How Yahoo’s $42 Million Mistake Can Help You
If you think you’re having a bad day, you could be thankful that you’re not Yahoo CEO Marissa Mayer, who has to explain to her Board of Directors why she fired her hand-picked Chief Financial Officer a little more than a year after he took the job at a cost of $42 million in severance benefits.
He was reportedly a bad fit with the company from the beginning, clashing with Mayer within months of being hired and failing to deliver advertising revenue.
I know I don’t have to tell you that going through the process of hiring someone only for that person not to work out is one of the most expensive costs of doing business. You may want to pick up this month’s issue of the Harvard Business Review and take a look at what some of the most innovative companies in America are doing to transform HR practices.
Regardless of how big or small your credit union is, there are new approaches you should consider taking. The best written value statements in the world are meaningless unless you can translate them into tangible practices for your credit union.
So, how does your credit union translate its corporate value statement into a tangible HR action plan? The question is particularly important for the credit union industry where so much of our growth and ultimate survival depends on projecting a unique brand of financial services. One approach that has been highlighted recently involves getting a wide variety of your staff involved in the hiring process.
For example, at Amazon, even hires for Junior Executive positions go through numerous interviews. These interviews are conducted by employees, or bar-raisers as they are called within the company, who volunteer for the job. What makes the program unique is that an applicant will be analyzed not only by the department with which he will be working but by an individual who may have little day-to-day contact with him or her once hired. What’s more, these bar-raisers all have the authority to nix a candidate. The result of this approach makes hiring at Amazon a laborious and time consuming process, but it ensures that whoever is hired not only has the skills to get the job done but has the type of personality that will ensure she is a good fit for the company.
A second thing you can do is to follow the example of Netflix and recognize that as your credit union evolves there are some employees who may no longer be a good fit. What Netflix does, to the consternation of many HR attorneys, is minimize the importance of performance reviews and instead empower managers to quickly communicate with employees and let them go when their skills no longer reflect the company’s needs. Netflix has avoided many potential legal pitfalls with this approach by also giving out some of the most generous severance packages within Silicon Valley.