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In a recent article in BusinessWeek, Michelle Conlin wrote well on the link between employee engagement and the bottom line, citing examples from Campbell Soup, Best Buy and JC Penney.
But it’s her final point, based on an example from Stryker, a medical technology company, that is critical yet rarely raised in discussing how to create an environment in which employees can become engaged.
At Stryker, pay and promotions are based in part on the engagement scores of a manager's direct reports. That, in essence, forces the bosses to double as optimism ministers. Says Rude: "People get jobs and lose jobs because of their ability to engage teams."
The debate continues to rage on who is responsible for employee engagement – the company or the employee. I believe the company is responsible for creating an environment in which an employee wants to and can engage. Stryker has achieved a nice balance and clearly understands that managers are the front line for creating an “engaging environment.” Our strategic recognition approach strongly advises managers be held accountable through KPIs or MBOs to ensure they are actively, continually and appropriately recognizing employees for the behaviors and actions that demonstrate the company values in achievement of the strategic objectives. Managers should also be held accountable for encouraging their employees to recognize peers as well.
By fostering a culture of appreciation, companies also create environments in which employees understand the importance and value of their everyday efforts in the company’s success. What could be more engaging than that?
We’re often asked, “What can I do to encourage, motivate and engage my employees in this recession when my budgets are being cut?” Our CEO, Eric Mosley, answered this question well in “Hands Off the R&R Programs!” in last month’s issue of Human Resource Executive.
Some companies are also downsizing their rewards, migrating from big-ticket items to lower-priced rewards, but rewarding more employees.
Eric Mosley says, "Five years ago, the average reward value in recognition programs was about $1,000 and their penetration was 10 percent to 20 percent of the workforce. Now, the average is $100 and strategic companies, progressive companies, want 80 percent to 90 percent penetration in their workforce."
According to Mosley, large companies can't change employee behaviors or attitudes by touching only 10 percent of their staff. They need to touch at least 90 percent and frequently, which is causing a general trend toward the development of reward and recognition programs that cost less to launch, yet engage the majority of the employee base.
"Ten years ago, HR would have been very uneducated about the science behind this," he says. "We've just seen an awakening of what it actually takes to change a culture. Sometimes a recession or slowdown can accelerate this movement."
What changes are you making to your reward and recognition structure in this recession? What’s the business benefit behind your programs? How are you measuring that? Are you seeing your recognition program change your company culture or are you simply reinforcing the elitist ethos of the same 10 percent continually recognized with high rewards?
I just watched a terrific presentation by Dan Pink, author of A Whole New Mind, The Adventures of Johnny Bunko and Free Agent Nation (and coming in December, Drive: The Surprising Truth about What Motivates Us. Succinctly and humorously, Dan dissects the “mismatch between what science knows and what business does.”
Dan discusses, as I’ve written before, about how incentives actually stop creativity in its tracks by focusing people too strongly on the reward – “If you do this, then you get that.” As Dan says:
“There is a mismatch between what science knows and what business does. Our business operating systems (how we motivate people, how we apply our human resources) are built around these extrinsic motivators – around these carrots and sticks. For 21st century tasks, that mechanistic reward and punishment approach doesn’t work, and often does harm.”
“If/then rewards work really well for tasks where there is a simple set of rules and a defined destination to get to. However, in much of the world, white collar workers are doing much less work that is routine, left-brained rule-based work. So what really matters are the more right-brained, creative, conceptual kind of abilities. For complex problems of any kind in any field, those if/then reward – the things around which we’ve built so many of our businesses – don’t work! This is a FACT.”
Dan also cites the Dan Ariely research I’ve written about here in which study participants are offered small, medium and large rewards, proving these reward structures only work for tasks involving mechanical skills. Those tasks requiring even “rudimentary” cognitive skill, a larger reward led to poorer performance.
“Too many organizations are making their decisions – their policies on talent and their people – based on assumptions that are outdated, unexamined and rooted more in folklore than in science. If you really want high performance on those definitional tasks of the 21st century, the solution is not to do more of the wrong things – to entice people with a sweeter carrot or threaten them with a sharper stick.”
What does he suggest as a new approach? “The scientists who have been studying motivation built more around intrinsic motivation, around the desire to do things because they matter, because they like it, because they’re interesting, out of a desire to do something important that is larger than ourselves.”
I agree completely. The problem, however, lies in the average company’s ability to communicate to employees how their efforts matter, how they are making a difference and why what they do is important both to the company and to what the company is trying to achieve in the world. That’s where strategic recognition comes in.
As Dan points out, companies lack the structures and systems necessary for motivating 21st century creative workers. Unlike extrinsic incentive awards that are known before the task is completed, strategic recognition is given spontaneously after the behavior or action being recognized occurs. Done properly to feed employee needs for intrinsic motivation, strategic recognition affirms for employees how their efforts matter to the group, team, company or customer achieving their goals and why those efforts are important within a much larger context of the company’s strategic objectives and the values that are important to them.
The spontaneity and sincerity of such recognition is what motivates employees to keep doing those things that bring personal fulfillment as well as company success. Building such an intrinsic motivational system on a platform that is also measurable and governable also gives company leaders the bottom-line proof they need of the value of these systems.
Are you ready for the employee of the future – the one that has been burned by the workplace, with zero loyalty to “the company” and preference for striking out on their own? Don’t know what I’m talking about? Jack and Suzy Welch explained it this way:
This recession has left a deep scar on the psyche of working people. Previous recessions came on more slowly, their layoffs occurred more gradually. And previous recessions didn't leave most people blaming business, especially Big Business, for what went wrong. Something fundamental in our society has changed, and it will show in how people choose their next jobs. … We can't be precise about when this terrible recession will be over. All we know is that it eventually will be. And when it is, a brave new type of employee will rule the day. And only brave new companies will be able to entice them back.
Need more proof? In one of their global workforce indices, Kelly Services reported:
• 51 percent of Gen Y are prepared to accept a lower wage or a lesser role if their work contributes to something more important or meaningful. • 62 percent of Gen X plan to look for a new job within a year. • 46 percent of baby boomers say their career goals are not being advanced in their current job.
Note these are Kelly’s global findings, showing the same trend across all workplace generations – general dissatisfaction with their current position and a desire to look elsewhere. What are you doing or planning to do to counteract this talent drain?
Clearly, you need to feed your employees’ needs for psychic income – the need for social acceptance, self esteem and self realization that can never be met through compensation. Strategic recognition is a powerful tool for positively reinforcing employees for those actions that reflect the company values while achieving the strategic objectives. This approach ensures employees understand the importance of their efforts within the bigger picture and helps communicate the value they hold within the organization.
What other solutions do you suggest for reversing this expected trend that will see your best employees head to your competitors?
