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Enhancing Organizational Performance

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This was written a few years ago, but still seems very current.

Jeffrey Saltzman's Blog

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I had an experience not too awfully long ago that left me feeling somewhat unsettled. I came across a widely distributed email from within an organization that vilified most thoroughly a competitor to that organization. The email showed a number of organizational members dressed up in military fatigues and talked about “going to war” against the competitor. The competitor was described as wanting to take food out of the mouths of this organization’s employees and even to drive them into homelessness by making them unable to pay their mortgages. The question was posed, “What are we going to do to this enemy?” The supposition contained within the email was that WAR was the answer. KILL them, because the people of this other organization were somehow less than human. To me it was a depressing reminder of the tactics that those in power will sometimes use to either retain…

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Written by Jeffrey M. Saltzman

July 22, 2012 at 8:11 am

The Ultimate Price

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Suppose you worked in a company that had 20,000 employees and was overall very successful, but had a dirty little secret, one that was widely shared by most of those in its employ. Those who worked in marketing, accounting, sales, human resources, treasury, logistics, engineering and most of the other departments were well treated. They were often described as being well paid. They were treated respectfully and had generous benefits. They enjoyed development opportunities, so that they could stay sharp and employable in their various professions. The company had never experienced a layoff and people felt secure in their jobs. In general people liked what they did and they liked their immediate supervisors. It was a very collegial atmosphere and after work people would often get together and visit socially. What was the dirty little secret?

Deep in the bowels of this organization’s headquarters there was one worker who did a job that was critical, more than critical, it was essential to this organization’s manufacturing process. Without this one person doing this critical job, this organization’s product could not be produced and the organization would cease to exist. It would have to shut its doors and layoff its entire staff. To say that this one person’s job was mission critical was an understatement. Unfortunately, this one job had a nasty side effect. After working at this task for 6 months the worker would perish. You see this job was 100% guaranteed to be lethal. Being on this job was a death sentence, no ifs, ands or buts. And no one could prevent, reengineer, modify or otherwise change this task from its ultimate lethal consequence. Every six months the one person who worked at this task died so that the rest of the organization, the 20,000 others could flourish. Now, also suppose that workers were hired from the outside for this job and were not told about the ultimate price that they would have to pay after working on the job after six months. They worked in ignorance, happy, well paid, until exactly on the six-month mark they would drop over dead.

How would you feel about working at that company? Would you? Supposed now that instead of one person dying every six months to ensure happiness for 20,000, it was 5, no make it 500, no let’s make it 5000. Supposed every six months, regular as clockwork, 5000 people had to die to ensure the success of the organization, so that 20,000 others could lead their lives in a secure fashion. Would you work at this organization? Would you let someone else pay that price for your security? What if it ensured the security of 20,000? Do you feel any differently about the death of one, so that 20,000 could be secure vs. the death of 5000, so that 20,000 can be secure? Should you? If you happen to be the “one” hired into this position you are just as dead after six-months as if you were “one of the 5000”. Is your one life any less valuable than the lives of 5000? Your shortened life was as meaningful and as full of happiness as anyone else’s until you took the job. What if the person toiling at this lethal task was an informed volunteer? Someone who knew the price that was to be paid, but for the sake of the 20,000 decided to pay the ultimate price. Does being a volunteer, someone willing to die at a task, so that others can live pleasant lives change anything?

Suppose instead of the total organization being 20,000 it was 20,000,000. Yes, 20,000,000 people could live happy harmonious lives, if only one-person performed a task that every six months led to their death. How would you feel about being associated with that organization now? Is one life too much to ask for the happiness of 20,000,000?
Now suppose instead of six-months carrying the death penalty for this task it was 5 years, no, let’s make it 10 years, no, let’s make that 25 years. Now, to-the-day, after 25 years on the job, each and every worker who performed this job would drop over dead. Does that make you feel any different about working for this organization?

What variables matter when it comes to paying a price as an individual so that society as a whole can benefit?

Let’s twist this just a little bit more. Suppose instead of the consequence of death being the price paid, it was that the workers on this mission critical task simply had to toil away at an assembly line sixteen hours a day, six days a week for a salary that barely allowed them to put food on the table. Instead of a quick death, after six-months, it was a very slow death, allowing them to toil away for their entire lives, barely able to stay alive at starvation wages, never able to get ahead or exit the harsh realities of their low pay world. The idea being that this group of workers being paid as little as they were allowed the organization to stay competitive globally, allowing the larger organization to flourish and all the other people within it to live happy lives. Does that change the picture? Does that make it any better?

Now, suppose you were the leader of this organization. You have the ability to decide where to locate jobs, how much to pay your workers, how to compete in the marketplace, what conditions you were going to allow some in your employ to suffer in order for the others to flourish. What would you do?

Written by Jeffrey M. Saltzman

July 16, 2012 at 6:55 am

Drive to Work and Social Safety Nets

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Presentation to
High Level Conference of the Economic and Social Council, United Nations
July 9, 2012

What do we know about what drives people to work, to contribute to groups or organizations to which they belong? It turns out to be quite a bit. Beyond subsistence, one key component of what drives people to contribute through work is the need that people have to feel that their life, their existence is of value, that it has meaning. Humans, by-and-large, have a strong desire to feel valued, and part of what drives that sense of being valued is belonging to and contributing in a meaningful fashion to societal groups.

Societal groups, be they for-profit companies, charitable organizations, governmental organizations, religious organizations, sports teams, nation states or neighborhood beautification committees are all simply various types of organizations to which we belong. And certainly it is possible to belong to multiple kinds of organizations simultaneously.

That feeling of “being valued”, of being considered a worthwhile member of an organization is driven by the interactions that individuals have within the groups to which they belong and how members are rewarded by those groups for their contributions. Rewards at for-profit organizations for instance, involve salaries and bonuses, benefits, psychological recognition, opportunities for advancement, and developmental experiences.

Rewards for belonging to other kinds of societal groups may be very different. Almost 70 years ago, in the midst of World War II, President Roosevelt in his State of the Union proposed an Economic Bill of Rights, providing for a strong social safety net stating that true individual freedom cannot exist without economic security, independence, and that political rights, as characterized by the initial Bill of Rights, are inadequate to assure us equality in the pursuit of happiness. Among the rights included were:

• The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
• The right to earn enough to provide adequate food, clothing and recreation;
• The right of every family to a decent home;
• The right to adequate medical care and the opportunity to achieve and enjoy good health;
• The right to adequate protection from the economic fears of old age, sickness, accident and unemployment;
• The right to a good education.

Many of these economic rights and rewards are achievable when people gain decent employment. But one question that arises is if a social safety net is provided, regardless of employment status, does it affect people’s drive to work? A partial answer to that can be found by examining how satisfied people are when reporting themselves to be over-worked or under-worked on their jobs.

First a preliminary question. If you survey a cross section of employees from within a country, are the findings generalizeable or predictive of broader conditions within that country? A test of this was undertaken from June, 2008 to October, 2009 by surveying quarterly, 16,000 people across the 12 largest global economies using an index called Employee Confidence which I developed. In a nutshell, Employee Confidence examines two aspects of employee attitudes, confidence in their respective organizations and confidence in their personal situation.

By treating countries as large organizations, with each country’s respective head of state filling the role of CEO, research techniques such as survey linkage can be applied to entire countries. This approach allows you to “link” attitudinal data from employees to measures of performance at the country level, such as national or state unemployment levels and GDP growth, among others.

Perhaps not surprisingly, the results we would expect to find at an organizational/company level also apply when you sample a representative cross-section of citizenry and look at country-level performance indicators. For example, within the USA, for one over-sampled iteration, each state was treated as an organizational unit. Comparisons of citizenry attitudes by state on the Employee Confidence Index to unemployment levels by state showed that Employee Confidence was a leading indicator of what unemployment levels would be within that state the following month.

In other words, the strongest relationships found were between Employee Confidence attitudes now, and what officially reported state unemployment levels would be 1 month from now. This relationship was marginally stronger than the relationship between current attitudes compared to the previous month’s unemployment levels and current attitudes compared to current unemployment levels.
Additionally at the country level, Employee Confidence was found to be strongly related to change in GDP growth during this timeframe, with employees in India, Russia, China and Brazil achieving top scores and employees in Japan, Italy, France and Spain scoring the lowest. The rank order correlation was found to be .87 between Employee Confidence at the country level and GDP growth.

This would seem to give some indication that asking a cross section of employees about their levels of Employee Confidence might be a leading indicator of whether unemployment levels among citizens and potentially other economic metrics such as national GDP were heading upwards or downwards in the near term.

Now, given that the evidence suggests that certain citizenry attitudes at a country level can be used in a similar fashion to employee attitudes in predicting organizational performance, we can begin to draw some conclusions using employee survey data not only about “people at work” but also about “people as citizens”.

For instance, one study I undertook looked at the relationship between workload and satisfaction. Employees who consider their workload to be “about right” tend to be the most satisfied with their jobs, while those who say they are underworked are less satisfied than employees who complain of being overworked.

This study examined the level of job satisfaction of more than 800,000 employees at 61 companies worldwide. Of the companies surveyed,
• 75% had operations in North America,
• 11% had operations in Europe,
• 14% had operations in Asia.

Employees participating in the survey were asked to rate their overall satisfaction with their jobs, and their perceptions of their workload. Respondents who described their workload as “about right” rated their job satisfaction at an average of 73 percent favorable, while employees who said they had “too much work” rated their satisfaction level at 57% favorable. By contrast, those who said they had “too little work” had the lowest average job satisfaction rating of 32% favorable.

By slicing the data geographically we can examine how workers in different parts of the world felt about their workloads and how that relates to job satisfaction. Employees in North America who said they had “too little work” had an average job satisfaction rating of 36% favorable, whereas European workers in this category had a satisfaction rating of 12% favorable, and Asian employees a rating of 13% favorable.

Job Satisfaction and Perception of Workload are not related to the degree in which a society spends on Social Safety Nets. For instance, according to the OECD in 2012 the USA will spend 20% of GDP on social spending, while in Europe, in general, greater amounts are spent on social safety nets, and in Asia, with the exception of Japan, which will spend 23%, spending on social safety nets is generally lower.

Some conclusions that can be drawn by looking across these studies include:
• Given the linkages found between country level performance metrics and employees attitude data, there does seem to be generalizability between employee attitudes at work, and given a large enough and a representative sample, citizenry attitudes at a country level.
• And while we did not survey people working in sweatshop-like conditions, people tend to be most positive when they have about the right amount of work to do, but on a whole, prefer being busy over not having enough to do. One could surmise that among people who are not given enough to do, there is a tendency to feel that their contributions are not valued.
• The notion that creating societies with strong social safety nets, as has been done in some European countries to a greater extent than in the USA, diminishes the desire to work does not bear out.

So where do statements such as, “those lazy people will find jobs once their welfare checks run out”, come from? There is a tendency for humans to make decisions and draw conclusions representing their world-view based on heuristics, or rules of thumb and to consider only evidence that supports their point-of-view. The down side of this evolutionary derived shortcut to speedier human information processing is that it can play into stereotypes, bias and bigotry.

Let’s apply some evidence-based decision making to the notion that by having a safety net that societies are creating benefits that are so generous that those who are unemployed will have less of a desire to work.
• The evidence suggests that the majorities of people are happy when working, and in fact are happier when they feel that they have too much to do rather than too little.
• The evidence suggests that in societies with strong social safety nets that there is no diminution of satisfaction for the majority of workers that the work itself brings.

It is possible to go into the general population and at the extremes of the distribution find individuals who fit the worst-case scenarios and stereotypes of people who prefer not to work, living off of social safety nets, but they are exceptions rather than the rule.

In sum, based on a review of multiple databases that include both the private and public sector, the evidence is clear, most people want to work, to do a good job at work and want to feel that they are contributing in a meaningful fashion and this is independent of geography and the type of social safety net that is in place.

© 2012 by OrgVitality, Jeffrey M. Saltzman. All rights reserved.
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