Uber Knew Better

5 of the Biggest HR Disasters From Respected Companies

The recent (read: long-time-in-the-making) “mishaps” at Uber and Susan J. Fowler’s riptide account of her experience as an employee got us thinking: how do such blatantly obvious HR failures even happen?

Which, then, got us digging: what other massive, public debacles have happened in the recent past?

HR disasters were once confined to the office – media makes companies today more transparent.

As it turns out, the answer is surprising and resounding, “Yes!” Surprising because we live in the age of information and scrutiny which is directly linked with company transparency and brand loyalty.

With leadership, mentorship and entrepreneurship in the spotlight, how did these 5 HR departments manage such gross oversights of employees’ rights and due process?

We want to dissect these disasters and ask a more useful question: “What can these 5 fiascos teach you?”

1. No Man, Woman or CEO is an Island

Citing that, “speed and quality are often sacrificed when we work from home,” the (soon to be former) CEO of Yahoo Marissa Mayer, decided to make a case for instituting a telecommuting ban.

The move met with fierce criticism from such figures as Richard Branson, who tweeted he was “perplexed” by the move, instead offering that Yahoo should: “Give people the freedom of where to work & they will excel”.

Besides this, the company has faced a slew of other issues (like bell curving or “stack ranking” employees by performance) to add to their already lagging profits and internal culture.

Some of them have become, oddly enough, actions directly related to Mayer, such as two suits brought for discrimination for hiring practices and gender bias – by men. The suits themselves, the company’s internal culture and the fire of responses from within and without the company for Mayer’s practices and the beliefs that underlie them all make up a cautionary tale, should anyone care to listen.

No CEO can expect to improve a company’s profits, let alone hope to overhaul it towards success, without the employees who actually execute for her. Regardless of justification, respect is a two-way street.

For employees, being treated a numerical productivity units that need to abide by controlled restrictions, doesn’t imply much faith from management. So, goes the thought, why should they reciprocate?

2. Great Intentions Don’t Always Trump Actions

It’s a fact that researchers love stating: startups have the ability to be more agile, leaner and better-suited to innovation because of one thing: Their ability to change rapidly.

But changing company culture, no matter its size or founding principles has to happen democratically, regardless of how well-intentioned the proposed change. And that goes double when the change is not just a semantic, organizational policy but requires people to re-think a new concept, like universal, minimum salary, that is hotly contested.

The truth is that internal company culture at big firms takes about 3 years to change while at smaller firms, this can be shortened from 1 to 3 years.

Dan Price, CEO of the startup Gravity Payments, learned this the hard way.

While his intentions for implementing a minimum, guaranteed salary of $70,000 were well-meaning, the company lost customers, employees and Price had a suit filed against him by his own brother, the company’s co-founder.

3. Morale is a Part of Productivity

Amazon, the ecommerce giant, recently came under fire for its warehouse and worker conditions, that are supposedly based on squeezing every last drop of productivity from workers and using metrics as a way to shame employees into working even harder.

While Amazon focuses on its numbers as proof-is-in-the-pudding type staunch progress, any company would do well to remember that the “human capital” has more to do with the potential and empowerment of humans, not a justification for degrading employee morale.

Instead of these practices, companies would do well to implement more holistic performance reviews, smaller and more intimate teams with direct lines of communication with supervisors and a way to measure “employee engagement” that is based in the company’s specific context.

4. “Growing Pains” is Not a Legitimate HR Policy

Gaming and development companies often experience “crunch” times, when projects are coming to a head and employees are regularly putting in 10 to 12 hour days, 6 or 7 days a week, to see its completion.

In the hands of Jeremy Stieglitz, Florida-based gaming company Trendy, experienced this kind of work-week all year along. Coupled with incidents of employee shaming, sexist decisions and toxic management communication, the company’s turnover of employees was unsurprising.

The lesson this entire fiasco teaches you? Organizational culture always runs the risk of becoming a replay of Lord of the Flies and it is HR’s position to address employee relations.

HR policies are not just suggestions. In order to protect employees and resist a culture of autocratic control and fear, there has to be due process and the position of an HR department is to help the two parties communicate and connect.

5. There is Such a Thing as Wage Theft

No one understands the reality of “all work, no payoff”, better than interns. It doesn’t matter what you label them as, wage theft is a real practice and internships are becoming a new loophole. Companies who deny their employees commensurate compensation run the risk of settling suits in the millions – far more than what it might have cost to simply keep employees satisfied.

Conde Nast can attest to this expensive reality: They opted to settle a suit brought by intern Lauren Ballinger out of court for $5.8 million.

Compensation — whether in the form of academic credits for interns or a minimum stipend – is part and parcel of working in the modern day. While companies can choose to offer in-kind perks such as fitness memberships, benefit plans and paid lunches, there is just no getting around a certain minimum salary for positions.

Hey, there’s no such thing as a free lunch – and this goes both ways.

About the Author:

sarah-merekarSarah Merekar is primarily a storyteller who loves to work with and in several different mediums, on various platforms and see how these co-exist and complement each other. She loves hacking product sales and understanding how content creation has an effect on this process. The content she creates for clients is high quality, highly tailored, and on brand, specifically in the form of digital & brand copywriting, design and video.

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