Personalization of people management practices is the way forward in a world that has become increasingly challenging for individuals and their families. People are looking for meaningful activities and a sense of purpose. Work is one important way to achieve that personal fulfilment. But it’s also a role in life that is competing with other societal roles, like parenthood, community membership and citizenship. Increasingly we see people looking for better ways to cope with that complexity and fragmentation. Companies can help people to lead the lives that they choose by adapting processes and practices to individual needs and possibilities. I call that the personalization of companies and people management practices.
In our quest to personalize the management of people in organizations we are always struggling with two limiting factors, or major objections. These are the conflict of personalization with the need for efficiency and the conflict with the collective tradition of labour relations.
Indeed, if you adapt your organisation and processes to individual needs, you could loose the economies of scale as you will be offering solutions that deviate from standard ones. This requires attention, specific follow-up, and so this may be a source of error and of extra effort.
Moreover adapting practices to individual needs and possibilities creates differences in treatment. Our collective tradition to labour relations is oriented towards equal treatment as it complies more with our sense of justice and fairness. Making exceptions creates precedents and precedents are something both unions and employers do not like. Trade unions still focus too much on the collective entitlement. According to this principle precedents open the right to others to do and receive just the same as the colleague for which the precedent has been created.
These two objections may be paralyzing. Nevertheless there is strong evidence that the one-fits-all approach is no longer the way how to handle things. And there are solutions to individualize practices and at the same time manage them. These solutions are mass customization and I-deals.
A first solution is mass customization. Mass customization adapts processes and practices to individual needs, whilst maintaining a degree of industrial efficiency. The term is widely used in the automotive industry where the manufacturing of cars needs to be efficient (standardised) and customized (adaptive).
The automotive industry can build a car model with a limited number of options which can be combined in a number of ways. The combination of the options give people suficient choice so that the car has been customized to the specific needs of the buyer.
You can adopt that very principle in people management practices as well. You can offer variations in job content, career speed, time of work, place of work, health packages, salary packages, development, … The offer is standardized and the employee can make decisions within a standardized framework. If this is well done, you can cover many individual needs, without creating precedents as these solutions are accessible to all employees. An excellent source of inspiration is the book on mass career customization by Benko & Weisberg (2007).
Mass customization exceeds the traditional notion of cafeteria plans, which are usually focussed on exchanging a wage component for something else (a company car, a parking space, holidays, pension, …). Cafeteria plans may be one element of mass customization.
But if mass customization is not sufficient, it is still possible to introduce I-deals. I-deals or idiosyncratic deals are individual agreements between an employer and an individual employee that deviate from the usual framework. The agreement is tailor-made and negotiated directly by the employee. Usually the deviation concerns one element of the agreement but it’s also possible that a totally new agreement is negotiated between the employer and the employee. It’s crucial that there is a benefit for both the employee and the employer. (after Rousseau, 2005).
And what are these benefits?
1. You can use i-deals to attract and hire people that bring specific talents to the organization. This is relatively difficult because the person you hired has not proven that he’s worth it. Most HR-managers will try to postpone the individual treatment for some time (the probation period). But think of it. Why would a company not hire someone who needs a specific time schedule when it is at the same time willing to offer the same schedule to current employees?
2. I-deals are a powerful tool for retention. People face different challenges in their lives and sometimes they need to quit their job in order to solve that challenge. Making changes in the deal you have with that employee can help that employee to stay in the company.
3. You can use i-deals to have people working longer. As people will need to work longe rand retire at a later age, these i-deals can provide a solution to enable people to do this (Bal e.a. 2012).
4. I-deals that are related to time and place of work may help people to find a balance between the different roles they have in their life (Hornung e.a., 2008)
5. I-deals that are related to development have a positive impact on employee engagement (Hornung e.a., 2008)
6. I-deals can provide ways to manage the consequences of health issues or even prevent them by offering ways of work that reduce stress and eventually may decrease the chances for burn-out. I-deals are indeed ways of regulating your work and put people in command of their lives.
A company should consider these benefits when proceding with I-deals. But there is one condition: there should be no secrets. Being secretive about I-deals might give people the impression of favouritism or even corruption (I do this for you if you do this for me). To avoid negative perceptions one should not treat i-deals in a secretive manner. The more secretive they are, the more i-deals will have a negative impact on the corporate climate. So I-deals should be public. And for this reason I am reluctant to include salary negotiations into the construction of an I-deal. Like I said on the HR square conference in june 2011, I-deals should focus on helping people to get on with their llives.
The legal environment
In Belgium and Europe there are many laws and agreements that enable people to flexibilize. Examples are laws that give parents the right to leave of absence after the birth of a child, flexibility to take care of relatives in case of illness, sabbatical leave, …
You could say that the legislator has provided a framework on national level that is similar to the mass customization on corporate level. And some employers limit their offer to that. This is not going to be enough in the future. The legislator cannot provide laws that foresee all solutions to all challenges that a person encounters in his or her life. Moreover, the legislation is not differentiating enough between those who need it and those who do not. To me, the legislator should not push forward in providing such means of mass customization. The company and the employees should take over.
Labour relations and collective bargaining
The social partners can still play their role not by maximizing the mass customization or by extending individual solutions to collective ones, but by providing a framework that fits the needs of the company and that becomes a competitive advantage to that company. It should be less a matter of entitlement but more of empowerment. And unions should understand and accept that collective bargaining is limited to an optimal level.
Since I-deals are oriented towards solving individualised solutions, unions could be happy to support those since they are in the interest of the people they claim to represent. The fact that people do not ask unions to do so and are perfectly capable of negotiating a deal for themselves is only a political problem. Indeed, I-deals should not be negotiated by unions, but by the employees themselves. The collective approach that unions have, is still valid, but only for the base deal which is the common denominator for all employees.
I can only say that i-deals should not be a threat to the system. They are an enrichment. And they enable companies to find ways to tackle current problems and help employees to be employable, regardless of the issues they might have with mobility, family, ambitions, … Surely this win-win is in the interest of everyone.
Back to the idea of justice
Many HR people will shiver when reading this. I-deals are usually reserved for senior executives, but not for the other employees. The question that arises is how you can have an i-deal for one person and refuse it for the other. How can you avoid feelings of injustice, jealousy? Is it not easier to offer the same to everyone and differentiate according to objective criteria like job grades, function, … How to avoid precedents and pollution of the social climate? How to avoid frictions with unions who will make demands to proliferate the individual advantages?
These questions are legitimate and the reluctance to go ahead is understandble. People do like to compare themselves and are very sensitive to unequal treatment.
But let me ask a simple question.
What is more unjust? Treating people with different needs in the same manner or encompassing individual differences into corporate policy? Can we deny that there is a diverse labour force of men and women, with different abilities, needs, religions, cultures? How can we ask of people to adapt to a mould, a one-fits-all?
The management of diversity requires personalization. Let’s take the example of people with a physical or mental limitation? How can we integrate people that have less abilities into a regular working environment. Is it not so that we can only do this by adapting the environment to the physical and mental possibilities of the employee? I argue that the industrialized approach to people practices makes it difficult to allow for diversity.
You might think it is outrageous to use the example of people with an impairment to make a case for personalisation, but think about it. It starts with our tolerance for differences between people and our willingness to include people. To do that, you need to flexibilize.
And there are many other examples. Adapting the job when capacities weaken with age. Or like single moms and dads who need more flexibility in the weeks they take care of their kids. Or young people who want to focus on their development and are eager to get education. Or the elderly employee who might want to reduce working time. Or Someone in the mid-career who might need a break. The stressed manager wants to cut down on responsibilities. Someone who lives far away might want to work at home. The new employee who might be not as talented for some tasks of the function he was hired for might require an adapted program. All these examples and many more can be covered by i-deals as far as the mass customized solutions do not suffice.
We adapt to individual differences because we think it’s right but also because the company might benefit from this.
I-deals are not meant for everyone in a company. Why not? A first reason is that many individual needs can be covered by the mass customized solutions that the legislator or the company offer. A second reason is much more sensitive because we link i-deals to the contribution someone has made, currently makes and will make to the objectives of the company.
A company will be reluctant to offer individualised solutions to someone who does not contribute to the results of a company. There needs to be a balance between the empathy that is offered by i-deals, the idea of justice, the contribution of an individual and the humanity of a company. I have written about that elsewhere.
Why should a company offer an i-deal to someone who does not cut it? Is it unfair to offer an i-deal to an engaged employee and not to a someone who does not contribute? I think it is not unfair. The reciprocity of the relationship between employee and employer is a vital element of the psychological contract. Offering an i-deal should be in the interest of both. And that’s why we should offer i-deals to people who add value for the company. Only then a company has an interest to add value to a person’s life by offering solutions that help him make the right choices.
I am convinced that offering an i-deal to a disengaged employee who does not contribute, will have no positive effect on this employee’s engagement. More, it will create collateral damage as the peers of that employee will see it as unfair that someone with less contribution receives flexible treatment anyway.
Focussing on reciprocity is fair. And so it is just. We can accept unequal treatment under the condition that the unequal treatment is to the benefit of the collective (Rawls, 1990). If e.g. an i-deal can make sure that the employee stays and shares his competences with the colleagues, the colleagues benefit from that as well. I realize this will be a balancing act, because the i-deal should be such that there are no or few disadvantages to the team. And if there are, the benefits should outweigh the disadvantages.
I can accept the argument that even when something is fair, it might be perceived as unjust. Indeed, people are “victims” of social comparison which can lead to strange and irrational behaviour and decisions. Let’s for now assume that we see an I-deal as act of fairness to one person, and not as an act of unfairness to another person. In this sense you could see I-deals as a kind of helping behaviour towards someone who needs it (or could use it).
I-deal, you deal for i-deals
I-deals. Everybody does it. And everybody has done it for a long time. And if the HR department will not allow it, individual leaders will look for solutions without asking. A good leader finds solutions to solve the problems that prevent him of moving ahead.
For HR I-deals are a way to flexibilize practices and to stimulate the evolution of the HR profession itself.
Today, in an individualized world, i-deals offer a way of thinking out of the box and forging an alliance with your employees. If you take care of them, they will take care of you.
Some reading material
Bal, P.M., de Jong, S.B., Jansen, P.G.W. & Bakker, A. (2012). Motivating Employees to Work Beyond Retirement: A Multi-Level Study of the Role of I-Deals and Unit Climate. Journal of Management STudies, 49 (2), 306-331.
Benko, C. & Weisberg, A.C. (2007). Mass Career Customization. Aligning the Workplace with Today’s Nontraditional Workforce. Boston, Harvard Business School Press.
Hornung, S, Rousseau, D.M. & Glaser, J. (2008). Creating flexible work arrangements through idiosyncratic deals. Journal of Applied Psychology, 93 (3), pp. 655-664.
Poelmans, S.A.Y. & Caligiuri, P. (2008). Harmonizing Work, Family and Personal Life.Cambrigde, Cambridge University Press.
Rawls, J. (1990). A Theory of Justice.
Rousseau, D.M. (2005). I-deals, idiosyncratic deals Employees Bargain for themselves. New York: M. E. Sharpe.
Rousseau, DM., Ho, V. & Greenberg, J. (2006). I-deals: idiosyncratic terms in employment relationships. Academy of Management Review, 31 (4), pp. 977-994.