Building Trust: How Netflix and Southwest Airlines Cultivate an Environment of Trust

VOLUME 3

BUSINESS INSIGHTS FROM UNC EXECUTIVE DEVELOPMENT

WHITE PAPERS FEATURED:

How to Build Trust in an
Organization

The Recruiting Revolution:
How Technology Is
Transforming Talent
Acquisition

Embracing Open-Book
Management to Fuel
Employee Engagement and
Corporate Sustainability

Maximizing Millennials in the
Workplace

The New Business
Imperative: Recruiting,
Developing and Retaining
Women in the Workplace

PLUS: CHAPTER FROM A
BEST SELLING HR RESOURCE!
A Model for Talent Manager
Excellence

A message from the
President and Associate Dean of
Executive Development at
UNC Kenan-Flagler Business School

Hello again from the University of North Carolina at Chapel We are also pleased to feature a chapter from The Talent
Hill, and welcome to the latest volume of ideas@work. Management Handbook titled A Model for Talent Manager
We created ideas@work specifically for business leaders Excellence, co-authored by Marc Effron and Jim Shanley.
interested in talent development so that we can share the We are delighted to have their contribution and to announce
knowledge and expertise that we’ve gained working with that we are partnering with them to launch the Talent
organizations around the world. ideas@work offers some Management Institute in November 2012. This new program
of the latest talent development research and highlights best will be led by Effron, Shanley and Corey Seitz, another leader
practices that we hope you can apply in your organization. in global talent management.

The latest volume features 5 new white papers authored by I hope that you enjoy the latest volume of ideas@work.
members of the UNC team. One paper explores the unique I encourage you to visit our website (www.uncexec.com) to
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and another paper discusses how social media and emerging white papers, webinars, and research. You can also join
technologies are transforming talent acquisition. A third our mailing list to receive our newsletter which features
paper examines the critical role trust plays in an organization these resources and more, and our team would be happy
and identifies ways you can build a culture of trust. The New to talk with you about the custom work we do for our
Business Imperative: Recruiting, Developing and Retaining organizational clients.
Women in the Workplace offers insights about the changing
role of women business leaders and how companies are Thank you for your interest in UNC Executive Development.
adapting to changing demographics. This paper also Susan Cates
includes findings from a recent survey conducted by UNC susan.cates@uncexec.com
Kenan-Flagler.

Consistently ranked one of Our commitment to At UNC Executive
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Inside this issue

How to Build Trust in an Organization
page 4

The Recruiting Revolution: How Technology Is Transforming Talent Acquisition
page 14

Embracing Open-Book Management to Fuel Employee Engagement and
page 26

Maximizing Millennials in the Workplace
page 36

The New Business Imperative: Recruiting, Developing and Retaining Women
in the Workplace
page 48

4+2
BONUS CHAPTER: A Model for Talent Manager Excellence
page 60

(Note: The information or conclusions expressed in the following white papers are the authors’ review of findings expressed by the
organizations. All brand representations are registered trademarks owned by the respective companies or organizations.)

3

How to Build Trust in an
Organization
Chris Hitch, Ph.D.
Program Director
UNC Executive Development

Introduction
In a 2001 interview with Fortune magazine about his for $7.99 each. Customers – many of whom faced a
company’s continued success, Herbert D. Kelleher, 60 percent increase for monthly Netflix services – were
founder of Southwest Airlines, attributed much of outraged, and the customer-led backlash eventually
it to the fact that he always treated his employees made Hastings reverse the decision. The damage was
like customers. Kelleher knew that employees who already done, however. By mid-September 2011,
are trusted and treated fairly will, in turn, treat their Netflix lost one million more subscribers than they
customers with trust and respect. had estimated after the July announcement, and the
company’s stock plummeted 14 percent. By the end of
This is the same kind of philosophy that made Netflix a the year, Netflix had made $40.7 million in the last three
huge success as a young start-up organization. From the months of the year. By comparison, it had made $47.1
beginning, Netflix founder Reed Hastings knew the kind million in the last three months of 2010.
of company culture he wanted to develop to achieve its
purpose. Netflix’s “Freedom and Responsibility Culture” The trust that customers, stakeholders and employees
was based on the premise that all employees understand had in Netflix’s top management to make sound choices
the purpose of the organization and that they know the was shaken by the decision, and the delayed reversal
value customers get from doing business with Netflix. further eroded that trust. Netflix’s leadership lost sight
The foundation of that culture is trust and responsibility; of the value they provided their customers – and by
trust in its employees to achieve the company’s extension their employees – when they failed to ensure
goals and trust in its customers to act responsibly by that their decisions and actions supported its purpose.
eliminating late fees and asking customers to return And by doing this, they let their employees down.
their DVD rentals when they are ready. Netflix employees no longer had a clear vision of the
value customers got from doing business with Netflix
That all was put in jeopardy when Netflix announced in – and this confusion has damaged its “Freedom and
July 2011 that it was eliminating it’s $9.99 per month Responsibility Culture”.
DVD + streaming plan in favor of two separate plans


H O W T O B U I L D T R U S T I N A N O R G A N I Z AT I O N

“ rust is the lubrication that makes it
T
possible for organizations to work.”
– Warren Bennis

Time will tell if Netflix can rebuild the trust they lost
with their employees and their customers—its culture of
trust, responsibility and freedom to take risks and to be
innovative hangs in the balance.

Leadership and organizational studies pioneer
Warren Bennis once said that “trust is the lubrication
that makes it possible for organizations to work.”
Organizations with high levels of trust have more
productive workforces, better employee morale and
lower employee turnover. They also perform better
financially than their industry peers.

Promise
This white paper:
• Defines trust in organizations.

• Explores the characteristics of organizational trust

and how it develops.
• Examines the benefits of trust in organizations.
• Examines the erosion of trust in the workplace.
• Offers steps HR professionals can take to build

or rebuild trust in their organizations. The Foundations of Trust:
Credibility, Respect and
Fairness
“ o be persuasive we must be
T Dr. Duane C. Tway, Jr., offered an excellent definition of
believable; to be believable we must trust in his 1993 dissertation, A Construct of Trust, as
be credible; to be credible we must “the state of readiness for unguarded interaction with
be truthful.” someone or something” (Dubois, 2010). Warren Buffet
put it another way. “Trust,” said Buffet “is like the air
– Edward R. Murrow
we breathe. When it’s present, nobody really notices.
But when it’s absent, everybody notices.”

5

We know when we feel that state of readiness, but High-trust organizations ensure that employees
what elements are needed to get to that state? Amy experience respect. This is exhibited through employers’
Lyman, co-founder of The Great Place to Work Institute, support of their employees’ professional growth and the
has studied trust in organizations for more than 20 consideration of employees’ ideas in decision-making
years. She has found three characteristics, or elements, processes. Finally, employees in high-trust organizations
that come up time and time again in her interviews with believe they are treated fairly regardless of their
clients: credibility, respect and fair treatment (Lyman, position within the organization (Lyman, 2012).
2003, 2012).
High-trust organizations collaborate well across
According to Lyman, in organizations with high levels of departments and hierarchies, and seek fair resolutions to
trust, employees see others (particularly management) difficult situations. Employees in high-trust organizations
as credible—they mean what they say, and believe have confidence in their leader’s vision for the future
what they say is true—and have confidence that the (Lyman, 2012).
actions of others will remain consistent with their
words. In high-trust organizations, co-workers believe
that others (particularly management) are ethical in their
business practices.

Example: Continental Airlines

Amy Lyman (2003, 2012) has cited Continental Airlines as an
excellent example of trust at work. In 2003, baggage reclamation
employees at Continental heard there could be layoffs in their area
to control costs. Rather than waiting for senior leaders to make
the announcement, the employees met and developed a plan where full-time employees
would move to part-time status so no one would lose their jobs. They presented the plan
to senior managers, who approved the plan. “What’s extraordinary,” Lyman writes, “is
that the employees took positive action to solve a problem and trusted that management
would listen … So what’s going on at Continental that supports the development of positive
relationships between employees and management? The simple answer is trust.”

Source: Lyman 2003, 2012.



The Development of Trust: Russell 3000 and SP 500, posting annualized
returns of 11 percent versus 4.26 percent and 3.83
Action and Interaction percent, respectively. Lyman also notes that those best
companies experience about half the turnover rate
Trust is earned through action. As Maister, Green and than other organizations in their industries. (Lyman,
Galford wrote in their seminal book, The Trusted Advisor 2003, 2012).
(2001), “You have to do something to give people the
evidence they need to believe you should be trusted. A 2009 study by Interaction Associates found that high-
You have to be willing to give in order to get.” trust organizations also had more effective leadership
and better collaboration at all levels of the organization.
Trust is also earned through interaction. It can be as The study found that high-trust organizations:
simple as a conversation between co-workers, a five-
minute chat in the break room between a manager • Have a strong sense of shared purpose.

and her employee, or teamwork among co-workers to
complete a project. It is the interaction that conveys to • Have employees who work together to support that

others the willingness on the part of one person to do purpose.
something that is to the benefit of another person’s
health and well-being (Lyman, 2012). • reate cultures in which tolerance and cooperation
C
are highly valued.
It is through a person’s action and interaction that
others can assess whether that person is credible, • Have leaders who coach rather than just manage.

reliable and fair.
• Have many people participate in making decisions.

The Effect of Trust: The study revealed that in addition to superior earnings
as compared to low-trust organizations, high-trust
A Better Bottom Line organizations excelled (as compared to their low-trust
peers) at exhibiting organizational behavior consistent
Numerous studies have been conducted through the
with their values and ethics (85 percent vs. 46 percent);
years that confirm the benefit of trust in the workplace:
at retaining employees (80 percent vs. 42 percent);
and at attracting, deploying and developing talent (76
• A classic study by Cornell University Associate

percent vs. 24 percent).
Professor Tony Simon of 6,300 Holiday Inn employees
found that hotels where managers followed through
If trust increases profitability and helps in attracting and
on their promises and had behavioral integrity were
keeping talent, then the lack of trust lowers productivity,
more profitable (in Bader, 2003).
job satisfaction and commitment and increases
employee turnover.
• Watson Wyatt Worldwide study found that
A
organizations in which front-line employees trusted
With all the documented benefits of having trust in
their senior leaders had a 42 percent higher return on
an organization, one would think that creating and
shareholder investment than organizations in which
maintaining it would be a high priority for senior
distrust was the norm (Reina and Reina, 2007).
business leaders. Unfortunately, many senior leaders
cannot seem to shake the top-down model of
• Amy Lyman’s tracking of publicly traded 100 Best

management that adheres to the notion that authority
Companies has shown that as a group and over
creates trust. In reality, trust creates authority.
time, those organizations have outperformed the

7

Areas of Excellence in High-Trust Organizations
High-Trust Organizations Low-Trust Organizations

85%
80%
76%

46%
42%

24%

Exhibiting Organizational Retaining Employees Attracting, Deploying, and
Behavior Consistent with Developing Talent
Values

Source: Interaction Associates, 2009.

The Erosion of Trust in Organizations
Trust may be a valued commodity in an organization, in their employer (48 percent), and a lack of
but it is a rare one. Research conducted by Reina transparent communication from senior leaders
and Reina (2009) found that nine out of every 10 (46 percent).
employees have reported experiencing some sort of
breach of trust in the workplace on a regular basis. Senior leaders are not blind to the erosion of trust
A recent Deloitte survey on ethics in the workplace in the workplace. The Deloitte survey found that 65
underlined the erosion of trust in the workplace percent of Fortune 1000 executives were concerned
and the negative financial effects on organizations that employees would be job hunting in the coming
struggling to regain their footing after the recent months and that the lack of trust would be a major
recession (PR Newswire, 2010). factor in the potential increase of voluntary employee
departures.
The survey found that one-third of employees
surveyed said they planned to look for new jobs To staunch the flow of talent planning to change
when the economy recovered. Of those who said jobs, it is more important than ever for businesses to
they would be job hunting, the main factors in the assess the level of trust in their organizations and to
decision to look for a new job were a lack of trust focus on ways to improve it.



Example: Whole Foods Market

J
ohn Mackey, CEO Whole Foods Market, Inc. (Austin, Tex.), wrote an essay
in 2010 that provides insight into why Whole Foods is ranked consistently
in the top 25 of the Best Companies to Work For list. To create a high trust
organization, writes Mackey, organizations must:

• evelop and articulate a higher purpose. “The single most important requirement for the
D
creation of higher levels of trust for any organization,” notes Mackey, “is to discover or
rediscover the higher purpose of the organization.” This higher purpose must go beyond
making money.

• alk the talk. Organizations must have leaders who “walk the talk”—who serve the
W
purpose and mission of the organization and lead by example.

• ave teams everywhere. Small teams maximize familiarity and trust, which helps
H
maximize collaboration at all levels of an organization.

• mpower employees, because empowerment equals trust. “The effectiveness of teams,”
E
Mackey writes, “is tremendously enhanced when they are fully empowered to do their
work and to fulfill the organization’s mission and values.”

• ave transparent and authentic communication. One of the biggest mistakes
H
organizations make is trying to “spin” their messages in the belief that if they tell
stakeholders what they want to hear rather than the unvarnished truth, they will like
them better. Spinning a message, in fact, creates distrust.

• ractice fairness. A virtue of transparency, notes Mackey, is that it helps ensure that
P
unfairness is quickly seen and corrected.

• reate a culture of love and care. Mackey believes that leaders must embody genuine
C
love and care of the organization and its people. In fact, he believes the virtues of love
and care should be considered in all promotional decisions, writing that “we shouldn’t
just promote the most competent, but also the most loving and caring.” A vital part
of this loving-and-caring culture, notes Mackey, is the cultivation of forgiveness rather
than judgment and condemnation.

Source: Mackey, 2010.

9

Steps to Build or Rebuild Step 1: Assess the Level of Trust in the
Trust Organization.
Although Warren Buffet may be right that it is the
The impacts of distrust in an organization—lower absence of trust which is noticed, this observation is
employee morale and commitment, lower productivity not sufficient to build the business case needed to
and higher employee turnover—tend to fall squarely on take action and attempt to improve an organization’s
the shoulders of HR. As such, HR should have a central level of trust. HR professionals should assess the level
role in establishing or re-establishing trust throughout an of trust in their organizations, and this can be done
organization. through employee surveys and confidential one-on-one
interviews.
Corsum Consulting (O’Neil, 2009) has developed a
mnemonic HR and senior leaders may want to keep in Some questions that can help assess the level of
mind when trying to improve trust in an organization: trust include:

• Do you trust your peers?

T = Teach.
• Do you trust your senior leaders?
Teach everyone in the organization how things work;
make it as transparent as possible. • Do you view your peers and senior leaders as credible?

• Do you believe your senior leaders’ actions are

R = Reward. consistent with their words?

Make sure reward systems align with corporate value
• Do you understand the organization’s mission and

and goals.
vision and the role you play to achieve them?

• Do you feel that risk-taking is encouraged?

U = Unconditional support.
• Do you feel safe communicating your ideas and

Encourage innovation. Create an environment where
opinions with colleagues?
mistakes are opportunities to learn, not to punish. Give
employees permission to “think outside the box.” • Do you believe you are treated fairly and with respect?

• Do you feel senior leaders communicate openly?
S = Share information.
• Do you feel your supervisor and other senior

Communicate clearly and frequently. leaders care about and encourage your professional
development?

T = Trustworthy. • Do you believe your ideas are taken into account

during the decision making process?
Make commitments and keep them.
The responses to these questions will help establish
This mnemonic can also help shape the practical steps
the level of trust felt by employees in the organization.
HR professionals can take to improve trust throughout
An analysis of the results should help identify which
their organization.
elements of trust – credibility, respect and fair treatment
– the organization as a whole is accomplishing and
which areas need improvement.



Step 2: Report the Results of the Step 3a: Assess Your Own
Assessment. Trustworthiness and Whether HR
A recurring theme, which emerges in the study of trust
Programs and Policies Promote Trust in
in organizations, is to improve it, organizations must the Organization.
communicate as openly and transparently as possible
with employees at all levels. Once assessed, the results
of an organizational survey of trust should be openly Step 3b: Ask Other Senior Leaders to
communicated to all employees. HR professionals
Do the Same.
should consider multiple delivery methods, including
town hall meetings and posting the results on a Trust in senior leaders is vital to an organization’s
company intranet. The communication should report success, and while an employee survey may help
on the strengths and weaknesses found through the recognize organizational trust issues, HR professionals
study. Areas of improvement should be identified, and must assess whether their actions are construed as
employees should participate in the process of what trustworthy by others. Feedback (from all levels in
steps will be taken to make those improvements. the organization) and self-assessment are ways this
information may be gathered.
Reina and Reina (2007) offer the following suggestions
to HR professionals when trying to establish or rebuild Some questions that could be asked when seeking
trust in the workplace: feedback or taking a self-assessment may include:

• llow feelings to surface. When reporting
A • Do I communicate openly, honestly and consistently?
on the results of the survey, allow employees to
• Are my actions consistent with my words?

constructively voice their concerns, issues and
feelings. Holding small group meetings after the • Do I share information with my employees

report has been presented may make employees feel consistently?
safer and encourage them to more openly discuss
• Do I help develop my employees?

their experiences.
• Do I respect my employees’ opinions? Do I include

• et support. Reina and Reina observed that a
G
their opinions during the decision making process?
common mistake made by senior leaders and
HR professionals is to think they can manage the • Do I treat all of my employees fairly?

process of building or rebuilding trust alone. Trust
is highly emotional for everyone involved; obtaining With the expertise of an outside consultant, use the
the support of an outside consultant to guide the information obtained from the organization-wide
organization through the process can help. survey and the personal assessment to develop a
“trustworthiness improvement plan.” This may also
• ake responsibility. HR professionals and senior
T be a good time to identify a coach or mentor who can
leaders must take responsibility for any actions they help guide you through the process in the long term.
made in the past that lowered trust. Do not spin
the truth or cover up mistakes—this will only lower Next, ask senior leaders to undergo the same process.
trust more. Everyone at the senior leadership level must lead by
example to establish or re-establish trust and credibility.
• ncourage forgiveness. Forgive yourself and others.
E
Forgiveness helps release feelings of anger, bitterness
and resentment that come with broken trust.

11

In addition, HR professionals should take the opportunity practices should be designed to foster a culture where
to assess whether HR policies and practices foster the employees feel safe to be innovative and engaged.
development of trust in the organization. To encourage
the growth of trust, HR policies and practices must Step 4: Follow Up and Remain Vigilant.
be aligned with the organization’s mission and vision,
and the organization’s total compensation plan should The loss of trust can occur after a single event (such
reward trustworthy behavior. HR professionals should as a layoff, merger or acquisition), but trust is built
develop and offer interpersonal communications and over time. HR professionals should assess the levels of
skills training to all employees to encourage constructive trust in their organizations on a regular basis and ensure
communication and information sharing. HR policies and that any incidences causing distrust are addressed in a
timely manner.

Conclusion
As the economy improves, valued employees who have HR professionals can staunch the flow of talent leaving
lost trust in their senior leaders will seek employment the organization by taking proactive steps to improve
elsewhere, leading to increased turnover, lost productivity trust in the workplace.
plus higher recruiting and onboarding costs.

Bader, G. Liljenstrand, A. (2003, May 15). Galford, R. Drapeau, A. (2006). Trust Maister, D., Green, C., Galford, R. Tzafir, S. (2005, September). The relationship
The value of building trust in the workplace. inside the organization. The Trusted Advisor. (2001). The trusted advisor. New York, NY: between trust, HRM, practices and firm
The Bader Group. Retrieved from http:// Retrieved from http://www.thetrustedleader. Touchstone. performance. International Journal of
badergroup.com/the-value-of-building-trust- com/newsletter/issue32-february-06.html Human Resource Management, 16, 1600-
in-the-workplace/ O’Neill, M. (2009, August 17). Five ways 1622.
Interaction Associates (2009). Building to build trust in the workplace. Corsum
Better Business Bureau. (2010, September trust in business. Interaction Associates. Consulting. Retrieved from http://www. Wentworth, D. (2011, December
6). Creating a culture of trust in your Cambridge: MA. corsum.com/Building-Business-Value-blog/ 7). Information underload. I4cp.
company. Better Business Bureau. Retrieved bid/24614/Five-Ways-to-Build-Trust-in-the- Retrieved from http://www.i4cp.com/
from http://vi.bbb.org/article/creating-a- Kochan, T. (2004, September). Restoring Workplace trendwatchers/2011/12/07/information-
culture-of-trust-in-your-company-22043 trust in the human resource management underload
profession. MIT Institute for Work PR Newswire. (2010, July 26). Trust and
Deloitte. (2010, September 29). 2010 ethics Employment Research. Cambridge: MA. ethics in the workplace have been battered Wright, P. (2003, September 1). Restoring
workplace survey. Deloitte. Retrieved by the recession, Deloitte’s 2010 ethics trust: The role of HR in corporate
from http://web.docuticker.com/go/ Lyman, A. (2003). Building trust in the workplace survey finds. PR Newswire. governance. Cornell University ILR School/
docubase/35598 workplace. Melcrum Publishing, Ltd. Retrieved from http://www.prnewswire. Center for Advanced Human Resources
London: England. com/news-releases/trust-and-ethics-in-the- Studies. Ithaca: NY.
Dubois, L. (2010, August 2). How to build workplace-have-been-battered-by-the-
a corporate culture of trust. Inc. Retrieved Lyman, A. (2012). The trustworthy leader: recession-deloittes-2010-ethics--workplace-
from http://www.inc.com/guides/2010/08/ Leveraging the power of trust to transform survey-finds-99228989.html
how-to-build-a-corporate-culture-of-trust. your organization. Jossey-Bass. San
html Francisco: CA. Reina, D. Reina, M. (2007, May 2). The HR
executive’s role in rebuilding trust. Human
Mackey, J. (2010, March 14). Creating a Resource Executive Online. Retrieved from
high trust organization. Huffington Post. http://www.hreonline.com/HRE/story.jsp?
Retrieved from http://www.huffingtonpost. storyId=12160414
com/john-mackey/creating-the-high-trust-
o_b_497589.html


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13

The Recruiting Revolution:
How Technology
Is Transforming Talent
Acquisition
Shelly Gorman
Director, Career Management
MBA@UNC

Introduction
We are living through an exciting era in technology • xplores how leading organizations are using these
E
development—the emergence of interactive, social technologies in their HR practices.
media and virtual technologies whose business
applications are not yet fully realized. While marketing • Provides HR and talent management professionals

professionals have been quick to embrace the potential with information they can use to help them
of these technologies for product placement, branding incorporate social media and virtual technologies into
and sales, HR and talent management professionals their organizations’ hiring practices.
have approached them with a little more caution as they
explore how interactive, social media and virtual world
technologies can be effectively applied to attract talent Social Media
to their organizations. The next section highlights some of the major players in
the social media market today, describes how recruiters

Promise are using social media technology to expand their talent
pipelines, and how job seekers are using them to aid in
This white paper: their job searches.

• dentifies some of the major players in social media
I
and describes their main features.

• xamines the pros and cons of using social media,
E
simulations and virtual world technologies to expand
talent pools and to identify good job candidates.


THE RECRUITING REVOLUTION AND TECHNOLOGY

15

Some of the Major Players in Social Media

• ore than 120 million users and growing.
M

• eveloped as a business networking application with no mixing of
D
business and personal.

• sed by recruiters to identify passive candidates and to see who
U
candidates know, in what industries, and at what levels.

• elps talent acquisition professionals publicize their employment brand
H
and advertise job openings.

• llows users to view and share videos online.
A

• sed by job seekers to post video resumes.
U

• sed by employers to create and post videos about their industries,
U
organizations, talent brands and employment opportunities.

• ore than 200 million users “tweet” their thoughts in 140 characters
M
or less.

• llows businesses to communicate to their stakeholders in real time—
A
whether that communication is about the latest product launch or a
job opening.

• llows users to find information streams they find interesting (like a
A
company) and follow them.

• llows HR professionals to market their employment brand, advertise
A
job openings and push followers to their career websites.

• Monster.com product recently launched as a Facebook application.
A

• erges Facebook and LinkedIn connections and harnesses the power
M
of Monster.com.

• ery similar to BranchOut in features, such as stepping users through
V
the process of completing online profiles, awarding badges for
completed steps and searching for jobs.

• ncludes job postings from Monster.com.
I



• A Facebook application launched a year ago.

• Allows users to separate their personal and professional lives while

tapping into Facebook’s 500-million user base.

• Allows employers to post jobs on their Facebook pages; shows users

jobs they may like based on their professional profiles.

• Allows users to endorse people.

• Includes job postings on BranchOut by employers plus job postings

from other boards.

• Shows users connections (individuals) they have to jobs; allows users

to tap into people they know to start the networking process.

• Allows talent management professionals to find passive candidates,

to review a person’s job history, to advertise job openings, to
promote their employment brands and to encourage visits to their
career websites.

• Currently available to individuals only, but Google Plus Product Specialist

Manager Chris Vennard says the application will offer business and
school pages within the first half of 2012.

• Has interface that is similar to Facebook, but its power to eventually

harness everything “Google” makes it a must-track for recruiters.

• Can categorize social connections through ”circles”. For example, users

can have circles that include only friends, only colleagues or only family
members, but the application allows users to assign individuals to more
than one circle. Allows users to develop profile information that is
customized and visible only to specific circles.

• Streams information based on a user’s pre-selected interests. This can

be handy for recruiters trying to increase their employment brand or to
advertise jobs.

• Allows videoconferencing for up to ten people at a time in ”hangouts”.

Users can specify friends or select circles to participate in a hangout,
and users can come and go throughout the videoconference. User can
even watch YouTube videos together in real time. Talent acquisition
professionals can use this to stream YouTube videos promoting their
organizations, interview candidates, and even hold small career fairs.

17

How Social Media Is Being Used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Social media appears to be successful in not only The quality of hires is always a concern, and while
expanding talent pools, but in hiring candidates as recruiters continue to rank employee referrals as
well. Sixty-four percent of respondents to a 2011 the best source of quality of hires (8.6 on a scale of
Jobvite survey said they had successfully hired a 10), social networks fair well with a rank of seven
candidate through a social network in 2011. Nearly on a scale of 10. Corporate career sites, third-party
all survey respondents (95 percent) said they had recruiting firms, campus recruiting, job boards and
hired someone through LinkedIn; 24 percent of search engines all ranked below social networks in
respondents had hired someone through Facebook the quality of hires (Jobvite, 2011). It is important
and 16 percent of respondents had hired someone to note that employee referrals and social networks
through Twitter. are not mutually exclusive; some social networks
like BeKnown and BranchOut include features that
encourage employees to recommend colleagues and
friends.

The Pros of Social Media in the Talent Acquisition Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Social media offers recruiters several advantages. Third, as organizations continue to do more with
First, these applications expand talent pools beyond less, these technologies are extremely cost effective.
geographic boundaries, allowing employers to reach It costs little to establish a social media presence,
a global audience. although managing those networks can be a
challenge.
Second, they allow candidates to find talent
acquisition professionals. Most people find jobs Perhaps the most compelling reason to use social
through personal or professional networks—moving media in HR and the talent acquisition process,
those networks online allows more people to be though, is because it is inevitable. Most large
aware of an organization’s employment brand and organizations already have a prominent social media
job openings. It also allows employees to notify their presence and leverage it to improve their employment
personal and professional networks of job openings brand and to find active and passive job candidates.
in their organizations.

The Cons of Social Media in the Talent Acquisition Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
One of the challenges HR professionals face when With so many choices available, choosing one or
entering the social media market is that it is growing more to use is a viable concern for job seekers and
at seemingly exponential rates with new players recruiters. For job seekers, maintaining multiple social
regularly entering the arena. This makes it difficult to media accounts could easily become a full-time job.
know where one should concentrate efforts when it The same is true for recruiting professionals, but
comes to talent acquisition. added to that concern is whether they will be using
the “right” application for their talent acquisition
needs as these platforms develop. Unfortunately, it
will take time to see what application emerges as an
overall or industry-specific leader.



Which Application Is the Right One?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In a side-by-side comparison of BeKnown and social media applications. When selecting which social
BranchOut, J.T. O’Donnell, founder of Careerealism. media applications to use, HR and talent management
com, urged job seekers to choose one and stick with professionals should not only consider the resources
it because you can’t go wrong either way. These are they have available to maintain them, but should
early days in social media for career networking, and also consider which ones will best align with their
no single application has emerged as a clear overall organization’s strategic HR plan.
long-term leader, and none has emerged as a leader
in a specific industry. Until that evolution happens,
recruiters will likely find themselves juggling multiple

Social Media in Recruiting on the Rise
The 2011 Jobvite survey confirms that social media recruiting is on the rise:

• 89% of respondents said they used social media to recruit talent in 2011.

• ocial media recruiting topped the list as the most popular area in which respondents
S
planned to increase investment.

• 5% of respondents said they planned to increase their social recruiting budgets. Only 16
5
percent said they planned to spend more on job boards and a third of respondents said
they planned to spend less on job boards, third-party recruiters and search firms.

Source: Jobvite Social Recruiting Survey, 2011.

19

Example: Discovery Communications
Tyler Benjamin, vice president of global talent management at Discovery
Communications, is the first to admit that Discovery is not yet a leader
in using social media for talent acquisition—and that is deliberate. “We
intentionally took our time to test out Twitter, Facebook and LinkedIn. This helped us
form a strategic social media plan,” said Benjamin. “We quickly realized that establishing
a talent brand was key and that most of our followers, while disbursed throughout the
world, wanted local information. We’re currently concentrating on building that brand in
the United States because we not only need to have content, we also need to have the
staff to manage that content. Our plan is to expand our global ‘local’ content within the
next few years.”

Discovery has used social media to establish alumni groups to some success. “We have a
lot of people who return to Discovery after spending time with other organizations. Our
alumni groups help us keep in touch with them,” said Benjamin.

Simulations and Virtual Worlds
Although the terms “simulations” and “virtual worlds” are often used interchangeably, they are not the same.
Simulations replicate job-related tasks to allow employers to assess a candidate’s skills. Virtual worlds like Second
Life allow participants to interact with each other through avatars. Virtual worlds were originally created with social
users in mind, but some employers are using it as a recruiting tool. This section describes both types of technologies,
provides examples of how they have been used in the talent acquisition process and explores their possible growth
in this field.

Simulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Early simulations were often administered on the job centers (data entry and customer service skills) and
site and imitated actual job tasks (like typing speed manufacturing (computer and logic skills), and to
and accuracy) to assess a person’s ability. These early offer candidates ”day-in-the-life” glimpses into an
simulations eventually expanded into in-basket exercises organization’s working environment.
where candidates had to assume a job role and handle
some of the daily tasks of that job (Handler, 2009). Many recruiters believe that simulations offer
advantages over traditional tests. First, they
Technology has taken simulations online and to a new are more engaging than traditional, non-interactive
level, making it possible to replicate a variety of work assessments. In addition, they offer more realistic job
environments and to assess performance in a more previews and can reduce bias and subjectivity in the
automated manner. Today, these engaging simulations hiring process because of their realism and automated
are being used to assess skills in such settings as call scoring (Handler, 2009).



Example: AutoMax Recruiting Training
AutoMax Recruiting Training recently partnered with Hire the
Winners, the creator of a car sales simulator that helps dealers learn
more about sales candidates and their sales potential. According to
AutoMax, the simulator has been used more than 16,000 times and has an 82 percent
retention rate after two years for sales people the simulator recommended. For those the
simulator recommended with reservation, the two-year retention rate was 64 percent,
and for those not recommended, the two-year retention rate was just 14 percent.

When Are Simulations Appropriate?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
There are a few important considerations for employers that simulations may cause bottlenecks in the hiring
thinking about using simulations in the talent acquisition process, particularly for organizations hiring a large
process. Some recruiters feel that simulations may turn number of candidates. Finally, the types of skills assessed
off upper-level professionals who expect to be wooed through simulations must be considered—they may be
rather than assessed, and they advise employers to better suited to softer skills, such as customer-service
consider the type of worker being recruited and whether orientation (Ruiz, 2008). For harder, knowledge-based
a simulation is appropriate. Others are concerned skills, traditional assessments may be more appropriate.

The Next Evolution of Simulations: Gaming. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The future is here in the world of simulations and 1. ive rewards (like badges) to visitors to your site when
G
recruitment, and that future is gaming. Employers they’ve engaged in an activity such as watching a
are using gaming technology to offer realistic job video or taking an assessment. Encourage them to
previews and video tours to attract candidates to their come back to the site frequently.
organizations. Gaming technology lures candidates to
the organization’s website, keeps them there longer as 2. Consider using virtual world technology like Second
they play a game or two, and in the process, users learn Life. IBM, Monster.com and other organizations have
more about the organization in a fun and engaging used this technology to host virtual job fairs, conduct
way. Recruiters are learning from gamers that awarding interviews and offer virtual tours.
badges and showing progress toward a goal attracts the
Gen Yers who have grown up playing online games. Ken 3. ffer video-based job tryouts.
O
Wheeler from ERE.net predicts that gaming will become
4. Hold virtual career fairs.
standard fare in recruiting within the next decade
(Wheeler, 2010).
5. se tests, puzzles and simulations.
U

Wheeler offers six tips recruiters can use to start the 6. evelop a full-fledged game. These simulated
D
gaming ball rolling. environments engage candidates and can immerse
them in your organization’s talent brand.

21

Organizations are taking gaming online to establish • Merrill Lynch developed their Financial Games

their talent brands and to attract candidates: Collection to educate undergraduates and MBA
students about available careers and to drive
• ahoo! Hotjobs launched Swivel Chair Relay
Y traffic to their career website. The game teaches
and Flip Off Your Boss to engage their targeted players about the IPO process while positioning
recruiting demographic of 18-24 year olds. The Merrill Lynch as a great place to work.
games blend humor and entertainment with the
HotJobs brand messaging. The promotion was • The U.S. Army was arguably the first

considered a great success, with more than organization to use gaming as a recruitment tool
40,000 people playing the games and registering when it launched America’s Army on its website.
as HotJob members. The game, according to the Army, significantly
helped raise flagging enlistment rates.

Source: Brandgames.

Example: Marriott International
Since its launch in June, gamers in 122 countries have played
the My Marriott game on Facebook, the first game designed
to educate players about careers in the hospitality industry.
Players enter a virtual Marriott kitchen where they hire and train
employees, ensure that meals are well prepared, serve guests, and buy restaurant
equipment and ingredients on a budget. They earn points for satisfied customers and
lose points for unsatisfied ones.

The game is part of a painstakingly planned global employer brand strategy that
was two years in the making, according to Susan Strayer, senior director for global
employer brand and marketing at Marriott International.

For Marriott, it was important to have a strategy in place for social recruiting. “We
didn’t want to execute solutions without understanding how those solutions fit into
the overall strategy,” noted Strayer. That strategy included the release of a video in
April with a new talent brand line, “Find Your World,” followed by the unveiling of a
Marriott International Facebook page (which now has nearly 32,000 followers) in May
and the My Marriott game in June. One of the goals of this strategy: to have people
self-select into the industry in general and Marriott in particular. “For Marriott,” Strayer
notes, “it’s not about finding people, but about finding the right people.”



Virtual World Technology: Virtual Career Fairs

The use of virtual worlds (mostly used to host virtual using that same technology; and visit networking
career fairs) in the talent acquisition process admittedly lounges where they can interact with different employers
had a rocky start a few years ago. Limits to the and other job seekers. Virtual career fairs can even allow
technology at the time and people’s unfamiliarity with managers who would normally be unable to attend live
how it worked caused these online experiences to be fairs to talk to candidates, speeding up the interviewing
often clunky and sometimes downright embarrassing, process.
according to Courtney Hunt, Ph.D., principle at
Renaissance Strategic Solutions. “I heard horror stories Virtual career fairs allow employers to reach candidates
of avatars floating during virtual career fairs—and that from across the globe without the costs associated with
wasn’t the person’s intent,” recalls Hunt. travel and hosting on-site career fairs. They are also
environmentally friendly because they are paperless
Others agree. Until recently, technological limitations (resumes are submitted virtually) and energy saving
made virtual career fairs just barely better than what (reduced reliance on gas to get to and from live career
employers could get through online job boards; a fairs).
place to post jobs and a corporate profile, an area for
online chats, and bulletin boards (Zappe, 2011). These A survey by Unisfair, a virtual engagement marketing
limitations caused interest in the use of virtual worlds in company, found that 60 percent of respondents plan
recruiting to wane. to increase spending on virtual environments and 67
percent of respondents are thinking about hosting ten
New and improved virtual world technology, however, or more virtual events in the next 12 months (Gardner,
has caused a resurgence of interest among HR 2011).
professionals who see virtual career fairs as a cost
effective way to attract talent, particularly those “Virtual engagement is not just a replacement for a
who grew up using technology and who find online physical event, but is a new channel for reaching your
interaction more the norm than the exception (Zappe, audiences,” notes Joerg Rathenberg, Unisfair’s vice
2011). president of marketing. “The research indicates that
virtual events are being adopted across industries and
In today’s virtual career fairs, job seekers and recruiters enterprises and will continue to be the preferred way to
use avatars to enter a virtual world. Participants can chat meet, market, collaborate and educate for both hosts
live through text, voice or video; conduct interviews and attendees alike.” (Gardner, 2011).

23

Example: Monster Canada’s Virtual Career Fair
A virtual career fair recently hosted by Monster Canada was deemed a huge
success by the company and attendees. The fair featured 21 employers and
generated more than 400,000 page views, 18,000 visits, 21,000 job views and collected
more than 12,000 resumes.

“Monster’s first virtual career fair in April was hugely popular and the high level of activity
clearly demonstrated how having an active online career strategy is the way of the future,
both for successful job seekers and employers,” noted Monster Canada Senior Vice
President of International Sales Peter Gilfillan (Market Watch, 2011).

Most recruiters agree that virtual career fairs should be the emergence of hybrid career fairs—a combination
part of a whole recruitment strategy and should not of physical and virtual locations that allow for human
replace face-to-face interaction. Many recruiters predict interaction.

Conclusion
Social media, simulations and virtual worlds are At the same time, it will require HR professionals to
opening new and exciting venues for HR and talent be nimble enough to make changes to their talent
management professionals to source new talent and acquisition processes “on the fly” while managing these
to establish their talent brands. The rapid pace at applications in ways that will achieve their organization’s
which these technologies are developing will challenge strategic talent plan.
HR professionals to stay up-to-date with their uses.

Berzon, A. (2011, June 6). Enough with the Giles, J. (2011, October). Meet the New Khan, R. (n.d.). Google Plus. The Starter’s Raphael, T. (2011, February 1). 2011 ERE
‘Call of Duty,’ Answer the Call in Room 417. Boss. Second Life’s Creator wants to Rewire Guide. Accessed September 24, 2011 from Recruiting Excellence Award Finalists.
The Wall Street Journal. Retrieved September How Businesses Run. The Atlantic. Retrieved www.youtube.com. ERE.net. Retrieved August 25, 2011 from
7, 2011 from http://online.wsj.com/ September 15, 2011 from www.theatlantic. www.ere.net/2011/02/01/2011-ere-
com/magazine/archive/2011/ 10/meet-the- Light, J. (2011, April 4). For Job Seekers, recruiting-excellence-award-finalists/.
Brandgames (www.brandgames.com). new-boss/8637/#.Tm-L_hkXE7k.twitter. Company Sites Beat Online Job Boards, Social
Media. The Wall Street Journal. Retrieved Ruiz, G. (2008, January). Job Candidate
Brightmove.com (www.brightmove.com). Hampton, M. (2011, Winter). Getting the September 6, 2011 from www.wsj.com. Assessment Tests Go Virtual. Workforce
Biggest Bang for Your Recruiting Buck. Management Online. Retrieved August 25,
Crispin, G. Mehler, M. (2011, March). 10th Employment Relations Today, 27-36. Light, J. (2011, May 30). Start-Ups Tag 2011 from www.workforce.com.
CareerXRoads Annual Source of Hire Report: Facebook for Career Networking. The Wall
By the Numbers. Retrieved August 30, 2011 Handler, C. (2009, March 11). Job Street Journal. Retrieved September 6, 2011 Wheeler, K. (2010, December 22). Serious
from www.careerxroads.com. Simulations for Selecting Employees: from www.wsj.com. Recruiting Games: 6 Tips for Using Games
What might the future hold? ERE.net. and Simulations for Recruiting Success.
DaZube, D. (2008, November). Virtual Job Retrieved August 29, 2011 from www.ere. Market Watch (2011, September 14). ERE.net. Retrieved August 31, 2011 from
Fairs Gain Ground. Dice.com. Retrieved net/2009/03/11/job-simulations-for-selecting- Monster.ca’s Popular Virtual Career Fair Is www.ere.net.
September 8, 2011 from http://career- employees-what-might-the-future-hold/. Back. Market Watch. Retrieved September
resources.dice.com/technical-resume/virtual- 15, 2011 from www.marketwatch.com/story/ Zappe, J. (2011, July 15). 8-city Virtual Job
job-fairs-gain-ground.shtml. Jobvite (2011). Jobvite Social Recruiting monstercas-popular-virtual-career-fair-is- Fair May Be the Crest of a Trend. ERE.net.
Survey 2011. Retrieved August 30, 2011 back-2011-09-14. Retrieved September 7, 2011 from
Epicor (n.d.). Finding the Perfect Candidate. from www.jobvite.com. www.ere.net/2011/07/15/8-city-virtual-job-
Epicor. Irvine: CA. O’Donnell. J.T. (2011, June 27). BranchOut fair-may-be-the-crest-of-a-trend/.
Johnson, D. (2011, August 18). AutoMax Versus BeKnown—Which Facebook App for
Gardner, D. (2011, May 9). 60% of Recruiting Training Partners with Hire Your Career? CareeRealism.com. Retrieved
Marketers to Increase Spend on Virtual the Winners and the Car Sales Simulator. September 24, 2011 from www.careerealsim.
Conferences. CMO.com. Retrieved Autodealerpeople.com. Retrieved August 31, com/beknown-branchout-facebook-career-
September 15, 2011 from www.cmo.com/ 2011 from www.autodealerpeople.com. app/.
virtual-worlds/60-marketers-increase-spend-
virtual-conferences?cmpid=NR87.


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25

Embracing Open-Book
Management to Fuel Employee
Engagement and
Anne Claire Broughton Jessica Thomas
Senior Director, Managing Director, Center for Sustainable Enterprise
SJF Institute UNC Kenan-Flagler Business School

Introduction
When John Case and Jack Stack first introduced the • xplores how open-book management practices are
E
concept of open-book management more than 30 years well-suited to help achieve corporate sustainability
ago, the intent was to unleash the entrepreneur in every goals.
employee and to spur them—and their organizations—
to better performance. Since then, countless • utlines steps HR and talent management
O
organizations have opened their books and engaged professionals can take to ensure the application of
their employees in understanding the critical numbers those practices in their own organizations.
with positive results to their bottom lines. Although
the original goals of open-book management were
improved profitability and productivity, organizations
The Basics of Open-Book
have realized other benefits from the practice. These Management
benefits include improved employee satisfaction,
engagement, retention, motivation, innovation and Before most people were focusing on corporate
corporate sustainability. sustainability, Case and Stack were espousing the
virtues of open communication to engage employees
to achieve better overall business performance. In his
Promise book, The Great Game of Business, Stack describes
open-book management as being “all about promoting
This white paper:
clear, effective and open communication” to employees.
• xamines open-book management and the benefits
E By doing so, employees at all levels have a clearer
of applying its principles to improve employee understanding of their organizations’ purpose and goals,
satisfaction, engagement, retention, motivation, are more engaged in their organizations and perform
innovation and corporate sustainability. better in their jobs.


EMBRACING OPEN-BOOK MANAGEMENT

Organizations practicing open-book management: • Teach employees how to follow the action and

keep score. All employees track progress on critical
• Explain clearly the organization’s key measures of
numbers through regular meetings and scorecards.
business success, allowing employees to make better- They are empowered to take action to improve
informed business decisions. performance as needed.

• Share financial information (such as income
• Engage the ingenuity of all employees in solving key

statements, balance sheets and other key metrics) business challenges, such as how the organization
with employees, and ensure they understand them can become more socially and environmentally
and know how they relate to the organization’s key sustainable.
measures of business success.
“When you share the numbers and bring them alive,
• Tell the stories behind the numbers to bring them
you turn them into tools people can use to help
alive and give them meaning. themselves as they go about their business every day.
That’s the key to open-book management.”
• Allow employees to share in the success of the

(Stack, 1992).
organization through a profit-sharing program that is
tied to key business metrics.

27

Why Open-Book Management Works
Clearly communicated and understood goals, a • Demonstrate innovative thinking because they feel

hallmark of open-book management, leads to improved more vested in their organizations’ success
profitability and encourages teamwork. This leads to (Henglein, 2009).
increased job satisfaction and reduced turnover.
Organizations practicing open-book management • See the big picture, allowing them to leave their silos

report that employees: and become team players. Giving employees a view
of the big picture also makes them more engaged,
• eel a stronger sense of ownership in the
F helps them understand how their roles fit in the
organization. organization, and how they can make a difference.

• evelop more trusting and collaborative relationships
D All of these factors lead to an improved bottom line.
with their employers. A study conducted by the National Center for Employee
Ownership (NCEO) found that organizations which
• nderstand their organization’s cost structure and
U
follow open-book management principles experienced
make better informed suggestions for improvement.
a 1-2 percent annual increase in sales growth above
• nderstand the need for cost controls through the
U typical sales projections.
regular sharing of financial information and become
more responsible in how they use their organizations’
resources.

Example: CleanScapes
CleanScapes, a waste reduction, diversion and collection service
headquartered in Seattle, Washington, was recently named by Inc.
Magazine as one of the top 5,000 fastest growing companies in the U.S.
and the fourth fastest growing environmental firm. Leaders at CleanScapes
credit much of their success (which includes $50 million in revenue in 2009, low employee
turnover and high levels of customer satisfaction) to their open-book management
approach.

CleanScapes keeps close tabs on important metrics (called “CleanStats”) and shares them
with employees during weekly meetings. These metrics go beyond financial and include
operational efficiencies, errors and kudos. “The metrics have been instrumental in helping
the firm meet and beat its internal financial performance goals,” reports HR Manager
Bonnie Abbott.

In addition to tracking and reporting on metrics, CleanScapes leaders hold daily
morning huddles by department. The company also offers generous benefits and is
known to promote from within. Drivers and managers meet for lunch once a month to
offer feedback and suggestions on how to improve operations, which has resulted in
organization-wide efficiency gains which include lower missed pick-ups, fewer accidents
and reduced route hours.
Source: Broughton, 2011.


EMBRACING OPEN-BOOK MANAGEMENT

Not surprisingly, these outcomes—a stronger sense of successful corporate sustainability programs do a better
ownership, improved trust and collaboration, stronger job of attracting and retaining employees. Executives in
teams, better informed and innovative suggestions, organizations with successful sustainability efforts also
and an improved bottom line, to name a few—are also report that their employees are far more knowledgeable
hallmarks of successful corporate sustainability initiatives about their organization’s operations than employees
that emphasize the triple bottom line of people, planet in other businesses, enabling them to devise efficiency
and profits. According to a 2011 McKinsey survey, improvements that lead to more sustainable operations.

Open-Book Management Challenges
The main concern most people raise when it comes to Other concerns about open-book management practices
open-book management is whether it is wise to share include:
compensation information to employees, the fear being
that it could make them disgruntled if they perceive • The worry that disgruntled employees may misuse

inequities in pay structures. financial information (such as profit margins) or other
proprietary information by sharing it with competitors.
Open-book management proponents do not
recommend sharing individual compensation • The concern that if the organization is successful,

information. Instead, they advise employers to combine employees will want a larger piece of the profits and
salaries and benefits into a single line on budget may become unmotivated if they don’t receive it.
statements so employees can see and monitor it. This Alternately, if the organization is struggling, workers
will show employees how much compensation and will be concerned with job security and possibly jump
benefits cost the organization without providing ship, taking their knowledge and talents elsewhere.
detailed information.
• The belief that open-book management creates

a conundrum for organizations by begging
And while some might believe that open-book
the questions: “Is it possible to be too
principles can generate resentment toward
transparent? If we open the
highly compensated employees, evidence
books, will we give
shows the opposite occurs. Employees
competitors too much
in open-book organizations better
information about
understand and therefore accept
our products and
compensation structures more
talent? Will it
willingly. Some management experts
lead to the
like Ed Lawler, director of the
poaching of
University of Southern California’s
our products
Center for Effective Organizations,
and top
believe that by keeping
performers?”
compensation plans secret
or practicing “closed book
management,” businesses
tend to generate more
distrust and resentment
among employees.

29

Building Trust: How Netflix and Southwest Airlines Cultivate an Environment of Trust

Building Trust: How Netflix and Southwest Airlines Cultivate an Environment of Trust

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