Category Archives: Employee Development

Continuous Improvement, Culture building, Employee Development, Leadership

The “R” Factor Part 2: Show Me the Money!

Our previous post focused on the importance of relationships within the workplace and the impact on people.

It has also been well-documented with facts and data that the cost of poor relationships in the workplace is significant; and in contrast, improving relationships improves the bottom line.

For example, a Watson Wyatt Worldwide study found a direct correlation between trust and profitability. Where employees trusted executives, companies posted returns 42% higher than those where distrust was the norm.

In a different study, they found that of the 7,500 employees surveyed only half trusted their senior managers. So imagine the impact of improving the relationships with the ‘other’ half!

Another study on trust in the workplace conducted by Leadership IQ, which involved a database of 7,209 executives, managers and employees, revealed that 44% of participants’ responses ranged from not trusting to strongly distrusting their top management, and that trust significantly predicts employee loyalty and their inclination to stay or leave the organization. Having employees “go” is costly and especially so at the managerial and executive level. As once cited in the Orange County Business Journal, the cost of losing one executive who underperforms or one who chooses to join another executive team is an average of $1.5 million per executive hire. Calculated another way, the cost can reach 400% of the yearly salary of a high level employee.

Along the same lines, in his book The Speed of Trust, Covey quoted Professor John Whitney of Columbia Business School, who said “Mistrust doubles the cost of doing business.”

In addition to the obvious and direct costs of attrition (recruitment, severance, training, etc.), there are other costs associated with dissatisfied employees at any level. There is the pervasive, though
often not measured, cost of wasted time and lowered productivity — the unproductive time spent in unresolved conflicts, complaining about management or co-workers, lack of engagement and not putting forth best efforts. It follows that reducing wasted time, like reducing other forms of waste, can contribute to improved profitability.

Imagine how much better-off we all might be if we could better manage our relationships; as noted above, the improvements could be staggering!

Developing People, Employee Development, Engagement

The “R” Factor

In a past newsletter, Senior Associate Ellen Kendall shared some thought-provoking perspective on the importance of relationships in the workplace – a perspective that has proven to be very accurate over the past two-or-so years.

Somehow along the evolutionary path of business and commerce, it appears some of us became increasingly enamored with the efficiency that a mechanistic and impersonal focus could bring us, and concentrated on using the “hands” of employees at the neglect of
employing their hearts and minds.

We created command and control hierarchical organizations and an emphasis on functional competency and silos. In the process, we lost sight of the human need for connection and interaction and minimized the importance of productive and meaningful relationships.

Or, said another way, in the words of Don Corleone in the movie, The Godfather, “It’s not personal, it’s business.”

But for many the pendulum is swinging back, as more of us are finding that the old attitude about separating business from personal issues no longer serves us well.

In fact, there is increasing belief that becoming more personal in the workplace might actually work to the advantage of organizations; and topics such as trust, interpersonal relationships, engagement, coaching, mentoring, and values-based leadership are now critical in an increasing number of organizations.

Similarly, it is becoming more evident that relationships, and the quality of relationships in the workplace, do matter. For example, Mike Morrison, VP and Dean of Toyota University in an interview went so far as to boldly say, “My message to leaders is actually quite simple: It’s the relationship… stupid!”

He went on to suggest that human capital is useless without relationships — particularly in our fast-paced, global economy — and that leaders can be best measured by their ability to create social capital or the sum total of all their relationships.

“It is through this network of relationships that their work is conducted,” Morrison stated. “As leaders, we need to be relentless relationship-builders and be 100 times more deliberate about relating to people.

“Work is much more relational than it was twenty years ago, when you could have narrow, clearly defined jobs. Those jobs don’t exist anymore… today we get work done through others… in today’s world we achieve results primarily through relationships.”

Morrison concluded that relationships are truly the most effective pathway to the highest levels of commitment, creativity, and performance within organizations. The reason is that positive
relationships have a transformational impact on the individual. They draw out the best in each of us.

Management guru Peter F. Drucker also commented on the need to focus on workplace relationships.

“Increasingly, command and control is being replaced by or intermixed with all kinds of relationships,” he said.

“Alliances, joint ventures, minority participations, partnerships, know-how, and marketing agreements… these are all relationships in which no one controls and no one commands. These relationships have to be based on a common understanding of objectives, policies, and strategies; on teamwork; and on persuasion — or they don’t work at all”.

Spring boarding off of these respected viewpoints, we’ll take a deeper dive into the value of the “R” factor in our next post.

Employee Development, Engagement

managers’ critical impact on productivity, engagement, and retention

managers drive engagement

In a recent presentation, Gallup shared some powerful data on why an organization’s managers are so important.

“Managers are the heart of your organization,” they said. “Managers communicate and uphold the standards of your culture and your brand. They can make or break any change initiative. Nearly every problem and achievement in your organization can be tied back to the quality of your managers.”

During the presentation, Workplace Expert Patrick Mieritz referenced Gallup survey results indicating managers account for 70% of the variance in team engagement!

If you’re wondering why this statistic is so significant, consider their findings on how highly engaged business units and teams impact typical “negative” outcomes:

  • 81% decrease in absenteeism
  • 43% decrease in turnover within low turnover organizations
  • 18% decrease in turnover within high turnover organizations
  • 28% decrease in shrinkage (theft)
  • 64% decrease in safety incidents (accidents)
  • 41% decrease in quality defects

Their research also shows that highly engaged teams have a significant impact on “positive” outcomes as well:

  • 10% increase in customer loyalty
  • 18% increase in sales productivity
  • 14% increase in overall productivity
  • 23% increase in profitability
  • 66% increase in well-being (thriving)
  • 13% increase in organizational citizenship (participation)

Managerial Best Practices
If you’d like to increase the effectiveness of your organization’s managers or your personal managerial effort, a good first step is to identify or confirm the things that are important to your workforce; and beware, employee expectations have shifted since the onset of the pandemic.

As motivation expert Daniel Pink explained, “People really want three things: autonomy, mastery, and purpose.”

Or as famed statistician W. Edwards Deming often said, and a fact that still rings true today, “People are entitled to joy in work.”

So, what’s to be done?

We all know that, at the organizational or senior management level, offering more flexible work arrangements (when possible), reviewing pay scales, and improving on-boarding/team development programs are steps in the right direction.

But, if you’re wondering about actionable ways in which mid- or front-line managers can increase engagement, productivity, and retention levels, you might also consider the following best practices:

  • Set clear expectations. Approximately half of all US employees say they know what is expected from them at work. To improve on this, SHRM suggests managers should emphasize objectives, set expectations early, make goals measurable, and give meaningful feedback (only 26% of US workers say the feedback they receive is helpful). Gallup adds a note to this by suggesting managers give meaningful and frequent feedback, indicating that workers who receive weekly meaningful feedback from their managers are 2.7 times more likely to be engaged in their work.
  • Create a culture of clear accountability. This does not mean taking a “do it or else” stance, but rather a motivational approach that includes open communication, recognition, and awareness.
  • Motivate each employee individually. There is no one-size-fits-all approach that works.
  • Coach and develop people based on their strengths. Gallup says that 66% of employees who strongly agree that their manager focuses on their strengths or positive characteristics are engaged. Focusing on strengths has also proved an effective way to ensure people are placed in the right roles; and providing ongoing development to team members has proved to have a significant impact on increasing engagement levels while reducing turnover.
  • Overcommunicate! Leaders who maintain open and frequent communication, who show an interest in their teams, who share stories of success and vision, and who remind people of the mission tend to foster higher levels of engagement.
Employee Development, Engagement

Lost Opportunities: The Hidden Cost of Disengagement

We all know that engaged workers are more productive and loyal. Conversely, disengaged workers are less productive and are among the first to “turnover.” And we all know that turnover can be costly considering it involves hiring, onboarding, training, ramp time to peak productivity, the loss of engagement from others due to high turnover, higher business error rates, and general culture impacts.

But how much does turnover “really” cost?

A 2017 Deloitte study stated the cost of losing an employee can range between 1.5–2.0x the employee’s annual salary. But the costs can be even higher based upon skill level. For example, a paper from the Center for American Progress determined that the average economic cost to a company of turning over a highly skilled job is 213% of the cost of one year’s compensation for that role.

Then there are some of the less tangible considerations, as illustrated by the following example: A young, seemingly fast-rising junior executive had been working at a large bank for just over six years. When he was asked about his job and how he felt about it he said, “The job’s OK.”

His lack of enthusiasm was evident, and when pressed to say more he added, “Well, I’m not really learning much anymore.”

When asked if he was fully-engaged he said probably not but went on to say that he still did a great job. “I still give 100% and consider myself to be a great employee,” he said. Then, after a short pause, he added,” But I don’t give them 110% and there’s a big difference between 100% and 110% — at least for me.”

When asked if he was out looking he responded, “No…, but I’m listening.”

When asked whether he told his boss how he was feeling he said, “Yeah, but….”

How many people in how many places feel like he does? He is bright, educated, skilled, well-liked, and might be an ideal candidate for a senior leadership position…if he stays.

But is he being made to feel like an important part of the team? Does anyone realize that he could be giving more? Is he being engaged?

As stated above, among the many documented advantages of an engaged worker is loyalty. But so too is the discretionary effort that they put forth; going the extra mile; the above-and-beyond attitude… giving 110%! How many innovative ideas might that extra 10% yield? How much more productivity? What impact might it have on customers or coworkers?

And if he doesn’t stay, the simple replacement costs are not the real issue. He is a potential super-star! He is a known-entity… trustworthy, dependable, low-risk.

What are the real (or hidden!) costs associated with disengagement; the costs of not getting 110%… the costs of not only lost workers, but also of
lost opportunities? As we’ve discovered over the years, the biggest waste in most businesses is the lost opportunities…

Continuous Improvement, Employee Development, Performance Management

Your Training ROI & How to Optimize It

We are often asked about how organizations can optimize the value of their Learning & Development or training programs, with many leaders looking for ways to increase training-related behavioral change as well as their return on investment.

A recent VitalSmarts webinar addressed this subject quite nicely, and shared several perspectives that are well-aligned with ours.

Here’s a brief summary:

First and foremost, the webinar’s over-arching premise is that Learning & Development must become a strategic partner of the C-suite in order to bring about improvement and real behavioral change. In addition, there must also be a C-level commitment to consistent L&D programming. As the presenters said several times, “Training, or L&D, must be treated as a process rather than an event.”

These concepts align nicely with our perspective about the importance of senior level management’s buy-in, sponsorship, and involvement in all improvement initiatives. And, in case some convincing is in order, the article went on to share some thought-provoking statistics.

For example, only 7% of Learning & Development leaders measure the bottom-line effectiveness of their training programs. Possibly more troubling, only about 10% of all Learning & Development executives have met with the C-suite; and only a few align their training plans with the organization’s strategic plan.

In addition, only 35% of the US workforce receives any training at all! And even then, the average is three days of training per year.

Finally, without effective reinforcement and ongoing development, only 14%-15% of the information shared in training “sessions” is applied in the workplace. Instead, people most often do nothing differently or make a few changes for a while and then revert back to whatever they were doing in the past. Clearly this enormous “gap” represents significant waste, which was referred to as “learning scrap.”

3 Best Practices

For those who are determined to improve the value and effectiveness of their Learning & Development programs, (i.e., increase learning transfer and reduce learning scrap), three best practices were suggested:

Define the role and purpose of Learning & Development within the organization. To begin this process, the first couple of questions might be, “What would translate to a breakout year for L&D?” “This training will be a success when… (complete the sentence)”

Build the Learning & Development platform on defined and agreed-to business outcomes. It was pointed-out that most L&D managers plan their programming on what they “hope people will learn.” But the real focus should instead be on “what people will do differently as a result.”

Recognize that L&D is a process, not an event. The process must include ongoing measurement and support to ensure the business outcomes are achieved. This means coaching, reinforcement, and accountability on multiple levels:

  • C-level must be committed and allocate resources for appropriate levels of learning as well as for reinforcement and ability coaching
  • L&D leaders must align with business outcomes, and move the “finish line” of their training to include an achievement phase
  • Front line managers must provide reinforcement and support
  • People at all levels are accountable for applying what they’ve learned and related behavioral change