Archives for October 2014

MasterCard Inc. is transforming itself from a credit card company to a broader technology enterprise to keep up with fast-paced changes within the payments industry and meet the ever-increasing need for security.

A desire to have a more entrepreneurial culture also requires a change in the company’s approach to learning. Janice Burns, with a background as a product manager skilled at launching products to meet specific consumer needs, was just the person to lead the revamp.

As chief learning officer and head of global talent development and organizational effectiveness, Burns is shepherding many collaborative initiatives in tandem with other senior leaders like Chief Innovation Officer Garry Lyons, the company’s communications leaders, and business resource groups within its diversity office.

Burns and her team are also revamping traditional learning programs to capture specific employee groups’ attention, particularly millennials.

That expansive, cross-functional collaboration is necessary. She said MasterCard’s new focus on innovation would flop if it were only top-down; it has to be grassroots to succeed. “Learning has to be about the culture, and it can’t only be driven or managed by the chief learning officer,” Burns said. “We’re building a culture of learning so it can happen anywhere, at any time.”

To foster creativity the company encourages employees to brainstorm ideas through innovation labs, peer-to-peer learning and reverse mentoring, and to bounce ideas off each other using MasterCard’s internal social learning platform. The brainstorming has yielded promising new ventures, such as contactless transactions at subway fare turnstiles, the ability to pay for items like cologne directly within ads in magazine apps and the launch of benefit cards for South Africans that identify recipients through fingerprints or voice recognition to minimize theft.

MasterCard is forging a new path within the risk-adverse financial services industry, said Daniel Latimore, senior vice president of the banking group at Celent, a Boston-based research and advisory firm. Trying to foster the necessary innovation without damaging the business can be a big challenge for financial services companies because most employees aren’t used to taking risks and have never been rewarded for doing so.

“Creating an environment where risk-taking is accepted and encouraged against this backdrop is extraordinarily difficult,” he said. “Leadership has to be seen to be rewarding employees who are trying new things.”

Product Management: It’s in the Blood

Burns and her team are also tailoring learning to specific employee segments, such as college new hires or veteran sales reps, by figuring out how they like to consume learning. The concept of learners as consumers grew out of Burns’ early history as a product manager, both at the former Chemical Bank in New York City and at her first position at MasterCard in the 1990s.

Her business acumen — particularly knowledge of MasterCard’s processes as she rose in the ranks within business units and then across the human resources lattice — landed her the CLO job, said Ron Garrow, MasterCard’s chief human resources officer. “She has watched the company evolve, and she understands the business very well. People who understand both sides of that equation can be very powerful HR leaders, as they understand all the levers to press.”

Burns said she still considers herself a product manager, and she expects those skills from her team when developing ideas for various employee “consumer” segments and then marketing to promote continued usage.

“This is a very different approach from that typically taken by other learning executives,” she said. “We always start with the business strategy, and we revisit it on an annual basis to see if our learning programs remain aligned with that strategy.”

For example, for time-constrained people managers, Burns and her team launched in July a pilot program, “Take 5 — Energize Your Mind.” The five-minute learning activity might be a video or a mini-case study that managers can access through daily email calendar invites. They can then chat with other managers about the topic within the social learning platform.

For the company’s various employee segments, talent development coaches reach out and remind employees to go on the social platform to check their guided learning journeys — a designated six-week period when employees engage in dialogue after reading posted items or videos. “We play the role of facilitators and motivators more than anything else,” Burns said.

MasterCard has been exemplary in using social media to get its employees to better understand its brand and to build opportunities, said Jeanne Meister, co-founder of Future Workplace and co-author of “The 2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow’s Employees Today.”

The company has a Social Media 101 training program to teach employees “how to share in a safe, responsible and respectful manner as well as use social [media]to be become an ambassador for the firm globally,” Meister said. “Janice is a forward-thinking chief learning officer in using social collaboration in a holistic way to recruit, develop and engage employees.”

Connecting the Dots: Workforce, Learning and Business

While it builds products for businesses, transit authorities and governmental agencies, MasterCard is also shifting workforce priorities. For example, Burns and her team are tweaking the learning agenda to accommodate tech professionals from other industries, Garrow said. Also this year, the team launched a new onboarding video introducing new hires to the payments industry, MasterCard and its products.

The program is presented in a four-part challenge that incorporates videos and quizzes and mirrors a day in the life of MasterCard employees — who they may meet, environments they may encounter and questions they may be asked. This more organic way of presenting and then immediately testing understanding promotes comprehension for industry newcomers.

Burns and her team have launched other offerings in response to business demands. For instance, the team piloted The Art and Science of Business Modeling program for MasterCard’s global products and solutions organization in September 2013 to build project managers’ skills.

Burns said the course significantly improved product employees’ skills in value proposition development, hypothesis testing, prototyping new business models and communicating complex models. In January, the team expanded the launch to more than 500 product professionals and incorporated it into the full product management curriculum for next year.

Burns and her team are also crafting tools to better capture millennials’ attention, Garrow said. Some 38 percent of MasterCard’s current workforce are millennials compared with 10 percent four years ago. The demographic shift requires that learning programs be more entertaining to ensure they follow through with some of the more mundane aspects, such as compliance training.

For example, this year Burns launched an informal e-learning program that incorporates gaming and animation into information security compliance training. Employees act as “superheroes” to prevent security issues, such as not opening suspect emails that could contain malware and potentially get into MasterCard’s systems.

Within the animated interactive experience, employees become characters in the scenario, and they have to make critical decisions. If run-of-the-mill compliance training is more fun, millennials stand a greater chance of finishing the training, Burns said.

The superhero compliance training sits within the company’s learning management system, but Burns and her team push it out to all employees through emails to make it as easy as possible to access. Employees receive an email and click on a link to the LMS, or they can go to their learning transcript — selected courses that best fit their position and career development track — and take it later. They also can click directly into the email or access MasterCard’s intranet to get to the security compliance training.

Burns and her team are also exploring how to better measure the impact of the company’s social learning platform, Corp U, which is used to meet specific business needs. For example, in June Burns and her team offered Digital Marketing Academy on the platform to a select group of employees worldwide. The academy was a collaborative guided learning journey that explored emerging digital marketing trends and technologies, with specific discussion topics on website design, user experience, search engine optimization, online paid media, social media and digital measurement.

By the end of the program, participants were able to articulate the trends driving digital marketing tools and strategies; identify and describe the key elements of a complete and integrated digital marketing program; and evaluate key elements of a digital marketing plan’s strategy, design and execution. Burns and her team also measured participants’ engagement levels by tracking their involvement initiating responses to discussions, how often they accessed online content and completed individual assignments and the full six-week course.

Many of MasterCard’s employees also practice reverse mentoring within the company’s business resource groups. Burns introduced the strategy based on an experience during her stint as chief diversity officer from 2007 to 2010. The business resource group for young professionals came up with the idea of reverse mentoring, in which they collaborate on new concepts with the company’s corporate communications department. With Burns’ initial guidance, now the resource groups also host events such as informal lunch and learns, a speaker series and formal learning programs across the company’s global operations.

The Study of Behavior

Burns said there is a common thread to all of her various roles at MasterCard. Whether in her role as a product manager or as a learning leader, she loves to study behavior. She said studying why people do what they do better enables her to find ways to motivate them “to either buy a particular product or to learn.” With human behavior as an umbrella, HR and learning become a marriage of sorts between industrial psychology, analytics and high-impact learning.

Burns has spent most of her career at MasterCard. As her career path evolved, she not only picked up new business skills, but also she went back to school, earning a master’s degree in public administration at New York University in 1995, and then completing the advanced HR executive program at the University of Michigan’s Ross School of Business. She earned a bachelor’s degree in psychology at Wesleyan University in 1986.

“I’ve been afforded opportunities I don’t think I would have had at other companies, particularly larger companies,” she said. “I’ve been able to build some great programs from the ground up in several different roles. It really feels like I’ve had many different career experiences over my 22 years.”

Reprinted from Chief Learning Officer

Health care remains employees’ most valued benefit, but few give their health plans much thought except when they’re choosing one during annual enrollment. However, that is changing as employers make significant changes to their plans and employees dig deeper into their pockets to pay for them.

With the steady climb of health care costs and the increase in medical debt for employees, health benefits are critical to recruiting and retention and job satisfaction. More than half of employees recently surveyed by insurer Aflac Inc. said that they would likely take a job with lower pay but better benefits, and three-fourths believe that benefits are “extremely or very important” to job satisfaction.

And yet most employees seldom use their health benefits or understand why they value them, according to Tom Sondergeld, senior director of benefits and well-being at Walgreen Co.

“It’s amazing that something employees spend about 20 minutes a year thinking about is so highly valued,” he said. “There is a very interesting dynamic being created around health care benefits right now. People don’t leave because the benefits are bad, but they will come and stay if they are good.”

Health care benefits give employees a sense of financial and emotional security, Sondergeld said. So tampering with them is likely to trigger an outcry. Sondergeld would know. He helped lead the Deerfield, Illinois-based drugstore chain’s highly publicized move from traditional health benefit plans to a private exchange two years ago.

With 160,000 employees nationwide, Walgreen’s move to join Aon Hewitt’s private exchange was widely viewed as a major turning point in employer-provided health care. But not all of the publicity was positive.

“The press was going crazy saying that we were pushing employees out to Obamacare and people were bringing us newspapers saying, ‘Look what you’re doing to us,’ ” he said. “It was a huge fight, and we had to get out in front of it with HR and managers and really fight hard to gain the trust back.”

Evolution of Benefits

Health benefits are evolving rapidly as more employers adopt high-deductible health plans, scale back on plan choices, change coverage levels or drop coverage for part-time employees. And employees are being asked to pay a greater share of the costs and take more responsibility for their health care choices.

Many employers are easing workers into these changes in order to give them time to learn about new offerings and to ease the financial pinch that some employees will feel, said Julie Stone, a senior consultant with Towers Watson & Co.

“We’re seeing planning now in stages, so by the time employers get to 2018, they will have redesigned their plans,” she said. That is the year that the excise tax, also called the “Cadillac tax,” on costlier health plans takes effect and it’s a target date for employers who are making changes to avoid the penalty.

Much is being asked of employees these days, and that concerns Cheryl Larson, vice president of the Midwest Business Group on Health.

“What is the saturation point for the consumer?” Larson said. “This cost-shifting trend is going to backlash in terms of health outcomes, out-of-pocket costs and productivity. There’s a huge issue of people in high-deductible plans not going to get preventive care because they don’t know that it’s covered at 100 percent. Everyone is talking about consumerism, but the bigger story is helping people navigate the health care system and understanding their benefits.”

In fact, 80 percent of employees say that a well-communicated benefits plan would make them less likely to leave their jobs, according to the “2014 Aflac WorkForces Report,” compared with 44 percent in 2012.

The need for greater clarity around benefits led Glassdoor, the online career community website, to launch a benefits-comparison site in August that lets potential hires know exactly what kind of benefits and perks a company offers before taking the job. It also allows companies to tout their perks and benefits and respond to questions from users.

“Companies are now looking for new ways to highlight aspects of their culture, and benefits are one of the ways that highlight how an employer values its employees,” said Will Staney, head of global recruiting for Glassdoor. “Before employees couldn’t really see what a company offered, and employers didn’t have a way to communicate that on a granular level.”

The Sausalito, California-based company is known for its database of employee-written company reviews.

“Employers are figuring out that benefits and perks and the subtleties of working in a place are becoming really important in selling the full package of what a company offers,” he said. According to Aflac, 59 percent of employees are likely to accept a lower salary in exchange for better benefits, but Staney said most employees don’t find out what those benefits are until they’ve accepted the job, and recruiters normally don’t know what their competitors are offering.

“In the past, when employers talked about benefits, it was usually in the interview phase or employees found out about the benefits at orientation,” Staney said. “Knowing this stuff when going in to negotiate a compensation package can help both sides.”

The benefits comparison site is another tool that employers can use to better educate themselves about their benefits, Staney said. Users can click on a company profile and browse a checklist that includes health and wellness plans, financial and retirement benefits, work-life programs, vacation and time off, perks and discounts, and professional support programs. They also can read employee comments and see what benefits employees are talking about most. For example, at Hewlett-Packard Co., the health insurance, 401(k) plan and vacation and paid time off are the most talked about benefits.

Benefits and perks are especially important to younger workers, according to Staney. “I think millennials are pushing this transition toward transparency around benefits, beyond salary, bonuses and stock options,” he said. When employees’ children turn 26, “they drop off of their parents’ insurance and they’re on their own. They are coming out into a job market where you’re not getting great salary increases, so employers are getting more creative with benefits and perks to attract them. They really care about getting as much information as they can.”

While employee benefits are becoming more complex, employers and employees continue to see their value as a recruiting and retention tool.

“Employees value health benefits almost as much as pay,” said Brian Marcotte, president and CEO of the National Business Group on Health. “That hasn’t changed. But whether or not employers will continue to offer health benefits for the foreseeable future is where it gets murky. There is a lack of confidence in their ability to control health care costs, and there’s only so much that they can do. The long-term question of the value proposition around benefits is going to take several years to prove out.”

He recommends that employers carefully examine the needs of their workforce and what kinds of benefits that they value most and plan their rewards strategy accordingly.

What Employees Want

For employees of Santa Barbara County in California, accident insurance and long-term-care insurance are the most-requested benefit plans, according to Andreas Pyper, the county’s benefits manager. Critical illness insurance also ranked high on employees’ wish lists, so the county introduced them this year.

During an open-enrollment meeting last year, Pyper said an employee told him that he was struggling to pay the bills for his son’s broken arm and his daughter’s treatment for a rare genetic disorder. His family used to be covered by an accident policy through his wife’s job but she no longer worked there, Pyper said.

“He said, ‘$1,800 for a broken arm may not sound like much, but given all the other expenses, it [accident insurance] was a lifesaver,” Pyper said. “So I did some research. It doesn’t cost anything, which means that we’re not spending any taxpayer money, and that’s important to us.”

Accident insurance covers a wide range of incidents and injuries; like other voluntary benefit plans, workers pay the full cost but at a lower rate than they could get on their own. However, costs for long-term-care insurance are extremely expensive, so it’s unlikely that the county will be offering that anytime soon, he said.

Offering employees the benefits they value is especially critical to recruiting and retention in the public sector, which must compete for talent with private employers who can offer more lucrative compensation packages, Pyper said.

But there is little doubt that for the vast majority of employers benefits are an important recruiting tool, and health care is the benefit that’s most important to employees.

“Employers have been offering health benefits for 70 years as a way to recruit and retain workers, and that hasn’t’ changed,” said Paul Fronstin, director of health and research at the Employee Benefits Research Institute. “Today we may be on the verge of change, but just about every employer offers health benefits. However, that doesn’t mean what they are offering hasn’t changed.”

And those changes will no doubt affect future workers who will face a different benefits landscape, said Towers Watson’s Stone.

“How will they approach the workforce in their lifetime?” she said. “There will be no pensions, and the value of their health care benefits will not be as high as those of older workers. Are they more likely to freelance, to work part-time? What will they value? And how will we attract and engage this next generation? And how does health care fit into that?”

Here at Talent Management, we often write about the invaluable importance of employee engagement. Engaged employees go above and beyond the call of duty and produce work that is exceptional compared to the work of employees simply looking to cash a paycheck.

Engagement is even more important, sources have often told me, when it comes to workers who commonly interact with customers — most notably retail, fast food or call center workers. If you make efforts to improve the work environment and create a culture to promote high levels of engagement — thus making frontline workers happier — that satisfaction will result in happier customers and increased sales.

For its part, The Container Store has discovered an innovative way to boost the engagement of its retail staff: Pay them more money. Amid the debate about the pros and cons of raising the federal minimum wage, The Container Store isn’t messing around — it pays its frontline retail staff nearly $50,000 annually.

A novel idea, I know. But that’s the strategy CEO and founder Kip Tindell is sticking with, as he outlined in this interview with The Wall Street Journal last week.

Why pay retail workers so much?

“One of our foundational principles is one equals three: one great person can easily do the business productivity of three good people,” Tindell told the Journal. “If you really believe that they can do three times the productivity then you can pay them 50 percent to 100 percent above industry average. The average salesperson makes $48,000 per year. [According to Bureau of Labor Statistics, median weekly earnings for retail sales people in 2013 was $598 or $31,096 per year.] We give big annual increases each year because we believe in keeping people mildly tickled about their rate of increase. We really and truly believe in paying according to contribution. So we want the 17th greatest contributor to get the 17th largest piece of the pie.”

This is certainly an interesting position — especially coming from a company that sits in the center of an incredibly volatile industry in retail. The company’s stock price, the Journal reports, dipped 25 percent this month after it lowered its sales forecast for the second time this year.

Talent managers love to talk about how engagement doesn’t necessarily equal more pay. Creating a positive work environment and providing employees with opportunities to learn and grow are other non-monetary forms of compensation that employees value. And to a point, I agree.

But ultimately money is a major engagement booster. People don’t work for fun (though some may find their work fun and enjoyable). They work because they have expenses and a life to provide for themselves and others. People want to feel valued for their work, and paying them is the ultimate sign of value.

Google employees enjoy fantastic perks and a work environment that appears exciting and full of energy. The company’s employees also work very long hours. And guess what: They’re compensated handsomely for that time and effort.

Now, this doesn’t mean all workers — retail or otherwise — should be blindly compensated like Google’s employees. But it is worth the reminder that money is still the ultimate way to show value when it comes to compensation.

Companies often talk about the importance of “investing in your people” when citing the significance of learning and development in organizations. Development is important, sure. But don’t overlook The Container Store’s strategy here. We live in an economy were frontline staff are paid the least, but then we rely on them to provide a lot of the value for customers.

If you want frontline workers to be more productive and if you want your customer-facing people to be more devoted to the company’s mission, give them a reason to be excited about their work. Pay them what they’re worth.