Employee Happiness – Throw cash at them right?

Recently I’ve been reading some of the work by psychologist Amos Tversky. Tversky was a cognitive and mathematical psychologist and pioneer in the study of systematic human cognitive bias and how we as humans handle risk. The following scenario is based on research originally completed by him.

Imagine you were offered two jobs. They are the same in terms of working hours, duties location and career prospects – in fact Job A is exactly identical to Job B in every way – except one, the difference between your salary and that of your colleagues. In Job A your annual pay will be £50,000 and your colleagues will earn £30,000. In Job B your annual pay will be £60,000 and your fellow employees will be on £80,000.

Which would you prefer?

Then, which would make you happiest?

Surprisingly when Tversky posed these two questions he got different answers. We’d all prefer to earn more money, but when happiness was introduced respondents felt that this had more to do with their perceived value to the organisation – even to the extent of being paid less at a perceived higher value. This is an interesting problem for those people currently in the job marketplace or in salary negotiation with a prospective employer.

What did you answer to each of the questions? Did you change your mind for happiness?

The Muddy Waters of Salary Transparency

Recently there has been much comment and debate around the issue of salary transparency in organisations. The New York Times columnist Lisa Belkin published an article on this very subject in August. Like many arguments in the world of employment there are pros and cons as you would expect. For those on the pro transparency front the case is a simple one.

1. Salaries will become more fair. The system gets a chance to adjust itself. (This argument is often given a more inclusive flavour with a smattering of diversity thrown in for good measure – “We will be able to see that women are paid fairly” – I’ve not heard this salary/diversity measure argued by any of the women in my organisation, and to me it smacks of validation)

2. It will be easier to retain the best employees because they’re more likely to feel they’re getting a fair salary.

3. The pressure is on the people with the high salaries to earn their keep. Everybody has to pull their weight – the higher the salary, the larger the weight.

4. Secret salaries can create paranoia and mistrust between peers (is he getting paid more than me?)

These are an amalgam of points, by no means exhaustive, taken from internal discussion and the wider blogosphere. I think the majority of the pro-transparency arguments are covered here. They are in no particular order and I hope to expose some of the counter arguments and the mis-thinking behind them.

Putting it right out there in the open I am against salary transparency. I feel there is little to be gained, when an organisation has reached a certain size and covers different geographies, in the widespread disclosure of salary information. The arguments in favour of keeping this information private far outweigh the perceived benefits, and in my opinion too many of the people arguing for the release of this information use equality as a soapbox for their own issues with their personal salary. As you will see, I postulate that this is an example of a very different outward agenda for what is essentially a personal issue.

The first and most important part of the argument against salary transparency is one of privacy. The advent of the Internet has meant that a wealth of information is already freely available to the casual surfer. With one reasonably refined Google search I’m confident you could find my mobile number, home address and probably my now dead pet Gerbil’s name*. Is this a good thing? Some would argue yes however there are some things I might not like to disclose – salary is one of those things. People may say it’s my bourgeois middle-class white upbringing that leads me to think it impolite to discuss salaries but I don’t believe that’s the case – as a recruiter I discuss salaries everyday, constantly and all the time. I am happy to talk about this in exact figures and not to think myself crass for doing so. It’s a taboo I’m happy to break. However I think there are genuine relevant reasons for not disclosing one’s salary. Despite any organisations attempts to maintain a flat structure people function through the constant comparison of themselves with others – in knowing a salary structure of an organisation do you immediately assume that those with a lower salary are less valuable? I’d make the challenge that yes as salary would be the only insight you have into the role played by an individual in that organisation. In my opinion salary is not a measure of value. If I’m bleeding to death I’d wager I’d not be concerned with the salary of the paramedic stemming the tide of blood, but his value at that moment would be priceless. Nurses and Care Givers are paid less than Investment Bankers and Police Officers less than the latest “celebrity” to leave the Big Brother house – value and moreover personal worth should never be measured in pounds, shillings and pence.

The issue of “fairness” is an interesting point and in certain organisations I feel would apply. If we take the example of a manufacturing plant and compare two workers performing the same task on the same line at the same time – then it would be unfair of an employer to make this same role tiered in terms of pay, I’d agree with that – the exact remuneration alters when one or more of these factors changes e.g. a worker on a night shift can expect to be paid more for working anti-social hours, a worker performing a more highly skilled task can expect to earn more and so on. However, within most modern organisations the nature of “role” has to be taken into account. You might have the same overall “function” e.g. both lawyers but for the individuals in question the “role” and responsibilities thereof may differ vastly. There are increasingly issues around this “same-ness” in modern roles, are there really any roles that are exactly comparable? In an organisation like ThoughtWorks where we have transient job titles and with a lack of public sector style concrete grades we are left to consider each individual separately. So how does an organisation decide what aspects of an individual’s performance and role are worth more – taking the world of IT consulting as an obvious example. What do we look for in potential ThoughtWorkers? What do we value? As a few examples I can say those people who are passionate about their jobs, those that commit to open source projects, maintain a blog and partake in the ongoing learning offered by more informal gatherings like our “Geek Nights” and “Ruby Tuesdays”. These are extra points that may add “value” to your employ by the company. However as I mention “value” doesn’t equate to “salary” as an exact transfer.

In the discussion of salary that I have with a potential new hire I always ask two questions. They are, “What is your current salary?” and “What would you like to earn?” The differentiation between these two sums allows me to gauge a candidate’s perception of their own value, in short their own marketability. This is an important consideration. It’s Marx that states that in working or allowing the “exploitation of their labour” an individual in a Capitalist state is in effect selling their labour to their employer. The “price” they accept to take a role is their salary. The scale of difference between the two numbers offered will also give a recruiter insight into their attitude towards the current employer and often their knowledge of the current market. I will be first to admit that anyone wishing for a £20,000 pay hike is going to have to demonstrate effectively what their reasoning is for wanting that large a differentiator, what are the factors for justifying it? For employers salary has a memory. The majority of standard reference requests will ask for a confirmation of a stated salary.

Salary transparency as a means of retention is again a limited argument. The assumption is that as an employee either the primary or ultimately the sole reason an employee stays with an employer is because of salary. We are all hopefully aware that this isn’t the case and that many employers offer a wealth of benefits and concessions to a work life balance that are not quantifiable in the simple measure of basic wage. Looking at those labour markets where salaries are substantially higher e.g. Investment Banking higher salaries are oftentimes referred to as “golden handcuffs” or “gilded cages” effectively these employers are having to buy the loyalty of their skilled staff in the face of the lack of other trade offs like work life balance or flexible working times. Is it the transparency of salaries that keeps employees in these locations happy and working or simply that the salaries are sufficiently inflated to keep them from asking (or giving a damn about the answer)?

ThoughtWorks is a developer of bespoke software solutions and a keep proponent of the Agile and XP methodologies. In designing software we ask our clients to use a standard construction in describing the purpose of a feature for their new software, referred to as a “story”. “As an X, I want to…, So that…” we use this to hold up requests for scrutiny, to evaluate them in isolation removed from the often emotive responses end users may have. So, as an employee of X company, I want to know all my co-workers salaries so that… then I think it all falls down, if there’s no action are you in a better or worse position knowing than not knowing? How does knowing this information inform your actions or your interactions with other employees? It’s my feeling that most people want to know the salary information of their peers to use as a jumping off point into their own discussions around their personal salary. However, the information of peer salary in this discussion is largely irrelevant – instead we should be thinking of the wider labour market in our current geography. To gain salary information as an individual you don’t have to piece together pages from the finance teams shredder or lie in wait in the dumpsters near the office, salary information is freely available on the job boards and advertising available to all. Recently there has been a glut of websites launched aiming to catalogue salary information for casual viewers. Glassdoor.com is a recent newcomer to this space and provides, amongst other things, salary information for staff of major corporations, and yes ThoughtWorks has a presence, although I can confirm that the pay scales are incorrect at present. Provided more people join and enter their information truthfully this scale will normalise over time.

In all of these discussions the culture of transparency is held as the ultimate goal of an organisation and I’d wonder if this is the case. In my opinion it is a culture of trust we should strive for. Employees who feel they are paid fairly, because they have effectively sold the “exploitation of their labour” with full knowledge of the market in which that labour is sold will be better able to realise their own position and not be concerned with how Bob was able to afford that new Corvette, but instead trust they are given a fair salary based on their own personal circumstance and that the company they work for will aid them in their strive to grow and develop as an individual – salary, the nuts and bolts measure of their value, will become secondary.

* For those interested parties the Gerbil in question was named “Nibbles”.

Also for those people disappointed not to find a tribute to McKinley Morganfield a.k.a. “Muddy Waters” of Blues fame I attach a picture by way of apology. Go listen to him here.

A job for life…and why it’s good to keep in touch with your ex…

I’m always pleased to read new posts on Johanna Rothman’s blog Hiring Technical People, as I feel there is a lot of noise around recruitment hers is a voice of sanity. Her latest entry on Initiative vs. Entrepreneurship seems to match perfectly with my experiences in my current role. In short she advocates hiring those candidates who demonstrate an entrepreneurial streak – whilst they may be a flight risk (leaving to set up on their own) the ideas and skills they bring in their time spent as an employee are often invaluable. Whilst this stance can often be a lightning strike to traditional thinking of a job for life in truth we now live in time that a “long term” employee is one that has been in the same job for three years! These are now our “old hands” this trend towards a patchwork CV increases in the technical sector and is further exacerbated by the peaks and troughs of an industry effected by technical discoveries as much as it is by financial market flux.

It’s a fine line between demonstrating high levels of initiative and entrepreneurialism. It can be a particularly fearful one for an employer who feels the investment thay make in sourcing and courting a “high flyer” should be rewarded with at least x-years of service. I’ve harped on about the “Values” ThoughtWorks holds dear before but it took Johanna’s post to make me see the thinking behind our – “Entrepreneurialism – Imagine and Pursue”. Actively encouraging this spirit within our staff can do only good, and has led to some truly innovative tools and products being created. Whilst it maybe true that some of these people have left to go on to pursue their own interests it’s certain that as an organisation as a whole we have certainly benefited from having those people as ThoughtWorkers. In taking those initial risks we have an alumni network that has aided sales and continues to promote ThoughtWorks as a standard of technical excellence at a global level – as evidence it was just yesterday I received not one but two referrals from one of our ex-employees. Sometimes it pays to stay in touch with your ex 🙂

Firing for Values?

As a subscriber to “Diversity Inc” my interest is always piqued when they get round to the core discussion of “values”. This month’s issue has a really interesting comment in their “Legal Section” simply they pose the question “Can you fire employees with different values?”.

Weldon Latham a discrimination law attorney suggests that companies should exercise caution in these cases. He uses the example of those companies that operated in South Africa during apartheid, he goes on to cite examples of those companies who did not permit the external prevailing rules of apartheid to operate within the rules of their controllable corporate environment. Weldon gives a cautionary note however that a corporation cannot exist entirely removed from the country in which it operates. This is a great point, recently I’ve been reading about the rights of women workers in Iran – legally they are only allowed 1 term of maternity leave, if they become pregnant again they are forced to resign. In a similar vein, when women are ill, the social security office pays them 66% of their daily wage while men are paid 75%. In the face of national, institutionalised discrimination surely a corporation has a hard road to follow – they can fight the prevailing hegemony of the country in which they operate or chose not to operate in that region at all.

These are broad sweeping issues, polarising to those outside of the countries in question. The question “Hands up who wants to work for a racist company?” is pretty easy to answer, but then what “values” are we willing to negotiate on? As a consultancy should the values-led organisation be wary of which clients they are willing to engage with? Should an organisation ask expect an individual employee to put aside their personal values, attitudes and beliefs for the company’s profit margin?

At ThoughtWorks we do have stated values. They exist as in many other organisations as a web page, in some people’s email signatures and as handy “non-discrimination” notices at the bottom of recruiting ads… how then do we ensure that they amount to more than this? Too often “values” are sloganeering in the extreme, more about marketing position and candidate attraction as hollow as a sweeping “we recruit the best”. How can an organisation ensure that it’s stated values do not loose meaning overtime? In ThoughtWorks we have an answer. The values we publish are the subject of a constant conversation around their use, meaning and also as a set of checks and balances to guide decision making. There are often questioning voices as to the “values alignment” of a particular project and also occasionally of particular individuals, certainly it’s a feature of our recruitment processes, and figures as part of the “Cultural Fit” interview.

There are those people who would take a contract in Iraq at the height of the conflict as it came with a massive salary, “danger money” if you will! There are those people who would only ever consider working for a not-for-profit organisation and even then some are deemed “too corporate” or “only about the money”. I don’t think ThoughtWorkers exist at either of these extremes nor as a body of people are they stuck in a particular mindset – instead happy to measure the flow of information against their own checks and balances – filtering through their own personal values. It is this discussion around our values that gives them their strength – they cease to be meaningless corporate lip-service and become a living, breathing part of life at ThoughtWorks, we don’t expect people to recite them by rote but chances are they are already living them.

From “Social Experiment” to Memetic “Big-Bang”.

ThoughtWorks says it’s different. It’s my role to communicate this “difference” in very real terms to candidates who apply to join us. As recruiters it’s something we do everyday, what differentiates us? How are we different? What differences are more attractive that others?

It is the communication of difference that causes a problem and if a skilled recruiter can use the cultural differentiators that an organisation holds to be true about itself then these can be used to marry up to a candidate’s motivations for joining the organisation. e.g. at a basic level, their current company doesn’t offer them opportunities to travel – ThoughtWorks has many of it’s consultants working outside of their home offices and aids them in relocating for a short term, the life of a project or even emigrating for good. Obviously not all aspects are that binary, it can’t always be “current dissatisfaction + “different” cultural aspect = reason for joining”. If it were always the case then an organisation would have to be all things to all people all of the time, no company is a nirvana so there will always be pros and cons to joining an organisation. All this got me thinking about the difference of ThoughtWorks comparatively to other organisations and how I could illustrate this to candidates.

ThoughtWorks has already done a lot of thinking about how it wanted to be different from the day it was founded and still does. Roy’s Social Experiment offers a model for a company based on humanistic or anthropological lines concerned with the human behaviour, belief and value systems, sociological and cultural norms, that matched the type of company the founder wished to work in. This is obviously already a marked difference from the established organisational model which owes more to engineering showing an organisation as human constructs to be planned and controlled by rational, formal, structures and procedures. Though I feel the first model still holds true, ThoughtWorks is now a much larger place, over 1000 “ThoughtWorkers” across multiple continents in a myriad of countries. In growing globally “cultural norms” are blurred and belief and value systems are disparate and sometimes even conflicting. How then does a “social experiment” of an organisation maintain “cultural norms”. One answer is to regionalise and accept geographical/political boundaries as cultural way points – the other alternative is to create a culture of your own.

The third model I propose in communicating the “difference” of ThoughtWork’s organisational structure is organic evolution by natural selection. In the case of ThoughtWorks it is an evolution punctuated by the imposition of selected “organic replicators” – the employees are selected through an interview process. While organic evolution is blind or without conscious design (sorry to the Creationists) organisational evolution is a conscious program of selected memetic replication, shaped by internal forces managers, recruiters etc as well as external forces market pressures, competitors and technological advancement.

Biological metaphors have long been applied to the world of business e.g. “Survival of the Fittest” to illustrate competition, but more recently new thinking around “Chaos” and self organising systems offer a better model for an organisation than the “engineering” approach. Allowing us to realise that organisations like economies “evolve” as self organising systems. If we take this “genetic” approach I think it’s natural to take Roy’s Social Experiment as the memetic Big-Bang that went on to spark the evolution into the organisation as it exists today

ThoughtWorks as an organisation has, from Roy’s original primordial soup, developed surprisingly common sets of dominant motivators. People who don’t share them don’t join, or don’t get on, or are the first to leave on discovering a culture than can be alien to the “norms” that exist outside. In creating and managing a “learning organisation” we can escape the genetic dominance of the simplistic “survival of the fittest” and move towards an assumption that companies are creatures of their memes in the same way that organisms are creatures of their genes, that is vehicles which the memes or the genes, the replicators, create in order to perpetuate themselves.

For me this is what ThoughtWorks has become, a memetic snowball rolling down a hill, growing as those that share the similar ideals and values join and growing larger with each new hire. The fact that this evolution is constant can account for the “bursts” seen in nature exploiting environmental factors, this has an obvious parallel with the exploitation of new technological advances and the fostering and cultivation of those advances that will give the organisation an edge. New memes can propagate freely and become “viral” within the organisation, undergoing a micro-evolution of their own as they pass among individual ThoughtWorkers.

Working outside of rigid and constraining forms of a “normal” organisation allows for freedom of communication, a flat structure free from hierarchical constructs and allows the collaboration that fosters innovative thinking to thrive. That’s not to say that ThoughtWorks is a panacea for career ills, it is a company full of individuals and with that come individual opinions, ideas and all the flaws and foibles that make us human.

Thinking about the company I work for in this way enables me to better illustrate how “different” we are from other workplaces and allows me to assimilate all the tangents that a candidate might have questions about. Motivations for joining a company are diverse and it’s rare that I talk to two people who share exactly the same motivators, however the ever changing and constantly evolving elements that go to make up ThoughtWorks as a whole enable me to offer an area of interest to most who apply.

Vive La Différence!

Recruiting: Gateway to the New World or HR’s Dirty Little Secret

 “My name is Matt and I’m a Recruiter.”

…the rest of the group rise and there’s a smattering of applause, the first step on the road to recovery is admission. Finally the guilty truth was out…

 Is being a recruiter all that bad? Certainly while at school it’s not something you aspire to, others wanted to be astronauts and doctors; with recollection I think I wanted to be a fire engine. Note, not a fireman, a fire engine. So what is it that leads someone to become a Recruiter? Personally I enjoy the talking to people and, perhaps arrogantly, I think that in a Consultancy particularly Recruiting has a real and defined role to add value to the business as a whole. I’ll explain, ThoughtWorks as a business model doesn’t sell software, we trade on the ability of our people to create software – in effect we “sell” the skills of people. In my arrogant recruiter way I think that the success or failure of a project can be directly affected by our ability to hire the “right” people and the timeliness of those hires -both responsibilities of the Recruiter. If you don’t have confidence in the ability of your recruitment team to do this then it might be time to change that team – or at least look at the motivations of your recruiters.

In my experience of working in an agency (the dark side) I continuously found myself talking to in-house recruiters who either wanted to change their role or were just plain unhappy. In my opinion a lot of this is due to the position that “Recruitment” as a function occupies in these organisations. Recruiters are often the first contact a candidate has with an organisation if at this stage they are made to feel insignificant or unimportant why wouldn’t the candidate look elsewhere? Keeping the Recruiters in your organisation buoyant and motivated should be of paramount importance – too often the “People are the most important thing” maxim is touted and paid due lip service but not given consideration from an internal perspective. If your recruiters are sending the wrong message or are not the “Ambassadors” you want them to be then you should quite rightly give them that feedback.

There is much talk of the “War for Talent” and whilst too much of human ingenuity is given over to ways of killing other humans it can’t be argued that a raft of innovation hasn’t happened in the area of “defence” (better called “offence” in certain nations). How can this innovation happen? In the military money is given over to “think tanks” to R&D and people who are freed of the day to day military procedure and policy that works for the rest of the team, if you expect your Recruiters to be the “Special Forces” in this War for Talent (this metaphor is stretched pretty thin now) you need to give them the imaginative space and freedoms to do so. This is one of the main reasons why I feel the a Recruiting function needs to be separate of a HR function.

Depending on how your organisation is structured perhaps this division doesn’t need to be so concrete – if your role as a recruiter is just to ferry candidates through a predefined process then I don’t think you have to concern yourself with a broader strategic view. However, I would argue that “Recruiter” and “HR Professional” are different skill sets – I don’t possess the skills (or the patience) to work in HR, I know I couldn’t do it, it’s more pastoral care and empathy than I can invoke! HR Professionals work from strong and firm foundations based on policies laid down in advance, whilst recruiting benefits from having an agreed process as a platform on which to extrapolate. We need a goal and some hurdles but what’s important is the individual candidate experience. Even if a candidate is rejected or told to try again later no one in their right mind wants that person to tell all his friends what a terrible time they had. I tailor the process to suit the candidate – interviewers are chosen with care, they might be peers, direct reports or part of the same team – I don’t just use whoever happens to walk past the interview room!

Recruiting should never be a “one size fits all” approach, and with a tangled web of policies and procedures with which to conform to it can become this. I’m very lucky in my role, I get to try new things all the time, I don’t have constraints on who I can hire based on country or nationality, I am “free” to recruit for talent. It can take a long time – the visa process for a Japanese/Brazilian coming to the UK is a path less trodden – but ultimately I think it’s worth it.

So the point of this torrential rant? If you’re hiring a recruiter make sure they want to be there! Test for ability to stay motivated, flexibility and personal drive. If you’re applying for a position assess if you’re valued as a person or are you meat for the grinding wheels of draconian HR dogma – let this inform your interactions with the company – a great recruiter working in a small team may be fallible some of the time but the process will fee more personal and less of a shunting from one gate to the next. Above all if you mention even in passing that it’s your company’s “…people that make the difference…” be prepared to invest time and energy ensuring that your Recruiters “get it”, realise that this is your first human impression beyond a job advert and make it count!

Recruiting for “Agile”

For many recruiters reviewing a resume is a simple task. It’s binary. The buzzword bingo they play is matched by the increasingly infuriating practice of loading CV’s with massive lists of all the technologies that the candidates has ever used, looked at or heard that someone else was using in a nearby room. It’s an antipattern created somewhere between naive recruiting practices and savvy developers to circumvent keyword searching and the buzzword bingo. In ThoughtWorks recruiting “Agile” experience is something I’m wary of.

The problem with this thinking is that “Agile” in this form does not exist. Recruiters looking in this way will miss out on the majority of great candidates. Agile is a conceptual framework not a language or a certificate for your wall, though I’m sure they’re available. Working within the binary world of “has Agile/does not have Agile” would alienate and turn away some of the brightest and gifted developers I’ve seen. If a candidate has a dearth of experience in a public sector organisation it’s more unlikely they will have encountered the all-singing all-dancing index card waving “Agile” we know and love – but then should we discount them? In looking at a resume or talking to a candidate I’m always looking for evidence of skills beyond that of “Tester” or “Developer”.

Too often experiences of the technical practices of XP are mistaken for the behaviors we should be looking for. To people who have not been exposed to “Agile” thinking I take the time to explain what “Agile” means to ThoughtWorks. What tools and techniques they are likely to see and be a part of. I then try to ask a practical question based on their interpretation of those techniques, do they see a benefit? Do they feel there is benefit in the closer communication between the team? and between the team and the customer? I may then go on to ask what they would like to see in a development process? What would they do to improve the processes they have been involved in historically? I’m trying to ascertain how they feel about software development in general do they have that passion?

If they can demonstrate times where they are committed to delivering useful software to their customer, they are flexible enough to change software late in the process, have a will to work in a self organising team and above all want to work in close collaboration with the business and their team members – well, how much more “Agile” can you get? Ramming what is essentially a concept into a prepackaged-gift wrapped box will only rob an organisation of it’s ability to recognise talent. Whether you have been a developer in a waterfall, RAD, RUP, SCRUM or some other methodology there is no reason to allow yourself to be over looked. Recruiters should be looking for potential not just clones of their current staff.

In his keynote opening QCon 2007, Kent Beck talked about the future of software development. He talked about the need to improve skills that are essential to excel in an agile development environment: Social and Technical Skills. He said social skills are more important than technical skills and suggested that Developers of the future will need to learn to listen more effectively. With the rise of a more tech-savvy business Developers will lose their “wizard” status and will need to turn to “Appreciative Attitude” and “Emotional Intelligence” as the important traits in being part of an Agile team. It’s interesting to see where this goes, if Beck is proven to be right Developers used to gaining an edge by buying the book and cramming overnight will instead have to work on their interpersonal skills – look for the early adopters in the Self Help and Psychology sections of a Borders near you…