To Maximize Productivity, Set Them Free

October 20, 2017

To Maximize Productivity, Set Them Free

Managers in corporations around the world have long been expected to motivate their subordinates to do their best. While almost every corporation expects this of their managers, many even link rewards, and compensation to such “leadership.”  A common tool to determine if managers are leading right or not is the annual employee engagement survey.

 

Not only is the survey used to determine company-wide initiatives to improve overall engagement every year, in many cases, individual managers are rewarded or punished based on the scores of their division or department. All this sounds like good business practice, doesn’t it? After all, happy employees make happy customers, and happy customers make happy shareholders. It should follow naturally therefore, that managers be held responsible for motivating their people. 

 

Or should it? Does it really make sense in the 24/7 connected and open source economy we find ourselves in today?  There are at least two fundamental reasons why the long-held logic needs to be reexamined in the currently unfolding fourth industrial revolution. The first has to do with the fact that managers’ ability to motivate subordinates is highly misunderstood, and the second is that employee engagement surveys produce mediocrity rather than excellence.

 

Should managers try to motivate their people?

Unlike in the previous century where knowledge was scarce and people were generally less informed, managers played a much bigger role in employees’ lives which included motivating them.  Today, ordinary employees are more informed and empowered than ever before.  They fully understand the consequences of working hard or not.  With the myriad of options available to them in the gig economy, they can now decide how much and when to work, and are prepared to face consequences and rewards accordingly.  Consider this example.

 

Uber drivers know that their income is directly proportional to the hours they are prepared to drive. They don’t need to be told, the decision whether to drive is 100 per cent their choice. Those that choose to drive less are not bad or lazy drivers — they may have other priorities and interests, and Uber driving might just be a way for them to supplement their income.  The point is, they decide.  Even while they don’t have inspiring and motivating managers, according to one study, 78 percentage of Uber drivers reported that they were satisfied with their work with Uber. Why such a high number? Because of the freedom they have, to choose their work quantity and timing.  The study also revealed 73 percentage of the drivers surveyed said that they prefer a job where they are their own boss, over a traditional 9 to 5 job reporting to a manager.

Managers are no longer the key drivers of motivation to excel in the job.

So, what about fulltime employees in traditional companies? Should they also be set free to decide and self-manage like Uber drivers? While it sounds counter intuitive, the answer might be a big yes.  If you acknowledge that in today’s connected and informed world, everyone is motivated only by self-interest (and not by their manager), then it makes sense to allow employees the freedom to choose how much or how little they want to work. As with any bell-shaped performance distribution, about 20 percentage of employees will want to do their very best work and go “above and beyond” every day, 60 percentage will be average performers, and 20 percentage will be low performers.

 

If we tell employees that it is entirely up to them to decide in which category they wish to belong, they will truly be happy, and do their best within that category.  And because of the omnipresent 80:20 rule aka the Pareto Principle, overall performance of the organization will not suffer because, as always, the top 20 percent will produce 80 percent of the results, with able (and happy) support from the remaining 80 percent.

 

There are two pre-conditions however, for such a system to flourish.  With freedom comes responsibility:

  1. If an employee chooses to work at the average or minimum level, they must be made fully aware that their rewards and compensation will be commensurate with their choice.  If they opt for minimum goals, they must know that they risk being fired if their performance falls below the minimum. As long as the contract between employees and managers is honest, let employees self-manage their performance.
  2. Employees choosing to work at the average or minimum level should not be looked down upon as long as they deliver what is expected of them.  These employees form the support system for the top 20 percent who produce 80 percent of the results. They are very important to the overall ecosystem and success of the organization.

 

Do Employee Engagement Surveys Help Drive Excellence?

If managers are rewarded based on their department’s employee survey scores or any such measure of their “leadership,” what are the consequences? Is making everyone happy the definition of leadership? Will managers make tough decisions when the organization needs them? Will they discipline non-performing employees? Or will they focus more on how to maximize their engagement scores by simply pleasing as many employees? In my corporate career spanning eight countries and five large companies, I have witnessed more negative consequences (i.e. pleasing) than positive ones.  

 

As Steve Jobs once famously said, “If you want to make everyone happy, don’t be a leader, sell ice cream.”  Employee engagement surveys turn managers into pleasers, not leaders.

 

Another problem with engagement surveys is that they completely ignore the age-old 80:20 Pareto Principle mentioned above, which posits that 20 percent of the staff are responsible for 80 percent of the results. As is common practice, the standard survey is distributed to all employees, and responses are averaged on each item to calculate scores.  Based on these scores, management then decides on key initiatives to bump up the numbers in the following year. What they don’t realize is that averaging the data drowns the voice of their 20 percent top performing employees. Consequently, management ends up encouraging mediocrity rather than excellence.

 

Many people cringe at this issue because they believe it is wrong to treat everyone other than the top 20 percent as second class citizens.  Something about this argument sounds horribly unfair to them.  So, let me clarify.  I am not suggesting that the remaining 80 percent are unworthy.  As stated above, they are important too, but their needs are different.  Instead of applying a one-size-fits-all approach to a diverse group of people, management needs to understand and address each category differently. There are many ways to do that, but the standard employee engagement survey is not one of them.

 

So, What Now?

Considering the above, and other arguments, managers are no longer the key drivers of motivation to excel in the job.  Management practices need a complete overhaul in the 21st century. In short, managers need to let go and embrace the following two of the many suggestions outlined in the book:

  1. Let employees self-manage the amount and quality of their work.  Make them owners of their own career and income.  Have an honest contract with each employee about what is expected of them, and based on what they choose, make clear to them what the consequences and rewards might be. This will free up managers from the burden of equally motivating all employees, and they will be able to help those that want to be helped towards excellence.
  2. Ideally, drop the engagement survey completely and replace it with a 360-degree feedback system based on company values.  If survey you must, then survey each of the bell curve categories (20:60:20) separately, and develop key insights about the needs of each category of performers.   
The Authors: 

Author of Open Source Leadership and Too Many Bosses, Too Few Leaders, Rajeev Peshawaria is the CEO of The Iclif Leadership and Governance Centre. Prior positions include Global Chief Learning Officer of both Coca-Cola and Morgan Stanley, and senior roles at American Express and Goldman Sachs. Rajeev provides speaking and consulting services globally to organizations in both public and private sectors.