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18 Home Energy | Summer 2018 by JOHN TOOLEY Strategies for Motivating and Retaining Superior Employees W hen we want to motivate people, the most common thing we do is dangle a carrot in front of them to get more of what we want, and use a stick when we want less of something. We use “if-then” statements: “If you do this, then I’ll do that.” If you are a manager of a business in the home performance industry and asking yourself, "How can I better motivate those who work for me?" and you want to know how to have loyal, happy, capable, and proud employees, read on. e number one question I hear from owners and managers across all the trades is “How can I find and keep superior em- ployees?” It’s difficult and expensive. Having a series of “short timers” not only erodes the company’s culture but is incredibly expensive. With the inevitable replacement costs, loss of or- ganizational knowledge, loss of productivity, and much more, studies estimate that the average cost of turnover is 90%–200% of the exiting employee’s base salary, which can be a large per- centage of a company’s operating budget. Retention of good em- ployees is more important now than ever. A highly motivated workplace culture plays a large part in positive word of mouth by superior employees. We need to create a workplace where our employees will spread the word to their friends. We want that message to be “Our company is the best place to work.” I believe that like begets like. When superior employees give good reports across their social net- works, they can help to attract the superior new hires we are looking for. Common Language It’s important to have a common language when discussing any subject. So when I refer to motivation, I define it as the general desire or willingness of someone to do something. By carrots I mean rewards or incentives dangled in front of employees to motivate them to strive toward some goal. We can give all forms of carrots; however, they should never be used to control. ey should be used as a celebration. And by sticks, I mean adverse consequences that decrease the likelihood that the person will do the same thing again. (Yelling, penalties, fines, and taking away privileges are examples of sticks.) So what does it take to achieve a highly motivated workplace? Develop and Maintain a Safe and Protected Workplace Our employees must feel safe and protected at work to do their best. Developing and maintaining a safe and protected work- place requires that we understand that processes fail more oſten than people do. When something goes wrong, our first reaction should be to examine how we can improve the process that al- lowed the problem to arise. In most cases a company’s owner’s the first reaction is “Whose fault was that?” rather than “How can we improve the process that let this happen?” Process- focused companies don’t blame individuals. When things go wrong, process-focused companies blame a poor or missing process. I can hear you thinking, “is can’t be right. ere are times when someone really is to blame.” at’s true. You can divide employees into two groups. e employees in Group A are those who do their work with the intention of doing it right. If they make a mistake, slip, lack training or skills, they are not to blame. We should blame the poor or missing processes that al- lowed the problems to arise. e employees in Group B are those who do their work wrong on purpose. We all have met these people. ey do work wrong knowing how to do it right. ey steal from the company or customers; they are the ones who

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  • 18 Home Energy | Summer 2018

    by JOHN TOOLEY

    Strategies for Motivating and Retaining

    Superior Employees

    W hen we want to motivate people, the most common thing we do is dangle a carrot in front of them to get more of what we want, and use a stick when we want less of something. We use “if-then” statements: “If you do this, then I’ll do that.” If you are a manager of a business in the home performance industry and asking yourself, "How can I better motivate those who work for me?" and you want to know how to have loyal, happy, capable, and proud employees, read on.

    The number one question I hear from owners and managers across all the trades is “How can I find and keep superior em-ployees?” It’s difficult and expensive. Having a series of “short timers” not only erodes the company’s culture but is incredibly expensive. With the inevitable replacement costs, loss of or-ganizational knowledge, loss of productivity, and much more, studies estimate that the average cost of turnover is 90%–200% of the exiting employee’s base salary, which can be a large per-centage of a company’s operating budget. Retention of good em-ployees is more important now than ever.

    A highly motivated workplace culture plays a large part in positive word of mouth by superior employees. We need to create a workplace where our employees will spread the word to their friends. We want that message to be “Our company is the best place to work.” I believe that like begets like. When superior employees give good reports across their social net-works, they can help to attract the superior new hires we are looking for.

    Common LanguageIt’s important to have a common language when discussing any subject. So when I refer to motivation, I define it as the general desire or willingness of someone to do something. By carrots

    I mean rewards or incentives dangled in front of employees to motivate them to strive toward some goal. We can give all forms of carrots; however, they should never be used to control. They should be used as a celebration. And by sticks, I mean adverse consequences that decrease the likelihood that the person will do the same thing again. (Yelling, penalties, fines, and taking away privileges are examples of sticks.)

    So what does it take to achieve a highly motivated workplace?

    Develop and Maintain a Safe and Protected WorkplaceOur employees must feel safe and protected at work to do their best. Developing and maintaining a safe and protected work-place requires that we understand that processes fail more often than people do. When something goes wrong, our first reaction should be to examine how we can improve the process that al-lowed the problem to arise. In most cases a company’s owner’s the first reaction is “Whose fault was that?” rather than “How can we improve the process that let this happen?” Process-focused companies don’t blame individuals. When things go wrong, process-focused companies blame a poor or missing process. I can hear you thinking, “This can’t be right. There are times when someone really is to blame.” That’s true. You can divide employees into two groups. The employees in Group A are those who do their work with the intention of doing it right. If they make a mistake, slip, lack training or skills, they are not to blame. We should blame the poor or missing processes that al-lowed the problems to arise. The employees in Group B are those who do their work wrong on purpose. We all have met these people. They do work wrong knowing how to do it right. They steal from the company or customers; they are the ones who

  • www.homeenergy.org 19

    habitually lie, take drugs, and so forth. These employees are blameworthy. They must be dealt with to protect the in-tegrity of our companies. We need to protect our treasured employees from being pulled down by the bad behavior of bad employees. That includes such things as ridicule, bul-lying, harassment, and any other wrong action that is done with intention.

    A blame-free workplace never dismisses accountability. We still need our employees to accept both, knowing that we trust them and will not blame them. We need employees who are both accountable and responsible at the table to help solve the prob-lems and improve the processes. They know more about what happened than we do. When our employees see that we walk our talk, trust increases, motivation increases, and retention grows.

    Never Turn Play into WorkLet me tell you a story. An old man sat on his front porch taking in the warm morning sun. Some children came by and started playing ball in the street in front of his house. The noise dis-turbed him, so he offered each child a dollar to go play some-where else. The children excitedly accepted the money and off they went. The next day the old man sat on his porch taking in the warm morning sun. Only minutes later, here come the children to play ball in front of his house. As you can imagine, the old fellow was annoyed. However, he paid each child a dollar once more. On the third day, both the old man and the chil-dren were back. This time the old man got mad and told the children to play somewhere else. No sooner were the words out of his mouth than the children demanded payment. “Pay up,” they said, “or we’re not going anywhere.” There are two morals to this story. First, never turn play into work. Second, incentives

    can become addictive. I’m afraid this holds true in many of our companies.

    Over 60 years of science on human behavior have tried to teach businesses how to effectively motivate

    their employees. As far as I can tell, that science has pen-etrated very little into the business world. Hundreds of years

    of motivational approaches can be summed up in two state-ments. Rewarding an activity will get you more of it. Punishing an activity will get you less of it. In fact, this concept of motiva-tion is much older. Five hundred years ago, Niccolò Machiavelli stated, “Might makes right.” The carrot pulls a person toward an outcome, the stick jolts him away. There are volumes of scientific research on what truly motivates us at work. There are three behavior drivers. The first is our biological drive; it is driven from within and consists of hunger, thirst, sex, and sleep. The second is driven from outside; it consists of rewards and punishments (carrots and sticks). The third is driven from within; it is the joy of the task. This driver is intrinsic motiva-tion. It arises when someone is compelled to act, not because of any external inducement, but because of an internal desire. These employees are ambitious and self-motivated. We have all met them. They are star performers. They love what they do and have no clock. They are driven by a higher purpose within.

    Our employees are driven by the second and third drivers. Either they are driven primarily by carrots and sticks, or they are self-motivated. Both carrots and sticks work to a limited degree if we are there to administer them frequently. However, carrots and sticks have only short-term impacts because they are used to promote good or discourage unwanted behavior. We should always avoid taking the play out of work. Carrots and

    business development

  • 20 Home Energy | Summer 2018

    sticks should never be used to motivate. The use of carrots could cause a harmful competitiveness among employees. The use of sticks could destroy motivation across the company.

    In Why We Do What We Do: Understanding Self-Motivation, Edward L. Deci states: “Doing an activity specifically because it leads to a reward, avoidance of a punishment, or social ap-proval is external motivation. This approach is pervasive in our society.” He describes how to create a work culture that nurtures the third driver. Deci draws an important distinction between autonomous behavior and controlled behavior. Autonomous be-havior is self-motivated behavior. Controlled behavior is exter-nally motivated behavior. Controlled behavior is not an expres-

    sion of the self, for the self has been subjected to the controls of carrots or sticks, often without realizing it. In 1999 Deci and two colleagues reanalyzed 128 studies published over nearly three decades. Their conclusion: Tangible rewards tend to have a sub-stantially negative effect on intrinsic motivation.

    We spend one-third of our time at work, so satisfaction with life is highly dependent upon job satisfaction. In Drive: The Surprising Truth About What Motivates Us, Dan Pink introduces three elements that will increase motivation in any business (see Figure 1). These elements are purpose, mastery, and autonomy. Let’s take a look at each one.

    PurposeWe must give our employees and those we want to become our employees a clear purpose for doing so. We need to create and de-liver a powerful vision that will enable others to join and achieve our purpose. For example, what is Starbucks’s purpose? It’s not about coffee. It’s “To inspire and nurture the human spirit, one person, one cup, and one neighborhood at a time.” Great com-panies appeal to their employees’ desires to make a difference. What’s Apple’s purpose? It’s not about phones, computers, or tablets. It’s “To challenge the status quo.” Both companies give their employees a purpose greater than themselves. “To make a profit” is often what people answer when I ask them why do they do what they do. Profit is a result. Purpose is what motivates action. Our purpose should include everyone in our company, our community, and beyond. Our purpose is something bigger

    than ourselves. A great book to help with developing our pur-pose is Start with Why: How Great Leaders Inspire Everyone to Take Action, by Simon Sinek.

    I have found that making sure everyone understands our company’s purpose, and why it is bigger than ourselves, is a key component of employee retention. A recent survey of 81,100 U.S. undergraduates found that young people ranked an inspir-ing purpose as the most desired characteristic in an employer. Other top priorities were job security, work–life balance, and working for a firm with fewer than 1,000 employees.

    New research from the iOpener Institute, which analyzed re-sponses from over 18,000 professionals, has shown that the digi-

    tal generation—Generation Y—values job fulfillment over finan-cial reward. This new analysis provides an important wake-up call for management. We must pay attention to employee feelings of engagement, empowerment, purpose, and future development if we are to retain and foster young talent in our companies.

    The authors of the report found that among the best compa-nies to work for, an employee’s belief that his or her “work has special meaning: this is not ‘just a job’” was the most closely associated with the desire to stay with the company. The next-most important factors were the belief that “I make a difference here,” and the belief that “when I look at what we accomplish, I feel a sense of pride.” This tells us that in a high-trust, high-per-formance culture, connecting employees to a sense of purpose is closely related to the issue of retention.

    MasteryYou need not see what someone is doing to know if it is his vocation,you have only to watch his eyes:a cook mixing a sauce, a surgeonmaking a primary incision,a clerk completing a bill of lading,wear the same rapt expression,forgetting themselves in a function.How beautiful it is,that eye-on-the-object look. [W. H. Auden, “Sext”]

    There are three behavior drivers: (1) biological—hunger, thirst, sex, and sleep; (2) rewards and punishments (carrots and sticks); (3) intrinsic motivation—joy of the task.

  • 22 Home Energy | Summer 2018

    Ah, to be in the zone while doing what we love! That beauti-ful eye-on-the-job to achieve mastery as part of a WAP or home performance crew; as a rater or inspector, lost in the fulfillment of what you are doing. When an hour feels like a minute. When one is inspired from within, time seems infinite. Dan Pink de-fines mastery as our urge to make progress and get better at what we do. Most of our employees want to master what they do. We must strive to help them reach their full potential. When our employees feel we are dedicated to their professional develop-ment, retention rises. Some people say we can’t afford to do that because these trained employees then leave the company. I’m sure you know the answer to that. We are worse off if they stay untrained. We only profit when we help them to develop as su-perior employees. When we create a development plan with our employees that will increase their value to our company, their intrinsic motivation will increase. We can’t motivate anyone in-ternally; we can only inspire them by our purpose and commit-ment to their profession and to their personal advancement. In short, if we want to inspire our employees we must walk the talk. If they feel we are helping them to get better and better, not only will motivation rise but so will retention.

    AutonomyAutonomy is our desire to be self-directed. Carrots and sticks require people to forfeit some of their autonomy. Using carrots and sticks severely limits what each of us can achieve. People need to feel that their actions are self-directed rather than con-trolled by others. Autonomy doesn’t mean that employees do whatever they want. We must trust our people to be self-directed within the specifications, policies, and procedures of our com-pany or program. The more our employees understand that we trust them, the more they will trust us. Granting employees au-tonomy will result in deeper motivation and greater retention.

    Researchers at Cornell University studied 320 small busi-nesses, half of which granted workers autonomy, and the other

    half of which relied on top-down direction. The businesses that granted workers autonomy grew four times as fast as the con-trol-oriented firms and had one-third the turnover.

    Our people must have autonomy, they must have ample op-portunity to pursue mastery, and their daily duties must re-late to a larger purpose. We need to turn work into play. I have been very blessed. I feel like I have not worked very much over my career. It’s been more play than work. It has not been “just a job.”

    John Tooley recently retired from Advanced Energy and now owns and operates John Tooley, LLC, where he consults, coaches, and does trainings on Business and Building Science.

    >> learn more

    Source for the average cost of turnover cited at the beginning of this article is Cascio, Wayne. Managing Human Resources: Productivity, Quality of Work Life, Profits. New York: McGraw Hill, 2016.

    Barck, Jonas. "Universum Releases 2017 U.S. Talent Survey Data,” Universum Global. New York: Universum, 2017. universumglobal.com/universum-releases-2017-u-s-talent-survey-data/.

    Bush, Michael. Connecting People and Purpose: Findings from the 2016 Fortune 100 Best Companies to Work For. Oakland: Berrett-Koehler Publishers, Inc., 2018. www.greatplacetowork.com/reports/626-2016-100-best-companies-to-work-for.

    Deci, Edwards L. Why We Do What We Do: Understanding Self-Motivation. New York: Penguin Books, 1996. tinyurl.com/ych2svjm (PDF).

    For more on the research conducted by the iOpener Institute, go to iopenerinstitute.com/wp content/uploads/2016/04/ iOpener-Institute-Gen-Y-Report.pdf.

    For more on the research conducted at Cornell University, go to tinyurl.com/y8m9trr9 (PDF).

    Elements of Deeper Motivation Beyond Carrots and Sticks

    PurposeRelatedness, feeling cared for and committed to and a sense of belonging—something bigger than ourselves

    MasterySense of effectiveness and confidence in one's context— develop versus grow

    AutonomyFree to innovate and create with discipline, responsibility, and accountability

    FIGURE 1. There are three elements that create motivation in any business.