Last year, I wrote about employees taking pay cuts, furloughs, lower bonuses and other hits because the business world was upside down. Many of these cuts were necessary to help companies through a difficult recession. Most employees, just being happy to be employed, accepted these changes.
As often occurs, the pendulum swung too far and now employees are unhappy. While the economy is by no means healthy, it seems to be rebounding a bit or at least consumer confidence is on the upswing. There are signs of life, admittedly not much yet, in the previously moribund job market.
Many companies took advantage of employees, reallocating wealth in many of the same ways the federal government has. Tough times generate dangerous precedents. A very profitable, major New Jersey company went as far as cutting its lunchroom subsidy. Their decision angered employees and reduced productivity since many employees now eat offsite, thus resulting in longer lunch periods.
401(k) matches or bonuses are not considered perks, rather they are an expected part of a compensation package. When expectations are not met, loyalty and trust are diminished.
Too many people are putting in long hours, but are not actively engaged or emotionally connected to their organizations. They are going through the motions, not offering the discretionary or "extra" effort that research shows encompasses roughly 35 percent of their capacity. In other words, employers are not getting full productivity.
In a strange twist, the very efforts companies implemented to ensure their future viability are actually having the opposite effect of diminishing employee performance, loyalty and engagement.
My advice to managers and organizations: Transform yourselves to demonstrate employee commitment or accept lower performance and higher turnover. The following ideas will facilitate improvement in employee performance and retention:
Communicate. During tough times employers must over commmunicate. At the beginning of the downturn I implemented a few communication strategies at my company that were very successful.
First, we began monthly employee lunches at more than 60 locations. For example, at our New York City headquarters, we have more than 150 employees gather for lunch, games and a state of the firm talk. We began holding employee events such as bowling and dodge ball.
Second, the company president regularly sends out a state of the firm e-mail that always has a realistic, but positive tone. Keeping employees informed during tough times proactively negates rumors.
Third, I encouraged all senior executives to be more visible and connected to their employees. By walking around each morning they gained a better pulse on morale and increased employee commitment.
Finally, we actively engaged employees in the benefits renewal process. Specifically, we allowed the employee council to evaluate our health plan options and choose the plan they felt made the most sense. Active engagement creates support.
Restore. If your company reduced or eliminated benefits or perks, now is the time to restore them. For example, if a company did not match the 401k in the last year or two it should commit and communicate that it plans on matching this year. If your organization cannot afford to reinstate the match it should offer its employees, or at least key ones, perks such as extra days off.
Communicate the link between the employee’s effort, the employer’s inability to match and the reward.
To complete the example you might say, "It has been difficult watching you work so hard and to not be able to reward you. Instead of a 401k match this year, which we are unable to do, we would like to offer an additional paid week off. I wish we could do more, but please understand this is our way of showing you how much we appreciate your effort and how important you are to the organization."
Make promises you can keep. When employees believe that things will return to normalcy, their productivity will rise. So if you are certain there will be year-end bonuses and raises, communicate it now. Sending the message that ‘business as usual’ is returning will increase employee engagement.
Understand. Employers should empathize with employees. Instead of being aggressive and assertive with employees who are not performing at their previous levels try to understand and address the cause.
At a time when employee engagement and loyalty is low these tips will begin to restore your organization back to where it belongs