When we think about tools like Expedia and Yelp, we realize the value of transparency in the marketplace. The
underlying issue is information asymmetry – when one party has more information than the other, that party
has additional leverage in a discussion or negotiation. Leveling the playing field between two parties in an
exchange helps both to feel like they got a fair deal, which is essential in an employment situation. This
specifically applies to compensation as well. There is value in openness, and companies that find the right
balance can reap the benefits of pay transparency

Research Supports an Open Approach: Research points out that companies where employees understand the pay philosophy are more likely to see engagement from employees. A sense of trust and openness at work can create bottom-line business results. On the other end of the spectrum, pay secrecy has proven to limit business impact. This combination of factors clearly makes the case that businesses need to seek transparency at some level.

Trends in Transparency: A wide variety of trends have contributed to this increased demand for compensation transparency. From the deep insights offered by tools like Charity Navigator (and other online transparency sites) to the media sharing stories of corporate corruption and scandal, many drivers have created an environment that is ripe for additional openness.

Delivering a High-Quality Employee Experience: The good news is that any organization can improve pay transparency. Using tools like transparency audits and frameworks, companies can deliver a culturally-appropriate level of openness that improves the employee experience. These methods help organizations to make decisions (both big and small) in search of the right balance of transparency.

The Business Case for Transparency

Several years ago, Dan Ariely, a behavioral economist and professor at Duke University, performed an analysis of country-specific organ donation rates. His findings showed that countries like Austria and Poland had higher than 99 percent donation rates, but countries like Denmark had dismal rates in the single digits. He wanted to find out what made each group different, because Denmark is very similar to its neighbors in terms of culture, religion, and other socioeconomic factors.

It turned out that the key influencer was not an intrinsic one at all. Each country’s Department of Motor Vehicles actually used a different method for enrolling someone in organ donation. For Austria and Poland, the enrollment form’s default was to participate in the program. For countries like Denmark, the enrollment form required them to opt into the program. That small difference led to significant impacts on organ donation and availability, and it offers a compelling lesson on how our default reactions can shape outcomes.

The lesson here is, given the choice, we should default to transparency. For some business leaders, it is reflexive to protect information, keeping it secret unless they have a good reason to share. While working as an HR leader, I performed plenty of coaching with my executive team focused on the concepts of pay transparency and business transparency in general. I always told them their default should be to share openly unless there are specific reasons not to. The benefits of this approach include greater awareness and engagement in the employee population.

If you’re interested in reading and learning more about compensation transparency, be sure to check out our free eBook on the topic underwritten by the great team at Salary.com, where this content was pulled from. I’d love to hear your thoughts on the topic!

This summer at Lighthouse we’ve been working our way through a number of research studies, but to be honest one of the ones I’ve been incredibly pumped about is focused on performance management. It’s probably because I get a sense of the discontent around this practice regardless of where I go and who I speak with. It’s incredibly hated at so many companies by HR, management, and the employees.

But there are also companies that are using it as a kind of secret weapon. In the research (the full report will be published in September) I am seeing some very interesting points on how companies plan to approach the practice of performance management, and it’s encouraging me to focus on it not just as managing or reviewing past performance, but enabling great future performance.

Top 10 Research Highlights

  1. We keep hearing it in the news–performance management is shifting/changing/dying. It’s certainly not staying the same. Approximately 60% of employers have made changes (including both minor adjustments and major shifts) to their performance process in the last 24 months. Another 25% are planning to in the near future.
  2. Despite the common discussion, annual goals still rank as the number one way employers manage performance. This is followed by recognition, coaching, and leveraging strengths.
  3. While performance feels like a drag for many employees (anecdotally :-)), the number one reason employers still practice it is to improve individual performance for workers.
  4. Which seems kind of said, because just 4% of employers say that their approach is highly effective and enables greater employee performance.
  5. Nearly one in five companies say that their performance management technology is clunky and difficult to use, which hinders progress in performance management, measurement, and improvement.
  6. At the same time, two-thirds of companies say that their approach improves engagement levels for their workforce. This is very much split by the kind of culture a company has (more on this below).
  7. High-performing companies are 58% less likely to say their approach to performance management is ineffective.
  8. High-performing companies are 20% more likely to say their performance management philosophy improves engagement rather than diminishing it.
  9. Astonishingly, companies with a competitive or controlling culture were more than three times as likely to say their approach to performance management failed to deliver the results and may actually impede employee performance and engagement.
  10. The performance practice spectrum. We’re analyzing the data through the lens of performance management activities on a spectrum. On one end are the old-fashioned, unpleasant activities like forced ranking and annual reviews. On the other end are more positive, engaging practices such as development coaching, peer feedback, and more.

    What we see in the preliminary results is that companies with a more collaborative culture are more likely to practice on the positive end of the spectrum while firms with more controlling cultures are more likely to fall on the negative end. More to come on this as we explore the data!

These highlights, while intriguing, are fairly high level. Look for additional insights in our upcoming white paper and webinar (to be announced) that focus more deeply on culture, what high-performing companies do differently, and other key insights from the research!

Note: If you’re looking for a good app to access We’re Only Human and other podcasts, I personally use Stitcher on my Android device. 

Did you know that your employees aren’t innovative or creative enough?

That’s the latest from a research study performed by University of Phoenix on workplace innovation. In an interesting mix of data, the organization asked employees to identify whether their employers were innovative or not, and hiring managers were asked to identify the level of innovation exhibited by employees. The results were intriguing, and I covered some of the key topics of the research in a recent podcast interview with Ruth Veloria, Executive Dean of the School of Business at University of Phoenix.  Continue reading

What does engagement mean to you and your company?

That’s a question I’m trying to answer with a new research study. I’m partnering with my friend Jason Lauritsen to examine the ins and outs of engagement in a very hands-on manner. Instead of just looking at the theory, we’re digging into the specific practices that YOU think drive the highest engagement in your workplace.

The survey takes about 10 minutes to complete, and I’ll be randomly selecting two participants to receive Amazon Gift cards from the people who take the survey through this URL in the next 72 hours. You must enter your email address at the end of the survey in order to be eligible to win. Ready, set, go!

Click here to begin the survey.

In case you’re curious, yes, I’ll be writing on these results in the coming weeks to help you understand how and why they matter. I’m also presenting at a few conferences in the next few months and will be weaving the results into those events as well. Your responses do matter!

Last week I published some new research that frankly surprised me. When we hear about video interviews, assessments, and hiring processes, we expect candidates and employers to be on opposite ends of the spectrum.

But it’s not the case. When asked a series of questions, both groups responded similarly, and the priorities for each group matched in terms of ranking, even if not in terms of exact percentages. In short, it was a very interesting set of research. I’ve posted a chunk of it below, but to read the full piece you’ll need to head over to Lighthouse Research.

The Candidate Experience: Perspectives on Video Interviews, Assessments, and Hiring

In some ways, hiring looks very similar to what it did twenty years ago. People search for positions, indicate interest, and are filtered down until the most promising candidate is offered a job. However, the technology we use has upgraded considerably over time. Today employers have tools to increase efficiency and efficacy, including video interviews, automated assessments, and more.

In a recent Lighthouse Research study backed by mroads, we explored some of the key aspects of hiring with video technology from both candidate and employer perspectives. The November 2016 pulse survey reached more than 250 individuals and employers, uncovering some interesting findings that both validated existing beliefs as well as uncovered some new insights. Here’s what we found out.

lighthouse special report

Key Findings

  • Stress Factor: Nearly 8 in 10 job seekers say that video interviews are as stressful or more stressful than in-person interviews.
  • Attracting Top Talent: 61% of companies say that peer interviews and interactions would be the best way to attract top talent with video hiring solutions.
  • Candidate Preferences: Nearly 25% more job seekers said they would prefer a live video interview to an in-person interview.
  • Candidate Assessment Perspective: Just under two-thirds of candidates think the right kind of assessments—those that give them an opportunity to showcase their skills or a work sample—prove their value in the hiring process.
  • Candidate Experience: Candidates believe that resumes are just as valuable as employment tests/assessments (25% each), but half of candidates say that video interviews are the most valuable tool for helping them stand out in the hiring process.

Click here to read the rest of the article (1,600 words total)

I like data. I like reviewing it, pulling out trends, and sharing insights. I also like when I get the opportunity to ask others what they like and get some anonymous feedback, because I believe that anonymity helps to improve the quality and quantity of responses.

Recently I was listening to a podcast, and the speaker mentioned offering a confidential survey, which he felt was more valuable than an anonymous one. I had to stop and consider the differences, and I realized there certainly may be times when offering confidential surveys can beat offering anonymous ones.

Types of surveys

  • Anonymous-Anonymous surveys collect information and aggregate it without leaving a “trail” to find the specific participant
  • Confidential-Confidential surveys collect information but tie the response back to a unique identifier for each participant. This allows a third party to follow up if need be on specific answers.

How they work and why they matter

Continue reading