Blanchard LeaderChat

Organizations want their employees to be more intrinsically engaged at work.  They want their employees to be more creative, more innovative, and to take more risks.  One of the ways organizations are supporting these initiatives is through the use of incentives.  While incentives can be a good way to drive short term behavior, you have to be careful that they don’t undermine long term motivation in your organization.

In his book, Punished By Rewards: The Trouble with Gold Stars, Incentive Plans, A’s, Praise, and Other Bribes author Alfie Kohn points out that when reward and recognition is conditionally based, it can actually undermine performance by: 

• Setting up a competitive atmosphere where some people win while other people lose 
• Discouraging risk taking when employees fall back on what has worked in the past instead of trying new things which may or may not work 
• Eroding natural interest by replacing intrinsic motivators with extrinsic ones

Perhaps most importantly, improper use of rewards and incentives can sometimes get in the way of good management.  This happens when managers rely to heavily on the use of rewards and incentives instead of drilling down on the reasons why employees may not be performing up to level. 

For organizations looking to improve the creativity, innovation, risk-taking and intrinsic motivation of their employees, Kohn recommends that leaders focus on three areas: 

1. Rethink financial incentives.  Instead of putting so much emphasis on pay-for-performance, pay people a little more than industry norms and then do everything in your power to help them put money out of their minds. 
2. Reevaluate evaluation. Make performance evaluation an ongoing process instead of a once-per-year event.  Make sure that it is a two-way conversation that is separate from conversations about compensation. 
3. Create the conditions for authentic motivation.  Kohn recommends focusing on collaboration—helping employees work together, content—design meaningful jobs and help people find the value in their work, and choice—wherever possible, give people the opportunity to determine how the task will be accomplished.

Kohn is a provocative thinker in this area. For leaders looking for the complete picture on the use of rewards and recognition in their organizations, he offers a great alternative viewpoint on the use of incentives.  I highly recommend him to you and invite your thoughts and comments here.

Making the bottom line your top priority may not be the best way to improve profitability. That’s the conclusion of recent research conducted by Mary Sully de Luque and Nathan T. Washburn of Thunderbird School of Global Management; David A. Waldman, of Arizona State University West; and Robert J. House, of the University of Pennsylvania, that underscores the risk of single-mindedly pursuing profit.

This finding is based on survey data gathered from 520 business organizations in 17 countries designed to test if a CEO’s primary focus on profit maximization resulted in employees developing negative feelings toward the organization. The result? Employees in these companies tend to perceive the CEO as autocratic and focused on the short term, and they report being somewhat less willing to sacrifice for the company. Corporate performance is poorer as a result. 

But when the CEO makes it a priority to balance the concerns of customers, employees, and the community while also taking environmental impact into account, employees perceive him or her as visionary and participatory. And they report being more willing to exert extra effort, and corporate results improve. 

These results aren’t surprising. When the definition of leadership focuses only on profit what tends to fall by the wayside is the condition of the human organization. Leaders wrongly believe that they can’t focus on both at the same time. 

Nothing could be further from the truth.  As this research points out, organizations perform best when they balance financial goals with respect, care, and fairness for the well-being of everyone involved. 

The Four Keys to Better Leadership 

In looking at all of the great organizations that The Ken Blanchard Companies has worked with over the years, we have found one thing that sets these organizations apart from average organizations. The defining characteristic is leaders who maintain an equal focus on both results and people. In these organizations, leaders measure their success with people (customers and employees) as much as they measure their financial performance. 

In these organizations, leaders do four things well. 

1. They set their sights on the right target and vision. Great organizations focus on three bottom lines instead of just one. In addition to financial success, leaders at great organizations know that measuring their success with people–both customers and employees–is just as important as measuring the success of their financial bottom line. In these organizations, developing loyal customers and engaged employees are considered equal to good financial performance. Leaders at these companies know that in order to succeed they must create a motivating environment for employees, which results in better customer service, which leads to higher profits. 
2. They treat their customers right. To keep your customers today, you can’t be content just to satisfy them. Instead, you have to create raving fans–customers who are so excited about the way you treat them that they want to tell everyone about you. Companies that create raving fans routinely do the unexpected on behalf of their customers, and then enjoy the growth generated by customers bragging about them to prospective clients. 
3. They treat their people right. Without committed and empowered employees, you can never provide good service. You can’t treat your people poorly and expect them to treat your customers well. Treating your people right begins with good performance planning that gets things going in the right direction by letting direct reports know what they will be held accountable for–goals–and what good behavior looks like–performance standards. It continues with managers who provide the right amount of direction and support that each individual employee needs in order to achieve those goals and performance standards. 
4. They turn the organizational chart upside down. The most effective leaders realize that leadership is not about them and that they are only as good as the people they lead. These leaders seek to be serving leaders instead of self-serving leaders. In this model, once a vision has been set, leaders move themselves to the bottom of the hierarchy, acting as a cheerleader, supporter, and encourager to the people who report to them. 

The way to maximize your results as a leader is to have high expectations for both results and relationships. If leaders take care of the people who take care of their customers, profits and financial strength will follow. The result is an organization where people and profits both grow and thrive.

In an online article for Human Resource Executive Online, Propping Up Employee Morale, author Lin Grensing-Pophal shares new research showing that engagement levels among high-performing employees have decreased at a higher rate than average performers during the recent downturn in the economy.

The 2009/2010 U.S. Strategic Rewards Survey by Watson Wyatt and WorldatWork found that “employee-engagement levels for all workers at the surveyed companies dropped 9 percent since last year — but the number was nearly 25 percent for top performers.”

In addition, “more than one-third (36 percent) of top performers said their employers’ situation had worsened during the past 12 months and the percentage who would recommend others accept jobs at their companies had declined by nearly 20 percent.”

Although HR leaders may be limited in what they can do financially, the article recommends getting creative in looking at other ways to help high performers feel valued.  While money is important, and high performers need to feel that they are being treated fairly in this area, there are other factors to consider including reward, recognition, and growth opportunities.

Ryan Johnson, vice president of research at Scottsdale, Ariz.-based WorldatWork, says that “one of the easiest things to do in an environment like this is to sit down with someone and have a discussion about their career development and where they’re headed in the organization.”

Johnson also suggests that, “simply letting high performers know that their performance is recognized and that they’re important to the company can be motivating.”

For more ideas on how you can let your high performers know that you care about them during tough economic times, be sure to check out the entire article.  For more information on other factors that lead to increased levels of engagement, also take a look at Employee Passion: The New Rules of Engagement on The Ken Blanchard Companies website.  Both of these resources can help you identify ways to build (or rebuild) engagement levels in your organization.

An in-progress, online survey by Sean Silverthorne of Harvard Business School’s Working Knowledge newsletter shows that 82% of respondents indicate that “Yes, the crisis is sapping my enthusiasm.” (Econ Crisis Making Middle Managers Miserable) 

Silverthorne also reports that 27% of middle managers find their current roles less meaningful and exciting than before the economic crisis, according to a recent McKinsey poll.  The main reasons according to Silverthorne? 

• Job Insecurity. Middle managers don’t have the job security they need to perform at a high level.
• Kill the Messenger. When there are layoffs to be done, middle managers more than any other supervisor class are the ones who deliver the message to those being let go.
• Career Interrupted. Middle managers now have fewer opportunities at work to be promoted.
• Pay Squeeze. At home, middle managers are under mounting financial pressure as their employers scale back on pay raises.

These situations can take an emotional toll on your managers.  Job security, maintaining a connection with people, and growth opportunities are important needs that all employees have.  (To see other needs, check out Eight Employee Needs You Must Address to Create Passion at Work).

How are your managers holding up?  This might be a good time to check in with them.

Most workers do not feel that employee performance reviews are valuable. That’s what Garry Ridge, CEO of  WD-40 Company discovered when he surveyed students in a business course he teaches at the University of San Diego. 

The problem, according to Ridge, is that most performance systems are used for the wrong reasons. They are either arbitrary, only done out of habit, or they are used to document evidence to fire someone. 

Instead, Ridge thinks that performance reviews should be used to develop people. It’s a philosophy he calls “Don’t mark my paper—help me get an “A” and it‘s a key concept in a new book he has coauthored together with Ken Blanchard called Helping People Win at Work. 

Helping People Win at Work is the first in a new series of books written by real-life CEOs describing how they have put the concept of “leading at a higher level” into practice in their organizations. 

For Garry Ridge that means having managers at WD-40 working together with their direct reports on Planning, Execution, Review and Learning. 

• Planning is all about setting goals and establishing the report card for the employee’s “final exam.”  It’s making sure that every employee knows exactly what he or she is being asked to do.
• Execution is where the manager has to keep up his or her end of the partnership relationship on a day-to-day basis, helping and coaching the employee to get an “A.”
• Review and Learning is a quarterly evaluation designed to answer the questions, “What did we set out to do? What actually happened? What should we do differently?”

 You can find out more about the concepts of Helping People Win at Work (including free access to the first chapter) by visiting the Blanchard website . You can also learn more by checking out an online interview with Dan Schawbel where Ken Blanchard discusses the book.

We just published the latest installment in our ongoing research on employee passion.  The focus of this latest paper was to look at the process people go through in deciding whether their current company deserves their full commitment or just enough to get by.

We found out something really interesting to keep in mind as organization’s look at ways to create a more motivating environment for their employees.  It’s not necessarily what’s happening in the work environment that you need to focus on.  It’s how individual employees perceive it.

Let me give you an example.  Recognition is one of the eight factors that we have identified as a component of a motivating work environment.  (It’s also ranked notoriously low in the surveys we’ve conducted.)  How would you go about meeting the recognition needs of the people in your organization? 

You might decide the answer was to create some sort of company-wide recognition process culminating in an employee of the month award. You implement the program, but are later disappointed when you find out that the Recognition scores on the latest employee satisfaction survey haven’t budged at all. 

The problem? Recognition means different things to different people.  For some people, recognition means choice assignments, extra compensation, or maybe a small perk like movie tickets.  For others it just means some heartfelt thanks from an immediate supervisor for a job well done.

The same holds true for all of the eight factors, which in addition to Recognition include Meaningful Work, Autonomy, Collaboration, Connectedness to Colleagues and Leaders, Fairness, and Career Growth. 

As you think about ways to create a motivating work environment, don’t forget that the best approach is an individual approach. Make sure that any new policies, procedures, and strategies are the things that people really want. 

What’s the best way for leaders to impact their organizations after a layoff, merger, or acquisition?  If you had to choose between focusing on your people, financials, or customers, where would you begin?  We asked that question to 700 frontline, mid-level, and senior executives who attended our webinar on Revitalizing the Downsized Organization this past Tuesday. 

Their response?  Focus on your people first. 

52% said addressing employee motivation needs should be the first order of business, followed by customer needs (14%), and then financials (12%). 

How does this stack up with your priorities during these trying economic times? It’s important to have a strong strategic focus on financials when money is tight, but make sure that you are also paying attention to employee needs.  After all, you need their best ideas and their best work now, more than ever.

Great organizations know that focusing on people—both customers and employees—is just as important as measuring the success of the bottom line.

Are you taking care of the people who take care of your customers?

There are a couple of different measures that always matter.  Productivity is one of them.  You have to hold people accountable to deliver upon the goals and tasks that they are asked to accomplish.  The other piece that is not as heavily managed is people’s discretionary energy. 

That’s part of what I found out after finishing an interview with Chris Edmonds, a senior consulting partner here at The Ken Blanchard Companies. My interview with Chris will be featured in next week’s issue of Ignite!, our monthly e-newsletter and Chris will also be our featured presenter for an April 14 webinar on Revitalizing the Downsized Organization.   Both of these resources are free and you can find out more by clicking on the links above.  If you haven’t had a chance to hear Chris speak, here are a few of the ideas that Chris will be sharing: 

• Most leaders are more comfortable managing metrics like productivity but may not be as comfortable having the type of wide-open conversations about issues that you have to have if you are going to build the passion and commitment you need to move forward in trying times.  And because leaders don’t take the time to stop and get everyone involved, you can end up making a stupid short term decision that may look really good right now, but a month from now, or six months from now, continues to have really negative impact on your business.
• You want your people to be passionate and engaged in the work that they are doing. And you are only going to get the discretionary energy of your people is when they are feeling trusted and respected as a valued partner and stakeholder in the way that the business operates.   
• It’s the secret behind organizations like Southwest Airlines where even when times are tough they don’t have folks leaving, demonstrating, or picketing.  Instead, they’ve got folks constantly meeting together about how they can help the organization get through this economy.  It is a great example of how overall employee commitment and demonstrated discretionary energy is driven by clear communication of what is happening, open involvement in trying to influence the decisions that are being made, and what can happen when people are consistently cared for as a vital asset.

Many employees feel they are not getting enough recognition and their work environment is not providing career growth.

That’s what we found out in our new white paper From Engagement to Work Passion which takes a further look at the concept of employee passion.  This is a continuation of our research which identified eight basic components that all employees need in order to feel valued, focused, and productive at work.

Overall Sample—Aggregate Results

(1,212 responses, six-point scale with 6 representing “present to the fullest extent”)

1. Meaningful Work                               4.75
2. Autonomy                                         4.50
3. Collaboration                                     4.06
4. Connectedness to Colleagues            4.04
5. Connectedness to Leader                   3.91
6. Fairness                                            3.81
7. Recognition                                       3.74
8. Career Growth                                   3.63

According to the data, Meaningful Work and Autonomy are most present in today’s work environments while Recognition and Career Growth are least present.

You can access the complete report at Blanchard Perspectives and White Papers

Tomorrow we are starting our annual 2-day all company meeting.  Over 300 Blanchard employees from around the world are meeting together to celebrate last year’s accomplishments and discuss this year’s strategies for succeeding in a tough economy.

A couple of us are doing presentations (including yours truly.)  I’ll be talking about engageable moments and specifically what rank and file employees can do to help maintain commitment and productivity during a down economic cycle.

My focus will be on what each of us can do individually to keep ourselves and others upbeat, focused, and positive.  That’s because all plans, no matter how well thought out, eventually work down to an individual level—to you and me.  And to a large extent, how you and I respond—and act on the initiatives that have been proposed will determine our company’s overall success.

Here’s the three points I’ll be making.  See what you think and how this matches up with your own experience.

Get clear on what you need to do

Today, it is easy to feel overwhelmed by bad economic news, become distracted, and lose focus. There are so many things that each of us want to do, what we need to do, and that the organization wants us to do. You need to sort through these competing priorities to create one list that you can focus on.

Ask for help

Don’t try to go it alone.  You don’t have to, no one expects you to, and it’s not going to generate the best results.  All of us are being asked to stretch ourselves, either in terms of doing more with less, or generating new and innovative ideas to help increase sales. Do you have the information, tools, equipment and resources to get the job done? You need to be able to ask for help.

Cheer each other on

Especially in tough times, we have to make sure that we take the time to pat each other on the back.  And don’t wait for big results before you praise.  Remember to recognize the small stuff too.