Tuesday, November 24, 2009

You Get What You Reward

"You get what you reward." That is universal truth, or about as close as you can get to it. Yet, corporate America continues to reward the wrong behaviors and then acts surprised when the desired results aren't achieved.

Examples: Most companies say they want quality, yet reward quantity. They say they want great customer service, yet how many do you know who poll customers and actually pay bonuses based on their observations? Not many.

Here's a good example of how it should be done, how there is a clear goal -- reduced costs of health care based on improved employee health and a reward carefully calculated to achieve that goal . . .

Whole Foods Market, the largest U.S. natural-goods grocer, is providing added employee discounts to employees who lose weight and measurably improve their health.

Employees will receive discounts of 20 percent, rising to 30 percent, based on blood pressure, cholesterol levels, body-mass index and whether they smoke or not.

"We're making an investment and we expect a return," CEO Mackey said, referring to potential savings in health care costs. (Whole Foods spent $150 million on self-insured health coverage last year.)

The offer reflects Mackey's published opinion that most health problems are "self-inflicted" and can be prevented through proper diet, exercise and similar lifestyle changes. Cost savings are achieved by "less government control and more individual empowerment." (For whatever it is worth, I wholeheartedly agree.)

Mackey angered some Whole Foods customers in August when he wrote in a Wall Street Journal op-ed column that people "have no intrinsic right to health care." It is a service, just like food, clothing and shelter, "best provided through voluntary and mutually beneficial market exchanges." The resulting outcry included calls for a boycott and his ouster.

That's too bad, because he is right.

Do such programs work? Well, this new health reward initiative goes into effect in January so the jury is still out. But other such programs inside Whole Foods have apparently worked well. Whole Foods shares have tripled this year.

Sunday, November 22, 2009

Study: Communication Drives Performance

A new study has shown conclusively that top-down transparent communication, a/k/a "straight talk," drives employee performance. This is a lesson we've long preached in the Credible Connections program based on anecdotal evidence.

Now, there's more . . .

"Courage, innovation and discipline help drive company performance especially in tough economic times. Effective internal communications can keep employees engaged in the business and help companies retain key talent, provide consistent value to customers, and deliver superior financial performance to shareholders."

According to Watson Wyatt's newest communication survey for 2009/2010, companies that are effective communicators "have the courage to talk about what employees want to hear," "redefine the employment deal based on changing business conditions," and have "the discipline to plan effectively and measure their progress effectively."

Does this really matter? Yes. The study shows that companies that communicate effectively had a 47% higher return to shareholders over a five-year period (mid-2004 to mid-2009).

The link between communication and these three levers of performance — courage, innovation, and discipline — is a welcome one. These are themes that I have written about, taught and coached for years. Here is how you can utilize them in the workplace.

Courage. Watson Wyatt defines it as "telling it like it is." This is especially true when it comes to delivering straight talk. Shielding employees from bad news is akin to treating them like children; it says they are not "grown up" enough to handle tough stuff. So why do companies do it? One reason is because they feel employees will lose heart and then underperform. The Watson Wyatt study shows just the opposite. Tell people what they need to know and they will reward you with solid performance.

Innovation. The status quo is not working so companies must do things differently. While Watson Wyatt sets up innovation as something that will be done in the future, that is too late. Innovation must begin now, in fact it should never have stopped. Innovation is not something reserved for product development; it is really applied creativity. Given this definition, employees should be encouraged to rethink processes, streamline job tasks, implement productivity measures, and continue to think creatively.

Discipline. Troubled times call for accountability. Companies need, as Watson Wyatt points out, to set direction and take stock of how well they are doing. All too often plans are not communicated effectively and employees are given direction without context. They know what to do but not why. The why is important if you want to stimulate engagement, that is, gain share of mind and heart. The same applies to measurements. Bad news rolls down hill, but what about good news? When things are going well, too often managers neglect to inform employees. A firm communication plan, supported by updates on intranets, wikis, and even blogs, not to mention, email, can help let employees know how the company is performing.

Effective communication is not the sole solution to troubled times, but it may be the most effective way to ensure alignment. Listening plays a critical role too. It is well and good to disseminate information, but if you fail to listen to its echo, that is, how people feel about it as well as understand it, alignment may be doomed.

Integrating courage, innovation, and discipline into your messages may help your enterprise survive tough times, and give you a step up in good times too.

By John Baldoni (for HarvardBusiness.org)

Thursday, November 19, 2009

Morale Numbers: Figures Don't Lie, But Liars Do Figure

There are numbers and there are numbers . . .

A quarter of U.S. employers say morale among workers at their companies is low, according to a recent CareerBuilder survey.

Two out of five employees responded they had trouble staying motivated and do not feel loyal to their employer.

Why? Stress. Two of five workers employees say stress levels were high; half said their workload was increased.


Morale is much lower than published, much like unemployment is much higher than published. A high percentage of employees will claim undying loyalty and motivation on a survey in part because they don't trust their employers to not "peek" into the survey, find the traitors, and deal with them. Other employees hope against hope the axe doesn't fall on them next and perhaps professing loyalty and motivation provides the penitence they are seeking from no one in particular.

This recession has crushed morale at most employers. And employers don't see it because most don't really care. They care about productivity and employees who are afraid of losing their jobs work hard.

Until . . .

Until there is light at the end of the tunnel, things get better, and when that happens most employees don't forget their fears, the sleepless nights and who was responsible.

The real tab will be presented to most employers after the recession ends and hiring begins.

The relatively few employers that have credibly connected with their employees by doing great jobs communicating and exhibiting care, compassion and concern objectively will be rewarded. Those who haven't will face the music in the form of decreased productivity, increased turnover, and union organizing efforts, just to name a few of the creative ways employees will respond. That will in turn result in a collective whine from employers who don't understand why employees don't just don't appreciate them anymore.

And the beat goes on . . .