January 2010~Maximizing Performance from Recession-weary Employees

How do you get incremental productivity from recession-weary workers? What steps can your organization take to reduce attrition risks that may have a negative long-term impact on business performance?

Over 2/3 of American workers surveyed in 2009 reported many adverse changes in their workplace since the onset of the economic downturn. Significant changes to be expected include restructuring and/or lay-offs, salary reductions, salary freezes, and changes to benefits. These changes had strong impact on the worker experience.

  • 65% of employees reported increased workloads,
  • 44% saw a decrease in work-life balance,
  • 10% perceived an increase in favoritism by managers,
  • 20% of top performers found less clarity in the link between their individual goals and the company goals, and
  • 41% believe their customers were negatively affected by restructurings – a sharp contrast to the management view of only 17%.

Overall, more than 50% of employees felt that they were less able to manage workplace stress than prior to the downturn, and feelings of job insecurity increased 73%.

These statistics have real impact on organizational productivity. Employee engagement is down 23% in top performers and 9% overall. Engagement is the level of emotional and intellectual commitment of an employee to the work, mission and vision of an organization. When engagement drops, innovation, productivity and quality of customer service suffer. Low engagement in top performers is also a red flag for retention risks.

As the economic recovery gathers steam, business will have more opportunity for growth and workers, particularly top performers, will have greater opportunities available to them in the workforce.

Your organization can take these seven proactive steps today to maximize productivity and lower attrition risks.

  1. Start now. The New Year is a good time to bring employees together and announce any coming changes. Letting employees know what to expect alleviates anxiety. Taking the time to review changes made in the prior year and to demonstrate the positive results of those changes helps heal lingering resentment. Showing your employees how a 10% salary reduction for everyone saved a specific number of jobs puts a personal touch on a negative experience. Let them know that their sacrifices made a difference for their co-workers and also helped the company maintain productivity and serve customers. When discussing the year ahead, be honest about job security. Hearing the truth from the top, good or bad, is preferable to reacting to the rumor of the week.
  2. Communicate and celebrate. Take the time to communicate company goals for the future and then, on an individual or departmental level, examine how your Employee Value Proposition (EVP) ties to your corporate goals. An EVP is the program of rewards and benefits an employee receives for performance in the workplace. In addition to financial benefits, it includes training and advancement opportunities, benefits derived from the work environment, and satisfaction with work content. If present day financial benefits are scarce, employees can stay engaged when they are shown how the organization is committed to honoring other components of the EVP. Engagement is also furthered when companies tie enhancements to the EVP with the achievement of established company goals. Show your employees how you plan to emerge from the recession and grow AND let them know what financial benefits they can expect when these goals are reached.

    Set aside time to celebrate the successes of 2009 and to recognize individual and departmental roles in those successes. Even small achievements can be tied to long term goals, fostering engagement at all levels.
  3. Provide desired training. Recent surveys show that training has suffered in the past 2 years as budgets were cut or eliminated. Although technical training is a top choice, many workers feel a need for interpersonal skills training in resolving conflict, managing change, and presenting ideas. More than half of workers surveyed felt that their confidence would improve with more training in these areas. Interpersonal training has a great impact on the work environment, improving productivity and increasing job satisfaction for those trained and their co-workers.
  4. Provide small incentives. If your company has increased production but is not ready to rehire, you are probably asking even more from workers who have already experienced a 10-15% increase in their workload. An exempt employee who has worked all weekend on a major project will not receive overtime pay, but he would appreciate a gift card in an amount that fits your budget. Ordering dinner for a team that needs to work late shows them their efforts are valued. Small incentives add up when raises and bonuses are out of the picture and when staffs are too short to allow comp time. Spending on these types of incentives has increased 23% in the past two years. Companies that countered adverse changes to their EVP with an increase in discretionary incentives have maintained a higher level of engagement than those that did not look for alternative ways to recognize employee efforts.
  5. Recognize individual efforts and achievements. There are two important ways that managers and executives can provide non-monetary recognition and you can use both – whenever it is appropriate. First, thank employees who go the extra mile. Verbal thank yous are great but a written note or an email that copies higher-ups is more tangible and impactful. Praise is an equally important form of recognition. When praising an employee for a job well done, be specific in calling out the impact of the achievement and the unique abilities of the employee that made the difference.
  6. Review job responsibilities and eliminate tasks when possible. Organizations should take the time to review job functions and identify the high value activities associated with every position. Once those activities are isolated, managers should take a serious look at remaining tasks and responsibilities. Low value activities can be performed less frequently or eliminated by employees who are working above capacity in order to maximize their time available for higher-impact work. This exercise has helped many companies achieve growth without adding headcount.
  7. Reinstate any reduced salaries as quickly as feasible. Salary reductions were found to have significantly greater impact on employee engagement than lay-offs and wage/bonus freezes. Over 70% of companies that reduced salaries in 2008 plan to restore them in 2010. Failing to restore salaries poses a big retention risk, particularly with top-performers. If you wait until your competition restores salaries, merit increases and performance bonuses, it may be too late to retain some of your best talent.

As various economic factors blend together to signal an emerging recovery, American businesses are shifting from survival mode to growth strategies. Many are ramping up production but are not ready to rehire. Those ready to rehire will do so slowly. This leaves companies struggling to squeeze extra productivity from workers at a time when engagement is low. Growth in 2010 will require strong employee engagement at all levels and creating an action plan to restore engagement is the best place to start.

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