Cash v Non-Cash Rewards * Why Does This Debate Keep Dragging On?!

“Just show me the money.” vs. “Nobody notices or appreciates the work I do. Why should I bother?”

Just another way of saying cash vs. non-cash rewards. Let me make this really simple. Cash does not motivate, it does not recognize, it does not appreciate. Cash compensates. Pure and simple.

And that’s not a bad thing. The media spin on recent research from Mercer tries to make it seem that way with headlines that scream: “Forget non-cash compensation: employees say ‘show me the money.’” If you read more deeply into the article you see this: “Leading reward elements perceived to have the strongest impact on employee retention and engagement for 2010 are base salary increases (41%)…”

This isn’t surprising. Quite a few companies need to increase base salary to return employees to level they were earning in 2008, much less give them a raise. That’s the realities of recovering from the actions taken in the recession when salary cuts and wage freezes seemed the norm.

But that doesn’t mean non-cash employee recognition and rewards will fall off in the coming months. As I said in my post on Compensation Café on Wednesday, you must build a solid foundation with appropriate, fair and livable base compensation. But once that’s done, you must then add the polish with recognition programs.

Another recent study from the Boston Consulting Group and the World Federation of People Management Associations showed that executives believe these areas are especially weak at their companies:
• Structured career management that rewards appropriate behaviors
• Recognition beyond compensation

The executives are right, buy why should they (or you) care? Another “SmartPulse” survey conducted by SmartBrief on Leadership released just two weeks ago asked: “What’s the most satisfying reward you can receive for a job well done?”

Cash seemed to win out at 30%. But when you add together 30% for “Praise and expressions of thanks from my team and customers,” 28% for “A handwritten thank you note from an executive/leader I respect,” and another 8% for “Public accolades and awards at a company awards ceremony,” that 66% craving appreciation in some form is more than double those who vote for just cash.

If you think just a couple percentage point raise is going to convey to your employees any level of appreciation, respect and desire to keep them (and their talent) loyal to your firm, think again.

What Goes Around * Stop Incenting Bad Behavior

As a blogger, you meet many interesting people and make several acquaintances through the blogosphere that you might not otherwise. One such relationship for me is with Doug Shaw, founder of What Goes Around Limited. Note the link when you visit his site – Stop doing dumb things to customers. That’s Doug’s attitude. We all know what we SHOULD be doing… so just step up and do it already! I like that attitude. It reminds me of a word I learned from an American colleague recently – it shows some “moxie.”

In a post last week, Doug went on a tear after hearing about a plan to restore short term financial incentives (bonuses) after all the mess they caused in this recession. Doug says it better than I can:

“OK, so having seen first-hand the value destroying, anti-collaborative behaviour that short term financial incentives drive, we’re gonna do it all over again. With a twist. We’ll let these sweet bonus carrots dangle a little further away. That way folks will have to focus even harder on the carrot, and from there I put it to you a stronger focus on the value destroying behaviour necessary to bag the carrot will emerge. Not happy? Furious more like!

“The case to ban financial incentives was one I first became really active on back in December 2008. We ran a workshop with some bright enthusiastic minds in and around BT. The purpose of coming together was to uncover the most effective ideas needed to improve customer service. Banning financial incentives was an idea agreed on by all in attendance. There were other exciting ideas around clearer dialogue and communication but it was the “don’t incentivise me, just pay me” discussion that flared. Since then I’ve looked in all kinds of corners (University of Miami, Harvard, the studies of Dan Pink to name a few), and discussed with all kinds of folk. And I find lots of useful practical examples of why these bonuses don’t work. I’ve pulled this journey together into a white paper (not a white riot) which you are welcome to take, read, argue with, whatever you like. As well as examples, it cites behavioural references which you may find useful.

“So how the hell am I gonna calm down now? Well I kept on reading and looking and I found two further interesting conversations. The first, called “You’re Getting a Bonus so Why Aren’t You Motivated?” was started on the Harvard Business Review by Eric Mosley, CEO and co-founder of Globoforce.”

Doug’s white paper is an excellent collection of examples on how poorly structured incentive programs simply drive bad behavior. I suggest giving it a read along with Eric’s Harvard Business Review article. Then come back and tell me: Are cash incentives worthwhile?

Top Tens of Employee Engagement * Actionable Advice from Industry Leaders

David Zinger just published his latest e-book collection: The Top Tens of Employee Engagement. A collection of advice on engagement from members of the Employee Engagement Network, The Top Tens is a solid handbook of ideas for engagement along a broad spectrum of needs.

While I’m thrilled to have been included with my “10 Steps to Realizing Strategic Engagement,” I was particularly impressed with how well the advice from so many contributors aligned with each other.

For example, Jennifer Schulte of Mars offered “Strategies to Impact Engagement across an Organization.” Her recommendations to Start at the Top, Focus on a Bold Goal, and Celebrate and Replicate Those Who Can Engage are an excellent compliment to my advice to Secure Executive Sponsorship, Define Clear Goals for Your Corporate Culture, and Frequently Recognize Contributors in a Timely Way.

Considering the importance of employee recognition – telling employees specifically how their efforts contributed to company success and how greatly they are valued in the organization – to creating a workplace environment in which employees want to engage, I was also quite pleased to see the number of people who mentioned recognition in one way or another. In no particular order (and not an exhaustive list):

Wally Bock: “Praise effort and highlight superior performance”

Sanna Wolsteholme: “Praise. Catch people doing things right.”

Terrence Seamon: “Appreciate the people that you have. … Give kudos to your people as often as you can. … Say thank you.”

Kelly Eskridge: “Give thanks. … When you thank people for something, there’s a much better chance they’ll do it again.”

David Marklew: “Show some appreciation, do it often, let it flow freely.”

And the final word from David Zinger himself, his seventh tip on engagement:

“Employees are responsible for their own engagement, we are all accountable for everyone’s engagement. No one has a bigger role in engagement than the individual themselves – if engagement is to be, it is up to me. We are accountable for other people’s engagement and we can influence their engagement – if engagement is to be, it is up to we.”

With that in mind, what are you doing to influence the engagement of those around you? Are you saying thanks? Are you actively looking for ways you can express appreciation to your colleagues? It’s certainly a solid start on the road to engagement.

Successful Recognition * What Not to Do

I am often asked and I lead frequent workshops on how to create successful strategic employee recognition programs. Programs that deliver the bottom-line results the CEO expects, the appreciation and acknowledgment the employees deserve, and the simplicity of use managers need. Our formula is proven and successful at any number of Fortune 500 multinational companies. While I don’t have any plans to change it, I’m always on the lookout for how to make it better.

I recently found excellent advice in, of all places, an article on gender diversity and inclusion in the workplace. The author offers this list of the best ways to derail gender inclusion:

1. Decide not to do an assessment, build a plan, set goals, or establish benchmarks.
2. Task a small group of committed, passionate people with designing and implementing a change initiative—and expect them to succeed without a clear mandate, significant resources, intelligent guidance, or visible support from above.
3. Start implementation without the support of key people.
4. Refuse to assign supervisors specific responsibilities; fail to reward those who follow through.
5. Keep quiet about the initiative, allowing it to be perceived as low-priority or to be ignored altogether.
6. Let negative talk or obstructive behaviors pass without comment or notice.
7. Assume that efforts that are well received in one part of the organization (a mentorship program, employee resource group, or set of educational workshops) will translate seamlessly to other parts of the organization.
8. Do the same things again and again, although they haven’t resulted in the hoped-for outcomes.

If you want to derail a successful strategic employee recognition program, that’s the list you want to follow, too. If you’re putting out an RFP for recognition, but you decide to stick with catalog merchandise because that’s what you’ve always done, you won’t see any change; you won’t achieve your hoped for outcomes.

So what should you do? What’s the best way launch a strategic recognition program? Or restart efforts you may have slowed or stopped during the recession? We recently published the results of research on how companies changed their employee recognition approach in response to the recession and how they are now adapting their recognition programs during the economic recovery. The paper also offers seven recommendations to properly calibrate your program for the recovery. To find out the details, download “Restarting Recognition: Tap into the Power of Recognition during the Recovery.”

Stop Giving Lip Service to Your “Most Valuable Assets”

“Our employees are our most valuable asset.”

Anyone else sickened by that phrase? I’ve heard it so often, it’s lost all sense of meaning. And though I do believe employees are a company’s greatest competitive advantage, too many companies are not treating employees as though they want to retain them in the recovery.

Charee Klimek’s answer to this is one of the most brilliant pieces of writing on the topic I’ve seen in recent months. A letter to the CEO, “Dear CEO, It’s Me Your Most Valuable Employee” outlines why employees are unhappy, even though they are fully aware of the constraints the company is under, and what the CEO could easily (and cost effectively) do about it.

Charee nails the common employee concerns – lack of trust, communication, collaboration, training and recognition – but her “ideas for positive change” are even better. Here’s the one on recognition:

“Recognize Us. If you want us to be creative, more engaged and continue to go above and beyond, show us the appreciation we deserve. The reward isn’t always about the money (though money wouldn’t hurt). Right now most people would appreciate a simple, genuine thank you.

“Share Success Stories. When people are recognized for doing great work, others should know it. Let's share success stories to celebrate each win and in time people will learn to match their behaviors to those that earn the greatest recognition, reward or acknowledgment.”

It really is that simple. Tell people thank you. Share their successes. Show them the meaning and importance of their work.

Diffusing a Negative Environment * The REAL First Step to Recovery

I thought I’d read just about every possible angle on jobs, employee loyalty, retention strategies, rehiring strategies, etc., as the economy improves. I was wrong. Last month, the Wall Street Journal offered a new twist: “Coping as a New Hire at a Dispirited Firm.”

The article is targeted to the new employee walking into the typical workplace devastated by layoffs, etc., during the recession. Advice includes “keep a level head,” and “stay neutral and positive.” This is solid advice to the new hire entering a tough environment, but what about advice for the leadership of that company to diffuse the negative environment itself?

Times were tough and are slowly getting better. Management in many companies made difficult decisions and executed those decisions -- some well, many poorly. The results of those actions certainly left dispirited employees in their wake. But if companies are now positive enough to begin hiring, then they MUST do something to reinvigorate the atmosphere of the workplace for those still there.

There is no easy or quick way to do this. Open, honest, direct and personal conversations -- as groups and between individuals -- is a critical step. Just being able to hire more bodies won't help companies return to past levels of profitability and productivity. They must also restore employee sentiment, attitude and morale.

Why Motivation Matters

We all want our employees to be motivated. Of course we do. We know motivated workers work harder. But WHAT are they motivated to do? That’s a much more important question.

In a recent Conference Board Review article, Geoff Loftus noted:

“In companies that don’t care about motivation, workers right on up through middle management routinely cut corners on the quality of jobs, provide poorer customer service, spend more time on personal phone calls and at longer lunches, and worst of all, escape from the dreariness of their jobs for hours at a time on the Internet. … To coin a phrase: An ounce of motivation is worth a pound of monitoring.”

I’d say those workers are fairly well motivated – motivated to just get through the day and go home, that is. We’ve all worked with colleagues who seem to be motivated in the same way. Others are motivated by far worse than Internet surfing – pure greed. Think the latest scandals in the financial world.

The job of the manager and leader is to help employees be motivated for the right reasons. You cannot motivate employees. You can provide reasons for them to motivate themselves. You can define what it is that is most helpful to the team and company and then frequently and appropriately recognize and reward behaviors and actions that meet those definitions. You can encourage, you can appreciate, you can thank.

How would you rather spend your time? Helping employees find reasons to be positively motivated through frequent recognition of excellent work, or constantly monitoring employees to reduce slacker behavior?

Recognition Horror Stories * Today on Compensation Cafe

Have you ever received some form of recognition that makes you face-palm and sigh to yourself, "I can't BELIEVE he just did that!"

In my line of work, I tend to hear the stories rather often. You've shared with me your stories (some "winners" here, here and here).

Today, on Compensation Cafe, I wrote about some of the latest stories. Click over to read up on How NOT to Recognize * Mortification ≠ Motivation and learn why your recognition practices should not violate your sexual harassment and safety/health policies!

* Image credit: Wikimedia Commons

Creating Meaning at Work * Show Them the Way

Meaning at work – it’s a phrase bantered around quite a bit in this industry. People want meaning at work. The cynical rejoinder is often, “People are just happy to have a job. That’s meaning enough.”

But this misses the point entirely. People want to know that what they do matters, that it makes a difference in something larger than themselves – whether that be the company’s success, positive impact on the environment, or changing the world for the better.

Dave and Wendy Ulrich recently published an entire book on this topic, which they discussed in a post on Harvard Business Reviews’ blog site:

“Neither position nor salary seems to have much to do with finding meaning in work. … People have to create the meaning of their work and their lives, and that process requires skill and practice, not just luck.”

Why should you care if people find meaning in their work?

“Those who succeed at creating meaning – either on their own or with the help of their boss – tend to work harder, more creatively, and with more tenacity, giving the companies that employ them a leg up in the marketplace. What’s more, study after study suggests that when employees experience meaning, their employers enjoy higher rates of customer commitment and investor interest.”

But how can you help people find meaning in their work?

“Even in unfavorable circumstances, people can experience an activity as meaningful when it resonates with chosen values, connects them with people they like, raises their sense of competence, or gives them an ‘ah-ha’ moment of insight.”

And that’s so easy to do with strategic employee recognition. If you follow best practice to build every recognition around your company values and strategic objectives, then use every opportunity to acknowledge and appreciate employees when they demonstrate those values in contribution to those objectives – you give them meaning. You help them see their unique value in the organization and helping achieve a greater purpose – individually and as a team.

BlogTalk Radio: The Difference between Compensation & Rewards (and bringing them together)

Last week I had the pleasure of participating in my first BlogTalk Radio show. Hosted by Paul Hebert of i2i, I joined a panel of fellow Compensation Café bloggers to discuss “Compensation & Rewards: What’s the Difference?”

I truly enjoyed the experience. It’s not often that you get people from the compensation side of the table and those from recognition and incentives on the same conversation. It quickly became apparent that those versed in compensation (the “spreadsheet jockeys” as Ann Bares referred to herself and fellow compensation colleagues) and those focused on recognition and incentives rarely collaborate.

Why is this? We dove into a couple of main reasons:

1) Compensation consultants look after the employee’s financial contract (competitive, appropriate, etc.). Those of us on the other side (in recognition and incentives) look after the psychological contract (reinforcing the right values and attitudes, feeding psychic income needs, creating an engaged environment).

2) Measurement – We know how to measure compensation. People aren’t so comfortable measuring the social or psychological aspects. Are they culturally aligned? How do we measure that?

That’s why we focus so strongly on measurement of recognition and reporting on the bottom-line impact. One problem has long been the technology available to make this possible. But now, technology is stepping up, allowing us to record and celebrate recognition with the same degree of depth as compensation.

And this is driving the convergence of what senior leaders are looking for – Total Rewards. As I said on the show, compensation constructs the building, but recognition adds the decorative “flair.” Both are necessary for creating a workplace people feel safe working in and want to come to and engage in.

Check out Paul’s summary of the show, and listen in to the entire show (just over an hour). Let me know your thoughts on the convergence between compensation and rewards.

Become the Hired Help to Get the Results You Want

I like Seth Godin. I like his approach to the work world. I particularly admire his ability to write short, tight, pithy blog posts that never fail to make me think. A recent post of his has been running through the back of my mind for weeks now. The gist of the post:

“My boss (when I had a job) worked for me. … His job was to figure out how to best give me access to the people, systems and resources that would allow me to do my job the best possible way. … What happens if you say to the people you hired, ‘I work for you, what’s next on my agenda to support you and help make your numbers go up?’”

This speaks directly to the intrinsic motivator autonomy that Dan Pink and others tell us is so powerful. People want the autonomy to do good work. But managers so often excel at not removing roadblocks, if not actively creating them. I’m reminded of a job very early in my career. Several of us shared a single calculator. Work would slow as we anxiously waited our turn to check our numbers with the calculator. Think how much more productive we would all have been for an incredibly small investment in a few cheap calculators.

Vineet Nayar, CEO of HCL Technologies, sees this as so important, he considers it a management philosophy:

“Employees First, Customers Second is a management approach. It is a philosophy, a set of ideas, a way of looking at strategy and competitive advantage. … The whole intent is to do everything we can to enable those employees to create the most possible value.”

How do you put employees first? How do you know what barriers to remove or tools to provide? How do you figure out how to “work for your employees?” Steve Hannah, CEO of the satirical newspaper The Onion, offers these guidelines.

“I am the hired help. The creatives are absolutely the center of gravity. … Never, ever do anything to deprive a human being of their dignity in work, in life. Always praise in public and criticize in private. … Listen to the people below you because they are on the front lines.”

Do you not only listen, but then act upon the suggestions of your people on the front lines? Do you offer praise when they deserve it? Do you see yourself as the hired help to make the “creatives” in your organization as successful as they can be? Until you do, you will not achieve the bottom-line results you want.

Is There Any Hope for Pay for Performance?

Pay for performance seems to be much in the news and HR trade publications lately. The general take-away from all of the articles is that pay for performance doesn’t work (or at least doesn’t work as well as anticipated or desired) but everyone does it anyway (to some degree) because everyone else is doing it.

A May article from Talent Management magazine tells us:

“The reason the pay-for-performance concept has been so disappointing is because the human aspect of motivating desired behaviors is not as cut and dried as the pay-for-performance approach generally implies. Most organizations simply don't know how to successfully define the performance they want, so organizations end up paying for failure rather than for performance.”

Paying for failure rather than performance – that’s what happens when you fail to clearly define, in an achievable and measurable (not subjective) way, what it is you expect people to accomplish. A June article (“Channeling Malcolm Gladwell on Pay Systems,” requires subscription log-in) from Workspan magazine cited the research on this:

“In the 2005 Annual Review of Psychology, two organizational psychologists said the following regarding the effectiveness of merit plans – which does little to increase one’s confidence level for using them: ‘Although merit pay continues to be the most widely used pay-for-performance program (especially among salaried employees), there is surprisingly little evidence about the performance implications of adopting, or not adopting merit pay programs.’

“In addition, three practitioner surveys show that performance management and pay-for-performance plans have considerable room for improvement.

“Two major surveys show that, in general, financial incentives are outranked by organizational, career and job-related factors for improving employee engagement and motivational levels. The 2007-2008 Towers Perrin Global Workforce Study found no financial incentives among the top 10 drivers of employee engagement. A 2009 McKinsey & Co. report found that three noncash motivators, including visibility with top management, are more effective motivators than the three highest-rated financial incentives, including increased base pay and cash bonuses.”

And yet… This month’s issue of Workspan includes an excellent case study (“Performance Management Rewired for the Recovery,” requires subscription log-in) of just how Intuit has made pay for performance work. Some Intuit methods that are far different from traditional (and often failed) pay for performance management approaches:

• Replacing “meets/exceeds” language in performance ratings with “delivering the business impact it needs”
• Using everything to reward performance – evaluation, compensation, recognition and opportunity
• Ensuring top performers are signaled, through various mechanisms, of their star ability

My point? Pay-for-performance has a role to play in the HR toolbox. But it’s not the only tool as it seems to have become in many organizations. It is but one of many methods.

Getting Employees Aligned with Your Values * The First Step

The conversation on aligning values and strategy continues. Feryal Hafez sent in this follow-up question to my post on Tuesday (that was itself an answer to a direct question) that deserves more of an answer than I could give in a comment reply.

“Is it possible for a recognition program based on values to function properly, even though employees are not massively aligned with these values? How and for how long and what is the best ways to promote company values so all align with them in the way discussed in this post?”

Feryal adds a post script noting she’s from the Middle East “where talking about this culture is something that needs (enforcement) rather than (convincing to align willingly)!”

Feryal, I’m going to use your own email signature line as the beginning of my answer to you – “It is all about having a positive attitude, everything else will be much easier.”

That is true in the case of aligning company values and strategy as well. You must begin with a positive attitude – an attitude from which you want to stop focusing solely on yourself and your own work so you can see and appreciate the excellent work of those around you. But you can’t stop there. You must go farther to actively thank your colleagues for their efforts.

But even that is not enough. You can’t just say, “Thanks. Great job!” You must link each and every moment of praise and appreciation to a company value that has been demonstrated in an effort to achieve a company objective. What does this look like?

We know that at your place of employment in Dubai one of your company values is “Consistent High Quality.” Let’s assume that a strategic objective for the year is to increase employee productivity by 15%. Perhaps a colleague says to you, “Feryal, excellent work on the employee engagement initiative. You showed Consistent High Quality in researching the best ways to foster and encourage employee engagement here and then in implementing new programs. As a result of your efforts, we’re starting to see improvement in our employee productivity numbers. We know we can count on you to deliver the results we need. Thanks again!”

Now you know what that value of “Consistent High Quality” means in your own work. You better understand that your efforts at researching this topic and implementing a program are noticed and appreciated. You’re now more willing to continue such “high quality” in future projects you may be assigned. Even more, you also understand how your efforts are contributing to your company’s success. You see much more clearly the big picture and how you, in your role, can help achieve the company’s strategic objectives.

But this is still not enough. To get the “culture enforcement” you need, you must now encourage every employee in the organization to do the same – to look around and notice the excellent efforts of their colleagues, to take the time to recognize those efforts, and to link every recognition to a company value or strategic objective.

“Culture enforcement” only comes with understanding of the factors of your culture – your values and objectives. And that understanding best comes through a person’s daily work. Once employees begin to see they will be recognized and appreciated for demonstrating the company values, they will become more aligned with them. The simplest – and most positive – way to achieve that is through a strategic recognition program that makes it fun and easy for a everyone to notice, appreciate and recognize their peers.

Balance * The Key to Behavior and Results

What’s more important to you? That things get done the “right” way or that the desired results are achieved?

I recall how annoyed and even angry I would become as a child when my math teacher would mark my work as incorrect when my answer was right but the I didn’t show all my work or my way of getting the correct answer wasn’t the “proper” method.

I was thinking about this as I read a recent article in Talent Management on performance and the theories of Thomas Gilbert. The author says:

“Doing things right is a waste if you do not achieve desired results. In the workplace, we expend far more energy on behaviors – how people should do things – than on valued accomplishments – the goals to be achieved.”

I argue a need for balance between these two. When the pendulum swings too far towards results, we get ENRON. Too much focus on behaviors can cause us to lose sight of desired results, however. When the two are in balance, the company’s goals are achieved within the proper constraints.

With the insight of an adult, I now understand my teacher marked my math solutions as incorrect because she knew that I arrived at the correct answer more by luck than through sound mathematics. If I continued to use my method, I would more often arrive at the wrong solution.

The same is true in the workplace. While we want our employees to be as productive as possible, we don’t want them striving to achieve impossible productivity numbers by risking their own health and wellbeing. While we would love for a new product to be delivered ahead of schedule, we don’t encourage production methods that also knowingly harm the environment.

That’s the power of strategic recognition programs – bringing balance to behaviors and results. Best practice is to clearly define the desired behaviors and values you know are important to achieving your strategic objectives (and clearly defining those as well). Then encourage everyone, at every level, to notice and appreciate the efforts of colleagues that reflect those values and contribute to those objectives. Keep it in balance.

The Benefits of Culture Aligning with Strategy

Occasionally I receive direct questions through the “Ask Derek” feature at the foot of my blog. While I reply to every question, the best or most insightful questions I answer directly through the blog.

Today I received this question from Christiana Nodjo: What are the benefits an organization will derive when its culture falls in line with its strategy?

While the benefits are numerous (and stay tuned in the coming months for a major announcement on just this topic), I’ll focus on just three:

1) The company’s most important values and strategic objectives are understood by everyone – in the way the CEO intended. Think about it. The CEO has in mind precisely what the company needs to achieve (objectives) and what behaviors/actions will be tolerated and encouraged (values) in getting those results. Too often, however, those objectives and values are lost in translation as the message is distorted as it gets communicated down through the ranks.

As I said in my post on Compensation Café today, “You can no more proclaim a culture into being than you can mandate changes to it, but you can encourage and recognize the behaviors of employees that contribute to the culture you want.”

Recognizing and sincerely appreciating the efforts of employees that demonstrate your company values in achievement of your strategic objectives is simply the most effective way of solidifying your company culture around your strategy.

2) Individually, employees choose to become more engaged with their work. Employee engagement has become the latest industry buzzword, but when in its purest form, the value of engagement cannot be disputed. Always keep in mind that engagement is not something you can foist onto an employee, it is only something you can foster. You can only create an environment in which employees choose to engage – choose to give greater discretionary effort (increased productivity) on precisely those areas you’ve deemed most important (increased performance).

The foremost driver of employee engagement is your company culture. As I said in a similarly titled post on the Enterprise Engagement Alliance blog, the truth of this statement lies in its simplicity. Employees don’t engage with widgets, deadlines or even people, necessarily. People engage with a sense of meaning, of purpose, of an understanding of fair play, of company values aligned with their personal values. The sum of all of this is your company culture.

3) Employees become united together behind these commonly understood goals. Even with shared values and great individual enthusiasm, a team that is not united in its efforts is dysfunctional. Once individuals unite as a team, functioning together to achieve departmental, divisional and company goals, they can reinforce both values and engagement. Mutual dependence develops trust, encourages learning, and fosters the sense of belonging to something greater than oneself.

Management – culture itself – must encourage teamwork by directly rewarding it and by demonstrating its importance. How do you do that? It can be as simple as a director instructing all employees, “Spot all the good behavior you can and recognize it – call it out, because I can’t be everywhere.” In a consistent culture, this is manifest in a thousand person-to-person moments.

How would you have answered this question? What would you have told Christiana?

CEO as Culture Setter * Putting Employees First

In a paean of praise to Bill Greehey, former CEO of Valero Energy and current CEO of NuStar, Dan Hilbert (who worked for Greehey at Valero) describes Greehey’s leadership model that drove Valero to the third-fastest growth rate in American history and increase the value of NuStar from $500 million to $3 billion in three years. The model is simple:

1. Take care of your employees.
2. Demand that employees take care of the community.
3. The community takes care of the company.

How did Greehey take care of his employees? One way was through direct, person-to-person thank-yous for hard work and encouragement for his subordinates to do the same throughout the company. Hilbert also describes the extreme and costly outpouring to take care of employees in the New Orleans area after Hurricane Katrina devastated the area. Greehey also operates under a no-layoff policy.

This is a perfect example of the importance of putting employees (not shareholders) first. If you take care of your employees, they will take care of you, your customers, your community and your shareholders.

The story of a personal thank you is particularly telling -- we all need and indeed crave appreciation and recognition of our efforts. But instilling such a culture of recognition must start at the top -- and be emphatically and consistently demonstrated by the CEO and then encouraged in his direct reports, and so on down the line.

Though I haven’t had a chance to see the American version “Undercover Boss,” I couldn’t agree more with this statement from Professor Michelle L. Buck, director of leadership initiatives at the Kellogg School of Management, when asked her opinion of the show and CEO experiences on them:

“A CEO or top executive won't be able to go undercover or even do a walkaround to meet all employees. But they can institute and create the organizational culture where the top leader has to be the role model. They have to walk the talk, and this has to cascade throughout the organization.”

Whether or not CEOs are actively trying to cascade their desired culture through the organization, they are doing so. Everyone looks to the top to know how they should act. What is being demonstrated or what cultural tone is being set by your CEO?