Management Style of Trust and Retention

Trust plays a powerful role in retention. We’ve talked before about the death of the 19th century style of management: command and control. But what replaces it?

I like the phrase I recently saw of “trust and track.” As explained by an entrepreneur who has achieved great success with this method, trust and track “involves educating employees about what it takes for the company to be successful, then trusting them to act accordingly. … If done right, trust and track can allow a company to be nimble, flexible and productive enough to perform at the highest level through good economies and bad.”

How does this play out in large organizations? This year’s Fortune No. 1 best company to work for: SAS. SAS is the world’s largest privately held software business and has been profitable every year of its existence. In fact, in 2009 SAS grew 2.2%, the second or third most profitable year on record. How’d they do this in the midst of recession? Trust and track.

As the CEO of SAS, Jim Goodnight says in this FT article: “I always say if you treat people like they make a difference, they will make a difference.”

What’s the impact of this approach on loyalty at SAS? This CNNMoney article tells us: “The average tenure at SAS is 10 years; 300 employees have worked 25 or more. Annual turnover was 2% in 2009, compared with the average in the software industry of about 22%.”

Are you trusting your employees to make a difference? Trust is itself a powerful form of recognition as well as motivator. Tell me your stories of the power of trust.

Free Webinar: Recognizing the Right Behaviors to Achieve Company Objectives

Do you want to find out why behavior-based recognition is so effective at engaging employees for increased productivity and business performance?

Join me next Thursday, 4 March 2010, at 11:30 Eastern/4:30 GMT for a free, live webinar with Aberdeen Group on “Recognizing the Right Behaviors to Achieve Company Objectives.”

Aberdeen Group Research Analyst Mollie Lombardi will be joining me to discuss why engaged employees drive business results; how strategic employee recognition is a proven way to drive business performance; and best practices companies should employ to get the most out of employee recognition programs.

Mollie will share insights uncovered in recent Aberdeen reports: “Beyond Satisfaction: Engaging Employees to Retain Customers” and “Globoforce: Recognizing the Right Behaviors to Achieve Company Objectives” and how they relate to today’s business climate.

I will be sharing a case study on how one company is experiencing strong performance results that are tied directly to its employee engagement initiatives.

Key take-aways from the webinar will be:
• What employee engagement is and how it differs from employee satisfaction
• How to build an engaged, motivated, and productive workforce
• When and where to implement employee engagement strategies to maximize its impact on business objectives and overall organizational performance

Be sure to join me next week by registering here.

Managing Turnover & Retention Effectively

A couple of recent articles in Human Resources Executive Online touched on the importance of employee loyalty and retention.

In “Managing Turnover’s Disruptions,” Tom Starner emphasized the costs associated with turnover and how to minimize them. Interestingly, the referenced research found that the negative impact of employee turnover on customer service could by mitigated through smaller work teams who were able to more quickly introduce new workers to the company’s culture.

Why is this true? Smaller work groups tend to foster more horizontal loyalty between team members to reduce turnover, while indoctrination into company culture aligns the employee more quickly with objectives and values.

And this alignment is critical to ensuring you are doing “The Right Kind of Retention,” a second article form HRE Online. As the author, Kenneth W. Thomas, points out, not all retention is equal. Do you really want to retain those employees who are staying because they have no other options but don’t really care about their work, your customers or your company?

Kenneth also introduces the key intrinsic rewards for employee, including sense of meaningfulness, choice, competence and progress. These align with Dan Pink’s intrinsic rewards categories of autonomy, mastery and purpose. This is where strategic recognition feeds these intrinsic motivators by communicating the meaningfulness of employee efforts, celebrating achievements of high levels of work and acknowledging progress.

What are you doing to alleviate the effects of employee turnover (voluntary or involuntary), to bring people into your culture more quickly, and then reinforce their intrinsic motivators?

Encouraging Employee Loyalty

A few weeks ago in my regular, highly unscientific poll (take our latest poll here), I asked: “Who are you most loyal to?” As you can see, loyalty to self was by far the largest with boss the least.

While this may not be surprising, it should certainly be concerning. In the face of overwhelming reports, research and studies that show nearly 90% of employees are currently engaging in some level of activity to leave their current position, company leadership should have employee loyalty (not just retention) at the top of their priority list for 2010, especially as the recovery begins in earnest.

A recent article in Talent Management really got to the heart of the loyalty matter, explaining why:
“Loyalty is no longer synonymous with retention. Just because employees stick with it doesn’t mean they are engaged and therefore as productive as they could be. Employee loyalty no longer means one-directional communication. It is not just an employee being loyal to his managers and the company.

“Employee loyalty should be thought of as circular communication. It starts with leaders creating initiatives that will earn employee loyalty. When employee loyalty initiatives begin with leaders who ‘walk the walk’ and treat employees how they want to be treated, results can be tremendous.”
What are you doing to create such a circular loop of trust, respect and ultimately loyalty? Believe me, of those wanting to leave, your high-performers will be first out the door. If you want loyal employees, start with giving them a reason to respect and engage with your company. Help them clearly understand your company values and objectives and then see them as reality in every day work, and not just a plaque on the wall.

Then make it clear that their efforts to demonstrate those values in achievement of your objectives are recognized and appreciated. Employees who know what is expected of them, why those expectations are important within the big picture, and that delivery against those expectations will be noticed and appreciated will become truly loyal to you and to your organization.

Employee Engagement Network: Advice for Managers

Are you involved with employee engagement initiatives at some level? If you’re not already a member of the Employee Engagement Network, I highly recommend it as a place to interact with and learn from some of the best minds on this topic. David Zinger, the founder of the Network, recently solicited one-sentence advice for managers on employee engagement and compiled them into an ebook. I’ve categorized some of my favorites into three groups below, but I give David the first word:

“Recognize that employee engagement is not a fluffy extra but the fundamental way you will get work done with others through conversation, co-creation, community, mutuality, and other inclusive approaches to achieve results that matter to organizations, customers, leaders, employees and yourself.” – David Zinger

Meaning & Purpose
* “Having a shared and compelling vision, continuously reinforced by communication, transparency, involvement and leading by example.” – Winston Tikaram

* “Managers and supervisors can engage employees by communicating expectations and how the employee’s role contributes to the overall big picture (sense of purpose).” – Cathy Missildine-Martin

* “Communicate the organization’s strategy to everyone in the workforce. If they aren’t exposed to the direction, goals and objectives, and given the opportunity to understand and buy into it, how can they possibly be held accountable for executing on it?” – Skip Reardon

Respect & Empowerment
* “Treat people the way they want to be treated, not the way you want to be treated.” – John Schonegevel

* “They trust you – have you told them you trust them?” – Jean Douglas

* “Don’t give someone responsibility for something, unless you are also going to give them the power to affect it.” – Samantha Wood

Culture of Recognition
* “People honor a culture that honors them. Take the time to recognize, appreciate, value and honor your people.” – Bernie Donkerbrook

* “Focus on what your employees are doing right with praise and recognition and coach them in the areas in which they require development, supporting them through their learning process.” – Madeline McQueen

* “Don’t rely on the annual employee evaluation – give positive and developmental feedback every day if necessary so that employees always know where they stand.” – Brian Jones

What was my one sentence of advice? “Specifically, clearly and consistently tell employees what behaviors and efforts are most necessary for company success by thanking and recognizing them when they demonstrate those behaviors in daily work.”

What’s your one sentence of engagement advice?

Varied Engagement and What to Do about It

CBS Money Watch on Bnet recently featured an article on what to do if you hate your job. Looking at why people are “dissatisfied” with their jobs, the author cites: “They don’t feel like they are contributing to anything meaningful, they aren’t passionate about what they do, and they don’t feel like their best talents are being utilized.”

That’s a fairly accurate summary of why employees are disengaged in today's workplace. Why should management care, though, as long as the work is getting done? Recent Gallup findings offer a strong argument as to why you should:
“In average organizations, the ratio of engaged to actively disengaged employees is 1.5:1. In world-class organizations, the ratio of engaged to actively disengaged employees is near 8:1. Actively disengaged employees erode an organization's bottom line while breaking the spirits of colleagues in the process. Within the U.S. workforce, Gallup estimates this cost to be more than $300 billion in lost productivity alone.”
Unfortunately the Money Watch article offered only two solutions for the dissatisfied employee: find a new job or “use your other 8 hours” to do what you care about. From the manager point of view, that second option is almost worst than the first as it encourages the employee to disengage even more while at work.

So what should managers and company leadership do to become world-class organizations and recover that lost productivity? Target the reasons for dissatisfaction (lack of meaning, passion and use of talents) with strategic employee recognition whereby sincere, frequent recognition of effort is more than a "thanks" but specifically tells a person: "I really appreciate what you did on project X. Your work helped us achieve Y, which is going to make meeting our strategic objective Z much easier. Keep it up!"

Take this approach and you've just positively shown the employee how their work is meaningful and give them some indication of the path the company is following. Even if their talents aren't being fully utilized at the moment, at least they're being appreciated!

How to Measure Employee Engagement Globally

A constant complaint about “employee engagement” is that the various research houses define engagement differently, offer different surveys to measure engagement, and then report those results in ways that mean different things in different environments and cultures. For example, Gallup found that Germany’s level of engaged employees is just 13%, but this new Barometer found 89% of German employees to be engaged or highly engaged.

What Barometer? The Conference Board (TCB) recently released a report (subscription required for full access) that attempted to find the common ground in the various approaches to employee engagement by coming to a single definition of engagement and provide a consistent measure for engagement everywhere in the world.

Adding to the litany of engagement definitions, here’s TCB’s: “An employee can be considered engaged if he or she is intellectually stimulated and passionate about his or her work, and demonstrates that through his or her intended actions.”

I like this definition because it speaks to both attitude and actions/results. TCB’s approach also eliminates perceived cultural perception differences to help a company truly understand the level of engagement across different cultural regions and then directly compare those results without “norming” for cultural differences, a process that introduces error into survey results.

What does this mean? In TCB’s words: “The state of mind called employee engagement is experienced in much the same way by workers throughout the world.”

What do you think about this definition of engagement and the idea of cultural universality? Is it too narrow? Too broad?

Three Tips to Share the Love on Valentine’s Day

Do your employees know how much you love them? Okay, perhaps that’s a bit strong. But today is the day to express love, respect and appreciation to those who matter to us.

In the work environment, shying away from “love” would likely be wise (especially in today’s litigious environment). But we shouldn’t pass up on this opportunity to show employees how much we respect them and value their efforts.

In that spirit, here are three tips for sharing the love with your employees on Valentine’s Day.

  1. Instead of an impersonal greeting card, send a note of appreciation that specifically acknowledges the attributes of the person or their achievements that have contributed to the success of the team, the customer or the company.
  2. Instead of unhealthy chocolates, celebrate the success of the team with a meal together.
  3. Instead of scent-less, out of season roses, let the employee choose what would be a personally meaningful and culturally relevant reward for their efforts.

As with the significant others in our lives, don’t limit expressions of your appreciation and esteem to one day of the year. Be sure to share the love throughout the year so your colleagues always know they are valued, appreciated and respected for their work and results.

Thanks…with Meaning and Purpose

It’s that time again. Finalizing the annual performance review and offering performance raises where earned. However, just like last year or perhaps even more so, budgets are tight and increases will be very small or non-existent. The Wall Street Journal recently reported, “Employers plan meager 2.8% raises in 2010, after 2% bumps in 2009, according to Towers Watson.”

So what are you to do to reward employees for their stellar efforts in the face of a very difficult year? How are you to motivate them and help them engage to achieve company goals for the year?

I liked how the Guardian put it in a recent article: “If people understand the need to change, can do it without too much hassle, and can understand the positive impact of their actions, it's more likely to happen.”

Can understand the positive impact of their actions – when you need to motivate others to achieve a task, are you just telling them what to do or are you giving them the bigger picture so they understand the value of what they are doing and why it matters?

How can you do that in this era of tight budgets? We recommend investing just 1% of total payroll – a very small investment, indeed – into strategic recognition that encourages repetition of desired and needed employee behaviors and actions within, critically, the bigger picture of your company goals and objectives. Tell people thanks for their work AND how those efforts matter to their team members, to the division and to the company as a whole.

Research and Spin * Reading between the Lines

Do you find it as interesting as I do how the same research can be interpreted differently?

Last Fall, McKinsey reported the results of survey on individual leadership style and what styles work best in a crisis.
“The kinds of leadership behavior that executives say will most help their companies through the current crisis, such as inspiring others and defining expectations and rewards, are the same ones they say will help their companies thrive in the future. The executives’ assessment of what’s needed for the long term hasn’t changed over the past year. … When asked which capabilities of organizations as a whole are most important for managing companies through the crisis, respondents choose two more often than any others: leadership, so that leaders inspire others and shape their actions, and direction, so that it’s clear where companies are going and that people are aligned on how to get there. Respondents also say those two capabilities have become more important since the crisis began.”

John Baldoni in Harvard Business’ Leadership at Work blog spins the results for viewing in the negative:
“A majority of managers just don't understand what it means to be a leader. That's a conclusion that I draw from a recent global survey by McKinsey and Company about what it takes to manage corporate performance. Only 48% of managers surveyed believed that they need to inspire and only 46% believed it was their responsibility to provide direction during this crisis. The numbers for inspiration and direction actually drop to 45% and 39% respectively when considered as behaviors for how to manage post-crisis. More troubling, only 30% of managers felt that they needed to motivate their employees during the crisis and just 23% did post-crisis.”

How’d you read the above? “Only 48% believe they need to inspire?” or that leadership and direction are chosen most often as the most important. I’m particularly troubled by Baldoni’s assertion that “only 30% of managers felt they needed to motivate employees…”

That’s not what the research says. The research asked respondents to rank “most important.” Of course, I believe motivating employees is important, but I also believe motivation is a strong element of leadership and direction and not easily separated.

What’s my point? Be careful in how you read research. What’s your take-away from the above two reports.

Globoforce No. 10 on TechCrunch Europe Top 100

I'm thrilled at the recent news that Globoforce made the TechCrunch Europe Top 100 list this year. The Index, which was created by TechCrunch Europe alongside YouNoodle, ranks the most innovative and highest-potential European tech companies. As a new entry to the list, it's particularly impressive we made it to the number 10 spot on this year's list of high-growth tech companies in Europe.

This article on the Top 100 Index had this to say:

“The companies that have made great progress in the last few months are ones that have being doing important things like generating revenue. … Although I’d like to see more European startups thinking globally from the start, and going for growth, no-one is saying one shouldn’t have at least half an eye trained on where the business model is going to come from.”

Eric Mosley, our CEO, commented: “Since our inception, we made the strategic decision to take a global view in our approach for not only our business model but also better serving the varied needs of current and future global clients. This mindset positioned us for success in a crowded marketplace, as it enabled us to help global companies unify their employees and cultures through employee recognition programmes that are built on a global platform but executed locally.”

This, of course, could not have been accomplished without the innovation and leadership exhibited by all of our employees around the world. To our employees, thank you to all of you for everything that you do every day to live our values: Imagination + Determination = Innovation!

Also, a tremendous shout of appreciation to our customers who have also partnered with us in bringing truly strategic recognition and the power of a sincere thank you to their employees around the world.

What Are Your Amazing Goals or Ideas?

Chris Ferdinand of Renegade HR recently published a terrific collection of short, actionable things HR can and should do in 2010. With contributions from various leaders and writers in the HR space, Do Amazing Things is a terrific, quick read in its entirety, but I’d like to highlight just a few:

Lance Haun from Rehaul says: “I’ve worked with quite a few top performers in many different settings from every possible department. The one thing all of them had in common? They all made their co-workers and cross-departmental colleagues look like rock stars too.”

Be sure to pause and thank others for making you look like a star.

Paul Hebert from I2I says: “Employee survey after employee survey shows that recognition is a key driver of employee engagement, satisfaction and loyalty. Knowing that recognition is such a powerful driver now is the time to stand up and Recognize and Represent. … In 2010, make it your mission to create a culture of recognition within your organization.”

Couldn’t agree more, Paul. Excellent advice.

Nathaniel Rottenberg from Rypple says: “Feedback is a critical component in motivating and developing employees, and is essential for attracting and retaining high performers. Organizations that don’t foster feedback-centric cultures will ultimately fail.”

What's the most powerfully engaging managerial style? One that focuses on employee strengths. The least engaging? One that ignores employees entirely.

China Gorman of SHRM says: “”You’re the expert. Make recommendations. Execute plans. Link your goals to the business plan. Measure your results.”

Now is the time to start. Offer solutions that deliver real results in better performance targeted to your needs, greater productivity and bottom-line improvements.

Read through Do Amazing Things, then tell me what would you add to the list?

Fostering “Horizontal Loyalty” among Teams

Bnet recently referenced Dan Pink and the idea of changing loyalty in an organization:
“Today’s workers tend to feel horizontal loyalty — a commitment to colleagues, former colleagues and particular projects. In short, put people on a team, and loyalties develop.”
I would agree with the truth of this. Companies have effectively destroyed any sense of loyalty many employees feel to the organization. That can be rebuilt through effort, but wiser leaders will work to also strengthen the loyalty and commitment bonds between employees and teams.

This can be powerfully accomplished by opening the opportunity to formally appreciate others to all employees through peer-to-peer recognition. To many, acknowledgment and recognition from colleagues is even more important than from managers. It is certainly critical in building an employee's knowledge of just how important their efforts are to the group or team in getting the job done.

What do you think of the idea of horizontal loyalty? How would you support building that kind of loyalty in your organization?

Trust and Retention

What is the level of trust in your organization? I don’t mean how well management trusts employees to not steal directly or indirectly from the organization. I mean how much the employees trust the organization to do what is right by them.

It’s inarguable that the trust relationship has been broken in many organizations during the recession. Towers Perrin reports, “Many employees are feeling less connected to their employers following rounds of layoffs, budget cuts and ongoing uncertainty. This can affect their willingness to commit themselves for the long term – and prompt more interest in opportunities they might have in other companies or even industries.”

PricewaterhouseCoopers (PwC) says that negative actions of the recession (pay cuts, layoffs, slashed budgets and poor communications) “are combining to erode the bonds of trust between some employers and their employees.”

Why does this loss of trust matter? The same reports conclude that these employees will seek other opportunities as soon as the opportunities arise in the recovery. The first to go will be those you most want to keep – the high performers with the most knowledge and competitive advantage.

So what do you do about it? BlessingWhite offers the obvious – rebuild trust: “Communicate the vision. You need to create excitement and trust in your leadership. You should highlight the initiatives of 2010 and create faith that your company is on the right path. Your employees now have a choice about where they work. The large majority want more than 'just a job'. You had better inspire them to be part of your future.

The same PwC report points out why: “Organisations which continued to focus on investment and employee engagement are emerging as clear leaders. Those who continued to offer their employees new opportunities and invested in their people pipeline have a competitive advantage.”

What are you doing in 2010 to rebuild trust in your organization among your employees?

Globoforce/Dan Pink Webinar Available for Download

I greatly enjoyed my time with Dan Pink last week as we led a webinar on “What Drives Motivation and Recognition.” If you missed the webinar, you can request a recording. Below I highlight key points from the webinar. Except where I’ve inserted my comments in italics, consider the below quotations from Dan on his insights in the webinar.

FACT: Money is a motivator, but the connection between compensation and satisfaction at work is more about fairness than about amount. If people feel like they aren’t being paid fairly or adequately to support families, then they will not be motivated. But once you pay people enough (or more than enough), then adding more money does not add more motivation. The best use of money as a motivator is to pay people enough to take the issue of money off the table so they can focus on doing their work.

So what are the main motivators? There are three:

1) Autonomy: The urge to be self-directed and not controlled. Traditional notions of management, however, are about control and getting people to comply. Management is an outdated technology from the 1850s that hasn’t been updated that much and doesn’t work well in the 21st century. It’s great if you want compliance, but if you want true employee engagement, self-direction is the better path to engagement. Get out of their way and let them do what they do best. (Dan also offers examples of how companies do this today and suggestions for integrating the strategies into your organization.)

2) Mastery: Our desire to get better at stuff (e.g., why people practice musical instruments on the weekend). A recent Harvard Business Review study found that the top motivator, far and away, was: “making progress in one’s work. The key to motivation doesn’t depend on elaborate incentives.”

FACT: Recognition matters. A lot. Because recognition acknowledges the progress people need, frequently catch people in the act of making progress, call it out so people notice it, share it more widely and formally, and celebrate it. This is so powerful because Mastery depends on feedback. This kind of Now/That recognition is a powerful form of feedback. If it’s non-contingent (not held out as a carrot), it’s very motivating to Mastery. A culture that recognizes and celebrates progress is enormously motivating, creating engaging and productive places to work. And this is where the work that Globoforce is doing really comes into sync with the science.

3) Purpose: Increasing earnings per share 2 cents is not a rallying cry to get people out of bed in the morning. People want to do something big and something important. This is not a profit motive. This is a purpose motive. A profit motive can result in unethical activities and poor productivity. If the purpose is just about maximizing shareholder return, it is not sufficiently motivating for people to do extraordinary things. (Dan gives further interesting insight into how the Baby Boomers in particular are accelerating this push for purpose with “encore careers.”)

Be sure to listen through the Q&A at the end for Dan’s insights on the importance of peer-to-peer recognition as true Now/That rewards that are a great form of feedback, helping people move towards mastery and building teamwork.
“Peer-to-peer brings a mass mobilization of the culture and is one of the most underused motivational techniques in the organization today.”

How Loyal Are Your High Performers?

If you are currently employed, how are you feeling about your company today? Perhaps resentful of actions taken during the recession and the impact on you and colleagues? Perhaps guilty about those reactions? You’re not alone. The Wall Street Journal recently profiled top talent across Europe, finding:
“Top talent across all sectors of the European economy—from bankers to lawyers—are increasingly becoming fed up with roles that they feel don't exploit their skills and are waiting for a strong signal that the global economy is actually recovering to jump ship. One in four high-performing employees say they want to leave in the next 12 months, according to new survey of 35 companies in Europe published by the Corporate Executive Board (CEB). The consultancy believes the results highlight a "worrying" developing trend for businesses. While these individuals perform 21% better than colleagues, they are 10% more likely to leave their organizations today than a year ago. … When the economy does pick up, up to 65% of the high-performing employees who said they are most likely to leave, could actually do so.”

Is this really all that surprising? I liked how succinctly Kelly Services put it in a recent Smart Manager article:
“Answer one simple and telling question. When was the last time you heard of a company that dramatically downsized, severely cut spending in all areas, and, consequently, achieved noteworthy success? Think no further. The answer is never!”

So, what should you do to retain your high performers? As the Journal article suggests, give them clear direction, leadership and strong communication. How do you that? Strategic recognition is a powerful methodology for accomplishing just that, but with a double benefit. With strategic recognition, you are repeatedly positively acknowledging and appreciating the efforts of those who reflect your company values in achievement of your objectives, which communicates and reinforces those objectives with every recognition. But it also does so in a powerfully positive way, building good will and a sense of the company’s commitment to and high valuation of the employee and his or her efforts.

What are you proactively doing to ensure your high performers are loyal to your organization going forward?