Beyond best practice: enhancing results with bespoke HR

March 2011

Original insight

Beyond best practice: enhancing
results with bespoke HR

HR professionals can be even more effective if they shape
and deploy HR practices and technology that are the best
fit for their organisations - so-called ‘bespoke HR’. This
approach is far more effective than following ‘best practice’.
Applying bespoke HR will result in HR departments getting
more value from every initiative.

Executive summary
“I hope in 10
There is good evidence that human resources (HR) departments contribute to the bottom line.1
years’ time the This paper describes how HR professionals can perform even better by being more discerning
whole notion of – and creative – in our response to business opportunities and challenges. Furthermore, HR
professionals can extend their employer’s competitive advantage by thinking differently when
‘best practice’ will planning new initiatives.
be replaced by
‘best fit’, with HR And it all begins by understanding why ‘best practice’ may be worst for your company.
professionals crafting When charged with a new programme, most HR professionals will normally seek to identify
differentiated and then employ ‘best practice’. Best practice may not be the best way to achieve the business
aim, however, and may actually make the issue worse or lead to lost opportunity.
approaches that suit
their circumstances We argue that HR professionals should shape and deploy HR practices and technology that are
and their culture.” the best fit for their organisations. This is preferable to strictly following ‘best practice’ guidelines
and failing to account for our organisation’s needs. Best fit solutions create competitive
– Duncan Brown, Director, The advantage by creating new solutions, building as needed on what’s worked elsewhere. They
Institute for Employment Studies, take more account of the unique nature of their organisation’s culture, practices and processes.
2010. So-called ‘bespoke HR’ will, we believe, cause HR professionals to lead other departments in
the number and range of successful projects.

We present some examples of HR practice and technology that employ ‘bespoke HR’ principles
and conclude with a model for applying the approach.

This Business insight report was written by Hannah Stratford, the Head of Business Psychology
at ETS. Hannah works with high-profile clients to help them leverage strategic value from
performance and talent management, employee research and multi-rater feedback
programmes.

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‘Best practice’ and HR process
“There is no
We should ask ourselves two questions about best practice: What is it? Why do we put so much
silver bullet that emphasis on it?
will deliver high
levels of employee Best practice has normally either been tested in academic research and/or is drawn from
successful case studies. Adopting best practice is alluring because it seems to guarantee
engagement success.
overnight and
Stepping outside of best practice is perceived as risky. HR Directors report that senior decision
certainly there is makers resist buying into new initiatives unless another company has done them first – and
no one size fits all successfully.
solution.”
The concept of ‘best practice’ assumes that one practice that is better than all the others. The
– Macleod Review, 2009. truth is that there are a range of good practices, some of which will help an organisation and
some of which will hinder its growth. In our experience, it really is the organisational context
that determines this success rather than the implemented practice or process itself. So why
don’t HR professionals pay more attention to this?

An example: best practice in performance management
The ‘forced ranking’ approach to performance and reward is a case in point. Managers rank
individuals’ performance until employees are part of the ‘top 20’ percent of the most productive
and best paid workers, the ‘vital 70’ percent, or the ‘bottom 10 percent’ who are at risk of
being fired. The approach has been very successful in competitive, team-based corporate
communities. But it’s not hard to see why this process has been confusing, de-motivating and
destructive when applied to enterprises where collaboration and teamwork are essential. Some
managers report feeling pressured into ‘almost falsely’ identifying people as under-performing
in order to fill their poor performer ‘quota’.

There are ways to succeed with forced ranking, but HR professionals should have a deep
understanding of their culture and a conviction that it will meet their business goals before
implementing such a process.

Forced ranking is fairly controversial and rare in performance management, but I’m sure you
or your colleagues will have spent some considerable time discussing the relative merits
of different odd and even-numbered scales for rating performance, the role of rating scale
labels, descriptive behaviours and shared concerns about rating inflation and consistency.
The answers to these dilemmas are the ones that best fit your organisation, its goals and
capabilities, with the added perspective of best practice and historical experience.

A second example: best practice in employee engagement
Employee engagement is another area that has attracted best practice myths about how to
encourage employees to go the extra mile. HR professionals are offered competing sets of best
practice by various advocates, who are convinced that their methods will increase engagement.
The Macleod Review, which sets out the case for employee engagement, is an excellent
primer for anyone interested in the evidence showing that an organisation that has engaged
employees is likely to be a successful organisation. However, the authors are at pains to say
that the accumulated wisdom is not a prescription for success. Instead, they state that: “there
is no silver bullet that will deliver high levels of employee engagement overnight and certainly
there is no one size fits all solution”.2

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‘Best practice’ and HR software
HR software solutions have transformed the role of HR, allowing employees and managers
to take ownership of and gain access to resources that an HR officer would previously have
provided. They also enable HR to demonstrate their strategic value to businesses through
sophisticated reporting which informs critical people-based decisions.

Modern HR solutions are rich in functionality for the individual user, manager and administrator.
Their weak spot is that each one is based on a set of ‘best practices’ which the manufacturer
believes all its customers will need. This can, combined with the lack of flexibility in most ‘off-
the-shelf’ HR software solutions, give rise to several problems:

• Users have to learn a new set of ‘best practice’ processes, when the original processes were
well understood and compliance was high.

• Users are faced with too much new ‘functionality’ meaning that essential tasks are not
clearly sign posted. This increases the time taken to use the new system, which can make it
time-consuming and more likely not to be used.

• Users and administrators don’t have a voice in the system development. Counter-cultural
processes and language are introduced, which can lead to confusion and resentment lack of
understanding and engagement. Additionally, while there are lots of reports available, often
they do not provide the data required by managers and administrators or the business.

• The company and employer brand are poorly applied making the user experience
unrewarding and reducing pride in the organisation.

In contrast, by employing the bespoke HR approach, even the most challenging audience can
be brought on board with HR initiatives.

ETS worked with a leading mining company that had found an off-the-shelf system difficult
to implement. The company wanted to deploy a 360-degree feedback programme for their
on-site employees, including miners working shifts underground. In their experience, the
rich functionality of the off-the-shelf system was a barrier to usage. Instead, ETS designed a
streamlined and simple solution with only the essential information and a short and clearly
sign-posted process.

ETS worked with the client to find the ‘sweet spot’ between the business aims, a range of best
practices and a deep understanding of the company culture and processes. The result was
great take-up of 360-degree feedback, which was combined with an emotional intelligence
tool and led to a positive cultural and business outcome.

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Bespoke HR: the antidote to ‘best practice’
Addressing the HR professionals who adhere to ‘best practice’ may feel they are implementing tried and
unique needs of your tested, proven approaches. But copying other companies without consideration of the needs
and requirements of your own organisation may in fact lead to failure.
business requires
careful consideration Are we perhaps tempted to adopt best practice without questioning whether it’s appropriate
of all the options in to our specific set of circumstances? That’s the conclusion reached by Duncan Brown from the
Institute for Employment studies.
light of your business
context. “I hope in 10 years’ time the whole notion of ‘best practice’ – in other words, copying what
everyone else has done – will be dead and buried, replaced by ‘best fit’, with HR professionals
crafting differentiated approaches to people management in their organisations that suit their
circumstances and their culture, as the best HR directors do already.”3

I have asserted that companies should not slavishly mould their practices to match the latest
academic research or technological innovation. But I don’t want to understate the challenge:
addressing the unique needs of your business requires careful consideration of all the options
in the light of your business context.

I suggest that finding the HR answers that best fit the business question is even more successful
if HR professionals build on and extend the essence of what makes each company successful.
Lynda Gratton of the London Business School describes ‘signature processes’ “which are
idiosyncratic and unique to individual organisations [and] are the secret to sustainable
competitive advantage”. 4

These can be seeming small things: the top management at one bank talk every morning (a
practice that has survived globalisation), which ensures that they company’s core values of
respect and accountability are maintained. Each company will have elements of its culture and
processes which, if understood and built upon, will help each goal to be met more successfully
and potentially lead to sustained competitive advantage.

Bespoke HR leads to HR processes and solutions that are designed specifically to meet
companies’ needs. Below are some examples.

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A bespoke survey measures engagement
Many companies use the same questionnaire, which has benefits in terms of being able to
compare to others. However, the questions may not address what drives engagement in each
organisation.

The Macleod Review avoids a one-size-fits-all approach, suggesting that engaging employees
is a multi-layered process: “The way employee engagement operates can take many forms –
that is one of the most fascinating aspects of the topic – and the best models are those which
have been custom-developed for the institution.” 4

It’s our experience that the measurable characteristics and actions of an engaged employee
differ considerably across separate organisational sectors, contexts and cultures. As such,
we work with each organisation we work with to define a unique questionnaire based on an
understanding how engaged employees feel, think and act in their specific organisation.

Once validated across the business and implemented as part of an engagement survey,
the Engagement Index is able to identify what drives engagement within that organisation
specifically. Such an understanding provides great insight for companies alongside some
robust data to inform organisational wide action planning to improve employee engagement
and ultimately business performance.

Figure 1: Measuring employee engagement for a specific organisation is a three-
step process:
1. Create an Engagement Index by
finding out how employees feel about
the organisation and then interpret
this information with reference to the
engagement literature and industry
Define Define experience.

* Define an engaged employee within the
organisation. How they think, feel and do 2.Measure other aspects of the
forms the Engagement Index. organisation such as perceptions
of leadership, communications and
facilities people have to do their job.

Measure Measure 3. Conduct statistical analysis to
understand which of those aspects of
* Measure other aspects of the work enable or inhibit engagement
organisation. among employees.

Analyse Analyse
* Conduct statisfical analysis to understand
which of those aspects of work
enable/inhibit engagement levels in
employees.

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Brand-driven processes and solution
A major, high-street retailer approached ETS with a unique challenge: to create a performance
appraisal solution that incorporates their vibrant brand and novel HR processes. The retailer
communicates with its dynamic, trendy workforce with reference to popular culture. The
company wanted to reduce the positive skew they were currently experiencing in performance
ratings and encourage the use of the full range of the scale.

Working closely with the client, ETS created a user interface that was wholly client-branded
and with strong visual links to music and film. The five-point rating scale was represented as
five stars, which is a common device for users rating music or movie downloads (Figure 2).
The brand is so strong and the values so embedded that we used stars as the foundation
of assessment, which also drives the brand. By tapping into this well-understood device,
employees were encouraged to employ the full length of the scale as they are used to scoring
music or movies less favourably with one or two stars. Since the middle score of three stars
was not stigmatised as a poor rating, this proved extremely effective in reducing the positive
skew in the data during performance ratings.

This bespoke HR solution makes the process individuals need to adopt clear and easy to
follow. This solution makes it simpler to rate colleagues, and engages the user through
the branded interface. The easy-to-use and effective solution was effortlessly adopted by
employees, with 98% uptake in its launch year.

Figure 2: Example of a strong brand and five-point scale using stars

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began working with brand: 6 june 2009
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page 1: values you
please use the star ratings to rate the values.

type your comments here... type your comments here...

FLEXIBLE ENERGETIC

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THOUGHTFUL CREATIVE

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Advanced reporting aids decision making
ETS designed a bespoke 360-degree feedback solution for a major financial services sector
client, based on a unique process and assessment criteria that we developed specifically for
their business needs. Central to the success of the work was a comprehensive reporting suite
that enabled data interpretation at the organisational as well as individual level.

ETS delivered a solution that links three employee-based evaluations and compiles the results
into a single individual development report helping individuals to drive forward their behaviour,
technical skills and ability to contribute strategically to be business.

The solution includes aggregate group reporting, which provides insight data regarding the
capability of the workforce at a macro level. This solution includes a user-generated ‘Heat
map’ that provides an organisational view of data that maps trends in employee performance
(based pre-determined criteria) and identifies trends or pressure points (Figure 3).

Figure 3: Heat map sample

Heat maps
Please select from the following drop downs to view the type of heat map you require

Data type Competencies

Selection criteria Demographic

Demographic option Business area

Run report Export to Excel

Demographic Demographic In uencing Drive and Continuous People Business
type resilience improvement leadership acumen

Business HR It is clear from the red
function and amber squares that
the HR business func-
tion is weak across a
range of competencies.
Business Marketing
function What is this telling us?

Business Sales
function

Business Finance
function
Based on the summary
provided by the red
and amber squares, this
organisation may need
Business Operations to address poor in u-
function encing skills across the
business. The poor
scores across the board
may indicate that this is
Business IT
function
an organisational-wide
issue.

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Bespoke HR to find ‘best fit’ HR solutions
HR professionals interested in finding ‘best fit’ solutions to their HR challenges and opportunities
should balance the business and HR goals, best practice and the company culture and
processes (Figure 4):

Business and HR goals:

• Be clear on what the business wants to achieve and how the HR initiative is going to help
achieve the solution.

• Ideally, identify business-relevant metrics that will show how HR contributed to the company’s
success.

Best practice

• Review all the best practices relevant to the business / HR aim. This activity includes HR
best practices but also tangential areas such as technology, change management and
communication. Include academic literature and industrial case studies.

• Critically evaluate the views of specialist ‘gurus’, being careful to identify their commercial
interest in having their views accepted.

Company culture and processes:

• Evaluate existing processes and capabilities in terms of what works well and what doesn’t.

• Identify the defining features of the company culture – people, systems, language, brand,
use of technology – that you will incorporate in your solution so that people want to engage
with the solution.

• Understand what made previous initiatives succeed and fail in your company so that you
can boost the enablers and neutralise the barriers.

• Identify signature elements that confer sustainable competitive advantage for your company.

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Following this procedure will lead to the design and implementation of HR processes and
solutions that are more likely to achieve their business and HR objectives and more rewarding
for employees and managers, a key factor in the success of new programmes.6 In terms of
technology, creating a user interface with well-known language and techniques, you will reduce
the additional workload required of your initiatives (another key to successful implementation).7

Figure 4: Bespoke HR to find ‘best fit’ HR solutions

Organisational objectives
and HR strategy
* Mission and goals
* Business and people strategy
* Programme objectives

Bespoke HR
Company and culture Best practice
* Capabilities * Existing best practices
* Processes * Case studies
* Culture * Academic literature
* Signature elements * Industry benchmark
* Technology
* Paths to success

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Conclusion
We HR professionals have in the past found ‘best practice’ to be a useful way to short-cut
decisions when implementing our plans. No more!

There are six common myths about best practice that are illustrated in this document. I advise
HR professionals to bear them in mind when tempted to exactly implement a best practice
solution:

Six best practice myths:

1. There is a single, well known answer to every HR question
2. Using best practice, one can ignore organisational context
3. Best practice is the safe option
4. Best practice creates competitive advantage
5. HR’s knowledge and experience can’t generate solutions better than best practice
6. Contravening best practice should always be avoided
HR professionals who see these myths for what they are should adopt the alternative
approach: bespoke HR. By taking into account the context and culture of each organisation,
HR professionals will create solutions that are more relevant, readily accepted and successful
than those based on best practice.

This paper has outlined why and how the HR department can create distinctive, successful
initiatives. I hope this will give you HR department and your company a distinct competitive
advantage.

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About ETS
This Business insight report was written by Hannah Stratford, the Head of Business Psychology
at ETS. Hannah works with high-profile clients to help them leverage strategic value from
performance and talent management, employee research and multi-rater feedback
programmes. Dominic Wake and Kelly Dern also contributed to the content of this report.

To contact Hannah or Dominic about this report, please send an email to Dominic.wake@
etsplc.com or call +44(0)1932 219949.

ETS works with companies such as Allianz, G4S, IKEA, PepsiCo, Tesco, and Thomas Cook.
We provide business-focused consultancy and custom-designed technology to meet the
performance management, employee research and 360-degree feedback needs of world-
leading companies. We combine innovative technology solutions with practical experience to
designed a solution that ‘fits’ your business needs.

ETS delivers our clients’ ‘ideal world’, which means that our solutions exactly match each client’s
corporate culture and processes: we listen to you needs; we do not expect you to bend to our
solutions. Where appropriate, we develop the new processes needed to meet your people
objectives. Where it is possible, we can integrate with, and automate, any existing HR processes
so that new and old work together.

Expert Training Systems
123 New Zealand Avenue
Walton-on-Thames
Surrey KT12 1QA

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References
1
Tamlin, P., Cowling, W. and Hunt, W. (2008). People and the Bottom Line. Brighton: Institute for
Employment Studies.

2
MacLeod, D. and Clarke, N. (2009). Engaging for Success: Enhancing Performance Through
Employee Engagement. London: Department for Business, Innovation and Skills (BIS).

3
Brown, D. (2010). HR’s Transformation Through the Noughties. Personnel Today. Retrieved
from
http://www.personneltoday.com/articles/2010/01/05/53345hrs-transformation-through-the-
noughties.html

4
Gratton, L. and Ghoshal, S. (2006). Signing Up for Competitive Advantage: How Signature
Processes Beat Best Practice. London: Advanced Institute of Management Research, 5.

5
MacLeod 33.

6
Lawson, E. and Price, C. (2003). The McKinsey Quarterly: The Psychology of Change
Management. London: McKinsey, 3.

7
Sirkin, H., L., Keenan, P. and Jackson, A. (2005). The Hard Side of Change Management. The
Harvard Business Review, October, 109-118.

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