HBR Case Study On CH2M Hill
Reinventing Organizational Career — Reads More Like A How To Reinvent The Wheel
CH2H Hill is an employee-owned company that rapidly grew through acquisition and became a full-service global engineering firm. The firm expanded from a $1 billion company in the 1990s with 6,000 employees to a $6 billion company in 2011 with nearly 30,000 employees. In 2010, the CHRO, John Madia, and the CEO, Lee McIntire, internally hired Jan Walstrom as the Chief Learning Officer. Jan’s background includes successful performance in project management with no HR experience. Jan spent 18 months working on a plan for the company’s talent management initiatives.
The company held on to its old way of operating as the company started as a small consulting firm, and they were unable to be elastic and adaptable in properly aligning talent management programs with the business’ operations. The company is spending $10 million a year on hiring and orientation costs. Exit interviews and engagement surveys identify deficiencies in advancement opportunities and clear direction on the job. The company is experiencing issues in workforce planning and succession planning, as top positions are vacant with no qualified employees to fill those positions. Jan, the CLO, was charged to address these problems by developing a career development program and processes. Jan developed one long-term strategy to solve the career development issues, and two short-term issues to be addressed, on-boarding and training; she eventually realized, however, the solutions were much more complicated because the problem was much deeper, which influenced corporate culture and rapid growth through acquisitions caused the unalignment in the organizational mission, values, and vision.
The company needs to put in place a workforce planning and succession planning programs. They need to create mentoring and sponsorship programs to assist employees in career planning and provide clear direction on the job. They should create a proper orientation and onboarding system which will assist employees in acclimating to the corporate environment. They also need to create employee development programs that have been proven to work in the industry, consider implementing dual-career ladder development programs. The company should conduct third party engagement surveys on a periodic/frequent bases to gather feedback for improvement of TM programs.
CH2H Hill’s failure to properly structure employee integration from recent acquisitions has created obstacles in the pathway of employee development. CH2H Hill is experiencing a high-voluntary turnover of new employees, lack of qualified employees to fill vacant senior-level position, 60 percent of employees have less than 5 years of experience, a majority of seasoned employees (Baby Boomers) are expected to retire, and in 2012, less than 25 percent of senior management and executives were promoted from within the company.
Application of Talent Management Concepts
The application of the course content are employee training and development, onboarding, succession planning, turnover, and engagement. Also, the organizational structure is not aligned with the organization’s strategic objectives and talent management programs are either nonexistent or are inadequate.
There were no proper Talent Management (TM) programs in place which enabled and optimized engagement, employee development, and maximize the employee retention. The HR functions and its organizational structure are not properly standardized or structured with the organizational objectives. This is part of the reason employee satisfaction and learning and development issues are systemic. There is a lack clearly identified TM programs which are proven efficient and effective. The paths to employees’ upward mobility are limited with bureaucratic tape attached to cross-training opportunities. There was no socialization program or retention plan present to create an environment for engagement. Employees are not engaged as there seems to be a lack of a pathway to grow within the organization. The employees did not have proper guidance or support system which is an indicator of a poorly constructed organizational structure.
The only good thing present is the flexibility enjoyed by many employees, the ability for employees to choose their projects, and many employees enjoy working on projects that help the environment. Many employees worked remotely with little supervision which allowed for empowering employees, but with little guidance. The lack of new employee training in the on-boarding system and lack of supervision and direction put new employees in a position of “hit the ground running” in order to succeed. The on-boarding practices are inappropriate and do not provide any proper training for new employees. The new employees should not be put in a situation of “sink or swim” during their on-boarding process. The company hired employees with experience and were expected to start working immediately with no training. There are no mentorship or sponsorship programs that would allow upper management to be involved in the employees’ career path.
There are no proper measurements for performance evaluation, and below-average performing employees are not properly coached and counseled. A couple of glassdoor.com posts mentioned are: “poor performers are often not dealt with”, “no incentives to work hard”, “minimum percent increase salary adjustments, even with high performers”, and poor performers make the same as high performers. The inadequate total rewards can cause engagement issues, as there are no performance measures linked to compensation related to raises or bonuses. This can cause employees to perceive their job with an attitude of there are no incentive to perform.
In 2010, 43 percent of employees were from the Baby Boomer generation and were expected to soon retire with no clear plan to replace those employees. This was compounded with 60 percent of employees had less than five years’ experience. The expected employees to retire with no clear replacement plan in place was a key indicator that the employees were not developed enough to fill the rolls of the Baby Boomers employees. The organization does not have proper succession planning and workforce planning in place to be proactive to ensure and promote from within the organization. This was the main reason Jan was charged to implement a development program.
Jan’s attempt to reinvent organizational development can be compared to a person wanting to recreate the wheel. The company did not need to reinvent organizational careers; they needed proven learning and development programs in place for proper employee learning and development. Jan’s idea to develop the employees was to make the manager’s “number one responsibly” as the develop of subordinates. This would require the manager to allocate time away from essential duties to accomplish their job; a manager’s primary job is to manage people. Jan seemed to think repeating the same job over and over again is how people gain experience and grow in the company. Jan measured experience by the number of years an employee has worked; the number of years worked does not equate to properly measuring skills. An employee can be doing the same job for twenty years, compared to an employee with five years’ experience in job rotation.
The first recommendation would be to create an employee training and development programs which reflect properly to their workforce and senior management. A practical solution is to use reliable and proven learning and development techniques. Some solutions may include leadership classes at local universities, online courses, non-managerial/technical development. There are a lot of costs associated with this recommendation, however, not properly training and developing key employees would translate to a company with poor career opportunities.
The second recommendation would be to create mentorship or sponsorship programs to help guide the employee’s career planning. A mentorship program would help provide direction to employees on the job. A sponsorship program would help with strategic workforce planning. The challenges of adopting this recommendation would be how to sell the sponsorship and mentorship programs to the managers and senior management.
The third recommendation is to create strategic workforce planning and succession planning programs. Properly planning for who is best qualified to fill positions is extremely important, especially in an organization with so many Baby Boomers planning to retire. Workforce planning and succession planning are an essential component for HR to have an efficient talent management supply-chain. The challenges of adopting this recommendation would be finding qualified candidates and developing those candidates in order to fill vacant or future vacant key positions.
The fourth recommendation is to create an on-boarding program and retention plan. A new employee needs to be properly assimilated into the organization. And a plan needs to be in place to retain that employee. On-boarding programs can be costly and time-consuming, however, a proper on-boarding program allows for new hires to get acquitted to the people and environment, properly fit into the organization, proper training, and it enables employee engagement. A retention plan is good to have such as knowing when to conduct stay-interviews, when to intervene in the ELC, and minimize turnover.
It is also recommended to hire a third party to conduct an engagement survey to receive feedback on a periodic basis to ensure TM programs are efficient and effective. Proper budgeting is needed to conduct third party surveys, but the ROI is worth it. Getting feedback that is unbiased will further help in ensuring the effectiveness of TM programs mentioned above. The engagement surveys can be broad and/or narrowed scope of the TM system. The frequency of the engagement surveys should be scheduled to track the TM system. For example, some surveys should be conducted on: 15-day, 30-day, 60 day, 180-day, and some TM programs in frequency of 30–60–90-day.
The promotion of the emotional connection to the old small operation style is an indicator that the organization needs to re-engineer their vision, mission, and values, which in turn would have allowed HR to align the employees’ objective and goals to positively impact the bottom line. The company lacks proper TM programs, such as employee training and development, on-boarding, workforce planning and succession planning, and retention planning. The TM programs need to be proven efficient and effective before implementation. The positives are that employees were given flexibility in the job, empowered to make decisions, had a flexible work schedule, but the lack of supervision had its downfalls.