Case Study: HR Issues in Uber Technologies Inc

Table of Contents:
Motivation behind the study & Literature Review....................................................................1
Background of the issue.............................................................................................................4
Stakeholder Imperatives.............................................................................................................4
Organizational Decision-Making Process..................................................................................5
Impact on people, their behaviour and attitudes........................................................................5
Evaluating success of intended outcomes..................................................................................4
Positive and negative aspects about the change.........................................................................5
Data Analysis & Findings..........................................................................................................5
Conclusions and Recommendations..........................................................................................5
References..................................................................................................................................5
Motivation behind the study & Literature Review
Women in workforce has a nuanced relationship with economic development and is a key
metric to judge and compare countries on social, economical and developmental issues.
Trends in gender gap, female secodary and higher education rates, quality of work available
to women depend on women
participation in the
workforce. Figure 1 clearly
exhibits that increased
workforce participation is a
vital driver of growth
especially for developing
countries which lie near the
bottom of the U-shaped
curve.

Figure 1: U-Shaped relationship between female labour force participation and

economic development

Figure 1: U-Shaped relationship

between female labour force
participation and economic
development

Female labour force participation has been declining in several countries of late. India ranks
at the tenth-bottom position in labour female participation rate in the world. Female Labour
Force Participation Rate (LFPR) for India has declined to 23.3% in 2017-18 [2].

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 Figure 2
India's falling female labour force participation

In US as well, the labour force participation rate of women has been falling, as the levels fell
below 57% breaching the levels set in 1988. This issue directly hinders UN’s Sustainable
Development Goal 5 (“Achieve gender equality and empower all women and girls”). [3]
Female labour force participation rate (%)

Figure 3

USA's falling female labour force participation

LinkedIn conducted a survey of 4000 women on who had changed companies to look into the
issue. The survey found that despite popular beliefs of more time devotion towards family
and a better work-life balance, the main reasons were

 Concern for the lack of advancement opportunity

 Dissatisfaction with senior leadership

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  Dissatisfaction with the work environment/culture
The survey found that these issues affect women more than men, as indicated in Figure 4. [4]

Figure 4

Reasons provided by Women vs Men for leaving their current jobs

Deep diving into this issue, the issue was age agnostic and the factors remained the same for
all age groups (18-45). For women in engineering (and more importantly technology sector)
roles, a graver image appears.

In a 2017 online survey of 2006 respondents who had left a job in technology related function
(since 2014), almost 40% women left due to mistreatment while another 25% were not
satisfied with the work environment. Table 1 provides the description gender wise, and as
depicted, women face the issues more often and with more severity than men.

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 Table 1 [18]

Reasons for US tech employees to leave the tech industry by gender (2017)

According to a three-year NSF-funded longitudinal study on Women engineers’ retention,

amongst the 5303 women surveyed, only 62% (N=3324) are currently working in
engineering. Table 2 provides a brief about findings of the study.

Study Currently Didn’t enter the Left >5 yrs ago Left <5 yrs
Segments working field ago
Proportion 62% 11% 21% 6%
(%)
Reasons provided

Satisfied with Not interested Care-giving

work (24%) (17%)
Supportive Start own business Lost interest
bosses (18%) (12%)
Contributions Didn’t like culture No Went to other
recognized (17%) advancement fields (66%)
opportunity
(12%)
Advancement Went to other fields No work-life
opportunities (15%) flexibility

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 (33%)
Training and Low Salary (7%)
Development

Table 2 [5]

Analysis of retention of women with engineering degrees

The study upon doing a MANOVA analysis with five types of differences (give below),
found out that there was significant MONOVA for Organizational supports (Wilks’ λ
statistic = .96, F statistic (7, 503) = 3.18, p value = 0.003) and Withdrawal cognition (Wilks’
λ statistic = .75, F statistic (3, 510) = 55.36, p value ~ 0 ). The variables considered for the
analysis were:

 Self-Efficacy
 Vocational Interests
 Organizational support
 Organizational Barriers
 Engineering turnover cognitions and attitudes

The study identified the following reasons for women engineers leaving the sector:

 Pressure related to the role assigned

 Hostile Work Climate
 Dissatisfaction from the job
 Inadequate opportunities for Training & Development
 Lack of opportunity for advancement
Each of these factors correlate with the survey results collated in Table 1 and the subjective
responses provided by the individual women contributors of the study.

Further, the study recommends the following steps to be taken to increase retention of women
employees (especially engineers) and prevent the loss to organizations (talent, competitive
edge and brand equity):

 Recognizing the problem as systemic and not women centric

 Implementing a top-down change having no tolerance for incivility
 Implementing role-based changes with clear communication about task objectives and
relevance
 Ensuring changes are implemented across all the checkpoints and improve increase
accountability and transparency of the changes done

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Background of the issue
The issue dates backed to November 2015. Susan Flower, one of the new joinees in the
Uber’s SRE Team (Site Reliability Engineer) was sent personal messages from her manager
two weeks after her joining, demanding sexual favours in exchange of getting the opportunity
to work on the best projects and being promoted faster than her peers. When she confronted
her manager, his unapologetic behaviour prompted her to escalate this issue to company’s
HR. Uber was a good-sized company even then and boasted of having an independent HR
department. But Susan’s case was taken very casually by the HR Team and even escalating
the issue to the superior authorities and management team did not fructify as she was told that
this was a first-time offence from the manager and so the manager was let free after issuing
an official warning. She was however advised to change her team as her performance
appraisal could take a hit having poor relationship with her manager. In-spite of having a
strong desire to working in the engineering team, Susan had to shift to another team.

With the passage of time when Susan interacted with other female employees in the
organization, particularly her previous engineering team, she came to know that the HR team
and management authorities had been false in claiming the incident with Susan as a first-time
offence from her manager. Many other female colleagues had reported such instances from
the same manager earlier, but the matter was suppressed each and every single time in a
similar manner because the manager was a star-performer in the company.

Susan was working well in her new team and had received excellent feedback about her
performance from other team members as well as her new managers. But finally, when the
performance review scores were released by the HR, Susan had been rated very poorly.
Moreover, it was not only her but other woman employees too working in different
engineering teams. When Susan confronted the HR manager, she initially told that it was a
technical issue and would soon be resolved. Later when the scores were not revised to the
actual ones, Susan was informed that it was an organizational call. When she approached the
top management discussing the issue, they replied “…women of Uber just needed to step up
and be better engineers”.

Many women employees started looking out for other opportunities and decided to quit Uber.
Susan also decided to quit, but she whistle-blowed and made sure that such issues of gender

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discrimination, sexual harassment, unequal opportunities and lack of transparency at Uber
came out in public domain. Statistics also speak like-wise. When Susan joined Uber in
November 2015, women constituted 25% of the engineering team and by the time she left in
February 2017, that number fell down to 3%.

Data Analysis / Findings

From the analysis of the above case, we figured out that Uber had made four major problems
which led to the overall series of events that happened:

1. Holding on to employees who are star performers but highly toxic:

In some companies it is often observed that there are certain star-performing employees, who
even if involved in sexual harassment or other forms of derogatory behaviour are not
reprimanded or fired because of their superior skill. Uber was involved in committing a
similar mistake. When Susan brought out the fact that her manager was demanding sexual
favours not only from her, but also from other female employees in his team, neither the HR
nor the top management paid any heed to it because the manager was crucial for their overall
business. As per an article in Harvard Business Review, “It’s better to avoid a toxic
employee than hire a superstar.”

If such inappropriate behaviour from top-performing managers to their female counter-parts

is silently accepted, it might induce others to demonstrate such toxic and unethical practices
leading to a very low gender diversity, as is generally observed in the tech companies today.
Statistically speaking, not firing top-performing but toxic employees would add only $5.3k
p.a. on an average while it will cost the company $12.5k p.a. in employee turnover and
another $25k-$30k from reduced employee morale or unhappy customers. Thus from a cost-
benefit analysis as well, it was observed that Uber was wrong in not paying heed to Susan’s
concerns.

2. Poor employee review and feedback system:

When Susan raised her grievances towards her manager, she was asked by the HR team to
either change her department or face a negative performance review from her manager if she
continues in the same team. Such instances make us remember the (in)famous case of. Ellen
Pao vs. Kleiner Perkins. A similar narrative followed there as well - A women employee

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facing severe backlash in her annual performance review, bonus allocation and promotion on
confronting her manager on sexual harassment and other inappropriate behaviour.

The HR team at Uber demonstrated that they had not learnt anything from what was perhaps
the biggest gender discrimination case in the history of tech companies. Performance review
should be based upon a 360-degree view of the employee performance and manager
perception should not be the only driving force. HR should ensure that employee feedback be
obtained from multiple sources including clients, peers, co-workers and higher authorities as
well.

3. Lack of transparency in organization:

Susan was initially rated highly in her performance review by her new managers and other
team members, but the final rating which she received was below par and well below her
expectations. When she inquired into the reasons behind this, CEO just made an umbrella
statement (rather vague) that the Susan had ‘undocumented performance problems’ and that
women at Uber needs to step up and be better engineers. Nowhere did the HR or the CEO
cite the actual reasons behind it or provided numbers or facts to back up such a claim. Such
lack of transparency leads to loss of motivation, increased attrition, lower gender diversity,
reduces trust and ultimately affects performance. Even a Harvard Business Review article
cited that “Such vague feedback is holding women back”

4. Ineffective positioning of HR within the company’s ecosystem:

In most of the companies it is observed that the primary function of HR is looking after hiring
and firing people. Some encompass a slightly broader scope by including training, developing
morale, performance evaluation etc. in what a HR does. This is an extremely incorrect
positioning of HR team within the company’s ecosystem. A Harvard Business Review article
points outs that ‘Uber didn’t realize that HR is not there just for recruiting, but should also
partner in business growth and leadership development. This requires HR to have
independence and autonomy in its decision making and their powers should not be subdued
by the whims and fancies of the Business Team. HR should have a parallel leadership
position in the company and they must have the power to hold leaders accountable and
responsible for their actions. In the of Uber, HR team should have investigated in the matter
of Susan’s allegations and should have hold the manager accountable for his inappropriate
behaviour even if the CEO or other Business Heads tried to subdue the matter.

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Stakeholder Imperatives
If we list down all the people who are possibly impacted by any action of Uber, we find the
list to be a long-drawn one through an analysis of the factors driving the triple-bottom line of
the company viz. Social (people), Environmental (Planet) and Financial (Profits). For the
purposes of this paper, we will limit our discussion to the key stakeholders who were
impacted in this case – i.e. employees (both riders and office staff), customers,
investors/owners, top management (various CXOs) and the Government. Generally, while
performing a stakeholder imperative analysis, we classify the stakeholders as:

Latents – People having high power but low interest in the

company. We keep them satisfied at best.

Apathetics – People having low power and low interest in

the company. We just monitor them and don’t care about
their interests a lot.

Defenders – People having low power but high interest in the

company. We try to keep them informed through-out the
decision -making process.
Figure 2: Stakeholder
Imperative Framework
Promoters – People having both high power and high interest in the
company. These people drive the decision-making process and closely
manage the company.

In this case of Uber, Government and public at large acted as Latents, Investors/owners and
top management acted as the promoters, HR acted as the defenders while the employees
(both the riders and the office staff) were labelled as Apathetics. When the sexual harassment
issue with Susan took place, the promoters did not pay much heed to her woes as their
primary area of interest lay in protecting and retaining their top-performing their manager.
They were primarily driven by the profitability of the company. On the other hand, in the
organizational context, Susan and other employees were the apathetics. They were neglected
in the decision-making process and were only monitored and their interests were not taken up
with a lot of care.

If we analyse, we would find that there is an inherent limitation in the way stakeholder
imperatives was set in Uber. HR people were considered as mere recruiters whose aim was to

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hire and fire people. HR were given the status of defenders who though are kept informed
about the decision-making done at the highest level, but are not involved in it. This was the
primary concern. In the present-day context, Uber with over 11,000 employees has become a
mature company with a stable growth. Hence, HR should have been given the status of
Promoters and not defenders. Had HR been involved in decision-making, then they would
have stood for the rights of Susan and other female employees. But since, HR had only been
merely kept informed about the decision-making, hence they were subdued to the whims and
fancies of the promoters/top management (including key managerial employees).

Organizational Decision-Making Process

The sexual harassment issue with Susan did not find voice as the decision-making process
was confined with some key personnel at the top management. However, as soon as the
Susan raised the issue in her blog, it came in the public knowledge. It is from here onwards
that the Latent stakeholders - Government and public at large, who have high power but low
interest, came into the scene. This created pressure on the Promoters and the defenders
(people having high interest in the company) to take action.

Accordingly, Uber hired former US Attorney-General ‘Eric Holder’ and ‘Tammy Albarran’
(partners at Covington & Burling, a law firm) to investigate into the claims. As the series of
events unfolded, more women working for Uber started to bring out their sexual harassment
issues in public via the #MeTooMovement. The movement with strong evidences from the
investigating team led to the firing of Emil Michael -who has involved in the sexual
harassment issue with Susan and many other female employees.

This did not stop here. As many as 20 employees along with Uber CEO- Mr. Travis Kalanick
were found guilty and were asked to leave the organization.

Impact on people, their behaviour and attitudes

The investigation created a wave of positive impact on not only the female employees but
also their male counter-parts who had witnessed any kind of discrimination. Allegations
made by some male employees against the Chief Head HR at Uber - Liane Hornsey about
racial discriminations found ground and he was also made to step down.

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This spurred a series of organizational changes including a campaign titled ‘180 days of
change’ wherein the internal processes, reporting mechanisms, stakeholder imperatives,
employee behavioural norms etc at Uber were revamped. But for the successful
implementation of these changes, the HR team needed to play a key role.

Evaluating success of implementations

Uber implemented the following major changes to address the issue of diversity and inclusion
with the organization: [19]

 Measurable D&I goals for senior leaders and a compensation plan incentivising their
fulfilment (grow percentage of women L5 employees to 35% by 2022)

 Partnering with Harvard Business School to educate current and aspiring leaders on
culture and inclusion

 Public commitment to gender equity by taking the California Pay Equity Pledge

 Becoming a caregiver inclusive company by providing 18 weeks of parental leave,

fully paid to all full-time employees globally

 Revamped the hiring manager training to build inclusive interviewing skills and
leading implementation of Rooney Rule- inspired parameters for hiring

 Creating performance management and diversity scorecards; Implementing audits of

tech and non-tech competency models for Talent and Career Management teams

Evaluating the success of intended outcomes for Uber, we find that:

 Women participation in Uber’s employees worldwide has increased from 36% in

2017 to 41% in 2019 (as mentioned in Table 3)

 Women participation in Uber’s tech department worldwide has increased from 15% in
2017 to 22% in 2019 (as mentioned in Table 4 & 5)

 With respect to its tech peers, Uber has been consistently lagging behind in
promoting women in leadership roles and this hasn’t improved since ‘17 (Table 5& 6)

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 Deep diving in leadership category for Uber’s tech department, proportion of women
fell by 1.8%, indicating a need to launch targeted programs to address the issue

Table 3 [14]
Distribution of Uber's employees worldwide by gender

Table 4 [15]
Distribution of Uber's employees worldwide by gender and department (2019)

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 Table 5 [16]

Percentage of female employees in Global workforce of major tech companies (2017)

Table 6 [17]
Percentage of female employees in Global workforce of major tech companies (2018)

Conclusions and Recommendations

Uber had to face monetary, PR losses and undergo significant restructuring to recover from
the HR catastrophe that the company got itself into. It was mainly due to the fact that Uber
neglected to put necessary HR structures in place, to supplement its ever-growing workforce
and ensure that all stakeholders involved (including its employees) are safeguarded and taken

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care of. Moreover, a competent HR leadership would have ensured that the company creates
a culture that supports, inspires and empowers its people. Even the initial steps that Uber took
were myopic and short-term oriented as simply firing off existing leadership does not
automatically translate into fostering a more inclusive culture, and increasing the number of
HR representatives (as recommended by Eric Holder) without incorporating employee
feedback into the process and repositioning Human resources as one of the foremost
functions of an organization did not translate into results.

Of late, however, Uber has taken up steps to fulfil long term goals which align inclusivity as
one of the firm’s top core values and it has instilled confidence in the stakeholders involved
that the company is making concrete changes to mend its way. However, Uber, and tech
industry overall need to go a long way to achieve this goal. Few recommendations along the
line would be:

 Targeted focus on increasing women participation in all functions of the organization

(including tech leadership, where the firm is severly lacking at the moment)
 Implementing a top-down approach having zero tolerance for incivility and
undermining women (by any means) in the organization
 Ensuring changes are implemented across all the checkpoints and improve increase
accountability and transparency of the changes done

 Establishing inclusivity as a core value in all aspects of the organization’s HR process

(recruitment, talent development, training, promotions, compensations, etc.)

 Communicating constantly with the employees and ensuring a smooth, transparent

and effective feedback process with the sole focus of improving employee
participation in decision making process of the organization

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References
1. https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-strange-year-
at-uber
2. https://www.vox.com/2017/2/21/14673658/uber-travis-kalanick-susan-fowler-
diversity-sexual-harassment
3. https://hbr.org/2017/03/uber-is-finally-realizing-hr-isnt-just-for-recruiting
4. https://money.cnn.com/2018/07/11/technology/uber-hr-head-resigns/index.html
5. https://www.cnbc.com/2017/06/06/more-than-20-employees-fired-at-uber-in-sexual-
harassment-investigation-report.html
6. https://www.businessinsider.com/ubers-head-of-hr-resigns-after-an-investigation-into-
how-she-handled-allegations-of-racial-discrimination-2018-7?IR=T
7. https://money.cnn.com/2018/07/11/technology/uber-hr-head-resigns/index.html
8. https://qz.com/work/1593845/the-uber-ipo-filing-admits-workplace-culture-is-a-risk-
factor/
9. https://www.businessinsider.in/Uber-is-in-hot-water-after-a-major-cyberattack-cover-
up-heres-the-long-list-of-scandals-the-company-has-weathered-so-far/February-2017-
Kalanick-is-caught-fighting-with-an-Uber-drive-on-camera/slideshow/61770302.cms
10. https://hbr.org/2015/12/its-better-to-avoid-a-toxic-employee-than-hire-a-superstar
11. https://www.pastemagazine.com/articles/2015/05/ellen-pao.html
12. https://hbr.org/2016/04/research-vague-feedback-is-holding-women-back
13. https://www.wsj.com/articles/gender-bias-at-work-turns-up-in-feedback-1443600759
14. https://www.bbc.com/news/business-44852852
15. https://www.theverge.com/2018/7/16/17576808/uber-gender-discrimination-federal-
investigation
16. https://www.e-education.psu.edu/earth107/node/1448
17. https://qz.com/india/1010986/a-timeline-of-events-that-led-to-travis-kalanick-
stepping-down-as-ceo-of-uber/
18. https://qz.com/1003453/emil-michael-ubers-most-scandal-ridden-exec-is-reportedly-
out/

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