ORC Sightlines

September 2005

Mid-Sized Companies Consider R&D Career Ladders

The HR Discovery Network, ORC’s new group for HR directors supporting the R&D function in mid-sized companies, kicked off its first meeting last week with a discussion of career ladders. ORC executive vice president Bob Formento noted that many companies are revisiting their dual ladders. Some are correcting design flaws that are causing performance management and compensation issues, while others are making just minor tweaks, but taking the opportunity to recommunicate with scientists and engineers about career options in the company.

There is no one ladder design that makes sense for all companies; corporate and national culture, the makeup of the technical staff, the type of function (e.g., basic discovery or product engineering), and the size of the organization may dictate different responses to design considerations. For example, a company with a global R&D function may find that the six- or eight-step ladder that makes sense in the U.S. must be subdivided into 10 or 12 steps in its Asian technical centers in order to provide the opportunities for recognition expected in that culture. Or companies that expect their scientists and engineers to work on cross-functional teams may find it necessary to replace or supplement traditional scientific titles with others that will carry more clout with non-scientists in the organization. Some companies in this situation have permitted individual contributors to combine their titles with the corresponding title on the managerial side of the ladder—e.g., Distinguished Fellow/Director.

Mr. Formento advised companies undertaking ladder design to involve all concerned constituents in the process. Managers and scientists alike are more likely to take ownership of the ladder and the career process if they have had a hand in developing them. “Poorly administered ladders,” Mr. Formento warned, “lose their integrity and value.” To have an impact on recruiting and retention, the ladder needs to be integrated with a strong performance management system, an explicit, highly visible career assessment and management program, and a compelling communications campaign for both prospective and current employees.

To discuss your company’s career ladder issues, contact Bob Formento in ORC’s Los Angeles office at 310-846-4201.

Michal Fineman also manages the Human Resources in R&D Network for Fortune 500 and equivalent companies.

Strategy and a New Tool for Effective Expatriate Communication

In policy and practice reviews at company after company, ORC’s consultants find that one of the biggest issues for expatriate employees is communication. When we survey expatriates, comments such as these are common:

“I did not even know there was going to be an allowance until I had already settled in for the move.”

“Hard to know who are the right people to talk with.”

“Lots of unclear areas across practice, office, receiving office.”

“Lack of transparency and explanation regarding changes.”

“Changes were not communicated.”

Expatriate employees are often distracted from their main mission by concerns and misunderstandings about their pay and benefits. Especially troublesome can be adjustments to pay resulting from changing economic conditions. As a result, international assignment managers spend an inordinate amount of time not only explaining but defending the company’s policies.

An effective expatriate communication strategy openly and clearly lays out both the company’s policies and the rationale behind them by:

To help make communication with international assignees both more efficient and more effective, ORC has developed VICKI, a new, Web-based tool that can help multinational companies train HR staff and line managers to communicate directly with expatriates and their families. Companies choose from a variety of “plug-n-play” modules to specify a customized tutorial reflecting their own particular pay philosophies and practices. Users move at their own pace through the tutorial and can replay information as often as needed.

Comprehensive, customized, and designed for clarity and ease of use, VICKI is a powerful communication tool that will help companies support their expatriates, increase their productivity, and earn their trust.

For more information on expatriate communications strategy and implementation or to inquire about VICKI, contact Dea McKenzie, 212-852-0377, or Lynne Molnar, 212-852-0364, or email vicki@orcww.com.

A Delicate Balance: HRIS System Security versus Self-Service

At the joint meeting of the ITHR and HRIT Networks earlier this month, company presentations and member discussion focused strongly on two potentially competing goals: ensuring that HRIS-related systems and applications remain secure against unauthorized access and at the same time offering easy-to-use applications for employee and manager self-service. An additional layer of complexity is added as many companies expand their outsourcing of transactional human resources activities such as benefits management, necessitating linkages to third-party Web sites.

Companies in the two Networks have implemented a range of responses to these challenges. One approach is to restrict access to self-service applications only from within the corporate intranet. Another, of special interest to companies supporting a far-flung global workforce not always connected to the intranet, is to permit Web-based access. Whichever approach they embrace, HRIS managers grapple with a host of technical and management issues.  One of those critical to system security is ownership. Getting organization-wide agreement on who makes decisions about system design and about what data will be maintained and how it will be managed is essential to building and preserving any rational system, but especially so for companies operating in regions with strict data privacy laws.

This point was echoed in the remarks of guest speaker and system security expert Daniel Geer, Vice President/Chief Scientist of Verdasys. Dr. Geer cautioned that the biggest threat to system security comes, not from external individuals or other organizations, but from within the company itself. It is relatively easy to install protections against outside hackers, he argued, but much harder to guard against intentional malfeasance and unintentional carelessness or mistakes of the company’s own employees. A governance structure and management processes that correct as much as possible for the human element will become more and more critical as the sheer amount of data in our systems expands.

Over the next ten years we can expect the traffic on our HR information systems to multiply exponentially. At the moment, however, even the most forward-looking companies are proceeding one step at a time. Especially when moving to Web-based self-service, companies are limiting access to certain key processes and applications while they work through these complex technical and management challenges.

The ITHR and HRIT Networks have sinced merged into the Human Resource Technology Solutions Network, which brings together human resources and information technology professionals responsible for their companies’ HR information systems. For more information about the groups, contact Cynthia Laird, 310-846-4206.

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