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May 6, 2014

Companies say no to HR

When the headline fails to say it all....

By Dave Crisp

The past week or so has raised a flurry of articles again about doing away with HR.

Looking for ways to make organizations simpler and easier to navigate and manage is always laudable. But are radical attempts at simplification realistic for everyone or even for these companies in the long term?

First is LRN, a company that not only got rid of HR, but all job titles, org charts and the like. They tell their story inspirationally on their site as a never-ending journey not to get bogged down in rules, but keep their eyes on the larger pictures. We need these idealists. It tends to be the ones in the weeds waiting to hear how to do without HR for cost or vendetta reasons that are more the problem. Testing alternate structures makes sense, though such radical rearrangements as LRN apparently is attempting may be taking more risks than wise as this article points out (not in the headline, but farther down).

Of course, even companies that keep HR are trying different approaches. One that keeps getting brought forward is Netflix. It’s first in an interesting series of videos that appeared recently on Huffington Post focusing largely on its decision to stop tracking paid time off. At first blush, this sounds like a "why didn’t we think of that" sort of idea, but one has to remember that all such concepts are culture-specific. If your company has a large number of very hard driving managers who push to get work out, the idea of simply freeing (or empowering) employees to decide for themselves what time off they need is potentially a bad idea.

If you take a look at some of the subsequent videos in that series — Sheryl Sandberg telling the Post about the need to fit in family time (Arianna herself appearing later having just published a book, Thrive, along similar lines) and the Dalai Lama, you can see some of the potential downsides. If bosses don’t see the need for vacation it’s a reasonable bet that many staff won’t feel they can use their empowerment.

Without fairly clear guides, such as "you get five weeks paid vacation and you take it or lose it" rule (with HR pushing for take it), you leave things supposedly entirely to the employee, but also their direct manager. In theory, employees may have the choice of when to go, but with a manager breathing down their neck insisting the project can’t wait, that overtime is needed, that you will be judged poor and potentially get yourself fired. And of course you run into the perennial problem that everyone wants July. In fact, in the Netflix piece, another innovation is being totally honest with people that they will be fired if they don’t perform to standard. Get the picture?

You’re on your own — or YOYO — means a lot of people won’t risk taking the time off they usually would under a fixed regime if they think an even worse result awaits them. Perhaps if you’re Netflix, a new culture, with a known CEO and HR leader encouraging empowerment you won’t run into problems of unfairness or unfair expectations... initially, but as a company grows, as problems multiply, as managers change, as new CEOs arrive, things may well take on a different flavor.

Another new idea most recently adopted by Amazon is to offer to pay employees who want to leave — in their case $2,000 escalating to $5,000 year by year. Zappos and (again) Netflix offer variations. (Canadian HR Reporter is taking a look at this phenomenon in a cover story for the May 19 issue.) Amazon is wise to do this to counter recent claims by warehouse staff in particular of bad working conditions. But if you don’t believe you can find other employment, staying and trying to call attention to needed improvements may outweigh your interest in leaving — a couple of thousand dollars simply won’t last long.

Whole Foods made the news for letting employees look up anyone else’s salary (a boost to fairness in pay). That works well for identical jobs, but even then, geographical/market differences enter the picture. It’s a lot cheaper to live in some areas than others, so fairness, as many note, isn’t always equality — it takes measures of cost of living, among others, to explain fully and some employees just won’t accept such explanations (some undoubtedly understand, but still see a hook to press for higher pay). This is especially true for different jobs — a warehouse clerk versus a receiver in a store.

At some point being able to discover pay rates is fine, but you also need a mechanism for explaining differences logically and understandably. I’m the first to say secrecy isn’t the answer either, but simplistic reports that "everyone knows what everyone else is paid" gloss over the challenges that this entails. Simply saying someone is more valuable, as the article suggests, isn’t a good answer for quite a few employees — and if you think line managers (the warehouse manager versus the store manager) can thoroughly and convincingly explain why the other’s employee gets more, think again. This is where HR comes into its own if it’s doing the job well, not just telling everyone "it’s the policy." Transparency and explanation are very helpful, but beyond the reach of many line managers who just don’t have the overview.

We definitely need organizations trying out these new approaches. But we also need some people managing what may go wrong, applying empathetic common sense and adjusting how we approach things rather than just setting the processes in motion and assuming they will thrive. LRN seems to have that idea... or at least their CEO/spokesperson does at this point in their evolution. What about tomorrow?

Dave Crisp is a Toronto-based writer and thought leader for Strategic Capability Network with a wealth of experience, including 14 years leading HR at Hudson Bay Co. where he took the 70,000-employee retailer to “best company to work for” status. For more information, visit
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Working for a company without job titles
Tuesday, May 06, 2014 9:58:00 AM by Dave Crisp
Great comment Brian. I often coach people in job search mode and more of them are bringing this sort of problem along. I suggest, as you have, they work at finding a short 'job descriptor' (which I think can substitute for an actual title, but also that they run it by their former boss so when asked in a reference check (in the rare cases those are actually done), the boss will confirm that's what the job was even though there were no actual titles. It's probably wise to put on the resume something like 'No job titles - job description: senior project manager' or something like that so one isn't perceived to be faking. It does pose a challenge, but there's usually a solution.
Working for a company without job titles
Tuesday, May 06, 2014 9:46:00 AM by Brian Kreissl
Hi Dave:

Great blog post, but I have another perspective on organizations doing away with some types of so-called "bureaucracy" such as job titles.

I am not sure if I would want to work for a company that didn't have job titles. Few people stay at one company long-term nowadays, and it just seems like that would make it much harder to land a job elsewhere.

I have written about this before, but job titles are very important to most people, and organizations are getting so picky (partially as a result of applicant tracking systems) that they won't consider candidates without the exact same job title as the position they are looking to fill.

People so frequently define themselves based on what they do, and I think it might be hard for them even in social situations when they can't give someone a job title that describes what they do (of course, they could make something up that roughly corresponds with the work they do, but it sounds like some of these companies want people to be so "flexible" that it might be hard to actually do that).