Global Trend

Meaning and Values Are Becoming the Keys to Successful Human Resource Management

Until the middle of the 20th century, money was the primary motivator for a substantial majority of employees, worldwide. Employers did not demonstrate that they really wanted anything more than do-what-you-are-told-labor in return for money paid in wages and salaries. And workers were satisfied to do the work and then periodically demand more money.

Gradually, employers and employees in the Western world moved from money to money and benefits. In that era, which lasted from the 1950s to the present, employees were lured, placated, and retained with money . . . plus health insurance, life insurance, disability insurance, child care, pet care, and even concierge services.

But interestingly, the movement today is not toward higher monetary compensation or more fringe benefits. Now, employees are seeking greater control of their time and the life-work balance. And, most of all, they want to derive greater personal satisfaction from their work.

To grasp what this will mean, just consider what’s going on at Google’s lavish and playful corporate headquarters. The beanbag chairs and lava lamps set the tone, while free lunch, created by chefs who used to serve the Grateful Dead, and an on-site gym with saunas and a masseuse send a clear message: “Google wants its workers to be as happy as possible.”

A policy of flex time ensures that employees also have the freedom to customize their schedules to spend more time with their families. More importantly, most of the employees feel an inspiring sense of purpose because they are part of Google’s larger mission to “organize all of the world’s information.”

Google represents the leading edge of a movement away from attracting and retaining knowledge workers primarily through money and conventional benefits. According to The Herman Trend Alert,1 this movement is a response to the fact that employees increasingly want control over the way they spend their time. They still want to do good work, and they want to be paid well, but they also want a rich personal life and to feel like their work brings value to the world.

Work-life balance has been a major issue for a decade or so. A 2005 Yankelovich Monitor survey2 showed that half of all workers felt they were working too hard, and surprisingly, almost a third said they’d take less pay to have more time for themselves and their families. It’s only more recently that workers have begun to see the firm’s overarching mission and their contribution to that mission as a differentiator.

Part of the reason is that, with the unemployment rate already at 4.7 percent and threatening to go lower, really talented employees can afford to be increasingly picky. This means that the often-intangible need to “treat employees well” is becoming a competitive advantage for companies that can master it.

Unfortunately, it seems that most employers have a long way to go before they completely figure out the business of how to motivate employees. In one recent survey, employees were asked to rank the 10 things that employees valued most in their work. The first four items on the average worker’s list were (1) appreciation, (2) feeling informed, (3) an understanding attitude, and (4) job security. The desire for good wages ranked only fifth.3

When employers were asked the same question, they ranked everything in exactly the reverse order, indicating a wide gap between the two groups that must be bridged.

Success with such efforts not only means that employees will stay around longer, it means they’ll perform better, and be more productive as well. As a result, more and more companies in the U.S., Canada, and abroad are seeking new ways to make their employees feel that they are valued as people and are making a meaningful contribution to the company’s mission.

This new business philosophy, based on the belief that happy and motivated employees produce higher profits, is being called People Performance Management. According to The New York Times,4 it’s being embraced at Dell, Southwest Airlines, Starbucks, and elsewhere.

For example, at CDW, which makes and distributes computer products, when the company makes its yearly sales and profit numbers, employees with three or more years of seniority receive an all-expense-paid vacation anywhere in the U.S. as a bonus. After instituting such inventive programs, the company reported a 22 percent increase in productivity.

But these unconventional approaches to motivating workers generally amount to more than handing out free trips. Employees also want to feel that their lives and work have meaning. And, in order to have meaning both at work and home, they have to know what’s going on. That means that top management has to tell employees what the company does, what it wants to do, and what its strategy is for getting to that goal.

One of the reasons that companies like Google and Microsoft encourage people to use flex time is that employees can come up with new ideas anytime and anywhere ? but only when they have an escape from their daily stresses and plenty of time to think. A flexible schedule gives them this time to think and also sends a powerful signal of trust. It says: “We know we don’t have to tell you exactly how or when to do your work. We know you’ll get it done.”

Another way companies are fostering innovation is through incentives. A survey of British workers by Vodafone showed that about 29 percent of the employees at companies that offered no incentives said they never have ideas. That number dropped to 8 percent when companies offered incentives and personal recognition for good ideas.

In other words, managers need to create a “culture of innovation.” That means providing not only a balance between work and life and a workplace that is enjoyable, but also providing a means for people to float new ideas. They must also feel that their jobs won’t be endangered if they offer a suggestion that won’t work. For every good idea, there are plenty of bad ones, and people need permission to fail safely.5

Of course, employees are also responsible for fostering a culture of innovation. If top management is willing to take the necessary steps and invest in its employees, then those workers need to respond in four ways:

- Start acting like innovators by questioning assumptions.
- Carefully observing what the company does and trying to see it with new eyes.
- Work in teams to develop innovations.
- Be courageous enough to put forth those new ideas, even if they might not fly.

One problem is that most companies aren’t able to build a feeling of employee fulfillment that lasts. In research recently reported in Harvard Management Update,6 employee morale at 85 percent of the companies studied was found to plummet after the first six months on the job. Worse, it continued to go down in subsequent years.

The researchers recommend eight steps managers can take to improve the situation. These steps are:

Instill an inspiring purpose. Give people a reason for being.

Provide recognition. Receiving acknowledgment of achievements is one of the most fundamental human needs.

Be an expediter for your employees. In the words of General George S. Patton, “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.”

Coach for improvement. Let them know how they’ve done at the time of the performance.

Communicate fully. Employees need to know what’s going on. Make sure they do.

Face up to poor performance. Employees who don’t live up to the standard can drag others down.

Promote teamwork. Research shows that self-managing teams solve problems better than individuals, and they promote camaraderie.

Listen to and involve your employees. A participatory style draws out the most innovation and productivity.Given this trend, we offer the following four forecasts for your consideration:First, in the short term, expect employees, like customers, to become better informed and more demanding. In some ways, the role of customer and employee will converge, as both leverage tools to improve their situation. This will bring both challenges and benefits to the company. While firms will have to deliver more in terms of meaning, satisfaction, and flexibility, they will benefit from loyalty, motivation, and innovation, as employees experience renewed buy-in. In the process, new forms of partnering will evolve between employers and workers. Second, as this trend evolves, expect to see a lot of fads and failed experiments. Among them may be free lunch and on-site massage therapists. Hyperion Solutions, a software maker, recently offered its workers $5,000 toward the purchase of a new fuel-efficient car to grab headlines as an employer of choice.7 But the more likely trends with staying power will be flexible work time, work-from-home arrangements, and flexible work and pay arrangements, in which the employee, while not necessarily hourly, is paid according to his contributions. When a worker needs more time for his or her family, companies can scale back both work hours and pay. Already, 81 percent of the companies in Canada have some kind of variable pay arrangements, most of them tied to performance. And, expect the definition of what it means to have a job to change for many.Third, employee care will begin to fall under the rubric of strategy, as managers recognize how to leverage happy, motivated employees to create a competitive advantage. Elaborate systems for motivating employees to innovate and be involved will be developed. There are already consultants putting systems in place. Fourth, one of the hallmarks of these enlightened companies will be that they acknowledge and involve the employee’s family. It is increasingly recognized that how well a person is doing at home influences his performance at work. One meeting services company in New York is giving away digital cameras as incentives, because they tend to be used by the whole family. This employer knows that if you can get buy-in from the family, the employee will be encouraged to put more effort into his job.References List :1. To access the narrative “Meaning and Values Slipping into First Seat,” visit the Herman Group website at:www.hermangroup.com/alert/archive_1-25-2006.html 2. ibid. 3. Roanoke Times, April 17, 2005, “Top 10 Ways to Motivate Workers,” by Camille Wright Miller. ⓒ Copyright 2005 by The Roanoke Times. All rights reserved. 4. The New York Times, September 24, 2005, “Great Job. Vacation Is on Us,” by Paul B. Brown. ⓒ Copyright 2005 by The New York Times Company. All rights reserved. 5. The Globe and Mail, August 19, 2005, “Reward Employee Ideas ? Literally,” by Rob Shaw. ⓒ Copyright 2005 by Bell Globemedia Publishing, Inc. All rights reserved. 6. Harvard Management Update, January 2006, “Stop Demotivating Your Employees!” by David Sirota, Louis A. Mischkind, and Michael Irwin Meltzer. ⓒ Copyright 2006 by Harvard Business School Publishing. All rights reserved. 7. Sales & Marketing Management, March 2005, “For a Good Cause: Motivate Employees with Socially Responsible Incentives,” by Julia Chang. ⓒ Copyright 2005 by VNU Business Publications, Inc. All rights reserved.