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[CEO Series] Do Not Let Outdated HR Policies Kill And Stifle Company Growth

Welcome to the “CEO Series”. Here, we talk about how entrepreneurs learn to become great CEOs, as the greatest technology companies in history, most often than not, are led by people like them.

Liz Ryan, who had held the position as the Vice President of Human Resource at enterprises like U. S. Robotics and 3Com, and is now the founder of a human resource consulting firm, Human Workplace, shared an incisive article called “Nine HR Policies That Drive Good People Away” on Forbes a few days ago (Editor’s note: The original article was published July 15, 2014). The condition in Taiwan is a bit different from that in America, but the spirit of the article is admirable.

The following are some of my thoughts after reading it, and based on my previous experiences.

Autonomous System Vs Institutional System

An eternal topic of discussion in human organization is the choice between an autonomous system and an institutional system. Which issues and matters should the co-workers be given the authority to make decisions, and which issues and matters should the company establish joint standards and regulations, and how particular the rules should be set; these are the decisions that enterprises have to make every day.

Image Credit: Meta4
Image Credit: Meta4

On the one hand, autonomy allows co-workers who have leadership skills and an entrepreneurial spirit to perform better and create greater values for the company. But the company has to face the risks of having workers who aren’t really qualified to manage the position, workers who only seek personal gains, and even abuse the company assets. The institutional system helps lower the management costs and reduce malpractice; but over-regulation would drive innovators away, and result in loss of advancing force. As the company grows, CEOs must always be aware of how to balance flexibility and SOP. This is something that should be given much thought and be revised from time to time.

Changes

If the company is classified to the market like finance, telecommunication and commodity that changes in a slower pace, then it is a rational choice to design an organization that is more institution-oriented as this structure could ensure that the company gains the greatest executive force and production force in a fixed, steady state of industry and also minimize the cost from malpractices. Then, the company will have opportunities to generate competitive power greater than other competitors.

On the other hand, if the company is related to industries that involve the internet and mobile internet world which rapidly changes, then a liberty-oriented structure would be more reasonable as the organization would be able to respond to the changes in the industry faster, and wouldn’t have to face losing the capability to keep up-to-date due to a rigid institution.

Image Credit: RJ Network
Image Credit: RJ Network

Hence, when managing an internet company, the designs on the company operating system shouldn’t be adopted from traditional enterprises. On the contrary, in order to allow talented people who have an entrepreneurial spirit to perform to their best so that the company can keep up with the changes in the market, internet companies often have to go the opposite way.

Meaningless Punch Clocks

The most obvious example is working hour and leave system. Traditional enterprises often impose strict working hours, some even impose penalties for being late to work and allowances for full attendance to make people follow the standardised way. But for an internet company in the new era, I think, with the exception of important meetings where punctuality should be observed, there shouldn’t be too many extra rules regarding punching in and out. Since there is no longer a fixed time to arrive at work and leave from work, even the work location, especially during holidays, should also be redefined. As long as the co-workers can communicate well, and they are able to finish their projects within a time frame while ensuring the quality of the work, they should be allowed to choose their most efficient work environment and ways of doing the work. As for those who abuse these rights, I believe letting go of them works better than changing the standards.

Image Credit: The Star
Image Credit: The Star

Mobility

Besides that, the complicated logic resulting in the imposition of many restrictions when it comes to promotions and transfers which occur in traditional enterprises should be changed. Talented people cannot work on the same task over and over again. So, let them have more opportunities and flexibility to move about, whether horizontally, allowing them to take up challenges in new fields; or vertically, allowing them to take over more leadership and management responsibilities.

Performance Appraisal

Traditional enterprises often treat their employees as if they are commodities, and conduct performance appraisal for every single one of them. Comparing them against each other in this way lacks respect for individuality. It is hard for talented people to accept this arrangement. Enterprises of the new era would rethink the relationship between salary and performance at work, review feedback mechanisms to help the employees improve, and even use tools like OKR to form the company work culture and organizational consensus.

Image Credit: Leap Consulting Services
Image Credit: Leap Consulting Services

Penny-pinching

Traditional companies do not book air tickets that come with air miles, request employees to take red-eye flights deliberately and stay in a lousy hotel to save money — we have heard too many of these stories. They save some cost but lose respect from their co-workers, this method may not be worthwhile in this new era.

 “Catch the Thief” Mindset

In order to guard against malpractices, traditional enterprise often has some watchmen who would treat every colleague as suspects in the company. These structures help to prevent malpractice, but unavoidably causing a waste of production force of the company as a whole, as well as affecting the morale of the company.

“All-blocking” Firewall

Lastly, traditional industries would use strong firewall that blocks email attachments, dropbox, Facebook and every other thing to protect the company’s classified know-how because in a industry where changes are slight, a little bit of difference becomes an advantage. In the internet industry that changes rapidly, external communication and marketing are more important, therefore internet companies in the new era should encourage employees to communicate with him/her frequently on Facebook instead.

This article is originally written by Jamie Lin, a well-published author based in Taiwan. The article is translated from Chinese by Loh Sin Yee and is reproduced here with permission. Images were added into the article for visual purposes.

 

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