Constant reproach by managers kills employee initiative

Published on Wednesday, May 14, 2008

A tongue-in-cheek forward that is doing the e-mail rounds, ‘A team of managers was given an assignment to measure the height of a flagpole.
So the managers go out to the flagpole with ladders and tape. They are falling off the ladders, dropping the tape measures - the whole thing is just a mess. An engineer comes along and sees what they are trying to do, walks over, pulls the flagpole ou t of the ground, lays it flat, measures it from end to end, gives the measurement to one of the managers and walks away.
After the engineer has gone, one manager turns to another and laughs – “See this idiot. We are looking for height and he gives the length!”
Moral: No matter what good you do, Managers can always find fault in you!’
It ends with a postscript cautioning you to never forward this to managers!

Drawing the fault lines
Sounds funny, but the sad truth is that most managers come from the ‘fault-finding’ stable. They are always looking for one excuse or another to find fault with their employees – it can be poor performance, divergent work patterns or even just a failure to conform to their own thought patterns.
Managers may seek glory in finding faults, at times just to show off their technical or managerial superiority. But what they fail to realise is that the blind attitude is quite self-defeating. Vociferous criticism will not do anyone any favours; it actually alienates the staff who will avoid seeking assistance or another way to solve the problem. The fear of constant reproach is also a huge demotivating factor that not only kills initiative but also increases turnover.

Rise above the blame game
No one is infallible everybody makes mistakes. Moreover, it’s easy, in fact far too easy, to find fault. If you look hard enough, you can make employees look bad over anything and everything.
Instead of expending all your energy in finding faults and assessing blame, as a manager you should re-evaluate your management style and shift the focus to fixing the problem.
Move from ‘fault-finding’ mode to a ‘fact-finding’ one where the spotlight is on finding the root cause of the problem and looking for a solution.
Maintaining a degree of accountability is important and you should identify who was involved in the problem. Ask open questions about the error without jumping to judgements and attacking employees. For instance you can switch from “and you did….” to “let’s look at the facts.”
While determining the cause for a performance gap, dig deeper as it could be that the employee did not have access to the necessary information/resources or even the work system could be to blame. If so, make according changes in the work environment that will enable the workforce to be more productive and succeed.
If the poor performance is attributed primarily to an employee error, steps should be taken to hold the individual employee accountable, but without resorting to petty ridicule, sarcasm or malice. Steer clear of public humiliation by discussing the issue behind closed doors.
Here too, the accent should not be on fixing blame and pointing out failures, but on offering constructive feedback laced with thoughtful suggestions, alternatives and counselling.
Also, keep the communication lines open so that the employees can approach you for directions and coaching whenever needed.
Portraying a supportive tolerance that gives an employee the opportunity to succeed again inspite of the failures goes a long way in building effective work relationships.

Find what they are doing right too
To enhance alignment with employees and improve managerial control, it is imperative to acknowledge employee ideas, contributions and achievements with both compliments and rewards. For instance, while critiquing a fault, you should also comprehend the big picture by accepting the amount of thought, preparation and hard work that has gone into the assignment. Developing an encouraging attitude sans any confrontational overtones will not only earn you staff respect and admiration, but also pave the way for employee growth by harnessing their best abilities and skills.
So, remember that you may be an expert in finding faults, correcting and criticising, but such behaviour will never build a positive and motivating work environment. Handling performance problems by finding solutions is the real key to great management.
To quote an ancient Chinese philosopher, ‘A leader is best when people barely know that he exists. Not so good when people obey and acclaim him. Worst when they despise him!’

PAYAL CHANANIA

Smart stock option plans drive growth, productivity

Published on Wednesday, May 07, 2008

Employee stock ownership is becoming increasingly popular, what with a vast majority of companies offering stock options frequently as incentive compensation.
Under this scheme, the management awards the right to buy a specific number of shares of the company stock during a certain time and at a specified price which is usually discounted. The awardees can elect to exercise the option and convert it into st ock on maturity (after a particular vesting period or phased vesting) by paying the strike price. They can then reap handsome profits by selling the stock at a higher price then or later.
What’s more, equity-linked compensation is no longer limited to the executive suite – CEOs, key executives, senior directors or top-performing managers. Stock options are trickling down to not just mid-level employees but even the rank-and-file.
The endemic usage rides on the rationale that stock rights will both attract and retain top workers by binding them to the company and making them feel like partners in the business. Having invested their personal wealth in the organisation, employees will be motivated to work harder and attain peak levels. Not only does the equity-based element align executive interest with those of shareholders, but also serves as a handy means of rewarding performance that goes beyond salaries, especially for start-ups that are not yet profitable or have limited amounts of disposable cash. But, the feeling of ownership as an incentive is not without its fallout. The promise of big payoff has made many millionaires out of ordinary (read: undeserving) executives and employees.
Stock options have perpetrated a series of headline-making scandals and frauds. Top executives are increasingly attempting to temporarily manipulate stock price and accounting, by say, dressing up the short-term numbers. They distort company earnings and even increase share price volatility in a bid to encourage stock performance irrespective of actual operating performance and income. It also encourages manoeuvres to manipulate value of options (pre- and post-exercising) so as to maximise personal rewards all at the expense of genuine investors.
Employees have also been known to indulge in financial shenanigans and other improper behaviour even to the extent of acquiring and/or exercising options based on insider information like an imminent announcement, deal or acquisition.
Apart from this, compensation specialists argue that stock options greatly dilute stock value, not to mention the fact that stock price is significantly influenced by future expectations and external considerations that have no bearing on actual profitability or growth. In fact, Warren Buffet has publicly blasted stock options because as he says, ‘The practice of repricing options for top executives unfairly rewards them at the expense of shareholders!’
Re-examining compensation programmes
The growing abuse of employee stock options is necessitating a long, hard look at compensation plans. So much so that, some employers have even totally scrapped their option-based incentives to return to more traditional ways of rewarding performance.
But, this knee-jerk response is quite uncalled for as the situation does not warrant total elimination. Stock ownership is still a viable form of compensation incentive for attracting, rewarding and retaining employees.
So, instead of abandoning it, organisations should invest time and effort in designing better compensation packages that balance base salary, annual bonus and other perks with stock options as each offers a different form of motivation.
Top companies have developed a smarter way to compensate employees by tweaking stock options. Restricted stock or deferred stock grants emerge as a more preferable strategy where securities are granted subject to certain safeguards like voting rules, time constraints and transfer limitations.
Another option is a performance vested restricted stock that is based on meeting certain objective performance criteria. In a similar vein, stock grants can also be linked to other key drivers like customer satisfaction, client loyalty, return on investment or even new product development.
Some organisations simply offer stock without any options, while others are actually opting for premium-priced options (priced higher than current market valuations) that spur employees to pursue growth as a means of jacking up stock prices.
Such measures shift the emphasis to long-term value creation as the workforce starts concentrating on turning in meaningful performance. As one finance professor observes, ‘Stock grants reward managers no matter what happens to stock price because the stock is worth something. Options, if they are indexed properly, reward managers only for value’.
However, such incentives should not be awarded left, right and centre just to control turnover, but structured and utilised appropriately to develop a shrewd succession plan!

PAYAL CHANANIA

Keep employees on board with family-friendly policies

Published on Wednesday, May 07, 2008

In the world of hectic work schedules, omnipresent deadlines and cut-throat competition, there is no place for family!
But on a more personal level, people do put their family first and face extreme difficulties in juggling their work and family obligations. It’s a hard time for working families, especially new parents, as work almost always runs in conflict wit h their home commitments.
An important meeting clashes with someone’s son’s annual day recital. A deadline is looming and another’s infant ‘chooses’ to fall sick at that inopportune time.
But, most employers turn a blind eye to employees’ ‘personal’ components and expect them to turn in work as usual. No wonder, most workers are harried with the constant struggle and end up resenting the lack of control over their work and work arrangements. Ultimately productivity suffers as the incessant strain and guilt weighs on their minds, leaving them distracted and stressed. Not to mention the increase in absenteeism and employee turnover.
Fostering a work-life balance
If employers really want to build a loyal workforce, they have no choice but to acknowledge employees’ family responsibilities and accept that it will affect their working life.
The simple solution is to treat working families right by adopting family-friendly policies. And, family friendliness is not just limited to the traditional notion of childcare. Personnel policies should incorporate workers who have to care for their elderly parents or other relatives by supporting their role as a parent/caregiver, not just an employee.
Some common employee benefits can include but are not restricted to:
Flexitime – Permitting flexible scheduling of work hours where the emphasis is on getting the work done and not on the actual time or location. Employees can opt for accommodative arrangements that meet their needs like working part-time, job sharing and telecommuting either wholly or for part of the week. They can adjust their work hours or even a 4 day work week. The accent is on flexibility and some companies even allow shifts from full time to part-time or vice versa and even leaving work to say, take a sick child to the doctor or keep a parent’s dentist appointment.
Time-off - Apart from the customary maternity leave, providing paternity and care giver leave (either paid or unpaid) meets the needs of new fathers and caregivers. Also, sanctioning additional unpaid family leave, use of accumulated vacation/sick leave or even career breaks helps employees take time off for their unforeseen family responsibilities.
Childcare – Parental assistance initiatives can range from financial help in child care expenses, subsidised services and allowances to low-cost or free on-site child care like workplace creches and feeding facilities. Besides this, companies can also offer referrals and other information for identifying quality and affordable child services.
Elder care – Dependant care support like resource lists of care providers and emergency caregiver services so that employees are better able to care for their frail or ageing relatives.
Health benefits – Few organisations even go as far as providing health insurance coverage for dependants or at least subsidise the premium with part contributions from the employer. Others arrange no-cost or low cost counselling for both employees and their dependants for coping with the family apprehensions or financial challenges. Also, seminars and workshops on varied family issues like mental adjustments, being a better parent, care giving and also personal wellness.
Actually, companies can offer a host of family-friendly initiatives; the possibilities are limited only by the imagination. They need not be very expensive either; sometimes the arrangements can be minimal like allowing reasonable access to work phones for contacting children or parents. Other cost-effective programmes like the popular western concept of ‘Take Your Child To Work Day’ is a good indicator of family friendliness and can pay big dividends.
What is important is that the benefits should be administered fairly and consistently with equal recognition given to young parents as well as employees with elderly dependants.
Also, maintaining a work-life balance goes much beyond just designing a slew of innovative policies and programmes. It should go hand-in-hand with a corresponding change in company culture that not only promotes the use of available work-life benefits but is also supportive of and responsive to employees’ family commitments. Understanding workers’ circumstances, respecting their needs, accommodating their requests, supporting their values and seeking their collaboration in conceiving practical solutions will go a long way in promoting quality of life.
Regular and open communication will make employees feel free to discuss their family responsibilities and instil the confidence of adequate cooperation for emergencies.
It’s a win-win situation, as once employees feel valued and needed, their loyalty, job satisfaction and productivity will go up manifold. Organisational effectiveness also improves with the enviable edge in hiring and retention of quality candidates.

PAYAL CHANANIA