I hope you find comfort in my latest Talent Management blog post where I explain why we shouldn’t fear change. In this post, I also debunk the myths that surround it and discuss ways you can achieve meaningful change in yourself and in others.
‘Leadership’ Articles
Why Wall Street won’t ever change their spending ways
I’m going to get right to the point. I have little faith that Wall Street will ever get smarter about how they spend their money. The reality is they have too much of other people’s money and deal in such large amounts day to day that they will never take seriously the efficiency and effectiveness of their own management systems. They have seen good times and bad. While they are talking about making dramatic changes now, history has proven that they will only be temporary. Even though they are in a position now where their financial belts will have to be tightened, it will be only for a short time because when the economy improves they will return to their spendthrift ways. Why? Because they don’t know any better and since they are in the business of selling money have come to believe that money will solve their problems only if it is given in large amounts. It is an environment where $100,000 is considered “chump change.”
What prompted this blog was an article in Bloomberg News titled, “Wall Street Mulls Partial Pay Freeze” by Jeffery McCracken and Christine Harper. They talk about the fact that revenues in the investment-banking business have been so bad that they might have to resort to eliminating the practice of boosting pay automatically each year. They quote Joseph Sorrentino of Steven Hall & Partners, an executive-compensation consultancy who said, “Pay increases have been traditionally automatic because there are traditionally very long hours in terms of the amount of work and this is another way to try to boost their morale and signify that they’re a strong part of the firm and that they’re appreciated.” This quote cracks me up because it shows the almost total lack of understanding of the laws of behavior.
I can assure you that Mr. Sorrentino has no data showing that the way these investment banking firms structure bonuses improves junior bankers’ performance, retention or morale. It is naïve to think that you can treat people poorly day to day, give them money at the end of the year and think that will create the feeling that “they’re a strong part of the firm and that they’re appreciated.”
The reason these firms can get away with wasting millions of compensation dollars is because practically every company in the industry is using the same poor uninformed compensation practices. Therefore, no firm has an advantage or disadvantage. The customer pays the freight.
If these firms ever get to a point where they must operate in a more sound way financially, I can suggest several things.
- Every problem cannot be solved with money, even on Wall Street. What causes people to quit and go to another company is more about the way they are managed than the money they make. If employees are treated poorly, they will leave for a dollar more. If they are treated well, it will take a lot more to hire them away. Make no mistake, loyalty cannot be bought. Big bonuses have often helped a disaffected employee start a competitive company or retire early.
- Bonuses that are not earned, more often than not, do not strengthen productive behavior because that is not the contingency involved in receiving the bonus. While upper management believes that annual bonuses increase loyalty and performance, they do neither because they don’t have to be loyal or productive to receive one. They have to do just enough to stay on the payroll. Of course management doesn’t believe this because if they did, they would make immediate changes where nothing would be automatic that was not individually earned. A system where employees knew the personal accomplishments they had to achieve to earn the money would be far superior and less costly.
- Forget what rival firms do. Focus on promoting to management only those who have good social skills and an understanding of the science of behavior. Pinpoint the behaviors and results that are valuable and generously reinforce those behaviors and reward those who produce the results. That way, the only thing that executives will have to “mull over” will be how to spend the money that is left over.
Ethical Lessons for Every Workplace
The recent scandals at Penn State and Syracuse have ignited larger concern over whether or not organizations devote the proper attention and care to building ethical structures in their workplace. My colleague, and ADI President and CEO, Darnell Lattal, was interviewed recently for both Training Magazine and Talent Management as she has written extensively on the topic of Ethics at work. I encourage all to read and consider how behavioral science should be used to ensure that your organization builds an “ethical infrastructure” that defines, measures, and reinforces ethical behavior.
How to Kick Start Your Career
There is no better way to start out the New Year than to be invited to CNN. I had the pleasure of sharing some tips for kick starting your career for the New Year. Whether you are looking for advancement or still seeking employment in this difficult business climate, I hope this CNN video offers you some ideas for making the most of your career and finding the positives in your work environment.
Improving Post-Accident Behavior
Predictability is one word you could use to describe an organizations reaction after an accident. It is quite common for organizations to jump to some kind of response after an incident or accident has occurred. But do they always do the right thing? In the latest video blog, Dr. Judy Agnew examines what typically occurs in the aftermath of an accident and why organizations should turn instead to more proactive measures of safety to better avoid the potential for future problems.
See also: BBS Basics Instructor Start-Up Package and BBS Orientation Booklet
Performance Management Isn’t What You Think
You may not want to miss my latest Talent Management Blog where I challenge readers on their definition of Performance Management and recommend that we rename Performance Appraisals to something that more clearly encompasses its original intent. Click over to find out what I think it ought to be called.
Also, don’t miss this month’s special report on Performance Management where you can read more from me and other leaders in the strategic HR arena.
Discipline and Safety: what you need to know before you act
While discipline is important under the right conditions, it can also be overused and misused. In this video blog, Dr. Judy Agnew describes the potential problems discipline can cause if not used properly and the side effects that may result. She also discusses why organizations shouldn’t jump to conclusions and what they should do first instead.
Good Intentions, Bad Effects
Guest post by Darnell Lattal
Throughout the past several years, ethics has made its way into business headlines, more often than not for bad rather than good. What people may be surprised to know though is that to get an organization to behave in ethical ways, it takes more than good people seeking to do good. It takes more than rules of conduct. Ethical behavior is what is shaped day in and day out by unintended consequences that occur as work is done. To “be ethical” requires a very deliberate focus on the impact, not the intention, of actions. It is also a clear-eyed review of how behavior got going to begin with and the unethical effects on the organization. It requires looking ahead at impact, not what has happened but what could happen and evaluating the degree of harm or good such impact could have.
There are things that each of us can do to contribute to a stronger ethical workplace. The best way to protect you and your organization is to understand how consequences increase or decrease the likely occurrence of certain kinds of behavior now and in the future. Here are a few suggestions:
- Talk openly. Make ethics a part of your workplace culture by talking openly and often about it. When you provide examples and take the time to communicate its importance, individuals will have a stronger understanding of how to avoid slippery slopes.
- Build ethics into hiring and training. Include ethics as part of your selection interview. Examine a person’s responses to ethical dilemmas and identify specific actions to take. Ask about times when they did something wrong and how they decided what to do. Look at a candidate’s ability to balance among conflicting values and how the individual might apply his/her judgment to “messy customer situations” or with coworkers. In training, have your employees define terms such as treating others with respect and how they demonstrate that in their behavior. Present case studies that require discriminations among choices and discuss the implications. Have individuals bring real-life ethical dilemmas to the team for discussion and resolution.
- Focus on consequences. Attach consequences to desired behavior and measure its occurrence. Extreme behaviors lead to immediate termination, but most actions are not stuff of moral outrage. Remember that ethical discrimination is shaped, reinforced, maintained and changed by the contingencies that surround and support individual actions. Make your expectations clear and then follow up.
- Define criteria. Establish a set of criteria to evaluate your own actions and share those with others.
- Support others. Encourage, model and help others establish a method to discuss actions and increase alertness to the ethical issues in everyday decisions.
- Monitor and enforce ethical behavior. Assure that structure and resources exist to monitor and enforce commitment to an ethical climate. Regular coaching and feedback, training sessions to increase skills, customer and employee feedback, structures, systems and processes that allow for the orderly flow of work are all important in reinforcing ethical behavior.
Be alert to what the longer term effects of consequences are for individuals and for the culture of an organization. The ethical traps, unintended consequences, are easy to fall into and none of us are immune from the fall.
Read more…
Personal Responsibility within a Behavioral Approach
Guest post by
Judy Agnew
We have received much positive feedback on our book Safe by Accident and we are delighted that so many people find it helpful. There is one issue that some people are struggling with so we want to take this opportunity to clarify. Some readers are having trouble reconciling our discussion of the influence of organizational/management systems on at-risk behavior and the concept of personal responsibility for safety. The question is: if at-risk behavior is found to be influenced by management-controlled organizational systems, does that let the frontline performer off the hook?
To some extent this is a philosophical issue. The notion of personal responsibility is embedded in our culture. It is present in our judicial, political and social systems and has served us well in many respects. In a work setting, telling employees that they are “responsible for their personal safety” at work is helpful as a broad antecedent. It sets the expectation that each person must do what they can to protect themselves and others. The question is what specifically are they responsible for? Telling miners they are responsible for their own safety and then sending them into a mine that is poorly ventilated and structurally unsound is absurd. They cannot be responsible for their own safety under those conditions because they do not control them. We think everyone will agree with this extreme example. The difficulty comes with less extreme examples. Workers who are trained in procedures but don’t follow them consistently, for example. Our position is that there is shared responsibility in most cases. Our concern with the notion of “personal responsibility” is that it sounds like an easy solution to a very complex problem. We are sure that some of you have told employees in your organization that they are responsible for their personal safety. We assume since you are reading this, that hasn’t solved all your safety problems. Antecedents rarely do.
So where does personal responsibility fit in?
Let’s back up. The goal in safety is to prevent injury and illness. If we say that people are responsible for their own safety, then it follows that if they are not safe, they are to blame. Our point is that blaming people for things that are, at least to some extent, outside of their control does not accomplish the goal. If it did more organizations would be perfectly safe by now. But let us be very clear: we are not suggesting that accountability (a synonym of responsibility) is bad. Accountability is essential in safety. However, it is critical that organizations first determine WHO should be accountable for WHAT. The word, accountability, is often code for whom to punish. The issue is not who should be punished but what actions will correct the situation so that it will not recur. Although punishment is appropriate under certain circumstances, we see too often that organizations punish only the person at the point of the accident without fully understanding the systemic issues that have contributed. This is not only unjust, but it fails to rectify the situation.
Systems are designed and maintained by people. Therefore, there should be accountability for those who control the systems to change the systems if they are faulty. Once the systems are changed then everyone who works in those systems should be held accountable (positively reinforced for engaging in safe behaviors and corrected when they are not). This is not about absolving personal responsibility–quite the opposite. It is about establishing accountability, at all levels, that will lead to true improvement. Frontline performers need to be held accountable for those things under their control. They should be responsible for reporting hazards, providing feedback to keep peers safe, participating in safety meetings, talking to management when systems make working safely more difficult, offering solutions, and working to improve their own safe behaviors. Frontline performers will be more successful in “taking personal responsibility for their safety” if they work in partnership with management and those who control the organizational systems within which they work.
A Dozen Ways to Weather the Economic Storm
Guest Blogger: Darnell Lattal
Nowadays you can’t turn on the television, pick up a newspaper, or read a magazine without seeing headlines about jobs and the turbulent economy. Inundated with negative news and experiencing the all-too-real repercussions of a financial downturn can be downright depressing and can easily impact performance at work.
Believe it or not, there is something productive we can do. Managers and employees alike can infuse the workplace with meaningful activity by focusing on behaviors that lead to positive outcomes. The following twelve tips will help any manager wade through these difficult economic times; delivering their best performance and that of those who work with them.
• Be realistically optimistic. Don’t spend time worrying about things that are beyond your control. Focus only on those things you can control and provide a sense of realistic secure messages that, while times are difficult, there is a future.
• Communicate! When hard decisions are needed, make them and communicate them cleanly and clearly to the individuals involved. If you need to lay people off, consider how you can support them during that transition, through community services that might help or via other methods. Encourage dialogue and provide straightforward answers.
• Have a contingency plan. Look to your own level as to where you can cut, reduce, and manage, including your own pay before you begin looking at other levels of the organization. If you are at the executive level, you should be the first to step up. You can definitely share this information, but don’t advertise, “Hey I’m a good guy. I’ve just taken a pay cut!”
• Invite feedback. Figuring out the honorable thing to do when you’re under the gun and your company is in high distress is difficult. Have trusted advisors who will always challenge you to think clearly and correctly and listen to your clients’ difficulties as well. For example, if they need a certain period of delayed payments and it’s reasonable for you to consider that, try working out payment terms with your customers.
• Be energetic in your own efforts to find financial resources and clients for your company. Don’t retreat and don’t become too controlled by what you read or hear in the news. Look beyond the newspapers and examine what you’re actually seeing in your organization. Many times we may find that business continues and even develops, but if we get too gun-shy, too soon, we don’t test good opportunities.
• Be willing to spend money during this time. Even while you’re reserving money, don’t retrench so much that you fail to market and reach out. Be careful not to conserve in areas that really will harm your future and growth over the long run.
• Consider a pay-for-performance system. You may not be able to give wage increases but you can consider setting up pay-for-performance based on profit sharing. By doing so, you will keep the organization whole while keeping salaries in place. Even at a time when you can’t give raises, you can reward people’s dedication, commitment, and performance by including them in any profits. By having a well-structured, pay-for-performance system, you also make people aware of what it takes to get to that profit.
• Engage all employees. Use the skills of your staff to build tools, materials, and resources that you will need going forward. Give employees a sense of purpose by enlisting them in helping to complete those projects you’ve put on hold. That may mean you need to use some creativity but that’s essential because their effort to show up is a valuable gift to you. Treat it as such.
• Be flexible. Another alternative is to offer your employees flexible time for their extra efforts. For example, when it’s possible, let them work from home and save on the high cost of gas. But do so carefully, because part of getting through these rough spots is a sense of teamwork and collaboration that happens when people are together trying to solve problems.
• Be honest and forthright about the organization’s economic reality. Always keep the information flowing. Don’t freeze up on giving employees the data they need including where you are financially, what’s coming down the pike, and what the future looks like. Have one-on-one conversations with individuals. Be honest; tell them when things are tough and are not going to get better for a while. Let them know you will do all you can to make their lives good and that you’ll remember their contributions, but only if you mean it. In the meantime, do not punish people if they need to explore employment possibilities elsewhere.
• Empower employees. Encourage your employees to look for opportunities to find business. Have meetings and ask for suggestions about what the company can do. You might get some good ideas!
• Add fun and recognition. No matter what the economic times are, we can still bring in lunches and have little celebrations of events that are happening, just to keep the mood up. The company can support get-togethers such as going to the movies or taking a break in the middle of the day to go to the park. Try to think of events that will reinforce employees. During an economic downturn, management should step back and really look at people’s contributions. Take the time to remember people in specific ways for what they have done. Make that public, enjoy it, and celebrate even in the face of tough times. Employees can do the same with peer-to-peer appreciation. Sometimes that may be difficult to do, but it’s important.