It’s hard enough to change a team’s culture, but how about a 28,000-person organization? That’s the job Mastercard’s chief human resources officer Michael Fraccaro undertook last year when deciding to overhaul the $350 billion financial service firm’s shared ethos, referred to internally as the Mastercard Way.
As CHRO, Fraccaro helped set the new organizational culture and related standards, but his most challenging task was developing new ways to measure employee buy-in. So he put data behind it.
Starting this year, Mastercard will tie job performance to how well employees have adhered to the company’s newly established culture. Fraccaro spoke with Fortune about why creating the ideal corporate culture has become priority No. 1.
This interview has been edited and condensed for clarity.
Fortune: What was the catalyst for reimagining culture at Mastercard?
Fraccaro: Our CEO Michael Miebach came on board in 2021 and, as part of his strategic focus, reiterated that we need to build on our cultural foundation, reinforcing the great aspects and leaning into certain areas. We now position our culture around three pillars: creating value, growing together, and moving fast.
How will culture be measured moving forward?
It’ll be part of our rewards and ratings and based on what goals and targets people achieve and how they do it.
How will you measure the Mastercard Way’s success and ensure it touches all 28,000 employees?
One, obviously, is measuring it through our employee experience surveys, and the other will be through the performance management system.
In 2022, we sent out a survey to allow employees to give feedback on how effective their leaders were in recognizing them, giving feedback, or caring about well-being. And as we think about the performance management system in 2023, we will also collect feedback on the nine behaviors within the Mastercard Way.
We also have a quarterly Culture Health Index looking at engagement, retention, succession, and inclusion. We’ve got ranges on the index that we measure and share with the board to provide insight into areas we’re progressing and where we need to do more.
Given the broader market conditions, why is it so important to measure culture right now?
What we’ve all been living through is almost like a social experiment. Measuring, tracking, and having data-based conversations helps to develop and inform better human capital strategies and determine whether you’re on the right track.
The most compelling data, quotes, and insights from the field.
Private employers added 235,000 jobs in December, led by consumer-facing service industries like leisure and retail, according to ADP’s National Employment Report. Hiring was strongest among small and medium companies, while large establishments saw a decline of 151,000 jobs.
“The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size,” ADP’s chief economist Nela Richardson said in the briefing.
Around the Table
A round-up of the most important HR headlines, studies, podcasts, and long-reads.
- The FTC proposed a rule on Thursday that would block companies from instituting noncompete agreements in employee contracts. New York Times
- Jobless claims dropped to their lowest since September last week, signaling that the labor market remains strong. CNN
- VCs, MBA programs, and small tech firms are jockeying to recruit recently laid-off tech workers from large companies. TechCrunch
Everything you need to know from Fortune.
Recession predictions. JPMorgan’s chief U.S. economist expects the economy to slip into recession by the end of the year as the Fed’s efforts to cool inflation trickle into the job market. —Christiaan Hetzner
Prime layoffs. Amazon is laying off more employees than it previously planned—over 7,000 additional cuts to be exact. The cuts, which have already begun, were originally expected to affect around 10,000 workers. —Signe Spencer, Matt Day, Bloomberg
Severance package reveal. After months of anticipation and uncertainty, Twitter employees finally received their severance agreements on Thursday, according to sources familiar with the matter. U.S. employees were offered one month of base pay as severance and must forfeit their right to partake in pending lawsuits filed against Twitter. —Kylie Robison
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