Michael Gomez - The Secret Sauce to Better Employee Engagement

[00:00:00] The world of business is more complex than ever. The world of human resources and compensation is also getting more complex. Welcome to the HR Data Labs podcast, your direct source for the latest trends from experts inside and outside the world of human resources. Listen as we explore the impact that compensation strategy, data, and people analytics can have on your organization. This podcast is sponsored by Salary.com, your source for data, technology, and technology.

[00:00:30] and consulting for compensation and beyond. Now, here are your hosts, David Turetsky and Dwight Brown. Hello and welcome to the HR Data Labs podcast. I'm your host, David Turetsky, and I have with me a brilliant mind in the world of human resources. Mike Gomez from Tasty Restaurant Group, the CHRO. Mike, how are you? Fantastic, David. How are you?

[00:00:57] I'm good. Mike, we are here at the ADP Meeting of the Minds in beautiful Las Vegas, Nevada at the Resorts World Campus, I guess you could call it? Yes, the Conrad Hotel. Right, we're actually downstairs from the Conrad Hotel. And we've just finished a few days of just craziness at the ADP Meeting of the Minds.

[00:01:21] So, great stuff, great learning, great experiences. Mike and I are sitting around having a really nice drink here, talking. And I said, Mike, let's tell the world about who Mike Gomez is. Mike, why don't you give us a little bit of who you are?

[00:01:39] Well, thanks for asking. I guess the best way to describe it is I'm a classically trained HR general with some good Fortune 50 brands like AT&T, PepsiCo, Walt Disney, and the McDonald's Corporation. Cool. More recently, after 20 years of executive search and HROD consulting, I've joined the Tasty Restaurant Group as the Vice President of Human Resources.

[00:02:08] We have a fairly large, complex business with six brands that include Taco Bell, KFC, Pizza Hut, Burger King, Dunkin' Donuts, and Baskin' Ramen. We're in 23 states with 23 law firms. We have this, we have that, right? And so it's a very complex role, and it's about impacting the lives of 7,500 people. Right. That is what I do.

[00:02:37] And we're going to talk a lot about how we impact those lives and how do we actually make them feel a part of something. But first, what's one fun thing that no one knows or a lot of people don't know about Michael Gomez? Wow. That I enjoy art. That I enjoy wine. That I enjoy time with my family. And I'm a dog lover. Awesome.

[00:03:07] Well, Mike, our topic for today is a very interesting one. It's about the secret sauce. So, Mike, what is the secret sauce? Well, within HR, you can find it across a number of different platforms.

[00:03:29] We, as HR professionals, as generalists, concern ourselves with employee relations and labor relations and compensation and benefits and staffing and ODing and training. These are the platforms that we operate in. Right. And the secret sauce is within all of them. And it can be tied to a benefit plan, a high-performance system. But these are the levers that we push in HR.

[00:03:57] This is how we effectuate change for the people we care about. And we really, in HR, try and show the business the direction that they need to focus in order to make sure those employees really feel a part of something, right? Well, absolutely. Look, you really need to understand the interdependent nature of the systems you put together in support of the business. Right. They work with each other.

[00:04:25] And one can't be performed without the assistance of another. It drives the obligation of the system. And so it's understanding these processes that exist throughout the calendar year.

[00:04:41] In the beginning of the year, it's about performance planning in a way that supports the strategic plan, followed by developmental feedback from the plan, followed by people forecasting, succession planning, management health survey, organizational health. And then you get into end of the year, performance appraisal. Okay. So these are the processes that we use and different systems support those processes.

[00:05:10] It seems like it's a life cycle. It seems like, as you mentioned, one feeds into the other. What's the eventual goal though? Employee engagement. Reduce turnover. Increase sales and profitability. Of course. So the end result is people feeling a part of something, knowing what the mission is, and being able to provide your customers with outstanding support. Exactly.

[00:05:37] In the end, it's about the employees engagement against the needs of the business. It's about moving knowledge and information and rewards and responsibility and accountability into the system. And in doing so, engagement levels go up and results improve. And you've done this for various companies. Is it different at an AT&T versus a TRG? In some ways, yes.

[00:06:05] Because you have to operate within the culture of an organization to effectuate change. But I would say that we're all people and we all have the same inherent needs. And there is, regardless of company, a similar set of social styles in each and ways of operating that impact us as human beings. So those are basically fundamental things about being an employer.

[00:06:33] And we care about the employees. And we're trying to take care of them, nurture them. Not as much like a family, although sometimes it feels like it. But there's that trust relationship, right? There's that implicit supply and demand relationship, which goes beyond economics. It goes to more of, I spend eight hours of my day or more at my job. So it really does take a large portion of my life, right? There's no question.

[00:07:02] In the end, our employees, like anyone else, they want to see how much you care before they care how much you know. Sure. And that's about trust as well, right? Sure. So we're closing the gap between supervisors and employees. We're educating the supervisors how to provide and receive developmental feedback in a way that effectuates change in all of their direct reports. Right.

[00:07:29] It is not an easy skill. No. It's a learned skill. No. And when we start receiving feedback from others that we're not used to, we can react differently. And so it has to be trained within the organization. And we're doing that now. Well, we've seen lots of examples where we hear that the manager is not only the critical link between the employee and the organization, but it's also the broken link.

[00:07:58] And a lot of times when that link breaks, employees leave because the number one reason we hear for turnover is because the employee and the manager don't get along. There's that friction. You know, it's a great point, and I'm glad you're bringing it up. People don't leave companies. They leave their manager. Right. Like what you hear so far? Make sure you never miss a show by clicking subscribe. This podcast is made possible by Salary.com.

[00:08:27] Now, back to the show. So let's transition, Mike. What is the answer to creating that secret sauce and creating that engagement? What have you found as being ways in which you can address it? High performance systems. Right. The systems that gave you the results you need. If you want illustrations, I'll give you a few. Sure.

[00:08:53] I'm focusing and aligning the workforce. Right. We adopted a new performance management appraisal system, fully transparent, highly automated and flexible, adaptable. We can make modifications. We can use our forms, not theirs. And it's a great way of focusing and aligning the workforce on all the key accountabilities, KPIs and evaluation standards that move the business. But it's not just about the technology.

[00:09:22] It's also about being able to align from the leadership through all the levels of the organization on what's important. Right. It's no question. It's what we did is we develop a uniform standard of excellence by creating the performance plans, spelling out all of the again, accountability, KPIs and evaluation standards.

[00:09:47] The evaluation standards are the key because they tell the employee how high the bar is. And if they jump over it, they win. Right. Right. And everybody wants to know where that bar is. And a lot of times they feel it's very subjective. And so they fight against the system because how can you win in a system that you don't know what the criteria are? Exactly. Right. So there's a certain level of elasticity within those evaluation standards. Sure.

[00:10:17] If you select a bar that's too high, they say, forget it. Why try? Right. Right. So it's a very important piece of the performance plan, but equally important to 80% of the plan, which is what I mentioned, accountability, KPIs and evaluation standards. There's two other pieces, one being competencies where we're linking the key behaviors to merit dollars, leadership influence, flexibility, adaptability, these types of things.

[00:10:45] And then the final piece would be for everyone in individual development plan. All you have to do is execute it. That's 5%. Okay. So 5% IDP, 15% competencies, 80% evaluation standards. Exactly. Let me go back to that because it's really important.

[00:11:03] So you're not only telling them the criteria for success, but you're also giving them the opportunity to understand how they're being judged on how they work, which is what the skills are. Exactly. And the frameworks that are necessary in order to be able to be successful. Then you're giving them an opportunity to also be able to provide a plan for how do I gain those skills if there is a deficit to be able to be successful. Exactly. Equally important to getting result is how you get there.

[00:11:33] And then a support plan and development plan that enables you to do it. So it sounds like the performance plan is a great way of being able to communicate with the employee as to what you expect from them, how they get it done, and how you're supporting their growth. Well said. A contract, if you will. Yes, exactly.

[00:11:53] Which a lot of people, because there's so much, I'll go back to subjectivity, but also because there's so much uncertainty, they kind of don't know what they're working for. They kind of don't understand how they're being judged. So this gives them a lot of clarity, right? Tremendous amount of clarity. More so than any other plan I've ever worked with in my life. So you're supporting them on the engagement side with the how do I get work done and how am I successful?

[00:12:20] What are other examples of how they feel supported in the organization? It's a good question. In addition to providing a plan, we provide feedback against the plan, right? How are they doing? How are we doing with training? How are we doing against the initiatives? Are you operating according to behaviors we think are important to advocate for your employees? All very important things. So feedback scheme, succession planning, who will be promoted and when, who will succeed who.

[00:12:50] We're planning the future careers of the people that work for us. That's important. These are important things to do as well as asking them how well we're doing. And so we rolled out a management pulse survey for the first time in six years across brands. Not one brand at all six. We asked their feedback. And we were pleasantly surprised. First, first survey out of the box. After six years, we were 78% satisfied.

[00:13:21] So we're, it's a good place to start. Sure. But we're not done. It's definitely a good benchmark. And because it was the first one, it's a way of being able to improve. Because now you know what they're, what's on their mind. Exactly. And then for us, and much like many other organizations across America, people don't have a lot of time to do performance reviews. And sadly, oftentimes they're not done. So this is a decades old problem across industries and functions.

[00:13:52] Where employees aren't getting the feedback they need. And if they're not getting any feedback, how do you think that affects their engagement? It makes them feel like they're not appreciated. Exactly. So we moved to a new fully automated and appraisal system where the employee gets to share their feedback. And beginning January 1 of the new year, they receive notification.

[00:14:16] And they get to go in and complete the evaluation one through four, plus all the other metrics that they've been provided with and say how they did. And when the supervisor goes into the system, a couple of weeks later, they can see the feedback provided by their direct reports. And through the use of a dual screen feature under the options section, they can move over the data they want to make sure they're making decisions that reflects the input. So they're incorporating what's good, right?

[00:14:46] But also serving as the supervisor, finalizing their opinion on the subordinate. Okay. With the input of the employee. So they're really getting context for what the employee feels like, feels about their performance and can bring that into what they write up. Again, moving the employee and the supervisor closer together. Yeah. So, you know, we didn't have a lot of success with reviews and we were in a low percentage.

[00:15:16] I won't say exactly what, but now after rolling this out, we were at 75. Okay. And that's pretty good. Now we feel more confident about going for 100. 100 usually is very hard to attain because there's the onesie twosies that don't get done. I would shoot for 99 first and then 100 next after that. I like to shoot for the moon, Dave. There you go. That is definitely a moonshot. We heard it here first.

[00:15:43] And hopefully, next time we have Mike on, we'll try and find out whether or not 100% actually happened. Like, what are the other ways in which you think about the employee as a whole person and engage them from other directions? Wow. Well, that's a great question. Let's talk about benefits. Right. We're evaluating a plan currently that we feel very comfortable with now following a lot of due diligence.

[00:16:12] And it's a unique plan because it falls under Section 125. It's a 501C plan for low-income workers. Okay. And it fits our business, right? We have a lot of low-income workers. Right. And sadly, many of our workers don't have anything left in their paycheck after choosing some of our benefits. Sure. And therefore, they don't use them. It's terrible.

[00:16:40] But with this plan, what's so cool is that it kicks back significant FICA tax savings. Yeah. It provides a favorable impact to the employee as soon as they're enrolled. Wow. It provides a number of benefit options that they never had previously, including a $25,000 life insurance policy. Wow. Okay. These things help retain employees.

[00:17:05] So in addition to the millions in FICA tax savings we anticipate, there is a secondary benefit that we believe is greater. And that is the reduction of turnover. Oh, sure. I mean, these are things that a lot of these types of employees really don't have access to today, right? It's very true. This particular plan is not well known. It's not well marketed. So you have to do your research.

[00:17:32] And there are a lot of plans within Section 125 that are 105B plans that are not required to be audited by the IRS and have been subsequently shut down by the Department of Labor. So you really need to know what you're doing when you get into Section 125. So talk to your benefits broker, talk to your legal counsel about it before you tread carefully into that. I think that would be a resource.

[00:18:01] It's important to understand conflicts of interest. Okay. Do your own homework. Exactly. Don't so easily defer to someone else's judgment. Right. Right. But you're marketing this. It's obviously a win-win for the business. It's a win for the employee. So how do we marketing this to employees, not just prospective employees, you know, candidates, but also your current employees?

[00:18:26] You know, you must be doing some communication to let them know what is this and how is this game changing for them? Yes. Well, it's a great question. We're just getting into that now with, you know, different letters of communication, employee newsletters, you know, direct communication to the employee. And we're attacking it from about six different angles.

[00:18:48] And we're trying to make a really big deal out of it because we believe this is going to be the tasty restaurant group, Santa's sleigh, coming in to save the day, sharing benefit after benefit after benefit with employees who previously had nothing. And we're going to relish the impact that it has on their lives. And by the way, there was some poetry in there.

[00:19:12] I don't know if you caught it, but I think that hopefully when your company listens to this, they realize they actually have a poet in their mix. Now, I don't want to demean or take away from your message because this is really a big deal for those employees. And hopefully that communication message comes across as this is really huge for you. I think, I think, I think it's going to have a huge impact.

[00:19:42] Exactly, exactly what impact or exactly what reduction? We don't know, but we're cautiously optimistic. But even the conversation about benefits in this space where it's not something that's been done more widely, but now it's being introduced, there's going to have to be some buy-in. There's going to have to be some hand-holding, right? Because you used a lot of numbers before. Yes.

[00:20:10] And I'm not going to say I know what they are, but some people are going to be brought along for the ride, right? I mean, it's not going to be a layoff necessarily. Well, I'm not so sure. I think it's going to be a big win right out of the box, right out of the gate. We're going to do some initial marketing. We're going to get people thinking about what's coming. And when it hits their check, they'll see that benefit right away.

[00:20:36] And then when they see the benefits they had now and nothing before, they're going to like it. Yeah. And I think I agree with you. I think people are going to like it. Let's come back to that some other time. Okay. So we've talked about engagement in terms of performance. We've talked about engagement in terms of benefits. You mentioned three things. What's that third thing here? Well, it would be dispute resolution. Dispute resolution, right? Dispute resolution.

[00:21:06] We have conflicts, right? Sure. Compliance is a big issue with HR. Sure. Right. We created a dispute resolution process for employees where through QR code, they can access a network of investigators that will listen to their concerns. Okay. And document them. These are trained experts. They're actually attorneys. Okay. And they know what they're doing. And by virtue of this process, we don't have issues fester. Right. And become bigger issues.

[00:21:36] Right. All right. So we're nipping in the bud with the pros. Right. And now it's sourced extension of our HR platform and competencies. Right. They, we work hand in hand. Right. The, the HR brand leaders for each of the brands that I had work with these attorneys and direct them and they do the investigations. And in doing so, they save our HR brand leaders time. Right. Right. So therein lies the benefit.

[00:22:04] Moreover, we're creating what's called an administrative remedy. And we have our employees sign saying they're aware of it and that they need to pursue this avenue of reconciliation for whatever concerns they have. Right. And if they didn't, and if they don't, and go outside of it to the EEOC, for example, we can, we, we make the case they didn't follow the administrative remedy. Right.

[00:22:34] And they agreed in writing that they would. Okay. Yeah. And oftentimes it nullifies the EEOC claim. We're very excited about this. We've been operating off this model now for the last eight, nine months. Oh, okay. And it's, it's been an effective tool for us to move the HR agenda and business agenda forward.

[00:22:57] So it's not just an ombudsman, which usually, you know, you think of an ombudsman as somebody who gets involved and, you know, tries to figure out what happened, does a little bit of investigation and tries to come up with a resolution. You're talking about, these are real pros here. These are people who really understand the issues. And, and I would also say, uh, with respect that ombudsman are professionals as well. Uh, this is just a different avenue, a different process. It's an investigation.

[00:23:24] It allows the investigators to do work, uh, that normally was being done by an HR brand leader. Right. And so it's all setting that, but we're all capturing it. We're capturing it. And it's all the metrics and the data and the reports are all built in. Sure. And we know what's going on. We know what's going on and everybody's obligated to participate. These are the keys.

[00:23:48] Is it really a, uh, see something, say something kind of like, uh, you know, if you're on the subway and you see a bag that doesn't belong there, you kind of highlight it. Is it something like that? Or is it something deeper? Like my boss and I had a meeting. Didn't go as well as I thought. There's something, something was said there that I didn't understand. I contact this instead, or what, what would be a, and you don't have to get into scenarios, but help me understand, you know, why would someone do this?

[00:24:18] What would be the path for this? Well, we had a couple of different avenues for dispute resolution. Uh, one would be for lower, uh, less serious issues. Maybe it's your, your time card or something, although that is important as well. And the, the other platform I mentioned is for the more serious issues, CEOC discrimination, right? Right. Right. Right. Right. Um, disparate treatment, um, sexual harassment, right. Workplace violence. Right. These are the issues we're concerned about.

[00:24:48] So it's really, you're listening to your employees. You're taking them seriously and you're helping them get a resolution for their, the issues that they see around them. We're letting the, we're letting them know. We want to know. Yeah. What's going on. So you're trying to help them from an engagement perspective by giving them the ability to know what their criteria are and how to actually know what their career is, where it's going.

[00:25:17] You're helping them with their, their benefits and you're helping them with their, their lives and being able to invest in themselves. And then you're also helping them by listening to them and trusting them. Exactly. And as a result, they're more engaged and they do things without being told because they appreciate what we're doing for them. And the benefits we're providing at no cost and the impact to their check. Right.

[00:25:47] And, and the performance feedback they're getting and the reviews they're not getting when they weren't getting them before. Right. Right. And it's also dispute resolution. They feel empowered because they, they have a resource for disputes. They have a resource for, for reviews. They have a resource for performance planning. Right. These are the things we're offering them in addition to competitive benefits that support the families that work for us.

[00:26:17] And I'm sorry I interrupted you. So the, what I was going to ask you is you're treating them like adults now, which I know sounds harsh, but in some organizations, we don't take our employees as seriously and you're not giving them the tools they need to succeed. So, it sounds like TRG, you're treating them like adults, like mature people, and you're giving them the tools to succeed. Look, it's a, it's a, an operating philosophy.

[00:26:44] I know our CEO, many years before I joined the organization, decided to take this traditional organizational pyramid and flip it on its head. With the employees closest to the customer being the most valuable. Sir. With the rest of us being the servant leaders to that end. Right. Hey, are you listening to this and thinking to yourself, man, I wish I could talk to David about this. Well, you're in luck.

[00:27:13] We have a special offer for listeners of the HR Data Labs podcast. A free half hour call with me about any of the topics we cover on the podcast or whatever is on your mind. Go to salary.com forward slash HRDL consulting to schedule your free 30 minute call today. What would your advice be for organizations who are saying, I hear what Mike's saying, but it sounds like a lot of work. Where do I get started?

[00:27:41] How do I practically change not just our attitude toward employees? How do I give them these tools? Well, you have to design the right human capital strategy. Okay. And you have to have the right component pieces that work together to drive your business. I know how to do it. I've been doing it for a long time. I don't think it's hard, but there's so much that it's just not being seen. If, you know, two times two times zero equals zero, you can't have any zeros.

[00:28:11] Right. So gap analysis is important. Right. You have to fill the gaps. Even with staffing, we run lean as an organization. Everybody's got to be good. Right. Because the process, so the processes kind of cross functions. Right. Right. And so we have to move the business and we do it with the right people in the right jobs. What would you say if I asked you how leadership buys into this?

[00:28:37] Because you can't do this without leadership being at the front of this, being able to empower not only you to get it done, but also their people to get it done. It's a great question. It's about managing change and garnering influence and sponsorship for the ideas that effectuate change in your business. And there's a number of ways you do that, but you have to have a senior team that trusts

[00:29:03] you and that feels you're, you are in fact the functional expert. Right. The business partner. And with those two, you're in a position to adequately facilitate change for the business. Right. But they have to know that you know the business, that you care about the business and you bring your functional expertise to impact their business and improve it. So if I asked you, what will you think the hardest thing of all this transition, all this

[00:29:33] change, what do you think that was the hardest thing for TRG to overcome? Wow. That's a great question. Past behavior. Yeah. Especially when it comes to performance evaluations, I'm sure. Well, we have to be the ones creating the enablement. Right. We can't just say do it. Yeah. Because I said so. Right. We don't work that way in HR, right? We have to influence.

[00:29:57] We have to show the way as servant leaders, show the platform, show the benefits. And, and this is why it's going to work. And with our performance management appraisal system, I did that and people bought in because it is user friendly. It does make sense. People want to participate. They want to get what they haven't got before. And you get them excited about it. Right. It's a transparent system. There is accountability. Okay.

[00:30:26] And people know it and they know they have to participate. And it worked. And this has been eye opening for me because it's interesting to hear that you can build a plan in HR that actually works and actually gets employee engagement to happen in an extremely positive way.

[00:30:56] And applaud TRG for this. Applaud you for this. I know it's not a one team, one person team who gets this done. So your team as well. Thank you very much for being on the podcast. I appreciate it. David, thank you for the opportunity to share a couple of thoughts. You know, in order to be great, we have to understand the greatness of others. Yeah, that's right. Thanks for having me. My pleasure, Mike. Thank you for being here. And thank you for listening.

[00:31:25] Take care and stay safe. That was the HR Data Labs podcast. If you liked the episode, please subscribe. And if you know anyone that might like to hear it, please send it their way. Thank you for joining us this week and stay tuned for our next episode. Stay safe.