Recent Trends in Human Resource Management

Monday, February 4, 2008

Motivating Employees In The Changing Business Environment

In the past, business and workers had an unspoken, but very real, agreement.

Business said to the worker, “If you will sacrifice your mind, body, and spirit for the good of the corporation—or at least to what your managers say is for the good of the corporation—then we will keep faith in you. We will provide you with a sizable measure of job security and predictability and we will seek to provide you with a steadily improving standard of living.” Motivating employees was relatively straightforward, although seldom easy. It was a matter of a simple exchange, the employee’s loyalty and commitment in return for job security.

In the new economy, the days of lifetime jobs and simple commitments are over. Employers readily announce layoffs. Employees just as readily leave for better offers. In an ironic twist, the new-economy knowledge organization proclaims people to be its most important asset then treats them like they are disposable. Balancing the corporation’s need for flexibility with employee demands for respect and fair treatment is becoming increasingly difficult, and effective management of human resources is critical. How do you motivate your people to higher and higher levels of performance when all of the rules have changed? How do you motivate your employees when the simple exchange of the past isn’t simple any longer?

Last year, a project was designed identifying the best ideas shared by top management thinkers about workplace best practices to deal with a changing environment. And, in the 21st century, continual change will become the norm. Here are four practices most management experts feel are essential for getting the best performance from employees. These practices all focus on motivation.

1: Provide Meaning and Purpose in Work
Employees need to have a reason for their organization’s existence that extends beyond the stock price, next month's sales, and year-end profits. Companies must have a product, a mission, or simply a vision of the industry that employees find exciting and energizing. These employees may not be with you for the long term but, while they are part of your workforce, they want to accomplish something worthwhile.

Merck is a good example of a company that provides such a purpose. This pharmaceutical manufacturer promotes itself as a company that puts people before profits and backs up that commitment with action such as putting a below-market price on its anti-AIDS drug and giving away medicine to developing countries. Maybe that's why in a recent survey, 97 percent of Merck’s employees said they were proud to work for the company and 86 percent said they thought their work had special meaning. Merck demonstrates a higher purpose than profits.

2: Be Work/Life Friendly
Offer your employees a range of benefits such as flextime, compressed workweeks, telecommuting, job sharing, on-site childcare, banking and dry cleaning. More importantly, it means working with employees in a genuine effort to be flexible. The best companies today recognize that employees have lives outside the workplace and that they can no longer neatly separate work and family, career and the rest of life. These companies don't just help employees manage their lives outside of work; they allow employees to bring their life into their work.

3: Share the Rewards
In our knowledge economy, time is becoming increasingly disconnected from value. The number of hours a person works today doesn't count except when these hours add delay or unnecessary expense, and then they count against the company and not for it. Today, value lies in the knowledge and skill which are applied to create, innovate, produce, service, entertain, and excite—not in hours expended. This change in perspective is leading best-practice companies to replace traditional compensation systems that tie base pay to hours, position and job content with compensation systems that tie base pay to skills and/or competencies, and to provide incentives tied to group and/or company performance rather than to individual performance. The latter practice usually consists of some combination of corporate-wide profit sharing and/or stock ownership or options coupled with gain-sharing and/or group incentives in major operating units. Employees today want to share in the financial rewards of what they produce, and they want to be compensated for the value they deliver, not the hours they invest.

4: Open the Books
If you really want to motivate your employees, you have to quit keeping secrets. You have to “open the books.” Two practices that are not typically found in most organizations are critical:
Business and Financial Education. You must make a concerted effort to educate your employees about the business. This usually involves mandatory training for everyone in the company.
Information Sharing. By definition, open-book management means just that—opening the books, sharing information, giving every employee access to the financial and operating data.

In the old workplace, few workers expected meaning and purpose from their work. At most, they hoped for a measure of job security and a slowly rising paycheck. Most workers assumed that they had to adjust their lives to their employer’s demands and could expect little, if any, accommodation in return. Work and one’s personal life were to be kept completely separate. An employee might occasionally get a small bonus, but it normally amounted to very little and was presented more as a gift from his employer than as an earned share. Finally, every company kept secrets. Only those with “a need to know” were allowed to know, and the prevailing wisdom was that most employees needed to know very little. Times really have changed. Employee expectations are certainly much different. You can’t motivate them any longer with the offer of a simple exchange—their commitment and loyalty in return for a job. Maybe that is why these four essentials are so essential.


Dan McCarthy said...

Ankur -
Thanks for visiting my blog on leadership development:
I hope you stop by often. I used to work at a global company and always enjoyed working with my HR partners in India. Good luck with your new blog. You've written very good posts and I'm sure it will do well.

Professional Consultant said...

Thanks a ton dear Dan.

I want to make this blog a success ans would require help to do so.

The idea of running this online forum is to make it a ready reference for its followers for the long time.

Please suggest some topics for discussion.