Tag Archives: mythbusters

Myth Buster: Do Employers Use Bad Credit Checks to Discriminate?

Actually, 87% of organizations report that they allow job candidates, in certain circumstances, the chance to explain results, according to a 2010 Human Resource Management study. Not to mention that a large majority of employers and HR don’t have the financial resources to do credit checks on every single employee.  

“Typically the credit check is not for all jobs,” says Tony Deblauwe, founder of the human resource consultancy company HR4Change, and author of “Tangling with Tyrants: Managing the Balance of Power at Work.”

“Usually there has to be a reason, such as the job is in finance, or an executive level job with profit and loss responsibility.”  

Employers Don’t Have the Approach of Lenders

Employers do tend to refer to credit reports for similar reasons to lenders; however, for HR, the credit report is only a small part of the evaluation of an individual.  

Not only have that, but employers and HR professionals scanned a longer period of history in a credit assessment.  

In the HR study, for example, most organizations focus on credit history of four to seven years overall. So even if the recession brought a little bit of hardship on a potential candidate, there should be room to investigate a person’s broad range of financial responsibility.  

Read the Fox Business article

Image: Simon Howden / FreeDigitalPhotos.net


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Myth Buster: Is There a Lack of Leadership Opportunities for Women Today?

From a study released this week by McKinsey & Co., it turns out that the resources to foster female leadership in Corporate America have gone down. The survey results were taken from 2,525 college-educated men and women employed by large companies.  

Just a handful of women have been able to advance in management with their corporate companies. “Only 11 chief executives of Fortune 500 companies are women, down from a peak of 15 in 2010,” according to a spokeswoman for Catalyst Inc., a nonprofit women’s research group. There were two Fortune 500 female CEOs in 2000, up from one in 1995, Catalyst said in a 2000 report.  

With the release of this research data, McKinsey analysts are urging employers to spend more time and invest more resources in leadership training and coaching for women in the workplace. In particular, they took note of multiple barriers that seem to made it more difficult (and less appealing) for women to climb the corporate ladder.  

For instance, the survey revealed a few interesting truths surrounding advancement in corporations:  

  • Women are “doubly handicapped” because 62% occupy staff jobs that rarely lead to a CEO role 
  • Employers aren’t watching middle-management women, providing them with the support to clear the next promotion hurdle(s) 
  • Employers and HR express a deep interest in gender diversity, but fail to actively promote leadership  careers for women, and making sure they have female mentors  

Read the Wall Street Journal article

Image: Simon Howden / FreeDigitalPhotos.net

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Myth Buster: Can HR Have a Seat at the Executive Table?

Five years ago, HR and labor experts have noted the growth of strategic functions for human resources professionals. Today, this trend is going strong. For organizations that’ve had to outsource certain functions, it is common that they outsource administrative tasks while focusing their internal HR in the long-term business planning for the organization.    

In the 2006 SHRM survey, HR professionals nationwide reported that their HR departments were, in large part, contributing to the majority of long-term planning that would enhance the company’s competitive advantage. At the time, more than 80% of surveyed HR managers felt that their department’s focus was on administrative support, thus limiting their ability to contribute at the strategic level.  

Although limited by budget cuts following the recession, HR professionals are continuing to become key players in strategy. This is particularly true as companies are starting to become more competitive and investing in the opportunities to grab new talent and expand.  

So it is, in fact, a growing truth for organizations everywhere that HR is expanding into a strategic function, gaining a seat at the decisionmakers’ table. When HR perceives itself to be strategic, it is often true that it is not perceived that way by the CEO or departmental leaders. It is either the various leaders of the organization underutilize HR services or the direct link between HR and company success is not being communicated.  

What can be done to move in that direction? Think about the ways in which you consider HR to be strategic and what can be done to improve those services to the organization. Line up the contributions to the organization’s bottom line – their goals and measurable financial results. Also, a reexamination of how you communicate HR value every day in the workforce is important to your program’s growth plan.  

Check back for next week’s Myth Buster as well as future tips on how to grow HR into a strategic function in your organization.

Image: Simon Howden / FreeDigitalPhotos.net

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Myth Buster: Do Pay Increases Really Make Employees Work Harder?

I declare today as Human Resource Myth Buster Day on our blog. Each week, I’ll be taking up a new HR topic on common assumptions of employee behavior or needs that are found in practice. By digging a little deeper and looking to a variety of experts and research studies, HR professionals can challenge themselves (and their organizations) to apply such knowledge to effectively engage workers in their jobs, make incentives that work, develop office policies that do more help than harm, and so on.  

To begin, let’s discuss fact vs. fiction when it comes to pay raises and pay cuts. Is financial gain the simple equation to boosting productivity? According to recent experts in behavioral economics, pay and performance don’t have the perfect marriage.  

Henry Ford’s Efficiency Wages

The discussion could go further back into history for a better understanding. In 1918, Henry Ford discovered the revolutionary concept of “a higher paid worker means a more efficient worker.” He exceeded his competitors by offering $5 a day to prove the success of what became known as the “efficiency wages” model. It was a win-win scenario – not only was he able to boost productivity, but his business attracted the best of the best talent.  

Gift-Exchange Experiments

In an article by Slate Magazine, they featured one of many experiments to demonstrate the relationship between pay and productivity among employees.  For a position advertised at $12/hour, the first set of workers received $12/hour as expected while the second half was overpaid at $20/hour at the end. Some of the results showed that while productivity among the second group was higher in the first 90-minute period, it began to significantly lower with passing hours.  

Unfortunately, an inquiry into pay cuts or raises is not simple. In the economic downturn, many employers were faced with the choice of cutting wages versus laying off a few employees. Results have shown that in this type of major change, giving out the pink slip to a few workers is better on employee morale than cutting everyone’s pay. However, when considering general employee motivation following pay raises and other financial perks, the gift-exchange experiment challenges us to consider long-term results of the monetary incentive.  

If you’re interested in reading more about the behavioral economics studies, check out the Slate article.  

Also, look out for the second feature on the Weekly Myth Buster series for The Human Resource blog the same time next week. Comments and suggestions are welcome!

Image: Simon Howden / FreeDigitalPhotos.net

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