The 4 biggest HR problems and how to solve them

For a CEO, the biggest HR problems are also the biggest opportunities: appraisals, training, motivation and paperwork. Find out how to fix them.

HR problems - annual performance review sarcasm

Businesses are made of people. Recruiting, motivating, inspiring, developing, rewarding and celebrating good people is the most important thing about being a CEO.

But there’s something broken with HR. Too often it solves the wrong problems or applies the wrong solutions. Why?

  • I think the HR-military-industrial complex is to blame for sticking to outdated approaches.
  • CEOs are to blame for not thinking hard enough about HR.
  • We’re all to blame for sticking to worn out ideas and/or embracing new fads without really thinking about whether they are good or whether they work in our company or not.

‘Best practice’ is a dangerous idea. Someone else’s best practice could be your worst nightmare. For example, stack ranking worked at GE but, arguably, failed at Microsoft.

It’s time for a shake-up. We’re working hard on this here at Turbine (and our parent company Articulate) so, for myself as a CEO, these issues are very current and pressing. I have some criticisms, thoughts, suggestions and questions; what do you think?

Problem #1: Appraisals

The reason this Office video is funny is because it’s painfully true. Appraisals are not life-enhancing experiences. If any other aspect of a business failed so epically, it would have been stopped long ago.

For many commentators, the traditional approach to appraisals is broken and it’s time to bury it. For Microsoft, stack ranking may have held the firm back. However, even as Microsoft abandons that approach, Yahoo adopts it. It’s like a zombie that just won’t die.

So what are companies actually trying to achieve with appraisals? Yes, it’s a link to pay and promotions and it’s a tool to address underperformance, but that misses the point.

Appraisals, like HR as a whole, need to address the fundamental questions: how do people improve and how do companies improve. Fostering progress is more important than measurement. Looking forward is more valuable than looking over your shoulder. Employees are human beings capable of infinite growth, not interchangeable units of production.

Here are two alternatives to corporate kabuki: Google found that monthly one-on-ones produced measurable improvements in manager and team performance and Adobe switched from a traditional performance review to real-time feedback.

Problem #2: Training

Traditionally, ‘training’ happens in a classroom somewhere, probably on a one-day course. This model is both painfully expensive and mostly unproductive, especially when you consider that some people forget 90+ percent of what they learned after one month, it all seems like a pointless David Brent-esque charade.

The key point here is that learning is a multi-faceted, active process. Sending people back to school and boring them to death doesn’t help; people learn best by doing.

(Sidebar: I’m a pilot and I came across the FAA Instructors Handbook recently, which contains a fantastic overview of pedagogy. Well worth reading for anyone involved in training.)

In fact, you can read all the manuals you like, but until you get into a plane with an instructor, you’re not really learning to fly. The 70:20:10 model for learning and development suggests that:

‘Lessons learned by successful and effective managers are roughly:

70% from tough jobs

20% from people (mostly the boss)

10% from courses and reading’

This video is a good introduction to this approach:

Problem #3: Motivation


What motivates people? What demotivates them? Many bosses get this terribly wrong. They create incentives that demotivate people. They micromanage. They ‘kick people in the ass’.

Let me give you an example of this from my own experience. Back when I was running Intelligent Games, we used to offer teams a timely delivery bonus if they finished on schedule. However, employee motivation was only one factor in timely delivery. When the delivery date slipped, as it inevitably did, people saw their bonuses go up in smoke. It must have felt like getting a pay cut – not the original intention.

More money may not motivate people as much as you think but taking it off the table certainly demotivates. In other words, what motivates people and what demotivates them are often in separate categories, according to Frederick Herzberg’s two-factor theory. A CEO’s job is to create a culture that promotes satisfaction and addresses the hygiene factors to avoid creating dissatisfaction.

Motivational factors Hygiene factors
AchievementRecognitionThe work itselfResponsibility



Company policiesSupervisionRelationship with supervisor and peersWork conditions




For knowledge workers – such as programmers and writers – understanding what matters to them is the key to motivating them.


Dan Pink’s Drive has some attractive insights about how motivation really works.

Problem #4: Paperwork


Over the last couple of years, I’ve talked to a lot of HR people through Turbine. One thing I keep seeing is a morbid addiction to paperwork. Literally ‘paper’ + ‘work’. They ask if we can recreate their forms in Turbine or adapt Turbine to incorporate some quirk in their own workflow (eg our managers like to sign time off forms, can we upload scans of their signatures to your app).

One company I talked to collected time off forms in 40+ different locations, posted them to one office to be signed off and to another office to be entered into the world’s most depressing Excel spreadsheet by the world’s most bored employee. Another company’s time off requests used quadruplicate forms where you had to press down so hard on the paper to get the carbon copy on the bottom sheet, that it almost tore the paper.

Obviously, I’m going to recommend Turbine as the answer to a lot of this stuff (Expenses, Purchases, Time off requests and HR records), but there are dozens of apps and tools to automate other routine admin. Here are a few that we use:

The biggest obstacle to off-the-shelf solutions is a bureaucracy’s natural instinct to replicate all the idiosyncrasies of its existing practices. However, it is often easier to go for the 90 percent solution and adjust behaviour to match tools rather than pay to adjust tools to match behaviour.

Physician heal thyself

As we try to solve our own HR problems over the coming months, I’ll share what we do and how it goes – good and bad. In the meantime, I’d love to get your ideas, feedback and thoughts. What works for you? What doesn’t? In the meantime, beatings will continue until morale improves.

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