The Truth About Management Style, Engagement and Organization Performance

According to Gallup, over half of U.S. workers are looking for new jobs. Others are actively disengaged to the extent that they sabotage the work of the 33% of employees who are engaged. Turnover not withstanding, up to 67% of workers in the United States have virtually quit and stayed.

Gallup’s State of the American Workplace report provides data that shows their previous surveys and research findings on employee engagement and the impact of disengagement on businesses, still hold true today.

We can all probably agree that managers set the tone for everything that happens (or doesn’t happen) in an organization, through their behavior and actions. The fact that so many people have detached from their jobs is, in itself, a message for today’s managers: people are either not finding or are no longer finding what they want, in their current organization.

At Prism Perspectives Group, we are convinced that this kind of detachment or disengagement is holding back business performance and sustainability. When we disengage, we stop bringing all we have to work. It shows up in effort, creativity, innovation, results and commitment. The implications of this are that the business improvements we’ve seen during the economic recovery are far less substantial than they could have been, had more employees been fully engaged.

Management behavior and actions shape the company culture. And, sustainability requires leaders to shape a culture and cultivate relationships that bring out the best in people, by reaching and connecting with the workforce. If you reflect on this, can you conclude that all of your organization’s managers are, in fact, enabling high engagement and performance through thoughtful example?

We are at a place in time where economic recovery has taken root, but U.S. management practices have remained unchanged, despite the proliferation of information about engagement that has described the adverse impact of disengagement on the workforce and on business.

Stepping back for an objective perspective, we know that it’s very hard to make changes in management and leadership practices, especially when the economy has caused survival to rise to the top priority for so long. And, in the face of continued economic improvement, the lack of a strong response to frequent, urgent messages about employee engagement underscores the fact that it’s human nature to put off difficult change such as behavior change.

This lack of a strong response to engagement issue also hints that today’s leaders may be convinced (or assume) that their management and leadership styles and practices are already good enough. They may believe this because of the business improvements we’ve experienced as we’ve moved through the recession. In either of these situations, it becomes easy for people to resist the need to drive change.

The time is now: Today’s management practices need to be changed and updated. Let’s leverage whatever momentum has been sparked during the economic recovery, to drive change to re-engage our workforces. While it’s true that many organizations have left Theory X and its punitive management practices behind long ago, replacing some of the old command and control practices with more democratic and participative ones, the evolution of our management practices has, in most organizations, plateaued. Our focus has shifted to other areas such as process improvement, cost reduction, and operating efficiency.

So — the question we face now, with the recent and ongoing improvement in the economy, is this: What is a compelling reason for an organization to drive change or transformation in leadership and management practices? Let’s look at some data and information.

 

  1. The S&P 500 publishes data showing how businesses are valued. Following is the current chart from Ocean Tomo.

  1. What’s most important to organizational success has shifted significantly over recent decades. The most noticeable change has been the role and valuation of tangible assets (i.e. bricks, mortar, capital equipment) versus intangible assets (i.e. human capital, intellectual capital). If you look at the chart above (from Ocean Tomo) these have made an almost complete reversal between 1975 and 2015. People, indeed, have literally become our most important asset. Yet, the changes implemented in a great many businesses have focused not on engaging people, but on priorities such as efficiency and payroll reduction.

2. Voluntary Turnover, as we’ve read and observed at many client organizations, has been at or above 30% per year, with as many as 40% of new hires resigning within their first 90 days. The cost of turnover can be measured by considering fallout such as lowered productivity, overworked remaining staff, recruiting costs, training costs, and lost knowledge. This is evidence that organizations are not succeeding in building strong enough bonds with their people, whether it be relationship connections or feelings of being part of something bigger, or having meaningful work.

3. Most organizations have 5-generation workforces today. While some aspects of our humanity remain constant, people’s needs and expectations at work can differ from one generation and/or age-group to another. This means that an organization’s demographics alone can create challenges current management and leadership practices fail to address. One of the most important practices that we find is often lacking is that of providing opportunities for growth, learning and career paths.

4. Our global organizations have grown more diverse in the past decade(s). In addition, the term “diverse” has evolved; it’s not just about visible differences between people such as race and gender, and it’s not just an H.R. issue anymore. It has become much broader in scope, including generation, sexual orientation, marital status, communication styles, as well as both culture based and overall life experience. Workplaces need to change in order to leverage benefit from diversity. This requires special knowledge and leadership focus.

5. Per Gallup’s research, employees seek the following from their managers: Opportunities for growth and development, regular, helpful feedback and sharing of information, input on prioritization and goal clarity, and accountability. According the Gallup’s website, survey results revealed the following (verbatim):

  • 30% of employees strongly agree that their manager involves them in goal setting
  • 27% strongly agree the feedback they receive helps them do their work better
  • 22% strongly agree their performance is managed in a way that motivates them
  • 19% strongly agree that they talked to their manager about steps to reach their goals

Exacerbating the issue is the fact that many organizations treat employee satisfaction as employee engagement. But, the two are very different, and it’s employee engagement that holds the key to driving improvement and sustainability in business.

For a reminder on what engagement truly is about, please use the following links to good reads:

We are convinced that this data provides a highly compelling business case for changes in management and leadership practices for most organizations.

We’ll end this article with a question: With all of the change that has occurred in the past 1-2 decades, plus all of the change we can anticipate in the foreseeable future — including the composition of our workforce — what are the implications for organizations whose management practices fail to evolve and transform accordingly?

Please share your thoughts, opinions and experience.

Rosanna Nadeau, Principal/Consultant

PRISM PERSPECTIVES GROUP LLC

Improving Organization Performance

Telephone: 603-878-1546 ~ Email: Rosanna@MyPrismUSA.c