Changing Corporate Culture, Increasing Productivity

MANY CORPORATE CLIENTS HAVE told us that too many of their employees are not sufficiently well motivated. Though such employees are often fired, their replacements frequently descend to the same level as those whom they replaced. "What's happening?" they ask. "Are we always destined to have employees who are under-motivated, who are clock watchers, and complainers?"

To increase employee morale and corporate productivity, you must dramatically alter corporate culture. Corporate culture comprises the values, ethos, and behaviors of a company. It affects how business is conducted, one's level of profitability, the time it takes to reach goals, and the responses of customers among various other important elements. To have a wellrun company that hums along smoothly and productively and employs dedicated and hard-working employees, you must design a corporate culture that nourishes such behaviors through a strategically implemented action plan.

Here's an example of a problem brought to us by one of our clients. The CEO had complained that a number of his employees were not highly motivated and were not reaching established benchmarks of productivity. In addition, they were a drag on their colleagues; by their complaints and overall negativity, they tended to sap the drive and ambition out of those with whom they worked. They never volunteered solutions, but always found fault with the way the company operated. Our client, of course, could and did fire such employees based upon their performance, but he was never really successful in replacing them with the kind of employees that would be ideal workers.

To determine what the CEO should do, we first conducted a survey of his workforce. Not surprisingly, it revealed a high level of discontent in about 32 percent of his workers. Many of them were perpetual fault finders, always looking for what was negative about the company and then complaining to their colleagues about what they discerned.

By contrast, within that same company, as in many other companies that we had also surveyed, were groups of individuals who were highly motivated, who enjoyed their work and took pride in their accomplishments.

Our client wanted us to help him clear out dead wood and put together a hiring and selection program that would result in his having highly motivated, positive minded employees who would significantly raise his level of productivity and so add to the company's bottom line. In other words, he wanted us to help him change his corporate culture.


Once the dead wood was cleared, we initiated a program for hiring productive workers. We hired employees based upon certain key attitudes as well as aptitudes and skills that conform to the sought-after work environment. In other words, prospective employees must have the type of positive attitude that will not only be reflected in their job performance, but will also be contagious to others within the workforce itself. Their aptitudes must also be appropriate for the jobs they will have to do. Aptitude and attitude must be complementary, for one without the other will only accomplish half the goal. And in many cases, if an employee has an appropriate aptitude for a specific job, but has a negative attitude, the company will not be well served. When the right combination of aptitude and attitude has been found, then one should also make sure that such a worker has the necessary skills to perform at a high level of efficiency and productivity. In addition to those qualities, we wanted employees who would feel as if they were part of a corporate family, who would take pride in being stakeholders in helping a company to reach its goals.

To further maintain a productive and satisfied workforce, we put in place a program of mentoring workers. Mentors coach workers to excel. They are thoughtful, helpful individuals who help workers to reach benchmarks of productivity. The coach-mentor is also there to make sure that there are no obstacles to a worker achieving success.

After our client implemented all of the above, levels of productivity dramatically increased and that went directly to the company's bottom line. The corporate culture had been refashioned and the workers thought the company a great place to work.

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Labor Relations without Interference

Union membership has steadily declined since the mid-1950s. Since 1975 alone, membership has dropped by over four million to its current level of approximately 18 percent of the workforce. In response, union leaders have vowed to reverse the trend of the last three decades through aggressive recruitment and by investing huge sums in organizing efforts. Leaders are also using new methods to attract members, including "associate" memberships, low-interest credit cards and discounted legal service plans. In short, unions are utilizing the latest administrative, technological and psychological approaches to regain their stature in today's workforce.

Employers, particularly those in the growing service sector of our economy, must be prepared to meet the challenge of the aggressive and increasingly sophisticated organizing drives by unions. Management may most effectively meet this challenge by asking themselves why unions have been necessary and then structuring a work environment in which they are unnecessary.

A work environment in which unions are unnecessary is one which stresses employer-employee cooperation, open and effective communication, understanding of shared goals, joint problem solving based on mutual respect, positive leadership and direction. Such an environment will produce a cohesive, productive workforce which has no need for or interest in a union.

The cornerstone of this type of proactive work environment is a workforce which recognizes that the employee's individual interests are the same as those of the employer and that these interests are best achieved through mutual cooperation. An employer can build and maintain a cooperative workforce by using a system designed to hire those employees who will work most productively within that company.

The Work Philosophy: Commitment to Cooperation

The current workforce and work environment must be evaluated before it is possible to design an effective hiring system. This evaluation is best accomplished by interviews with selected members of management. These interviews accomplish two goals: they define the company's "work philosophy" and allow the company to formulate a description (or "wanted poster") of the employee who will work most productively within that company's work environment.

A company's "work philosophy" is a policy statement regarding its commitment to cooperative employee relations and the advantages of operating without interference from organized or outside representatives. All levels of management, particularly top management, must be fully committed to the principles outlined in the work philosophy if it is to provide a strong base for an effective hiring system. For that reason, the philosophy must be an amalgamation of top management's views, ascertained through their initial input, of the type of employee relations environment which is appropriate for that company.

Profiling the Ideal Employee

The initial information gathered from management can also be used to develop a profile or "wanted poster'' of the ideal employee. This profile defines specific behavioral attributes and values, but should not be an outline of personality characteristics. Instead, it must emphasize prospective employees' propensities for cooperation on the job and their past work experience.

One starting place for a profile is an evaluation of the company's existing workforce. Supervisors and managers should be asked to describe those employees who are "successful"' from both the company's and their own points of view and those who are "unsuccessful." Those interviewed should be cautioned to avoid describing employees' personality traits. What is more important is how employees view:

  • The work they do,
  • The people to whom they report,
  • The company's policies and procedures, and
  • The employees with whom they work

For example, the initial evaluation could determine the amount or independence which is suitable for an employee of the company. It could also determine whether the work requires employees to think for themselves and adapt their work habits to specific situations, or if it requires employees to conform to a standardized pattern of repetitive work.

As an alternative to interviewing supervisors and members of management, the preliminary information may be gathered through an opinion survey. An opinion survey allows supervisors to express their unbiased views regarding the existing workforce and has the added benefit of eliciting the supervisors' opinions and attitudes about their work environment in general.

Once a sampling of "wanted posters" has been gathered from management and supervisory personnel, their descriptions can be distilled into a list of desirable and undesirable characteristics. These characteristics form the backbone of an effective hiring system and should define both positive and negative attributes. In other words, it is important to know the characteristics an interviewer should look for in a prospective employee and those an interviewer should seek to avoid. A profile of this nature provides a company with an objective method of determining whether an applicant will strive to achieve the company's goals and objectives.

Pinpointing Cooperative Employees

Once positive and negative characteristics are defined, a set of interview questions must be designed to measure candidates against the profile attributes. These questions should be phrased to encourage the applicant to respond with more than a "'yes" or "no" answer. In addition, a manual is needed for interviewers which shows how the positive or negative attributes appear in typical and exemplary answers.

Carefully designed questions and suggested answers provide an interviewer with a consistent, objective system for evaluating prospective employees. The hiring system is even more objective when it is based on a tally sheet which summarizes and evaluates an applicant's responses to the interview questions. An effective tally sheet would indicate how many points were assigned to each attribute on each question. The total number of points the applicant receives will determine whether to consider the person for employment.

Aside from assessing an applicant's suitability for a company's work environment, a hiring system of (his nature can also protect an employer from charges of discriminatory refusal to hire. A systematic interview and scoring process can assure that no unlawful questions are asked. In addition, if challenged, the company can produce a standard set of interview questions and the applicant's tally sheet to rebut any allegation that the company's employment decisions are based on discriminatory motives.

Auditing the Work Environment

A company cannot develop and maintain an ideal work force by using the hiring system alone. A system of labor relations audits is also necessary to assess the effectiveness of the hiring process and to monitor the company's employee relations climate. Labor relation audits can fulfill a number of functions, including:

  • Minimizing labor relation "risks" by minimizing exposure to discrimination charges and wrongful discharge lawsuits;
  • Aligning employees' expectations with the company's organizational philosophy and competitive reality;
  • Promoting and maintaining employee morals, effectiveness, satisfaction and loyalty to the company; and
  • Monitoring personnel procedures and policies including the competitiveness of the compensation package.

A System of Labor Relation Audits

Regular audits completed by management, supervisors and employees help to monitor a company's environment and labor relations. Various types of audits which can be utilized to accomplish these goals include:

  • Employee Audit, which monitors each employee's satisfaction and loyalty to the company;
  • Vulnerability Audit, which assesses a particular group's receptivity to a union organizing attempt;
  • Daily Human Resource Audit, which is completed by human resource managers and reviews absenteeism and disciplinary actions which might indicate dissatisfaction and vulnerability to union organization;
  • Weekly Human Resource Audit, which reviews turnover rates, tardiness, layoffs, disciplinary action, voluntary terminations, injury rates, employee communications and other factors which may highlight potential personnel problems; and
  • Monthly or Quarterly Human Resources Audit, which includes an analysis of wage and benefit comparisons, union organizing activity in the company's geographic area, a review of hiring procedures, methods of announcing and filing job openings, training, awards, communication programs and other indicators of employee satisfaction.

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How to Increase Productivity and Reduce Labor Unrest

Abstract By altering an organization's hierarchical structure and making its employees feel as if they are participating in management, a company can decrease labor strife, increase productivity, and reduce personnel turnover. The Author presents the employee involvement matrix which can aid a management team in implementing employee involvement programs that will be successful at different levels of sophistication. The matrix utilizes two continuums: the employee involvement continuum, which contains the various types of participation; and the learning continuum, which specifies the skills that are required in order to implement a given level of involvement.

Keywords Employee involvement, Staff turnover, Productivity, Participation

Many old-line companies have a hierarchical structure in which directives are issued from top to bottom. It is not unusual for such companies to experience periodic labor strife, which brings with it a concomitant reduction in productivity and revenue. Labor is what companies want to prevent, but it is an integral part of a hierarchical corporate culture.

My experience with numerous clients over the last two decades has shown me that by altering its hierarchical structure and making its employees feel as if they participating in management, a company can decrease labor strife, increase productivity, and reduce personnel turnover.

Prior to changing a corporate culture, supervisors -- who reflect the views of senior management -- must learn new modes of behavior. Invariably in an authoritarian hierarchy, supervisors are expected to achieve certain rigidly sanctioned goals. Their roles may consist of checking off the names of morning latecomers, keeping close tabs on daily production quotas, and inspiring workers by instilling fear and insecurity.

After participating in training program aimed at team building and increased employee involvement, however, supervisors can be transformed into team leaders who coach and mentor workers, giving them a sense of pride in their accomplishments, Where supervisors and workers once followed rigid formulae, now they can be encouraged to be flexible and creative, to use their own best judgment, and to pitch in and help colleagues. Management and employees work together which a common mission: to make the company a better place to work. The end result goes beyond increased productivity and profitability to produce enhancements of company products.

Such successes, however, cannot occur without first changing the corporate culture. Experience has taught us that a number of initiatives are essential for improving workforce morale:

  • Developing a written, one-year plan for improving workforce morale.
  • Creating flexible task forces to handle every workplace issue.
  • Evaluating employee opinions on new ideas, tactics, and strategies.
  • Defining the existing corporate culture, through the use of contemporary surveys, so that the views of employees mesh with the company's financial goals.
  • Deciding how much to budget for training so this initiative can be an integral part of all future budgets.
  • Establishing a system for evaluating the success of both existing and future proactive endeavors.

Instilling enterprise-wide change

Three factors must be in place if the enterprise-wide change initiative is to succeed: a methodology for successful communications, an understanding of the various employee involvement activities, and senior management's commitment to cultural change.

A methodology for successful communication is essential if a corporate culture is to become flexible and open to change. A sophisticated method of workforce communication can help change the corporate culture and maintain those changes over time. Without back-and-forth flow of communications, a clearly defined corporate identity and purpose will become blurred, resulting in ambiguous expectations. It is essential that all workers feel they understand where their company I headed and how it plans to get there. There is a direct an axiomatic link between good communication and significant increases in productivity.

All businesses, regardless of size, have two distinct cultures: a management culture and an employee culture. For the most part, companies tend to operate under management's agenda, unaware of the employees' agenda.

Communications should serve to unite these cultures. The unification of divergent agendas is the key to any successful, long-term human resources strategy. Thus, communication is critical in any effort to achieve productivity gains while enhancing morale, which usually run on parallel tracks.

To create a truly effective change initiative, communication strategies must be blended with employee involvement initiatives. The employee involvement matrix can aid a management team in understanding employee needs and goals. (See Exhibit 1.) The matrix helps company leaders focus on what they must do to implement employee involvement programs that will be successful at different levels of sophistication. The matrix takes in to account organizational conditions, management commitments, and workforce skills; and it provides a guideline for the realistic and appropriate degree of employee involvement.

The basic concept underlying the matrix is that increased levels of employee involvement cannot be accomplished unless adequate employee and management sills exist. Increasing employee involvement can be attained as company-wide training levels and organizational conditions improve and become more sophisticated.

The matrix (See Exhibit 1.) utilizes two continuums to project an appropriate level of employee involvement for a particular company. The horizontal continuum, labeled "Employee involvement," contains the various types of programs. The first program, cooperative goal setting, is the least complicated and requires the least "cultural commitment" on the part of the company. The continuum progresses to program No. 10, which is employee ownership and control.

"[If real cultural change is to occur] there must be a genuine commitment by management to a meaningful level of employee involvement as part of its ongoing business strategy."

The vertical continuum on the matrix is the learning continuum. It specifies the type of knowledge and skills that will be required throughout the company in order to implement a desired level of employee involvement. The learning continuum has five general areas, ranging from interpersonal relations to business process.

To determine the reasonable level of employee involvement in a given company setting, management should begin at program No.1 on the employee involvement continuum and work upward.

If employees are already involved at given level -- cooperative goal setting or an employee idea system -- and wish to do more such as convene focused task forces, the group process and problem-solving skills shown in the next section of the learning continuum would have to be in place before that new activity could be attempted.

The basic premise of the matrix is that successful implementation of employee involvement at any level must be preceded by requisite workforce skills and managerial commitment.

The final factor in the success of the cultural change process is commitment by management. Simply instituting training on the skills in the learning continuum will not be sufficient. There must be a genuine commitment by management to a meaningful level of employee involvement as part of its ongoing business strategy. A constant re-evaluation of the level of cultural commitment by management is essential to moving further along the employee involvement continuum.

Employee involvement continuum

  • The employee involvement continuum progresses through ten steps of increased involvement.
  • Cooperative goal setting -- the joint establishment of goals b each individual and his or her supervisor after mutual discussion. Goals are set and reviewed on a work-cycle basic.
  • Employee idea system -- a managed and funded program, which provides formalized feedback and includes a reward system. The program results must be highly visible for maximum success.
  • Focused task forces -- the convening of a group to work on a specific issue of set of issues and to recommend alternative solutions within a given time period.
  • Problem-solving teams -- work-unit teams that spend a specified amount of time each week trying to solve identified work-related problems.
  • Cross-functional groups -- problem-solving at interdepartment level with representation from various group functions within the work environment.
  • Union management committees -- can be considered if the employees are represented by a labor union. Joint union-management involvement will help to maximize union participation in all phases of employee involvement.
  • Process improvement groups -- selected groups to solve macro-level problems and improve key enterprise processes, such as product development, quality control, marketing, and distribution.
  • Self-managed work teams -- unsupervised teams of individuals working together for the purpose of improving skills, rotating jobs, and making work-related decisions that affect the total team.
  • Entrepreneurship -- creating opportunities for employee to implement innovative ideas, including designating a special team to pursue an idea, accepting the risks, and appointing a champion to execute the idea within the organization.
  • Employee ownership and control -- employee ownership of all or part of an organization or subsidiary within that organization. Increasing degrees of ownership can improve a business's profitability.

The Learning Continuum

The Learning Continuum denotes the skills and processes necessary for each level of employee involvement.

A. Interpersonal relations involves five skills:

  • Team building -- creating and sustaining high-performance oriented teams.
  • Effective meetings -- conducting purposeful and productive meeting and methods of meeting planning, leadership, participation, and follow-up.
  • Leadership styles -- understanding and practicing leadership styles and straits and the factors that make certain styles more effective.
  • Motivation theory -- knowledge of what motivates individual human behavior, e.g. personality, needs, expectations, dependency/maturity theories.
  • Communications skills -- understanding and practicing effective, two-way communication, e.g. listening, writing, speaking, and giving and receiving feedback.

B. Group process involves four skills

  • Presentation skills -- techniques for preparing and giving a persuasive and effective presentation.
  • Data gathering/organization -- methods of collecting data such as surveying and interviewing, and methods of organizing and presenting information.
  • Group problem solving -- utilizing group problem-solving techniques as compared to the individual-solving process.
  • Group leadership -- analyzing how people behave in groups, what constitutes a group, and the roles of a group's leaders and participants.

C. Employee relations consists of four types of learning:

  • Stakeholder analysis -- analyzing the goals, motives, and behaviors of all internal and external stakeholders of a given enterprise and determining how to maximize mutual benefits.
  • Conflict resolution -- understanding, mediating, and resolving conflicts between groups.
  • Negotiation -- methods and strategies for achieving win-win results in negotiations and avoiding the zero-sum game.
  • Collaboration -- comparison of cooperative versus competitive strategies and their relative impact on goal achievement.

D. Organization analysis includes three processes:

  • Work and job design -- coordination of the interrelationship of jobs, workflow, and other factors in orders to improve quality, productivity, and employee commitment.
  • Organization structure -- design of organization structures to meet current and future economic and technological demands.
  • Systems/process analysis -- identifying and solving problems utilizing macro-level processes, which promotes the attainment of key business objectives.

E. Business process contains four skills:

  • Risk analysis -- pinpointing and quantifying risks in given enterprise and determining acceptable risk levels and trade-offs.
  • Life-cycle analysis -- identifying the critical steps in the development of strategies, plans, markets, products, and technologies to ensure their ultimate success.
  • Cost/benefit analysis -- methods and techniques for determining cost factors and projecting real and probable benefits in implementing new business ventures and technologies.
  • Business systems -- analyzing the goals, inputs, processing requirements, outputs, constraints, and feedback mechanisms in a business operation in order to maximize. Efficiency and effectiveness.

We have seen the implementation of this broad initiative effectively change the corporate culture of many companies, unifying the agendas of management and employees, Sustained through the proactive implementation of flexible communications programs, the resulting corporate cultures have achieved a significant increase in productivity, very low levels of personnel turnover, and an absence of labor unrest.

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