Are You Too Nice for Your Job?

Written by: Mark Vickers from i4cp

Mark Vickers

"With managers it's not about being tough or nice - it's about whether they can fix organizational problems and keep things running well. As long as companies are finding solid evidence confirming the performance-engagement link, they shouldn't be afraid to measure or make it a high priority, especially in tough times. This applies not just to HR but to all managers." Mark Vickers

Welcome to our continuing TrendWatcher podcast series here on Total Picture Radio - this is Peter Clayton reporting. TPR has formed a strategic alliance with The Institute for Corporate Productivity (i4cp), allowing us to publish on our site the compete weekly research report in their TrendWatcher initiative, as well as record a weekly interview with the lead author of the article.

Joining us today from St Petersburg, FL, is Mark Vickers, vice-president of research at i4cp. Today's podcast is titled Are You Too Nice for Your Job?-- covering the debate concerning employee engagement.

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Talking Points:

What has the research you’ve done at i4cp say about employee retention? Mark a couple of interviews I’ve conduced recently fit nicely into the discussion of eI interviewed John Sumser at ERE in San Diego last month, and he had an interesting take: basically, that employee retention programs were not worth much, because after five years in the same job, people really need to move on. Your thoughts?
Employee engagement, it’s importance and the general assumption that HR is “too nice” . In your TrendWatcher, you quote Rutgers University's Richard Beatty
Another interesting ERE chat - with Neal Bruce, SVP at First Advantage of they’re employer services division. We were discussing the binge and purge hiring mentality, which gets to the core of your Are You Too Nice for Your Job? TrendWatcher. Part of Neal’s view is very sophisticated analytics now exist, within the suite of services First Advantage and other organizations provide, to allow companies to do a much better job of talent management. What has your research shown?
You write: Another new i4cp survey looks at HR metrics and analytics, and it reveals that there's a lot going on. Give us some examples.
To quote Drucker: “What gets measured gets managed.” Part of Neal’s view is very sophisticated analytics now exist, within the suite of services First Advantage and other organizations provide, to allow companies to do a much better job of talent management. What has your research shown?
How has the economy factored into employee engagement?
One interesting point you make: I think part of the problem is that some people conflate "engaging employees" with "always being nice" to them.
One of the companies you site in your TrendWatcher is 3M. What has been their experience with employee engagement?
Have you been able to track employee engagement to earnings?
How about productivity? (It seems obvious that engaged employees would be more productive, but do you have any numbers?
What has surprised you, if anything in researching "Are You Too Nice for Your Job"?

Are You Too Nice for Your Job?

Written by: Mark Vickers from i4cp

As if things weren't hard enough in corporate America, now we've got a professor telling CFOs that most of their HR colleagues are misguided on the issue of employee engagement, not-so-hot at analytics, and maybe even poorly qualified as managers of strategic talent.

Oy. Just what we need at a time when it's more important than ever for people managers and financial managers to work together. But even before CFO.com published "Memo to CFOs: Don't Trust HR," you could see it coming.

When it's economic crunch time, you're always going to get tension between those focused on the bottom line and those focused on keeping employees' trust. Reductions in force (RIF) are awful tempting, and often necessary, where payroll makes up a huge portion of the balance sheet. So it's little wonder that top managers are going to be asking one another (and themselves), "Are we focused on the right stuff? Shouldn't we be tougher and smarter in these hard times? Are we just being too nice?"

The irony, of course, is that many organizations are already being so "tough" that they're hemorrhaging workers, with U.S. employment dropping in every month of 2008 and plummeting over the last four months. It's ugly, but you can't really argue that companies aren't making some tough decisions.

What you can argue about is whether the decisions are wise and whether "nice guys" are going to finish last in this ultracompetitive environment.

So let's look at some of the evidence. Rutgers University's Richard Beatty is quoted as saying, "HR wants to treat most employees the same way, and they spend considerable time trying to defend or fix poor performers, taking on the St. Bernard role" (McCann, 2009). Ouch. Even if you like saints and dogs, I don't think that statement is meant to be positive. But, let's face it, there's some truth to it. All the really "nice" managers - HR or not - want to try to fix poor performers, at least initially. Sometimes there are sound legal or logistical reasons for this, though sometimes it's just a matter of trying to be fair and humane.

But I seriously doubt that most HR professionals or other managers bend way too far in this direction. They know they should reward good performers and get rid of the bad ones. In fact, preliminary results from a new i4cp survey show that about four-fifths of all respondends (and 84% of those from really large corporations) tie pay to performance, and most of them use some kind of system that differentiates among performance ratings while trying to control for rating inflation. About half of large companies use either a forced ranking or forced distribution system.

Also, about half of respondents from large companies said that the economy has made pay-for-performance systems a higher priority, while 38% said it didn't (the rest said they didn't know). Another i4cp survey found that when employers are trying to determine who to include in an RIF, 59% look at performance reviews.

So, clearly, there's a lot of attention being paid to performance, often with an eye to figuring out who should get the top pay increases (or who should be let go) at a time when dollars are tight. It strikes me as possible that CFOs and their HR colleagues are working well and effectively together in a lot of organizations.

Then there's the issue of analytics. Beatty is quoted as saying that while "the language of organizations is numbers, HR isn't very good at data analytics" (McCann, 2009). Again, there's historically some truth to this, but I suspect it's less true than in the past. Another new i4cp survey looks at HR metrics and analytics, and it reveals that there's a lot going on. Most companies look at the basics, such as labor expense as a percentage of total operating costs or total compensation as a percent of revenue. Fewer look at certain quality indicators, such as quality of hire (42%) or quality of separation (27%), but the survey indicates that many oganizations are considering or developing those measures.

And then there's the employee satisfaction issue. Beatty is right that HR often places a lot of emphasis on this. "HR people try to perpetuate the idea that job satisfaction is critical," he's quoted as saying. "But there is no evidence that engaging employees impacts financial returns" (McCann, 2009). Well, it's true that the issue is widely measured, with 69% of i4cp respondents saying their companies use satisfaction surveys and 66% saying they use employee engagement/index surveys. But those two measures aren't really the same, and there's evidence that engagement, in particular, makes a difference.

Companies with high levels of employee engagement saw their earnings per share grow at more than twice the rate experienced by firms with low engagement levels, according to Gallup researchers. They compared organizations that had four or more engaged workers for every disengaged employee with firms that had fewer than one engaged employee for every disengaged one. The companies with high levels of engagement “saw 2.6 times more growth in earnings per share”(Ott, 2007). And a major study by the American Society for Training & Development (2008), conducted in partnership with i4cp, found that a whopping 83% of respondents said that, to a high or very high extent, they considered enhancing customer service and helping to drive customer satisfaction as a reason for seeking a more engaged workforce.

And then there's i4cp member company 3M, an organization renown for its innovations, which found a signficant correlation in its laboratories between innovation and employee engagement , according to a recent i4cp webinar on the subject.

As long as companies are finding solid evidence confirming the performance-engagement link, they shouldn't be afraid to measure or make it a high priority, especially in tough times. This applies not just to HR but to all managers.

I think part of the problem is that some people conflate "engaging employees" with "always being nice" to them. The truth is, not only are they not the same, but they can sometimes be opposed to one another. In U.S. News & World Report, Alison Green (2009) lists reasons to beware managers that are just too nice, such as their relunctance to make hard decisions, have hard conversations, set consistent standards, impose consequences when those standards aren't met, and send consistent messages. "Ironically, too-nice managers eventually end up with the very thing they're seeking to avoid: disgruntled, dissatisfied employees," she notes.

In other words, being "nice" is sometimes a code word for being afraid to do the right thing as a manager, and this can lead to disengaged workers. A person can still be a nice boss, as long as he or she isn't afraid of being a good boss. A manager can't be afraid of dealing with problems, setting goals, making distinctions between types of performance, and holding people accountable for results. Making these tough decisions is one of the hallmarks of not only good managers but of good HR professionals. If those good leadership characteristics aren't present and accounted for, maybe then CFOs will have good reason to complain.

Documents used in the preparation of this TrendWatcher include the following:

▪ American Society for Training & Development (2008). Learrning's role in employee engagement. Retrieved from astd.org
▪ Green, A. (2009, March 16). 4 reasons to beware the too-nice manager. U.S. News & World Report.
▪ McCann, D. (2009, March 10). Memo to CFOs: Don't trust HR. CFO.com. Retrieved from cfo.com
▪ Ott, B. (2007, June 14). Investors, take note: Engagement boosts earnings. Gallup Management Journal.

Resources:

i4cp TrendWatcher Archive