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Here are some persistent practices that most companies still need to change to bring themselves into the 21st century. Do they show up in yours?
Practices that Drive Wedges into the Workforce
Inconsistent rules that divide the workplace like paying executives as much as possible while paying others as little as possible to save labor costs: Paying on a different philosophy sends the message that it's all about the few, not the success of the whole. Better to establish a philosophy and apply it consistently. Rank and file employees in a highly successful Fortune 500 company wanted top industry wages for all employees. They didn't care how much executives got. They just wanted the same consideration for themselves, and eventually they got it.
Another wedge driver -- exemptions for executives when things get tight: Talk about reinforcing the "it's all about them" belief. No more. If business is bad, everyone sacrifices. If pay raises are frozen for the rank and file, they're frozen for the top brass. Bonuses? Not unless all critical numbers line up. And they shouldn't if you're freezing pay. It's always hard to argue that bonuses paid out during a pay freeze weren't financed on the backs of everyone else. The past couple of years we've seen executives at Schwab and elsewhere slashing their own pay taking cuts along with staff as examples that the point is not the well being of some, but the success of the whole.
And one more -- segregated classrooms: When executives do training they get fancy padded binders with workbooks printed on special paper. They meet at a nice resort with great food paid for by the company. If they have to stay overnight, it's in deluxe accommodations. When everyone else goes to training they get the basic card stock and standard paper workbooks stapled in the middle. They squeeze into the lunchroom and brown bag it if the training goes over lunch. More often than not, however, the company schedules the training during employee off-hours so they don't even get paid. If training is important, how you manage it should say so instead of perpetuating the idea that training is a perk for some and a mandate for others. Use training to support the business. Create a policy and stick with it regardless of who's going to training. Stop organizing classes by title and level and let people learn from each other in mixed groups. Pay for time in training. If it's good for the company, it's worth paying for.
Practices that Distract from Business Results
False merit pay and performance appraisals: (I've written a bit about these lately, but they had to make the list.) Few merit pay systems reward high performers. So make annual market adjustments instead to keep everyone competitively paid, and use gainsharing or some other plan to pay for results. Drop the notion that pay will motivate higher performance. It won't. Use it to share the rewards of success with teams and business units. Stop using performance appraisals. They make performance all about satisfying the boss. Instead, bring work teams and team members together to make commitments that support business results. Learn from notable companies like SAS and Merrimack Pharmaceuticals that have embraced appraisal-less performance management with great results.
Practices that Discourage Teamwork
Irrational decisions about office space, equipment, and supplies: If someone who crunches numbers all day gets an old, clunky computer with a small, poorly lit screen while an executive who uses his for email gets the newest, most powerful computer on the market with a large cinema screen, something's missing. Decisions about office space, desk size, computer, phone, and any other equipment or supplies should be based on what's needed to do the job, not title. Allocate resources where they can do the most good rather than satisfy someone's ego. It will support the concept of all being on the same team pulling together for the same goals.
Practices that Destroy Trust and Commitment
Keeping secrets from employees, frustrating them and destroying moral: Cut the spin from all-employee meetings. Tell it straight so the adults working for you can make adult decisions about how to respond. An early mentor once told me that whatever we say to the union they should be able to take to the bank. That goes for all employees. Tell people where they fall in their pay ranges. Let them know what other opportunities pay so they can make smart career moves. Stop playing games with job postings pretending to be fair when you already picked someone for the job. Again, make a fair policy and stick with it. If you are going to make exceptions, get rid of the policy.
So, if you haven't gotten around to it, take a scan of your business and see if there aren't a few management practices sleeping in from the last century. If you step up to the challenge and modernize management, you can push performance to a whole new level for the challenges of today.
Trying it on for fit:
Take inventory of your current management practices to see if you recognize any described here. Prioritize those you do according to their predominance and negative impact on employee engagement. Make a plan for addressing them that includes a system check to prevent them from creeping back in. Be public about what you're changing and why. Solicit help from the rank and file to keep management on course, and be humble enough to accept feedback when you're off.
Send an email and let me know what you learn from your experiences. I would love to hear from you!
