Blogging from SHRM 2011: See You There?

Just like last year I will be headed to the SHRM’s 2011 Conference in Las Vegas,  Nevada on June 25th.  I am excited about the conference because last year’s was so great.  I will be following the sessions on morale and engagement to see what everyone has to say and find out what new ideas are percolating “out there”.  I will also blog after the keynotes from Sir Richard Branson (pause for tiny feeling of pride for my fellow Brit), Arianna Huffington (must brush up on my Greek) and Michael J Fox (my hero, I am sure many peoples’ hero, cant wait to hear and see him).  Oh yes the Zappos guy Tony Hseih will be a must-see, given his success and cutting edge management ideas.

Last year SHRM had a special focus on military returnees from the Middle East trying to get back into the workforce and some fantastic speakers, who knocked the ball out of the park with their emotional comments on that topic.  That will also be a feature this year and I am excited to find out what else will tug on the heart strings and stimulate the cortex.

One of the best things about SHRM is the unplanned encounters of great people from all over the world, all HR enthusiasts busting their behinds somewhere, trying to make their work places great, like the rest of us.  Fortunately, despite the reputation of Vegas as “Lost Wages”,  I am not at all tempted by the crap tables:  my casino was the stock market and the 2008 Crash cured me even of that, so my attention will be all business, plus the Keith Urban concert of course.  If you wanted to be at SHRM11 and cannot be, let me know and perhaps I can write about something which interests you?  If you will be there, let me know!

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Why Morale and Engagement Are So Important

(first published in this form in humanresourcesiq.com April 1, 2010)

Author’s note: this is an abbreviated and edited version of part of a Chapter in my book, detailed below. 

If there is one word which encapsulates the benefits which accrue from a high morale organization, it is this: performance. This refers to performance at the individual level and that of the organization as a whole. Evidence for morale correlating highly with, and driving, performance is strong and growing.

If you have competition such as most organizations in the private sector (although increasingly public sector organizations have competition), then high morale will increase your competitiveness. If you serve customers, your customers will be more satisfied when served by high morale employees; those customers will also be more likely to return to you. If profits are your goal, you will increase the likelihood of these. If you have a publicly traded stock, even your earnings per share can correlate strongly with your morale level. If you are in the public sector and have a mission, like in the military or law enforcement, you will be much better at fulfilling that mission; indeed many in the military say that without good morale, missions become much more difficult or even impossible to achieve.

At the individual level, the high morale employee will experience less stress than the low morale one and as a result, less absenteeism and sick days; the high morale employee will be more engaged, willing to work harder, be more committed to the organization’s goals than the low morale one, and certainly be a stronger advocate for the organization with others such as customers, family and friends or potential employees.

Combining morale with organizational performance is one of the central focuses of the morale field of study, since consultants in this area are so often faced with the “so what?” question, such as: 

“I like the general idea of high morale and it sounds like a good thing, but what does it really do for me?” 

An alternative and more negative view is often:

“I’m in business to compete and make a profit; this stuff is a waste of time and won’t change a thing.”

Against this background, to counter these still widely held views and demonstrate just how powerful morale is, we will summarize many of the performance and effectiveness benefits of the high morale organization here. Everything you will read on this topic is backed by solid data, in nearly all cases from multiple sources.

• Morale Provides a Competitive Edge in Good Times and Bad

Surviving a crisis (for the organization alone or for the society in general) is far easier when morale is high. The team pulls together and works as one. Sacrifices are shared much more easily. High morale is therefore more than protective armor, although it does play that defensive role: it offers an offensive path through the crisis which those lacking it will not be able to follow.

• High Morale Supports the Implementation of Organizational Strategies

 It’s not your plans that are important; it’s whether you can implement them. A good strategy is a fine thing, but it is useless unless you can make it happen. Making it happen depends to a large degree on your people, and therein lies the power of morale.

• The Morale Process (Measurement-Implementation) Gives Employees a Voice

It sounds like a circular argument, but it is true: simply measuring morale and feeding back the results, when carried out correctly, improves morale. Over and over again, employees have thanked us for being in their organization, collecting their opinions and letting them know how they and their colleagues feel as a group.

• High Morale Helps Organizations Attract and Retain Talented People

Organizations selected by Fortune and the UK equivalent Sunday Times Best Places to Work, trumpet their appearance on such lists in recruitment advertising, not just at the point of sale like at Starbucks, but also in newspaper and online ads. They are eager to let the world know how good it is to work for them. 

• High Morale Makes the Workplace Easier to Manage and Increases Productivity

Stripped of the dramas created by negative morale situations and the challenges of dealing with people who like to perpetuate them (from individuals with no management responsibility to managers themselves), the high morale workplace becomes less fearful, stressful and more “fun”. Management time can be focused on things which make the organization more productive, not just “putting out fires” related to personnel, or replacing the people who have left. 

• High Morale Reduces Workplace Accidents, Reduces Absenteeism, Reduces Workplace Stress, Improves Employee Health and Reduces Sick Days Taken

 Plenty of evidence exists for all of these claims; in fact the evidence is so overwhelming that it is hard to imagine why organizations do not implement practices which would lead to a maximum level of morale, even if only to gain just these advantages; and yet many do not.

• High Morale Organizations In The For-Profit World Have Better Financial Performance Than Low Morale Ones

There is strong evidence from multiple and highly credible sources that morale is positively correlated with higher stock prices, higher earnings per share, and even 5 year survival following an IPO.  

• High Morale Organizations Can Have Higher Customer Satisfaction Than Low Morale Ones

A great deal of research shows the morale-customer satisfaction connection, and demonstrates causal connections between the two. 

• Morale is a Leading Indicator and Allows Organizations to Prevent Potential Negative Situations

 By examining trends based on previous employee survey data you have collected, you can have a sense of how the future will play out if you take no action. This is especially true when a poorly performing manager is having a negative effect on employee morale.

• The Morale Process Is One Of The Most Democratic Activities In Which An Organization Can Participate

There is nothing quite like giving every single person who works in an organization the chance to say exactly what they feel, knowing that top management will look at every piece of data and every written word. 

• High Morale At The Individual Level Is Connected To Job Performance By That Person, And Is As Good A Predictor Of That Performance As Other, Well Tested Measures

Multiple studies now demonstrate that there are few activities one can undertake better than knowing a person’s individual level of morale, in order to predict how they will perform on the job.

Faced with the overwhelming evidence for the power of morale and its effect on organizational performance, some put forward the idea that the relationship is actually reversed, i.e. performance drives morale. While there is a “loop” effect, in that a customer’s positive feedback about a company’s product or service to a sales representative can boost that individual’s morale, for example, the evidence supports a much stronger effect in the other direction, from morale to performance.  

Recent data from Gallup show that the US workforce is only 29% “engaged” at work, and the Conference Board states that US job satisfaction has been falling for two decades. Europe is, if anything, even lower.  With the US and Europe facing ever more intense competitive pressures from high workforce morale countries like India, China and Brazil, they cannot afford to fall behind; it is in their interest to do all that they can to enhance the morale aspect of work life.  If they do this, the morale and engagement of their people will be one of their key competitive edges in an increasingly global marketplace.

 Excerpted from Employee Morale: Driving Performance in Challenging Times by David Bowles and Cary Cooper. Copyright © 2009 by the authors and reprinted by permission of Palgrave Macmillan, a division of Macmillan Publishers Limited. All rights reserved.

Happiness at Work II: More Thoughts

I find this subject quite fascinating and judging by traffic here on the blog, more than a few of you do too.  Reactions to the original articles by Sue Shellenbarger in the WSJ (see my Happiness at Work I post) have also been interesting, ranging from those who say that this is fabulous, to those who seem to think this is the typical work of manipulative, scheming management out to exploit the workforce with a cynical appeal to something which appears (on the outside) so kind.  In other words, its a lot like the reaction I get when I tell people I work in the area of morale at work;  most people beg me to come to their workplace as soon as possible, but some (especially in Europe which is very interesting and the subject of a future post here) think this whole morale/engagement thing has the purpose of driving the enslaved workers even harder.

I wrote to Sue and also posted a reply to the article online at the WSJ and wanted to share one of these with you, at the risk of a little overlap with my first post on this subject.  Basically I said that happiness is fine, trying to bring something positive like that to the workplace can’t be all bad, but that it might have limited effect, based on how dysfunctional the internal culture is.  Here is what I wrote to WSJ reporter Sue Shellenbarger:

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Sue your recent work on happiness at work is very interesting,  but I have a few issues with it:

– if I overlay the world’s happiest nations like Denmark, Holland, etc. on a chart of the countries with the world’s highest workplace morale (currently China, India, Brazil), there is not much overlap. Why is this?  Maybe because workplace morale has to do with a lot more than being happy. Happiness might want you to relax or take the day off and go to the beach;  high morale and its resulting behavioral component, engagement, make you want to contribute, go the extra mile, tell others about how great your company is as a place to work or buy from, etc.

–its all very well to encourage people to take a positive view but that is not always easy.  Even Eckhart Tolle (whom I love, thanks for the reference to him!) suggests that quite a few situations require us to get out.  Lets imagine an employee furious that his CEO makes 300-400 times his pay and benefits (the US average, far far above worldwide figures) and has a golden parachute if he screws up (a la Nardelli at Home Depot), something this employee would never been offered.  Rick Wagoner at GM destroyed 96% of the GM share value during his tenure and barring bankruptcy was set to receive a nice $20 million retirement package. Should HD and GM people be “happy” about this?

–there is plenty of evidence that high morale and engagement is a strong correlate and driver of performance, and some of the studies you mention note that happy people perform better, but that happiness might be part of their overall morale, but only a part.  They didn’t get to that high morale just by learning to be happy, they got there also because management treated them well, gave them power to make decisions, a chance to grow on the job and many many other things.  Put a “happy” person in with the boss from hell for a few months and lets see what happens….

I am all for people taking responsibility for their own well being;  but we also need to shake up management in this country and improve our pitiful standing in the morale sweepstakes: Gallup says only 29% of US employees are engaged at work, and Mercer has us at below average worldwide in engagement.  In an increasingly competitive world, with all the performance benefits of high morale that we now know about, we cannot afford to stay here!

Anyway, great discussion and thanks for the chance to contribute.   FYI my philosophy is strongly capitalist and not pro government intervention, but mindful that, like football, we need clear rules and enforcement of them to ensure fairness.  Kind of like John Mackey, of whom I am a big fan.

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Lots of people writing to the WSJ wanted a job as a happiness coach, they think it is like going to a workplace with a bunch of drinks and having an instant “five o’clock somewhere” Happy Hour!  Would that it were so simple, right?  I’ll stick with my position that learning about oneself and learning to be happy is a huge part of life, and as valuable a resource for dealing with life’s ups and downs as anything I know.  Everyone should try and find a way to do this, and if they did we would have a better world.  But there is more to organizational culture and the building of high morale than this and we need to be careful that people don’t hang on to this as a superficial “fix”, especially in difficult times.  Don’t forget what I told Sue:  the “happiest” people in the world DO NOT have the highest morale at work.

Let me know what you think!

Happiness at Work 1: Is it Enough?

There has been a lot of talk lately about “happiness” at work;  several new books seem to be coming out, and the Wall Street Journal has featured the topic more than once via the work of its reporter Sue Shellenbarger (see http://blogs.wsj.com/juggle/2010/01/27/workplace-blues-call-a-happiness-coach/?KEYWORDS=happiness+at+work and http://online.wsj.com/article/SB10001424052748704905604575027042440341392.html?KEYWORDS=happiness+at+work)

Sue does a great job of describing what is happening, not only the books being produced but of course the new happiness gurus and coaches which have appeared!   She makes it clear that there are mixed feelings in the consulting community about this but also makes a good case that this kind of intervention really works.  I wanted to share my take on this and in the next post will show you what I wrote back to Sue at the WSJ web site on the subject.

First of all as someone who has trained intensively over many years in psychology, I felt it was part of my training to make that inner journey into my psyche and find happiness;  how could I help others, if I was blocked inside?  How could I work in the area of morale at work if my own morale was sub par (which it had been for years when I started “psych”)?  The old joke is that psychologists are more messed up than the average person, and this is the reason they get into the field, to which I say, I resemble that remark!  But unlike the joke, I don’t generalize it to ALL others in the field (OK yes certainly some).  In any case becoming “happy” was something which happened as a result of my journey;   how can I therefore not recommend that to people at work?  The answer is that I do recommend it, but I also have a word or two of caution:

–I recommend it to anyone, anywhere, that if you have the great privilege to be able to work on your inner processes, understand your thoughts and operation of your mind, let go of your past, you should jump at it!  Quite apart from what happens to your personal relationships (hint:  they get better), if you end up as a manager somewhere you will be a much better one, I assure you.  If you have learned about your ego, then that ego will not control what kind of manager you will be.  Have you ever met the ego-driven manager?   She (these things have no gender preference) always takes credit for what YOU do, never hires anyone smarter than herself, and so on…the list in endless).  If you have let go of your past, you will be a better employee, not always seeing your boss as a “bad Dad”, for example.  If you have learned to take personal responsibility for your life, even better, this is a HUGE step forward, to let go of victimization and blame.  All of this will make you happier at work, because these things (ego, living in the past, “victim mentality”) create enormous stress for both the perpetrator and those around her/him.  So yes, if you can go through this, jump at it and embrace the changes because you and your loved ones and co-workers will all benefit from your growth.   To the extent that a “happiness coach” at work can teach these things, I would say, fine.  As it turned out, I found a way to do this and pay for it myself outside the work place, which involved a lot of financial sacrifice for a starving student but was well worth it.   But having said all this, even if many of the workers in a team have gone on this journey and reached a good “happy” place inside, it is not enough to create a high morale work environment.

–It isn’t enough because no matter how happy a person you are inside, you can run into major roadblocks at work.  Consider the following:  Jean is a generally happy person, not all the time but most, just like the rest of us.  She gets a job at XYZ Corp. where she works for Fred’s team of salespeople.  At first, everything seems fine, as good as she had expected when she had the interview with Fred and a couple of team members.  Then, rather like in a marriage, she starts to see below the surface and Fred’s best behavior breaks down to reveal a darker side (I don’t mean that marriages always reveal darker sides, although they can…only that” best behavior” breaks down to reveal what we have been hiding).  Fred turns into a “boss from hell”, ego driven, critical;  nothing is good enough for Fred.  The team members who had seemed so content in the interview reveal that they have had to deal with this for years.  How is Jean’s happiness doing now?   She knows how to take responsibility for her life, and of course she can leave….but wait, there are no other jobs like this anywhere near where she lives and her husband cant quit his job and move to another city.  What should she do?  She can complain about Fred to Fred’s boss but Fred’s boss is just like Fred and that is the reason he hired Fred (saying Fred will be a “good fit”, meaning a good fit to his values and OWN “boss from hell” behavior!)  Clearly, Jean is stuck and her well-being and happiness will suffer until something is done about this dysfunctional work culture.

If you think about it, a happiness coach might have limited traction in this environment;  some cynical members of Fred’s team might say that if Fred’s boss in the example above brought in a happiness coach, it would be like putting a smiley face sticker on an empty gas gauge (a wonderful comparison attributable to Esther Hicks)…and they would be right!  What is needed here is a good house cleaning, hopefully resulting in the departure of Fred and his boss.  Does this sound a bit cruel to Fred?  No its not cruel, because these kind of people can rarely be rehabilitated, and even if they are it takes time during which the team might continue to suffer.  This type of action is actually the reverse of cruel because it frees a whole team from a dysfunctional boss or bosses;  I use a phrase in the book which is appropriate here:  “sacrifice the one for the many”.

With Fred and his boss gone, perhaps morale can be rehabilitated in XYZ Corp.  Perhaps…maybe the dysfunctions run deeper, in which case much more needs to be done in the short term, not to mention the longer term deep cleaning and cultural shifts which are usually required to create the true high morale culture.  I have had clients in which this process took years, but they committed to it and saw it through;  now they benefit from all that work with the huge performance advantages of a high morale workforce.  And as a result of this the employee surveys show, guess what?  Yes that people are HAPPY to work there!

So, happiness at work, yes I am all for it.  But if the gas gauge shows empty, don’t cover it up with something superficial, do everything you can to fill that tank!  I’ll post more on this soon, including my letter to Sue Shellelbarger at the WSJ and my post on their website.  I’d love to hear from you on this or any other topic on my blog.  Tell me what you think.

Executive Compensation and Worker Morale I: The John Mackey Blog

Back in June of last year John Mackey, CEO of Whole Foods Market, an organic grocer headquartered in Austin, Texas, wrote a piece on the Harvard Business Review Blog about excesses in executive compensation and the effect these had on worker morale, among other things.  It was titled “Why Sky-High CEO Pay Is Bad Business”, is a great read, and can be seen here:

http://blogs.hbr.org/hbr/how-to-fix-executive-pay/2009/06/why-high-ceo-pay-is-bad-business.html

Mackey is an interesting character, having started this business 30 years ago and made a huge success of it (WFMI is the largest such merchant in the world, with stores in the US, Canada and the UK).  Lately he has become somewhat of a darling of the very people you might not associate with Whole Foods and its tree-hugging image:   readers of the Wall Street Journal.  The reason for this was his 2009 op-ed piece written about the Obama health care plan and how he, Mackey, felt that such a plan was too much government and too little common-sense actions which he and his company had already taken to provide cost effective health care to all his employees (or “Team Members”, as Whole Foods calls them).  The Journal had such a huge positive response to this that they interviewed him a few weeks later, further burnishing his image.  Some on the left side of the political spectrum, WF customers, were dismayed, and thought he had gone over to the dark side;  they took their business elsewhere,  but they seem to have been replaced by Journal readers who have found a new, organic soulmate in Mackey!

I was inspired by his Harvard blog to the point that I wanted to add my two cents and thought this would be worth bringing also to this venue.  Here is what I posted in reply:

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I think this is as timely and well informed a discussion as I have seen anywhere on this subject. As someone who has a great deal of respect for John Mackey and who spent two years living in Austin and using his flagship store there almost as an office while researching my recent book (co-authored with Prof. Cary Cooper) on morale and performance, I had a chance to see the result of his management style and philosophy in action. I can say from that experience, as well at some of his other stores, that Whole Foods has a very high level of morale and that Mackey and his company live what he talks about here.  Not only that but Mackey’s recent offerings in this area and worker health care, for example in the Wall Street Journal, always use common sense practices instead of government regulation as their proposed approach.

The evidence for the corrosive effect of high executive compensation on morale may only be anecdotal but there is one related piece of data I can point out: the US has, at best, average worker morale on a worldwide basis. I observed this during 25 years of consulting around the world in this field, and Mercer’s recent data confirm it.  Not only that but our emerging competitors, India and China, are now way ahead in the morale stakes.  Gallup confirms that only a pitiful 29% of US employees are “engaged” at work (engagement being a behavioral by-product of high morale).  While this could be brushed off by those ignorant about morale’s effect on performance, or put down as something “touchy-feely” or “soft”, well informed managers now know that morale’s importance is far more than this, and is in fact “mission critical”.  The military has known this for years, but unfortunately the value of this information has taken a long time to reach some management ranks.  As my book shows, the evidence for morale not only correlating with but driving performance, is overwhelming; this includes such areas as profitability, productivity, customer satisfaction and even employee health.  Some here have also rightly mentioned that execution is the key to organizational performance, not just the underlying strategy: well, morale is one key measure of the shape an organization is in, as it prepares to execute its strategy.

Anyone who has done employee surveys or run focus groups will tell you that employees complain a lot about executive compensation. They roll their eyes when the CEO gets on a video presentation and tells them “we’re all in this together”, knowing that his 300:1 or greater compensation level belies that statement and puts him on another planet compared to the average worker.

One word which drives morale more than any other is “fairness”.  This does not mean French-style equality or any form of socialism, it is quite different. Fairness can mean a significantly different compensation level for two people in an organization, but based on job size and complexity, performance on the job, etc.  But when workers see someone at the top drain shareholder value to the extent of a Rick Wagoner at GM (96% drop in share price during his tenure), and the rewards which are given to those people even when they screw up so badly (Home Depot and HP also come to mind here for previous CEOs), no wonder they become cynical, and yes, de-moralized.  What would have happened to a GM worker in a paint shop whose work had a 96% defect rate?  Continued employment and a great retirement package?  I don’t think so. Nothing about this is fair, it is a game which is fixed so that some CEOs can win no matter the final score, and this is allowed to happen by too many passive and overlapping Boards and disenfranchised and apathetic shareholders.

We therefore know three things: 1) our morale is anything from really quite low (29% engaged) to average at best; 2) we have practices of excess and greed in the executive suite which we know from experience de-moralize our people; and 3) our emerging competition is kicking our behind in the morale stakes and this will bring them enormous competitive advantages over us unless we get our act together.  So we (not the government!) need to wake up and realize, we are in a fight for our standard of living and way of life here; lets get these excesses under control, and lets get our morale up to the world class level which it deserves to be, given the unbridled optimism and energy of the American people.  Yes that’s the same America whose early states used the word “Commonwealth”, with all that that means.  It means fairness.

Morale…or engagement?

There seems to be a lot of focus lately on “engagement” in the workplace.  Some people even say that this has replaced “morale”:  after I took a break from consulting in this field for several years then came back to write a book (see also tabs above), I called a friend who is in the employee morale survey business and he told me that I would “no longer recognize” anything because it was now “all about engagement”.  I laughed and continue to find this quite amusing.  The reason is that many management trends come into fashion then fade.  Some endure for a long time, and even become part of management theory, but they are a small number of the total; an example of an enduring and valuable insight is “corporate culture”, which has been an enormously useful lens through which to look at organizations, and which truly was a breakthrough from the limited way in which they were described and analyzed before. But for every “corporate culture” insight there are many ideas which have only a short shelf life.  Is “engagement” one of these or is it truly a breakthrough?  Has it really replaced “morale”?  Most important of all, is it really new?  Lets start with the last point…what exactly is engagement?

Most definitions make it sound like a higher level psychological state which leads to certain behaviors, but by a minority of employees: Gallup (which is widely quoted in our book) says that only 29% of US employees are truly engaged, which is a sobering thought.  Those talking about engagement mention several things which engaged employees do: advocacy (recommending the organization as a place to work or its products or services to customers); “going the extra mile” (not rushing out at 5pm sharp, staying on to meet special customer needs, for example); volunteering for assignments; showing low resistance to pitching in, and so on.  The only problem with this is that these are also classic traits of high morale employees!

Having said that, with the understanding that engagement and morale may indeed be quite strongly related, I believe engagement is a very useful concept for several reasons:

• It seems to excite interest in the field and therefore gives people a focus on morale; this cannot be a bad thing
• It gives us a way to say that a group is “engaged”;  we cannot say they are “moraled”, or “highly moraled”
• It is a way to describe those who are truly at the highest level of morale in a way that makes sense to many people because the word “engagement” is so widely used in the English language;  because of this it may make it easier to share with employees and those who manage them, perhaps as a goal to reach (“a highly engaged workforce”)

I’d like to quote from our book because I spent some time there trying to synthesize morale and engagement in a way that makes sense:

“If we are to attempt a fusion of morale and engagement, it is this: engagement is a by-product of high morale, a result of it. When workplace psychosocial and physical environmental factors are perceived positively by the workforce, they experience a sense of well-being which we call high morale. When that morale level is high enough, it triggers behaviors on the part of workers which include the ones we have described above (advocacy, willingness to “go the extra mile”, commitment, helping others, etc.) and which we call “engagement”. Engagement is therefore not possible without high morale; and high morale usually results in engagement.”

I hope this adds to the discussion and look forward to any feedback you have on your experience using the concept of “engagement”.  In the end, there is no conflict here, just different ways of looking at the same thing.

Welcome to the Morale/Engagement and Performance Blog

Hello I’m David Bowles and I want to welcome you to my blog on morale/engagement and performance, the theme of a book published worldwide by Palgrave-Macmillan (see tabs above and picture below), which I co-authored with Professor Cary Cooper.  Instead of just focusing in the book on “what to do on Monday morning” to improve morale and engagement, Cary and I have looked in depth at the performance connections with morale…the things which are the answer to the question: “why should I care about this touchy-feely stuff”?  As we say in the book, performance is the reason why you should care and why organizations large and small are making morale and engagement “mission critical”.  I look forward to sharing with you here the research-based data we feature in the book and discussing your reactions to, and experience with, what I have to say.  Whether you are interested in productivity, profitability, customer satisfaction, worker health or innovation…all are affected by, and our data show, driven by, high morale and engagement.  Coming at a time of unprecedented stress and upheaval in organizational life, the drive towards high morale and the workforce engagement which results from it, can be our way towards success in the tough, globalized world which is our future.  I look forward to sharing this journey with you and hope you will contribute your ideas and thoughts.

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