Article 18employees or partners?You can win your staff’s loyalty by treating them as associates, not MILTON ZALLmotivating employees isn’t easy. Everyone has As we move up the hierarchical ladder, we come to unique psychological, emotional, and professional needs, ego, which consists of external recognition, acknowl-and we all have different reasons that drive us to satisfy edgment, and . Yet it’s every manager’s job to create an The highest level of need is self-actualization—environment that helps each employee meet his or her realizing our dreams and using our gifts, talents, and individual needs while simultaneously reaching business through this hierarchy is the essential quality of human life. When people’s basic needs are In his famous “Hierarchy of Needs” theory, sociol-addressed and they feel secure, they begin to focus on ogist Abraham Maslow showed the gradual escalation of internal motivation. Some individuals pursue material workers’ drives and motivations:luxury, while others pursue their thirst for knowledge or Physiological needs are at the bottom of the artistic expression. Many are compelled by a desire to hierarchy and involve basic physical needs—the ability to lead or help others, to play the hero, or to shine in society. acquire food, shelter, and clothing. These needs must be A manager’s challenge is to discern what makes each satisfied before an individual can progress up the hierar-employee tick and to motivate each employee accord-chical two in the hierarchy involves safety needs. An But external rewards work only temporarily. You individual requires a safe, nonthreatening workplace—and other managers need to create an environment where job security, safe equipment, and a secure work employees are committed to their jobs, their fellow , and their company. But this is a challenge. Step three involves social needs. Once a person’s Although as a manager you can’t play the role of psychol-basic needs are met, the individual can concentrate on ogist or psychoanalyst, it benefits your company if you his/her social needs—contact and friendship with fellow can discover who every worker is—get to know their workers, social activities, and other , special gifts, abilities, hopes, and plans for the 1
Article 18. Employees or partners?future. If you take time to discover these attributes, you’ll their existence and that managers recognize them, be able to find the best fit between employees and their remember their names, and greet them. Individuals and jobs—a crucial step in building need to be thanked for hard work and special feats, and they should be rewarded for unique contributions. Managers who encourage employees to ALIGNING BUSINESS OBJECTIVES AND use initiative and to set higher challenges for themselves EMPLOYEE MOTIVATIONachieve better results than managers who incite compe-tition among employees. Gaining personal accomplish-Most organizations are doing away with traditional ments at the expense of others undermines teamwork and hierarchies, instead emphasizing teamwork and cooper-threatens customer service. You can win the loyalty of ation. For employees, this means fewer promotions and your employees and get their best input by treating them more collaboration. For employers, this means coming up as partners, by showing concern, by listening, and by with new ways to coax maximum versatility and from all team members. Incentive plans are an increasingly popular strategy for aligning organizational SOME PROGRESS HAS BEEN MADEand individual goals by treating employees as partners in both the risks and the successes of the the past 25 years, as companies began experi-On a personal level, there are some common needs menting with innovative workplace practices, two among all employees: the need for self-expression, the distinctly American high-performance models have hope for professional development and career emerged. The first is a . version of lean production advancement, the desire to be accepted as a team that relies on employee involvement. The second is a . member, the wish to be respected by management and to version of team production that relies on employee take pride in their work, and the need to be acknowledged, empowerment for performance gains. Productivity trusted, and rewarded. Through strategic communica-improves the most when work is reorganized so tions, management’s job is to communicate company employees have the training, opportunity, and authority goals; market, industry, and business information; and to participate effectively in decision making. Performance future plans—and to invite employee feedback. As a improves when employees know that they won’t be manager, you must learn how to place people in roles punished for expressing unpopular ideas and won’t lose where they can use their abilities and make progress their jobs if they help to improve their personal goals. If you fail to do this, your company may experience substantial financial loss due to Employees want to receive a fair share of any perfor-turnover, accidents, lawsuits, rebates, refunds, and loss of mance gains—assurances that unionized workers in customers and -performance companies already enjoy. Attempts to improve performance by manipulating compensation packages have proven counterproductive. After all, it’s far easier to design an incentive system that will do Managers who encourage employees management’s work than it is to reach consensus about to use initiative and to set higher goals and problems or to confront difficulties when they arise. The average life of an incentive system is about five challenges for themselves achieve years, and when the system stops paying off, employees better results than managers who turn against it. Soon precious attention, time, and money incite competition among expended on endless debates about the incentive the other hand, companies have seen remarkable Yogains in productivity and performance when workplace u and other managers must learn how to create a reorganizations make employees partners in the enter-corporate culture and a supportive work environment. Thiprise. The best efforts include employment security, gain s begins with strong leadership and excellent masharing, and incentives to take part in training. In this nagement. It continues with effective human sense, compensation packages are an important resources strategies—positive discipline, fair and just component of the human resource practices that are treatment for all, clearly defined policies, and career and necessary to support high-performance work development training programs. It demands effective organizational communications, tools to facil-What can you and other managers do? You can focus itate communication, team assignments, reward on paying people equitably rather than using pay as an programs, objective appraisals, adequate pay, and good instrument of motivation. You should avoid coupling pay benefits and company yearly or quarterly performance and promote the Because employees want personal recognition, it’s top 10% to 15% of employees for outstanding long-term important for them to know that management is aware of contributions. The poorest performers should be weeded 2
ANNUAL EDITIONSout, while the rest should be praised for good perfor-chairman and CEO, guides a team of about 10 other mance and recognized through other executives. Starbucks company power is divided under the control of three people or functional officers: the chief executive officer (Howard Schultz), the chief THE MOTIVATING ORGANIZATIONfinancial officer (Michael Casey), and the chief operations officer (Orin Smith). From there, a handful of regional A successful approach is often to carve employees into a managers oversee nearly 2,000 branch managers, who are share of the profit created by their part of the company. responsible for all the partners in their own stores. Profit should be defined in relevant cash-flow terms after Managers at the store level feel much closer to top execu-covering the cost of all capital employed—a measure that tives. Store managers are encouraged to develop a career Stern Stewart & Co. calls Economic Value Added (EVA). within the company, and the relatively flat management EVA provides employees with three clear incentives: to structure allows them to do profitability, to grow profitability, and to Intrinsic motivation—being motivated by challenge withdraw resources from inefficient activities. EVA also and enjoyment—is essential to creativity. But extrinsic directly ties decisions to the net present value of their motivation—being motivated by recognition and —doesn’t necessarily hurt. The most creative More than 50 prominent companies have adopted artists tend to be motivated more by challenge, but they the EVA approach to profit sharing. All key managers at also tend to be motivated by recognition. Can employee Quaker Oats have been on an EVA sharing plan for motivation be accomplished? Not easily, but if you plan it several years, and Scott Paper Company introduced an with sincerity and care and incorporate the notion of EVA incentive program for all salaried employees at the employee partnership, you’ll of 1993. Another example is Starbucks. Just as IBM is remembered by its strict dress code and Microsoft is known for its laid-back culture, Starbucks will be remembered for its innovative employee policies and its Milton Zall is a freelance writer who specializes in taxes, employee-focused management style. Although investments, and HR/business issues. He is a certified internal Starbucks is a multibillion dollar company, the company auditor and a registered investment advisor. You can reach him management structure is relatively flat. Howard Schultz, at miltzall@ Strategic Finance, April 2001, pp. 62-65. © 2001 by Strategic Finance, published by Institute of Management Accountants, Montvale, by
