Forster N. - Maximum performance (2005)(en)

170 MAXIMUM PERFORMANCE

all leaders and managers should allow their staff as much freedom as possible to carry out their jobs, within clearly agreed and understood guidelines and in alignment with team, departmental and organizational objectives (O’Reilly and Pfeffer, 2000: 16–19). This means that empowerment requires something more than simply delegating tasks to others. To empower employees successfully, we have to give our power away to them. This might sound both daunting and counterintuitive, but all we have to do is unleash the motivation, talent and creativity that is already there by giving our people more responsibility for making decisions about the work they do and the tasks that they are engaged in. We will return to this idea later in the section on ‘attributions’ and in Chapter 7.

The best executive is the one who has the sense to pick the best people to do what he wants and self restraint enough to keep from meddling with them whilst they do it.

(US President, Franklin D. Roosevelt, 1936)

The ‘relationship’ between satisfaction and motivation

Our objective is simple. It is to turn everyone on our payrolls into raging, inexorable, thunder-lizard evangelists!

(Guy Kawasaki, Apple Computers, 1992)

Success is not an end in itself. It is merely an encouragement to go further. (Sir Alex Ferguson, Manager of Manchester United FC, after winning the European Cup in May 1999)

One of the most confusing elements of needs theories of motivation concerns the purported relationship between satisfaction, motivation and performance. Maslow, Alderfer and Herzberg all suggested that employees who are able to satisfy their needs at work would be more motivated and productive than dissatisfied employees. This idea also appeals to common-sense assumptions about employee motivation. Surely a satisfied employee will also be a more motivated and productive worker? This is a widespread assumption, but we must be extremely cautious about assuming such a simple relationship. Research evidence shows that there is often only a weak causal relationship between these three factors (see, for example, the thorough review of this literature in Hosie, 2003). This means that the remaining variances in well-being and productivity must be caused by factors other than ‘satisfaction’ – in itself a notoriously difficult variable to measure and quantify. In reality, there are just two things we can assert with absolute confidence about individuals with high levels of job satisfaction. First, they are more likely to remain with an organization and not seek employment elsewhere. Second, high levels of job satisfaction

EMPLOYEE MOTIVATION, EMPOWERMENT AND PERFORMANCE 171

do not always lead to higher levels of motivation or enhanced job performance, because of self-satisfaction and resistance to change and learning. How this process works is illustrated in Table 4.1.

Table 4.1 The satisfaction–dissatisfaction process

1.Identify needs as a result of being dissatisfied with current situation

2.Identify ways of satisfying those needs

3.Select goal-directed behaviours

4.Perform tasks to achieve these goals

5.Receive feedback (+ or –) and feel temporarily satisfied (+) or dissatisfied (–)

6.If dissatisfied, re-evaluate needs and objectives and become remotivated

7.If satisfied, identify new unfulfilled needs and objectives, become dissatisfied and remotivated

Here’s an example to illustrate how this works in practice. Imagine that you want some chocolate. You then have an unfulfilled need and you are motivated to satisfy that need. You go and buy a large bar of chocolate, eat it and are then satisfied – for a while. Eating more chocolate immediately would not make you more satisfied. However, at some point in the future, say the next day (or, for an extreme chocoholic, the same day) you once again feel the need for more chocolate, become dissatisfied and motivated to buy some more chocolate, and so the process begins again. The word ‘satisfaction’ is defined as ‘the act of satisfying or fulfilling one’s needs or desires’ (OED website, 2002). Consequently, satisfaction can only ever be a temporary phase, leading to short-lived periods of feeling good, being appreciated and fulfilled or, in the example above, replete with chocolate. So someone who was perpetually satisfied with everything cannot be a fully functioning human being, because they would have no intrinsic motivation to achieve anything.

Hence one of the real secrets of motivating staff effectively is to operate with two ‘pedals’ simultaneously. One is labelled ‘satisfaction’ and the other is labelled ‘dissatisfaction’. The aim is to satisfy people temporarily, by providing appropriate rewards and positive feedback for a job well done, for achieving work goals or for coming up with innovative new ideas or solutions to problems at work. However, for much of the time, we must also engender a feeling of mild dissatisfaction, by always keeping people a little ‘hungry’, wanting more, keeping them on their toes and striving to pull them towards higher levels of achievement. This also means that feelings of mild anxiety can be a

172 MAXIMUM PERFORMANCE

good thing, because people who are feeling anxious about their performance will have a greater hunger to be successful, achieve work goals and reach for higher levels of performance, when compared with people who are ‘satisfied’ or, even worse, ‘self-satisfied’.

This hunger for achievement is captured in an anecdote told by Julie Bick, a former employee of Microsoft: ‘A Microsoft manager returned from a trade show and joyously sent out an email to his team, announcing their product had won nine out of ten possible awards. Within a day he had received forty emails back asking which award they had not won and why’ (Corporate Research Foundation, 2003: 149). In many of the most successful companies of the 20th and early 21st centuries, the idea of ‘job satisfaction’ was, and continues to be, frowned upon. For example, Collins and Porras (1996) refer to ‘the fire that burns within’ amongst employees in these very successful companies, demonstrating that jobs in these organizations were (and continue to be) designed to be challenging and demanding, not easy or comfortable. This idea is neatly encapsulated in a parable they recount in this book, and is one we will return to in Chapters 8–10.

The parable of the black belt

Picture a martial artist kneeling before the master sensei in a ceremony to receive a hard-earned black belt. After years of relentless training, the student has finally reached a pinnacle of achievement in the discipline.

‘Before granting the belt, you must pass one more test,’ says the sensei.

‘I am ready,’ responds the student, expecting perhaps one final round of sparring.

‘You must answer the essential question: what is the true meaning of the black belt?’

‘The end of my journey,’ says the student, ‘a well-deserved reward for all my hard work.’

The sensei waits for more. Clearly, he is not satisfied. Finally, the sensei speaks. ‘You are not ready for the black belt. Return in one year.’

A year later, the student kneels again in front of the sensei.

‘What is the true meaning of the black belt?’ asks the sensei.

‘A symbol of distinction and the highest achievement in our art,’ says the student.

The sensei says nothing for many minutes, waiting. Clearly, he is not satisfied. Finally, he speaks:

‘You are still not ready for the black belt. Return in one year.’

A year later, the student kneels once again in front of the sensei. And again the sensei asks, ‘What is the true meaning of the black belt?’

EMPLOYEE MOTIVATION, EMPOWERMENT AND PERFORMANCE 173

‘The black belt represents the beginning – the start of a never-ending journey of discipline, work and the pursuit of an ever-higher standard,’ says the student.

‘Yes. You are now ready to receive the black belt and begin your work.’ (Collins and Porras, 1996: 199–200)

Process theories

These theories approach motivation from a different angle by striving to understand how the conscious thought processes and decisions of individuals influence their motivation levels. They also take more account of contingent factors that can increase or decrease motivation and performance (for example, goal-setting procedures and reward systems). These theories include expectancy, equity, goal-setting, reinforcement and attributions. The empirical support for process theories is more robust when compared to needs theories. However, it has been suggested that these also oversimplify motivation because they neglect factors such as egocentric and aggressive behaviour, toxic personalities, office politics and differences in individuals’ perceptions. They may also be difficult to put into practice, as they require time, effort and an intimate knowledge of employees. Nevertheless, as with needs theories, they too have a number of practical applications for leaders and managers.

General expectancy

Start with good people, lay out the rules, communicate with your employees, motivate them and reward them. If you do all those things effectively, you can’t miss.

(Lee Iacocca, former CEO of Chrysler, 1988)

General expectancy (GE) theory is based on the deceptively simple but important premise that it is the expectation that effort exerted in particular activities will lead to desired outcomes that influences motivation levels (Cambell, 1970; Vroom, 1964). There are four variables that operate together in a multiplicative fashion to increase motivation levels:

•effort-performance expectancy: the belief that effort expended will pay off in performance;

•performance-outcome expectancy: the belief that effort expended will lead to desirable outcomes;

•instrumentality: the belief that there is a meaningful connection between the effort expended on a particular task and the outcomes that ensue from this;

174 MAXIMUM PERFORMANCE

•valence (or value): the belief that valued courses of action have a high probability of leading to anticipated and desired outcomes and rewards.

Hence the theory suggests that, if expectations are matched by anticipated and/or desired outcomes, then motivation levels will be increased, and vice versa. One of the most practical (but often overlooked) applications of GE theory concerns the selection and recruitment of employees. For example, a survey conducted by the international recruitment agency SDI indicated that the fit between the goals and culture of an organization and employee was a much better predictor of job motivation than either experience or technical skills (Chynoweth, 1999). This research, based on a survey of more than 2000 companies and job seekers in the USA, found that employees who were happy with their employer were more likely to stay with their organization and less likely to change jobs. Conversely, 70 per cent of those who reported that they didn’t fit in with the culture of their organization left within one year. SDI suggested that the use of ‘motivational fit’ techniques doubled the chances of a new employee staying with their employer. As SDI’s managing director, Angus Macalister observed, ‘From a business perspective, making a mistake in hiring someone is really shocking – typically it costs three time people’s annual salary to re-recruit for a position’ (cited by Chynoweth, 1999).

Another survey, by the IT recruitment agency Icon Recruitment, found that half of the 500 employers they surveyed had made ‘bad hires’. These caused lost revenue through increased recruitment and training/induction costs, and lost productivity. Each lost employee cost these companies more than twice the annual salary of each one. While most of the companies surveyed used some form of hard data to evaluate the merits of applicants (such as degrees or work experience), most overlooked the behavioural and cultural ‘fit’ of job candidates. One third did not even consider how potential employees would fit with the work environments they would be expected to work in (Foreshew, 2003).

Other research shows that those employees who have been given accurate job previews are significantly more likely to stay longer with an organization, and are also likely to report higher levels of job motivation and productivity (Suszko and Breaugh, 1986). Even so, according to Marilyn Mackes of the National Association of Colleges and Employers in the USA, 78 per cent of all US graduates will leave their first employer within three years. The main reason give for this was ‘because the job did not meet their expectations’. One-third of all

EMPLOYEE MOTIVATION, EMPOWERMENT AND PERFORMANCE 175

Australian graduates leave their first employers within three years. The two main reasons given for this were ‘because the job did not meet their expectations’ and ‘a lack of clear career structure’. In Australia, it costs something like $A9000 to recruit a graduate and a $A100 000 investment in training and development before a company gets a return on this (cited by Chynoweth, 1999).

Spending time and energy trying to ‘motivate’ people is a waste of time. The real question is not, ‘How do we motivate our people?’ If you have the right people, they will be self-motivated. The key is not to de-motivate them.

(Jim Collins, Good to Great, 2001)

Consequently, it is important that organizations have appropriate selection and recruitment systems in place that are capable of identifying not only people with the right technical skills, but also those who have realistic expectations about the company, the jobs they will be doing and its culture and working practices. This requires the establishment of sophisticated recruitment procedures that measure the complete range of technical skills and knowledge, work experience, attitudes and cultural ‘fit’. These companies are looking for the best recruits (in the sense of technical skills and academic qualifications), but they only employ the right recruits – a subtle and important distinction. Several recent books have shown that the most consistently successful companies in the USA spend an inordinate amount of time and effort on their selection and recruitment procedures, much more than less successful companies do (for example, Collins, 2001; O’Reilly and Pfeffer, 2000; Collins and Porras, 1996).1

One example of this is Hewlett-Packard, the American computer company, regularly cited as one of the ‘best companies to work for’ in surveys conducted by Fortune during the 1990s. The company was known for recruiting the cream of engineering and other technical graduates from the top US universities, with more than 200 applications for each vacancy. In Australia, there were over 500 applicants for about 30 graduate positions each year between 1990 and 1999 (Forster, 2002; Parkin et al., 1999: 242). HP has always been very selective in considering job applicants and used a variety of techniques as part of its selection process. Known collectively as ‘the thick-screening process’, these could include written aptitude tests, psychometric tests, formal presentations, group problem solving and leadership exercises, and several rounds of interviews with senior management, peers and those who might be working under the new recruit. This emphasis on adaptability and cultural ‘fit’ with HP ensured that, once employed by the company, few new recruits ever left, and those who didn’t fit in ‘were spat out like viruses’ (Collins and Porras, 1996).

176 MAXIMUM PERFORMANCE

A second example is Southwest Airlines (SA), which uses a sophisticated selection and recruitment system, originally developed by Development Dimensions International. This system rejects tens of thousands of applicants every year. During 1997–8, a period of rapid growth for SA, the company advertised for 4000 new positions. They received 200 000 job applications. Of these, 165 000 were rejected immediately, and 35 000 were selected for preliminary interviews. A mere 2 per cent of the original cohort of applicants was offered employment with SA. The benefit for the company is that it only has to employ people with the skills, competencies, personalities and attitudes that are needed to work at SA (the company’s CEO, Herb Kelleher, once observed, ‘You hire attitudes: everything else can be trained’). This approach has produced a highly motivated, highperforming and loyal workforce (O’Reilly and Pfeffer, 2000: 36–9).

The 29 organizations selected as ‘the best companies to work for in Australia’ in 2002 also spend an inordinate amount of time and effort in screening new employees. For example, Microsoft Australia receives 20 000 job applications a year. Of these, about 80 will be hired in a typical year. Among the attributes and competencies it seeks in new employees are ‘Drive for results’, ‘Customer focus’, ‘Communications skills’, ‘Fostering diversity’ and ‘Building team spirit’ (Corporate Research Foundation, 2003: 149). This approach has obvious benefits for companies. For example, the SAS institute

has a business model that has permitted it to successfully affect the competitive dynamics in its industry segment and that provided numerous economic benefits. For instance, consider two consequences of SAS Institute’s low turnover. First, the company saves money. If the average turnover in software companies is 20 percent, a conservative estimate, and SAS Institute’s is three percent, the difference multiplied by the size of SAS’s workforce means that about 925 fewer people leave the SAS than other companies. What does it cost to replace someone? Most estimates range from one to two times the annual salary. Even with a conservative salary estimate of $US60 000 a year, and an estimate of 1.5 times salary as the replacement cost, SAS Institute is saving more than $US100 million a year from its labour turnover – from a revenue base of about $US800 million. This is a lot of money in both absolute and percentage terms.

(Collins, 2001: 118)

The second practical application of GE theory concerns the education and development of employees. These can equip people with skills that will enhance their expectations that any effort they put in at work will not be wasted. In turn, this can generate other positive outcomes such as greater confidence, self-efficacy and self-motivation. A third practical application of GE theory is in the use of performance appraisals (PA). A good PA, which is objective and fair, can serve as an incentive to perform, in the belief that appropriate efforts will be matched by positive outcomes and rewards in the future.

EMPLOYEE MOTIVATION, EMPOWERMENT AND PERFORMANCE 177

Goal setting

Goal setting is a technique with a long history in sport (for example, Carron, 1984; Smith, 1979), and it has become widespread in organizations over the last 20 years, in the form of practices such as ‘management by objectives’ and the use of stretch targets, in many American, European and Australasian companies. The major reason why this technique has become so popular is that there is reliable and consistent research evidence to support the view that it can have a powerful influence on the motivation and performance levels of individual employees and work groups. For example, one survey by TMP Worldwide indicated that most performance problems at work are the direct result of employees not having clear goals or an understanding of expected work standards (Karvelas, 2002b). Used effectively, goal setting can increase self-confidence and reduce performance anxiety. This can also have an iterative effect on employees: as people achieve goals, their confidence and self-belief grows, and they are then able to aim for higher goals and levels of achievement. As they achieve these new goals, their confidence and self-belief grows . . . and so on. This is true for different groups of people, of all ages and ability levels, in many different work environments. Because of its record of success, goal setting has become a very simple, practical and powerful tool for leaders and managers at all levels of organizations. There are three main types of goals: (a) outcome, those concerned with achieving concrete results, (b) performance, those concerned with achieving results, but judged in relation to some agreed standard (for example, last quarter’s sales figures), (c) process, those concerned with what an employee needs to do in order to achieve outcome and/or performance goals.

Goal-setting theory shows us that simply setting goals for employees is insufficient. To be successful with this technique means establishing goals that have specific qualities:

Specific and measurable

If a goal is too vague, employees may not be sure about what they should be doing. Similarly, expectations about desired results and outcomes should be clearly established up-front.

Agreed and manageable

Employees must make a personal commitment to their work goals. This means that they must have some say in setting these. Goals should not be imposed. If employees don’t perceive that they have some control or choice over these, they may refuse to accept them or take no responsibility for any negative outcomes.

178 MAXIMUM PERFORMANCE

Realistic but challenging

If a task is too easy, the employee will gain little satisfaction from achieving it. If it is too difficult, the employee will be overwhelmed and give up or fail.

Time framed

Progress towards a goal must be planned in a sequence of steps, within an appropriate and agreed time frame. If you do not set time fames, there is a danger that the employee will lose focus on the goal. Achieving complex or demanding long-term goals may require the establishment of an agreed sequence of shorter-term goals.

Evaluated

Additional support might be required as employees work towards their objectives (the process goals described above), and contingent feedback should be provided on the progress they are making towards these.

Resourced

Achieving challenging and demanding stretch goals may require additional resourcing in the form of learning and development opportunities, or the provision of financial and non-financial resources to support progress towards these.

This may seem like a lot to remember, but can be easily recalled with reference to the SMARTER acronym: Specific – Measurable – Agreed – Realistic – Time framed – Evaluated – Resourced.

How well leader/managers implement goals for their employees is dependent on how well they know their staff as individuals, identifying appropriate goals that can stretch and motivate them, monitoring their progress towards these and providing appropriate resources and feedback. Carefully setting performance goals can sustain and increase motivation, and employees will be more motivated to perform if their goals are self-determined, clear, agreed with their superiors and personally challenging, but not overwhelming. Goal setting should be carried out regularly, with advance notice and information prior to any feedback sessions, with enough time being allowed to discuss an employee’s progress and opportunities to evaluate why goals were, or were not, achieved. This should be followed by a short account, compiled by both parties, of what has been agreed in the meeting (adapted from Rudman, 1997; Locke and Latham, 1990; Locke, 1968).

EMPLOYEE MOTIVATION, EMPOWERMENT AND PERFORMANCE 179

Equity

Army personnel in Latvia are reportedly snarling after learning that the country’s Interior Ministry spends far more on feeding its guard dogs than it does on feeding them. No Latvian firms manufacture dog food, so the ministry imports it from France at a cost of $A4625 per dog per year, while it spends only $A2490 per soldier per year buying food from local farmers. An Interior Ministry spokesman was unwilling to comment on the possible effects of this on the morale of their soldiers.

(Reuters’ report, cited in The Australian, 27 February 2002)

This theory suggests that motivation is the outcome of the equity that individuals perceive between the effort they put into a job and the rewards they receive, when compared with the efforts and rewards of co-workers, or others in similar jobs and occupations. A lack of perceived equity, in effort expended and rewards received, will lead to reduced levels of motivation over time (Adams, 1965). The two most important practical applications of equity theory are that, as far as possible, all employees should be paid equitably for performing well in a particular job, with a known and agreed formula for rewarding above-average performance. It is highly demotivating for employees to discover that colleagues doing the same job at the same performance levels are earning more. One well-publicized example of the effects of pay inequity in the 1990s concerned the actors, Caroline Quentin and Leslie Ash. They discovered that they were being paid £25 000 less than their male co-stars in Men Behaving Badly, just before the start of filming the third series of the programme in 1997. A similar situation arose before the second series of The X-Files in the mid-1990s, when Gillian Andersen demanded pay equity with David Duchovny. In both cases, the threat of their withdrawal from these series quickly ended these pay inequities.

We can even ignore the moral, ethical or legal arguments for opposing this kind of inequity. The main reason why leaders and managers should avoid this is because it is bad for business and organizational performance. This is becoming an increasingly important issue in organizations characterized by cultural and gender diversity. Not only can inequitable reward systems lower motivation and morale, they can increase labour turnover, with consequent loss of good staff to competitors. They can also be extremely expensive for companies if employees decide to sue for discrimination. This may appear to be common sense, but there continue to be many examples of women and ethnic minority groups in the USA, Europe and Australia successfully suing their employers for inequities in pay, career and promotion opportunities (please refer to Chapter 6 for several examples of this and a discussion of the business case for removing these inequities in organizations).