5 cutting edge people management practices explained

Can HR really give their organisation a competitive edge by introducing some of these five cutting-edge people management practices into their organisations?

Petru Tinca • 
5 cutting edge people management practices explained

The events of the last few years culminating in the cost-of-living crisis have led to one of the most challenging commercial environments that we have ever seen. No quarter is being given: sales, profits, talent, employee loyalty… they all need to be desperately hard fought for. Digital innovation and out-of-the-box thinking are required to simply stay in the game (let alone get an edge on the competition). But one strategy card that is being underplayed, is cutting edge people management practice – which, when deployed correctly, can give organisations a distinct competitive edge.  

1. Data-driven people management

Google’s Project Oxygen uses employee performance data gathered from performance appraisals, employee engagement & pulse surveys, exit interviews etc and has allowed them to identify 10 behaviours that are the most common amongst their highest performing managers. These success profiles are then incorporated into their management development programmes. Google recently ranked in the top 25 companies for people management as voted for anonymously by employees, which reflects the effectiveness of their data-driven people management. They are not the only company who adopt this approach but were one of the first to go public about it. And with the right HR software, you too can collect useful performance data through your own pulse surveys and other digital initiatives.

2. Skills-based hiring

Back in the early noughties we observed a trend where significant numbers of employers started to require candidates to have degrees for jobs that hadn’t previously needed them, even though the job had not changed. This was known as degree inflation. And this raising of the entry bar was appropriate at the time when there was a talent surplus. Roll on two decades to a time of extreme talent shortages, and this falsely elevated entry bar seems counter-productive.

Progressive companies are now acting with research showing that between 2017 and 2019, employers deemphasised degrees for 46% of middle positions and 31% of high skill positions, mostly in the IT and managerial roles. They instead became focussed on a skill-based hiring approach to widen the talent pool in a time of scarcity.

When researchers looked at the talent-stressed labour marketplace as a whole though, it was clear that there was still a predominance of degree inflation, making skills-based hiring a cutting edge practice that can still differentiate you from the competition.

3. Aqui-hiring

Acqui-hiring has been around for a while but has existed on the fringes of HR Strategy, mainly in Silicon Valley. Acqui-hiring is a portmanteau of acquisition and hiring and refers to the process of buying a company mainly to get hold of its employee skills and competencies, rather than for its product offerings. Facebook have been one of the biggest proponents of this strategy with Mark Zuckerberg once saying, “Facebook has not once bought a company for the company itself. We buy companies to get excellent people” It’s basically using M&A as an HR Strategy.

4. Crowd-sourced feedback

At last count, around a quarter of companies are using crowd-sourced feedback as part of their performance feedback process. This cutting-edge practice is the cousin of 360-degree feedback because it incorporates the perspective of peers but differs in several fundamental ways. Crowd-sourced performance feedback usually utilises a cloud-based social media platform which allows peer perspectives to be shared in real-time and not as part of an annual or even quarterly review structure. They are also not anonymous, which enables them to have more realism and greater context… but to that end, contributions and tone are expected to be constructive and based on how people can improve.

5. Transparent salary policy

As an HR professional you may need some significant warmup before bringing this one to the boardroom, as transparent pay is a highly unusual and controversial policy!

Well, at least it is in the private sector because the public sector has historically published detailed pay structures for most positions.

However, by publicising private sector salaries – particularly those of executives, managers and high earners – the company’s pay practices will be under scrutiny, which should encourage a fairer and more egalitarian approach to pay. Who can argue with that? One survey from Beqom found that 60% of 1000 surveyed US employees would switch to a company with more pay transparency. 

Salary transparency is not just about revealing every employee’s salary – that is one extreme version of transparency that might terrify the boardroom. Less extreme versions involve publishing pay scales for every position, with some explanation of what it takes to be promoted up the grades.

Change is coming, Microsoft has announced a new pay transparency policy, taking effect from January 2023 and several states in the US have introduced – or soon will be introducing – new salary transparency laws. Amongst other things, this will require businesses with more than 15 staff to include salary range, and a description of all benefits and compensation on all job postings.

It’s remarkable today that salary secrecy is the norm and salary transparency is still a cutting-edge management practice.

In a highly competitive tactical corporate landscape, people management is one of the few remaining under-exploited areas of business strategy. This presents a real opportunity and employers who can successfully innovate in new areas of people management stand to gain a significant competitive advantage over their peers.