced by the validation process.

Working against that validation is the fear that somehow they will diminish the employers’ perception of them by overreaching at the bargaining table. Executives remain concerned (particularly given the present economic climate), that even the mere suggestion of asking for employment rights not readily offered to them will leave prospective employers with a negative impression of their new hire before the new relationship commences.

With this concern fixed in mind, many executives often forego discussion of a written agreement or changes to same, and simply take the leap of faith that the relationship will ultimately meet some or all of their expectations, or that their employer will come to appreciate their contributions and offer rewards in line with those expectations at a later date.

More often than not, however, executives fail to recognize that their positional advantage with an employer diminishes at every stage of the negotiation, and virtually disappears after the executive begins working for that employer.

Many executives who do not understand their positional advantage in these situations find themselves accepting from their employer terms of employment that barely define salary and benefits, let alone the critical provisions whose absence can leave the executive exposed when the “honeymoon” period ends. Executives can be sure, however, that almost every intelligent employer will lock the executive into extremely detailed post-employment restrictions as part of the hiring process.

The great irony in executives who are outmaneuvered by employers in this fashion is that they would never allow this situation to occur in their own business dealings with third parties.

How do executives find their leverage in employment negotiations?

Positional advantage always begins with self-assessment. Executives must consider what brought them into the marketplace or to their promotional opportunity in the first place. They must carefully assess their strengths and weaknesses by drawing upon prior employment experiences with management and reach a greater appreciation and understanding of their value in the marketplace and their expectations of a new position or employment opportunity.  

The self-assessment process is also beneficial because it will lead to a more sincere approach in negotiation with an employer. And in such negotiations, candor and transparency are critical tools in delivering executive expectations to employers.

Unfortunately, many executives do not perform this self-assessment before direct negotiations with an employer begin, and thereby underestimate themselves. They assume that in a competitive job market, pressing for clear and definite employment terms will distinguish them from other candidates seeking the same job opportunity or position. Make no mistake. The market will support the executive worth his or her weight in talent regardless of the economy.

Next, executives need to carefully consider the perspective of their employer in how businesses approach employment relationships. It is true that most businesses do not see eye-to-eye with executives on the structure of employment agreements, and will act to limit an employee’s rights wherever possible. However, executives often fail to recognize that they share the rationale underlying management’s viewpoint in negotiation: the protection of assets in the event things go awry in the employment relationship.

The appreciation of mutual self-interest in employment negotiations is at the very heart of positional advantage. The basic goal of every employer who offers a written employment agreement is to protect the company’s business assets and intellectual property because such agreements represent the principal method available to employers to impose post-employment competitive restrictions on executives. In contrast, executives look to written employment agreements not merely to confirm their compensation packages, but rather to secure severance and other benefits in the event of termination by the employer.

 Executives who are capable of seeing this commonality of interest and can articulate in negotiations that the rights they want to obtain from the employer are essentially the mirror image of the terms that their employers want from them will have effectively applied positional advantage and in almost every negotiation will gain the upper hand by controlling the conversation.

To gain that necessary edge in negotiations, executives need to have in mind at all times during the hiring process the critical terms that they want to build into a written agreement of employment:  

Job Responsibilities and Duties. Executives are going to want the nature and scope of their work for the company identified in a written agreement. Incorporating into the agreement a job description or an outline of duties and responsibilities is a must because it serves as the backdrop to evaluate how an executive is perceived in the work environment, the flexibility to maneuver for a greater role, and forms the very basis for job performance evaluation. If possible, executives also want their employer to identify who they will be reporting to at the company. This becomes very important particularly where an executive has successfully obtained a well drafted severance provision.

 Compensation. Executives need to consider far more than merely the amount of base salary. A well-drafted compensation provision will address how and when salary increases and avoid allowing the employer to correspondingly decrease their salary in an economic downturn. If the employment relationship involves incentive plans, bonuses or stock awards, the executive must insure that the terms and conditions under which such additional compensation is awarded are as clear and precise as possible. Executives must also be wary of provisions that define the conditions under which employers can rescind or forfeit such additional compensation.

 Benefits. Some of the same concerns about compensation play an important role in detailing the benefits that employers will make available to their executives. Many employers refer to non-existent policies yet to be created as to the nature or extent of benefits. And recently, employers have started adding provisions to bargain away an executive’s rights by negotiating flexibility in benefits plans, reserving the right to review and alter plans on a periodic or annual basis. There are a variety of creative solutions to address this issue, including allowing employers to reserve certain rights to modify benefits to meet their business objectives as long as the aggregate value of the benefits are not diminished.

Severance. This is the holy grail of executive rights in an employment relationship. Today, many employers are cutting back on severance provisions, which may in fact be a grave mistake, particularly since many of them are still insisting upon post-employment restrictions such as noncompetition agreements. (In a number of instances, employees have successfully challenged those restrictions without severance as an unfair impediment to their ability to earn a living.) One of the new popular programs being offered to executives are “bridging” severance provisions, which allow executives a limited period of severance while looking for new employment. The severance is terminated immediately once the executive obtains new employment.

Severance provisions always come at a price, however. Executives must be prepared to adhere to certain post-employment restrictions governing their ability to compete or solicit business away from their employer. As these restrictions have become the business norm, executives should focus their energies upon reaching an understanding with the employer that those restrictions parallel the term of severance (i.e., a one year non-compete can be accepted provided that a year of severance is provided). Executives will want to insure that they are provided with severance in the event that the employer fails to deliver on its promises, such as payment of salary or benefits, or the business of the employer is acquired by third parties in what is known as a “change of control”. A change of control severance trigger has enormous benefits to executives, particularly where it is carefully drafted to encompass a wide range of circumstances, including management buy outs or shareholder approved liquidation of the company’s assets.

 Termination. This is perhaps the provision most important to employers other than non-competition and intellectual property/confidentiality rights. Many employers will insist on a host of provisions, including their ability to terminate the executive with little or no notice, while requiring months of notice from their executives. One effective strategy available to executives facing strict company provisions on termination is to request a parallel provision that allows them to leave the company’s employ for “good reason” and still obtain severance, such as a breach of the employers’ obligations under the agreement, company relocation or a reduction in salary or benefits. This good reason clause is the mirror image of the clause that allows the employer to terminate at will.

Once the executive has these core concepts firmly in mind, they can weave them into negotiations from the outset of the hiring process. Failing to do so may have disastrous repercussions for a successful negotiation of employment rights. As negotiations continue, employers grow increasingly resistant to the efforts of executives to modify what has been agreed to verbally. The written agreement should therefore resemble in every respect possible what has been discussed verbally in the negotiation of employment rights.  

Finally, the executive must remember the cardinal rule of all negotiation. Never sign an employment agreement without due diligence. No buyer in a merger or acquisition would ever acquire a business without a thorough understanding of that business. An executive’s career is her most important business asset. It is therefore critical to review the agreement word for word with an employment specialist, who should be seen in the revisions process, but never heard.

In closing, Leverage is the very key to the negotiation and development of a successful employment relationship. For the executive who masters the technique of positional advantage, great opportunities in the marketplace are always close at hand.

   ==================WORDS ON THE AUTHOR=================== 

Howard Matalon, the author of the Strategic Advantage Series, is a executive coach affiliate of QUAD 2 Consulting, specializing in inplacement and outplacement of executives. He is also a seasoned employment litigator, with over fifteen years of experience counseling both executives and management on important issues of labor and employment law. Mr. Matalon also practices law as a partner of OlenderFeldman LLP in Northern New Jersey. Mr. Matalon’s contact information is available from QUAD 2 and on his firm’s website, www.OlenderFeldman.com.

Published by Scott Neilson on 12 Jul 2010

“Annual Job Review Is ‘Total Baloney,’ Expert Says”

Thank you, Amy, for submitting this piece.  It is a wild one.

Have a look at this article.  It is long, but I have captured some excerpts below and made some comments.  I would be very interested in reading yours. The link is:

http://www.npr.org/templates/story/story.php?storyId=128362511&sc=nl&cc=es-20100711

Employee performance reviews should be eliminated, according to UCLA business professor Samuel Culbert. “First, they’re dishonest and fraudulent. And second, they’re just plain bad management,” he says.

Periodic reviews create circumstances that help neither the employee nor the company to improve. As Culbert and his co-author, Larry Rout, write in their book, Get Rid of the Performance Review! annual reviews do not promote candid discussions about problems in the workplace — and their potential solutions.

I cannot speak to whether performance reviews are truly “fraudulent”.  That has never been my observation, but I do not know on what grounds the author is making that assertion.  My observation is that performance reviews are not effective because they are poorly prepared and executed.  This seems to be a chronic problem in organizations, and I do not think that it is because the concept is wrong.  I think it is because the practice is flawed.  It seems that the process generally lacks leadership commitment requiring it to be done well, and it lacks rigor in how it is actually performed. 

  • Management does not make it clear that performance review is fundamental to the success of the business. 
  • Management often does not require that the basics are in place to enable that to happen, i.e., they do not oversee the process to ensure that job descriptions and goals exist and are clear and accurate. 
  • Management does not do an adequate post mortem of the process to evaluate how well and completely it was conducted, and to determine how to make it better in the future.

Many organizations I have seen have a decent approach for defining job roles and responsibilities, and setting goals for the year.  However, the process often seems to fall apart in the measurement of performance against those goals, and the discussion or feedback about that performance.  Often, managers do not clearly define what the expectation is or how it will be measured.  When the time comes to evaluate performance they have to come up with that way of measuring it, if they even do that at all.  When it is done it is often done after the fact by the manager and comes as a surprise to the employee.  In addition, managers often do not take the time to collect all the relevant information to do an adequate job of really measuring performance.  As a result, the performance review discussion is flawed.

Further, the discussion itself often becomes combative.  Managers are frequently not well trained in conducting effective conversations about performance.  As a result, individuals feel personally attacked and the opportunity for constructive discussion is lost.  See the link http://www.scottneilson.com/?p=391 for our previous post on Feedback.

The author Culbert goes on to say that “The boss already has heard [from] his boss what they want to pay the guy, or the woman. So they come up with a review that’s all backwards.”

Unfortunately, I have to agree with some aspects of this point.  I have experienced many times when performance charts are force fitted to comply with a pre-determined pay raise amount.  Having said that, in my experience it is an overall amount that must be distributed based on what the company can afford, not based on an individual.  The manager’s task is then to manage that pool of salary increase funding as best they can to make it as equitable as possible.  In all honesty, I cannot say that that is inappropriate.  The business can afford what it can afford.  Now, one may certainly take umbrage with what that amount is and how it is determined, but it is not at all unusual, nor inappropriate, for businesses to know how much they can afford to give in pay raises and to determine a pool of funding from which to distribute those raises.

This aspect also is connected to how the organization wants to strategically position themselves from a pay perspective.  Some organizations intentionally do NOT want to be at the high end of the pay scale.  They do not mind the fact that they will lose some of their best employees to competitors who are willing to pay top dollar for top performance.

Finally, forcing a percentage increase to be distributed across an employee base does require managers to distinguish between employees who are performing and those who are not.  This is an area in which managers are notoriously weak.  It is distasteful for many to have to do this and so, given the opportunity to by-pass that responsibility, they will take the easy way and give everyone a good rating and pay raise, which defeats the purpose of pay for performance.  This approach does require them to make some effort to distinguish between good and poor performers.

Asked if performance reviews might be tweaked instead of eliminated outright — for instance, a manager might use statistics to measure an employee’s effectiveness — Culbert says that one-dimensional measurements can bring a new set of problems.

“Once you set up the metrics, that’s the only focus for the employee,” Culbert says. “The problem with performance reviews is that the metric that counts most for the employee is the boss’s opinion. So the employee starts doing what he or she thinks is going to score in the boss’s mind, and not even talk about what he or she believes is necessary for the company to get the results that really matter.”

Yes, this is likely to happen.  One performance measure is unlikely to result in strong overall performance of the business.  However, I will come back to my previous assertion that this is a result of poor execution, not bad concept.  There are models for elementary approaches such as Balanced Scorecard which are designed to address the fact that there are many aspects which must be performed well and will be measured.  They just have to be used and executed properly.

How could something so obviously destructive, so universally despised, continue to plague our workplaces?

  • In part it’s because the performance review is all executives have ever known, and they’re blind to the damage caused by it.
  • In part it’s because few managers are aware of their addiction to the fear that reviews create amongst staff, and too many lack the confidence that they can lead without that fear.
  • In part it’s because HR professionals exploit the performance review to provide them a power base they don’t deserve.
  • And in part it’s because few people know an alternative for getting the control, accountability, and employee development that reviews supposedly produce—but never do.

This I do not agree with, especially about HR professionals using it to “provide them a power base they don’t deserve.”  Again, I think that the concept of performance review is correct.  It is the execution that is flawed.

Reviewing performance is good; it should happen every day. But employees need evaluations they can believe.

Agree here…again, refer to the post on Feedback link: http://www.scottneilson.com/?p=391

 

…the alleged purpose of performance reviews is to enlighten subordinates about what they should be doing better, the real purpose is intimidation aimed at preserving the boss’s authority and domination in relationships. 

No, not buying that one.  While it probably does exist, I would not make the blanket statement that the “real purpose” of performance reviews is intimidation and preserving the boss’s authority and domination.

To me, the problem boils down to one word: insecurity (although incompetence comes in a close second). Too many managers relish the authority they have—and fear losing it. They worry they won’t be able to persuade their direct reports to do things their way. So they get their self-confidence the only way they know that the current corporate structure allows—by intimidating their subordinates into silent compliance. In other words, they scare the hell out of them.

Personally, my observation has been that organizations do not do a good job of training their managers to manage.  That includes many aspects, such as organization design (to match the key processes of the business with the desired outcomes), job definition and description (to provide clarity to the individuals about who is doing what to get there), and performance management (to enable effective and constructive discussions to take place to enable individuals to see where they are hitting the mark and where they are missing it in the daily performance of their jobs).

I would love to hear your thoughts on this.  Please reply right to the blog rather than emailing me with your thoughts

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