LinkedIn is a social network specifically designed for career and business professionals to connect. Over 65 million professionals use LinkedIn to cultivate their careers and businesses, as well as using it to build strategic relationships (Duermyer, 2017) Therefore, their main focus is to provide a platform in which business people can network. This report will critically analyse four aspects of Linked In’s approach to people management; strategic human resource management, recruitment and selection, performance management and reward management. Recruiting the correct candidate is extremely important for company’s such as LinkedIn, as employees are fundamentally at the root of the success of a company, and despite LinkedIn having many strategy and reward systems put in place, these will not prove efficient unless the employees can express the corresponding behavioural profiles and prove they have the attributes which are key.
Strategic Human Resource Management
Strategic human resource management supports long-term business goals and outcomes with a strategic framework. (CIPD, 2018) These strategies are crucial to the growth and prosperity of a firm, as well as their ability to gain and retain competitive advantage; LinkedIn’s strategy has 5 major parts.
There are a specified set of ‘best practices’ that will always produce superior results, these include human capital base, motivation and opportunity to contribute.
Explosive growth by LinkedIn has seen their headcount rise from 700 to 6000 employees in four years (Shaw and Schifrin, 2015). Therefore, this increase in human capital base will add to the skills and knowledge that the company has to work with. In order for the strategies developed by LinkedIn to be successful, for example increasing monetisation whilst creating value for LinkedIn members (Shaw and Schifrin, 2015), aspects such as innovation and critical thinking are key.
Innovation may originate from the highest levels of management or could be a spontaneous creation of mid – level employees who take initiative to solve a problem or develop a proposal for change and the most successful companies allow both. (Kanter, 1986)
As part of LinkedIn’s employment brand promise, employees have the opportunity to transform themselves, and as a part of this they are able to participate in a once a month ‘Hackday’. This allows employees to pull together a team to tackle problems and come up with solutions (Shaw and Schifrin, 2015). This is a useful tool that provides a platform for employees to devise solutions and ideas that the company can take forward and develop as part of innovation; Hack days will also help with the confidence of employees, as they are more likely to suggest ideas if they feel they have a voice within the company that will not only be heard but considered. Furthermore, Hackdays will assist in moving the company closer towards the ‘best practices’ – as a day where employees are able to do something different and interact with other colleagues will aid towards both motivation and contribution.
An implication of this however, may be that employees need to be given more discretion and certain failures may need to be overlooked or occasionally rewarded in order not to hinder motivation and passion. Consequently, certain individuals may begin to suffer from a superiority complex with feelings of enhanced personal control and morale. This therefore may lead to a greater commitment of ‘self’, rather than the organisation as a whole. (Schuler and Jackson, 1987)
This type of employee behaviour therefore does not align with the attributes highlighted in LinkedIn’s core values, especially those such as ‘Act like an owner’. (Shaw and Schifrin, 2015) Where employees are expected to act like an owner in each decision they make, considering what is best for the welfare of the entire company. LinkedIn therefore will need to take care when allowing employees to take risks or suggest ideas, as they will not what to hinder engagement or motivation, however they will also not want to create egotistical, hedonistic employees who lose focus of the company’s main effort.
Recruitment and selection
Recruitment includes the practices and activities carried on by the organisation with the primary purpose of identifying and attracting potential employees (Barber, 1998)
When filling a position, LinkedIn look at internal candidates first (Shaw and Schifrin, 2015). There is a lot of movement within the company and this aligns with the ‘Tour of duty’ aspect of the company’s Employee Value Proposition. This helps to prevent a high turnover and enables employees to continue growing and learning new skill sets, as well as the fact employees tend to work harder when the likelihood of promotion is high (Fisher, 2006). Thus helping promote LinkedIn’s core value of demanding excellence, as well as these employees already being able to identify themselves with the culture and core values of the company.
However, when it comes to recruiting internally, there is risk of demoralisation as according to equity theory, motivation is based on a person’s assessment of ratio of outcomes s/he receives (e.g., promotion) for inputs on the job compared to the same ratio for a comparison other (Hitt, 2011). This could therefore lead to disheartenment and discomfiture amongst employees and as a result the company could suffer from people seeking jobs elsewhere due to a feeling of unworthiness, which means the target of avoiding high turnovers may not be met regardless.
Furthermore, LinkedIn have a rigorous hiring process which can take on average 55 days (Shaw and Schifrin, 2015). Understandably, the company want to ensure they are hiring the best people for the positions and want to ensure these candidates would also fit into the culture of the company, however extensive interviews can take up a significant amount of time and money – which could be injected into the business elsewhere, for example helping to achieve one of the main strategies at LinkedIn such as expanding international presence (Shaw and Schifrin, 2015).
Selection is extremely important at LinkedIn, as should the wrong candidates be hired this could lead to poor performance, additional training, demotivation of others, high levels of absence and so on, which will end up being a large cost to the company anyway. (Torrington et al., 2014) However, in order to be more efficient in this process the company will want to focus on a well written job description, that communicates the unique attributes of the job that would make it stand out to the right individual. Furthermore, as the company find they are not very efficient when it comes to the functional screening of applicants over the phone, they therefore need to equip themselves with the right set of tools to help them screen fast and efficiently, as the ability to screen fast is critical to part of an efficient hiring process. (Simplicant, 2018)
Performance management is a process of linked activities that aim to ensure goals are being met in the most efficient and productive way possible. (HRZone, 2018)
A significant part of the Employee Value Proposition at LinkedIn is their compensation package, including a pay – for – performance system (Shaw and Schifrin, 2015).
Performance-related pay (PRP) is a way of managing pay by linking salary progression to an assessment of individual performance, usually measured against pre-agreed objectives. But despite the common use of PRP schemes, questions still remain around the its effectiveness.(CIPD, 2018)
At LinkedIn, employee evaluations factor strongly into compensation decisions; which are conducted formally once a year and informally more often in many groups (Shaw and Schifrin, 2015).
These staff performance reviews help employee’s recognise and value their team members, as well as stimulating the creation of a culture of open communication within LinkedIn; aiding their current current core tenet of collaboration (Shaw and Schifrin, 2015) as workplace relationships will prosper in a culture that recognises achievement and values accountability.(Business Queensland, 2018)
However, performance appraisals and employee performance is a time consuming process, especially at LinkedIn where employees do their own evaluations, are evaluated by managers and receive peer feedback multiple times across the year. By result of them being conducted so frequently, filling out these evaluations quickly may be seen as more important than doing them well; when you start with a lack of understanding of the value of a good evaluation, lack commitment to do them properly and have a poor process to support the generation of a good evaluation, you have little chance of a good end result. (Workforce magazine, 2018) Thus the exercise just becomes a waste of time and resources for the company, and is overall lacks efficiency.
Furthermore, using this method as the determining factor of price related rewards could lead to many potential problems within the company; one of which being deteriorating quality. Performance related pay where employees at LinkedIn are aware they are being evaluated by peers as well as managers may focus more on quantity as opposed to quality (Bizfluent, 2018). If employees are in a rush to get things done, they may try to cut corners and mistakes will be made as a result. This will therefore have a larger negative impact on not just themselves but on the company as a whole.
In addition, extra pay may not be a major motivator in the workplace, as very often it is the job itself that is the source of true motivation. (Herzberg, 1968)) As well as PRP accentuating the difference between the highest and lowest paid employees within LinkedIn. (The Economist, 2018)
Therefore, when looking at performance management, LinkedIn could look to put systems in place such as coaching, creating an environment where employees can seek advice on how to achieve performance levels and ensuring morale is high amongst everyone and not favouring certain employees over others. (Blanchard, 2018)
Reward management is defined as the strategies, policies and processes required to ensure that the value of people and the contribution they make to achieving organisation, departmental and team goals is recognised and rewarded (Armstrong, 2010).
LinkedIn want to encourage and reward performance linking it to individual long-term career and corporate growth aspirations, and thus employee engagement is key. Employees who have good quality jobs and are managed well, will not only be happier, healthier and more fulfilled, but are also more likely to drive productivity, better products or services, and innovation. (CIPD, 2018) Therefore, for employees at LinkedIn to feel satisfied at work, it is important for them to be able to align themselves with the company’s culture and core values. The company does a lot to ensure the welfare of their employees is put first, for example, the monthly ‘Indays’ where employees are able to step away from their regular duties and take this time to think, reflect learn and develop (Shaw and Schifrin, 2015). This is an effective way to allow employees to refresh and rejuvenate and therefore be more focused on the tasks in hand when they come back to work. Moreover, the company provides nutritious meals and snacks for employees, as well as a wellness program which includes onsite fitness centres and events. (Linked In, 2018) These factors will thus help contribute to employee engagement within LinkedIn; which ultimately puts the company in a position where there is less risk of staff turnover as employees become increasingly loyal and begin to find a real passion for the their job and the business as a whole.
However, the company is rapidly growing and extremely fast paced, resulting in extremely high expectations from employees. Additionally, those who are working at a superior level within the company may come across barriers such as lack of budget or equipment support, access to important information, work overload and tasks that do not fit the training of that employee.(Newswise, 2018)
As a result, if employees are unable to access the resources they need to perform their best, their levels of engagement may begin to diminish.
Furthermore, the six core values promoted by LinkedIn appear to omit any welfare of employees as individuals, for example their interests or family, that could be incorporated into the values of the company. This would ensure all employees at LinkedIn feel that they are valued personally, and not just seen as tools that aid the functioning of the business.
LinkedIn have many strategies and practices in place to ensure the welfare of their employees and to create an environment where people strive for success. They have an open mind about innovation and the contribution of all of their employees; it does not appear that there is a threatening hierarchy within the company, which could hugely hinder motivation.
The company conduct a meticulous recruitment procedure in order to ensure all employees hired are perfect for the job with this organisation, however LinkedIn may want to consider looking into the efficiency of certain techniques they use, such as screening. Furthermore, although performance related pay has many benefits to both the company and the employee’s, LinkedIn may want to focus on other strategies such as coaching, to ensure morale remains high amongst everyone and not just those receiving more money. Finally, LinkedIn promote six core values that are very respectable, however extremely business oriented. Ultimately, it is the employees who will drive this organisation to success and therefore their welfare should be highly regarded amongst the organisation, as without happy, well nurtured employees, LinkedIn would not be half as successful as it is today.