Engagement expert David MacLeod believes that a competitive advantage can be gained by inspiring the workforce to give that “vital bit extra”, explains Kate Donovan
The fashionable line-up at this summer’s network of Live Earth concerts, which included The Pussy Cat Dolls, Razorlight and the Black Eyed Peas, not only attracted the young and trendy, but also demonstrated their commitment to reducing global warming.
Whether or not they were tapping their toes to the musical medley, employers should take note of the degree of interest shown by the young in socially aware issues such as the environment. If they don’t already have a corporate social responsibility strategy in place that appeals to staff then employers should consider how they can demonstrate their own commitment to society if they want to motivate future generations of employees to give that little bit extra to the organisation, says David MacLeod, guest lecturer on employee engagement at Cass Business School. “Gaining the business advantage in a competitive market requires inspiring your workforce to give that vital bit extra. I think young generations particularly, while they want to be financially successful, want [their success] to be within a positive social context,” he explains.
The importance of discretionary effort is set out in MacLeod’s forthcoming book on employee engagement, The Extra Mile, which is due to be published in November and is co-written by Chris Brady.
MacLeod says that it is vital for organisations to engage with the young if they want to be successful in recruiting, retaining and motivating this talent group. A factor that is even more important in an ageing society.
The notion of motivating staff by showing them that an organisation takes a pro-active approach to caring for the community and society has some relevance to the established motivational theory put forward by management theorist Abraham Maslow, says MacLeod. This places self-actualisation needs, such as personal growth and self-fulfilment, high up his hierarchy of needs model of motivation.
Importance of contribution
MacLeod explains that an organisation’s contribution to society, aside from its financial profit, can be motivational for staff and helps meet their self-actualisation needs. “It is very important that senior leaders articulate the contribution their organisation is making, [by saying], ‘if we don’t make profit we can’t survive’, [and adding], ‘this is the contribution we make’,” he says.
Where, for example, pharmaceutical companies are focused around alleviating suffering, MacLeod believes this commitment to a greater good should be expressed to the workforce. “Leaders have got to be authentic. They must think about what they care about and what their value system is. Secondly, these have to be clearly articulated. They have got to be a part of communication cascades,” he says.
Providing for employees to make charitable contributions and work within the community, therefore, can be motivational. “There are an increasing number of forward-looking organisations that allow their employees small bits of time to make some contribution in more of a community sense,” says MacLeod
Although people are increasingly keen to work for an employer with a sense of corporate social responsibility, MacLeod believes that reward and benefits are still powerful motivators. In particular, flexible benefits schemes enable employers to treat employees as individuals in a cost-effective way. “Flexible benefits are a very good way of tailoring what you can afford to offer to better meet what suits an employee in their particular lifestyle choices and often their particular age groups,” he says.
Non-financial rewards
Whatever approach employers choose, however, MacLeod explains that the motivational value of non-monetary rewards should not be underestimated. The simple process of saying ‘well done’ and ‘thank you’, preferably in an open session in front of other employees, can help to build self-esteem. “Non-financial rewards are repeatedly confirmed as more important than many organisations think they are,” he says.
It is also important for senior management to be seen to recognise employees’ efforts. “Arguably not nearly enough of that goes on,” adds MacLeod.
But when it comes to financial reward, getting it right is an absolute must. Giving out monetary rewards that are perceived to be unfair or inadequate can do more harm than good and quickly demotivate staff. “If you give one group more than you give to another without a good reason, if there’s no rationale for how the system works [or] if the system is seen to be unfair, then people get pretty fed up,” explains MacLeod.
Line managers have an crucial role to play in making sure that the rewards are fairly dished out to team members, so MacLeod urges that these managers themselves are not neglected. “It’s very important to attend to the middle manager because the front line really interacts with them and often the middle manager can be a bit lost and forgotten,” he adds.
Employers that are making a decision about what combination of financial or non-financial awards to offer can now calculate which type of reward will best engage their staff, resulting in improved individual performance and consequently, the company’s overall productivity. In effect, employers can rank which types of reward are most cost effective, even for softer elements such as a training initiative encouraging people to listen to colleagues.
These newly-developed measurement methods are known as regression and conjoint analysis. Statistics gathered from employee surveys and such like are analysed through a process of regression, whereby the employee’s answers are used to establish which benefits are most important to them.
Financial Investments
The conjoint process, meanwhile, gives employees various options, asking them which benefits they would prefer to receive. The results allow certain conclusions to be drawn. “You could say, for instance, a 5% increase in base pay might get you the same level of increased engagement as say a 10% increase in the bonus, but one costs you hugely more than the other. Through these techniques you can work out how to make best use of your financial investment,” explains MacLeod.
Making employees care enough to go that extra mile is increasingly significant in giving an organisation the competitive edge, and MacLeod believes that emotionally engaging staff is key to harnessing that all important discretionary effort.
Employers are realising that not only must they get the business strategy right to achieve results today, but they must also engage employees so that they continue to deliver results in the future.
David McLeod will be speaking on engagement for performance at the Employee Benefits Conference in London on 2 October 2007
Biography
David MacLeod is a visiting professor at the Cass Business School, City University, where he lectures on engagement. He is also a Fellow of the Sunningdale Institute, the Royal Society of Arts and the Institute of Marketing.
MacLeod has been on the front line leading private sector organisations through major programmes of change that have resulted in significant profit increases. His previous roles include chief executive officer for a division of ICI and head of the marketing team for Dulux.
MacLeod also had a spell at the Cabinet office as senior adviser on change and performance, working across different aspects of civil service reform.
He later became fascinated by the issue of engagement and moved on to study the subject at an academic level.
He currently works as a senior adviser at Towers Perrin where he specialises in mergers and acquisitions, and helping organisations to engage employees in the delivery of business strategy.
He is co-author of the book, The Extra Mile with business academic Chris Brady. The book is due to be published in November.
Insight into what drives European workers:
- Some 46% of employees across Europe believe that their organisation inspires them to do their best work.
- Only 37% of respondents had no plans to leave their organisation when they were questioned.
- Highly-engaged employees are least likely to want to move. Just 3% of highly-engaged employees intended to change organisation, compared with 11% of moderately-engaged and 35% of disengaged staff.
- Nearly two-thirds (65%) of European employees think that their organisation cares about customer satisfaction.
- More than a quarter (28%) of employees across Europe feel that the issues they face in their day-to-day work are understood by senior managers.
- Across Europe, 28% of employees believe their senior management has a sincere interest in the satisfaction and wellbeing of staff. However, just 25% report that their organisation helps employees to balance their work and personal life.
- Just 27% of European employees believe that senior managers communicate openly and honestly with them.
Source: Towers Perrin’s Global workforce study 2005.