leadership – Page 11

February 18, 2010June 29, 2023

Employee Engagement Workers Want Feedback — Even if It’s Negative

The best way to drive employee engagement is for managers to accentuate the positive in employee performance. The second best engagement approach is to focus performance discussions on employee weaknesses. Worst choice: Give no feedback at all.

That is the synopsis of “The Relationship Between Engagement at Work and Organizational Outcomes,” by Gallup Inc. More than 1,000 U.S. employees were interviewed for the report. Gallup broke management styles into three categories, based on employee perceptions:

• Managers who focus mostly on employee strengths
• Managers who focus mostly on employee weaknesses
• Managers who focus on neither strengths nor weaknesses

Thirty-seven percent of employees say their bosses concentrate on strengths, while 11 percent say their managers focus solely on negative characteristics. Gallup says 25 percent of employees surveyed fall into an “ignored” category, in which their supervisors address neither strengths nor weaknesses. Twenty-seven percent of people did not express strong opinions about their managers either way.

The differing approaches reflect back varying levels of engagement. Sixty-one percent of employees in the “strengths” group report being engaged in their jobs. Still, 38 percent of those workers remain disengaged despite the positive feedback, perhaps because they believe the praise is not sincere, according to Gallup. About 1 percent of employees whose managers are focused on strengths are considered to be “actively disengaged,” meaning they may act out on their job frustration.

By contrast, engagement is considerably lower—just 45 percent—for employees whose managers focus primarily on negative characteristics. One-third of such workers are disengaged. Most alarming: 22 percent are deemed to be actively disengaged.

The worst engagement scores can be found in the “ignored” category, where only 2 percent of employees are highly engaged. Fifty-seven percent report being not engaged and 40 percent are actively disengaged.

So while emphasizing strengths gives the strongest boost to engagement, even negative feedback is better than no feedback at all, according to Gallup.

“We found that it is better for managers to dwell on some aspect of employee performance—even if it is a focus on negatives—than to avoid the matter altogether,” says Jim Harter, a Gallup research scientist and co-author of the report.

Harter says negative feedback “at least lets people know that they matter,” while neglecting them can be far worse.

Engagement—or lack of it—carries huge implications for how well companies achieve their business goals, especially amid recession, Harter says.

“The growth trajectory for companies with highly engaged workers, on average, looks really good when compared against their competitors. These types of companies are holding their own while their competitors are dropping off” on key variables, Harter says.

Organizations with high engagement scores exceed their peers in nine areas of business performance, including customer loyalty, profits, productivity, quality, turnover and absenteeism. For instance, organizations with the highest engagement scores in Gallup’s database have an 83 percent chance of achieving above-average business performance. By contrast, organizations at the lowest levels of engagement have a 17 percent chance.

The report is based on Gallup’s Q12 Index, which measures a dozen factors that are known to affect engagement.

Workforce Management, February 2010, p. 10-11 — Subscribe Now!

September 10, 2009June 29, 2023

Bring Back Classical Management

When the first Model T rolled off the Ford assembly line in Detroit in 1908, it was more than just a car.

The Model T represented a new sacred bond between the autoworkers, the owners and managers of Ford, and the American consumer. Ford promised that he would “initiate the greatest revolution in the matter of rewards for its workers ever known to the industrial world.” In 1914, he doubled workers’ pay from an average of $2.34 to $5 a day and shortened the workday from nine hours to eight. At the same time, the cost of the Model T went from $850 in 1908 to $440 in 1915, an unheard-of approach to business (so much that his peers called him a traitor).

Today, we may not fully appreciate the magnitude of what Henry Ford accomplished more than 100 years ago, but we should. Most likely, we don’t appreciate it because what he did fits the definition of “classical management,” a concept that originated in 1908 and flourished until the mid-20th century but can rarely be found today. But in the current recessionary and highly competitive business environment, human resources managers would benefit from having an understanding of this largely defunct concept in order to restore its principles for the betterment of their companies.

The concept of classical management is simple to understand: It is a leadership function that seeks to optimize benefits for the worker, investor and consumer to fair and consistent levels. Back in 1908, Henry Ford accomplished this objective by pricing the Model T lower than what his competitors charged for their cars. He also increased workers’ wages to twice what the market paid. According to Ford, “Every time I lower the price a dollar, we gain a thousand new buyers.” This approach is the primary reason for the real productivity gains that occurred in the U.S. economy from the start of the 20th century until the middle of it. However, as the U.S. became the most prosperous economic superpower of all time during the middle of the 20th century, these principles started to disappear from the U.S. corporation in favor of competing interests within the corporate structure.

The waning use of classical management didn’t present itself as a problem until the 1960s and ’70s, when other national economies began to recover and compete in the U.S. consumer marketplace. Eventually, U.S. corporate leaders began to realize that they had a competitiveness problem, but often responded with approaches that were the antithesis of classical management: quick-hit schemes, such as financial engineering and accounting routines, rather than the creation of real productivity and value.

After decades of such gimmicks, the sacred bond between a workforce and its manager is no longer typical and valued. Instead, the relationship has been marginalized and the labor model has effectively been globalized. But now, after years of being a non-strategic entity within the walls of a corporation, the human resources manager can play a critical role in helping the corporation’s leadership understand classical management as a key business strategy for its future. I truly believe that an organization needs to follow the precepts and discipline of classical management to be competitive in the 21st century.

An interesting aspect of classical management is that effective human resources management is critical to its successful implementation. Look at a few corporations where classical management exists today:

Nucor Steel is a successful corporation winning in a sector that most Americans believe is a relic: U.S. steel production. Nucor is the largest steel producer in the U.S. with $6.2 billion in sales. It is the nation’s largest recycler and competes head to head with Chinese companies that are often the beneficiaries of an unfair advantage on the open global market.

How does Nucor do it? If you ask its leadership, they will tell you that they do it through the productivity that is achieved through an optimal balance among its workforce, consumers and investors. Nucor has never laid off a worker, pays all of its employees incentive bonuses (which can be up to 150 percent of an employee’s pay) and has a policy of egalitarian benefits beyond belief. For example, there are some benefits that workers get that senior executives don’t qualify for—but not vice versa.

Also, the management team’s base pay is purposely lower than that paid by competitors. If the organization doesn’t perform well, managers feel the pain in their wallets. I also believe that Nucor’s managers—like others who embrace classical management—place value on the company for which they work. It isn’t all about the dollars.

Another example can be found at Costco, where CEO Jim Sinegal runs the business from the retail floor, answers his own phone, pays his employees almost 50 percent more than his competitors and contributes twice as much for health benefits. In the past, when Wall Street analysts have chastised him for such practices, he was quoted as saying that such actions aren’t philanthropic, but rather are sound business practices. Since Costco has a faster pace of earnings growth than its top competitor, maybe Wall Street and others should pay attention.

Lastly, the world’s largest single-site brewery is in Golden, Colorado, part of the MillerCoors Brewing Co. (which, incidentally, is where I work). This operation also has a sacred relationship with its highly tenured hourly workers, some of whom have up to 40 years of service. This workforce receives incentive bonuses, and the open relationship between these workers and management is responsible for levels of productivity that have been necessary to support a rapidly growing brand of products.

Are these companies different from yours, and if so, how are they different? Here are some points of comparison to consider:

Does your company have a business strategy to drive revenue and profit growth through optimizing the results for consumers, workers and investors? Or are some of these stakeholders being squeezed by quick-hit schemes and accounting gimmickry? In particular, is the workforce being marginalized by such practices?

For the past few decades, the role of human resources has been marginalized as well, viewed as something unnecessary to competition in a global market. Today, in the midst of a widespread recession, HR has the opportunity to present a real long-term strategy that will lead to productivity and sustained growth. It’s not a strategy that will take hold overnight. Classical management died slowly, and it will take time to revive. Today’s HR manager must start by building a new discipline and culture within management that understands what classical management is, and why it is a critical alternative to today’s conventional approaches. Companies including Nucor Steel, Costco and MillerCoors have found a way to lead their industries by leading and managing their workforces. Can your company be next?

May 6, 2009June 29, 2023

Employee Engagement in Tough Times, Part One

Amid periods of economic uncertainty, engaging and retaining valued employees is particularly critical if organizations are to maintain quality in their products and services and lay a foundation for future growth. Yet while challenging economic environments make employee engagement more critical, they also make it more difficult to achieve. Belt-tightening often results in organizational retrenching, reduced staffing levels, increased workloads and constrained compensation budgets.

The present economy may leave organizations feeling as if they are being squeezed in a vise. But there is opportunity amid the economic uncertainty. Careful attention to positioning individuals and teams to succeed will not only allow organizations to weather the storm, but also to emerge from the downturn in a stronger competitive position.

All organizations will be changed by the downturn
In the present economy, there will certainly be winners and losers, as there are in any period. But while some organizations may fare better than others, outcomes will be consistent in at least one respect: All companies can be expected to emerge from the downturn as changed organizations. In some cases, the changes may be fundamental, owing to mergers, acquisitions, restructurings, or shifts in market focus or positioning. In other cases, the changes may be more modest. Cost-cutting efforts, layoffs and shifts in priorities may simply result in new ways of addressing existing goals and objectives.

Also read: Employee Engagement in Tough Times, Part Two

However, regardless of the magnitude of the downturn’s impact on your organization, it’s important that you recognize that this time will bring changes, and with them come immediate challenges and longer-term opportunities. The immediate challenge is to minimize the disruptive aspects of organizational transitions on employees and customers. The longer-term opportunity is to ensure that once the downturn ends, your organization will be not only different but better.

Disruptive events, such as recessions, cause organizations to re-examine taken-for-granted ways of working. In these periods, there is a unique opening to restructure working relationships in more productive ways—before managers and employees once again settle into more stable patterns. And therein lies the opportunity to leverage a downturn to create positive changes that can serve your organization well—now and in the future.

Lessons from the past
In understanding organizational responses to periods of economic uncertainty, we can draw some lessons from the 2001-2002 downturn. Near the end of the recession, Hay Group surveyed executives from organizations appearing on Fortune’s Most Admired Companies list and from peer companies, as part of our ongoing partnership with the magazine. Nearly all respondents (86 percent) agreed that the economic environment was more challenging for their organizations than it was two years prior to the recession. With respect to motivating employees, however, respondents in the most admired companies generally reported that their organizations were in a better position post-recession than pre-recession. They also reported enhanced levels of employee loyalty and reduced concern about losing key talent. For the peer companies, by contrast, the downturn was perceived to have had a net negative effect in each of these areas.

The 2001-02 downturn was a transforming event for the most admired companies and peer companies alike, involving widespread changes in operations. While the most admired organizations and their peers exited the downturn in different places with respect to employee motivation and commitment, all came away with an enhanced appreciation for the impact on business success of employees’ performance and engagement. Fifty-seven percent of all respondents viewed the impact as greater or much greater than two years prior, whereas just 7 percent saw the impact declining.

A perspective from the vice president of human resources for a Fortune 500 building products manufacturer highlights the particular importance of employee performance in a downturn: “When our business is good,” he noted, “you could put monkeys in charge and they would still make money.” But when times are tough, he continued, strong leadership is essential and individual contributions are easily distinguished. Put another way by Warren Buffett, you find out who’s been swimming naked when the tide goes out.

A current view: human resource priorities

In November 2008, Hay Group conducted a global study to understand how human resource strategies, programs and priorities are being affected by the current economy. Nearly 2,700 respondents from 91 countries were asked to describe whether changes were being made to such areas as pay and benefits, staffing levels, performance management and training programs, and what those changes entailed.

Notably, three of the top five workforce concerns indicated by respondents pertained to the employee life cycle—attracting and recruiting the right talent, engaging and motivating employees and retaining key contributors. Concerns about talent acquisition and retention may seem misplaced during an economic downturn, when we are confronted with daily reports of organizations laying off large numbers of people. But the study results point to key reasons for organizations to continue to attend to these issues.

Even amid downsizings, organizations are still hiring staff to fill critical roles. And many are finding it harder to do so, as promising candidates are reluctant to move from their current positions. As one respondent noted, “Our new-hire offer acceptance rate is low due to the market situation. The candidates are worried about future layoffs if they change jobs, as the practice is commonly based on last in, first out.” Likewise, faced with constrained compensation budgets that limit their ability to reward staff, many organizations are fearful of losing valued employees. Savvy leaders recognize that competitors often see opportunities to lure away key contributors in downturns and worry about vulnerabilities in some or all of their markets.

Employee engagement is critical in a downturn, but it’s not enough

Maintaining a focus on engagement is especially critical in difficult times. Engagement refers to the commitment employees feel toward the organization (e.g., their willingness to recommend it to friends and family, their pride in working for it and their intentions to remain a part of it). But it’s also about employees’ discretionary effort—their willingness to go the extra mile for the organization. Right now, as organizations need to do more with less and strive for greater efficiency, tapping into the discretionary effort of employees is all the more essential.

Unfortunately, however, our research confirms that many organizations that have enviably high levels of employee engagement still struggle with performance issues. So while engagement is necessary, engagement alone is not sufficient for achieving maximum levels of individual and organizational performance. Leaders must not only engage and motivate employees but also enable them to channel their efforts productively and effectively.

In what we call an enabled workforce, employees are effectively matched to positions, such that their skills and abilities are put to optimal use. Likewise, employees have the essential resources—information, technology, tools and equipment, and financial support—to get the job done. They are able to focus on their key responsibilities without wasting time navigating such obstacles as procedural restrictions or nonessential tasks in the work environment.

Most organizations employ a sizable number of frustrated workers: individuals who are highly engaged but lack the tools required to be fully effective and successful. Frustration is a significant problem for organizations and employees, especially in a challenging economic environment. Organizations trying to squeeze out every drop of productivity can’t afford to squander the energy of motivated employees. And employees who are being asked to work harder and to do more with less understandably want to work in smart and efficient ways. In the short term, these motivated but frustrated employees may suffer in silence. But over time many can be expected to turn off and disengage, or tune out and leave.

The second part of this article will offer a “path to performance” for generating business results through enhanced levels of employee engagement and enablement.

May 6, 2009June 29, 2023

Employee Engagement in Tough Times, Part Two

Tough times make it essential that organizations get the most out of talent at all levels. But those that focus exclusively on employee engagement are likely to be disappointed by the extent to which improvements in this area translate into enhanced performance. To maximize individual and team contributions, engagement alone is not enough. The commitment and discretionary effort offered by engaged employees can easily be squandered if leaders do not also enable them to succeed by putting them in roles that fully leverage their potential and providing them with the workplace supports they need to carry out their responsibilities.

A path to performance
The drivers of employee engagement and employee enablement can be organized around four major themes, representing a “path to performance” for generating business results through enhanced levels of employee effectiveness.

Also read: Employee Engagement in Tough Times, Part One

Organizations first need to clarify strategic objectives to promote understanding and line of sight at all levels. They need to instill confidence in leaders and ensure appropriate market positioning and focus on customers and quality. Next, organizations need to align structures with strategy and ensure that resources, decision-making authority and support from co-workers are adequate to put employees in a position to succeed.

With the structure in place, organizations then need to attend to getting the right people “on the bus,” providing training to enhance employee skills today and development opportunities to build capability for the future. Finally, organizations need to motivate high levels of employee performance through appropriate performance management systems, along with compensation and recognition approaches that reward employee contributions.

Below we highlight key considerations in each of these areas in challenging economic environments.

Key considerations in a downturn
Leadership and direction:
Leaders need to help employees understand that the company has a coherent strategy that will allow it to succeed in the current business environment. They must communicate that both the company as a whole and its individual divisions are making progress relative to strategic objectives, and that all employees have a role to play in helping the organization carry out its plans. To win trust and confidence in a downturn, leaders are well advised to:

• Communicate, communicate, communicate: In the midst of change, communication channels in organizations often dry up. Yet in times of uncertainty, employees are most in need of communication. If leaders are not meeting this need with credible messages, gossip and rumor often fill the vacuum.

• Be transparent: As employees are asked to make sacrifices for the organization, it is important that they have a sense that decisions are being made rationally and equitably and that the changes will result in increased organizational effectiveness and the eventual betterment of the work environment.

• Enlist supervisors: If middle managers and first-line supervisors are supportive of senior executives, they can foster high levels of confidence in the organization’s leadership and direction. If, on the other hand, middle managers and supervisors signal to employees through their words or actions that they lack faith in organizational leaders, employees’ trust can be expected to decline rapidly.

Work structure:
Faced with challenging economic environments and competitive pressures, many organizations have reduced headcounts without reducing the amount of work to be done, resulting in higher workloads for remaining staff. To promote efficient execution of key tasks, leaders need to ensure that employee efforts are backed by efficient processes, adequate resources and support from co-workers:

• Solicit broad input: While effective job and organization design is part of the solution, so too is harnessing the creative ideas of employees at all levels. To draw out improvement suggestions broadly, organizations need to ensure that leaders and the organization’s overall culture encourage employees to come forward with innovative suggestions for improving the way work is done and reinforce the value of employee creativity by appropriately translating ideas into action.

• Clarify must-win battles: In high-workload environments, leaders must clearly state which personal goals and priorities are critical. Doing so allows employees to focus their efforts on essential, value-added tasks.

• Make sure managers wear “enterprise hats”: In transition environments, some managers and employees may be inclined to hunker down and focus on the achievement of individual or departmental priorities. It is imperative that organizational cultures, performance management systems and hiring and promotion processes reinforce the need to balance local concerns with broader organizational concerns.

Capability:
Faced with a difficult economy, some organizations may be tempted to shift their focus away from training and career development activities. But doing so is a big mistake. Recognizing that personal development and growth are among the most important drivers of engagement and enablement, organizations should instead:

• Be surgical in training and development cost reduction: In tough times, organizations are often forced to make cuts in training budgets. In doing so, however, organizations should identify and protect high-value training offerings and training that is focused on high-potential employees.

• Emphasize the role of line managers: Through coaching and regular performance feedback, supervisors can help employees identify developmental needs and enhance their skills. Supervisors also serve as mentors and sponsors for employees by helping them understand organizational expectations, develop supportive networks and work the informal systems that are a part of every organization.

• Promote equity and fairness: Where promotion opportunities are constrained, it is important that leaders effectively communicate the resources that are available to help employees manage their careers and clarify how promotion decisions are made. These messages build employee trust that development processes are fair and equitable.

Rewards:
In high-workload environments, employees are very sensitive to compensation issues. Acutely aware of all they are contributing, they can be expected to pressure their organizations to balance rewards and contributions. Managing rewards in a downturn requires that organizations:

• Focus on rewards, not just ratings: Many organizations spend an agonizing amount of effort to ensure that managers comply with prescribed distribution curves for performance ratings. But what is the value if the highest performer still receives only marginally more in merit or incentive pay than the average performer? Instead, organizations need to ensure that performance ratings translate into differentiated rewards.

• Clarify reward philosophies: In partnership with WorldatWork, Hay Group recently undertook a study of compensation practices and policies by surveying top compensation managers in member companies. Notably, more than two-thirds of more than 1,200 respondents rated their pay-related communications to be “not effective” or only “marginally effective.” Not surprisingly, these respondents also expressed much less favorable views of the motivational impact of their compensation systems. While 91 percent of respondents indicated that their companies have a pay philosophy, nearly two-thirds indicated that “about half” or “less than half” of employees understand it.

• Leverage tangible and intangible rewards: Especially when compensation budgets are tight, organizations need to think more broadly about the value propositions they are offering to employees—that is, the totality of financial and nonfinancial returns employees can expect based on their contributions.

Conclusion
Organizations that manage dynamics in all four “path to performance” areas successfully during the downturn are likely to foster the engagement and enablement necessary to cope with economic challenges and set the stage for enhanced performance when the economy recovers. When it comes to employee issues, a downturn is not the time to take your eye off the ball. For organizations as for individuals, character is revealed in tough times. The organizations that continue to put people first in tough times will win loyalty for the future.

September 17, 2007June 29, 2023

The Talent Trifecta

We know it matters. Some go to war for it. Professional sports teams draft for it. Actors audition to show they have it.

Others consider it the ultimate solution and try to manage it. Agents contract for it. Some are innately endowed with it, while others strive diligently to develop it. We all want it.

“It” is talent, which is evolving into a science for some HR professionals and a passion for many line managers. A multitude of programs and investments have been made to attract, retain and upgrade talent.

Yet, sometimes after stipulating that talent matters, it is easy to get lost in the myriad of promises, programs and processes and lose sight of the basics. At the risk of grossly oversimplifying, let me suggest that there is actually a deceptively simple formula for talent that can help HR professionals and general managers turn their talent aspirations into actions: Talent equals competence times com- ¬mitment times contribution.

Competence means that individuals have the knowledge, skills and values required for today’s and tomorrow’s jobs. One company clarified the usual definition of competence and framed it as “right skills, right place, right job.”

Competence clearly matters because incompetence leads to poor decision-making. But without commitment, competence doesn’t count for much. Highly competent employees who are not committed are smart, but don’t work very hard.

Committed or engaged employees work hard, put in their time and do what they are asked to do. In the past decade, commitment and competence have been the bailiwicks for talent.

But my colleagues and I have found that next-generation leaders for an organization may be competent (able to do the work) and committed (willing to do the work), but unless they are making a real contribution through the work (finding meaning and purpose in their work), then their interest in what they are doing diminishes and their willingness to harness their talent in the organization wanes. Contribution occurs when employees feel that their personal needs are being met through their participation in their organization.

Organizations are the universal setting in today’s environment where individuals find abundance in their lives through their work. They want this investment of their time to be meaningful. Simply stated, competence deals with the head (being able), commitment with the hands and feet (being there), and contribution with the heart (simply being).

In this talent equation, these three terms are multiplicative, not additive. If any one is missing, the other two will not replace it. A low score in competence will not ensure talent even when the employee is engaged and contributing.

Talented employees must have skills, wills and purposes; they must be capable, committed and contributing. HR leaders can engage their general managers to identify and improve each of these three dimensions to respond to the talent clarion call.

Competence
Competent employees have the ability to do today’s and tomorrow’s tasks. Creating competence comes by following four steps:

1. Articulating a theory or setting a standard.
Competence begins by identifying what’s required to deliver future work. Rather than focus on what has worked in the past by comparing low- and high-performing employees, more recent competence standards come from turning future customer expectations into present employee requirements. At any level in a company, an HR professional can facilitate a discussion sparked by these questions:

}What are the current social and technical competencies we have within our company?

}What are the environmental changes facing our business and what are our strategic responses?

}Given our future environment and strategic choices, what technical and social competencies must employees demonstrate?

By facilitating a discussion about these questions, HR professionals help general managers create a theory or point of view on competencies that leads to a set of employee standards. When general managers build competence models based on future customer expectations, they direct employee attention to what they should know and do. The simplest test of the competence standard is to ask target or key customers: “If our employees lived up to these standards, would they inspire confidence in our firm?” When customers answer yes, the competence model is appropriate; if they answer no, it needs more work.

2. Assessing individuals and organizations. With standards in place, employees may be assessed on the extent to which they meet or do not meet standards. In recent years, most talent assessments have evaluated both results and behaviors. Talented employees deliver results in the right way. The right way is defined by the competence standards I described in Step 1. These behaviors may be assessed by the employee and others through a 360-degree evaluation by subordinates, peers and supervisors. But to provide a holistic view of employees who have contact outside the company, they can also be evaluated by such stakeholders as suppliers, customers, investors and community leaders. This shifts the 360 to a 720 (360 times 2 equals 720). This assessment lets the individual know what to do to improve, and it also provides valuable input to the organization about how to design and deliver HR practices to upgrade talent.

3. Investing in talent improvement. Individual and organizational gaps may be filled by investing in talent. In work my colleagues and I have done, we have found six investments that may be made to upgrade talent:

Buying: recruiting, sourcing and securing new talent into the organization.

Building: helping people grow through training, job assignments or life experiences.

Borrowing: bringing knowledge into the organization through advisors or partners.

Bounding: promoting the right people into key jobs.

Bouncing: removing poor performers from their jobs and/or the organization.

Binding: retaining top talent.

When HR professionals create choices in these six areas, they help individuals and organizations invest in future talent.

4. Following up and tracking competence. Hoping for talent won’t make it happen. Ultimately, talent measures should be derived to track how well individuals are developing their skills and how well the organization develops its talent bench. Individual employees can be tracked on their understanding of their next career step and their capacity to do it. Organizations can track the extent to which backups are in place for key positions. Or, leaders who are measured on how much money they contribute to their company can also be assessed on the extent to which they are talent producers rather than talent users. Here is what I mean: If these leaders run through an organization’s talented employees, driving them away or burning them out, there should be some accountability for such outcomes. As leaders produce money for a company, so should they be held responsible for replenishing the talent pool, and must be expected to answer to the organization if they are only tapping it out.

These four steps will help HR professionals and general managers ensure competent employees to do today’s and tomorrow’s work. In the past 20 years, almost all companies have done at least minimal work in these four areas.

Commitment
Competence alone is not enough. Commitment means that employees are willing to give their discretionary energy to the firm’s success. This discretionary energy is generally conceived as an employee value proposition that makes a very simple statement: Employees who give value to their organization should get value back from the organization. The ability to give value comes when employees are seen as able to deliver results in the right way.

Those employees who give value should get value back. In many studies of employee engagement, researchers have identified what employees get back from their work with the firm. Almost all consulting firms have engagement indexes that can be used as a pulse check to track employee engagement. Generally, these instruments suggest that employees are more committed when their organization offers them:

Vision: a sense of direction or purpose.

Opportunity: an ability to grow, develop and learn.

Incentives: a fair wage or salary for work done.

Impact: an ability to see the outcome or effect of work done.

Community: peers, bosses and leaders who build a sense of community.

Communication: knowing what is going on and why.

Entrepreneurship or flexibility: giving employees choice about terms and conditions of work.

When these seven dimensions exist in an organization, employees have a VOI2C2E, as shown in the acronym above. They demonstrate their engagement by being at work on time, working hard and doing what is expected of them. Commitment (not just satisfaction) may be measured through surveys or productivity indexes.

Contribution
One of my colleagues graduated from a top business school (a validation of competence), got her ideal job and was willing to work very hard (which demonstrates commitment). But after about a year, she left. She still savored the job and was willing to work hard, but she felt that the job was not helping her meet her needs.

In recent years, many people have been finding that traditional organizations, such as families, neighborhoods, hobby groups and churches, which had once met people’s needs, have been faltering. As employees work longer hours and with technology removing the boundaries between work and life, companies need to learn how to help employees meet their needs. When people have their needs met through their organizations, they feel that they are contributing and finding abundance—the personal fulfillment and meaning that we seek in life.

My wife, Wendy, and I have scoured theory and research from positive psychology and developmental psychology—individual motivation, personal growth and organizational theory—to figure out what organizations can do to help employees find abundance, which occurs when individuals feel they are contributing. We have identified seven questions that leaders may help employees answer so that employees experience abundance in their work:

Who am I? How does the employee identity meld with the company reputation?

Where am I going and why? How can the organization help the employee reach his or her goals?

With whom do I travel? How does the organization build a community of support so that an employee feels connected?

How well do I practice spiritual disciplines? How well does the organization practice such spiritual disciplines as humility, service, forgiveness and gratitude?

What challenges do I enjoy? How does the organization help an employee find challenges that are easy, enjoyable and energizing?

How well can I access resources? How does the organization help the employee manage health, physical space and financial requirements?

What are my sources of delight? How does the organization help the employee have fun? Fun work environments mean that employees have the ability to laugh at difficult situations, thereby becoming resilient and positive.

When managers help employees find answers to these questions through their participation in the organization, these employees will find abundance and feel that they are contributing.

Talent is not an “it”—some abstract, unknown and impersonal set of ideal principles. Nor is talent a random set of programs and policies that evolve according to the whims of talent-fashion trends. Using the simple talent formula—competence times commitment times contribution equals talent—leaders and HR professionals may join in helping talent become a reality. It is worth doing.

Workforce Management, September 10, 2007, p. 32-33 — Subscribe Now!

August 2, 2007March 2, 2020

Managing the CEO Sweepstake at GE

In 2000, there was a very public horse race going on at GE. Who would succeed Jack Welch? Here, GE’s Bill Conaty discusses how he and Welch handled the business world’s equivalent of the Kentucky Derby, with the media betting on one of three CEO candidates: Robert Nardelli, who at the time was CEO of GE Power Systems, and who recently stepped down as CEO of Home Depot; James McNerney, then-CEO of GE Aircraft Engines, who went on to be CEO of 3M and now is president and CEO of Boeing; and Jeff Immelt, then-CEO of GE Medical Systems, who ultimately won the top job.

WM: How did you keep morale up when everyone in the media was making bets on who would win?
Conaty: We just banned running for office. In fact, running for office still is the kiss of death at GE, because when you have people running for office you have competition going on within the house. We are competitive as hell, but we want to direct that at our real competitors. So when the media got involved, we just let them do their thing. But internally, we just kept drilling down and watching the top three individuals at the time.

WM: But how did you make sure that the three candidates didn’t start competing with each other in a negative way that affected morale?
Conaty: Jack told them within the final six months that, No. 1, we were putting their replacements on the job. There would be one winner, and the two that didn’t get the job would have to leave. Putting their replacements on six months in advance was more of a shocker for them than it was for us. We also got the opportunity to see how they managed their successors.

WM: These individuals represented some of your strongest talent. Isn’t there something to be said for trying to keep the two candidates who didn’t get the CEO position?
Conaty: There is, but in this case we felt—and Jack felt stronger than I did on this—that the level of interest in the candidates as future CEOs of other major companies would just be intolerable for us. While I personally was trying to make the case that we could retain two of the three, Jack listened to me, gave me my day in court, but decided that the pressures to leave would be too intense. And he was absolutely right. There were companies that were holding their CEO positions open at the time—3M was one of them, so was Home Depot. And there were a couple of others. I think Jack felt that when he took over as CEO, there was an internal horse race. There were five or six candidates in the running and he just found that environment and internal competition to be distasteful and dysfunctional for the company. He also felt that you have to give one person the job and not have somebody looking over their shoulder hoping they slip on a banana peel.

Workforce Management, July 23, 2007, p. 28 — Subscribe Now!

January 31, 2001October 24, 2019

Thirteen Alternatives to Downsizing

Research by Workforce and by others has shown that many companies that downsize end up with less productivity or less revenue than when they started. Here are several alternatives to consider.

Long-term Staffing Alternatives

Hiring Linking to Vision
The organization identifies the skills that will be needed to meet its goals, assuring that it is recruiting and hiring people who can meet future challenges.
Cross Training
By understanding the skill mix of staff today and linking it to the skills needed in the future, the organization allows individual employees to determine what they need to do in order to remain employed.
Succession Planning
Rather than leaving succession planning to chance, HR should work with line managers to identify likely candidates possessing the types of management and technical skills it needs in various positions.
Redeployment Within the Organization
Successful redeployment requires (1) a sophisticated career management process so that managers and employees are aware of open positions, and (2) career assessment and development activities that allow people to get ready for positions.
Creating Value-added and Revenue-enhancing Opportunities
This is an “Employee Buy Out” within the organization where a group of employees create a new business or line of service that the company can market.

Cost-Saving Strategies

A Comprehensive Model
Automakers, as well as other industries in Japan, have adopted a series of steps they use as an alternative to downsizing. If the first step doesn’t get the needed savings, they move to the next. Areas of focus include compensation, hours, wages and placement.
Reduced Hours
A policy is established that either places everyone in a particular job category on a flexible working arrangement or creates a flex-pool made up of volunteers from the department. The goal is to reduce the number of hours worked by each employee.
Lower Wages
Wages are reduced in order to save money.
Attrition
Waiting for people to retire or leave on their own can occur either through natural attrition or by offering voluntary retirement or similar packages.
Alternative Placement
Offer early retirement incentives to pension-eligible employees in a specific area.
Leave of Absence
People are offered a leave of absence with full benefits for a specified period of time to help an organization weather a downturn. Although people are promised a job upon completion of the leave, it may not be the same job or at the same pay level.
Employee Buy-Outs
The company allows employees to buy the operation that was slated for closing and set up their own businesses.
Shared Ownership
The company allows employees to trade pay increases or pay cuts in return for company stock.

June 23, 2000January 13, 2020

I’m Important, You’re Important, We’re All Important

When I spent two years interviewing people about their work and workplaces, the concept of “self-worth” came up time and again. “I don’t feel important.” “I’m a worker bee.” “I’m just not valued.”

Worth emerged as such a dominant theme that it’s on my list of the 22 keys to a meaningful workplace.

No, worth can’t be measured like ROI or turnover. But it sure as heck can be increased. Below are some thought-provoking ideas and reminders for nurturing a stronger sense of self-worth among employees in your workplace. I hope you’ll print the list and use it to stir conversation, discovery, and action.

1. Those hallway “hellos” really do matter. Make them count.

2. Someone somewhere in your organization has the answer to that problem you’ve been struggling with. Turn off your computer, and surf the sea of knowledge that surrounds you.

3. We’re obsessed with knowledge, skills, and abilities. Shouldn’t we also tap into our deep interests?

4. Internal competition always produces at least one loser, which is one too many. Especially when we’re the loser.

5. The fancy award dinners and wall plaques aren’t essential. This is: “thank you.”

6. Let’s have a month when everyone is named employee of the month.

7. Co-creation may be the most time-intensive, frustrating, exhausting, and surest way to foster true empowerment and a deep sense of worth.

8. People are moved by compelling missions–not by run-on mission statements.

9. Plenty of organizations have complaint departments, complaint forms, and complaint-resolution personnel. Will someone please create a compliment department?

10. Who should have easy access to all customer input? Easy answer: everyone.

11. Employee attitude surveys are an exercise in tree-killing unless they’re used to generate rich dialogue and focused action. Save a tree: Just say no to employee surveys that are destined for a dusty shelf.

12. Okay, it’s a cliché, but it’s so true: Respect takes years to nurture, but it can be destroyed in seconds.

13. Can you cite one example of a performance evaluation that truly informs, inspires, and energizes?

14. Few people expect high pay. Everyone expects fair pay.

15. For years, we’ve used terms like boss, subordinate, my people, your people, and upper-level. Should we be surprised that some employees feel like second-class workplace citizens?

16. Space matters. If some people are jammed into tiny cubicles while others get cavernous offices, what kind of message is being sent?

17. If you don’t think Dilbert is funny, you need to worry.

18. If you think you’re turning into Dilbert, you really need to worry.

19. If your workplace is a Dilbertesque universe, engage in random acts of positive change management. Focus on the one positive thing you can do instead of the 100 things you can’t do.

20. If you’re unwilling to do a thing about it, stop off at the local office-supply store, buy some resumé paper, and get busy. A better situation awaits–but only if you seek it out and seize it.

Other columns by Tom Terez:

April 20, 2000June 29, 2023

Sample Performance Review for Non-exempt Employees

This form must be written in ink or typewritten

PERFORMANCE REVIEW AND EVALUATION

Name:
Position:

Location:
Department:

This review covers the period from __________to __________

The performance review and evaluation process requires the supervisor to do the following:

1. Clearly establish the areas of responsibility for the job.
2. Establish expectations, standards or objectives for the work to be done during the next review period.
3. Periodically review progress with the subordinate concerning how well expectations were met. Maintain on-going documentation of performance.
4. Annually review and evaluate performance.

The key to this process is clear communication between the supervisor and subordinate.

The objective of the entire process is to ensure that all employees understand:

1. What they are to do;
2. What the standards are by which they will be measured;
3. How they are progressing; and
4. What their evaluation is at the end of the review period.

Document the employee’s performance and select a rating (1-4, defined at the bottom of this document) for factors listed below:

Quality of Work — Consider the accuracy, thoroughness, and neatness of work performed.

_____________________________

Productivity — Consider the amount and timelines of satisfactory work completed and whether the employee consistently meets established or reasonable deadlines.

_____________________________

Interpersonal Skills — Consider the employee’s ability to work cooperatively with others, resolve conflict, and help others. Also consider customer relations, telephone technique, etc.

_____________________________

Dependability — Consider the reliability and consistency of the employee’s work. Also, consider the employee’s attendance record.

_____________________________

Initiative — Consider the exercise of independent judgment and innovation within the employee’s limits of authority and the amount of supervision required.

_____________________________

Job Knowledge — Consider the extent to which the employee understands and applies his/her knowledge of the techniques, methods, and skills involved in the job.

_____________________________

PERFORMANCE RATING DEFINITIONS

CLEARLY OUTSTANDING: Clearly exceeds, by a significant degree, most of the major requirements of the job, while maintaining fully satisfactory performance in the remaining duties. Performance results are clearly outstanding. Employee regularly assumes additional responsibilities beyond those which are required. This rating usually including the top 10% of the workforce.

ABOVE EXPECTATIONS:

Usually exceeds, by a significant degree, some of the major requirements of the job while maintaining fully satisfactory performance in the remaining duties. Employee often assumes additional responsibilities beyond those which are required.

MEETS EXPECTATIONS:

Consistently meets and occasionally exceeds the requirements of the job. Performance results are satisfactory in all aspects of the job.

NEEDS IMPROVEMENT:

Usually meets most of the job requirements; but improvement is needed in one or more phases of the job. Results are less than normally expected. When this rating is a warning that the employee’s job is in jeopardy if performance continues at the current level, Human Resources will be involved in preparing an Improvement Plan.

Discuss any other factors which relate to the employee’s work performance, such as significant accomplishments, critical incidents, or necessary improvements:

_____________________________

Overall Evaluation — Select one overall rating which best describes the employee’s performance throughout the review period considering the ratings and commentary throughout the above document.

Clearly Outstanding
Above Expectations
Meets Expectations
Needs Improvement

INDIVIDUAL DEVELOPMENT

What are this employee’s strongest skills and abilities?

_____________________________

What development action(s) will be needed to maintain or improve current performance? Also, what action(s) will help prepare the employee for future job assignments?

Development Objective

Action/Anticipated

Completion Date

Appraised by
Date

Reviewed by
Date

Employee Comments:

_____________________________

Employee:
Date

(Employee signature does not necessarily signify agreement with the evaluation, but that the evaluation has been discussed with the supervisor.)

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.

April 19, 2000June 29, 2023

Sample performance appraisal for exempt employees

Performance Appraisal for Exempt Employees

Name: _______________
Position: _______________
Location: _______________
Supervisor: _______________
Reviewer: _______________
Period Ending: _______________

PERFORMANCE RATINGS:

Exceptional
Above Expectations
Meets Expectations
Needs Improvement
N/A — Not applicable

PERFORMANCE RATING	DEFINITION

Exceptional:	Consistent performance substantially exceeding normal expectations for total job.

Above Expectations:	Frequently exceeds normal performance expectations for key job tasks.

Meets Expectations:	Meets normal job requirements in accordance with established standards and may exceed requirements for some job tasks.

Needs Improvement:	Overall performance acceptable but improvement needed in one or more significant aspects of job.

All evaluations must be supported with specific comments, and all “Overall Evaluations” (see below) of Exceptional and Above Expectations must include specific examples to support the ratings given. When Needs Improvement is the performance rating, attach a written plan to improve performance to this review and enter the Next Review Date in the space provided.

PERFORMANCE RESULTS: Achieves expected quality and quantity of output. Places greatest effort on most important aspects of job. Does work on-time, on-budget without sacrificing performance goals or standards.

RATING:

COOPERATION/TEAMWORK: Willingly accepts assignments. Able to work on or with teams to cooperatively reach goals.

RATING:

INITIATIVE: Self-starter who willingly puts forth effort and time and performs tasks with a minimum of supervision. Begins to solve problems within scope of responsibility as soon as they are apparent. Advises supervisor of current or anticipated problems. Able to apply job knowledge to produce innovations in work process or product.

RATING:

ORGANIZING AND PLANNING: Resolves conflicting priorities and schedules with peers and other staff. Performs effectively under pressure and deadlines. Effectively uses time and resources to accomplish work. Will shaft strategy, make decisions, obtain the aid of others to achieve objectives.

RATING:

COMMUNICATION: Verbal and written communications are clear, concise and accurate. Appropriately documents work so others can find work in progress and historical information about the job.

RATING:

INTERPERSONAL SKILLS: Interacts productively with others in formal and informal groups both within and outside the company; is receptive to differing ideas and adjusts to the different work styles of others.

RATING:

For Supervisors, Managers, and/or
Sales Related positions include the following:

SUPERVISION AND LEADERSHIP: Effectively leads and develops staff. Effectively directs staff and provides ongoing feedback. Accurately evaluates performance, matches abilities and job requirements, establishes an effective working relationship, and acts as a positive model for others. Assures a positive working environment in compliance with company standards.

RATING:

SALES/MARKETING: Obtains new work (e.g. listings, corporate accounts, etc.) from both existing clients and new clients. Makes marketing suggestions and effectively implements existing marketing programs.

RATING:

OTHER (Define and rate another significant performance factor if appropriate)

RATING:

PERFORMANCE PLAN FOR NEXT PERIOD (Include expected accomplishments and measurement criteria)

DEVELOPMENT NEEDS (Areas of knowledge or skill to develop that will improve job performance)

Plan for how Supervisor will specifically assist employee to maintain or improve performance:

OVERALL EVALUATION:

EXCEPTIONAL
ABOVE EXPECTATION
MEETS EXPECTATIONS

NEEDS IMPROVEMENT (Requires written improvement plan of maximum 6 months)

Next Review Date and/or Other Actions:

SUPERVISOR’S OR EMPLOYEE COMMENTS (If needed, attach additional sheet)

(Employee’s signature indicates that evaluation has been discussed with the supervisor. It does not necessarily signify agreement).

Signatures:

Immediate Supervisor:
Date:

Reviewer’s Manager:
Date:

Employee:
Date:

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.