A highly engaged workforce translates into improved financial performance for companies. You’d expect that, wouldn’t you? Yet many companies with command and control structures still don’t get it.

Because jobs are scarce now, senior management of these laggards don’t feel the need to engage with employees to reach the shared goal of making the company great. As a result, according to an Aon Hewitt study, companies that don’t fit its “Best Employers” category are losing shareholder value.

Smart companies understand, however, that an engaged workforce is a productive workforce.

Employee Engagement Correlates to Shareholder Returns

Organizations with high levels of engagement (65% or greater) continue to outperform the total stock market index and posted total shareholder returns 22% higher than average in 2010, according to the study by the human resource consulting firm. On the other hand, companies with low engagement (45% or less) had a total shareholder return that was 28% lower than the average, as illustrated in this graph.

The study shows the key drivers of employee engagement in this graph.

Note that study respondents from Aon Hewitt’s employee engagement database say that pay is only half as important as career opportunities.  So simply giving employees a raise isn’t as important as putting systems in place that reward employees with opportunities to build their careers in the organization.

If you are an employer, are you engaging with your employees and offering them the opportunities to grow? If you are an employee, do you feel stuck in place? Maybe it’s time to move on.

Slowly, but surely, more companies are seeing the wisdom of enlisting their employees as brand ambassadors. I’ve written about this several times, including the post 7 Steps to Making Your Employees Brand Ambassadors.

Employees are eager to help because if their company succeeds and grows, they will too.  Employees who are actively engaged on social media as brand advocates help to burnish the company’s brand, they are motivated by being asked to take on the assignment, and customers receive better service.

CommProz.biz has identified 10 companies with outstanding brand ambassador programs. What companies would you add to their list?

Do you ever wonder if all the work you’re putting in is making a difference? I know I do. We envy the “stars” in our professions. But they got to where they are with a succession of small wins that add up to major progress and their huge success.

In her book, The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work, co-author and Harvard professor Teresa Amabile describes how even small, incremental wins can have a major positive influence on what she terms an employee’s “inner work life.”

Finding Meaningful Work

Perceptions, emotions and motivations influence inner work life, but the single most important factor “is simply making progress on work they find meaningful.” Even the most trivial wins can affect performance. On the flip side, a trivial negative experience can have two to three times the impact as a positive experience.

Amabile says that when individuals focus on work that is most meaningful to them it will also benefit the organization. Keeping track of our small wins will motivate us to continue making progress.

Managers Can Be Catalysts

In this video, she describes how a manager can be the catalyst for improving the inner work lives of employees and their positive performance by:

• Giving employees clear goals in their work so they understand why it is important
• Allowing them autonomy to reach their goals
• Giving them the sufficient resources to get the work done
• Helping them to access the materials they need
• Clearing away the obstacles
• Treating employees as human beings, respected and recognized for their value in the organization

While these tips may be self-evident, it is amazing that so many organizations don’t do them. My personal view is that one of the biggest obstacles to success is an employee not knowing what’s expected of him. What is my job? Another one is giving someone the responsibility, but not the authority, to do her job. “OK, bring that product to market. By the way, I have to approve every penny you spend.” Sound familiar?

Here is more of what Amabile had to say.

Altimeter's Jeremiah Owyang via CrunchBase

More employees of small companies are advocating for their companies on social networks than their much larger competitors.

That’s what the Altimeter Group found in its recent survey of 140 companies. By ratio, smaller companies in the 1-5k range had one 1 out of 195 employees publishing compared to 1 out of 356 in companies with 100k or more employees (see graph below).

More flexibility, less red tape

More flexibility, less red tape, and evolving cultures may be among the reasons.

As I wrote in a post 7 Steps to Making Your Employees Brand Ambassadors, the internet allows companies to empower their employees to promote the company and its products. Small companies can’t compete with the monster advertising and social media budgets of their biggest competitors. But small companies can enlist an army of their own employees to go viral with positive comments on social networks.

I’m glad to see this happening and as the company’s web strategist, Jeremiah Owyang, said in announcing the survey results, “Over time, expect all ratios to drop, as a prolific next generation rises into senior roles. We’ll be measuring this periodically, but for now, I would assert that more employees will be using the official accounts over time, as the younger generation learns their way around the business, climbs up the ladder, and is granted ability to publish.”

The director of operations for Gunwel Associates, a boutique tax and bookkeeping firm with only four employees, wrote a post earlier this year, describing how his firm is building customer loyalty and attracting new customers through the activity of its employees on social media. As Christopher Sheehan wrote, “If you’re not connected then you must get connected…becoming active in social media can and will grow your business as well as build client loyalty. We’ve seen it happen.”

So let your employees publish, you big companies out there. Small firms are nipping at your heels!

Altimeter research on employees on social networks

That’s the conclusion of a new report Civility in America 2011.  The 2011 online survey* was conducted in May among 1,000 American adults to assess attitudes towards civility online, in the workforce, in the classroom and in politics.

I was particularly struck by the statistics on workplace civility: 65% of the respondents blame corporate leadership for making the workplace more uncivil.

More than 70% of Americans consider political campaigns, pop culture, the media, government and the music industry hubs of incivility. Not surprisingly, Congressional Democrats, Congressional Republicans and Tea Party supporters are all viewed as more uncivil than civil.

According to the study, “while more than one-third (39%) expected things to turn less civil when surveyed in 2010, now more than one out of two Americans — 55% — expect a lack of civility to become the norm. Only nine percent in this year’s survey expect civility to get better compared to 26% who expected some relief last year. Incivility seems to be here to stay.”

Workplace Incivility Hurts Sales

Approximately seven in 10 Americans (69%) have either stopped buying from a company or have re-evaluated their opinions of a company because someone from that company was uncivil in their interaction, says the study.  Not good for sales or a company’s brand. In another disturbing finding, over four in 10 Americans — 43% — have experienced incivility at work.

Respondents blame workplace leadership and other employees for the growing incivility problem. As I wrote in an earlier post, Treating Fired Employees Like Criminals, losing a job can be devastating. But when companies mistreat employees they are letting go, it poisons the workplace and, now we learn, can add to incivility.

With the 2012 Presidential campaign heating up, I guess we need to be resigned to even more incivility as the battle lines are drawn by politicians and we’re subjected to mud slinging in commercials. How sad.

*Study sponsored by Weber Shandwick and Powell Tate and conducted by KRC Research 

A company can make the best products, but if customer service is bad, there goes the company’s reputation – and sales. I was reminded of this the other day when doing a few errands.

Service with a Smile From TD Bank

TD Bank's Penny Arcade

I started at TD Bank, well known for its “Penny Arcade.” It’s an automatic coin counting machine in each branch that saves you the trouble of rolling all your coins. I save all my change in a plastic container and when it’s full I bring it to the bank – it’s usually around $100 (today it was $105.35) and treat it as sort of a present to myself.

Immediately on entering the branch on Third Avenue, a receptionist greeted me with a smile and asked, “Can I help you today?” She offered to help deposit the coins and then asked if I would like to open an account.

After the machine issued a receipt, I brought it to a teller who welcomed me and asked how I wanted my money. That was a nice touch – so I said in $20 bills. Then she also asked me to open an account. Not this time, but maybe next time? I left as a happy non-customer.

Too Busy for a Greeting at Ethan Allen

I walked a couple of blocks and entered the Ethan Allen store where I had bought an ottoman, which needs a minor repair. Two people at the reception desk. No greeting. Just bored expressions. Finally I told them what I wanted and one of them said in an unfriendly tone of voice, “we don’t do that here – you have to call customer service.”

Then she went back to reading messages on her iPhone while her colleague looked up the phone number and handed it to me on a slip of paper. I thanked them and said goodbye. No response. I like Ethan Allen products, but this kind of service doesn’t make me feel good about the brand.

A Helping Hand at Bloomingdale’s

Bloomingdale's little brown bag

My last stop was Bloomingdale’s to shop for a housewarming gift. As I wandered around the gift department seeking inspiration, a sales person came up to me with a big smile and asked if I needed help. Score a point. I found a very nice tray, a pitcher and some bowls and as I struggled to carry them, she immediately took them from me and brought them to the cash register while I continued to look. Two points.

I was happy with my choices, so she rang up the sale and packed them up. I left with a good feeling about Bloomingdale’s. (I also love the yogurt at the store’s 40 Carrots restaurant).

Burnish Your Brand

Companies spend millions of dollars on advertising campaigns to build their brands. But often the first contact a customer has is with a receptionist or a sales person. These employees need to be trained in proper customer service. Don’t think of this as just another below-the-line expense. Consider it an investment in your brand, which is your most precious asset.

With so many employees working virtually and scattered around the globe, is the water cooler extinct as a place to exchange ideas? Well, maybe in person, but the wired water cooler is emerging as a force in employee engagement.

Companies are creating online communities where employees can pull in the information they need when they want it and engage in conversations with other employees.

How empowering – employees expecting their companies to serve up information that is interesting, entertaining, useful and, most of all, authentic. If it doesn’t smell right, they will know and vent online with each other. Welcome to the new world of the wired water cooler!

Pfizer, American Express and Tiffany Are Doing it Right

At a recent panel discussion, Pfizer communications executive Robert Libbey said his company’s communication funnel is “almost too successful and it’s not always easy to control the fire hose of information” inundating employees. That is the challenge faced by many companies in a wired world.

Sponsored by the New York Chapter, International Association of Business Communicators (NYIABC), the panel also included Audrey Gray, vice president, executive communications for American Express Company, and Bill Carr, director, internal communications, Tiffany & Co., who discussed how their companies are using their intranets to connect and interact with employees.

Pfizer’s Transformation

Robert Libbey

When Mr. Libbey, who is senior director, global colleague communications for Pfizer, took a comprehensive look at the company’s various internal outlets in 2008, he found 400-plus news and information intranet sites that weren’t connected and almost impossible to manage.

Fast forward to 2011. Pfizer scrapped the old system (in 2009) and now manages a corporate news channel, with underlying SharePoint 2007 technology that is easy to manipulate. “We went from bricks to play dough,” he said, explaining the malleability of the new technology.

The corporate news bureau pushes out nine to 10 stories a week. He said there is no “spin” on stories – with the company informing employees about the good and the bad and encouraging comments. The content sometimes is repurposed and posted on Pfizer’s external company website. “We assume that anything we send to employees is likely to be seen by outsiders.”

In 2010, with more than 30 editions tailored for business units, functions, markets and locations, the new Pfizer site had 162,000 unique users, 5.2 million article views and nearly 60 million page views, with savings in the millions in development and maintenance costs.

Community Building

In response to the fire hose of information Pfizer colleagues face each day with all that they can access externally and internally, Mr. Libbey said that part of his company’s  solution is to let employees create their own intranet home page and choose the information they want to receive.

To this end, Pfizer has embraced internal social media – paralleling the company’s active participation in external social media – and created its own Facebook-like community called “MyWorld.” Any employee can join – all have a profile – and use the 250-character micro blog feature to connect with others and follow the micro blogging of others.

Employees can also start conversations on the company message board about almost any topic. The comments are not vetted first. “People are going to have these conversations anyway,” said Mr. Libbey, and rarely does a post have to be removed because it didn’t conform to guidelines.

The World of Tiffany

Bill Carr

With 9,000 employees around the world, Tiffany is using its intranet and other interactive communications to help connect employees and share best practices. Bill Carr, director of internal communications, said Tiffany recently consolidated its corporate headquarters in a new location with the latest high-tech equipment.

The company just launched “BlueTube,” a digital signage tool that will provide a rich, interactive experience for employees to connect with the company and each other.

With stores in far-flung locations, it isn’t possible for employees to gather around the water cooler to exchange ideas. He said that a very popular Tiffany tradition is the annual holiday video. Employees look forward to it every year with great anticipation.

In the most recent video, Tiffany sales professionals share tips that have worked for them in building relationships with customers. One described how she sends personal, hand-written notes to her customers, inviting them to visit and see the new collections. These are greatly appreciated and help to build customer loyalty.

“We still have a long way to go,” said Mr. Carr, “but we’re excited about new opportunities to use interactive tools to inform, educate and inspire our employees, while building engaged communities that can interact and learn from each other.”

It Isn’t Boring at American Express

Audrey Gray

Audrey Gray, vice president, executive communications, began with a quote from Henry James: “The only rule is never be boring.”  You’ve got to keep employees engaged with information that is informative, interesting and authentic. She stressed that authenticity in marketing is actually respect for one’s audience.

Amex’s intranet “The Square” hosts 10 different blogs, company news, tools for accessing company information, and a news story every day, delivered to 63,000 employees globally.  She reiterated what the other speakers said – use “hot headlines,” short quotes, and liberal use of bullet points and subheads. “We’ve changed our writing style so that we don’t use any corporate speak. It needs to be real.”

The most popular feature on “The Square” thus far has been a “live blog” of the company’s annual senior management meeting. Her team was at the meeting and wrote posts all day long for two days, more than 100 in total. “Employees felt they were let in the door,” she said.

Junking the Old Water Cooler

If you read a blog I wrote a while back about the water cooler you know how important I feel it is to bump shoulders with your colleagues. Connections are critical to learning. But let’s face it, there isn’t time and employees are widely scattered, making the wired water cooler an attractive alternative. Besides, most people are glued to their computers all day – so if they can’t get to the water cooler, why not bring the water cooler to them?

How about it? Is your company turning your intranet into a wired water cooler where employees can hang out in chat rooms and form communities with like interests? Let us know.

Tony Hsieh, the CEO’s founder and CEO wrote about his company’s carefully cultivated culture in a book Delivering Happiness: A Path to Profits, Passion, and Purpose

Spreading the Happiness Message

In this video, Hsieh explains his philosophy of happiness. It’s so important to him that Zappos has started a happiness movement encouraging companies to instill a culture of happiness to attract and retain employees. Now isn’t that a novel idea? Delivering Happiness has its own website with case studies and the happiness events they hold in major cities. It invites companies to Join the Movement.

And who doesn’t want happy employees who commit to their company and contribute to its growth?

[tweetmeme]I was riveted by the lengthy obituary of Violet Cowden, one of an elite corps of women pilots who, during World War II, ferried planes from factories to airfields where they were urgently needed. She died at 94 on April 10 and left a lasting legacy of loyalty and patriotism – but also a lesson for companies today about how not to treat their employees.

According to the The New York Times obituary, Vi and her fellow women pilots flew thousands of vital missions, freeing male pilots for combat missions. Attached to the Army Air Forces, these experienced and patriotic women were known as WASPS (Women Airforce Service Pilots). Vi was the subject of a documentary last year, “Wings of Silver: The Vi Cowden Story.”

They Paid Their Own Way

I was shocked to learn that “Because they were civil service employees and not military personnel, the WASPs had to pay for their own food, lodging and often capacious attire. There were no flight suits for women then, and Mrs. Cowden, barely more than 5 feet tall, was installed in a men’s Size 44 for the duration.” Vi worked seven days a week and “flew in all weather, came down on runways without lights and sometimes took the controls of planes so fresh from the factory that they had never been tested.”

As the war wound down, male pilots began returning to the U.S., and Vi, along with the brave women she served with, were summarily dumped as men took their places. Most of the women faded into obscurity.

Although 38 women lost their lives and many more were injured, they were not recognized for their service until many years later when President Carter signed a bill granting the WASPs recognition as veterans which allowed them to received limited benefits.

Finally, in March of 2010 The United States awarded the Congressional Gold Medal – the highest award that a civilian can receive from Congress – to nearly 300 women, including WASPs, all over the age of 86.

Fast Forward to Today

How are employees being treated today?  Companies that are dumping employees because of a tough economy and aren’t nurturing the employees who are left, will be sorry when things get better. As I’ve written before, employees will jump ship once the economy improves if they don’t feel valued.

That’s why employee engagement is so important. Listen to your employees. They have good ideas and want their company to succeed. Enlist them as brand advocates on social media. Let them have a voice in the company. Don’t wait. Give them the tools they need to do a good job so they feel appreciated, unlike Violet Cowden and the fearless women she flew with.

Here is Vi at 92 describing her war-time experience.

Paul Marciano

[tweetmeme]Despite all the research that confirms traditional reward and recognition programs decrease employee motivation and productivity, organizations persist in their use. Why? Perhaps because they seem to make sense taken at face value. I mean, who would think that “Employee of the Month” programs actually destroy employ morale and teamwork – but they do!

Perhaps these programs persist because people just don’t know any better. Here are 10 reasons why you and your organization should STOP using these programs to try and motivate employees because they are a huge waste of time and money.

 
1. Programs fail because they are programs. Reward and recognition programs fail for the same reason that diets fail — because they are programs! Programs don’t fundamentally change employees’ beliefs or commitment to their job.  They simply change their behavior during the course of the program. Employees are motivated to work toward the goal only as long as the program continues.

 

2. Rewards are not necessarily what employees want. The most basic assumption of reward and recognition programs is that the “donkey” wants the “carrot.” I live on a farm with donkeys. This may surprise you, but not all donkeys like carrots. Organizations always assume they know what employees will find desirable. In truth, many rewards are not the least enticing and some even downright undesirable.

 

3. Goals can limit performance. Setting goals should be viewed as stepping-stones and opportunities to celebrate accomplishments, not as finish lines. In the words of Mike Krzyzewski, Duke University’s men’s basketball coach, “I never have a goal that involves number of wins — never. It would just tend to limit our potential.”

 

4. Programs foster cheating. Cheating or deception of some form tends to occur in most programs. Examples range from the fairly benign to the illegal. These include expediting or delaying orders or expenses, withholding information or providing misleading information, taking shortcuts, stealing customers, or in some other way attempting to make the employee or team look better than the competition — also known as co-workers. Programs with high-value rewards and few winners are most likely to turn employees into cheaters.

 

5. Programs destroy teamwork. Obviously, cheating destroys teamwork but other factors contribute to team dysfunction. Within any team there are employees with different skill levels, commitment to the organization, and those with the inability to devote additional effort outside of normal business hours because of family and other responsibilities. Invariably, “pulling the load” frustrates the hardworking, motivated employee. In the end, win or lose, the employees who were the most motivated will feel the most cheated.

 

6. Programs reduce creativity and risk taking. Employees are risk-averse when it comes to competing for a reward. They don’t want to risk losing and looking bad because they tried some new, clever approach that failed. Traditional reward and recognition programs reinforce “doing it by the book” — not experimentation. Such programs actually discourage innovation, creativity, and risk taking — the very behaviors that improve organizations. People may work harder but they will not work smarter.

 

7. Reward programs devalue work. Reward and recognition programs actually diminish the perceived value of the work to be done. Psychologically, employees are doing the work not because it is important but because they can benefit from it materially. The more employees value a task, the more motivated they will be to perform it well.

 

8. Wrong behaviors are rewarded. Frequently, reward and recognition programs reinforce the wrong behaviors. For example, organizational leaders may speak of the importance of teamwork but then create programs that recognize and reinforce individual performance. This may well result in rewarding the individual who is the worst team player. Is your company accidentally reinforcing behaviors that run counter to the values of your organization?

 

9. Programs have no impact on workplace culture. Reward and recognition programs will never lead to long-term, sustainable changes in behavior because they have no impact on organizational culture. Culture drives behavior and behavior reinforces culture. Highly effective organizations have a culture where people work hard and achieve – and this behavior is not the result of any program.

 

10. Reward programs decrease overall motivation. Ironically, these programs reward the top performers in the organization and reinforce how unappreciated the poor performers feel. How much more motivated and productive can the best employees be? It’s like the student who asks, “Dr. Marciano, I got a 98 on my exam, can you help me get 100?”

The employees who increased their efforts and were not recognized will be demoralized and adopt the attitude, “Why should I bother working harder if I don’t get anything for it?” The additional effort of these employees actually dips below what it was before the program.

It may be difficult for managers to accept but it’s the truth; traditional reward and recognition programs that seek to motivate employees actually do more harm than good.

So, you may be asking yourself: “If I don’t motivate employees through traditional programs, then how can I improve productivity?” The answer is – you’re asking the wrong question. Maximizing the productivity of your workforce has nothing to do with motivating them – it has to do with building a culture of RESPECT that leads to engagement.

Engaged employees are committed, loyal and dedicated, and will deliver high levels of discretionary effort without the promise of carrots or threats of the stick. Employees experience respect when leaders engage in the following behaviors.

Recognition: Acknowledging employees’ contributions on a daily basis

Empowerment: Providing employees with the tools, resources, training, and information they need to be successful

Supportive Feedback: Giving ongoing performance feedback – both positive and corrective

Partnering: Fostering a collaborative working environment 1:1, within and across teams

Expectation Setting: Setting clear performance goals and holding employees accountable

Consideration: Demonstrating thoughtfulness, empathy, and kindness

Trust: Demonstrating faith and belief in employees’ skills, abilities, and decisions

If you want to maximize the ROI of your employees, throw out the carrots and sticks and start showing them respect.

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Paul Marciano is author of Carrots and Sticks Don’t Work: Build a Culture of Employee Engagement with the Principles of RESPECT.  His book provides real world case studies and turnkey strategies to increase employee discretionary effort and reduce turnover. Dr. Marciano earned his Ph.D. in Clinical Psychology from Yale University where he specialized in behavior modification and motivation. Follow him on Twitter @drpaulmarciano.