The Star System: Plotting a new course in the China HR universe
No, not like the one Jean Luc Picard and the Enterprise used to zip around in. The New York style HR system — where one guy is paid an outrageous amount of money and given all the best resources, but has to perform to keep the coveted spot. All the young sharks circle, waiting for a chance to take his place.
A few years ago when you could hire a roomful of bilingual MBAs for 6,500 rmb per month each, harmony was the name of the game. Now that you’re shelling out rmb 30,000 + for mediocre candidates, it’s time to plot a new course. Engage.
Here’s the logic: You’re up in the top 25% of your value chain (i.e.: high quality, branded and expensive) and you’ve got sales goals to hit. Let’s look at two HR scenarios.
When you are in a buyer’s market for talent, you can keep the base salaries low, the staff bulky and task the more experienced guys with broad but low-level sales management responsibility. In this kind of hiring environment, it’s a numbers game. You can hope to play the (completely fallacious) 80:20 market rule in the hope that a sales superstar will blunder into your HR office, while the rest of your team you’ll be satisfied if they show up for work on a regular basis and give adequate customer service when clients call in.
But in a seller’s market for HR, the numbers game is working against you. Employers are easy to find and experienced staff are the ones who can be choosey and bid up prices at will. You can forget about herding gangs of graduates onto your sales-floor and keeping them entertained for a year or two until they figure out what they’re supposed to be doing. Every MNC and foreign invested SME in town is on the prowl for your HR assets, and the notion of slow & steady career development is a distant memory.
Now, here’s the real killer – they mediocre managers that you are paying 25 or 30,000 rmb / month just to get in the door are starting to believe that they’re actually worth it – OR MORE! So you’ve got complacent, fat, overpaid managers who all think of themselves as big-picture strategists–and who don’t want to break a nail doing actual work.
Any options? Just one that I can see. Play into the scenario by picking one guy with reasonable potential and making that sense of entitlement and arrogance work for you. Help him unlock his inner asshole by paying him twice as much as the next highest paid guy and treating him like a Viking god. Give him the best office, an assistant, and a great compensation plan that is based on his performance. He gets the best leads, the best access to the boss and other company resources and a flexible schedule. And make sure everyone knows all about it. But here’s the catch – if he doesn’t make the numbers work, your going to bust his ass down to tea-boy and promote the poor schmuck he’s been torturing to the top dog spot. He can quit and find a new shop if he wants, but he’ll never get as good a deal as you were giving him, and he knows it. The pressure will be on him to run the entire department and use those guanxi building & networking skills to make your department a success.
Paying one guy 60 and 3 junior people 20 is cheaper and more effective than paying 4 people 45 a month. It will also save you a lot of management time, because you are putting all kinds of pressure on this one superstar to organize the rest of his team and department to meet the singular goal of meeting his target every quarter. Yeah, you’re paying this guy a lot, but that’s the only way you’ll ever have any leverage. If you try to pay a whole team market rates (or slightly less), you’ll always be looking over your shoulder to see who is picking them off – and playing catch-up when you have to replace them. If you pay one guy OVER market rates – tied to ambitious but reasonable performance goals – then turnover becomes HIS problem because you’ve made managing the overall performance of the department or team his responsibility. He wins because he will be one of the few people in this market to understand the realities and rewards of management. You’ll come out ahead because you’ll finally be managing instead of fire-fighting. The only losers will be the junior people in his department, but at least they have the prospect of unseating the jerk who is grabbing all the glory.
The Star System is notorious for creating disharmony and fostering greedy, aggressive behavior. But we are already living with that. At least this way, you get to channel that obnoxious, condescending energy towards someone else – and have a much better chance of meeting your targets.
Make it so.