Employee Recognition through Celebrating Failure.

Summary: Failures are bad. Learning from them is easy. Right? Well not quite. Organizations need better ways to go beyond superficial or self-serving learning and recognition might be just the right solution.

 

“I have not failed, I have just found 10,000 ways that won’t work” – Thomas Alva Edison.

Continue reading “Employee Recognition through Celebrating Failure.”

n:gage: Jazz up Women’s Day wishes!

 

 

 

 

 

 

 

 

 

We know women work magic all the time – and here is a chance to really jazz up your wishes for tomorrow on Women’s Day.

5 cool badges to use in your emails, IM or set as your DP (let the world know what you are!).

For those who just can’t get the words out right, we got you covered. Select one of the eCards and you are all set!

To download the content head click here or copy the link into your browser (http://get.kwench.in/ngage_womensday2017_/)

Happy Women’s Day from all of us at Kwench! 

 

A Pareto Curveball on Employee Performance

ID-100176404I can’t feel nothing but this chain that binds me/Lost track of how far I’ve gone/ How far I’ve gone, how high I’ve climbed/On my back’s a sixty pound stone/ On my shoulder a half mile of line (The Rising, Bruce Springsteen)

 

 

Curveball: a slow or moderately fast baseball pitch thrown with spin to make it swerve downward and usually to the left when thrown from the right hand or to the right when thrown from the left hand

The “Bell-Curve” has been the mainstay of performance ratings for a very long time now. The distribution of employee performance is forced to align with the assumption that the organization has a few high performers, a few low performers and a vast majority clustering around the ‘average’ performance level. The whole idea of trying to fit everyone on to a ‘bell-curve’ is thus based on the assumption that performance in an organization tends towards ‘average’ – and I guess you can immediately spot the inherent problem with this assumption.

No organization would like to be configured to be average; yet, everything from compensation distribution to employee engagement strategies continues to be guided by this basic rule of thumb.

Popularity or Performance?

The rather uncomfortable question that needs to be asked is what is the core driver behind the performance evaluation numbers/ranking? Increasing the rewards substantially between the top performers and the rest raises the possibility of a vast majority being disgruntled. Rewarding a few much more than the rest poses challenges for traditional notions of fairness and equality in the workplace. Not making enough distinction removes the incentive to strive for better performance – especially for the outliers.

The crux of the issue lies in the question: what portion of the employees is actually driving the business results.

In an a series of interesting studies, involving 633,263 researchers, entertainers, politicians, and athletes – researchers Ernest O’Boyle Jr. and Herman Aguinis concluded that performance follows a power law distribution more closely than a Gaussian distribution. Put in other words – a few outliers are responsible for a majority of the output.

Pareto’s rule, a popular example of power law distribution – is often referred to as the “80-20 rule” i.e. 80% of the output can be attributed to 20% of the causes. Often subjected to abuse, this ‘rule’ still remains an easy way of summing up the conclusions of the power law distribution.

This insight has interesting challenges for how HR will deal with evaluating employee performance and contribution in the future.

In a traditional setup, the typical manager grapples with one or more of following while doing an evaluation:

  • Lack of clear quantifiable goals for the employee: Goal setting, an exercise often considered a mere formality and carried out with minimal participation from the employee and the manager comes back to haunt both when its time to evaluate performance.
  • Lack of a proper understanding of ground-realities: Managers are humans and are victims of their own perceptions. In the absence of intelligent means to capture customer and peer feedback combined with the previous point of incorrect or inadequate goal, managers often have an incorrect or skewed opinion of performance – especially in large teams.
  • Directive from HR to fit team into a bell curve: Small wavelets build up into a large wave, but small bells don’t make a big bell! The basic requirement that every team must have a Gaussian distribution borders on statistical absurdity – but continues to be a popular practice.
  • Fear of (increased) attrition: The team member has been working on the customer account for most of the year. The training is time consuming and team members take almost a month to start contributing. Too low a rating might increase attrition and the manager will need to find replacements – which will again need to be trained! Putting everyone near average is much safer from the manager’s perspective.

The ‘Bell-Curve’ to some extent lets the manager play-it-safe with his evaluations. A Power-Law assumption takes away that safety-net increasing emphasis on getting the evaluations spot-on. Put another way – the Gaussian assumption lets the organization be popularity focused and dilutes engagement, while the Power-Law assumption goes to the other extreme and focuses heavily on performance – posing a major challenge to established notions of engagement.

It might seem tempting to abandon the existing (flawed) system of force fitting employee performance ratings into a Bell-Curve in favour of a Power-Law distribution, but such a move would be fraught with potential pitfalls.

 Not only must Justice be done; it must also be seen to be done.

Remember that much of employee disengagement revolves around a sense of justice and fairness. The organization should not only do but also be seen as providing the required tools and facilities for the employee to succeed at the task, the organization should able to and also be seen as being able to correctly evaluate how the employee is performing at the task and then finally the organization should and also be seen as adequately recognizing the contribution made by the employee. Stumbling on one or all of these will lead to employee disengagement sooner or later.

In the power-law distribution a vast majority of the organization will be rated as “below average” The new assumption in no way implies that an organization should be only made up of only top performers – in the long run this is impractical for organizations of any size. The useful insight that can be gleaned from the new distribution is distinguishing between the employees who are vital and those who are not. Alarming as it may sound, when taking decisions of whom to retain or promote, making this distinction becomes a critical success factor.

Performance systems that can highlight top performers serve as powerful tools in the hands of HR and leadership of companies looking to engage with their employees and establish a culture of high performance. The impact of interventions based on inputs from a power-law trend of individual performances will expectedly be far higher and more meaningful compared to traditional systems. The challenge however will be eliminate bias in the evaluation – the impact of any such bias will be disproportionately higher in a Paretian distribution, with potentially disastrous consequences – a true curveball!

Acknowledgements and References: 

Image courtesy of FreeDigitalPhotos.net

The bell curve is a myth – most people are actually underperformers, Michael Kelly, May 2012, BusinessInsider

The Best and the Rest: Revisiting the Norm of Normality of Individual Performance, HRMA Research Briefing.

The ABC drivers of Intrinsic Motivation

ABCDriversEngagement_

Yes, ‘n’ how many years can some people exist/Before they’re allowed to be free?/Yes, ‘n’ how many times can a man turn his head/Pretending he just doesn’t see?/The answer, my friend, is blowin’ in the wind/The answer is blowin’ in the wind. (Blowing in the Wind, Bob Dylan)

When we talk about Employee Engagement, the discussion is essentially about motivation. Engagement is in fact, at some level a consequence of Motivation – a sort of end state if you may.

When I meet senior executives in organizations, a common lament is that ‘quality’ talent is so difficult to find. And if it’s a group of executives, then you can be assured a passionate discussion on a broken education system, exorbitant pay packages offered by rival companies, attraction to go abroad etc. will ensue

I usually try to bring up the topic of motivation and get them to talk about it. It works sometimes, but sadly more often than not – it gets pooh-poohed. One (very smart) executive recently told me bluntly – ‘ the very act of accepting the job offer represents motivation to work here. Why should we need to keep providing additional motivation? Nobody was motivating me with badges and games all these years!’

The lady had a point. Her conclusion was erroneous but her premise was not totally incorrect.

Accepting the job offer represents the first step in a journey with the organization (and with everything else that comes as a part of the deal – managers, peers and the organizational culture.) When the job offer is taken up, chances are you have crossed the hygiene hurdle of adequate compensation, so I am not considering that in my discussion for the moment.

The paycheck only comes around once a month, but the employee has to deal with the effect of organizational culture, his peers and his managers every single minute that he is at work (and sometimes even when he is away).

In my opinion, there are three questions every executive should try to answer honestly

  • What intrinsic motivations can this candidate have to work with me?
  • What intrinsic motivations can this candidate have to work with my team?
  • What intrinsic motivations can this candidate have to work in my organization?

Note that I ask you think about the ‘intrinsic’ motivation. Compensation, Job role, Profile, Designation, Bonus is extrinsic motivations.. Focus on understanding the intrinsic motivations.

Take a few minutes and answer the three questions before reading further. Chances are when you answer each of these questions candidly; you will already know why you are not attracting top talent.

The ABC Drivers:

From all the literature I have pored over and the people (team members, managers and leaders) I have talked to, three main drivers of intrinsic motivation stand out – and I call them the ABC drivers of Intrinsic Motivation.

A: Achievement – A sense of accomplishment is a major driver for motivation for anyone who gets up in the morning and goes to work- taking time away from family and battling traffic. Its human nature – If you don’t have a constant sense of achievement, an idea of how you are contributing to the larger ‘story’, your engagement levels crash. Then you are doing ‘something’ with no clue ‘why’ you are doing it (a very common comment I hear!). Managers and leaders who want the best out of their team have a duty to set the context, explain how the tasks are contributing to a larger whole, give constant and constructive feedback and help provide a sense of accomplishment. If any of these pieces are missing, the engagement picture will remain incomplete for the employee.

At some level, your answer to Question 1 as a Manager should address this aspect. If you are a manger who is successful in providing your team members with a sense of achievement, they will always want to work with you!

B: Belief – Employees are highly motivated when they believe that the organization enforces a level playing field. They are motivated when they know that they have the authority to take a decision to solve issues. They are motivated when they know favoritism has no role in decisions taken, when team members are not promoted for being a ‘smoking buddy’ of the manager and when the organization stands behind the employee for doing the ‘right’ thing. A belief that the organization really cares about its stated mission and its employees really does wonders for employee motivation.

This driver should appear in your answer to Question 3 on why should someone want to work for your organization.

C: Camaraderie – Would you want to go to work in an organization where secrecy rules the roost? People in such organizations are afraid to share any information or to collaborate on projects because compensation and career progression depends on information asymmetry. Favoritism, Secrecy, Coteries, Mistrust drives a general feeling of apathy among the employees and engagement levels will be abysmally low. All the bonuses in the world can’t fix this problem.

A sense of camaraderie and teamwork is critical for driving engagement. Employees look forward to work when they get to work along side peers who support and empower them to achieve organizational goals.

This driver should appear in why people would want to work in your team. What kind of team-culture do you have? Do team members support each other? As a manager, do you pave the way for your teams to leverage everyone’s strength or do you ‘divide and rule’?

 

In Conclusion: If you want to increase employee engagement in your organization, then as managers and leaders – at some point, you will need to ponder over these three questions and see how aligned you are towards enabling the ABC intrinsic drivers among employees. And note that, these are in a way the only things that you need to do, but these should underpin all your thoughts, actions and efforts – otherwise everything you do will ring hollow in the long term.

Rewards that go boink! (or the folly of cash as an incentive)

Money_Trap_Mark Hanna:   The name of the game, move the money from your client’s pocket into your pocket.
Jordan Belfort:   But if you can make your clients money at the same time it’s advantageous to everyone, correct?
Mark Hanna:   No

(Dialogue from the movie ‘The Wolf of Wall Street’, 2013)

I have an article on how to ‘Engage the employee with the right reward’ up on People Matters where I continue to advocate the need for companies to find the right strategy towards rewarding their employees – doling out cash bonuses just doesn’t cut it.

This post however, is more about what I left out of that article (thanks to word-count limits and the need to stay focused on the theme). At the very beginning of the article I mention in passing how the financial collapse of 2008 exposed the flaw of a cash-bonus-linked-to-sales strategy. What I did not write about was the erosion of trust that the greed of a few caused. And lets fact it – this is true about any industry, not just banking. There are plenty of examples in other sectors like call-center employees cutting short or worse hanging up on customers, because their variable pay was linked to number of calls attended rather than issues successfully resolved, engineers using short-cuts to get automobile products out faster without adequate testing or known flaws leading to catastrophic failures or in some cases deaths.

The death spiral for the company arising out of perverse incentive structures is actually quite simple:

Wrong incentive structure -> Incorrect actions by employees -> Short term spike in sales/output->A select few get rich on commissions/bonus->Medium Term/Long Term problems come home to roost->Best case – the company/product brand takes a hit, Worst case company goes belly-up.

Jordan Belfort:   My name is Jordan Belfort. The year I turned 26 I made $49 million dollars which really pissed me off because it was 3 shy of a million a week. – (Dialogue from the movie ‘The Wolf on Wall Street’)

Pre-2008 some bankers just went (massively) overboard in pushing their banks hurtling down that spiral and got the whole industry in a mess since everybody ended up doing the same shenanigans to get massive bonus payouts.

Joseph Stiglitz in his excellent article ‘In No One We Trust’ talks in depth of this erosion of trust and says

“…We had created a system of rewards that encouraged short-sighted behavior and excessive risk-taking. In fact, we had entered an era in which moral values were given short shrift and trust itself was discounted.

… Bank managers and corporate executives search out creative accounting devices to make their enterprises look good in the short run, even if their long-run prospects are compromised.”

So do we take the money-is-root-of-all-evil approach and pay people in food coupons? No. Absolutely not, but neither can leadership of companies afford to take the ‘lazy’ route to establishing a rewards strategy but just resorting to cash payouts as a percentage of profit/sales/top-line. (Remember Enron anyone? Even as the company was imploding, its executives were rewarded with large bonuses for meeting specific revenue goals.) The problem here is not only the flawed rewards structure, but something much deeper. Something for which the whole organization exists in the first place – the very raison d’etre.

The real challenge for leadership in establishing a rewards strategy – goals:

Before you worry about ‘how to reward employees’, the greater challenge is in establishing ‘what’ you are rewarding them for. “Organizational Goals!” you say and full marks to you. Employees in an organization are working on their individual goals which eventually must meld together to achieve the organizational goal.  Employees at Enron were also being paid to achieve organizational goals but in hindsight it’s obvious those goals were all wrong!

Things can also go horribly wrong when impossible goals are set because, leaders shoot their mouth off or get visions of grandeur. Let’s take a short trip back in time. It’s the late 1960’s. The Ford Motor Company was fast losing ground to more fuel efficient cars the Japanese were cranking out. Lee Iacocca, a very smart man with lots of successful launches to his credit, (and the then CEO of Ford), announced the challenge of producing a new car that would weigh less than 2000 pounds and cost less than $2000 and would be available in the market in 1970. The result: skipped safety checks on the Ford Pinto that led to cars catching fire and eventually resulted in massive law suits.

 So we now realize that organizations have a more fundamental problem – with goal setting. That goal usually filters down from the top – which brings us to an interesting conundrum. Going back to what Stiglitz has to say in his article.

“So C.E.O.’s must be given stock options to induce them to work hard. I find this puzzling: If a firm pays someone $10 million to run a company, he should give his all to ensure its success. He shouldn’t do so only if he is promised a big chunk of any increase in the company’s stock market value…”

 Research has shown that the motivation that people will have to do the right thing or blow the whistle when things are not quite going the way they should is greatly enhanced when they feel they are working for a larger purpose than just monetary gain. When the only incentive one has is money, it tends to create the ‘stretch goal’ trap. Bigger goals – Bigger reward – Bigger bank balance! Forget everything else, all ‘that’ is somebody else’s problem. The ‘Big Whale’ trades, the LIBOR fixing scandal, the recent record fines paid by JP Morgan, Enron, the list just goes on and on.

“Of course, incentives are an important component of human behavior. But the incentive movement has made them into a sort of religion, blind to all the other factors — social ties, moral impulses, compassion — that influence our conduct.” (Stiglitz)

Setting the correct goals is thus fundamental to achieving the desired output from employees. Goals that are too narrow; are too many in number or have an inappropriate time horizon which eventually result in, higher risk taking and unethical behaviour by employees in an attempt to meet those goals.

So how do we set the right goals?

This, dear reader, is the trillion dollar question. The ultimate question of life, the universe and everything – the answer as we all know is 42! There we have it. Problem Solved. :)

With due apologies to Douglas Adams, there is no one correct answer for this. With incorrect incentives, the chances of the goals themselves being set wrongly go up exponentially. Add to that the fact that goals when applied to teams with have varied levels of challenge for its members.

In their Working Paper, ‘Goals gone wild’, Lisa D. Ordonez et al. point this out –

“Perverse incentives can also make goal setting politically and practically problematic. When reaching pre-set goals matters more than absolute performance, self-interested individuals can strategically set (or guide their managers to set) easy-to-meet goals. By lowering the bar, they procure valuable rewards and accolades. Many company executives often choose to manage expectations rather than maximize earnings. In some cases, managers set a combination of goals that, in aggregate, appears rational, but is in fact not constructive. For example, consider a self-interested CEO who receives a bonus for hitting targets. This CEO may set a mix of easy goals (that she is sure to meet) and ‘what the hell’ difficult goals (that she does not plan to meet). On average, the goal levels may seem appropriate, but this mix of goals may generously reward the CEO (when she meets the easy goals) without motivating any additional effort when the goals are difficult.”

Goal setting and the consequent rewards strategy are closely intertwined. Your rewards strategy might be well thought out, meaningful and beautifully executed but if they are being handed out for the wrong goals, it will still be meaningless in the long run. Rather than taking the easy way out of boiling the organizations goals down to the revenue numbers and profit figures of billions of dollars, its time leaders spent more time establishing meaningful goals that are aligned with the long term interest of the organization and all its share-holders.

The alternative of continuing with status-quo on goals and incentives is a scary proposition. Already there are rumblings of real estate and investment bubbles building up in South East Asian economies as a consequence of the Fed tapering. Another large financial shock just might be the proverbial last-straw on the camel’s back. On the positive side, we might get a few more entertaining movies.

References and acknowledgements for this post:

‘In no one we trust’, Joseph E. Stiglitz, NYTimes, 12 December 2013, Goals gone wild: The systematic side effects of Over-Prescribing Goal Setting, Lisa D. Ordonez and others, HBS Working Paper, 09-083, Image used in this post courtesy of Free Digital Photos.

Building a high-energy work environment

_Workplace_Motivation_Usually when people think of an office buzzing with energy with everyone in the ‘zone’ they think of start-ups. Small office, people sitting where they can, cheap furniture, lots of wires criss-crossing the floor from all the machines lying helter-skelter all around. For the record, the first “office” ‘kwench had was a living room and we had one-plastic table and a plastic chair (for guests).

Large offices with cubicle farms, cafeterias, grand lobbies typically evoke mental images of power and a large process oriented machine at work rather than energy.
Good generalizations for stock photography and movie plots, but hardly the reality. The energy you feel in start-ups doesn’t come from sitting on the floor or having doors as desktops, it comes from the motivation levels of those working there. Similarly the fluorescent lighting in the swank offices of a large organization isn’t sucking out the creative energy of the workforce, something else is.

There is a default environment in a young start-up that larger organizations with hierarchies, departments and processes need to consciously implement. The magic-dust that transforms a workplace into a high-energy work environment is, engagement.

Component_Target_In the book Employee Engagement, W Macey et. al, write that there are there are four components (or aspects as some would prefer to call it) held with the glue of engagement, that need to come together – – to enable a creative and motivating work environment. What follows is a slightly modified list.

(a) Employees should have the liberty to engage: ‘But who is stopping them?’ you ask. The answer, is ‘most likely – everything.’ Companies have processes and set rules to ensure that things get delivered on time with the required accuracy and this definitely is a good thing. But it is not the best thing. Employees following set processes and delivering as promised drive customer satisfaction; engaged employees deliver customer delight. But they should have the liberty to do so. The organization should be tolerant of creative solutions and possible failure – a confidence that failure will be treated “fairly”. If deviation from processes is always punished, innovation is unlikely to ever happen in your workplace.

(b) Employees should have the capability to engage: So you set the ground rules in your workplace and encourage the team to go the extra mile. But nothing seems to happen. They seem to be just doing what they have been doing all along! What gives? In order for people to really make a difference they should also have access to the required knowledge/information. If all the information is locked away on a “need-to-know” basis chances are very few will actually “know”.  Once you provide your employees the liberty to engage, support it by creating an open environment where they have access to information, where they get timely and open feedback on their work, and have the confidence that the organization will provide full support with everything they need to meet their goals.

 (c) Employees should have the motivation to engage:  An average employee spends 10-12 of their waking hours at work, add a couple more for getting to work and back. That’s 12-14 hours, of the 18 hours they are awake, away from their family. It’s important that you give them a very good reason to do so. When you provide the liberty and set the ground for capability for employees to engage within the workplace, the onus largely lies on the employee to step up and capitalize on the freedom. To motivate them however, the onus lies on the organization. Multiple surveys have shown that employees are most disengaged because they lack clear and specific goals and timely recognition for work done. From the organization perspective the requirements are clear (and fairly simple). Match the employees to the right roles – provide clear achievable goals – provide an open environment where the information required to deliver results is available – provide timely feedback and recognition.  When people have a sense of belonging and recognition of incremental progress they are making towards a larger, complex goal – motivation levels go up automatically.

 (d) Establish a transparent way of working to enable engagement: Once you have set up the first three layers, you have to enable positive reinforcement through an open and transparent culture. Make recognition public – this has a strong element of positive feedback and also ensures that there is no feeling of favoritism. Enable Peer-recognition and evaluation systems – Peers are usually in the best position to know exactly what work has been done. When the goals are clear, the combined effect of mini-evaluations over a period of time is more powerful and accurate than any detailed annual-appraisal can ever hope to be.  Be tolerant of open networks within the organization – enable a free flow of conversation and be open to constructive criticism. Typically social networks formed for a purpose tend to be focused and self-regulating. Any deviations are usually dealt with by the group without the need for active monitoring by a ‘higher authority’.

Engagement is what enables your employees to “see the big picture” and align their goals with that of the organization. But on a day-to-day basis it’s the work environment that provides the impetus for your employees to engage (or in the other extreme – disengage).

It is tempting to conclude that the onus lies on the senior leadership of an organization to do everything from establishing organizational business targets to driving an open and engaging work-culture to make sure those goals get met. While they have a large role to play, in a dynamic marketplace, waiting for senior leadership to decide every small detail is suicidal. The best way is be open and involve employees’ right from the planning process for establishing the organizations goals/targets for the year and continue to engage them throughout.

At 3M, one the world’s most innovative companies, the HR team provides the tools and processes but it’s the individual managers and supervisors who are in charge of engagement at the employee level. Accountability for establishing a culture of engagement at the workplace is done by embedding engagement into the list of leadership competencies. The company provides managers with engagement scores on company-wide surveys making employee engagement a key strategy to establishing competitive advantage in the marketplace.

References and Acknowledgements:

The “What” and “Why” of Goal Pursuits: Human Needs and the Self-Determination of Behavior, Edward L. Deci and Richard M. Ryan Department of Psychology, University of Rochester; Work Redesign and Motivation, J.Richard Hackman, Driving Performance and Retention through Employee Engagement, Corporate Leadership Council, Employee Engagement, Macey et al, Wiley Blackwell; Creating an engaged workplace, CIPD Report, January 2010.

Image1 and Image2 used in this post courtesy of Freedigitalphotos.net.

Mission Impossible – ‘Presenteeism’ Protocol

Disengaged_Gap_The world of banking has a term it dreads – NPA (Non-Performing Assets). These typically refer to loans that are at high risk of default.

Your employees are your most precious assets and their best performance is what you bank on to make the organization thrive. The Towers-Watson Global Workforce Study 2012 surveyed over 32,000 full-time workers across the globe and found that only 35% were highly engaged. The rest?

22% felt they were unsupported.

17% were detached.

And a whopping 26% were disengaged.

If you were a bank with over 25% of your assets at risk, the central bank would be all over you with audits, stress-tests and maybe even cancel your license.

If were a manufacturing firm with 25% of your plants breaking down all the time and hardly producing anything, you would declare the units sick and fix them or close them down.

If you were an airline with 25% of your planes flying practically empty you would reroute, optimize, or shut down the routes.

And yet even though over a quarter of your employees are disengaged, you still hope to meet your financial and business goals without a clear well-thought out employee engagement strategy.  Time to call Ethan Hunt?

References and Acknowledgements

The Towers-Watson Global Workforce Study 2012; Post title inspired from the Mission Impossible movie series; Image courtesy of Freedigitalphotos.net.

Presenteeism: “One central consequent of presenteeism is productivity loss, and scholars have attempted to estimate these productivity numbers. While examining productivity decrements, however, it is implied that losses are measured relative to not having a particular sickness or health issue. Furthermore, in comparison to being absent from a job, those exhibiting presenteeism may be far more productive. Nonetheless, a large study by Goetzel et al. estimated that on average in the United States, an employee’s presenteeism costs or lost on-the-job productivity are approximately $255.” (source: wikipedia)