Friday, January 12, 2018

Managing Promotions Effectively

How do you maximize employee productivity? To answer that question, many companies focus a great deal on the extrinsic reward system. Others recognize, rightfully, that intrinsic motivation matters more than the compensation scheme. These firms focus on the organizational culture, mission statement, and other factors that may shape the work environment and employee behavior. Jeff Haden, contributing editor, points out that one factor may be more important than all the rest. Here's an excerpt from this article:

A survey of over 400,000 people across the U.S. found that when employees believe promotions are managed effectively, they are more than two times as likely to give extra effort at work -- and to plan for having a long-term future with their company.  But wait, there's more: When employees believe promotions are managed effectively, they are more than five times as likely to believe their leaders act with integrity.  The result? At those companies, employee turnover rates are half that of other companies in the same industry. Productivity, innovation, and growth metrics outperform the competition.

Why such a significant impact with regard to promotions?  I think it's because employees care a great deal about what scholars call procedural justice.   In short, we don't just care abou the outcomes that we experience at work.  We care about the process by which decisions are made.  If we perceive those processes to be inequitable, unjust, or illegitimate in any way, then our commitment, satisfaction, and trust in leadership will decline.   So, as you think about promotions, remember that everyone is watching, not just the people in that particular department.  They are looking to see if the process is just.  


Marc Scrivener said...

This is very interesting. I’d suggest that perceived procedural justice varies from workplace to workplace, and that there may be a disconnect from the actual procedural justice in some cases. There must be a connection to Adams’ Equity Theory.

Michael Roberto said...

Absolutely... large differences in perception can exist across organizations.