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How often have you seen or read a CEO talk about “people are our most important resource” only to find that leadership behavior is divorced from leadership talk?
Now we have numbers to prove how ineffective U.S. management has become.
Each year the Gallup organization designates one company with a Great Workplace Award based on its level of employee commitment. Publicly traded organizations that receive the Gallup Great Workplace Award experienced 115% growth in Earnings per Share. Public companies of similar size and similar industry sector that did not receive the award gained 27% EPS growth over the same time.
Those are impressive numbers. But wait: there's more. Great Workplace Award winners compared with sector peers:
Absenteeism: 41% lower
Turnover: 24% lower
Employee safety incidents: 70% lower
Quality incidents: 40% lower
Productivity: 17% higher
Sales: 20% higher
The Practice of Management No Longer Works.
Given these impressive numbers, why wouldn’t ALL organizations aspire to become Great Workplaces? The reality is that most organizations do not have high employee commitment aspirations. In 2018, the Gallup organization published its 2017 research of 195,000 United States employees. Gallup's conclusion: “the practice of management no longer works:”
15% strongly agree the leadership of their organization make them enthusiastic about the future.
13% strongly agree the leadership of the organization communicates effectively with the rest of the organization
23% strongly agree their manager provides them with meaningful feedback about their performance.
21% strongly agree their performance metrics that are within their control.
67% said they had a performance review within the last 12 months.
60% strongly agree that they know what expected of them at work.
40% strongly agree that their supervisor seems to care about them as a person.
30% strongly agree there someone at work who encourages their development.
33% strongly agree that at work their opinions seem to count.
33% strongly agree that their associates or fellow employees are committed to doing quality work.
Organizations have nowhere to hide.
When you think about how difficult it is to attract/retain competent employees, this data should set off alarm bells for leaders. The Gallup Organization recommends the following action steps be taken:
Career pathing and continuous learning is important for young employees. Put an emphasis on showing that there is a path forward. Michael Graham of Grahall, Inc., reinforces this recommendation: “Employees that believe they are being developed and career pathed by their organization are several times less likely to exit for greener pastures.” (2018).
Create strong incentive programs and a value proposition that will inspire your workers to become your best recruiters.
The careers webpage sometimes feels like an afterthought in corporate web strategy. There is real opportunity in creating an online presence helps candidates truly understand what an employer offers and what makes it unique.
Summary and Conclusions:
It is common to hear leaders claim that “people are our most important resource.” The Gallup large sample data suggest that management has little reason to be proud of its success in motivating this resource.
When a company is founded, it contains something “special” that attracts/retains key people. Perhaps it is a culture of insurgency against the status quo. As a company grows organically or through acquisitions, it brings in talent with history at different companies. Little to no time is spent helping new employees unlearn past habits of success. It is assumed that new employees will “fit” in and "get" the culture.
Of course, they do not. In time, the company becomes bland, bureaucratic, and cynical---just like its competitors.
Growth is achieved at the price of sacrificing what once made the company great.
Study Your Best Workers.
Independent “Skunk Works” within large companies is one approach to managing this dilemma: physically and psychologically separate the innovation sector from the efficient operations sector.
Another approach is to study your own company’s best workers. Human Resources should not waste time/money trying to copy the “best practices” of leading companies.
Companies with industry-leading best practices achieved this honor for one reason: they know how to change. By the time your company manages to replicate “best practices,” the best companies will have moved on to new approaches.
Employment is a Cycle and Not a Transaction.
We find too many companies take a transactional approach to managing employees: recruitment, coaching/training, and termination are all placed into separate silos. That may be a bureaucratic convenience for human resource professionals, but that approach fails to appreciate employees look at their treatment within the organization from a system perspective. And the totality of that system is called "corporate culture."
For example, when terminating employees, too many leaders look at the termination as a specific transaction: spend as little money as possible but try to be roughly consistent with “average” benefits of comparable organizations.
Such an approach has the danger of making termination decisions appear to surviving employees as “punishment” for something that the company may have had a contributory role in. There may be times when specific employees have 100% responsibility for their ineffective behavior. Most of the time, the company had a contributory role in the situation.
From an employment cycle perspective, termination policies should be perceived as a grateful company providing soon-to-be-former employees with opportunities to find better fits elsewhere. They are no longer employees but you do want them to be proud alumni.
This concept may sound foreign to you if you look at termination from a transactional perspective.
You may not view employment from a cycle perspective, but your employees certainly do. How you manage the end of the employment life cycle will impact your ability to attract new talent to the front end of that cycle. You are managing a system and not a specific event.
References:
Gallup. “State of the American Workforce, 2017.” February 2018. https://news.gallup.com/reports/178514/state-american-workplace.aspx
M. Graham. Personal Conversation, 2018.
