Archive for the ‘Labor Relations’ Category
“Don’t cry because it’s over, smile because it happened.”
There has been much attention paid to happiness lately. It is a hot topic. Economists have been talking about the role of government in producing happiness and how it could be used to measure the success of an economy. Measures of happiness have been discussed as a supplement to the traditional measure of GDP or even to replace it. The Organization for Economic Cooperative Development (OECD) has a formal program to measure happiness across their member countries and at their conferences there are presentations on the importance of and how to measure “Gross National Happiness”. The United Nations has a Commission on Happiness which commissioned Columbia University’s Earth Institute to create the first World Happiness Report.
Our knowledge of what makes people happy has radically changed over the last 20 years. Positive Psychology has played an important role in the rise of happiness as a measure and one finding is that a significant portion of how happy people report they are has been linked to genetics. There are some people who are simply more inclined, through genetics, to be happier. One question that arises revolves around what can people do, if anything, to influence the natural level of happiness they are born with? Is it all genetics or can the environment or certain behaviors influence your base level of happiness?
From a business performance perspective, do happier employees result in happier customers? Is there a linkage? Do happier employees result in higher levels of organizational performance? And before organizations run off and start looking to hire only genetically happy workers, the latest research findings imply that the happiness gene can be impacted by environmental conditions. Happiness is not a specific set point or a specific degree as determined by your genes, rather it appears to be a range and your environment and your behaviors will determine where you will live within that range. Some people have a naturally higher range and others will have a lower range. A person with a higher natural range who is doing all the wrong things can have a lower happiness score than a person with a lower natural range but are doing all the right things. The interplay between nature and nurture (and other environmental factors – such as drug usage) is both more subtle and more complicated than has been previously thought.
Happiness can be thought of as a formula, as difficult as that may be for some people. Happiness equals your biological set point/range (S), plus the external conditions you are living under (C), plus the voluntary activities you undertake to improve your happiness (V).
Happiness = S + C + V
As I mentioned “S” in the above formula represents your biological pre-disposition and is a range of potential happiness you are capable of experiencing. The level you are experiencing can change day-to-day. For instance, if your son or daughter just got into the college they always dreamed of attending your happiness score will rise (as will your pride in your child), but when you get the first tuition bill your happiness score may plummet (as will your bank account balance). Yet you operate within your genetically determined happiness range.
“C” represents external conditions that matter for your happiness. These fall into 2 main groupings, those you can’t change such as race, age and gender (or at least things you can’t easily change) and those you can change such as marital status, where you live or your income level (sometimes also not so easily changed).
“V” represents thing you choose to or don’t choose to do. These are voluntary activities that can change where you fall in your happiness range. These things can include exercise, education and learning new skills, volunteering your time, charity work, meditation, playing a musical instrument or even taking a vacation. Total immersion in a task that gives pleasure is one sure way to increase the “V” component of happiness.
Things in the above formula can get a bit tricky as we are dealing with complex humans after all. In order to maximize the “happiness effect” of both “C” and “V” you need insure that you do not become adapted to or too used to the activity. If, for instance, you are always on vacation, then taking a vacation loses some of its specialness and the impact on your happiness can diminish over time as you spend more and more time on vacation. Playing a musical instrument may be a real pleasure in your life until you are forced to practice for hours at a time. This pattern of adaptation is why wealthy people tend not to be as happy as you would think. They become acclimatized to being wealthy and it loses much of its impact. But don’t get me wrong it is a lot easier to be happy when you have money than when you don’t have any. And if I had to be unhappy, I would rather be unhappy and wealthy than unhappy and poor. The point is not to look at a level of wealth as a never ending source of happiness. That won’t happen.
Physical pleasures which are voluntary and intermittent, such as eating rich food or having sex (people report the highest levels of happiness immediately after having sex) follow the same pattern. If you become satiated with an activity, but continue with that activity, the ability of that activity to impact your happiness will diminish. And at the extreme level continuing with an activity, perhaps eating ice cream well past the point of satiation, can create a state of disgust, lowering your happiness level.
Within the world of work, happiness can be increased by giving people more control over their work and working conditions. For instance, having an IT department dictating exactly which laptop a worker gets, based on their level or position in the workforce is one sure way to reduce happiness overall. Giving workers a menu of acceptable choices and then giving them control to choose the best choice for their own situation is a very simple example of how to improve happiness. The same holds true if you can give workers more control over their work schedule or locations. In general when people feel that they do not have control over their lives, including aspects of their work situation their happiness will diminish.
One experiment which demonstrated the impact that control over your living situation can have occurred in a nursing home. Residents were given control over relatively simple aspects of the lives within the nursing home (e.g. which art work would be hung on the walls). Nurses reported that residents who were given more control over their living conditions had higher levels of happiness, as rated by the nurses. But beyond happiness these resident also had fewer deaths within their ranks than a control group. So happiness levels that someone was experiencing had a physical affect.
Combine this with the finding that people are more positive about many things when they sense positive movement on an issue, movement having even more of an impact than absolute levels, and you begin to get a sense of what makes an employee and people in general happy. For instance in one ongoing study of employee positiveness, the most positive employees did not come from countries with the highest levels of economic performance or GDP, but rather from those countries with the most rapidly improving GDP levels. In other words things were perceived as getting better for people economically.
A special mention needs to be made about task immersion, a state called “flow” by Mihaly Csikszentmihaly one of the founders, along with Martin Seligman, of Positive Psychology. When someone is in the flow, they are totally immersed in a task that is appropriately matched to their skills. They give examples such as painting, writing, photography, singing and dancing. I could add examples such as solving work related problems, building a house, writing a program, fixing a machine, etc. When a worker is in the flow, happiness will be greatly increased. These are the pleasures a worker experiences in simply doing a good job at work and when the work is matched to the appropriate worker. And as mentioned above however, if the work is past the point of satiation the happiness that the work can bring decreases until the activity can disgust the worker.
There are many ways to impact an employee’s happiness. Among them pay, benefits, job security, recognition, advancement opportunity, respectful treatment, working for an organization that is viewed as having effective leadership all have roles to play. The relatively recent research on happiness implies that increased levels of happiness can also be achieved when a worker is accomplishing something (something they feel is important), learning something (new skills to prepare them for the future), or improving something, moving the outcome in a positive direction (a product, a process or themselves). Happiness is positively impacted by giving people as much control over their environment as possible by making them feel in control of their lives. Happiness is also generally positively impacted if people can help others, building and strengthening social connections.
There is still much to be learned about happiness, especially in the area of its impact on organizational goal attainment and customer satisfaction, but it does seem clear that well-run organizations can benefit from doing some relatively simple things that can increase employee happiness.
© 2012 by Jeffrey M. Saltzman. All rights reserved.
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“For the tyrant has the power to inflict only that which we lack the strength to resist.”
Krishnalal Shridharani – 1939
There is change afoot. Arab countries that had been ruled by authoritarian/despotic figures are undergoing upheaval. And while the verdict will be out for a while, there is widespread hope that something more closely approaching democracy will replace the regimes that existed. There is a good chance that in some of these places one despot will simply be replaced by another, but there is also a chance that should a vibrant democratic entity arise, with free market conditions, that a new center of excellence for commerce, creativity and innovation, and perhaps even tolerance will emerge out of the ashes of the failed states. Allusions to the need for slow gradual change are primary driven by those who benefit the most from a slower pace of change. And contrary to their more recent behaviors, Arab countries have a longer past history of tolerance for people’s differences. The current intolerance of anyone different was and is still a mechanism by which authoritarian regimes hope to keep power, with attention focused on the made-up enemy without rather than on the emptiness within. In many lands constitutions will need to be rewritten, with freedoms enshrined and rights guaranteed. This is a great unfreezing moment, one that the world hasn’t seen since the fall of the Soviet Union, and before a refreezing takes place change needs to be wrought, as much change as possible in order to bring forth the maximum benefits to those who have suffered under oppressive rule. It is scary, yes, for many countries that depended on the stability of the status quo, uncertainty is keeping many awake at night, but the potential benefit is just too great to be ignored or not encouraged.
Could other kinds of organizations, not just nations benefit from some unfreezing of power structures and adoption of new “constitutions” of governance?
My daughter had been off school for a week of vacation surrounding President’s Day. Between vacations and snow days I think she has spent more days at home than in school this winter. At the beginning of the vacation week we headed up to Vermont and did some snow shoeing at Hildene, the summer home of Robert Todd Lincoln, the only one of Abraham Lincoln’s four sons to reach adulthood. Though he did a stint as Secretary of War under James Garfield, he did not become part of a political dynasty. Nevertheless, he did ok for himself, becoming the Chairman of the Pullman Palace Car Company which at one point controlled ¾ of the railroad track in the nation, as well as manufacturing the cars that ran on them.
Later in the week we went to see Mary Poppins on Broadway (discount tickets available at TKTS) and afterwards swung by the NY Public Library, the world’s largest marble structure, on 42nd Street. I was hoping to show her one of the original copies of the Declaration of Independence that is housed there, but found out from the security guard that it is displayed only on July 4th and even with me cajoling him to bring it out just for a few seconds for us to look at he wouldn’t budge. We took a tour of the 3rd floor reading room instead and went through an exhibition that was being held on the texts of three of the world’s religions, and there I did get to show her a Guttenberg bible. Guarding the entrance to the library on 5th Ave. and 42nd St. are Patience and Fortitude, two famous marble lions residing on the north and south side of the entryway staircase. Mayor Fiorello LaGuardia named them Patience and Fortitude in 1930, for the qualities he felt New Yorkers would need to survive the economic depression. Ralph Waldo Emerson said that Patience and Fortitude conquered all things.
Most organizations tend not to be run as democracies, but more like autocracies or oligarchies, and a few like kleptocracies, and what I have been describing will provide some examples of that. Robert Todd Lincoln’s mother Mary, put her foot down and much to the embarrassment of Abraham, refused to let her son enlist in the military until the civil war was pretty much over and then only as an aide to Ulysses S. Grant to ensure that he did not see combat. There was no voting, no general agreement about that decision in the household. Mary Poppins ran her household in a “spit spot” fashion, there was no arguing with her when she wanted something done and of course she used a “spoonful of sugar” to make her “medicine” go down. And New York City’s beloved mayor, Fiorello LaGuardia was an authoritarian figure, never letting anyone forget who was in charge. Though elected he ruled with an iron fist and got his way on most issues. Examples of organizations that are not run in a democratic-like fashion can go on and on, so what exactly does it mean to democratize an organization, say a profit making enterprise, and are there any benefits?
Let’s try an experiment. Read through this list of characteristics of an organization and see how many of these describe where you work.
- The organization is full of silos or stove piped and the cooperation of people or groups needed to operate smoothly is restricted as everyone takes care of their own interests.
- Legacy systems and past policies limit the ability to adopt and implement new systems and policies.
- The organization has become routine in its operation, less able to adjust quickly to new situations.
- Personnel and resources already allocated for existing tasks are not easily available for new needs.
- Subordinates fearful of displeasing their superiors may not report accurate or complete information needed to make decisions.
- The initial vision of the organization, the founder’s sentiments, and what it stood for has eroded, and myths or stories of the founding of the organization as well as their symbolism fade.
- If a strong ideology is present in the organization, firm adherence to it may cause inattention to actual external conditions and how the organization needs to change for effective functioning.
- Deteriorating efficiency and competency of the organizational bureaucracy, or excessive controls and regulations, may make the system’s policies and operation ineffective.
- Internal institutional conflicts and personal rivalries and hostilities may harm, and even disrupt, the operation of the organization.
- High potential talent, top performers and those newly hired may begin to depart the organization in response to conditions, restrictions, bureaucracy and pressure to conform to “the way it is done here”.
- Customers are beginning to become apathetic, skeptical, and a few even hostile to the organization.
- Corporate vs. field, line of business or old guard vs. newly hired differences may become acute.
- The power hierarchy of the organization is always unstable to some degree, and at times extremely so. Individuals do not remain in the same position in the ranking, but may rise or fall to other ranks or be removed entirely and replaced by new persons.
- Business Units within the organization may act to achieve their own objectives, even going against the direction of the organization overall.
- With so many decisions made by so few people in the organization, mistakes of judgment, policy, and action are likely to occur.
- If the organization decentralizes controls and decision making, in an attempt to become more effective, its ability to coordinate the organization becomes further eroded.
There are 16 separate statements above describing organizational characteristics. How many applied to your employer? Two? Five? Eight?
I have to admit something to you. These statements were not from a list of organizational characteristics, but rather, I slightly edited and disguised the work of Gene Sharp who wrote “From Dictatorship to Democracy” and this is his list of characteristics and weaknesses of dictators and dictatorial regimes.
For profit organizations are not about to become democracies in the sense that the staff will take a vote and decide on a course of action. Organizations spend much time and effort in selecting and developing leaders whose responsibility it is to lead. The best leaders though are one’s that listen to their people, reflect on what they have learned, and they work diligently to align the organization’s goals to the personal goals of the employees, establishing a mutuality of benefit. By being part of the organization the employee’s personal goals and life ambitions are being accomplished at the same time that the organization’s goals are being accomplished, hence they have a shared interest. This shared interest will result in a greater buy-in on the part of all employees to the organization’s goals. Organizations and specifically leadership that takes into account their employees attitudes, personal goals, life ambitions are behaving in more democratic fashion. Organizations – leadership, of any sort, that attempt to impose their will on employees by means of leverage or formal power may win the battle but will lose in the long run as any employee who can escape will do so, leaving only those who are trapped by circumstance or ability.
In study after study the leadership characteristics that most strongly rise to the top as being worthy of followers are described as:
- Forward Looking
Those are not exactly the characteristics of someone who forcefully imposes their will on others.
Kouzes, J., Pozner, B., 2007, The Leadership Challenge, 4th Edition, Jossey Bass, San Francisco.
Hildene website, 2010, http://www.hildene.org/
NY Public Library website, 2010, http://www.nypl.org/locations/schwarzman
Sharp, G., 2002, From Dictatorship to Democracy, 4th Edition, The Albert Einstein Institution, East Boston.
© 2011 by Jeffrey M. Saltzman. All rights reserved.
Visit OV: www.orgvitality.com
“Act in such a way that you always treat humanity, whether in your own person or in the person of any other, never simply as a means, but always at the same time as the end.”
After reminding my daughter what is was like when I gave birth to her, with my wife smiling peculiarly in the background, I often remind her of what things were like when I was growing up. I regale her with stories of how we made do with so little compared to today. For instance, I don’t know how many times I have described how I used to carry my little sister to and from school on my back, while barefoot in the snow, uphill, both ways – – before breakfast. And how when my shoes got a little small, how we would cut off the toes (of the shoes), to make them last just a bit longer, or how we lived in a house so small, that you had to be careful not to break the window in the back when you put the key in the front door to unlock it. And after amusing ourselves just a bit with these tales, it tends to take on a more somber note as we realize just how lucky we really are.
When we were kids we had a much better standard of living than what our parents had and lived in much better circumstances, and if you go back one additional generation, circumstances and living conditions were truly awful. My mom’s parents had gotten as far as Ellis Island in the late 1910’s before being told that the quota was full. They were given a choice of Canada or Cuba and I guess Cuba sounded warmer. So my mom was born in Havana, Cuba, her first language was Spanish with a heavy dose of Yiddish, and Russian. Her dad started off manufacturing ties in the living room of their small rental apartment at night and then took to the streets during the day to sell his wares. For one of her birthdays she got a roller skate, just one, as her parents could not afford one for each foot, so she learned to skate using just one of those old fashioned skates with four wheels, one in each corner. When her shoes did wear out, with a hole in the bottom, her father would carefully cut newspapers to line the shoes so that they would last just a bit longer. And after that unexpected side trip and struggle in Cuba, twenty-some years later they finally made it to the USA, their dream, where my mom and her parents eventually became naturalized US citizens. She was introduced by a cousin to my dad, who was returning from WWII, after serving in the army in Europe, doing stints in England, France and Germany, and they soon fell in love and got married.
My dad, of course, had no end to the stories he could tell about what it was like growing up in Providence and Brooklyn. He was the oldest son of three, born in 1920, just a day after his parents landed in New York and that accident of timing made him an instant US citizen. He remembered how horse drawn carts would deliver milk and other goods to the various neighborhoods as he was growing up and how a Coke and hotdog was 5 cents. His father worked repairing radiators in the streets of the lower east side of New York (and was exposed to some nasty chemicals that likely finally killed him) and eventually saved up enough money to open a small candy shop in Brooklyn, and after that did not work out, became a furrier in the garment district. Two of my grandparents three sons fought for this country in WWII, one in the Pacific Theater (who slightly exaggerated his age at enlistment) served in the Navy and one in the European Theater in the Army. The third son was too young at the start of the war to serve. All three brothers now lay side-by-side in a cemetery just north of New York City.
The thing that is the most remarkable about these stories is that while the details of the events may be, the essence of the stories are not unique, with the vast majority of families in the USA today able to share similar stories of their own family’s struggles and tumults as they sought to gain a foothold in this great country. When you look at the bigger picture, we are a nation, by and large, of immigrants and we are all more similar than we are different. The drive and desire that the immigrants brought with them powered us to the heights that we have achieved. Yet there are those who tend to look for the differences between us rather than the similarities that bind us together. Differences can of course be found if you want, but we are better served by examining and building on our similarities. Most of us for instance, want a better future for our children than what we or our ancestors may have had or at least one similar to our own. All of us want to be treated with respect and dignity, our humanity being recognized and valued. We all want to be given a fair shake by society, an equal chance to succeed, as others have had. And we all want to be able to pursue our cherished dreams, our happiness that our constitution lists as a fundamental right.
The same holds true in the world of work, and no one should be surprised by that for the world of work is nothing more than a reflection of our society as a whole.
Utilitarian philosophy as described by John Stuart Mill and Jeremy Bentham is a worldview that societies should exist and decisions should get made in service of the greater good, majority rules. That logic can be used when laying off workers, the greater good of preserving the organization and jobs for the other employees being served. But it is not difficult to knock holes in the efficacy of this approach for every situation. For instance, say you were a doctor and had 5 very sick people in your office. Two needed kidneys, one a lung, one a heart, one a liver. In the next room you had one healthy patient. That one healthy patient, if sacrificed, could save the lives of the 5 other people and thereby increase the greater good, by donating the needed organs. Does that one person, representing a minority in that doctor’s office have rights to keep his organs, even though it would serve the greater good to give them up? Of course it becomes rather obvious that we don’t make decisions that way when it comes to such an example. But that argument was used by the advocates of Proposition 8 in California which barred non-heterosexual marriage, that simply because the majority (52%) of Californians voted for it, that homosexuals and lesbians were forfeit of their rights. What if the 5 sick patients in the doctor’s office voted to have the organs removed from the only healthy patient? Would that fly?
John Locke, widely known as the father of liberalism, countered that approach by stating that man has certain inalienable rights, that even if the majority or the greater good is not served, that each individual has the right to life, liberty and property, which Thomas Jefferson broadened out later on to life, liberty and the pursuit of happiness. One major point of Locke and Jefferson is that majority rule could not simply erase the rights of an individual even if that individual was a minority of one; these inalienable rights were fundamental and as such could not be pushed aside by legislative decree. And building on that, Kant’s moral imperative can be summed up as not treating people as a means to achieving your own self-serving goals, but treating them in accordance to their humanity, as humanity is the end state which we all have in common.
Back to the world of work. Many organizations today benefit from their ability to promote their products as being “green”. One recent research study concluded that being green was not a passing fad, but that it is here to stay and those companies that operate in a green fashion are more likely to have greater increases in sales than those with similar products, but are not as green or green at all. So here is a question that I pose. Given what roles humans have in organizations, how do we create organizations that are “GREEN” when it comes to their PEOPLE and not just around their products and services? How do we employ people in a sustainable fashion? How to they treat people so that they support the notions of life, liberty and the pursuit of happiness and treat people for the sake of their humanity and not as a means to an organizational end? Are the rights of the individual forfeit when it comes to organizational or employee life? What are the obligations of organizations to operate in such a manner that reflect the greater values that we as a society have adopted?
I would expect, of course, a great diversity of thought.
© 2010 by OrgVitality, Jeffrey M. Saltzman. All rights reserved.
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“Appreciation is a wonderful thing. It makes what is excellent in others belong to us as well.”
One of the basic fundamentals in achieving high performance from individuals is to provide them recognition for a job well done, sincere meaningful recognition. Being given recognition becomes part of the equity equation as people consider whether they are being treated fairly by an organization. Recognition can consist of psychological recognition, monetary rewards, advancement, development opportunities as well as a host of other possibilities.
There are two classes of rewards and recognition – those that can be tied to performance, such as merit increases, and those that should be independent of performance – those that are a standard that should be made equally available to all. For instance, if you were running a mining operation you would not hand out safety equipment as recognition for good performance, rather all miners would be given equal access to the safety equipment available. The ability to operate safely on the job and access to safety equipment is independent of individual performance.
I had one client that had tied recognition, the score you received on your performance appraisal, to the health care benefits you received. If you scored highly on your performance appraisal and got sick you were flown to Singapore where you received the best medical treatment available. If you did not score highly on your performance appraisal local health care was made available, which was definitely below world-class status. After a few conversations with the management of this organization, I convinced them that these 2 elements should not be tied together.
This was a clear example that recognition on the job (in this case the ratings on your performance appraisal) could have an impact on your life expectancy. But there has come to light additional new evidence. Matthew D. Rablen and Adrew J. Oswald of the University of Warwick, found that winning a Nobel Prize can add as much as 2 years to your life. When candidates are nominated for a Nobel Prize they do not know it, as the lists of nominees are not released for fifty years after the Prize is awarded. This sets up a situation where the winners (who know they won) can be compared against those nominated (who don’t know that they were nominated). Those who won and received the associated recognition lived longer. “The only possible explanation is that the enhanced status conferred by a Nobel somehow improves a person’s health. Walking across the platform in Stockholm does wonders” said Andrew Oswald, one of the authors of the study. Remember that the nominees are no slouches, they are all very well thought of in their respective fields, but the status associated with the Nobel, somehow provides a little bit extra.
Given that many organizations are keen on improving the health of the workforce to reduce health insurance rates and to raise productivity, I wonder if they have ever viewed providing recognition as a health related practice. Also importantly can organizations make their rewards and recognition confer that little something extra? Could the budgets associated with recognition be offset against health insurance increases? Or on the flip side could organizations that provide no recognition be blamed for ill health or hastening the death of an employee? The human brain’s impact on internal bodily processes is simply not to be underestimated.
Sometimes recognition comes from unexpected sources. Abraham Lincoln when faced with many rivals within his own party for the position of President decided that the best place for them was within his cabinet. By keeping his rivals close to him, he could keep an eye on them but he was also telling them something. He was providing them recognition of their abilities and saying that he wanted them working with him, because he valued their input, rather then being at odds with them.
There is a myth that exists around brilliant people (maybe even just smart people) and recognition. It is that these people are intrinsically motivated and that means that they do not need or desire recognition for a job well done. Doing good work by itself is rewarding enough. (I get this feeling that this myth was developed by people who feel somewhat intimidated by really smart people). While there may be a few people like that out there, my experience is that the vast majority, while they may be intrinsically motivated, like nothing more than a pat on the back and other recognition for doing good work. They, like us, put their pants on one leg at a time in the morning (assuming you are wearing pants) and while they may really like their independence, they really like people recognizing their contributions as well.
Recognition is one of those fundamentals that cut across organizations, cultures, occupations, geographies, generations and genders. It works and has an impact on your work environment as well as in your personal space. The next time you have an opportunity, and want to tell someone that they did a good job and you appreciate them, don’t hold it in, let it out and see what kind of benefits you can spread.
© 2010 by OrgVitality, Jeffrey M. Saltzman. All rights reserved.
Visit OV: www.orgvitality.com
“When the tide goes out, you can see who’s been swimming naked.”
Warren Buffet on leadership in a recession.
How do employees react during a recessionary period? What happens to their attitudes about work and the work environment? What about their perceptions towards leadership? And most importantly do those attitudes, or shifts in attitudes actually affect organizational performance? The information that has been distributed on this topic over the last couple of years has been somewhat less than clear, or at the very least has been sending mixed interpretive messages. Some of the reported data has indicated that employees on a whole are less positive, less engaged or as some term it actively disengaged. That finding could represent a possible reaction to the somewhat harsh measures that some leaders adopted as they attempted to increase the odds of organizational survival during a deep recession.
Other reported findings strongly affirmed that employees are more positive now than prior to this recessionary period, possibly as a result of realizing how ugly things are on the outside, so the inside is looking pretty good. That would be a result underpinned by both frame of reference comparisons and the notions of cognitive dissonance, the need to resolve conflictual cognitive positions (e.g. even though I used to really hate it here, the place must not be so bad since I am staying). Categorical statements, that something is all one way or the other, black or white, raise my warning antennas and so one is left wondering, is it possible to look across the various reported results, many of them stated in a categorical fashion, and make some sense of it all? Scott Brooks, Walter Reichman and I did just that and here is a summary of some of what we found.
Methodological observations regarding the reviewed reports:
Some of the reports we reviewed1 are based on client data, meaning data that has been collected from clients during the course of a consulting firm running their employee surveys. Client data over the course of a few years can change, depending on which clients the consulting firm happens to have, what survey cycles clients are on etc. One industry for instance that may be well-represented in the norms during normal economic times like retail, and has been hard hit by the recession may cut costs by delaying or canceling their survey, and so their industry may be underrepresented in the data during a recessionary period if the norms are client based. So when examining client data over time you may not be looking at an apples-to-apples comparison even if the data is coming from a single source such as a consulting company.
Additionally, surveys of clients that occur during recessions may represent clients that are weathering the recessionary storm slightly better than most, since the budget for collecting the data has not been axed, or the data may be coming from organizations that are deep adherents (at least more so than others) to the notions of collecting and measuring certain aspects of employee attitudes, employee engagement being one of those. And of course the employees themselves who are being surveyed in client based norms are the survivors, those who have not been laid-off, which may also have an impact on their attitudes, especially when compared to the general population. One approach to correcting some of the issues with client-based research is the use of a standard basket of companies for tracking purposes, similar to the Dow Jones Industrial Average methodology. That could be achieved through a consortium of companies who agree to share their results. That would fix the problem of which companies are included (since it would be standardized) but not who from each company is included (during a recession we would still be surveying only survivors).
Some of the reports that have attempted to shed light on the state of employee attitudes during this recession are based on random sample surveys or stratified random samples (meaning you make sure certain demographic categories, such as senior managers, or females etc. are adequately represented). These data are not client based, but rather are gathered from people who have agreed to complete surveys, usually for some kind of incentive, for instance, a chance to be entered into a lottery for each survey they complete. These surveys include a cross section of people, some employed, some under or unemployed but if sampled correctly are representative of the population as a whole, not necessarily the employed population, or the population from companies that care enough about employee attitudes to be out there measuring it. Depending on how the sample is drawn they may come from private and public sector organizations, government as well as not-for profit. It may include those working full-time as well as part-time. One issue of course here is the motivation that these individuals have for completing the survey. Many of them, we have to assume, are not doing it for the sake of the research, but rather in a fashion to maximize their ability to achieve whatever incentive is being offered. (That is why it is called an incentive.) That creates a question in many minds of just how these people will respond, and will they take the survey seriously.
One conclusion from looking at all of the data that gets put out is that unless it is clearly stated in the report, and often times it is not, and the methodology explicit, you really don’t know who is included in either client-based or in random sample survey reports and hence the conclusions from one report are not all that easily compared against another.
Some broad trends we saw:
- “Engagement” during this recession has not declined. With an eyeball meta-analysis, the actual change may be slight improvement, perhaps 2-4 percentage points over the last year. This “surfs across” potentially meaningful differences in sampling, methodology and varied definitions of how you measure engagement. But those institutions that describe engagement as declining are in the minority.
- Not all employee opinions act the same way, moving up or down in lockstep.
- Stress is increasing.
- Opinions about leaders have fluctuated.
- US Employee Confidence hit a low 1Q09 and has not returned to the 2Q08 baseline.
- One conclusion is that “engagement” may not be the best indicator of the strain of the recession on the employee population and hence organizational performance.
- There is no “overall” recession impact across all survey topics
- There is evidence of polarization within some organizations. While different across different studies, there seem to be segments (levels, functions, etc.) within the organization showing divergent trends:
- Perhaps while engagement goes up, there is a growing core of actively disengaged employees.
- Executives and middle management respond differently, though exactly which layer feels the squeeze most keenly is not clear from the reports (and they likely differ organization-by-organization… as is clear in some cases among our own clients).
- Increasing frustrations (driven by increasing workload and lowered rewards/benefits) among high performers/high-potentials put them more at-risk for eventual voluntary turnover.
Some More Detail:
One concept created a good number of years ago called Employee Confidence© has been tracked quarterly since June 20083, by asking employees about attitudes towards their company’s internal as well as external performance (organizational performance). Internal covers such areas as business processes and leadership and external covers the attractiveness and value of products and services offered to the market as well as competitive positioning. Also tracked has been people’s perception of their personal situation, again both internally and externally. The internal situation deals with perceptions of job security and future prospects at current employers, and the external with being able to land on their feet elsewhere if necessary by finding another job. (To be part of this tracking study, which cut across the 12 largest economies globally, you needed to be: an over 18, full-time employee in the private sector, in a company with at least 100 employees. Data was collected quarterly on random samples of 5000 in the USA and 1000 in each of the other countries, with the exception of Russia where the number was 500. Incentives were used. The data was compared to known demographic characteristics of the working population in each of those countries.) Taking a step back from all the data, both from this Employee Confidence sample and from client based data, and drawing some insights and overall conclusions, or at least observations what we see as highlights include:
About Employee Engagement:
In 2008/2009 you generally did not see declining employee engagement scores at organizations (there was the occasional exception). The scores were flat at worst but most were actually rising with many hitting heights not seen within the organization prior. This was in spite of the general concern among clients that engagement would decline during the recession. Some of this can be attributed to good management taking action on important issues and some is environmental, a response to the concern that people have about losing their jobs. One notable study had a client with 7 point rise in their employee engagement score across about 25,000 people. A determination was made that 2-3 points of that rise was likely due to management actions and 4-5 points was due to the environment. (Drop me a note if you want to know how that was done email@example.com).
About Employee Satisfaction:
In many cases however, items that were markers of the employee’s current state of satisfaction with their situation declined. By way of explanation, a person can be very unhappy with increased workload and stress, with their 401k losing substantial value, with no company match, no raises, friends being laid off, increased concern about their own job security, perhaps seeing management taking care of themselves before the rank and file, but that person can still be engaged in their work. As an example, a person can be very engaged at their employer making buggy whips as Henry Ford is in the next building figuring out how to mass produce cars. They are engaged, working diligently to produce the best buggy whips in the world, but their level of engagement does not stop the world from changing nor does it assuage increased concern at seeing the world changing with perhaps the employer not changing or not changing fast enough to keep up. A corollary to this is the false notion that employees who complain are not engaged. They in fact may be the most engaged as they are trying to communicate to the organization information to head off a potential disaster as they see it.
While some people/organizations measure satisfaction and engagement with the same items, they are clearly different constructs. (Of course there is no agreed upon set of items in use to measure engagement within the employee survey industry which may account for some of the reported differences).
About Job Prospects and Job Security:
Being able to find other employment if necessary, which is normally very favorably rated, began to decline and has remained at or near the bottom of all the items tracked. Most normal people by nature tend to rate their skill sets highly and see value (beyond what others may see) in what they can do. This makes them normally very confident in their ability to find another job should the need arise. The precipitous decline in this dimension is a fundamental shift in people’s confidence (it has rocked their world and how they self-perceive) and affects all sorts of behavior including buying patterns and a willingness to tolerate intolerable conditions at an employer. As this score recovers we will see people who had been staying with an employer because of a lack of opportunity elsewhere move on with a corresponding increase in voluntary turnover. This may be starting already as for the last 3 months voluntary quits has surpassed layoffs as why people leave jobs and for the 15 months prior to that layoffs surpassed quits.4 This finding is perhaps giving an inkling of what is to come.
Perceptions of job security at the beginning of the recession when all the layoffs started were understandably in steep decline. This lasted through the first quarter of 2009 and roughly corresponded to when a massive bulge of layoffs occurred with 3979 mass layoff events occurring in 1Q09, a record high affecting 705,000 people5. This also corresponded to the lowest Employee Confidence scores recorded. However, once that bottom was hit there was a rather sharp rebound later in the year. One possible interpretation is that employees felt that the organizations had cut to the bone and could not cut any more. Employees felt that they had survived so far and so where likely to weather the storm. Exceptions to this pattern of decline and then rebound occurred in industries that were weathering the recessionary storm rather well including healthcare, education, government and food service. They did not see nearly as much of a decline. Females were more positive about job security than males, not because they were females, but because of an over-representation in industries that were doing ok. The gap between males and females disappeared when the rebound occurred, possibly due to the males feeling that all the cutting that was to be done had been carried out.
About Business Process:
During this recession it was pretty clear in the data that the majority of employers were trying to cut their way to profitability, rather than innovating with new attractive offerings or by moving into new markets. They were revamping internal processes, laying off people, cutting budgets and benefits. They were looking inward rather than outward to find solutions to their performance problems. And while it is always healthy to improve internal organizational performance, in this case it is a rather risk adverse approach compared to modifying the products and/or services being offered. It is more of a sure thing to cut back on costs rather than create products that people find attractive, even in a recession, as a way to protect margins in the short term. Not every company took that path however and historically companies that have been started in recessionary periods included: HP, GE, Burger King, Fedex, Microsoft, CNN, Trader Joes, and our own OrgVitality. Each one creating a path to success based on offering attractive and valued products and services to the marketplace that were relevant to the economic time period in which they found themselves. In this recession Autodesk, Nucor, Colgate Palmolive, Apple, Coca Cola, Target, McDonalds, Dunkin Donuts, and Google among others for instance have done quite well by developing new and innovative products and by moving into new markets.2
About Organizational Effectiveness and Leadership:
At the beginning of the recession, the back-half of 2008, management was given the benefit of the doubt and was given stable or slightly increasing scores from the rank and file regarding their job performance. Of course you need to keep in mind that the rank and file during this period are the survivors, those who had not yet lost their jobs. As it appeared that the recession was going to get really ugly in the first quarter of 2009, the rank and file lost a lot of confidence in management and performance ratings on management plummeted. The realization hit that there was no magic bullet that the recession was going to be painful and deep and of a long duration and the blame, at least partially, was laid at management’s feet.
Ratings of leadership over the last year and a half or so have been very volatile with some organizations reporting extremely favorable ratings on leadership while at the same time others are reporting the poorest scores of recent memory. There has also been more divergent trends within organizations, often with vital groups perhaps feeling more stress than others (e.g., VP levels) declining dramatically while other levels are able to maintain or improve. A sharp recovery was noted in the perceptions of the job being done by management, as rated by employees, during the back half of 2009 as many of the programs designed to temper the recession began to have an effect among those still employed and further draconian layoffs were not as prevalent.
About Geographic differences in the USA:
If you compared the attitudes of employees against the unemployment level at the state level a significant relationship was found. In other words, in general those states that were exhibiting higher levels of unemployment were generally those where employees had the lowest levels of confidence. Some interesting patterns and exceptions to that statement emerged.
Those employees in southern states tended to be more positive than their unemployment level suggested they should be. In general, those in the mid-west were less positive than they should have been with the notable exceptions of Nebraska, the most positive single state and the state with the lowest level of unemployment, and Michigan with the highest level of unemployment and the second lowest level of employee confidence. Those states located in the northeast and west had employee attitudes as predicted by their unemployment levels with the exception of Oregon where employee attitudes were less positive than they should have been. The states that were exceptions certainly had the attitudes going in the predicted direction given their unemployment levels, it is just that the corresponding employee attitudes were more exaggerated than expected in either the positive or negative direction.6
- The recession has put organizations and employees on edge. While dealing with the increased stress and load created by aggressive cost-cutting, employees have a heightened sensitivity to leadership messages and missteps and organizational cues regarding the future. Critically, employees watch how the crisis has revealed the organization’s commitment (or not) to its stated values.
- As a result of this sensitivity, organizations may experience greater swings in engagement and/or satisfaction through the recession (the two not necessarily being related or moving in the same direction), though the swings may go in either direction and may be concentrated within a specific population. These swings may occur within key segments (e.g., management layers, functional areas or performance levels).
- But changes in survey results seen across clients lead to a conclusion: the recession isn’t the only cause of changes in employee opinions and engagement in particular; it’s the organization’s response to the recession.
- In many cases, employees have rallied behind their organizations’ recovery efforts, and are as engaged or more engaged than ever. In part, they are not simply comparing the “now” to what was. Clearly they understand that the crisis has demanded dramatic change, and they have hunkered down to help. To some extent they may compare themselves to other cases of what might be, for example to the failings of other organizations or to their unemployed acquaintances.
- One way to sum it up is that the recession has become a test of Vitality including strategy, values, behaviors, organizational agility and resiliency. Organizations are not passive players regarding the degree to which decision-making authority is sucked upwards, open communication is stifled, leadership commitment to values are maintained, or the emphasis on service remains central. Certainly, it has become harder to invest in employees. But in many cases, employees understand that and may take even greater pride in how their organizations handle the recession.
1Sources of published findings which were reviewed included: OrgVitality, McKinsey, CLC, Metrus, Valtera, Modern Survey, Kenexa and Towers Perrin among others.
2The Business Week 50, Business Week, March 26, 2009
3The Employee Confidence Framework was developed by Jeffrey M. Saltzman.
4 MSNBC June 9th, 2010
5Bureau of Labor Statistics; http://www.bls.gov/news.release/pdf/mslo.pdf
6Saltzman & Brooks, “Strategic Surveying in the Global Marketplace and the Role of Vitality Measures”, appearing in “Going Global” (Kyle Lundby, editor), 2010 Jossey-Bass
© 2010 by OrgVitality, Jeffrey M. Saltzman. All rights reserved.
Visit OV: www.orgvitality.com
There is a farm not too far from me. Well, to call it a farm might be a bit generous. I think it is more like a tax ploy as agricultural land is taxed at a lower rate here then land zoned for other uses. This old estate is one of the most gorgeous farms you have ever seen with stone barns and manicured fields and upon its gently rolling pastureland there exists a herd of black cows, very well groomed, that look like they haven’t done a day of work in their lives. Or have they? It reminds me of a story I came across a while ago that went something like this.
Say you come upon this rural scene. Upon the grasses growing on the gently rolling hills of a farm there is a large herd of grazing dairy cows slowly meandering around, occasionally standing under the shade of the magnificent trees scattered over the hillside, wandering over to get a drink at times from a water trough and then proceeding back to grazing upon the wondrously lush grasses. All is peaceful and the cows seem very content slowly chewing on their cud, letting the day pass them by.
Standing by the edge of this field leaning on a fence you spy the owner of the farm. You met him at the local feed store and recognize him as the guy who told you he had moved out of the city looking to bring his management expertise to what he described as the inefficient upstate farms. You see him standing there gazing at the cows dressed in a nice business suit, balancing a laptop on the top edge of the fence, but instead of being soothed by this bucolic scene he looks agitated. You approach a little closer and can hear him yelling at the cows that are seemingly oblivious to his rant, “You lazy good for nothing cows, get to work or I’ll have you butchered!” The cows simply continue to chew. The farmer upon seeing you watching walks over and begins to describe his frustrations. “These dairy cows,” he said, “they don’t do anything all day, just stand around eating and drinking. I carefully measure their performance by how much milk they produce, and so to give them the opportunity to show some discretionary effort, to give more milk, I hook them up to the milking machine for long periods of time, but they won’t produce any extra milk. They are lazy slackers. Unless they start producing some more milk so I can increase my margins I will turn them into beef patties.”
The notion this farmer has of course is that all you have to do to get additional production from a dairy cow is to have them hooked up to a milking machine for a longer period of time. After all, that is how you get milk out of them, so in his mind that is when they are being productive. This new farmer views the time the cows spend in the field eating and chewing their cud, preparing to be milked, as wasteful. He does not understand that shouting at the cows, threatening to turn them into sausages will not cause them to produce milk any faster, that actually milking them is only one part of the larger production process. People, who are working hard, but perhaps just thinking, might be giving extraordinary amounts of discretionary effort while appearing to be doing nothing. On the other hand sometimes when someone appears to be doing nothing, that is exactly what they are doing and that is where the chickens come in.
Chickens are not known to be the brightest of animals and should you draw a line with a piece of chalk and then take a chicken and press their beaks to the line for a few minutes, then slowly remove your hands, the chicken will become fixated on the line and will not move from that position. There is no thinking going on, no insights being contemplated just a chicken which can’t seem to disengage from the activity of staring at the line or so to speak the chicken can’t seem to operate outside of its pre-programmed responses. When set upon this task the chicken sticks to it, regardless of whether it makes any sense. As this story goes, an employee too can become fixated upon a line – the company line. Writing in “The Giant Hairball”, Gordon Mackenzie describes the chicken staring at the line as similar to an employee becoming fixated upon the company line. “This is our history. This is our philosophy. These are our policy. These are our procedures. These are our politics. This is simply the way we are.” Pretty soon the employee can’t operate any other way for they have, like the chicken, become fixated. The uniqueness, the potential that each employee brings to their job is at risk potentially of becoming lost. Don’t lose your uniqueness; don’t become fixated upon a line.
Humans form a complex social web as they interact in organizations. There are formal organizational structures to which they adhere and each organization also has informal structures, which has been described as the way that the work actually gets done. Every organization has a formal structure and because the formal structure can’t capture all the nuances with respect to what it takes to accomplish complex tasks an informal structure arises as well. The work that was done on this concept goes back to the late 1800’s and is collectively called the Hawthorne studies. Almost everyone has heard of the Hawthorne studies as the placebo effect – that simply changing something in the workplace can increase productivity because of worker expectations that the change is being made to enhance performance, so simply because of that expectation, it does. But the Hawthorne series of experiments went on for quite a period of time and examined various things in the work environment including informal organizational structures.
According to these extended Hawthorne Studies these informal structures, from a positive perspective, help the organization accomplish its tasks but from a negative perspective informal structures created power cliques that had the following characteristics:
- Clique membership/ostracism acted as a form of social control
- Clique membership forced people to conform to group desires
- Clique members would all stick together on stories, and would fudge reports so as to achieve uniform results
- Cliques established norms regarding output, treatment of supervisor, reciprocity and other interpersonal relations
- Clique members resisted change – especially those changes that challenged their informal power structures.
Their overall conclusion: “formal organizations are not as formal as they may seem, even if they are bureaucracies. When human beings interact with each other over a long period of time, they develop a social structure that is only partly based on the formal organizational structure. The informal social structure has as much to do with the way the organization runs as does the formal structure. The informal social structure may or may not work to the detriment of the organization.
Every organization has structure, both formal and informal, one is not necessarily better or worse than the other, but rather both are natural outcomes of how humans as social animals function. However, being overly dependent on a formal structure, and not recognizing the influence of the informal structure or depending on the informal structure while not acknowledging the strengths and shortcomings of your formal structure are both recipes for falling short of your desired organizational goals.
A chicken will stare at a line not because of any social influences or informal structures pressuring them into this rather bizarre behavior, but because of internal limitations and cows can be putting forth mighty efforts at milk production while appearing to do nothing. The informal and formal structures can also either produce rather bizarre behavior, which can internally limit the potential of the organization or if well understood by the organization, these structures, while potentially appearing to do nothing can be greatly enhancing the potential of the organization.
© 2010 by Jeffrey M. Saltzman. All rights reserved.
Visit OV: www.orgvitality.com
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 power or to unify a population by the vilification of another external group or an internal subgroup. The fact that this message was celebrated within the organization while quite disturbing was perhaps not surprising.
Creating unity within a population by fabricating an external threat followed by the complete vilification of that external entity, whether that entity is a single individual, an ethnic or religious group or an entire country, is a tried and true method used by dictatorial regimes or others seeking or desiring to hold onto power all around the world, beginning in the most ancient of times. For those who brutally wield power it is a way to justify their brutality. It plays to people’s innermost fears and creates a rationale for why those in power must hold onto power, or why those seeking power should be given it, for the argument is that they and they alone can protect you from the evil that is waiting to pounce, given the chance. Stigmatizing a group or a class of people as a threat and the source of internal problems is a fundamental building block of creating bigotry and hatred, and for the establishment of behaviors, through legislative means, societal or group norms for treating those so identified as an unequal subclass.
It can be tempting for today’s organizations of whatever stripe (e.g. private sector, governments, religious, political parties), given the difficulties they face, to use that same logic for creating and/or playing on people’s fear, for portraying “outsiders” or those others as an enemy is an easy path towards increasing internal group cohesiveness or attracting others to the “cause”, at least among those wanting to be part of the inner circle. Pointing the finger at others for your problems deflects blame, or a proper examination of systemic deficiencies from where it rightly belongs, which is squarely in the mirror. It is shrewd in the sense that it plays off of people’s natural tendencies, but it is a path that is taken by vacuous people, is morally corrupt and unethical. Instead of creating a vision that inspires a group to greatness you prey on people’s uncertainty, biases, and threats to their baser survival needs to bind them together by blaming others for their troubles. Once you head down that road there is no gaining higher ground.
George Washington, in 1790, was making a tour of the states, partly to promote the adoption of the Bill of Rights and to drum up support for its ratification by the states. He stopped in Newport, Rhode Island, a city which had suffered greatly during the revolutionary war and proclaimed to a population eager to hear his words that America was a country “which gives to bigotry no sanction, to persecution no assistance”. He provided assurances, in diverse Newport, that tolerance of people’s differences was a key component to the future success of the fledgling nation. His vision for the future of the country was one in which diversity of thought and belief was to be celebrated. His thinking was congruent with the likes of Franklin, Jefferson and Adams among others, even as they varied widely in their individually held beliefs. The very religious Adams for instance lost no love on Jefferson, calling him godless in their very heated battle for the presidency, but the god-fearing Adams signed a treaty with the Bey of Tripoli on June 10th, 1797, as the United States negotiated with the Barbary pirates (finally going to war in 1801 – America’s first foreign war) which contained these words in Article 11, “as the United States is not in any sense founded on the Christian religion it has no character of enmity against the laws, religion and tranquility of the Mussulmen” (archaic English for Muslims). James Madison was also a proponent of religious pluralism and tolerance, as demonstrated by his arguments before the Virginia Assembly in 1785 that pluralism was “the best and only security for religious belief in any society, for where there is such a variety of sects, there cannot be a majority of any one sect to persecute and oppress the rest.” The notions of vilifying or oppressing or of holding separate those who are “different” than the majority was not part of the thinking of the founding fathers of this country.
Political groups and other organizations have striven for political or influential power and to exert their views on the majority for a long time, and the one of the paths taken by those groups in their attempts is somewhat well worn. Here is a list of attributes and environmental conditions that describe the circumstances surrounding one group as they attempted to rise to power. See if you can identify the group.
- This movement was born in a tense period of economic uncertainty and joblessness;
- There was an uneasy feeling that the nation’s influence and power was fading;
- Two political parties were in power but were bitterly opposed to each other and unable to formulate effective solutions to pressing issues, such as high unemployment and the failure rates of businesses;
- The view promoted by those seeking power was that those in power has lost touch with the masses and what was important to them;
- The view was promoted that current leaders were violating the founding principles of the nation;
- Political changes underway were a source of intense dissatisfaction for some;
- A portion of the nation’s troubles were blamed on subgroups (such as immigrants) within the nation and those wanting power were promising a solution;
- This party attempted to draw in people who traditionally were not politically active;
- This group appealed most strongly to lower middle class who were fearful about the their future;
- As this group gained power and influence, politicians from more traditional groups began jumping on the bandwagon;
- This party grew out of smaller political groups and movements.
And of course this listing could, but does not refer to a contemporary group but rather to the rise of the Nazis in Germany taken out of a text (slightly disguised) on the history of the German Workers Party.
The point here is that it is not unusual for organizations to resort to the lowest common denominator, people’s fears and concerns and to do so quickly in pursuit of its goals, holding itself out as the only hope for organizational continuity or personal goals, security and desires. It is a well-worn path that we as humans have traveled down many times before. And while these behaviors are not rare, they are not always given into and the enlightened founding fathers of the United States did not succumb to the vilification process of those who did not look like them, who did not pray like them, who did not have the same origins or the same political beliefs. After 234 years perhaps it is time for us to remind ourselves of the ideals that they based this country upon. We must never forget history, for it is a window which shows us our likely future behavior, and gives us insight into how others may try to take advantage of our nature. I would like to think we as a species might finally learn a lesson or two about our nature and then perhaps the next time around things might be different. Perhaps. Perhaps not.
© 2010 by Jeffrey M. Saltzman. All rights reserved.