Companies Say No To HR Departments

The past week or so has raised a flurry of articles again about doing away with HR.

Looking for ways to make organizations simpler and easier to navigate and manage is always laudable… but…. Are radical attempts at simplification realistic for everyone or even for these companies in the long term?

First is LRN, a company that not only got rid of HR, but all job titles, org charts and the like. They tell their story inspirationally on their site as a never-ending journey not to get bogged down in rules, but keep their eyes on the larger pictures. We need these idealists. It tends to be the ones in the weeds waiting to hear how to do without HR for cost or vendetta reasons that are more the problem. Testing alternate structures makes sense, though such radical rearrangements as LRN apparently is attempting may be taking more risks than wise as this article points out (not in the headline, but farther down).

Of course even companies that keep their HR are trying different approaches. One that keeps getting brought forward is Netflix. It’s first in an interesting series of videos that appeared recently on Huffington Post focusing largely on their decision to stop tracking paid time off. At first blush this sounds like a ‘why didn’t we think of that’ sort of idea, but one has to remember that all such concepts are culture-specific. If your company has a large number of very hard drivingbalance managers who push to get work out, the idea of simply ‘freeing’ (or empowering) employees to decide for themselves what time off they need is potentially a bad idea.

If you take a look at some of the subsequent videos in that series – Sheryl Sandberg telling the Post about the need to fit in family time (Arianna herself appearing later having just published a book, Thrive, along similar lines) and the Dalai Lama, you can see some of the potential downsides. If bosses don’t see the need for vacation it’s a reasonable bet that many staff won’t feel they can use their ‘empowerment.’

Without fairly clear guides such as ‘you get five weeks paid vacation and you take it or lose it’ rule (with HR pushing for ‘take it’), you leave things supposedly entirely to the employee, but also their direct manager. In theory employees may have the choice of when to go, but with a manager breathing down their neck insisting the project can’t wait, that overtime is needed, that you will be judged poor and potentially get yourself fired. And of course you run into the perennial problem that everyone wants July. In fact, in the Netflix piece, another ‘innovation’ is being totally honest with people that they will be fired if they don’t perform to standard. Get the picture?

You’re on your own or “YOYO” means a lot of people won’t risk taking the time off they usually would under a fixed regime if they think that an even worse result awaits them. Perhaps if you’re Netflix, a new culture, with a known CEO and HR leader encouraging ‘empowerment’ you won’t run into problems of unfairness or unfair expectations… initially, but as a company grows, as problems multiply, as managers change, as new CEOs arrive, things may well take on a different flavor.

Another ‘new idea’ most recently adopted by Amazon is to offer to pay employees who want to leave – in their case $2000 escalating to $5000 year by year. Zappos and (again) Netflix offer variations. Amazon is wise to do this to counter recent claims by warehouse staff in particular of bad working conditions. But if you don’t believe you can find other employment, staying and trying to call attention to needed improvements may outweigh your interest in leaving – a couple of thousand dollars won’t last long.

Whole Foods made the news for letting employees look up anyone else’s salary (a boost to fairness in pay). That works well for identical jobs, but even then, geographical/market differences enter the picture. It’s a lot cheaper to live in some areas than others, so fairness, as many note, isn’t always ‘equality’ – it takes measures of cost of living, among others, to explain fully and some employees just won’t accept such explanations (some undoubtedly understand, but still see a hook to press for higher pay). This is especially true for different jobs – a warehouse clerk versus a receiver in a store.

At some point being able to discover pay rates is fine, but you also need a mechanism for explaining differences logically and understandably. I’m the first to say secrecy isn’t the answer either, but simplistic reports that ‘everyone knows what everyone else is paid’ gloss over the challenges that this entails. Simply saying someone is more valuable, as the article suggests, isn’t a good answer for quite a few employees – and if you think line managers (the warehouse manager versus the store manager) can thoroughly and convincingly explain why the other’s employee gets more, think again. This is where HR comes into its own if it’s doing the job well not just telling everyone ‘it’s the policy.’ Transparency and explanation are very helpful, but beyond the reach of many line managers who just don’t have the overview.

We definitely need organizations trying out these new approaches. But we also need some people managing what may go wrong, applying empathetic common sense and adjusting how we approach things rather than just setting the processes in motion and assuming they will thrive. LRN seems to have that idea… or at least their CEO/spokesperson does at this point in their evolution. What about tomorrow?