Aligning Reward Systems For Improved Organizational Performance

Part 4 of a 4 part blog series discussing employee motivational challenges.

Select and align rewards so that all parties are motivated to work toward the objective at hand. People will not actively work against their own interests. The idea of that is irrational. As a result, we have a much better chance of succeeding if the reward and incentive systems encourages our employees to act in the manner we are seeking.

This dynamic provides our employees with an incentive in the form of a reward if the employee delivers. This one-two punch creates in the employee a mental image of being rewarded and motivates them to push forward.
Our employees oftentimes respond to reward systems above any other lever we can pull. Reward systems are a form of feedback to employees. You are sending a signal about the nature of the work you want performed, as well as the performance level.

As a result, it is important to carefully select and leverage incentives to get employees to carry out the necessary behaviors. We also want to ensure that we are rewarding the employees who are making success happen.
Aubrey Daniels (2003) in the update to his classic book Bringing Out the Best in People: How to Apply the Astonishing Power of Positive Reinforcement recommends observing employees to figure out which rewards will be the most effective. He explains how to conduct this analysis:

• Identify behaviors that are producing the poor outcome and arrange consequences that will stop them

• Identify the behaviors that will produce the desirable outcomes

• Arrange consequences that will positively reinforce them

A ‘Case and Point’ experience with a sales team:

• The Objective: An organizational development team was tasked with getting an outside and an inside sales team to work together to increase sales revenue, as well as number of customers.

• The Intervention/Situation: Our very experienced team of HR professionals flew the outside sales team, who conduct customer visits, and the inside sales team, who sell via the phone, together for an in-person three day workshop. The session involved large group sessions where leadership explained the importance of having the sales teams work together. We also facilitated smaller sessions where the outside and inside sales people from the same region met face-to-face in an attempt to overcome any barriers.

• The Outcome/Lesson: The punch line is that the reward system in the form of commissions was not adjusted to the extent needed in order to create a financial incentive for these sales people to work together. Not surprisingly, the result was that the salespeople did not work together for increased sales until the reward structure was aligned several years later.

Key Questions: Rewards and Recognition

• What business unit reward/ recognition systems are in place to drive business performance, and are they understood?

• Do we have a defined, common and aligned reward system continuum?

Note: The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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Aligning Strategy with Employee Values for Improved Organizational Performance

Values Vintage Letterpress Type in Drawer
The word “VALUES” written in vintage metal letterpress type in a wooden drawer with dividers.

Part 3 of 4 part blog series discussing employee motivational challenges.

Tackling strategy, and the corresponding projects, in a manner which fits with the organizations’ larger culture, leads to employees with enthusiasm (and even passion) for their efforts. This is about helping employees feel part of an effort which is bigger than themselves. As a result, your workforce will be connected and committed to your efforts.

You are providing your workforce with purpose since their efforts have meaning for them. Employees signed up for a tour of duty with your organization because of your culture, mission and values. If you are asking your employees to execute a strategy or carry out projects which are inconsistent with fundamental tenants of who they are, employee motivation will plummet.

Garth Morgen (1986) sums up the ability of organizations to chart their own destiny perfectly in his classic book Images of Organization:

“By appreciating that strategy making is a process of enactment that produces a large element of the future with which the organization will have to deal, it is possible to overcome the false impression that organizations are adapting or reacting to a world that is independent of their own making. This can help empower organizations to appreciate that they themselves often create the constraints, barriers, and situations that cause them problems.” [p. 137]

Case and Point:

The Situation: A nonprofit organization I worked with launched a state-of-the art technology learning center in the heart of a booming metro area. The center attracted mainly business people who worked near the center who had no problem paying top dollar for the Internet and application training.

The Challenge: The center was exceeding goals in terms of usage and financial results. Who could find any fault in such a successful endeavor? The answer is mission driven employees at the nonprofit who were advocates of the organization’s educational efforts aimed at disadvantaged populations. This new effort, aimed at serving the business community, did not fit with these employees’ values, nor their belief about the mission of the nonprofit.

The Outcome/Lesson: All the success in the world was not going to move the employees of the organization to be fully behind the business focused technology project. How could this effort be fully embraced when it was not fully aligned with the mission of the organization? Over time, the educational efforts of the nonprofit shifted back to serving the core audience.

Key Questions: Sense of Purpose and Connection
• Is there a clearly articulated and understood employee value proposition?
• Are there mechanisms in place to help ensure that the strategies being considered are aligned with the employees’ values and beliefs about the purpose and mission of the organization?
• Do employees feel their work adds value to the organization?

Note: The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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Gaining Employee Buy-In for Improved Organizational Performance

Part 2 of a 4 part blog series discussing the importance of addressing employee motivation for improved organizational performance.

This is about establishing a business case for change. Your employees need to understand the importance of the effort at hand in order to buy in. We must craft the focus, direction, and integrated operational drive essential to achieve objectives. Our objective is to establish the rationale for change, provide clear strategic direction and results in clear, consistent policy.
If your workforce does not recognize the importance of their efforts, why would they put energy into making them succeed? What is called for here is a compelling argument for change and making the case for why the change needs to happen now.

John Kotter (Harvard Business Review, 2007) says the first step to motivating an organization to act is to establish a sense of urgency. His advice first published in the Harvard Business Review in 1995 previewed his 1996 classic book Leading Change. Kotter says that the key to find a significant opportunity and use it as a vehicle for getting people motivated to make the change in their organization:

“They then find ways to communicate this information broadly and dramatically, especially with respect to crises, potential crises, or great opportunities that are very timely. This first step is essential because just getting a transformation program started requires the aggressive cooperation of many individuals. Without motivation, people won’t help, and the effort goes nowhere.” https://hbr.org/2007/01/leading-change-why-transformation-efforts-fail/ar/1

Case and point: I led a change effort to roll out a new Customer Relationship Management (CRM) system for a sales force. The sales team were silent at the initial planning process meetings since they clearly did not understand the big impact that a new CRM system was going to have on their jobs. At a meeting with all of the salespeople, I projected the generic CRM system customer data capture screen. The sales people immediately started asking questioned, providing feedback, and even shouting complaints! Yes, mission accomplished. They were now engaged.

Key questions:

• Are the goals clearly defined and communicated?
• Is the importance of the work being carried out effectively cascaded to your operating groups, team and individual levels?
• Can your employees clearly articulate how their projects fit into the larger strategy?

Note: The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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Improved Organizational Performance through Employee Motivation (Not Skill vs Will!)

Part 1 of a 4 part blog series discussing employee motivational challenges. This is an important topic in our organizational transformation work related to Strategy to Execution.

If I had a dollar for every time someone suggests training as the solution for an HR issue, I would be a rich man. However, there is a barrier to performance which is lying below the surface. This less obvious challenge, which people rarely admit to, is around motivation. It is critical to understand how this phenomenon, which can quickly make productivity plummet, plays out so that it can be addressed.

Here are some simple questions to determine if motivation is the root cause of a performance problem:
• Could the employee do the job if they had to? (E.g.: Their life depended on it!)
• Does the employee perform the job at standard or above when they are being observed?
• Does the employee do the job well at times and poorly at other times?

If you answered yes to these questions, then your employee has the ability to do the job. However, they are not always choosing to ‘do’ the job and you are probably dealing with a motivation problem. And you are not alone! A recent national study showed that less than 1 in 4 non-management employees are fully engaged. [http://bit.ly/1Lk0xSm]

Motivation is too often assumed to be solely about the employee lacking a desire to succeed (E.g.: Lacking will). Many of us were introduced to this view of motivation by Hersey and Blanchard’s Situational Leadership training program where one learns that direct reports have either a “skill” or “will” issue preventing them from performing. Situational Leadership has helped 10s and 1,000s of leaders pay more attention to the needs of the work force and, thereby, improve overall performance. http://www.kenblanchard.com/Solutions/Situational-Leadership-Development/Situational-Leadership-II

At the same time, additional approaches to employee motivation are needed. I have rarely discovered a deficiency of employee will due to a lack of desire or inclination to work hard. Very few people wake up every morning and say to themselves: “Today, I want to do a very poor job at work.” The vast majority of our workers want to do well.

Rather, if an employee is not willing to perform a task, there is often times a missing component on the part of the employer. The most common causes of employee lack of motivation are that the leader has not explained to the employee the importance of the work, has not aligned work to employee values or has not aligned the rewards being offered.

In all these cases, the quickest way to get the employee up and running again is for the leader to figure out the specific barrier(s) to motivation and address them. There is no need for the leader to dive into the complex, murky topic of the employees’ “psychological maturity” as Situational Leadership training would suggest. Rather, the leader needs to carry out the much simpler tasks of:
• Explaining the importance of the work
• Aligning employees with work which fits their values and
• Making sure that the employee is motivated by the reward system

We will explore each of these motivational issues in my upcoming blogs.

What motivational issues do you see with your workforce?

Note: The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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Process Improvement: Let’s Understand the Basics Before Going to the Complex

Process Improvement  on Metal Gears.
Process Improvement on the Mechanism of Metal Gears.

Process improvement professionals tend to do a deep dive into the methodology immediately after an introduction.  The conversation tends to go something along the lines of “Nice to meet you as well, do you use the DMAIC approach to get at root cause?”  While this is an important question, let’s consider a few fundamental questions which may be useful to understand before we debate methodology.

A Definition of Process improvement

Process improvement is essentially an exercise in problem solving.  One is typically trying to address an organizational problem or create an opportunity.

  • A problem is some unwanted state of a person, place, thing or operation.
  • Problem solving transforms the unwanted state into a wanted state—e.g., Customers who are complaining about poor quality are satisfied with your product.
  • The process consultant typically facilitates the organization to reach goals and create transformative change.

A Process Improvement Approach

The process improvement problem solving approach is typically carried out by considering the individual presenting symptoms (indicators of an issue) and extracting the root cause(s).  You then develop solutions for the root cause(s) to help ensure that you are solving for the key issues versus symptoms…

Process Improvement Outcomes

Process improvement can have a positive impact on a number of organizational areas

  • Build a sustainable, competitive advantage globally
    • Invest in process management to deliver meaningful results
    • Common to see a 2-3 times return on investment of your resources
  • Support organizational strategy, goals, and objectives
    • Sustain growth of the enterprise: Revenue and earnings
    • Accelerate, expand and improve what you are already doing
    • Build competencies globally
  • Build a culture for growth
    • Provide a common approach to process improvement
    • Develop transferrable leadership skills at all levels
    • Enable predictable processes, innovation, and growth

So let’s consider the definition, approach and outcomes of process improvement before we get into more heady discussions.  I find that when my clients understand these baseline concepts we have a much more useful discussion re: the more advanced topics.

What additional fundamental process improvement topics do you find are useful to discuss?

Note: The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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Organizational Change Management is All About People Readiness

Professionals have described the term “Change Management” as being vague and confusing.  I have even had clients refer to the term as “completely baffling” since it does not specify whom, nor what we are trying to change, let alone manage.

I find that throwing in the descriptive term “People Readiness” to be helpful since it suggests preparing the workforce for successfully crafting and implementing a project.  You are making sure people are ready for a technology roll out (such as SAP), a new process (such as lean manufacturing) or an employee initiative (such as team building).  Regardless of what is being rolled out, the focus of People Readiness is making sure that your human capital can successfully navigate through a change, leading to organizational performance.

Why is it important for us to have a clear understanding of the term “Change Management?”  If we do not grasp this concept, we are more likely to ignore this critical aspect of successful project execution.  In pushing ahead without preparing people, we miss out on significant positives:

  • Rally your entire team to work together – Build employee understanding and support for your project across the organization by ensuring that the workforce is prepared and feel involved and supported.
  • Optimize the benefits of the project – Receive the highest return-on-investment from your project as a result of your people operating at full capacity (Operating on “all cylinders”, so to speak).
  • Reduce the risks of going off course – Avoid projects running off-course with all sorts of negative, unintended results since your human capital is focused on the change at hand. This helps with employee motivation, resulting in organizational performance.

The term “Change Management” is used much more frequently than alternative monikers, such as “People Readiness”, in the blogosphere.  As a result, perhaps we should stick with the term “Change Management”.  However, let’s more fully explain this term by always “humming a few more bars” for our organizations so that they comprehend the power of People Readiness.

What terms do you use for Change Management?  How do you get your organization to understand it?

Note:The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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A Formula for Organizational Performance So Simple That It Is Ignored

Formula_500_F_13443858_RNR2YnK5y3GRqqtJp79hXtmx1WQSO9ufThe Obama Administration is promoting legislation that would help many students go to community college for free.  This is an effort to once again kick-start education as a driver of economic growth. http://www.nytimes.com/2014/12/21/nyregion/raising-ambitions-the-challenge-in-teaching-at-community-colleges.html?_r=0

As a former community college administrator and instructor, my burning questions are ‘Why community colleges?’ and “If they have figured out the ‘secret sauce’ for performance, how can we all get some?”

In short, community colleges are masters at change management.  I saw first-hand hundreds of students of all ages enter community college ill prepared for work, and in many cases struggling in their day-to-day lives, and leave the college changed people.  Ready to perform!  Community colleges understand this simple formula that all organizations could learn from:

  • Input: Students enter who are in many cases underprepared and lack the motivation required for success.
  • Process: Faculty connect students to ideas and goals bigger than themselves and instill the skills and habits of thinking.
  • Output: The students leave more prepared to successfully navigate the world of work (and the world in general) and are energized (in some cases, even transformed!)

Substitute the word ‘Employees’ for ‘Students’ and the word ‘Leadership” for ‘Faculty’ and you have the change readiness and adoption ‘secret sauce’ for any audacious goal that you may throw at your workforce.

This suggests that success is all about connecting your workforce to the objective at hand: Be it a new strategy, the roll out of a new technology, etc.  Bam, you have motivation!  Then, help make sure that the employees have the requisite knowledge and capabilities.  Bam, you have performance!

This formula for success, which the community colleges figured out years ago, could not be more easy to comprehend!

  • Why then do our organizations run off into countless directions, many of them pointless, trying to discover the formula for high performance?
  • Is the answer simply, so simple that we do not believe it?

 

Note:The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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