In yesterday's program, Commentator Robert Morison, co-author of Workforce Crisis, talked about the role employee engagement plays in productivity. What he said sparked some interesting feedback, including the following email I received from Patricia Smith, a viewer in New York, New York:
I'd like to comment on the essay of 5 July 2007 about the reason(s) so many employees are not "engaged" in their work. Why is the simple and basic truth always the one reason not mentioned? Of course, I refer to compensation. It may be true that a minimal (less than cost of living as has been the rule for many years now for the majority of workers) increase will not improve morale and workers who earn advancements improve in productivity and devotion to the organization. But what does advancement mean? It means not only new and different assignments but an IMPROVING standard of living.
Beware giving employees new and different (and usually more demanding) tasks without corresponding growth in compensation! Productivity may "increase" when more is demanded of an employee with no improvement in the standard of living but this will be the result of fear (and the observation that the work they are taking on used to be done by those who have been "outsized"), not true devotion to the organization. The growing gap between the value put on those who occupy the CEO suite and the vast majority who make an organization really work is not lost on those outside the CEO suite. But of course, those in the suite don't believe it makes any difference WHY productivity increases, as long as it does. The important concept here is how much people are "valued" and we all know in our culture how that is measured. As a PBS member I will be very disappointed if my comments are not read on air for the general public to consider.
Patricia makes some very strong points. Unfortunately, the allotted time for our broadcast is limited, so we cannot include viewer comments. But, that's exactly why this blog exists.
Comments
Patricia raises some good points, but her central one, that compensation is the "simple and basic truth" behind engagement is only partly true. Compensation plays a bigger role in lowering engagement than in raising it.
Lots of studies have shown that, while you can raise satisfaction to some extent with more money, you can’t buy real engagement. It's based on attachment to the work and/or the organization. The comment from Noah says it well: "My job needs to accommodate my standard of living, not dictate it. If I find myself in a position where my next pay-raise dictates my productivity at work, there is no reason I should be in that job. I will leave and find work that provides opportunity, creativity and independent thinking. These are the buzz words that drive employee productivity."
However, when an employee feels underpaid (i.e., compensation doesn't accommodate one's standard of living), or that the compensation system is unfair, or that executives are grossly overpaid in relation to the average employee, he or she disengages from the organization, and then the inherent interest and value of the work and connection to colleagues are the only sources of engagement.
Noah also makes a good point about the diversity of the workforce and the ways people relate to work and employers. The nature of the work and the opportunity to learn are important to almost everyone, but other motivators vary, to some extent by generation. Based on our survey research, we identified six distinct ways that people relate to their work, six different patterns in what they want in the "employment deal."
Patricia's argument reminds me of the segment we call "Fair & Squares" – the employee gives fair effort (and extra effort when asked), expects that effort to be recognized, and expects to be treated fairly in all respects, including compensation. The employee measures success in terms of steady personal and financial progress. The worst things an employer can do with a Fair & Square is be blatantly unfair and to change the deal without notice. Fair & Squares are the largest segment of the U.S. workforce (20%) and are, on average, among the more engaged.
Employee productivity – The new perspective (Generation Y)
It is difficult to have clear cut answer to what motivates employees because there is no clear cut employee. The workforce is diverse, and people from different cultural, financial, and generational backgrounds all respond differently to the same incentive. The best way I can put it is like this;
In my generation, “there is a higher value on self fulfillment tied with corporate progress.” My job needs to accommodate my standard of living, not dictate it. If I find myself in a position where my next pay-raise dictates my productivity at work, there is no reason I should be in that job. I will leave and find work that provides opportunity, creativity and independent thinking. These are the buzz words that drive employee productivity.
Today’s generation works with the company not for the company. (This is a true devotion mindset.) My standard of living increases with my company’s bottom line, so therefore our value is a measurement of our EBITA.
Boldly put: performance rules.