I Finally Gave In and Joined Twitter!

When I went to the SHRM Annual Conference last year as a proud member of the 2010 Blog Squad, I was the only one who was not actively using Twitter. Some of the people there were incredulous (but not those on the Squad, they were nothing but friendly), and some who didn’t make it onto the Squad were a bit peeved that a person who did not use Twitter….can you believe it?…made the Squad in the first place. Not so Jessica Merrill, Goddess of social media and especially Twitter, and author of Twitter for Business (highly recommended by the way). Jessica perhaps felt a bit sorry for me…being out in the cold and all that….but that wasn’t her motivation to give me a complimentary copy of her book at the end of the Conference, which she kindly did. That was simply to bring another person into something which she believed in and felt passionately about. I read the book right away and loved it, but it has taken me almost a year to get around to it (my excuse is that I am busy writing a new book). In any case here I am and I am going to go for it. Its not easy being starting with just one follower…but at some point everyone has been there. In fact I just picked up two more in the last hour…including SHRM’s multitasking social media guru and the man who picked me last year for the Blog Squad, Curtis Midkiff. OK, off and running and totally excited about it, and waiting now, breathlessly, for SHRM11 to start and the Tweetup to take place! Like with bacon and eggs, the chickens were involved but the pig was committed: I am committed to Twitter (but with a better outcome). Follow me and my Tweets by clicking below. I’ll have updates about the new book, ideas I am working on for new blog posts, and pleas for help with ideas for just about everything I do. I am a voracious consumer of information, especially as it relates to my passions of worker morale and engagement. Contact me here or….yes now I can say it…on Twitter. Glad to be there.

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!

LinkedIn profile/contact: http://www.linkedin.com/in/davidbowlesphd

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Warning: Ego at Work! Do You Have People Like This Where You Work?

My recent blog post on ego and morale/engagement in the workplace received more hits than anything I have written in the last year.  I wonder why?  One reader wrote and told me that she found it quite stressful just reading about the stereotypical ego-driven manager and how (s)he operates, having had exactly such a person as boss in a previous job.  My argument in the previous blog was that ego is the biggest destroyer of morale and engagement at work, because in so many organizations, there are ego-driven managers.  But there are also, of course, ego driven employees, who may not have much power over others but are a pain to work with, and manage.  They drain the energy of the group and occupy too much time of the manager.  As host of an occupying force, their energy is not going to be focused on your organization and its goals, nearly as much as someone who does not have this trait.  Instead the ego-driven employee will spend inordinate amounts of time on other things, to satisfy the insatiable needs of this force which has them in its grip.

As we saw last time the ego is a false self, built up over time, and usually in childhood, to replace the “real” you, which you decided…unconsciously of course…was not “enough”.  Its like an inner conversation in which you said to yourself, “well I’m not making it with who I am now, so I am going to build a new “me” which will have the characteristics or exhibit the behaviors that I am sure will work with <fill in the blank>”.  At an early age, this blank is often filled with one or both parents.  At a later age, that role is often played by, guess who?  People at work.

This is a normal condition, only the famed spiritual writer Eckhart Tolle claims to have no ego, but the rest of us are stuck with one, to a greater or lesser extent.  The key is how much this false self stays unconscious and drives behavior; in some cases it will remain totally unknown to its host (the ego loves that, it is a stealthy creature) and even completely control its host.  If that is you, you simply have no idea what drives your life and would be amazed to find out.  The ego won’t easily let you, though, and will make you fight like crazy before any light is shone on itself.

We humans think we know ourselves as we get older, but often we do not; instead, we continue to do things which the ego demands in order for it to continue to exist.  Let’s look at some of these behaviors which might show up in your current or prospective employees or yes even….you:

–Sheila has a compulsive drive to up her personal Twitter and Facebook connections, even asking people she knows almost nothing about to become “friends” and competing with others who seem to have “made it” on these platforms.  As a result social networking takes up a significant part of her work day, even though much of it may not be business related.  (How’s that for a productive day?  You added 20 “friends” but got nothing done at work!)  Like many good activities and things in life, Facebook or Twitter can also become an addiction, and although Sheila does not think she is addicted to anything, she nonetheless feels a compulsion to act out this behavior. Unconsciously, Sheila has a deep belief that if she has 5000 Facebook friends she will have certain worth or value which was lacking when the count was 5.  When she reaches that number however, after a painfully short celebration, she finds that it does not “work” and she is no happier; unfortunately she is not allowed more than 5000 friends by Facebook, so is “stuck” there.  Sheila will look for another temporary and fragile solution, or if she is lucky and finds herself pushed by an inner drive or a good friend, be forced inwards for the journey which will lead her to a real and solid sense of self-esteem not based on external events, “friend” counts or material goods.

–Fred treats his bosses like parents, even gravitating to a boss whose style most (unconsciously) reminds him of a parent with whom he had problems.  This same mechanism is at work with the woman who marries a man who treats her like her father did, of course.  Its familiar, its what she is used to, what she thinks she deserves (good or bad, I am not saying this is always a bad thing, its just a common thing).  In the organization, we see this all the time.  We also see a more extreme version, where a mild mannered boss can be seen as a tyrant by an ego-possessed worker, whose bad childhood experience of “authority” makes anyone in an authority position ”bad” like the parent. This is of course a failure of perception, a projection of the parent onto someone who may not deserve it at all.  Of course, in Fred’s case, since Fred always seems to gravitate to people who are actually like his Dad, the perception could be close to reality!  Fred sees himself as a victim of these types of people, but of course he is not: he continually chooses them.  Until he understands his choices and why he makes them, he will continue to do this, and his organization will get less of his talent and energy and more of his childhood struggles.

–Mike expects to be rewarded for just showing up.  His ego has given him its inflated sense of “worth” which it transfers to its host. This is not to be confused with self-confidence or real self-esteem. The ego version is unrealistic and unearned; but if this is pointed out the ego will react harshly, to say the least!  Unfortunately Mike does not have a solid sense of himself as a good or capable person, so external signs are constantly solicited and he pressures his manager in ways that she finds very irritating.  In Mike’s case his problem was exacerbated by growing up at a time when his peer group of “Trophy Kids” was given awards for placing 4^th in a race, for example. Constant positive feedback, which his ego demanded, was actually provided by a (temporary) cultural phenomenon, the expectations of which organizations still struggle with today.

–Johnny makes a confrontation of everything and plays to win at all times, even when this is not at all appropriate.  This drives other team members crazy; why can’t he relax and have fun sometimes, or let someone else shine?  Because his ego will not allow it, it requires constant proof that he, Johnny, is the best! Johnny’s ego scoffs at the idea of making room for, or celebrating the success of others, seeing such apparent generosity as “weakness”.

–Christine cannot receive anything but an “exceeds expectations” rating on the dreaded annual performance review.  Unlike the normal disappointment which might come to those who are rated “average” (although never using that word, always euphemistically called “meets expectations”), Christine goes into a major funk each time and gets into a verbal fight with her manager.  She also gets seriously discouraged, instead of being able to bounce back and excel based on what she has learned. This in turn reduces her chances of genuinely deserving a hike in the rating next time.

In each and every case here, the ego has taken over an individual.  In one way or another, and there are several ways in which this happens, a false and very fragile self has been created and maintained, sometimes for decades, and ends up causing havoc everywhere this person lives….including at work.  The amount of time and energy which goes into managing the hosts and the egos themselves is uncountable, because it is so widespread.  The customer satisfaction consequences of such ego-driven (and often disgruntled) employees are off the charts.  But there is hope, if we can identify early some of these cases and avoid them.  If not, then we have to look at ways to manage people we have hired (and did not know what was in store for us).  We will look at some of these strategies next time, as well as talk about what to do if these cases remind you of…YOU!

Why is European Customer Service So Bad? A Tale of Two Food Stores

I just got back from a long stay in Europe, where I live part time (in Germany). I am always surprised when I am there as to how bad customer service can be. I’m not talking about business to business service, I am talking about service in retail establishments like supermarkets, cafes and restaurants. We all know that Paris has a bad reputation for surly service, although I must say it is not worse there than in many other central European countries, and to a lesser extent in my native Great Britain.

Why am I so surprised? Because the Europeans often spend so much time training people in jobs like waiter, yet the results leave so much to be desired. A Swiss waiter or waitress will go through all the training about wines, types of and placement of cutlery, on and on, but when they deliver the food, except in the highest-end establishments, they throw it on the table with little or no eye contact or words exchanged. Language is not the issue, I speak their language(s). When I point this out to my Swiss or German friends, they agree, telling me that they are amazed in the other direction when they come to the states, how friendly and good the service is here, and how they are just “used to it” in their own countries and can do nothing to change what they see as a cultural phenomenon.

Let’s do an interesting comparison between two arms of the same company, the famous Aldi food store chain from Germany. Aldi (the word Aldi means “Albrecht Discount” because it was created by the Albrecht brothers, who became billionaires as a result of their creation), is a wildly successful concept for the German food market, selling a limited selection of inexpensive and good quality items in a fast paced environment, which flushes customers one-way through the aisles rather like IKEA. When one reaches checkout, the real fun begins, not only when a lane opens, which creates a stampede, but also when one reaches the clerk doing the scanning. Let me just say, you had better be prepared! Get your bag(s) ready, and fill them as soon as you can. You will receive no help from anyone to load your shopping, and heaven help you if you load slowly and drag out the waiting time for the line….the withering looks you get will drive you to a higher-end store like Tengelmann next time, if you are thin skinned.

Now let’s cross the Atlantic to the US, where Aldi owns a food store chain with a remarkably different culture, Trader Joe’s. TJ’s, as it is called by its many fans, was bought by Aldi around 1979, but few if any Americans know that. TJ’s and Aldi’s German stores could not be more different, not so much in the way they look or the quality of food they sell, although that is a bit different, but in the way things work. At TJ’s a line which opens does not result in a stampede, instead the person first in a longer line will be invited to be first in the new one. On arriving at the checkout, clerks will, in a remarkably relaxed and friendly way, check your stuff then load it expertly into the bag(s). No rush, no frenetic feeling, yet it all happens fast. TJ’s does not necessarily have more customers in the store at one time than Aldi, and yet it will always have six or so checkout lines going. Aldi tops out at three and often has only one, with the line snaking back into the store. That changes when enough people call out “neue Kasse”, or as the military would say, “call for backup!”

How is this possible? Clearly TJ’s is a profitable enterprise even given the apparent inefficiencies built into the system vis-à-vis its parent’s German stores, such as more checkout clerks and loading of customers’ bags by them. I bet Aldi has studied the numbers and would introduce the German system if they could….but of course they can’t! This is because the US has a shopping and general service culture which demands that customers be treated in a certain way. Having to stuff your own bags would be seen as a major insult; having the clerks do that is a minimum expectation. Having long checkout lines, the same. Germans are of course rather oriented to rules and perhaps they see the Aldi system as “those are the rules and I abide by them”. Faced with this situation, Americans would say, “those are the rules and unless they change I am voting with my feet and going elsewhere”.

This is a blog about morale and here is where I am leading to: I have shopped Aldi in Germany many times and when I look at the workers there they look somewhat burned out and certainly harried, tired, stressed. They rush from one task to another as if their life depended on it, and that includes when they have check-out duty. On a recent visit to a German Aldi, a friend of mine was looking for an item which she could not find and a clerk who was stocking shelves was working in the area; instead of stopping to help my friend, the clerk berated her for being in the way! The pressure on the clerks seems to be so intense that stopping for a customer, also in my experience, is almost the last thing they want to do.

Trader Joe’s people on the other hand, no matter if they are in California where I live or any other state, seem to have that “laid back” relaxed style even though they work fast and efficiently. They are friendly. I’m willing to bet their morale and engagement is head and shoulders above that of their German colleagues, which has many significant long-term implications for their business, their longevity on the job, and yes, on their individual health. This is a shame, Aldi has proved that they can master a system in the US that makes both workers and customers happy. For me as an Aldi customer in Germany, I only tolerate it to get the cheap coffee, cheese and wine which they have.

As for the heavily trained waiters in Switzerland and their non-existent people skills, give me an untrained US worker any time, who smiles at me and says the classic “have a nice day” when I leave. Better a fake smile than a real scowl.

Have a Nice Day!

Goldman Sachs: Can Employees be both “Engaged” and Unethical?

This question has been banging around my head since the SEC charged Goldman and one of its star traders with civil fraud.  Can a company have very “engaged” employees who are at the same time highly unethical?  The allegations relate to the mortgage securities business and one particular financial vehicle, so they are very focused;  but they look like a proxy for a lot that happened in the last few years, and Main Street seems to be happy that Wall Street might be…finally…getting its comeuppance for helping bring about the Great Recession. 

As a former active stock trader (for my own account) I am very aware that every trade involves a buyer and a seller, and that shorts have as many rights as longs.  This is not the point.  The point is that the game is meant to be played on a level playing field, with equal access to information for all.  With that in mind one can take the risk and bet on the direction of a stock, mortgage bonds, etc.  So if there is fraud, the game suddenly changes and one side benefits to the detriment of the other.  This is what the SEC is charging. 

So let’s consider the Goldman culture:  don’t you think that people who work in such a successful environment, where the average bonus for 2009 was more than $700,000 and where they are among the best and brightest people in their field, in the world…don’t you think these people have high employee engagement?   Read the e-mails of the trader who is charged, the “Fabulous” Fab, he seems to be having a blast, even though he admits to not understanding what the hell he is selling.  Doesn’t it make sense that this environment would be one in which people would be extremely engaged, partly by the intense nature of the business, by the fact that Goldman can and does hire the most enthusiastic, the most motivated, the most energetic?  By the fact that they can earn what for most of us would be like winning a lottery every year?  I’d love to ask the person who has surveyed this company’s employees but I am sure he is far too ethical to tell anyone about a client, and I would never actually do it anyway.   Perhaps he is a lot more ethical than some of those he is surveying?  Why do I say that?  Because the Goldman e-mails indicate that traders regularly characterized one or more of the financial instruments which they were selling as “shitty”, as famously demonstrated in Congress the other day when the mails were read by the Chairman of the committee which gave Goldman people such a grilling.   Did the traders tell the buyers how “shitty” these were?

So it has occurred to me, and not for the first time recently, that engagement, high morale, call it what you will, and ethics…can be quite unrelated.  This goes against what I thought I knew, but life always proves me wrong when I think I am sure about something.   The reason I thought ethics was important in engagement was that there is evidence, which I presented in my book,  that ethical companies are seen as very attractive to some people, and they engage more because the company lives sustainability, fair trade, no- sweatshops, Green values.  This is especially true for younger workers for whom these things seem to be especially important.   Clearly though, as we saw at Enron, some people have values which are quite different and they find a place where those values are being lived, and those values have nothing to do with fair trade and so on;  they have to do with winning at any price, lying and cheating.  Witness the gung-ho Enron energy traders who delighted in getting large areas of California to be “browned out” (lose electricity) by their trading prowess.  They gave names to trades which have been immortalized in books such as “The Smartest People in the Room“.  They actually were thrilled that “Grandma”, three states away from their Houston offices, would have no power.

I know that some of you reading this would say, these people were out of control, they were deranged in some way.  I would say that much of the time they probably exhibited many of the traits of an engaged work force, as we currently define them.  Engagement definitions, as far as I can tell, make no mention of ethics or morals. It’s clear therefore that lack of a moral compass does not have to deny someone the chance to be engaged.  “Values” for one person can mean honesty and fairness, for another (usually unconsciously of course, most would not openly admit such a thing), hiding the truth and greed. Yes, ethics can engage certain people, those for whom this is important.  But there are obviously more than a few people who don’t care about that, who care about making money and doing what they can to advance, and whatever the company wants them to do, and to hell with ethics.  Companies and individuals with these values will, inevitably, find each other.

Perhaps we can take comfort in the fact that this never ends well.  There is a form of “corporate karma”.  Enron went bankrupt and its auditor went out of business;  sadly many innocent people who were probably very ethical and might have known nothing of the fraud being conducted on other floors of their Houston tower, lost their jobs and retirement plans.  Many Goldman people are certainly this way too, they are honest and ethical people.  But Goldman’s reputation, especially on Main Street, has been devastated by the activity of some.  How endemic this is in the firm, we may never know.  They have become the poster child for bad behavior, even though many on Wall Street see what they did as “business as usual”, and their alumni who have access to television pulpits (such as the frantic Jim Cramer) defend them, as one would expect.   So what is to be done?   I am not saying that we need to extend the definition of employee engagement to include ethics;   I am saying though that we need to be mindful of this.  We love football teams which win within the rules of the game; we hate those that cheat, those that secretly film another team’s practice to gain advantage against them.   Even Goldman has very recently said it plans to go deep into its culture and make some changes.  I hope they do.  “Engaged” employees who lack the “moral” root of the word “morale”, that’s not a long term strategy for any organization, no matter how successful they are for a while.

Work Morale and Engagement Killers: Let’s Not Take Away One of the Few Advantages We Have Left!

Let’s start by looking at some basics of the international competitive position in which western industrial countries find themselves:  can the US, the UK and Europe compete worldwide on cost?  Of course not, in most cases.  This is why whole industries have disappeared or radically downsized, such as steel, garment manufacturing, shoe manufacturing, auto manufacturing, etc.  How can we compete when the average Chinese manufacturing worker receives $134/month and the average US worker $2370 (source:  CBS News, February 16th 2010)?   Can we compete on skills?  Theoretically yes but witness the wave of outsourcing, even reaching into the medical sphere, whereby a mammogram image is whisked via high speed Internet to Bangalore, read by an expert radiologist there at a fraction of US costs, written up and whisked back to the US in time for the opening of the doctor’s office the next day.  Or look at Elance, where even self employed individuals can outsource web site design, etc. for dramatic savings compared to their western resources.  Can we compete on innovation?  Yes but how quickly can our competitors copy what we have invented?   Can we compete on speed of execution?  Yes in some cases, but again, with the telecom revolution exemplified by the mammogram example above, geography has shrunk.  This does not leave much with which the western industrial countries can compete: quality certainly but that can change (look at how Japan went from perceived low quality to best in class across all sorts of things, especially autos, Toyota’s recent troubles notwithstanding.  Maybe China and India can do the same but on a much larger scale?)

However, there is one thing on which we can always compete and which wont be taken away from us if we wake up and do things right: our people, their drive, their enthusiasm, their desire to get the job done. In other words, their morale and engagement.  Given how limited our options are, therefore, can we afford for anything in our organizations to undermine one of the few advantages which we can leverage?  Of course not.  Yet many organizations allow just that. 

To see what I am talking about lets look at the morale killers, as I like to call them.  You can think of them as engagement killers too, since the latter is a by product of morale.

–Lets start with the dinosaur of morale killers, the “boss from hell”; he or she (this is an equal opportunity creature, as The Devil Wears Prada demonstrated) can really ruin even the best intentioned and most enthusiastic worker’s morale.  Even worse, as my book pointed out, he/she can have lethal (I used that word carefully and correctly) effects on employee health.  The “boss from hell” is always my first pick as a morale killer because that is mostly where high morale and engagement are created or destroyed: at that crucial meeting point of the worker and the organization, as represented by the boss.

–The weak boss:  next we have the boss who isn’t from hell but goes to endless seminars (even ones on morale), comes back with all the buzz words, but nothing seems to change.   Failure to implement is a sign that he/she lacks the courage to do so,  lacks the willingness to override his own ego, or works in an environment which makes his efforts difficult and is not willing to fight against that. 

–The disgruntled worker:  this is the proverbial bad apple who is allowed to fester within a barrel of good ones.  In other words it comes back again to management.  This individual would be disgruntled even if he had a job on the beach at Club Med with his own comfortable ocean front cabaña to live in and a modest number of canoes to rent.  He would complain about his TV not having enough channels.  These types of people, when not handled correctly (using by “separating from them” as one of my ex clients used to say), erode the morale of their team, especially when they share equally in team rewards which they in no way deserve. 

–The toxic culture (“way of doing things”):  since culture precedes all appearances of high morale and engagement, and makes it possible for that to exist, we cannot ignore the fact that no matter how well intentioned people might be in some organizations, the cards are stacked against them.  Often found to contain many “bosses from hell” (which it sees as great people), the toxic culture has many different forms.  Such cultures are often based on the personality and past experiences of so called “leaders”, who bring their baggage with them and essentially have everyone in the organization carry it.

–The dysfunctional culture:  not necessarily toxic, but also not functioning in a way which would create a high morale environment, these organizations are often run by people who lack two of the crucial elements of leadership: courage and vision. These people really have no idea their workforce is the bedrock of the organization’s success, not the great strategy which they have dreamed up or what clever tricks they can play financially.  Maybe they play lip service to “putting people first” but it is a shallow commitment, not backed up by the heart and soul needed to really make that happen.  Maybe they also pay themselves handsomely while contributing poorly to performance, a sure fire morale killer which I have covered elsewhere.

Of course there are many other situations which kill morale and engagement; and there are many organizations which have those above.  Otherwise why is it that every time I meet someone and tell them I work in the area of morale at work, I always get the same response:

You should come to my place!!

This is NOT because things are so great, it’s more a cry for help, and it happens almost every time.  Think of the implications of this, in the context of what I said at the beginning of this post.  Can we afford to be this way?  Can we continue to have only 29% of US workers “engaged” (Gallup)?  Can we afford to be only average (UK, US) or below average in morale (France, Germany, etc.) on a worldwide basis?  The answer to this question is going to determine how we live in the future because morale and engagement are THE performance drivers we really can control and improve.  Think about that if you are in a leadership position, someone complains about a “boss from hell”, and you are tempted to say, “That’s just Bob”.  No its not.

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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.

What Is The Ideal High Morale and Engagement Manager and How Does She Get There?

I don’t usually put excerpts from my book in here, I write original material.  But today I was inspired by a single question from someone on the Employee Engagement Network, a lively, friendly and well informed group of people brought together by Canadian David Zinger.   The question was:

In today’s workplace, what are the main levers that Supervisors can use to improve morale?

Although my book was not organized around “what do to to improve morale” (many books have done that) I did ask some questions about whether managers are born or made, and if one could make a perfect high morale manager, what traits she (in this case) would have.  As such this is not about “levers” (not sure I like that mechanistic view of things) as much as it is about how one can prepare oneself for the critical job of managing others.  It is about values, beliefs and actions….which could lead a person to having high morale, engaged employees.

Here is what I said:

“What if it is possible to create, through training and other experiences, a manager who leaves behind a trail of goodwill and enthusiastic employees, no matter where she goes?  What traits would this person have?

• She would have left behind that part of her personal background and baggage which would have poisoned relationships with her team and her peers
• She would check her ego at the door and make sure it didn’t effect her management style:
  • for example by not “stealing” credit for projects from others
  • by knowing that when people in her team are successful she too is successful, not diminished
  • by hiring or promoting people who might be smarter than her in the field and not being threatened by that
• She would have a view of people as essentially motivated, intelligent and creative
• She would believe that those qualities can be “invited” into the work environment with the right kind of management support and encouragement
• She would see her job mainly as a coach, not a controller
• She would have a profound respect for her people and treat them that way
• She would treat people with equality and fairness, not favoring some at the expense of others based on personal relationships, or other factors not related to the job itself
• She would base all measurement processes of her employees on mutually-agreed-upon, clear goals
• She would provide honest, supportive, regular and timely feedback to her people
• She would be tough enough to make difficult personnel decisions, such as helping a low performing employee to face up to that fact
• She would be a communicator of the stated values of the organization as well as living them via her own behavior
• She would not tolerate violations of those values by anyone and would protect her team from those who would violate them

 

If this sounds like superwoman, it is not: great managers do a lot of these things by instinct, but some of them can be learned. Others (like the essential ability to identify and control one’s ego) can be a long term personal growth project on which many do not wish to embark, and which is unlikely to change on a week long course in the country.”

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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. 

Let’s Be Clear: Executive Compensation Excess is Eroding Employee Morale and Engagement

(This is Part 2 of a three part series on executive compensation and morale).

Earth to CEOs:  Come Back Down Here with Us!

First a disclaimer:   this post is about a sub-set of CEOs, not all.  I am a business psychologist trained in social science research and understand full well that samples should not be generalized to the whole unless they are truly representative.   Many CEOs (and I have worked with a lot), are downright great people, generous, caring, and absolutely dedicated to the welfare of their workforce.  They dont have an ounce of greed in their bodies and they make sure they play by the same rules as those who work for them.   Perhaps you work for one of these people, or are one of them yourself.  This post is not about them/you!   This is a about a subset, enough of a group to make a difference in overall averages, and this subset has a mentality which is damaging US competitiveness.

I’ve been watching this new show on TV here in the US:  Undercover Boss.  Its about a CEO or COO going out in disguise and taking on some of the more difficult jobs which his (so far, all male) own people have to do.   In some cases he is so useless and the job so difficult, he gets fired after one day!  The show seems to be popular, partly because the CEOs have been humiliated.   Its also because most have so far reacted to this experience and shock at what people “out there” in the companies actually have to do, with genuine humility, often being really moved by the experience.  They are often moved enough to make changes, to promote lucky ones they come across, give raises, special gifts, etc.  Even to re-think the whole way their company does business.  I was thinking about all of this in the context of what we have been through in the last 2-3 years.  Is this the start of a trend?  Will we start to see a more real, personal CEO whose eyes are more open to what his or her people have to face every day?  Will that start to change the behavior of said CEOs?  Particularly in the area of compensation.  I know some of you are saying, dream on!  But I have a compelling reason for them to change, as you will see.

My hope is that we will indeed look back one day at this Great Recession and say, yes that was the time when we dumped this whole fad of glorifying some CEOs and brought them back down to reality.  Reality is that too many CEOs (usually, but not always men) were not all that their publicity machine puffed them up to be, but were paid as if they were.  I’m not talking about the Steve Jobs and Sergey Brins, the geniuses who founded the now-iconic companies which they lead and who deserve every bit of positive press (and dollar) they get;  I’m not talking about the hundreds of thousands of less well-known entrepreneurs who risk everything for their dream.  I’m talking about a different animal here:   the hired hands brought in as CEO.   They came in with a big blaze of publicity and then often had…mixed results.  I’m thinking of Bob Nardelli at Home Depot, Carly Fiorina at Hewlett-Packard and quite a few others.  Their Boards were acquiescent to the point of giving them a contract which no average worker could receive:  a fail-safe golden parachute which translated into “you win, you win; you fail, you win”.   Of course that is exactly what happened in my two examples; under Nardelli,  HD stock went DOWN by 8% in an up market but he made $240 in total compensation from December 2000 until his exit in January 2007.   His exit package was an additional $210 million.  That’s right, two hundred ten million dollars.  Under Fiorina, HP stock also went down, listen to Wikipedia’s summary:

“When Fiorina became CEO in July, 1999, HP’s stock price was $52 per share, and when she left 5 years later in February, 2005, it was $21 per share—a loss of over 60% of the stock’s value.  During this same time period, HP competitor Dell’s stock price increased from $37 to $40 per share.”

For this remarkable performance, a 60% drop in share price, her exit package was $42 million.  At GM, Rick Wagoner’s planned $20 million pension was interrupted by the company’s bankruptcy;  his contribution to GM’s performance resulted in a drop of 96% in the stock price under his tenure.   Even Jack Welch, once untouchable as the glorified CEO of the American giant, GE, totally screwed up his image with his outrageous $8 million/year retirement package which even included flowers in numerous luxury residences.  This was only brought to light by his divorce, and created such an uproar that even the SEC got involved with GE and poor Welch was shamed into giving a big part of it back, mumbling that it was important to “manage perceptions”.  Thats right, perceptions, forget about values, right?  Apparently it wasn’t enough that he left GE with $880 million in stock…..

Now we see the public mood swinging heavily against such excesses:  no longer able to tap rising house values, and more scared of facing unemployment, if not already there, the view from Main Street towards the corporate world’s rigged compensation game is decidedly sour.  Who can blame people, when their taxes are being used to bail out some of those who are the main perpetrators?  Unfortunately, the heavy hand of government is starting to be used to fix things, as in an ominous sounding “special master” for compensation installed by the Obama administration.

If this sounds like I am pessimistic, I do not mean it to: as a result of this orgy of excess, the most recent wave of which perhaps Welch set off as early as 2002 and which culminated in this recession, I have a more optimistic outlook.  Maybe we can celebrate that this era might be coming to a close.  It’s certainly time that it did.  The US cannot continue to be the only country in the world where the CEO pay to average worker is 300-400:1, and where golden parachutes give CEOs advantages which none of their fellow employees receive.  In other countries, including those which are extremely competitive with this one, the averages are closer to 25:1.  It is my opinion, based on quite a bit of research, that CEO pay excesses are eroding morale and engagement in the United States.  Why do I think that? 

–First because its plain old common sense that if you run a company and your pay is so far off that of your co-workers, you have already “disengaged” yourself from them in a major way.  Don’t then pretend that you can have an engaged workforce when you yourself have made that less possible by accepting, even demanding something which none of your co-workers could ever receive.  Play the game on the same field and with the same rules as those you work with:   then you will have a chance to really engage everyone.

– Second, and very tellingly, the US is far, far from top dog in the morale world.  It is average at best (see Mercer’s website for worldwide employee engagement data).  How can this be when almost everyone who lives here says it’s the best place in the world to live?  (Some Norwegians, Dutch and Danes might disagree…but stay with me here).  So yes it might be the best place to live, but…..not the best place to WORK.  Part of the reason for that is…excess, and lets say the G word, Greed at the top.  Anyone who has spent as much time as I have (25 years) interviewing thousands of people at work and surveying hundreds of thousands, will tell you:  excesses at the top infuriate otherwise even-tempered employees.   They cannot understand why they have to play by the rules but top management does not;   they resent special “executive” dining rooms, special parking (GM at its peak had a heated parking garage with special elevator for the poor executives who could not stand the cold Detroit winters); employees  boil over when these individuals then come onto to the Intranet with a special message for the “troops” saying, “we’re all in this together”.  “No we’re not”, they say.  “You are on another planet”, Mr/Ms CEO.

Smart companies with smart and more reasonable CEOs understand this, in the US and elsewhere.  John Mackey of Whole Foods, someone for whom I have a great deal of respect..and not just for his views on compensation…is a good example.   At Whole Foods no one is paid more than 19 times that of the average worker. Munich-based BMW last year also became the first big company in Germany to implement bonuses based on reasonable ratios compared to the average worker’s bonus.  The company spokesman was quoted as saying “We don’t just want to build sustainable cars. We also want to have sustainable personnel politics. We think this is good for the company culture”.  Ahh how refreshing that he places personal, selfish interests lower than that of a sustainable culture for his workforce.   Is this one of the reasons why BMW has, and continues to make, such great cars?  I think so.

Will the intense pressure which comes with such a recession, which we still seem to be in, make diamonds out of coal?  I hope so.  I hope that public opinion, and yes even outrage, will shame those who are greedy into more reasonable behavior.  Lets be clear here:  I am not talking about more government regulation, salary caps, etc!  I hope that increasing understanding of the importance of employee morale/engagement as a performance driver will convince Boards, shareholders and CEOs that it is in the interest of their organizations that these baser instincts of the human spirit are tamed.  Boards especially need some backbone and certain other body parts which I wont mention here.  They need to stand up to these demands, refuse to buy the “arms race argument” that “the other guy is making this much”, and make a stand for something new.  Its 2010, and it’s not “me” any more, it’s “we”.  China, India and Brazil are already going down this road;  their worker morale is far ahead of that of the US or Europe.  Will we let them take away one of the few real advantages remaining to us by not facing up to those who would erode it in our organizations by their own selfishness?  I certainly don’t think we should.  Our future standard of living might depend on it.

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!