All Posts Tagged With: "employee engagement"
3 Things Employees Care About Most
“In my experience with managing people all over the world, I have found that most ineffective managers are considered ineffective not because they don’t know how to motivate people, but because they don’t know what motivates their people.”
The observation comes from Rajeev Pershawaria in “The Three Things That Employees Really Care About” (FastCompany, May 12, 2011). He describes an exercise he has facilitated in seminars with hundreds of executives around the world. In the exercise, he poses an imaginary dilemma:
“Imagine you are about to change jobs and have two competing offers. Both jobs pay roughly the same amount of money and are in the same industry. Both are at reputable companies. How will you choose between the two jobs? What factors will you consider while making your decision?”
Think about that for a minute.
What factors topped your list? The nature of your new job? The work culture? Coworkers? Future opportunities?
Pershawaria captures the executives’ responses on three blank flip charts that represent the three things people care about most. He then reveals the hidden titles:
Role
Environment
Development
He observes that “most managers think they know what motivates their direct reports, but when you ask them, they actually list things that motivate them.” To be effective at engaging people, managers need to talk regularly about the three buckets, listen to understand their preferences and aspirations, and label and link their work with their expectations. For example, before giving an assignment to a woman on your team who wants more experience in cross-border transactions, he recommends that you “talk to…
15May2011 | Steve George | 0 comments | ContinuedOne Team’s Systematic Approach to Improvement
A recent case study published by ASQ tells the story of how FirstSource Solutions used tools and processes that are common among Baldrige Award winners to tackle a single problem—reducing the turnaround time (TAT) to approve applications for a retail mortgage client—with impressive results.
The client was in the United Kingdom. Here’s a synopsis of how Firstsource tackled the problem:
- It used data to define the problem: Over a nine-week period, the client offered mortgage loans in 14 days or less 69% of the time, well short of the 75% target.
- A financial benefit estimation exercise determined that improving performance on TAT to 80% would increase revenue by six million pounds annually, create a more efficient process, and provide faster service to applicants.
- Firstsource formed a team to improve TAT. The team received training on the Six Sigma DMAIC methodology and quality tools.
- The team started with a supplier-inputs-process-outputs-customer (SIPOC) exercise to create a high-level process map and identify stakeholders.
- The team produced a three-stage analysis road map to assess the current situation and identify possible root causes and improvement activities. It used the road map to agree on five causes of the longer TAT.
- The team brainstormed possible solutions and then assigned a relative rating for each solution to eliminate half of the original possibilities.
- The team validated the impact of the solutions through a one-week pilot study with a metrics dashboard that was shared with all stakeholders involved in developing solutions. Based on their feedback, the team decided to proceed with full implementation.
- The team used PDCA…
Employee Engagement Epic Fail
In the first quarter of 2011, Wells Fargo posted a $3.8 billion profit. Wall Street ignored the profit and, worried that revenue growth is not keeping pace with expenses, Wells Fargo’s stock price fell.
Wells Fargo has responded to Wall Street’s concerns as most companies respond: It set out to reduce fixed costs. It launched Project Compass, a “bottom-up initiative” to involve employees in generating ideas that will cut expenses. And by expenses, Wells Fargo means jobs. The bank already eliminated 4,500 positions in its mortgage division in the first quarter, which may be one reason it posted a $3.8 billion profit, which still did little to appease Wall Street.
If you are a Wells Fargo employee and you are enthusiastic about supporting Project Compass, you deserve to lose your job. By its actions, the company is telling you that the interests of stockholders are its most important consideration. Employees are costs that must be cut. You are not valued. You are a commodity. You are expendable.
A few years ago I worked with a company called TBM Consulting, which helps companies become lean. Wells Fargo wants to become leaner. It could learn something from TBM.
The most important thing it could learn is that employees cannot do their best, and a company cannot transform itself, if they fear losing their jobs by supporting initiatives like Project Compass.
In fact, Anand Sharma, TBM’s president, and Gary Hourselt, executive vice president, argued for the opposite approach in their book, The Antidote. “You must reassure employees that…
21Apr2011 | Steve George | 0 comments | ContinuedServant Leadership Boosts Employee Engagement
On his blog, Bret Simmons talks about a new study of 191 financial services teams and 999 total participants recently published in the Journal of Applied Psychology. The study showed that employee engagement soared when employees believed that their teams were safe places for individual risk taking, which is a result of servant leadership.
The study examined both transformational leadership and servant leadership. A transformational leader offers a compelling agenda of high performance and change and a clear structure to help team members pursue it. This promotes cognition-based trust, which, according to Simmons, is “is trust based on the belief that the leader is competent, responsible, reliable, and dependable.”
A servant leader genuinely cares and is concerned about each team member and gives each person the opportunity and responsibility to act in the team’s best interests. This promotes affect-based trust, “which is trust based on the emotional bond to the leader.”
Cognition-based trust predicts team potency, while affect-based trust predicted team psychological safety. While both significantly improved team performance, “the size of the effect of team psychological safety was almost double the size of the effect of team potency,” Simmons wrote.
The study concluded: “Engaging in the behaviors associated with servant leadership and transformational leadership is important for a leader to cultivate and maintain team members’ confidence in his or her agenda and competencies as a leader (cognition-based trust) and to gain their faith that he or she will act in a manner that supports both their individual well-being and that of the team (affect-based trust).”
When…
30Mar2011 | Steve George | 1 comment | ContinuedFour Brutal Truths
Milliken & Co. won a Baldrige Award in 1989, the second year the Award was given. A multinational group of textile and chemical companies, Milliken has continued to improve over the last two decades, using its Baldrige experience as a springboard for industry leadership and role model best practices.
It customized the Toyota Production System to its own culture and operations and applied the scientific method to new initiatives, using PDCA to experiment, test, and improve. It succeeds “in the face of four brutal truths that often derail organization improvements, preventing innovation and sustainable excellence,” according to Laurie Haughey, Milliken’s director of education services and marketing (article here):
- The majority of performance-improvement programs fail. Milliken looked to Japan and the process controls taught by W. Edwards Deming to develop a sustainable management system. “More than 100 management employees made four exploratory trips to visit leaders of Japan’s best companies…to learn and adopt performance systems,” writes Haughey.
- Organizations will founder unless they cultivate the trusting environment needed to perform honest self-analysis. First, Milliken adopted zero-based thinking: Its objective is zero, not some acceptable level of failure. Second, it uses value-stream mapping to identify the eight forms of manufacturing waste. Third, it encourages workers to expose problems and search for root causes.
- Organizations often count the wrong things. “Rather than focusing solely on bottom-line numbers,” Haughey writes, “organizations should consider a more holistic approach in measuring corporate success.” In Milliken’s case, the foundation of its performance system is safety. Every meeting starts with a safety review. Hourly employees own…
A Culture That Values Employees
What is your organization’s turnover rate? Why does it matter?
Software company SAS has an employee turnover rate of 2.6%. The info-tech industry average is 22%. SAS has approximately 11,000 employees. If it lost employees at the industry rate, it would have to replace an additional 2,100 employees each year.
How much does it cost to replace an employee? You can find a method of calculating that cost here, but a good rule of thumb is 150% of an employee’s annual compensation (the cost of recruitment, training, lost productivity, and lost sales, etc.). I don’t know what the average annual compensation is for an SAS employee who leaves the company, but let’s say it’s $60,000. Probably low for knowledge workers and certainly low for executives and managers, but we’ll be conservative here. If it costs SAS $90,000 to replace every employee, the company’s 2.6% turnover rate compared to the industry average 22% rate is saving SAS $189 million annually!
How does SAS achieve such a low turnover rate? According to CEO Jim Goodnight, “Knowledge-based companies need knowledge workers. Looking at services that keep employees motivated, loyal, and doing their best work as merely expenses and not an investment is, I think, a little shortsighted.” So SAS keeps turnover low by investing in its employees.
In 2010, SAS topped Fortune’s Best Places to Work list for the second year in a row. According to Fortune, its perks for employees are “epic”: on-site healthcare, which 75% of employees use as their primary care; high-quality child care…
22Feb2011 | Steve George | 0 comments | ContinuedEmployee Engagement and Innovation
You can’t skim the headlines of today’s business news and opinions without reading about innovation multiple times. It’s the hot topic among executives, the program du jour, the solution to every problem, and the yellow brick road to recovery. The only problem is that it is fraught with danger, beset by flying monkeys that threaten the innovation process at every step: a culture that stifles innovation, the lack of systematic approaches to support innovation, the expectation of innovation from just a few people.
While the value of innovation will endure, the current innovation fad will fade. The organizations that sustain a competitive advantage will continue to make the most of sound management systems that do the important things well, one of which is engaging their employees in achieving performance excellence.
I’ve written about this in the past (links below). I’ve discussed a Towers Perrin study of 90,000 employees in 18 countries that showed that companies with the most engaged employees had a 19% increase in operating income in the previous year compared to a 32% decline among those with the least engaged employees. Gallup called employee engagement “performance optimization management principles” and determined that organizations with these principles outperformed their competitors by 26% in gross margin and 85% in sales growth.
In “What It Takes to Be a Great Employer,” Tony Schwartz, president and CEO of The Energy Project, points out that people share four core needs beyond survival: sustainability, security, self-expression, and significance. “Amazingly,” he writes, “few companies focus on meeting any of…
8Feb2011 | Steve George | 0 comments | Continued
