Hiring for Happiness: Revised Draft

8/8/2019 Hiring for Happiness: Revised Draft

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Richard Burton [email protected]

Hiring for happiness.A human resources plan for Happy to help it grow from being a startup to being amedium-sized business.

Quick summary: If you ask people what their dreams are, help them repay their debt, letthem run projects and help them connect with their colleagues, theyll be happier at work.

Subject for consideration: Develop a HR plan that ties to the 2010 business plan ofyour organization, delineating at least four strategies and action steps, measures ofsuccess and timeline for accomplishment.

What is the business plan?

Happy is a company with a simple goal: to make people happier. This includes itscustomers, partners, suppliers and employees. This abstract and lofty goal is going to beexecuted through a number of companies that will each have their own focus but stillcontribute to the larger mission. We are starting two companies initially:

Happy Music This Company is focused on becoming a profitable freemium1 music label.Customers will be able to download all of our artists music for free and the artists willcharge for premium services and products. These will include licenses to their songs,merchandise, gig tickets, sponsorship deals, small releases of premium CDs, exclusiveonline content and private performances. We believe that the war on piracy is a failure 2

as illegal downloads outnumber legal downloads 1000:1. It seems that for some reasonmusic wants to be free3 and we believe our artists tracks should be allowed to spreadfreely online. We believe that this will create a larger, more loyal fan-base withoutspending huge sums on traditional marketing channels and that fan-base can then bemonetizedensuring that the artist is able to make a fantastic living and lots of people aremade happier because they get to enjoy their music.

Happy Events This Company aims to architect the most incredible and unique parties,gigs and festivals possible. We believe that when it comes to spending disposable

income, experiential purchases tend to make people happier than material purchases 4.Our hope is that they will be so extraordinary and enjoyable that we can make a healthyprofit and then invest this money into promoting and supporting our artists.

When will this HR plan be used and how will it help?

Our first goal for Happy is to bootstrap the Company to profitability as soon as possible byputting on fantastic, ticketed music events in the UK & the USA. We then want to use theprofits from these events to help us try and discover a repeatable model for marketingand monetizing artists successfully. Right now we have no idea what were doing or ifthe freemium music label will work. Our intention is to focus on a few musicians andevents to get the details right on a small scale and try and get the model to work

financially.

If we can discover a repeatable model that were confident and were not desperate foroutside capital I think that would be the time to go and approach investors. At this stage Iwould imagine Happy to be a small team of no more than 10 people full-time and perhaps10-15 interns or volunteers who help out on a part-time basis.

The plan I am outlining would not be cheap. It would require a lot of extra work and capitalso I only think it would be feasible once were at the stage where we would accept outsideinvestment. The HR plan would be used to scale Happy from an embryonic startup to amedium-sized business with around 100 employees. This, of course, all depends on uscracking the freemium music label model and making it profitable.

1The Freemium Business Model, Fred Wilson-http://www.avc.com/a_vc/2006/03/the_freemium_bu.html2 Sean Parker at the Daily Beasts Innovator Summit, Co-Founder of Napster. Investor in Facebook &Spotify3 Peter Samson said "Information should be free" in 1959 at the MIT Tech Model Road Club4The Relative Relativity of Material and Experiential Purchases, Travis J. Carter & Thomas Gilovich


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What are the goals of this HR plan and how is it structured?

In order for us to make our customers happy, its essential that our employees are happytoo. This paper will outline 4 strategies that we intend to implement from the outset toensure that we can deliver on our ambitious goals. Each strategy will contain thefollowing:

A concise outline of the strategy and how it will affect the Company.

An analysis of how it will affect the employees and impact on them.

A cost-benefit analysis.

An appropriate Human Resources Metric.

After outlining each strategy in detail the paper will conclude by looking at:

How this will influence our relationships with our customers and suppliers.

Any relevant history or background on the strategies outlined

This paper will available on our Company blog. The four sections will be as follows:

1. Recruitment Dreams with deadlines are important.2. Remuneration Debt makes people unhappy.

3. Responsibility If you think its a good idea, go for it.

4. Relationships The Company can be a family.

1. Recruitment

Dreams with deadlines are important.

Outline of the strategy

Think and Grow Rich, a motivational text by Napoleon Hill, emphasized the need formental deadlines for every goal you set5. His belief is that many people say tothemselves I want to be rich some day whereas as very few people say to themselves Iwant to have a million dollars in my savings account by 31st December 2015. Napoleonargued that having a defined goal with a definite due date forces the sub-conscious to findsolutions and avenues to turn that dream into reality. Dreams with deadlines are thereforevery important to our company culture at Happy. We want to do two things for ouremployees:

1. Help them achieve their own personal dreams.This applies even if they mightnot be the primary focus of the company. For example: want to learn to kitesurf?Awesome! That might not be the focus of Happy Music but wed love to help anemployee achieve that goal in their free time if its going to make them happier.

2. Ask them which of our company dreams they can help us achieve. Our hopeis that all our employees want to help us in our mission to make people happier. Wehave a responsibility to help them do that.

How will it affect our applicants and impact on them once theyre with us?

The strategy must be implemented in the hiring and monitoring processes. When we hiresomeone we need to fully understand what their personal goals are and when they wantto achieve those by. Similarly, we want to make sure our employees understand the

specific goals of the company and when we want these to be achieved by. The monitoringside is dealt with in more detail in section 3, which focuses on projects andResponsibility. Therefore here I will focus on the hiring process:

No more CVs, Resumes or Cover Letters Everyone hates writing them.

5Think and Grow Rich, Napoleon Hill


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Everyone hates reading them. We dont want these to be part of our hiring process.

Small set of personal questions aimed to elicit unique responses Eachapplicant will be asked the following:

o Outside of your work, what else are you passionate about?

o What do you dream about achieving some day? (Not work-related)

o What date would you like to achieve that dream by?

o How can Happy help you do that?

o When have you been happiest?

Small set of company-related questions aimed at eliciting uniqueresponses The questions will be relevant to the department. Each question alsoaims to get them to think carefully about whether their education or life-experiencecan help them in their job. Were more interested in peoples problem-solving skills

than the letters after their name. For example:

o At the moment it takes an average attendee to Happy Fest 35 minutes to getfrom their car to their camping spot. How can we reduce this to 15 minutesfor Happy Fest 2012?

o Were hoping to have all our invoice checking and supplier-payments happen90% faster than it currently does by June 20 th 2012; can you help us achievethis goal

o Were trying to get 5 of our artists on the top 5 Japanese radio-stations byMay 5th 2015; what would you do to try and make this happen?

As you can each dream can be measured and has a deadline. This ensures theresno vagueness about what needs solving on when we think its possible to do thatby.

Quick video about themselves Applicants will be asked to upload a short, 5-minute clip about themselves. Were interested in where theyre from, what theylike to get up to, the people they care most about and their vision for their future.

No interviews -Thirty-minute slots put both the interviewee and interviewer intoan abnormal environment unlike anything in the real world. We dont think its fairon us and we certainly dont think its fair on the applicant.

Paid training month We will carefully sift through the applicants responses tothe questions and the videos they submit to find the best batch of people we can.

Technically this might be called a probation period but I dont like the way thatsounds. If I was a new employee on probation I think Id be more nervous than anew employee in training. We will then invite them to come and join us for a monthso we can be certain that theyre going to fit in with the culture and the team. Wefeel that its easy for people to put on a front for 30 minutes but much harder to doso over 30 days.

Our hope is that by focusing on our applicants dreams and on how our applicants canhelp us realize the companies dreams, were setting some fair expectations and doing ourabsolute best to make sure our employees are happier.

Cost-benefit analysis using a HR metric: Candidate Appropriateness


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Candidate Acceptance Rate + Voluntary Unemployment

These two metrics are great at measuring thefit of an employee. In my mind I see the fit asbeing a two-way thing. Do we want this person to

join our team and does this person really want tojoin us?

Cost-benefit example: Ive come up with anexample project that we might one day have toexecute: hire 100 talent scouts. I dont thinkthe approach to recruitment that Ive outlinedabove is significantly more capital-intensive thana normal recruitment process. Therefore Iveworked up some numbers based on fewassumptions listed to the right. Ive assumedthat $30,000 in labor and marketing spend could attract around 5,000 applicants and thatour HR managers would be able to whittle down the applications to a fantastic batch of100 trainees. Secondly Ive estimated a cost of $100/new employee/day in training costs.

Thirdly Ive assumed that we would pay our scouts $25,000 a year and that it would takethem 8 months to bring on a new act and help that act start generating enough revenueso that the employee can reach a break-even point. Based on these assumptions Ivelooked at the implications of varying Candidate Acceptance Rates (from trainee toemployee) and the Voluntary Unemployment Rate (from a batch of trained employeeswho havent been with us for 8 months).

As you can see if the batch of 100 employees that join the training program are terribleand we only hire 10% of them the cost/new employee will be over $30,000 a head which isfar too much considering their basic salary + benefits will only be $25,000. Therefore Imhoping that the dream-based approach to recruiting will keep this ratio above 90% to keepour cost/new hire as low as possible.

Talent scouts

AssumptionsCost of generating applications: $30,000Applicants: 5000Trainees: 100

Cost of training scheme/trainee: $3,000Salary + benefits: $25,000Break even point in months: 8

Cost of whole operation:$330,00

0

Cost of new employee leaving: $16,667


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If weve misjudged or misled an applicant about what its going to be like working forHappy during the training period and they decide to leave before theyve startedgenerating returns for the business it would be terrible. Ive assumed the cost of anemployee leaving at any time during the 8-month period after they are hired as at leastbeing total pay for those 8 months, which is $16,667. Even if someone is with us for 2months and not enjoying it they will have a negative effect on other Happy Scouts; theywill ruin the culture if feel they cant contribute to the company and the money spent onfinding and training them will also be wasted. Therefore I see $16,667 as an under-estimate. On a more positive note, if 90% of a new batch of Happy Scouts stick with usand manage to find some great acts then the business should hopefully fly.

2. Remuneration

Debt makes people unhappy.


Money and financial problems rank as the No. 1 cause of stress.6

American Psychological Association's (APA) 2009 Stress in America Report

Both the founders of Happy are students and we know how ominous debt can feel.College seniors who graduated in 2009 had an average of $24,000 in student loan debt,up 6 percent from 20087. We want to help our employees get out of bad debt like credit-cards and shark-loans as fast as possible so they can enjoy financial freedom and startsaving for their future. Therefore, as soon as the business expands from the small coreteam and starts taking on lots of new staff, we are going to offer our employees the optionof letting us help them get out of debt. We would partner with a reputable debt-

management company and negotiate a bulk discount on their services. Then employeeswould hand over all their credit card and student debt for this company to handle.Employees would reduce their salary depending on the amount of debt they have and howquickly they want to pay it off. Then each month they would receive $x,xxx and a letter

6 http://ebn.benefitnews.com/news/employees-need-help-dealing-with-financial-stress-2682850-1.html7 http://www.nytimes.com/2010/10/22/education/22debt.html


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showing them how much debt theyd paid off and how much closer they are to financialfreedom. This program would be entirely opt-in, no one would be forced to do this butwed love the option to be there for them.

How will it affect our employees?

Once this strategy is in place, employees will notice a few differences:

Access to financial advisors All our employees will have access to a financialadvisor with whom they can confidentially share the state of their personal affairs.

Then this advisor can use this information to put together a custom remunerationpackage that isnt just a regular wage and help them work out whats the best wayto achieve their personal financial goals.

Replace wages with timelines All employees who want to sign up to theprogram will have a percentage of their debt paid off each fortnight. So instead ofgetting $70,000/year they might get $35,000/ year and be debt-free in the next 4years.

Higher real wage if they opt for debt-management - Our goal is to make the

debt-repayment option way more attractive to our employees. Therefore we willtop up their debt repayments by 5% if they stick with the program, increasing theireffective real income and the speed with which their debt is paid off.

Suggested use of Mint.com Each employee will be asked to set up an accountwith Mint.com, a free personal-finance monitoring system, that will help them get amuch better insight into what they are spending their money on.

Ultimately we want our employees to be as happy as possible and we believe that bytaking pro-active steps to help them be financially free our employees can focus on theirwork more and make even greater contributions to the company.

Cost-benefit analysis using HR metric: Profit/Employee

Dr. E. Thomas Garman, President of the Personal Finance Employee Education Foundationand professor emeritus and fellow at Virginia Tech University puts it simply:

Poor employee financial literacy costs employers at least $750 in cashfor eachemployeeevery year8

This number is Dr. Garmans attempt to quantify the inefficiencies that arise fromemployees managing their personal affairs poorly. A report from Financial LiteracyPartners, LLC puts the cost of debt-related employee stress much higher: $15,000 peryear per affected employee.9. Therefore, in purely financial terms, if a debt-managementscheme costs >$15,000/year/employee it should have a net positive financial return for

the business.In a recent survey of over 45,000 American workers, 71 percent of respondents saidthey'd find it difficult to meet their financial obligations if their paycheck were delayed for

just one week 10. We would prefer our employees cash runway to be around a month andfor them to feel far more confident about their personal financial situation. Our financialadvisors would have to be readily available to help our employees plan budgets and makebetter decisions with their money. Our hope is that all this care is going to increaseemployee loyalty and dedication:

"If you help with debt the payback employers get in terms of employee loyalty can beimmeasurable"

James Bradley, information services manager at Accor11

8 http://www.pfeef.org/press/press-releases/Employers-Waste-Money.pdf9http://www.finlitinc.com/images/Employee_Financial_Stress_is_Costing_Your_Company_A_Bundle.pdf

10http://www.corporatewellnessmagazine.com/article-detail.php?issue=issue-11&article=cure-for-employee

11http://www.personneltoday.com/articles/2006/04/25/35019/spotlight-on-employee-debt.html


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What concerns us is how stress, unhappiness and depression can make it difficult orimpossible for someone to focus on their job. If an employee is constantly worried aboutpaying their bills and knows in the back of their mind that their credit cards and short-term loans are spiraling hopelessly out of control then theyre not going to be able to dothe best work of their lives. Our hope is that by focusing in on this major cause of stressour employees will be far more productive and feel extremely loyal to the company.

Cost-benefit example: Lets create a hypothetical example. Here are the assumptions Iam working with:

Productivity = Debt Ratio * (3 * Salary)

Or

Profit/Employee = (Employee Debt/Employee Wage) * (3 * Salary)

Or

A reallyproductive adds 3 times their wage in profits for a company.

Now lets imagine two employees who start at two different companies. Although theywork at different companies their financial situation is pretty similar. They both:

Take a new job paying $50,000/year (or $12,500/quarter)

Start the new job with $4,000/quarter in bad-debt repayments

Have debt that is compounding at an interest rate of 17.5%/quarter.

The only difference between these two employees is:

One starts a job at Angry, Inc. who just pays them a salary.

One starts a job at Happy, Inc. who take on all of the employees debt, reduce thequarterly compounding interest to 0% and use 8% of the employees salary eachquarter to pay down the total balance to zero. Once they employee is bad-debt free

they can then push this 8% into a savings account and start making big plans forthe future.

I feel the evidence is compelling. If this scheme is put into place we can help them getdebt-free fast and profit/employee will rise at a good rate instead of droppingprecipitously. You can see that salary remains a constant but as the employee at Angry

nears bankruptcy (when quarterly repayments exceed quarterly salary) their productivitydrops off to $0 per quarter or a net loss for the company as it will still be paying theemployee their salary.

3. Responsibility

If you think its a good idea, go for it.


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Micro-management and unnecessary layers of control creep into most organizations asthey grow. We want to maintain the fast-paced feel of a startup even if we grow ourheadcount to the point where we would be classed as a medium-sized business. ThereforeId like our staff to fill their days working on one of three things:

1. Core stuff Employees will spend the bulk of their time working on the areas

where they feel they can contribute the most. Our number crunchers will beanalyzing all the stats and our biz-dev people will be opening up new revenueopportunities.

2. Projects We will shamelessly copy Google here with 20% of an employees time12 to be used working on smaller projects that could help make more peoplehappier. These projects will all be shared on our internal project-managementsystem (www.basecamphq.com) and other employees can chip-in, join the projector add feedback. These projects should be in keeping with our philosophy of havingdreams with deadlines. That way a team manager can check in on all the projectsand see which ones are going great and which might need some extra help orthought. Typical projects might include trying out new versions of the website or

coming up with a system to make our PR blasts more effective.

3. Pitches If a project needs serious budget and company-wide support then anemployee can focus on turning it into a pitch for the whole company and effectivelycreate a new startup within the company. A big project might be something like anew club in Ibiza for the Happy brand or a chain of bars. If a pitch gets the greenlight that employee will have their core stuff taken care of by someone else so thatthey can focus down on making this new idea happen.


My hope is that our employees never, ever feel patronized, belittled or small. I want them

to feel like they can take control of their project and make a real difference in thecompany. If employees feel like they can pitch a new concept to the company and make ithappen then my hope is well constantly be getting great ideas and suggestions fromeveryone. The culture should feel exciting and be built upon the idea that trying stuff fastmatters most. IDEO, one of the most sought-after design consultancies in the world puts areal emphasis on rapid prototyping of ideas13. Our employees should feel like they havethe opportunity to go and prototype something all the time. Whether its putting aquestion on a whiteboard for other people to look at or coding up a new interface for oneof our systems; if they think its a good idea, they should go for it.

Cost-benefit analysis using HR metric: Profit/Employee Project

The real value of "20%" is not the time, but rather the"license" it gives to work on things that "aren't important".14

Paul Bucheit, the founder of GMail makes an important pointabout Googles 20% time policy. It is hard to quantify the valueof having an innovative culture that makes employees feel itsacceptable to try lots of ideas out until they find somethingthat works. This is not to say that it doesnt have quantifiableresults, as you can see from Googles stock price over the lastfew years.

Example: Profits from projects thought-experiment

Imagine Happy is at the stage where is has 100 staff with an average salary of

$30,000/year. The headcount is increasing at 20%/year and the average salary of theemployees is increasing at $10,000/year. Lets also assume that the average employee

12 http://googleblog.blogspot.com/2006/05/googles-20-percent-time-in-action.html13The Art of Innovation, Tom Kelley with Jonathan Littman14 http://paulbuchheit.blogspot.com/2009/01/communicating-with-code.html
http://www.basecamp.com/http://www.basecamp.com/


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works on around 10 projects a year, spending a month on each and 2 months on holiday.

Using the idea that wins are projects that increase profitability and lessons are projectsthat decrease profitability (but may teach us what notto do), here are some theoretical

probabilities on different sizes of wins and losses and how they might affect the company: 44% of the projects be small win or loss. Win: Small increase in company

efficiency. Loss: Small amount of extra time and expenses.

Medium & Large wins are 2% more likely than medium lessons. We areoptimistic that we can stop bad projects fast and push great projects way quicker.For example: A medium win is 5% likely in this example and might open up a newprofit opportunity for one of our smaller artists. A medium loss is 3% likely andmight be a failed project exploring a new lighting setup at an even.

Big wins and lessons happen one time in a thousand and cost$10,000,000. These are pitches or new businesses that weve invested a lot of

capital and time into. If they fail they will be expensive and we will shut them down.If they succeed they could open up massive profit-opportunities.

Once in a blue moon, a mega win might pop up. These are projects thatbecome entirely new arms of the Happy Brand. For example, a foray into insuranceor hotels might become huge for us.

Below are some figures generated from the assumptions above:

Employees:Projects/

employee/year:Projects/year: Avg.Salary/employee/year:

Total cost of20% time:

100 10 1,000 30,000 600,000

120 10 1,200 40,000 960,000144 10 1,440 50,000 1,440,000

173 10 1,728 60,000 2,073,600

207 10 2,074 70,000 2,903,040

5 years total of

projects: 7,442 Total Cost of 20% Time: 7,976,640

Cost Likelihood

No of Projects Like this in

5-year period Losses/ProfitsSmalllesson: -10,000 44.00% 3,274 -$32,743,040.00Medium

lesson: -100,000 3.00% 223 -$22,324,800.00Large

lesson: -1,000,000 1.00% 74 -$74,416,000.00

Big lesson: -10,000,000 0.10% 7 -$74,416,000.00

Small Win: 10,000 44.00% 3,274 $32,743,040.00Medium

Win: 100,000 5.00% 372 $37,208,000.00

Large Win: 1,000,000 3.00% 223 $223,248,000.00Big Win: 10,000,000 0.10% 7 $74,416,000.00

Mega Win: 100,000,000 0.01% 1 $74,416,000.00

Total net profits: $238,131,200.00


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Avg profit/ loss/ project: $32,000.00

Obviously the table above is based on a lotof assumptions; however I dont think theyre ridiculous assumptionsand its clear that so long as wins are more likely than lessons, the cost/benefit analysis holds up very strong.

4. Relationships

The Company can be a family.


We want to encourage all of our employees to feel like theyre part of something more funand significant than just a workplace. We have a few ideas for how to give ouremployees lots of extra opportunities to connect:

Enjoy breakfast & lunch together

Offer subsidized company holidays

Enjoy Happy Events together

Learn new skills together

My hope is that employees end up becoming close friends as well colleagues and thattheyll be a lot happier in the workplace. Happy is starting in two inherently socialmarkets: music and events. Therefore its important that our employees are very socialpeople too.


I imagine our employees choosing to live and work close together. They are encouraged tohave their own space and life separate from the company but hopefully theyll want to getinvolved in all the group activities that will be going on. If one of our artists has a gig inthe evening then all the team are invited to come and check them out and enjoy theirperformance. At the weekends, well put on fun activities and pay for employees to learnnew sports like kite surfing or go on a trip to explore a potential new venue. To get abreak from the laptops & iPhones, Happy will sponsor company-wide holidays where we alltake off to a lodge in the hills or beach-hut somewhere beautiful without any form ofconnection to the outside world. Although its corny, were trying to be a Happy Family.

Cost-benefit analysis: Cost of Turnover

Example: Increasing vs. decreasing turnover thought-experiment.

Imagine Happy has 20 staff at the end of its first year with an average salary of$30,000/year. The headcount is increasing at 75%/year and the average salary of theemployees is increasing at $10,000/year. Lets assume that the total cost of hiringsomeone is double his or her salary and the cost of replacing someone is two and ahalf times his or her salary. Then lets assume that we allocate a budget equal to 15%of the annual payroll to helping our employees enjoy themselves and their time outsidework and that this has the effect ofdecreasing turnover 20% a year and that withoutthis care for our employees we could find turnover increasing at 20% year. Based onthese assumptions I feel it is clear that, from a purely financial point of view, so long asthe cost of helping our employees develop great relationships with their colleagues

remains below the cost of a higher turnover rate, its worth it.


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Conclusion

How this will influence our relationships with our customers and suppliers?

Happy is on a mission: We want to make people happier. This will not be possible to do foreveryperson all of the time. Instead we want to maximize peoples happiness as much aswe can. If our employees love their work, feel they are making progress and know howbest they can help the customers and suppliers then this can only be a net win for the

company. If our call center staff are fired-up and enjoying their day then that will comeacross in the way they deal with customers concerns. If the lovely people in our accountsdepartment feel they are running a tight ship and are working on a side-project that couldreally go far then the way they will our suppliers will undoubtedly be better as a result.

How long has this obsession with happiness been around?

Tony Hsieh, the founder of Zappos.com, is the inspiration behind Happy. He wrote a bookcalled Delivering Happiness15 where he outlines his favorite theory for improving employeesatisfaction. He argued that the following 4 things were paramount:

Perceived ControlPerceived Progress

Connectedness

Vision / Meaning (Being part of something bigger than yourself)

Our first two strategies focus on setting the expectations of new recruits andremunerating them in such a way that gives them better control over their personalfinances. Our second strategy, which focuses on giving employees responsibility, aims togive our employees the feeling of progress when they succeed and control of somefunction within the company. Our focus on relationships in the final strategy is purely

about helping our employees finding connectedness with others at the company. Finally,we feel that the goal of the company: to make others happier, is what keeps every singleperson feel like they are part of something that matters. As Guy Kawasaki would say, wewant to make meaning in our company16.

15Delivering Happiness, Tony Hsieh16How to Change the World, Guy Kawasaki http://www.youtube.com/watch?v=lQs6IpJQWXc


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Happy is making a sincere commitment to helping people work out something that theyreusually terrible at: finding out what makes them happier.

Appendix

Data

Employee fit

Candidate acceptance rate

Trainee/employee ratio (%) Cost/new hire ($)

10% 33,000 100

20% 16,500 9030% 11,000 80

40% 8,250 70

50% 6,600 60

60% 5,500 50

70% 4,714 40

80% 4,125 30

90% 3,667 20

100% 3,300 10

Cost of voluntary unemployment among 90 new employees:

Employee/profitable employeeratio Total cost of new employees leaving:

10% $1,350,000

20% $1,200,000

30% $1,050,000

40% $900,000

50% $750,000

60% $600,000

70% $450,000

80% $300,000

90% $150,000100% $0

Employee Debt/ Productivity

Q1 Q2 Q3 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2013


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2011

2011 2012

Salary12500

12500 12500 12500 12500 12500 12500 12500

UnmanagedRepayments

4000

4700

5522.5

6488.9375

7624.501563

8958.789336

10526.57747

12368.72853

Managed

Repayments/Savings

4000

3624

3182.2

2663.085

2053.124875

1336.421728

494.2955305

-

495.2027516

Profit/AngryEmployee

25500

23400

20932.5

18033.1875

14626.49531

10623.63199

5920.267591

393.8144192

Profit/HappyEmployee

25500

26628

27953.4

29510.745

31340.62538

33490.73482

36017.11341

38985.60825

Cost of Turnover

Year: Employees:Avg.Salary/employee/

year:

Total costof hiring

(2 xannual

salary):

Total

cost ofreplacing

(2.5 xannual

salary):

Budget forrelationship-

building(15% of

payroll)

1 20 $30,000 $60,000 $75,000 $90,000

2 35 $40,000 $80,000 $100,000 $210,000

3 61 $50,000 $100,000 $125,000 $459,375

4 107 $60,000 $120,000 $150,000 $964,688

5 188 $70,000 $140,000 $175,000 $1,969,570

Turnover

ratedecreasing

:

Number of

employeeswho leaveeach year:

20% annual decreasein turnover rate

Turnover

rateincreasing:

Number

of peopleleaving:

20% annual

increase inturnover

rate

10.00% 2 $270,000 10.00% 2 $270,000

8.00% 3 $504,000 12.00% 4 $756,000

6.40% 4 $882,000 14.40% 9 $1,984,500

5.12% 5 $1,481,760 17.28% 19 $5,000,940

4.10% 8 $2,420,208 20.74% 39 $12,252,303

Project Plan

1.Identify your topicResearch my ideas for creating a happy company culture and how the HR process caninfluence that culture.

2. Plan

Step

Item Details Time Due Date

1Re-read DeliveringHappiness by Tony

Hsieh

As the inspirationfor Happy I need to

go over Tonysbook again

3 days 1st November

2Find out what makesemployees happiest

Research blogs,papers and articles

2 days 15th November

3Find out what makes

employees unhappiestResearch blogs,

papers and articles2 days 18th November


14/14


4Plan 4 strategies

related to my topicPick 4 areas Id liketo try and focus on

4 days22nd

November

5Research relevant HR

metricsUnderstand whatthings to measure

2 days 24th November

6 Write first draft Fingers to laptopkeys!

5 days 1st Dec

7 Upload online forfeedback

Get it out there 1 day 5th Dec

8 Note feedback Take it on board 2 days 6th Dec

9 Revise draft andsubmit

Revise and refine 2 days 10th Dec

Documents

Hiring for Happiness: Revised Draft