Four Questions Each Leader Should Ask

Bill Boebel, serial entrepreneur and CEO of Pingboard, has written a good column for Fast Company about the four questions each leader should ask themselves.  Boebel argues that leaders need to focus on these four questions in order to build a productive work environment for their team members.

1. DOES EVERY SINGLE EMPLOYEE UNDERSTAND WHERE THE COMPANY IS HEADING?

2. DO EMPLOYEES UNDERSTAND HOW THEIR WORK CONTRIBUTES TO LARGER OBJECTIVES?

3. DO MY EMPLOYEES FEEL VALUED?

4. AM I SETTING MY EMPLOYEES UP FOR A THRIVING FUTURE?

Source: Blue Diamond Gallery

Four terrific questions.  Here's a suggestion: Each leader should print these questions on a poster and put them up his or her office.  Stare at them every day.  Ask others to provide them regular evaluations of how well they are doing on these four issues.  

Making People Feel That They Count

Andrea Illy, CEO of Illy Coffee, talks in this short video about how important it is for people to feel that they "count" in an organization.

An Effective Fix for Bored, Disengaged Employees

Chief Learning Officer magazine reported this week on a study by Udemy about boredom and disengagement in the workplace.  The study found that 43% of respondents were bored at work.  80% believed learning new skills would enhance their boredom.  Bored workers were twice as likely to leave the firm.  Females and millennials were more likely than men and baby boomers to report that they were bored at work.  

Why these feelings on the part of so many workers?   People get bored at work for several reasons. First, they are stuck performing the same routine day after day.   People value some variety in their work.   Second, they have no autonomy.   They simply must follow the directives of others, with no ability to suggest and implement better ways to accomplish the organizations's goals and objectives.  Third, they don't understand the big picture.  These workers do not comprehend how their work is contributing to important organizational goals.  The sense of mission is simply not there.   Finally, they are not being challenged.  They are not being asked to learn new skills, take on difficult challenges, and develop personally.  

What's the fix?  Give workers a clear sense of mission.  Show them the importance of their work, how it fits into the bigger picture.  Provide them the autonomy to recommend and execute better ways of getting the work done.  Instill some variety into each person's workweek, so that they are not stuck in a dull routine.  Finally, provide them opportunities for learning and development, through both new challenges on the job or off-line training and education.  

Why People Leave Their Jobs

Bravetta Hassell of Chief Learning Officer magazine has a good article this month titled, "Employees Really Do Leave Managers.  Use L&D to Change That."  Here is an excerpt:

When it comes down to it, having free snacks in the employee break room, for example, isn’t as important as having a manager who appreciates his employees.  According to the report, “The Human Touch for Tech Talent: Employee Retention Could Be as Simple as ‘Thank You’,” employee responses to questions about what attracted them to a company and what kept them there say as much. The survey showed that 60 percent of employees said when analyzing a job offer, knowing whether staff feel appreciated by managers matters. Variables like how fast a person could move up in the company or how they’d be evaluated for raises were of lesser concern. Other highlights from the survey included:

• 33 percent of respondents want to know their manager always has their back compared to 22 percent of people who valued having a clearly defined career path, and 17 percent of respondents who found it important to receive regular performance feedback.
• 32 percent of respondents who looked back at ‘worst boss’ experiences said that person never gave credit where it was due.
• 28 percent of respondents to the same questions said that person rarely gave verbal praise or support.

What can learning and development professionals do about these findings?   According to Hassell, they can rethink the types of capabilities that they focus on during professional development  programs and initiatives.  These findings suggest a renewed emphasis on how to delegate effectively, how to recognize employees for their work, how to celebrate team successes, and how to maintain an open and ongoing dialogue with subordinates.  

Five Dimensions of Employee Engagement

The Sloan Management Review published a piece recently about the connection between employee engagement and profitability growth. V. Kumar and Anita Pansari conducted research on employee engagement in a wide range of companies.  They first set out to define engagement, given that many people look at the concept differently.   They settled on a definition that encompassed five dimensions of engagement:

We wanted to use our discussions with managers and a review of the literature to understand how employee attitudes and behaviors affected company performance. This led us to define employee engagement as “a multidimensional construct that comprises all of the different facets of the attitudes and behaviors of employees towards the organization.”7 The five dimensions of employee engagement are: employee satisfaction, employee identification, employee commitment, employee loyalty and employee performance.

The scholars used their "employee engagement scorecard" to measure engagement in 75 companies in 7 different countries.  One year later, they examined profitability growth at 30 of those firms in depth.  Here's their conclusion:

After controlling for other relevant factors including GDP level, marketing costs, the nature of the business and the type of goods, we found that the highest level of growth in profits (10% to 15%) occurred in the group of companies whose employees were highly engaged; the lowest level of growth in profits (0% to 1%) occurred in the group of companies whose employees were disengaged.

What Do Facebook's Best Managers Do?

Facebook's VP of People Lori Goler talked to Business Insider recently about an interesting study that the firm conducted. Facebook analyzed teams throughout the organization to determine the ones whose members reported the highest levels of employee engagement and satisfaction. They talked to members of these groups to find how what the team leaders were doing to create such high levels of engagement. Seven behaviors stood out. They should not shock you at all, but they do provide a nice summary of what good leaders do day after day as they work with their teams:

1. They care about their team members.

2. They provide opportunities for growth.

3. They set clear expectations and goals.

4. They give frequent, actionable feedback.

5. They provide helpful resources.

6. They hold their team accountable for success.

7. They recognize outstanding work.

The Impact of Inauthentic Behavior: How Does It Feel to be a Phony?

Kellogg Insights reports on the latest research by Francesca Gino, Maryam Kouchaki, and Adam Galinsky.   They examine the impact of inauthentic behavior - or "phoniness" to put it simply.  What happens we were act like phonies, perhaps to stay in the good graces of a boss at work?   These scholars demonstrate that inauthentic behavior actually makes us feel immoral.  Moreover, it makes us want to engage in some moral behavior (e.g. helping or serving others) to compensate for that bad feeling about ourselves.   The scholars suggest that low employee engagement in many workplaces may result, in part, from the fact that people feel immoral about phony behavior that they have engaged in at work.  What's the implication for business leaders.  Here's an excerpt from Kellogg Insights summarizing the scholars' conclusions:

For business leaders, these consequences are worth keeping in mind. If employee dissatisfaction is based on a violation of moral values—even at a subconscious level—it might be worth considering how authentic employees are allowed to be in their particular role. “It seems to be true that to act in accordance with one’s own self, emotions, and values is a fundamental aspect of well-being,” Kouchaki says. “Leaders might want to factor that in. The knowledge that inauthentic behavior has costs and that prosocial behavior”—like assisting or mentoring a colleague—“increases moral self-regard—this is something leaders might consider when designing their organizations.”

Should Your Firm Dump Its Employee Grading System?

The Wall Street Journal published an article this week titled "The Trouble with Grading Employees."  The article, authored by Rachel Feintzeig, focuses on some companies that have chosen to abolish their performance evaluation rating systems for employees.  Feintzeig also reports on some firms that have considered eliminating their rating systems, but were reluctant to abolish them.  Intel was one such firm.  Here's an excerpt that focuses on why rating systems are being questioned by companies such as Intel:

Intel Corp. has long rated and ranked its approximately 105,000 workers on a four-level scale, from “outstanding” to “improvement required.” Devra Johnson, a human-resources director at the chip maker, observed that ratings tended to deflate morale in a good chunk of the 70% of the company’s workforce that receives a “successful” rating each year—the second-lowest label.  “We’d call them the walking wounded,” she said.

I think the debate about ratings systems actually misses the point.  Companies should focus less on whether they use ratings and more on how they optimize performance overall.  To do so, firms should focus on four big ideas.  First, employees need to know where they stand.  That's the core principle that all performance evaluation systems must adhere to regardless of whether firms use a rating system or not.   In too many situations, employees simply do not understand how they are doing.   Second, differentiation is essential.  Not everyone is above average.  Even with ratings systems, some firms do not do enough to distinguish between high and low performers.  Others take rankings to an extreme.  Third, good performance management rests more on the informal modes of communication between manager and employee than on formal evaluation systems.  Communication between manager and employee must be frequent, open, and two-way.  Waiting for the formal review to take place is a recipe for disaster.  Finally, great companies create environments that foster intrinsic motivation.  They do not rely solely on the extrinsic rewards or punishments that come with formal evaluations. 

 

What do we want from our managers?

Gallup has released some interesting findings from a survey of 7,200 employees across a wide array of organizations.  Gallup has done some outstanding work in the past showing that many workers are not engaged or even actively disengaged at their jobs.  The lack of engagement often has much more to do with a bad boss than it does with other broader attributes of organizations. In this survey, Gallup's results help us understand what employees desire from their managers.  Here are three big takeaways:

1.  People want their managers to communicate very often with them... daily seems to be the desired frequency.   They also want their bosses to be approachable.  Engaged employees tend to be those who feel very comfortable asking their boss a question at any time.

2. Employees desire clear guidance regarding objectives and priorities.   They want to know: What should I be working on right now?   What's most important?

3.  People want everyone to be held accountable in a fair way.  Equal standards for all: that's the desired state. 

Employee Loyalty at Marriott

Fortune has an in-depth look at Marriott's culture this week in its "best places to work" issue.  The magazine notes that Marriott's leadership, culture, and talent management practices have enabled it to achieve low employee turnover.  According to the article, "The average tenure for a hotel general manager at Marriott is 25 years; industrywide it’s much lower. Some 10,600 people have been there more than 20 years."  

What's the secret?  Well, it's not one thing, as you can imagine.  It's an entire system of activities that creates the type of environment in which people want to stay.  I thought one practice was particularly worth noting.  It's described here:

The second is an on-the-ground network of business councils—76 local and regional teams of general managers worldwide who meet regularly to compare notes and serve as a conduit to Bethesda, where they report to Debbie Marriott Harrison, global officer for culture and business councils (and Bill Marriott’s daughter). The councils “are one of the best tools I have,” she says.

I found this network quite interesting, because it creates the opportunity for information sharing and best practice transfer across the organization.  Moreover, it enables important information to flow to the corporate office.  It gives people voice and enables senior management to keep the finger on the pulse of the organization.  Of course, the key to making these types of councils successful is what senior management does with what they hear from the field.  I assume that Marriott demonstrates how they are truly listening to this input, and they act on the information and suggestions provided to top management.  People want a voice, but they also want to be sure that they are actually being heard. 

Fostering Higher Employee Engagement

By now we have all seen the dismal data regarding employee engagement.   Here's the key finding from Gallup:  "The bulk of employees worldwide -- 63% -- are "not engaged," meaning they lack motivation and are less likely to invest discretionary effort in organizational goals or outcomes. And 24% are "actively disengaged," indicating they are unhappy and unproductive at work and liable to spread negativity to coworkers."  

Many companies have made it a strategic imperative to foster higher levels of engagement.  Often these organizations focus on the corporate culture and the work environment.  They reconsider employee compensation, benefits, and other non-pecuniary rewards.   However, I think many of these efforts will falter unless organizations focus on the single biggest driver of disengagement.  As the old saying goes, you don't quit your company; you quit your boss.  Companies need to focus on the relationship between supervisor and employee.   Developing and enhancing the skills and capabilities of these supervisors will go a long way toward improving engagement.  If the supervisors do not change the way that they lead, then all the other efforts will have minimal impact. 

Unconventional Ways to Retain Talented Workers

Chris Ostoich has written an interesting article for Fast Company regarding how to retain talented employees using some rather unconventional approaches.  Ostoich is the founder of a software company named BlackbookHR.   I especially liked this point excerpted below:

Keep An Inventory Of Employees’ Skills And Interests

You may know what your employee Andy does in his job—he’s a front-end web developer and designer—but do you know he’s also a self-taught guitarist, a video editor, a painter, and has a variety of other talents? All employees have skills and interests they don’t use in their day-to-day work. If you can tap into those outside talents, you can benefit your company and better engage your employees. Make a place on your company’s intranet, in a Google doc, or anywhere people can share or search for skills. Look for opportunities to tap into this knowledge network whenever possible.

Does Having an Easy Grading Boss Actually Enhance Your Job Performance?

Jack Zenger and Joseph Folkman published a thought-provoking piece in Harvard Business Review this month.  Zenger and Folkman run a leadership development consultancy.   They conducted research on supervisor evaluations of subordinates.  They noticed that some managers are much harder graders than others (not surprisingly).   Moreover, they discovered that, "People who work for easy graders are perceived to be more effective leaders by their colleagues than those who work for hard graders."  What did the conclude from these data?  Zenger and Folkman argue that, "perhaps the ratings are in some way self-fulfilling, and the leaders who see the best in their people actually make them better, while those who look more critically make their subordinates worse."  

What do I make of these findings and interpretations of the data?  First, I will acknowledge that prior research does show that this "self-fulfilling prophecy" effect does exist.  However, I would be careful about how these data have been interpreted.  First, Zenger and Folkman examined 360 managers, and then identified 50 easy graders and 31 hard graders. Why not equal amounts of easy and hard graders?  Why these particular breakpoints for looking at the managers at the extremes in their dataset?  They may have a good explanation, but they do not provide it in the HBR article.  Second, they fail to prove that objective differences in performance do not exist among the groups of employees in their study.   Perhaps the hard graders have lower performing units for a variety of reasons.  Third, they do not address the fact that they have simply measured how colleagues perceive the employees in this study.  They do not actually measure performance objectively.  Thus, it could be that easy graders talk about their employees in a very positive way, thereby influencing how colleagues perceive these employees.  The same may occur for hard graders in the opposite direction.  Thus, employees do not become awesome because their managers think they are awesome. Instead, colleagues come to believe employees are awesome because their managers talk so positively about them within the organization.   For these reasons (and others), I would be careful about the conclusions and interpretations being made by these researchers. 

Time to Celebrate Accomplishments: The Year-End Leadership Message

The holiday season and the end of the year have arrived.  Leaders should take this opportunity to reflect back on the work that their organizations have done over the past twelve months.  What were the significant accomplishments?  What key goals were achieved?  What lessons did the organization learn, perhaps even from some failures that took place?   What will be the key priorities in the year ahead?   Each leader should take the time to answer these questions in a thoughtful letter to the members of their organization, or perhaps in a brief recorded video.   Such a message helps celebrate the accomplishments, and it offers the opportunity to share the credit for the success of the past year.  Moreover, leaders can recognize key individuals or teams publicly.   People want to be recognized for their efforts, and simply paying bonuses for good work does not buy employee engagement.  Public praise and recognition goes a long way.   The message also offers an opportunity to show that the leaders of the organization are reflecting on lessons learned, and it provides the forum to encourage all employees to learn from their successes and failures of the past year.  Finally, leaders have a chance to build alignment, to get everyone on the same page regarding the goals and objectives for the year ahead.   How should the leader close such a message?  Yes, you want to thank everyone for their hard work and wish them a happy holiday season.  However, leaders also should take the time to ask for feedback and input.  They should encourage employees to send them questions or comments in response to this year-end message.   Leaders need to make this communication a two-way street, not a one-way broadcast.  That final step will further enhance employee engagement, and it might yield some terrific ideas on how to improve the organization. 

Attracting and Retaining Better Workers: Higher Wages Alone Won't Do the Trick

We have heard a great deal of commentary about the low wages paid to front-line employees in some industries, particularly the retail and restaurant sectors.   While politicians debate the merits of raising the minimum wage, some people point to the companies paying higher wages as a model.  They argue that these companies attract and retain more productive workers because they pay higher-than-usual wages.   For instance, people point to firms such as Costco, Trader Joe's, and Whole Foods as examples.   I think that we have to be very careful about these arguments though.  These firms attract and retain highly productive, engaged employees for reasons well beyond the wages that they pay.  Yes, they pay their employees more than some of their rivals.  However, these firms also have built an entire organizational system that supports an engaged, productive, and collaborative workforce.  They have developed a culture that attracts talented people.  They have embraced certain values and principles.  They have articulated a sense of purpose that people find compelling.  They have developed managers and supervisors who know how to engage employees.   I could go on.  The point is simple: they have built an entire system that attracts and retains these workers, and helps them produce great value for the firm.   Paying someone a few bucks more without doing these other things won't have any significant effect on engagement, customer satisfaction, employee retention, or profits. 

How PWC Engages Millennials

Bob Moritz, the U.S. Chairman of PWC, has written an article for Harvard Business Review regarding his firm's efforts to attract, engage, and retain millennials.  Moritz and his firm collaborated with researchers from USC and LBS to understand key generational differences.  From that work, PWC began to develop initiatives to foster higher levels of engagement and retention among millennials.  They have tracked the effectiveness of various efforts.  Moritz cites four major areas of emphasis:

1. Give them voice. Millennials want to have input regarding the future direction of the organization.  Therefore, PWC gave them voice in several powerful ways.  They asked millennials to offer ideas regarding the most effective methods for talent development in the firm.  In addition, they asked people for suggestions regarding the next $100 million opportunity for PWC.  More than 70% of the employees offered suggestions.  
2. Provide flexible career paths.   Millennials do not want to stay in the same role for a lengthy period of time.  They want to shift positions and roles, try new things, and embrace different opportunities.  Moreover, they want greater flexibility in their careers.  PWC has created several programs that enable talented employees to take time off or to work part-time for the firm while pursuing other opportunities (such as graduate school). 
3. Recognize them often and in multiple ways.  Millennials want to be recognized, and that does not mean only monetary awards.  PWC implemented more frequent recognition, and they began to offer a host of non-monetary rewards.   For instance, PWC created a sabbatical program as a reward for millennials who perform well and stay at the firm for a certain period of time.
4. Give them a chance to give back.  Millennials want to make a broader impact, and they want to work for a firm that has that same aspiration.  PWC found that employees who participate in a corporate responsibility initiative tend to stay at the firm for a longer period of time.  For example, participants in one program to enhance students' financial literacy tended to exhibit much less turnover than those who did not participate (only 8% of participants had left PWC a year later, while 16% of non-participants had left the firm). 

Market Basket and the Benefits of Low Employee Turnover

As the crisis at Massachusetts-based supermarket Market Basket rages on, it's worth noting that Consumer Reports just ranked the retailer as one of the top 10 supermarkets in the United States.  I also found an article this week on Boston.com quite interesting, because it explored the question of how Market Basket could keep prices so low while offering employees compensation and benefits that exceeded those provided by rivals in the industry.  The article, by Adam Vaccaro, cites low employee turnover as one key to the firm's success.  I thought that I would do a bit of research on the economic cost of high turnover.  I went to the Hay Group's website, since that firm has done a great deal of research on issues related to employee compensation.   The Hay Group examined the economic benefit of having a highly engaged workforce coupled with low employee turnover (the two obviously are related... if you have high engagement, you are likely to have low turnover).  Here is what they found:

Similarly companies with high levels of engagement show turnover rates at 40 percent lower than companies with low levels of engagement. However, companies that both engage and enable employees demonstrate a total reduction in voluntary turnover of 54 percent... For an organization with 20,000 employees and an annual voluntary turnover rate of eight percent, the cost of turnover is approximately $56 million (assuming an average salary of $35,000). Reducing the voluntary turnover rate by 40 percent would yield annual savings of $22.4 million. But reductions in turnover through high levels of engagement and enablement would yield savings of over $30 million annually, a difference of more than $7.5 million.  

The Hay Group research also shows that highly engaged employees are likely to far more productive.  As a result, the firm achieves substantial additional economic benefits.  What can firms do with these economic gains from the combination of high engagement, low turnover, and high productivity?   Certainly, they can pile up healthy profits.  However, in the case of a firm such as Market Basket, it appears that they were able to share that economic value with customers and employees as well.  Employees received solid compensation and benefits, while customers enjoyed low prices.  Of course, all of these gains are at risk if the Board cannot move to resolve the leadership crisis at the firm.  As of now, the workers are standing strong in support of their former CEO.  The Board continues to examine a potential sale, either to that former CEO or to another party.  

Engage Your Employees By Helping Them Solve Customers' Problems

Mark Lukens, Founding Partner of consulting firm Method 3, has a good article on employee engagement at Fast Company. Lukens makes the point that senior executives often "throw perks" at employees in hopes of increasing engagement. It does not work. Boring work, a lack of autonomy, and inadequate feedback from managers cannot be overcome simply by offering a few perks. Lukens argues that we can increase employee engagement by helping our front-line works serve customers more effectively. Here's an excerpt:

Employees at the frontline collectively have the best knowledge of what customers want and what bothers them. This is what they care about. If they can satisfy those customers then they will be satisfied in their jobs, feeling like they’re achieving something. To create real engagement start by talking with those workers about what their customers want and the obstacles to their satisfaction. Empower your customer-facing employees to solve these problems whenever possible, and as they feel more successful and deal with happier customers, they’ll also feel more engaged.

Hiring for Attitude and Cultural Fit

You arrive at a company and are escorted to a room for your interview.  The interviewer arrives with a notebook in hand along with a cup of water for you.  When you leave the room, what do you do with the cup?  Do you put it in the trash?   Hmmm... why does it matter?  Well, at HubSpot, Chief Product Officer David Cancel uses this simple technique to help assess cultural fit.  If a person disposes of the trash, he looks favorably upon them. If he or she leaves the trash behind, he begins to wonder if that individual will fit in an organization that looks for effective and humble team players.  For more on Cancel's approach, check out this article at Fast Company by Rebecca Greenfield. 

Over the years, Cancel has found that the usual interview questions, as well as a variety of tests or brainteasers, do not always lead to the best hires.  Those various interview methodologies simply do not help determine if someone will fit the culture and serve as an effective team player.   Instead, small techniques such as the cup/trash test help him develop a better understanding of how people with interact with others in the organization.  

Others in the organization have begun to create their own techniques for ascertaining cultural fit. For instance, according to the article, "Meghan Keaney Anderson, a director on the product marketing team, asks people what they like to read and why. She wants to attract people who love to learn and are curious enough to invest their time outside of work in learning."  

What's the result of this effort to hire better for cultural fit?  Apparently, employee engagement and employee retention have risen since HubSpot began implementing this approach.  

Engaging Your Workers

Business Week interviewed Jim Harter of Gallup about the firm's extensive analysis of worker engagement (or should we say, disengagement) across the United States.  Gallup data show that only 30% of American workers are engaged at their workplaces.  If you think that this problem exists only in the United States, think again.  Harter explained that the global engagement numbers are even lower!  Harter offered some comments based on their analysis of the data:

We see workplaces that have doubled the rate of average engagement, and the variance has a lot to do with the quality of management. Having a manager who really understands the individuals they’re managing and gets them into positions where they can use their talents effectively is really important. And then we’ve also found that individuals knowing what they do best and knowing their talents and being aware of them so that they can then leverage them along with their co-workers is really important.  Another thing that kind of stood out to me in these organizations we studied that grew is they didn’t use the economy and changes in the economy as an excuse. When the economy dropped, they just leaned into it a bit more. 

As for those companies that have moved to open floor plans, well they might want to rethink that design.  Harter reports that people tended to be more engaged if they had "a space that they could call their own."   They enjoy collaborating with others, but they value their own space.   As for telecommuting, it does not harm engagement in general.   In fact, telecommuters tended to report slightly higher engagement on average.  However, the most engaged workers in the Gallup data are actually those who telecommute less than 20% of the time.