Let the sun shine!

Those in the news business are familiar with “sunshine laws,” which stipulate that government and other public institutions must openly share information about their operations, decision-making and financial expenditures. The idea is that “opening the doors and letting the sun shine” on government will foster honesty, good decision-making and public accountability.

It’s a concept that works well in the private sector too.

The study on employee sustainability that I’ve been writing about in the past several posts identifies “sharing information” as one of the four most important things managers should do to create sustainable workplaces with happy productive employees.

As the researchers, professors from two leading business schools, note: “Doing your job in an information vacuum is tedious and uninspiring: there’s no reason to look for innovative solutions if you can’t see the impact. People can contribute more effectively when they understand how their work fits with the organization’s mission and strategy.” (“Creating Sustainable Performance” by Gretchen Spreiter and Christine Porath, Harvard Business Review, January-February 2012).

I could not agree more, which is why Intertech embraces an open book management strategy. Specifically, every month, we share the following with all of our employees:  sales, cost of goods sold (COGS), gross profit, expenses, and post-tax profit. These numbers are important to our consultants because they each receive a year-end personal bonus based on utilization (i.e. how many hours they charge).  We apply a multiplier based on post-tax profit.

Our people can earn up to two times their year-end bonus based on company profitability.  In 2011, consultants received 50 percent additional year-end bonus payments based on profitability.  We call this our Profit Participation Program (PPP) and we share the PPP multiplier at the all-company monthly meeting as well.

While employees thrive for many reasons, I’m convinced that our open book approach has fostered a greater sense of employee ownership in our collective success.

Next post: Minimize incivility (and fire the assholes!)

If you do nothing, you’ll make no mistakes!

In my previous post I described a seven-year study on workplace productivity found that employees thrive when they are given discretion to make decisions. For many managers, especially new ones, this can be a scary proposition. What happens if an employee makes a big mistake on your watch?

We’ve found ways at my company to encourage good independent employee decisions, while still giving people support and direction when necessary. For example, I’ll ask an uncertain employee, “What do you think we should do?” This open-ended question encourages them to begin thinking of solutions and developing their decision-making skills. I also try to give some parameters, particularly when decisions involve expenditures, For example, “Go ahead with your idea and purchase XYZ if it’s less than $1,000.  If it ends up being more than $1K, circle back with me and we can talk about it.”

It’s also helpful to clearly communicate the outcome that you’re looking for and to share, if it’s true, that you’re open to whatever path will get them there (assuming it’s legal and within reasonable fiscal limits!).

Despite an employee’s best efforts, they will make mistakes. It’s just part of work and life. When this happens at Intertech, I share the story of how I screwed up as a college kid on our family farm. If you’ve read my book, Building a Winning Business, you probably cringed as I described breaking the axel on my Dad’s truck while trying to haul a log. Fearing the worst, I reluctantly confessed to my Dad. To my immense relief, he simply replied: “If you do nothing, you’ll make no mistakes.”

I like that story because it helps to create perspective.  When someone is taking a mistake or situation too seriously, or they’re dealing with someone who is taking themselves or a situation too seriously, I share that “If this is the biggest problem they’ve got (or we’ve got), life is going pretty well.” It’s usually true!

Next post: Let the sun shine!

Happy Employees… What the Research Shows

Earlier I promised to share some of the research emerging on the topic of happy employees and productivity. There are a surprisingly large number of studies in this area, but one of the more intriguing ones to cross my radar screen is highlighted in the current issue of Harvard Business Review in the article, “Creating Sustainable Performance.” Professors Gretchen Spreitzer (University of Michigan’s Ross School of Business) and Christine Porath (Georgetown University’s McDonough School of Business) describe how they spent seven years researching “the nature of thriving in the workplace and the factors that enhance or inhibit it.”

Their number one conclusion validated the importance of training and professional development. “If you give your employees the chance to learn and grow, they’ll thrive—and so will your organization,” write Spreitzer and Porath. They also note, “Happy employees produce more than unhappy ones over the long term. They routinely show up at work, they’re less likely to quit, they go above and beyond the call of duty, and they attract people who are just as committed to the job. Moreover, they’re not sprinters; they’re more like marathoner runners, in it for the long haul.”

In seeking to understand what makes certain workforces sustainable, or profitably growing well into the future, the word “thriving” was chosen by the professors to capture the essence of this elusive concept. In their words, “We think of a thriving workforce as one in which employees are not just satisfied and productive but also engaged in creating the future—the company’s and their own. Thriving employees have a bit of an edge—they are highly energized—but they know how to avoid burnout.

“Across all industries and job types, we found that people who fit our description of thriving demonstrated 16% better overall performance (as reported by their managers) than their peers. They were 32% more committed to the organization and 46% more satisfied with their jobs. They also missed less work and reported significantly fewer doctor visits, which meant health care savings and less lost time for the company.”

This is all very interesting, but what leads employees to truly thrive?

The researchers identified two key components: vitality–or a sense of passion for their work–and learning; the growth that comes from gaining new knowledge and skills. The two qualities work in concert according to the study. “One without the other is unlikely to be sustainable and may even damage performance. Learning, for instance, creates momentum for a time, but without passion it can lead to burnout.”

Spreitzer and Porath interviewed more than 1,200 white- and blue-collar workers in an array of industries and found that management can do four things to promote a culture of vitality and learning: (1) provide decision-making discretion, (2) share information, (3) minimize incivility and (4) offer performance feed back. I’ll take a closer look at each of these factors in my remaining posts in this series on employee happiness.

Next post: If you do nothing, you’ll make no mistakes!