In 'The Talent Powered Organisation', Peter Cheese indicates that 25 years ago 80% of the typical company's market value was based on tangible assets such as machinery and facilities and how effectively they were managed. Today only 20-30% are attributed to tangible assets and the rest to intangible assets like knowledge of market place, relationships with customers and workforce capabilities. And all of these assets are tied up in people.
The problem is that people are not machines! You cannot switch them on and get a predictable result. On the other hand it is exciting that people are not machines. They use logic and reasoning to make complex decisions that machines can not and they have personalities that make it so much more pleasant to be on the receiving end of a service than if a machine was standing there!
The challenge is engaging all the people in your organisation to the extent that they give willingly, enthusiastically and consistently of their discretionary effort. In particular you must consider your key talent groupings that we referred to last month who are critical to achieving the business strategy.
The behaviours associated with engagement are readily observable – an engaged workforce looks happier and busier. They have lower absenteeism rates, greater job loyalty and a higher commitment to getting things done.
Common sense tells us that a motivated workforce is more productive than one that is not and the connection between engagement and performance has been a subject of many studies over the years. Recent studies by the Corporate Leadership Council (CLC) and Towers Perrin have concluded that :
'The employees who are most committed perform 20% better and are 87% less likely to leave the organisation.' CLC, 2004
'More favourable employee opinions are predictive of lower turnover. The performance gap between the bottom and top quartile of engagement scores is 36%' Towers Perrin, 2008
So what does motivate or engage people? There are a variety of models that have been developed from a chunk a research done over the years. The one that I usually end up coming back to and is very familiar to many, is Hertzberg’s Two Factor Theory  which separates ‘motivational factors’ from ‘hygiene factors’. Hygiene factors are the foundational requirements for an employee to feel valued e.g. salary, working conditions and status. If they are absent or undermined, the foundations of motivation will be compromised however they do not intrinsically motivate. Motivational factors include opportunities for personal growth, recognition for achievement and the freedom to make a difference or leave a mark.
Dissatisfied and unmotivated employees + Hygiene factors = Satisfied (but not necessarily motivated) employees
Satisfied employees + Motivational factors = Engaged employees
Examples of Motivational factors include:
- Sense of achievement/ opportunity to make a difference
- Recognition for achievement
- Interesting work
- Advancement/ promotions
- Opportunities to learn and grow
These are very similar to the motivational factors outlined by Maslow in his 'Hierarchy of Needs'.
In the 2004 study conducted by the CLC, they identified the top 50 ‘levers of discretionary effort’. Many of these related to the following categories:
- Quality of communication and relationship between the manager and the employee
- Fairness with which the employee’s performance is assessed
- Clarity about the job they need to perform
- Understanding of how their job connects to organisational success
- Being in the right job and having the right skills to do the job
These levers strongly link to the motivational factors mentioned before. A review of how your organisation’s processes and procedures support the motivational factors is an important first step in creating the right climate for motivation.
Another aspect that stands out is the role of the manager in all of this. The same CLC study found that of the top 25 levers for engagement, 19 are within the control of the manager. So, in order to have an impact on the drivers for motivation, it is essential that you have the right managers with the right skills.