Workplace of Choice

A recent study, Profit at the Bottom of the Ladder, by Jody Heymann has found something that many Human Resources professionals have known for years, the more you invest in your employees, the harder they work. It seems simple, right?  But yet, it’s always been a challenge to quantify this relationship. This study gives actual financial statistics as to why it is important to invest in employees, the very proof we’ve been looking for.

The study explains how many companies invest mostly in their higher level employees but that employers should invest in all of their employees.  Often times employers think that investing in lower level employees is a waste of time and effort because they’re not as committed as higher level employees and may soon leave the company.  On the contrary, this study proves that employee productivity can be significantly increased, employee turnover reduced and other costs cut by investing in all employees. For example, Xerox Europe started to “offer training and career tracks to line workers [which] led to lower turnover and easier recruitment, and served to make employees more efficient while they were with the company.” Normally, in the call center industry, turnover rates are extremely high but Xerox was able to promote 20% of their entry-level employees over a one-year period. Another great example is Autoliv Australia, a company that makes auto parts. They changed their leave and vacation/PTO policy to be more flexible for all employees which made their turnover rate fall from 20% to 3%.

Investing in your employees can give your company a huge return. How do you invest in your employees?

Setting and cascading goals throughout the organization is vital to achieving company objectives.  When defining goals, you'll want to make sure they meet the SMART criteria:

Specific: A specific goal has a much greater chance of being accomplished than a general goal.

Measurable: Establish concrete criteria for measuring progress toward the attainment of each goal you set.

Attainable:  It should be a stretch to reach the goal, but not so much so that it's out of reach. 

Realistic: What it takes to do to achieve the goal should be within the availability of resources, knowledge and time.

Timely: The goals should have a clearly defined time-frame including a target completion date.

Using the SMART criteria above, you should determine 3-5 goals that are tied to success measures of the company.  Oftentimes they are financial, business development, process development or customer satisfaction measures. 

Once the Company Goals are determined, they should be communicated throughout the Company and translated to departmental goals.  Those departmental goals then become the framework that shape each employee's individual goals.  Hence the goals are cascaded as Company Goals down to Departmental Goals down to Individual Goals.   These individual goals can play an important role in performance management, career development and employee rewards.

We're just coming off "the most wonderful time of the year"...but Rewards don't always have to come just during the holidays and new year!  Rewards can come in many different forms and serve many different purposes:

• Something given in return: something desirable given in return for what someone has done
• Money offered in return: money offered as a reward
• Benefit received: a benefit obtained as a result of an action taken or a job done
• Something reinforcing desired behavior:  something positive that follows a desired response and acts to encourage desired behavior

Rewards can come in many different forms.  Before you give a reward, it's helpful to know the following:

1. What is being rewarded? Specifically state the behavior or result that is being rewarded.

2. Why is it important? How does it help the business achieve its goals, financial metrics or other key performance indicators?

3. What result(s) did the behavior produce? Cost savings, customer satisfaction, process improvement, etc. You want to quantify it so the positive behavior can be replicated!

There are lots of different ways to reward positive behavior:

• Cash awards: Money is obviously the most readily used. Also consider gift cards, cafeteria "free lunch" certificates or giving a charitable donation in an employee's name.
• Non-cash awards: A handwritten thank you note, recognition at a company meeting, peer recognition or a company "wall of fame" are ways to recognize employees.

Regardless of the reward vehicle you use, but sure to:

• Be timely: Recognize the positive behavior when it happens, not 3 weeks later!
• Reward consistently: Be sure to recognize big and little accomplishments...but do so proportionately. A major cost savings may justify a cash reward, but solving a minor problem on the fly, may just require a "thank you"
• Be sensitive: If the employee you want to recognize is shy or quiet, reward them quietly, not in the company meeting! Respect the employee's style and preferences by recognizing them in a way they will feel comfortable. You certainly don't want to minimize their positive behavior by making them uncomfortable.

What is your Company doing to reward employees?