Great People Deserve Great Managers: Managers Effectiveness Index at Kronos Incorporated

David Almeda, chief people officer at Kronos, presented at DevOps Enterprise Summit (DOES) 2019 their five-year transformation journey to making Kronos one of the FORTUNE 100 Best Companies to Work For®. One of their largest initiatives boldly transformed their managers’ capability by introducing a Manager Effectiveness Index (MEI). MEI focused mainly on redesigning the role of managers, training managers and measuring their effectiveness across the entire company as told by the people who work for them. To do this, they essentially reversed their performance review process by asking employees to rate their direct managers’ performance and effectiveness twice a year. David Almeda’s presentation at DOES can be found here.

Kronos MEI most recent surveys revealed a 92% confidence in the future success of Kronos, and 94% of their employees are proud to work at Kronos. Today the company is ranked #35 on Glassdoor Best Places to Work 2020 and saw its rating increase from 3.1 in 2013 to 4.4 in 2020, while their CEO Aron Ain, who published "WorkInspired: How to Build an Organization Where Everyone Loves to Work" in 2018, has been recognized as a Glassdoor Top CEO for four straight years.

David Almeida, who played a leading and instrumental role in this initiative, answered few questions for InfoQ about the critical role of managers in employees’ engagement, productivity and retention, shares how they rolled out and refined their MEI to support the organization continuous business and cultural growth until today, and gives us a sneak peek into their next major innovative project, the Kronite Effectiveness Index.

InfoQ: You mentioned in an interview with HR Leaders on How To Create a Culture of Engagement, and more recently during your talk at DOES in Las Vegas that you and your team study and optimize the relationship between managers and their employees because a solid relationship impacts engagement, retention and performance. Yet, not many organizations have a process to ensure that this happens and to hold managers accountable for "making sure they're doing what they should be doing as people managers every day". In most organizations, managers act as delivery managers, and are accountable for release dates and deliverables, not for people development. What advice would you give to organizations that are trying to change their managers’ role and responsibilities?

David Almeda: When managers focus on managing projects, are held accountable for deliverables, without knowing and understanding their people, they distribute tasks and deliverables without any understanding of their people’s strengths or development needs.   This approach of management misses important elements of what motivates and inspires people to work.   The role of a manager is to continually let people know, through both words and actions, where they are succeeding, where they need to focus more and that they are appreciated in the organization and supported.

As I mentioned at the DOES conference:

"As a manager, how do you help somebody have a work-life balance if you don’t know or understand anything about their life?"

Building the relationship with our employees and learning about them is an integral part of our Manager Effectiveness Index (MEI). The managers-employee relationship is not a surface relationship, -- we work on it and make sure that it grows deeper over time.

I know my people very well, I know what their career aspirations are, I know what their workloads are, I know all those things. And when we know our people very well, we can manage opportunities more effectively based on various criteria, such as strengths, interests, aspiration, availability, etc. As a manager, I have choices on how I assign different pieces of responsibilities and outcomes within my organization and my team. The way we assign work and projects within a team has direct implication on the outcome. So, knowing and understanding your people is critical to their performance and, ultimately, to the organization’s performance. MEI touches on all these different areas and hold managers accountable for them.

As we were rolling out our MEI program, it became apparent that some managers were just not innately capable of being managers. They were doing all the mechanic and robotic activities, almost like you're talking about and managing project deliverables, but they were not managing people. They were not creating relationship, nor a compelling and engaging environment. This isn’t managing and leading people, by our definition. We helped these people move into individual contributor roles. You don't need to be a manager here to be successful as we have parallel career tracks.

Then, we had other situations where the organization just wasn't set up for success. Managers had too many direct reports, in one case 20 direct reports. Therefore, we reorganized some areas, and invested in some cases to make it an organization that was manageable and allow managers to develop in ways we wanted to better lead our people.

InfoQ: How did you define and roll out the role of managers at Kronos?

David Almeda: Let me let me start at the beginning. In fairness to the managers, we weren’t doing a great job as an organization with training our managers or giving them the necessary skills to lead people. So, that’s what we started focusing on in 2012. We first started by socializing and explaining what the role and expectation of a manager is, which is leading and developing people. Then we started training our managers.

In the beginning, we designed and rolled out a fairly basic management capabilities training program, which was the first company-wide training. For many reasons, we needed our managers to take the training, but I didn't want to make it seem heavy-handed, so we made it optional to start with. We believed that if it was good enough, people would attend the training and recommend that their peers do the same, and that's exactly what happened. I believe we have a responsibility to create a compelling content that would compel people to attend. At the end, 95% of the organization went through it without ever being mandated, and that's been our track record since.

We rolled out Manager 101, 202, 303. So, when we rolled out MEI in 2016, it was just driving accountability for the practices we've established before. In other words, we were now holding managers accountable for the behaviors and actions that were being taught in the two-day in-person manager training. We are now focused on developing and rolling out Manager 404, 505, and we have additional initiatives coming down the road in 2020. MEI sits on that continuum; it isn't a standalone initiative.  I believe that at some point in the future we will introduce the next version of MEI, which is likely to be slightly different and which will help evolve our management practices even further.

Managers appreciate that we invest in them as managers as opposed to just holding them accountable and never training them. We're training them, developing them, and most importantly telling them what we're holding them accountable for. Above all, MEI fosters healthy conversations between managers, employees and teams that otherwise might never have been discussed or even surfaced.

As far as advising organizations, I always get worried that companies are going to take our MEI model and how we rolled it out, and plug that model in their own organizations without doing the work required, such as assessing their own environment, figuring out what makes for a ‘great manager’ at their specific company, teaching managers how to manage, and go straight to holding people accountable, which would Likely not go well. 

InfoQ: We know the importance of managers in driving employee engagement and retention. Yet, most organizations don't prioritize managers training and effectiveness. Would you attribute the success of your MEI initiative at Kronos to the sponsorship and continuous support of your executive leadership?

David Almeda: I think their support does matter, but the success of these types of initiatives also depends greatly on the organization’s culture. Our initiative started with the active support of our CEO, the executive committee and other key members of management.  For us, it was more important to make a compelling business case for the change in order to get our entire organization to buy-in.

We have a mantra at Kronos, that we use quite often:

E = Q x A, which stands for:
Effectiveness = Quality x Acceptance

How effective we are as an HR organization is only as good as the quality of a product or a solution and how readily it is going to be accepted and adopted by our people. If we put something out there that we believe is high quality, but the organization decides that they don't like it, it’s not going to be adopted nor will it be successful. It certainly is important that leadership supports these initiatives, but you need to get buy-in from various levels of people within the organization that will see value in it. And a lot of that comes with education and training. It’s important to take the time to communicate and educate employees at all levels as needed.

For example, if we had  chosen to roll out a management change, like MEI, from a top-down perspective, and didn't give people the opportunity to understand the purpose of MEI and how it was likely to impact them, especially since the change was not a traditional practice, the chances of success would not have been good in our view.

InfoQ: Google’s Project Oxygen, that started in 2008, identified 8 traits of highly effective managers. More recently, they revised this study and added 2 skills, which are collaboration across the organization and strong decision-making. As you survey your employees twice a year, you collect a lot of data. Did you use that information to identify traits of highly effective managers, such as personality and leadership traits, or characteristics that appear to be the most appealing and recognized by individual contributors and teams? Also, based on how people are growing and developing, we can assume that what managers and employees needed in 2016 could be very different in 2020. How did you leverage the data collected to foster continuous improvement of the MEI program and training content?

David Almeda: First, I believe that we will never be done here. One of the characteristics of our culture is our ability to continuously iterate on initiatives and models and inspect and constantly seek to improve. That's a major part of how we work, and we have people dedicated to continuously pushing us forward. As an example, our HR leadership team spends 90 minutes weekly walking through the next iteration of the key programs and processes that we touch from a talent standpoint and discuss how we're going to evolve those.

James Carse's book, "Finite and Infinite Games", that Simon Sinek picked up on, first introduced the concept of infinite game according to which we don't play to win, we play to continuously improve our game, and we're never done playing. If you're a person who likes to develop and then stick to a specific model or way or working or take a custodial approach to our type or work, you're not going to be comfortable working here, because we are never done.

Everything we do, MEI included, is exactly that. Every year, we take the MEI and engagement survey data and give that data to a third party.  Working with our engagement survey partner, we are able to provide them with full access to desensitized data. We then pressure-test the MEI questions to check if they are still relevant. We also check if the questions about overall engagement and retention still matter, if there has been changes in the dynamic of the organization; if so, does it vary by geography, by tenure, or by persona, and how. Through a deeper level of data analysis and through that iterative process, we've eliminated questions that have become irrelevant over time, and we've added questions to address new relevant aspects of management. We will continue to evolve this process every year. As we do this, we also hold focus groups to make sure that managers traits and behaviors that drive engagement continue to show up, even if they show up in a slightly different way.

We are making the changes and tweaks needed. As an example, we are currently working on the next iteration of MEI, which requires us to do this slightly differently. I also think that we need to continue revisiting this, because as much as this has been effective for us, at some point, just like everything else in business, it may no longer be needed. Maybe there's a different area that we need to increase our focus on. I don't see that happening honestly in the near future but, you can't hold on to anything just because you have done it for a long time.  It must have material value to remain a part of the overall talent management strategy.

InfoQ: I believe in the value of system thinking, Cynefin and the importance of navigating complexity. It’s really important, when we optimize an area, to look at its impact on other organizational areas and optimize the whole. MEI surely had an impact on recruitment. Did you change the way you are sourcing and hiring candidates, and managers in particular? Today, we are moving away from hiring for culture-fit; instead we focus on hiring for culture-add because if we only look for people who fit in our current culture, we run the risk of impeding inclusion, creativity, innovation and resilience. How do you mitigate the risk of standardizing the role of managers and hiring only people who fit a certain type and traits?

David Almeda: Absolutely, we need to focus on both aspects, recruiting managers who will behave in ways that drive engagement, while at the same time allowing everyone to bring their whole self to work.

The way managers behave in organizations determines about 50% of the employees’ overall experience of their company. It is a major driver of employees’ commitment, engagement, productivity and experience. So, within norms, managers need to show up and behave in ways that we know are going to not only retain our talents, but also make managers, and by extension, the organization, highly successful.

At Kronos, we have identified a core set of behaviors that are proven to drive engagement, as reported by organizations such as Glassdoor, Great Place to Work, Fortune and many others. We identified, at a high level, four behaviors that great managers consistently display:

• They communicate frequently openly and honestly
• They empower and enable
• They develop and encourage
• They support the whole person

Some former managers realized, through the MEI process, that they were not cut out to be people managers. For example, if they don't include employees in decision-making, if they don’t enable and empower employees, or don’t feel they need to communicate what's going on in the organization, that’s not aligned with our management values. Google, similarly, wanted to solve for the problem of brilliant jerks at work. They did not want to hire people that fit that description. For us, arrogance is one of the traits we don’t tolerate.

We have a lot of highly talented and smart people who accomplish great things every day, but we need everyone to understand that we are smarter together. Being a manager at Kronos is a privilege.  A big part of a manager’s job is to help employees develop and grow in their career. So yes, our MEI program does impact the way we source for talents and we consider that during the recruitment process.

Having said that, to answer the second part of your question, that does not in any way mean that we're looking for one model or type of person. We do not want people to maintain the status quo and work as we've always done. It’s not helping any organization. We want to get better and better, therefore we highly encourage our people and managers to bring their whole self to work so that we can continue to bring new ideas and new thinking patterns. We constantly look for people that are going to challenge the norm and old ways of working and collaborating.

MEI enables inclusion, resilience and innovation, and our managers act in ways that demonstrate these values in the organization.

InfoQ: Teams are becoming a lot more central with DevOps team culture movements. Team management requires different management and leadership skills than managing individual one-on-one relationships. Does MEI also factor managers’ ability to effectively lead teams and connect teams with other teams and leaders across the organization?

David Almeda: Yes, it does account for team management. A percentage of the MEI survey questions focus on leading teams’ work, dynamic and interaction effectively, as opposed to just the relationship managers have with their individual direct reports. Managers are definitely expected to lead teams, and we are aware that this requires different skills. That said, based on our current MEI results, I'm not hearing enough noise nor seeing enough in the data right now to make increasing our focus on team effectiveness a high priority for us now.

Candidly, we have more work to do around cross-functional team collaboration, which we are prioritizing right now. We just introduced what we call the Kronite Effectiveness Index (KEI), which is a cross-functional and cross-teams peer review initiative. KEI looks at how effectively people within a team, and across teams, interact and communicate. That's a valid problem to solve, and we see opportunities because of the nature of scaled products and technology cutting across multiple groups and functions.

We are trying to figure out how, within our particular culture, we can share and take candid and constructive feedback cross-functionally in ways that will be viewed as developmental as opposed to punitive, with the sole purpose of making our organization more effective.

InfoQ: Your work is research and data driven. Do you have an internal research arm at Kronos dedicated to researching and studying organizational behavior, people and cultural development?

David Almeda: I have a small and highly motivated team focused on that. We are passionate about how to make the business better, how to make our environment better from an employees’ perspective, and how to do all these things holistically, not just for the sake of innovating. We’re looking at ways we can strengthen the Kronos community and ways we can become a better place for people to work, because these are the right things to do.

We see our organization as multi-layered, connected and synergistic, so we ask ourselves how we can take that kind of living breathing thing and continually innovate, not for the sake of innovation, but with the objective of positively impacting both, the organization and people who work here.

Our work involves a lot of analysis and evidence-based activities, because we don't start anything without understanding what the impact is going to be, mostly through qualitative or quantitative analytics.

We also spend a lot of time engaging with the larger HR community. We make two trips a year at least to benchmark against other organizations that are looking at similar or better opportunities. We found that people and companies are interested in our work, and very willing to share theirs.

As an example, we met with Salesforce few months ago, and our one-hour meeting turned into a two- -hour meeting as we were riffing on a management topic. It’s been really helpful for us over the years to meet with other companies who believe in the business impact of culture, like to share, compare results and learn from each other.

InfoQ: Today it’s as much important to drive external community engagement as internal employees’ experience. As you mentioned, you are active and generous with the larger HR community, and don’t hesitate to share the work you lead at Kronos with other companies. How does your external engagement benefit Kronos? Does it contribute to attracting talents in search of better culture and management for example?

David Almeda: We invest in our managers and people primarily because we simply try to do the right thing all the time.  From my perspective, that’s the way you would ideally want to build and run a corporation and that’s the right way to treat people. We try to create systems, processes and institutionalize different methods and practices that work for us, in a way that creates something that's sustainable, expandable and that will support rapid growth without creating duress on people.

The kind of recognitions we get externally does help us, but it was never the reason why we do what we're doing. It's just a really nice by-product of our initiatives. As an example, we didn’t submit to speak at DOES in Vegas, but when Gene Kim asked me to, I was very happy to share our work. But it wasn't for any reason beyond the fact that we deeply believe in our people and we hope that other companies that struggle with their management structure will be able to benefit from one or few of our practices that worked really well for us. Afterall, if people have meaningful and inspired work, it lifts us up as a society.  After I presented at DOES, I flew to Baltimore to do the same presentation for a private equity company also interested in how we implemented MEI.

If we can help other companies think about the role of managers in this way, if we can help move that capability and ethos of corporate and organizational America along, then we're happy to play a role, because we think it's the right and most effective way to run a business and treat people.

About the Interviewee

David Almeda, Chief People Officer at Kronos, is responsible for overseeing the company’s global human resources functions. In this role, he drives the company’s human capital management strategy – including talent acquisition and development, compensation and benefits, offices and workplace services, corporate security, and employee engagement programs – to support the company’s continued growth, innovation, and profitability. Almeda is an active member of the Society for Human Resources Management (SHRM); he serves on the Board of Directors of the New England Human Resources Association (NEHRA) and is an advisory board member of both The Workforce Institute at Kronos and the Executive Program in Work-based Learning Leadership at the University of Pennsylvania, Wharton.