The Peter Principle states that “in a hierarchy every employee tends to rise to his level of incompetence.” It was formulated by Dr Lawrence Peter and Raymond Hull in their 1969 book by the same name.

I call them “the brand dead” or “brand spectators” who fur up the organisation’s arteries. Most MDs tolerate a Peter or two. But when conditions change, Peter and pals can very quickly poison your brand from within. When the big battalions are mobilised and change is demanded, the Peter’s, not the market conditions, are your worst enemy.

Consider the impact a Peter can have on your recruitment drive.

“Hire people who are better than you are, then leave them to get on with it . . . ; Look for people who will aim for the remarkable, who will not settle for the routine.” The late David Ogilvy, advertising executive

“If you pick the right people and give them the opportunity to spread their wings—and put compensation as a carrier behind it—you almost don’t have to manage them.” Jack Welch, former chairman and CEO of General Electric

Ogilvy and Welch point the way towards recruitment nirvana – making the most of the fact that it’s an employer’s market to recruit experienced; challenging; maverick; game changers who will stimulate the innovation you need.

But the Peters will desperately cling onto the status quo, recruit in their own image and reinforce the employer brand which failed to spot the issues which have since marched all the way around the corner and into your boardroom.

And if you’ve encouraged Peter-style behaviour within your intermediaries and recruitment agents, you’re in deep trouble as they will doubtless perpetuate a protectionist culture.

When you get a moment, just take a look at the various recruitment and blogging forums and consider how many really good people are out there at the moment. Listen to what they’re saying about the recruitment practices of the Peters. Ask yourself whether you know who your Peters are and whether Peter can be motivated to change?

But most of all question whether your recruitment strategy is paying Peter by robbing Paul and the impact this is having and will have on the performance of your brand.

In the UK we’ve become obsessed with the notion of the Employer Brand.  There are a number of definitions but, in short, this is essentially the brand (in its physical and behavioural forms), the employer presents to existing, potential and new employees. 

Of course, there’s nothing wrong with positioning brand as a concept as applicable to the internal audience and employee audience as the customer audience. And it’s a welcome change to perceive employees and potential employees as customers of the internal support functions.  However, it’s an equation without balance.

I believe our HR functions can and should take a step further towards embracing the role of brand management in the motivation, development, recruitment and management of employees (see Brand Engagement ). That extra step means moving beyond Employer Branding and embracing the notion of the Employment Brand. It calls for a lot more than a simple shift in semantics.

We can lure employees to our employer shop window with silvery-tongued promises, clearly differentiated package, glitzy brochures featuring models airbrushed offices and slick recruitment processes, with a seamless link between the core business and linked suppliers like recruitment companies and marketing organisations.  But how do we keep them people once they step through the doors and complete the induction programme? How do we prevent potential brand ambassadors from becoming brand saboteurs if they become disenchanted with the difference between what they were promised and what they experience?

Just as a brand, from a customer perspective, isn’t the promise made but the promise delivered, the Employment Brand is the result of the Employer Brand minus the Employee Brand (i.e. what the people processes promise minus what they actually deliver). 

It’s a simple twist but by focusing on the notion of Employment Brand it keeps the minds of those responsible for managing the people processes firmly focused on constantly ensuring they understand what they’re promising new as well as existing employees and that they are delivering against that promise. 

This approach calls for close collaboration between recruiters; inductors; measurers; people developers; communicators and brand managers. It’s a massive and positive opportunity for HR departments to step confidently into the brand breach with their marketing colleagues:

-         to develop one compelling story about the brand

-         to work to a consistent set of values

As recruitment markets gradually move back in favour of the talent pool, this shift in emphasis may just be a genuine brand differentiator.

There’s been much written about employee engagement in recent years as this relatively modern phenomenon continues to evolve from its internal communication roots.

Although often over complicated, the general premise of employee engagement is simple. Individual contributions of employees in the workplace is influenced by the strength of their emotional connection to their employer. The stronger and more positive that connection, the more likely it is that the employee will contribute their best effort for the sake of their organization or brand.

At its core, EE is based upon reciprocity. The employer works to create a work environment that is satisfying and rewarding for employees and stimulates their emotions and higher order needs. It literally invites them to bring themselves to work and become similarly invested (engaged) in their organisations long-term success. The concept is fairly simple to grasp, but not necessarily easy to implement.

One of the challenges is that emotional connections can be difficult to define and measure and are prone to shift in response to changes in the work environment. More confounding is that these relations are influenced by multiple variables (line management relationships, organizational mission and values, workload, peer relationships, etc.).

Add to this the cost/resource challenges created by the worst recession since the Great Depression and the fact that EE is reliant on discretionary budgets and EE as a business strategy can quickly become a “nice to have” in the good times.

These challenges aside, engagement as a strategy is not only important, but vital, especially in a climate of economic uncertainty, to the long-term viability of most business enterprises. According to a proprietary report just completed by the University of Akron’s Centre for Organizational Research, engaged employees tend to:

• Be more satisfied with their jobs
• Be more likely to stay with their employer even when other opportunities emerge
• Be more tolerant of (perceived) temporary economic hardships due to the economy
• Bring a consistently higher level of commitment, creativity and energy to their jobs
• Demonstrate higher levels of “good citizenship” behaviours both at and away from work

As a general rule, it’s safe to say that most employees are not engaged with their employers right now. In fact, the most recent Conference Board survey in the US found that only 45% of employees currently report being satisfied with their jobs (the lowest since the survey was started in 1987). As many as 60% indicate that they plan to actively seek new employment sometime in 2010.

Can Employee engagement really be reserved as “nice to do” strategy for when times are good? Employees are smart and quickly spot insincerity. In tough times, resorting to push communication cloaked in the trappings of engagement is like washing the car and then parking it under a tree full of pigeons.

 These are complex corporate times but as the finger of blame for the global economic downturn is pointed at various external stakeholders like the regulators and even the customers themselves, it’s interesting to hear the term “corporate culture” finally surfacing in banking post mortems.

The term performance culture has been increasingly abused within performance management parlance.  It has become inextricably linked with the drive for delivering shareholder value in quarterly increments and the “up or out” mentality which has spilled over from investment banking.

But now that almost every investment banking super-tanker has holed itself on the reefs of greed, selfishness, arrogance and some fairly suspect practice it’s time to reclaim the phrase. This is why leaders like RBS’s Stephen Hester are now having to open internal moratoriums in an attempt to bridge the obvious and growing employee engagement gap that has opened up within some of our high profile financial services names.

Ironically, despite this being an employer’s market, employee engagement; employer brand and corporate culture have never been so important. But it’s time for a fundamental re-think about how internal stakeholders (employees) are managed. The infrastructure underpinning many employment brands is clearly in need of a dramatic overhaul. And this is no job for the marketing function or advertising types.

Clearly characteristics like sustainability, network building and relationship development are the bedfellows of integrity, accountability, security and trust (the values, ironically, most popularly used to market the wares of financial services companies). But how can these values flourish when FS employees have seen HR functions replaced by processes and help lines; when average employee tenure (and loyalty) has fallen so dramatically and when  effective performance management and feedback loops have been replaced by grievance processes and whistle blowing – the corporate equivalent of “ratting on your colleagues”

I’m certainly not calling for a complete return to the cosy old hierarchies; glass ceilings and command and control regimes. But it’s clear that there’s going to have to be a large dose of mature, “back to the future” relationship based thinking if the nirvana of an appropriate and authentic performance culture is ever going to be achieved by arguably our most influential businesses and brands. And if the last 18 months has taught us anything it’s that none of us can afford for our financial services brands to continue to fail their employees by making promises to customers and the market that they simply can’t keep.

Ian

The importance of managing employee perceptions has given rise to the contemporary notion of Employer Brand.  This is essentially the brand the employer projects to existing and potential employees via the chain of communication touch points ranging from recruitment intermediaries through to line managers. 

I believe, however, that by focusing on Employer Brand, the HR community runs the risk of become obsessed with only half the story. If we accept that a brand is simply a set of promises unless people keep those promises then a more accurate and effective descriptor for this aspect of internal brand management is Employment Brand.  This reflects the difference between the espoused or promised brand and actual experience and points to the importance of culture management.

As the employer brand tends to fall within the remit of the people-centred functions (usually HR) and the brand projected to customers remains ring-fenced by the Marketing functions, the seeds are sown for brand warfare perpetuating multiple value sets, confused behaviours and creeping brand death if the situation persists.  This internal brand warfare is rife across sectors and undermines the effectiveness of the brand management process.  One of the battalions critical to the outcome of this war is the internal communication function. The brand projected by this function will largely be reliant upon the reporting line of this function.  Research indicates (see Buckingham, Brand Engagement www.palgrave.com/products/title.aspx?PID=281268 ) that HR may well be winning this particular war as HR functions are increasingly adopting Internal Communication within their remit.

This trend towards HR dominated internal communication is exposing effective brand management to increasing risk of failure however because:

1. HR budgets for internal communication and employee engagement are largely discretionary and are very exposed when the balance sheet comes under threat
2. HR functions have a habit of perpetuating additional value sets and complex behavioural matrices than those espoused by their marketing counterparts which can lead to duplication, complication, confusion and behaviour that is not “on brand”
3. Internal communication should be regarded as a professional discipline in its own right.  It is not internal marketing and PR and is not employee consultation nor is it message management.

The most obvious answer is to encourage more effective partnerships between HR and Marketing and to professionalize internal communication in the interest of managing the brand from both the internal and external perspective.

Largely as a consequence of the scenario detailed, employee communication tends to be project based and tactical, cascaded or marketing-think applied to the internal market.  Written communication dominates whereas face to face communication via line managers is proven, time and again, to be the most effective communication.  Employee engagement can’t be conscripted, cascaded or aligned however tricky the internal marketing process.  It has to be developed from the ground upwards and packaged in a manner that is appropriate to the culture of the organisation in question.  It must also role model the aspirational brand values. 

Consider many financial service brands as a case in point.  Reflect on how many FS brands project brand values like integrity, trust, heritage, customer service and professionalism?  Employees understand that this is a marketing stance. Too many however, also understand that the prevailing internal culture is increasingly characterised by winning, eliminating competition, survival of the fittest and short-termism.  Internal brand alignment activity which does not acknowledge the current culture and is therefore inauthentic is a waste of money at best.  It is interesting to note that the UK Prime Minister, Gordon Brown, has recently announced a pending package of protectionist measures geared towards encouraging medium to long term thinking within the FS markets and to address iniquities in the reward structures of many financial services organisations. The provocative question is that if they were actually living the brands they espouse would this intervention be necessary?   He is simply acknowledging what employees have known for years (and many customers), that the brand values projected belie the internal culture.  When that happens for long enough it gives rise to brand disasters on the scale we’ve seen recently which many critics have foreseen for some time.

The answer to this brand challenge has to be to unite the internal and external facing brand custodians to develop a holistic engagement programme which is appropriate to both markets.  It must, however, be based upon a sound and clear business case and appropriately funded as a “must have” rather than “nice to have”. I also believe that the key facilitator should be the CEO and that accountability for the success of the holistic brand management programme should be focused on the medium rather than short term which will prevent money being wasted on Big Bang engagement initiatives which are a welcome diversion from normality but rarely work. I believe that there is a route-map of key principles underpinning experience based employee brand engagement but no one size fits all packageable approach.

Food for thought?

Ian