Employees everywhere are expecting a lot out of their newly acquired MBAs, but employers still stress performance, not degrees. As human resources teams take on the challenging job of explaining business realities, the one aspect of HR skills that seems to take centre-stage here is communication.
Says a GMAC (Graduate Management Admission Council) survey (2007): Graduates of full-time MBA programmes expected to earn 54% more, on average, than they earned before earning their degree. Part-time students estimated their compensation would climb an average of 43%, while those in executive MBA programme foresaw a 33% average increase1.
But what do HR practitioners have to say about that?
When the company foots all
Tay Bee Sin, director, human capital & administration services, PhillipCapital Group, says the company encourages its employees to upgrade as it creates more opportunities and gives them more exposure and knowledge. She stresses that an employee's qualification tells the company that the employee has the ability perhaps to be exposed to higher responsibilities. It opens up his or her chances of being promoted. She adds that the company has certain road maps, and sponsors training and higher learning.
Phillip's Singapore office has 500 employees and it gets about four to five applications for sponsorship every year. Tay believes that employees take up higher learning to learn new things and doesn't feel that they expect higher salaries or automatic promotions once they gain their degree. She feels that the focus is on learning and stresses that it would be wrong on the employee’s part to take up a course just to earn more.
Mark Sapsford, HR vice president, Johnson & Johnson Medicals (Asia-Pacific), says his company believes in career development and relies on a number of strategies to help its employees grow. There are local country groups that see through the development planning process and look into career aspirations of employees. They assess current performances and focus on closing gaps, if any. The company does sponsor higher learning depending on the individual’s needs. Sapsford says that Johnson & Johnson believes in ability and performance, and this philosophy is communicated to employees at all times.
Performance is trump card
Tay says if an individual is already an employee, his or her progress will depend on performance, not qualification. An MBA degree is not something the company emphasises unless it is a requirement. “Phillip follows a performance-based culture and no employee is led to believe he or she can automatically gain a promotion or higher salary because he or she has an additional qualification.”
Sapsford believes speedy growth doesn’t always bring out the best in a leader. He points out a lot of highly qualified people come in and are pretty keen to move quickly through the organisation.
“We want to give people the opportunity to show their skills as quickly as they can. We also want to make sure they get to work through what we call a cycle of success,” he adds.
Sapsford explains that it isn’t enough to be the manager in the good times when you have a good product and a buoyant market and no competitors. It’s making sure that when there is competition and marketplace issues, the candidate is able to handle it as a leader. “You will be a much better leader if you work through the whole business cycle,” he says.
“We need people to take two to three years in any role. It may take longer sometimes but just to make sure those who make it to senior roles are really able to be successful.” He says that the company doesn’t want people getting to senior roles where it might get too hard for them and then they leave. “What they leave behind is a personal mess. They need not be necessarily skilled in the next role and they make it difficult for those working with them.” He says the company adopts a balanced and more measured approach to make its leaders successful.
Regina To, Waggener Edstrom Worldwide’s HR business partner (Asia), says employees in the PR industry who decide to pursue an MBA will naturally have higher expectations for career advancement after they obtain their degree.
“This can often be challenging, because the public relations (PR) industry tends to place a larger premium on experience, consultancy skills and media industry knowledge, rather than pure academic credentials,” she says. “At a senior level, however, where an executive could be managing an entire agency or a regional office, business skills from an MBA degree will have greater benefits when paired with experience.”
To believes that an MBA does not guarantee immediate elevation in one’s workplace. “In the communications industry, it is often the experience and the connections as well as recommendation from one’s clients that drive advancement more,” she says. It also depends on “academic results versus real-world experience”. To also adds that some blue chip companies place a greater emphasis on “book smarts”, but there are many that place great value on experience, in other words, “street smarts”.
Communication is key
Tay says there are cases where employees, after attaining their degrees, have specifically asked how the company would recognise them because of the additional qualification. There are employees who may feel that their degrees aren’t getting adequate recognition, and therein lies the challenge.
“Communication and education is what we believe in,” Tay says, adding that the company retains employees through other ways like career growth, training and development, rewards and recognition, and not just by recognising their qualifications.
PhillipCapital, Tay says, conducts regular market surveys and adjusts its salary ranges as per the market. It also promotes a balanced work-life culture and believes in a total rewards system. Tay says the company’s system addresses expectations and the challenges that rise because of it through performance indicators and regular feedback right from the beginning. It meets developmental needs and grooms the right people for future leadership roles. “It’s not the MBA that matters, it’s whether you deliver or not.”
She also says the company has two sets of orientation programmes that inform the employee about the organisation, its structure, its mission, vision, products and services. At the departmental level, there are training kits and the heads further engage their employees so that they imbibe more intrinsic knowledge. “We talk to them after three months and address issues or problems, if any, on a regular basis.”
To says that quite often, after the individual has completed an MBA, he or she will tend to demand broader and deeper exposure to the financial and operational aspects of running an agency.
She points out the many expectations that companies sometimes can’t fulfil:
■ Salary increments
■ Specific opportunities such as job relocation to another global office
■ Changing accounts or the choice to choose a different client to work with
■ Additional benefits such as child care services, healthcare, etc.
■ Better work-life balance
■ More new hires for assistance
■ Flexibility at the workplace
■ An education fund to cover employee studies or
■ A Professional Certificate associated with the trade they are currently in
“Communication strategies include one-on-one meetings, arranging for personal meetings with the management, if necessary, and facilitating workshops to communicate the expectations of management,” To says. The company also provides professional counselling to its employees.
Walking out the door
Tay says that the company hasn’t faced any resignations because of resentment regarding unfulfilled expectations as far as higher learning is concerned. She states there are those who leave due to other reasons like mismatch of roles or better salary offers elsewhere. She also says that there are employees who have threatened to resign because the company can’t match their expectations as far as promotions are concerned. “We try to handle it by going back to the appraisal system and explaining to them why we didn’t consider them for bigger roles.”
Sapsford points out that Johnson & Johnson has base salary target ranges that depend on the individual’s market rates and performances at any point in time. There are incentive schemes that are performance-based, and a ‘One to Win’ scheme that recognises top achievers through conferences that are held in different parts of the world. He says that more than any qualification, what matters is how candidates apply what they have learnt. The company looks to move its employees into more demanding roles in which they could apply their knowledge. “It’s not an instant move. If you can deliver, and if you have a qualification, that should accelerate your move towards the next role.” Johnson & Johnson offers intensive training in its products, and its programmes encourage the employee’s engagement not just on a local level but on a broader scale in the organisation.
He says that though there have been cases where the company’s employees have left for jobs with better salaries, none has left because of any unfulfilled expectations regarding qualifications. He is confident that the company’s culture and environment and the career opportunities it provides is sufficient reason for the majority of employees to look beyond a pay hike.
Regina says that any HR team can work closely with the management to tailor-make a position that is suitable for MBA graduates. She adds that another way is to “strategically chart a unique career path that can both challenge and allow these graduates to apply what they have learned.” Regina feels that it is not the sole responsibility of the HR team to retain graduates if expectations are not met. “The responsibilities of meeting expectations rest upon the company, the line managers and the employees themselves.”
Focus on the right thing
Tay feels the employee needs to understand what kind of role he or she is pursuing and what it takes to effectively function in that role. “Focusing on getting an MBA is wrong,” she says. “The key thing is about application, not the degree. It’s about being able to apply what you learn.”
It is important to choose the right institution and the right programme, Sapsford says, and to get involved with the people and activities, as employers are not looking for academics but for those with leadership skills. “Overall, it is an attitude and passion for what they do.”
There is no doubting what employers need - skill, competence, and the willingness to grow. Qualifications matter, but not as much as the employee’s ability to perform. The culture of every company is reflected through its HR teams, and HR leaders are making full use of their communication and retention skills so that the right people get the right message.
Casestudy
No movement guaranteed
Michael Stickler, EMC Computer System's regional director, staffing, HR (Asia-Pacific/Japan), tells Susheela Menon about his experiences as an employee, and firmly believes that employees with qualifications still need to perform to get ahead.
At EMC, we follow two ways to encourage higher learning. We have a tuition assistance program for employees who take up higher studies on their own and we also choose a very select group of employees for who we pay MBA programs in full.
When it comes to us sponsoring the people in full, we build up an expectation that those employees have a special status within the organisation. We do choose among our high potentials – the group of people we place big bets on as a company. As a result we take special care of them in terms of career development as well as making sure that they are positioned properly financially. We are committed to developing them outside of their MBA programs as well. We sponsor selectively out of the 3,700 Singapore staff we have and as MBA programs cost a lot of money, we spend it on the best schools. Those who want to study further apply annually and we select not more than five out of them based on what they can do for the business, not necessarily for the business in Asia only, but for the business of EMC worldwide.
As far as expectations are concerned, we make it clear that those who take up degrees on their own get our help because they show initiative, not because we necessarily intend to fast track their careers. Those we sponsor are already at the middle managerial levels and when we do it for them, we put together plans to take them to the executive level and give them more responsibilities and move them between different roles and different countries. For the first group, we don’t specifically look at salary hikes or career development. If they do their MBAs and gain experience, we put them in bigger jobs and pay them accordingly. As we are paying our employees competitively we do not pay special attention to salary increases.
For young people who do university, they work for two years and do their MBAs and come back and look forward to senior roles and big job titles. The reality is for an organisation like this with 37,000 people - it is a real huge company - education is important but you can’t fast track experience. There is a lot you need to learn in the business as well before you become ready for bigger jobs. So we try to build a training and support environment (coaching, mentoring) to ensure proper knowledge transfer and get people ready to take increasingly bigger roles.
We have a very disciplined cycle of annual performance reviews followed by annual compensation reviews and development plans that are mandatory for every single employee. During these development discussions, we communicate very clearly with the employees on their expectations and how we can match them as a company. The majority of our employees aren’t looking into MBAs or necessarily big career growth. They want to do a good job. If we think that with or without an MBA they don’t have the making for a bigger role here, we communicate that in a hopefully positive way but also in a very clear way.
We group employees annually through our Organisation and Talent review process and we have four groups. There is obviously a group of employees who do not fit in their role and we have to deal with that. Then there are those who do a good job, but we would not face a material impact if they leave. High potentials and critical talent are those two groups we focus on mostly. Those are the kind of people who have either very special skills and/or are regarded as having future leadership potential.
For high potentials and critical talent, we have a whole set of supporting measures for retention. We have annual company sponsored training and development activities. We invite good universities here to conduct really high-level business leadership programs. The other thing we do is to move people around the region quite a bit. We provide big platforms for people who want to get experience in different countries. There are roughly fifty assignments all over the region at any given time. It is important to lots of people as it gives them a platform for their personal careers, whether it is with or without EMC.
Obviously there is a compensation element too. We compensate very well, both in terms of cash compensation and deferred compensation. There is a group of 100 people and that group is very well taken care off – in financial terms as well as with other development activities. We haven’t lost a single person out of this group in the last three years so we feel that our model works very well.
It is a very difficult thing to study and work at the same time. So employees need to be clear what it is that they want from higher learning. It involves a lot of sacrifices and a whole lot of work, and if you think you are okay without it, then leave it. Once you decide to study, however, choose a good school because that is what draws HR people to your resume. Choose world-class schools that provide the network as well as world-class education.
My suggestion to employees would be not to see their degree as a guarantee for bigger roles. It is an entry ticket but you still need to perform above and beyond your peer group and the company’s expectations. If you are 28 and you have an MBA, you still don’t have the experience that you have at the age of 40 or 50. To get better pay is not the ultimate goal. The most important thing is still that you love what you are doing – and this together with the right experience and qualification will help you accelerate your career.
Susheela Menon
