Malcolm MacKillop LL.B, Senior Partner, Shields O’Donnell MacKillop LLP

HR and Risk Management
WHAT YOU REALLY NEED TO DO

When thinking about risk, your first consideration should be people. Many of the risks that your organization may face will be caused by or more importantly, can be prevented by people. This includes financial risks, damages to your company's reputation and loss of profit or productivity.

What is risk? How do people play a role in causing damage and how do you prevent it from happening? What is the role of HR, the people managers in a risk management process?

Philip Gennis, LL.B., CIRP, msi Spergel Inc.

Firstly, risk is any threat or danger that may cause harm and prevent an organization from fulfilling its mission. Risks can generally be lumped into four categories: financial, technology or intellectual property, regulatory and human resources or people. Risk management is the process whereby an organization identifies risk, determines the probability of the risk occurring, estimates the cost of the risk and develops a plan to eliminate or minimize the impact of the risk.

These risks can range from fraud or embezzlement, loss of customers or key staff, mismanagement, damage to equipment or infrastructure, technological disruptions, lawsuits from clients, competitors or disgruntled staff, loss of reputation in the community, fines and penalties for not complying with government regulations or requirements. As you can see, there is a lot of risk out there!

How you deal with risk is risk management. Your organization should already have a risk plan in place. If you don't have a plan, there is good news and bad news. If your organization does not have an overall risk management plan, you probably have holes in your risk management strategies and are not covered for any number of potential risks at present or in the future. There is some good news. It's never too late to plan how to deal with your risks. In fact, you are already managing risk by having some mechanisms like property insurance and reference checks in place.

Financial risk management is probably the one area that gets the greatest attention, especially from the executive suite. Philip Gennis, msi Spergel Inc., confirms that for HR experts, it is a good place to focus your own risk management strategy. The process can begin with a review of all HR policies and practices to ensure that they provide the maximum protection for the financial resources of the organization.

This review should answer a number of questions. Does your initial intake process ensure that people with a history or record of financial mismanagement are excluded from financial positions in your organization? Does your data verification process ensure that candidates are really who they say they are? Do you ask for proof of any degrees or diplomas that certify their financial credentials are in order? Part of protecting the organization from financial risk involves knowing whom you let in and whom you keep out. HR plays a key role in this area of risk protection.

As employees continue their careers with the organization, they should also continue to be supported and monitored by HR in a number of ways that help protect the employer from financial and other risks. Your training programs should ensure that all employees have access to the latest technology and strategies to maximize performance and contribute to increased productivity and profitability. Your performance evaluation system should be able to respond quickly to managers' concerns and identify any potential dangers related to any particular employee or group of employees. Your employee retention and succession plans should ensure that managers always have access to the best possible candidates to fill monitoring, auditing and other financial risk functions.

In addition to looking after their own shop, HR managers have much to offer the organization in other areas of financial risk management as well. This falls into three main areas of support. First, help managers and the executive team to utilize existing employees to their maximum strengths. Then, assist in the contingency planning process of risk management. Finally, recommend additional resources to support the financial well-being of the organization.

Maximizing Available Assets

HR can help maximize available human resources by ensuring that the right people are hired for the right jobs, particularly in positions of financial reporting and oversight. This also means working with the management team to help them plan their resources to deal with current and future demands.

This can involve making suggestions to managers about transferring financial experts from one section that has a surplus of experienced employees to an area that has fewer and seems to be struggling with responding to requests for improvement. HR could also suggest training upgrades for certain employees, even long term employees who may not have the capacity to read and understand financial projections or how to achieve them. In this way, HR can contribute to both productivity improvements and financial awareness that can only help the organization's bottom line.

Contingency Planning

Every risk, including financial risks, must be either eliminated or managed. For those that are managed, there should be a plan to deal with any unfortunate incidents or events that may occur. For example, there could be a case that unfolds involving suspected fraud by a senior manager. HR can ensure that the person is removed from the premises and that legal and executive team members know their roles. In addition, HR can play a major role in such situations by dealing with all aspects of internal communication and ensuring that the other important work of the organization continues with as little disruption as possible.

Additional Resources

HR can also play an important role in this area of risk management that might range from the hiring of security guards to protect against both internal and external threats to engaging additional financial officers to ensure that financial information is timely and useful to the executive team. In other cases, the recommendation may be to purchase additional insurance to protect the organization. One example is called Key Man Insurance which pays not only pays the salary of key employees who go off sick, but also covers the cost of a replacement employee while they are away.

There are many other ways that HR can improve the overall risk capacity of the organization including identifying gaps in training, developing systems to delegate and monitor spending authorities, and identifying trends in recruitment, staffing and employee retention, particularly in management positions or areas with a major financial impact on the organization.

Philip Gennis feels that it is now imperative that Human Resources become and stay involved in risk management, particularly with the demise of major organizations in the past few years. Though risk management may not have been a major priority for HR a decade ago, HR can ensure that the financial health of the organization is well maintained and that all financial risks to the organization are identified and planned for long before the alarm goes off.

Members Quarterly Staff Writer

NOTE: Philip Gennis presents on "Acquisitions & Mergers: How Business Cultures Change", a panel session with Malcolm MacKillop at IPM Toronto May 9 Conference. Click here for more details

The Art of Behavioural-based Interviews
GETTING THE RIGHT FIT

A well-answered behavioural-based interview question is music to an interviewer’s ears. It’s a rarely played tune. The behavioural-based interview is offered as the preferred style of selection interview in many organizations. Candidates are asked questions designed to solicit an example of past practice in a desired skill or competency area. The belief is that past practice is the best predictor of future success. Candidates draw on their experience to provide an interviewer with insight into what they’ve previously done when faced with a situation they are likely to encounter in the new environment.

In many cases, the hiring manager or the HR professional prepares interview questions. Common errors in designing and hosting in a behavioural-based interview can be minimized with preparation and planning.

Know the Work

Gail Boone, CHRP

A well-crafted job ad is critical to attract competent and confident candidates. Start with the job description and really understand the work. Use the job description to design the advertisement and communicate the key competencies required. Choose ten to twelve frequent and challenging aspects of the job to test during the interview. Once the competencies have been selected, draft one or two questions for each. Review the questions with the interview team prior to finalizing the interview process to enable selection of the question that best allows for full exploration of the competency to be examined.

Structure the question

A good behavioural-based interview question consists of two parts. The first provides background or context for the competency being examined. It shares a little about the work or the work setting to ground the interviewee. The second is to ask about the competency itself. The question uses a verb to ask the interviewee for an example or situation when the circumstances or conditions of an event occurred. The question should be crisp and clear. For example, to ask about addressing conflict, the question might read: “This team works in a high stress environment and interpersonal conflict is inevitable. Please provide an example when you had to deal with a conflict between you and a coworker.”

Sometimes, interview questions are so obscure that other panelists can’t understand the question. It’s too late during an interview to discover that the question is not working. For example, avoid examining two competencies with one question. An example of this would be “Please speak to your experience solving a complex problem as a member of a trouble team”. Is the interviewer looking for skill in problem solving, dealing with troubled teams or solving the problem of a troubled team?

Determine before the first interview if you are going to prompt the interviewee when there’s a struggle to provide an example. If so, prepare a list of prompters to be used with each question. Sample prompters include: what were you required to do, how did you do it and what was the result of your action.

The value of each competency should be determined when the questions are developed. Designing a rating scale with descriptors for each value helps to take the guess work out of scoring the answers. Familiarizing the interview team with the scale before the interview helps to achieve consistency in rating.

The art of hosting

Consider offering the questions to the interviewees fifteen minutes or half an hour before the interview. This provides time to allow the interviewee to identify the best example for the competency area examined. Some interviewers don’t like to give the questions ahead of the interview. They believe interviewees should be prepared for anything that comes. Some interviewees don’t like it either as it heightens their anxiety.

Appoint a chair from the interview panel to open, manage and close the interview. Once the candidate is seated, it is important to set the environment. Opening comments help set the environmental and job context. The chair should provide a preamble that addresses the time allotted for the interview, how many questions will be asked, whether one or more panel members will ask questions and finally, the remaining rules of engagement. For example, tell the interviewee that they can skip over or ask to come back to a question. Take notes as long as they are left behind after the interview has concluded. Refer to their resume or interview prep notes. Ask questions of clarification. Indicate that time will be allowed at the end for the interviewee’s questions.

An interviewee should be expected to manage their time. If this is an issue, it is important for the chair to step in to indicate time remaining so as not to run over and disadvantage other interviewees.

Closing the interview

Be sure to close the interview by asking the interviewee if there are any questions. Provide information about the timeline and next steps of the interview process. Some organizations use this time to obtain signed consent for permission to check references. Assure the interviewee of a call before you contact the references. This allows the interviewee to determine when to notify their workplace of a potential departure. It also provides an opportunity for them to notify their references to expect a call.

In summary, behavioural-based interviews can be the vehicle to help select a confident and competent new employee. Time and care is required up front to ensure a positive interviewing experience for all involved.

Gail Boone is an Independent Facilitator and Consultant specializing in Strategic Human Resources and Organizational Development. She can be reached at (902) 497-8650 or via email at gailboone@ns.sympatico.ca.

NOTE: Gail Boone presents on "Motivational Leadership" at IPM Halifax April 11 Workshop. For more details, go to Click here for more details

Building Effective Relationships in the Workplace
WHAT YOU NEED TO KNOW

In the global financial crisis which peaked in 2008, many businesses learned (often too late) the devastating effects of underestimating the value of “trust” in relationships with their clients and stakeholders.

Following the crisis, we noticed a marked increase in corporate advertising designed to demonstrate that organizations were treating client relationships very seriously. It became increasingly difficult to have a business conversation without the words “trust”, “relationship” and “collaboration” being mentioned.

David Newby McLuhan & Davies Communications Inc.

Today, more and more companies recognize that trust-based relationships underpin business success. It’s not enough for an organization just to tell its clients that it is trustworthy and collaborative. It must demonstrate a genuine, value-driven mindset in every interaction.

Perhaps the greatest lesson we have all learned is that every employee at every level, whether externally or internally-focused, needs to “live” sustainable, trust-based, collaborative relationships.

How do we achieve this? As success comes from the adoption of a particular mindset demonstrated through consistent behaviour, accountability starts at the top of the organization and must be cascaded down to every individual employee, and supported by skilled leader-managers. The old adage “you’re only as strong as the weakest link” applies. Here are some of the key considerations for each group.

Organization

At the highest level, the organization needs to ensure that its stated values, culture and vision clearly reflect its commitment to relationships and are supported by aligned systems and processes.

These need to be clearly communicated to all internal and external stakeholders, encouraging those stakeholders (particularly clients) to hold the organization accountable for inconsistencies.

An obvious inconsistency would be stating “collaboration” or “teamwork” as a core value and then remunerating employees primarily on the basis of individual effort or results.

Employees

Many employees are faced with overwhelming workloads and challenged with balancing two priorities. They must demonstrate that they can complete tasks under intense time pressure, in complex situations and with limited resources. They must also build collaborative, trust-based relationships with colleagues, business partners and other stakeholders.

Employees may be trained, measured and rewarded in the completion of tasks, but are often left alone to figure out how to build the relationships. Their skill in this direction is often only noted when something goes wrong.

Here are some tips to help those employees who recognize the need to build effective relationships in the workplace:

Treat everyone as an individual and adapt your behaviour accordingly.

Just because you like to wing it at meetings, remember there are people who feel uncomfortable without an agenda, so use one, if necessary. Maybe you love talking detail, but if you see a glazed look on your partner’s face, consider talking about big picture goals. In other words, be aware of others’ preferences and change your own style of communication to make the connection.

Ask questions to understand others’ needs – both personal and business.

Understand that people do business with people. They will more readily help you achieve your goals if you can help them achieve theirs.

Don’t control every conversation or try to impress with your deep technical knowledge.

Being a subject-matter specialist is useless if you can’t communicate in a way that interests others. Intimidating others through your expertise will not help your relationship – it’s more likely to damage your chances of earning trust.

Be credible, reliable and genuinely interested in others. Demonstrate your interest in every interaction.

To earn trust, you have to give trust. Allow others to contribute to conversations and take the lead sometimes. This is the key to true collaboration and will win you a lot of respect.

Consider training options.

There are many who think that social skills are all we require to build effective relationships at work. This is untrue. You need a very particular skill-set. Even more important is the mindset which will demonstrate your motivation in any relationship. A good start is to think “how can I help this person?” rather than “what can I tell this person?” You will stand out from your peers very quickly if you are trained in behavioural tools and techniques you can immediately use in interactions with your highest-priority colleagues and stakeholders.

Management (including C-Suite executives)

Managers hold the keys to success but are often the reason why an organization cannot successfully effect cultural or behavioural change.

The organization may express its commitment to trust, teamwork and relationships in its values, vision and cultural statements. It may train its employees to adopt the right behaviour. If managers don’t adopt the same behaviour and effectively recognize, manage and reward their employees’ behaviour, inconsistencies will appear. These inconsistencies cannot be hidden from clients.

To ensure success, managers (from the top-down) should be trained in the specialized skill-set (and mindset) which will support them in their own relationships with all stakeholders including their reports. Such training complements leadership training. Then managers should be given organizational tools so they can recognize, measure and reward the right behaviour in their employees.

Effective Workplace Relationships in action

I recently experienced the value of alignment between an organization, its employees and management when I implemented a training program for an under-valued technical support team in a large financial institution.

The manager took an active part in the preparation and the training itself. During the training, she encouraged constant discussion over the implementation of lessons learned, potential hindrances and the support that participants would require from her and the organization to be effective. Subsequently, this manager adopted the tools and techniques from the workshop into all aspects of her daily interactions with her team.

Months later, a team member excitedly told me that the company had acknowledged this team’s success, had rewarded the employees and had promoted the manager to VP!

David Newby is COO, McLuhan & Davies Communications Inc. and can be reached at 1-800-862-2429 or via email at dnewby@mdctraining.ca.