If You Pay Your Employees Equally, You’re Not Being Fair to Any of Them Reply

Hauling-logsBy Eric Chester, Business 2 Community 

The Sawmill:

Jake and Justin, twin brothers who were 23 years old, worked for a large sawmill not far from where they grew up.

Their father was aware that even though both sons had essentially the same job title and duties, Justin was paid significantly more than Jake. Curious as to why, the father sought out the owner and asked him about the variance. In response, the owner invited this father to drop by his mill and casually observe the activities.

A few days later, the father showed up at the mill. The owner picked up the phone and called Jake into his office. He said to him, “There’s a trucker from Portland at the gate with some logs he wants to sell us. Go find out what he’s got.” Within fifteen minutes, Jake returned and said, “I checked out the load and it looks like he’s carrying about 40 to 50 large logs, mostly pine, and all appear to be in pretty good shape.” The owner thanked Jake and dismissed him from his office.

He then summoned Justin and made the same request. “There’s a trucker from Portland at the gate with some logs he wants to sell us. Go find out what he’s got.” A half hour later, Justin came back and said, “I counted 38 pines; most are about 20 feet and are in really good condition. There are also 11 aspens which are slightly shorter, and all but 3 are in pristine condition. He wants $1,000 for the whole load. Sam McHenry was down here twice last week looking for aspen for this large furniture project he’s working on, so I called him and asked if he’s still in the market for aspen. He told me he’d take the eight good aspen off our hands and offered $150 for each. If we accept his offer, we’ll make all our money back plus 20% and the 38 pine will be pure profit.” The owner told Justin to sell the aspen to McHenry, then thanked him and sent him on his way.

He then looked at the father. “If this were your mill, would you pay those two employees the same amount?”

“Absolutely not,” the father said. “Though equal, it certainly wouldn’t be fair.”

(The Sawmill is a parable by Eric Chester.)

ON POINT – Compensating employees using time spent on-the-job as the sole metric (hourly wage, monthly salary, etc.) may be simple to calculate, but it does little to engage employees and incentivize top performance. The most effective compensation methods are those where employees are paid in direct proportion to the value they bring to their organization. This is not simple or easy, but it is a prerequisite to building a great workplace culture and being recognized as an employer of choice.

How and Why Employees Subvert Bad Corporate Policy Reply

self-interestBy Chris Simmons

Self Interest trumps everything. That is precisely why it’s the 1st Rule of Human Nature.

Despite this fundamental truth, many corporations ignore this core tenet of human nature and are then baffled when they experience poor results.

For example, I recently learned of a major US corporation that pays its staff a daily 10% “punctuality bonus” for being on time. More specifically, it is truly a 10% bonus that supplements the employees’ lower day rate. At first glance, an apparently understandable practice for a manufacturing entity.

This is where self interest comes into play. Like most companies, this firm offers sick leave — but at the employees’ lower base salary. So imagine how employees respond. If you guessed that they came to work sick, you are correct. If you guessed they came in to work sick, clocked in on-time, and then went home on sick leave – you’d also be correct.

It’s easy to see the numerous pitfalls of this practice, including some significant liability issues. No matter how well intentioned, any policy that runs counter to human nature and self interest will be intentionally undermined by those forced to endure it.

An associated truth of human nature is that people focus more on protecting what they have rather than the possibility of a future gain. This is why ads for major sweepstakes now say “You may have already won!,” as this wording enjoys response rates several times higher than “mail in your entry” contests. In a like fashion, this manufacturer could benefit greatly by ending the daily bonus and increasing base salaries by 10 percent.  Punctuality could still be enforced by simply docking an employee’s pay for a late arrival.

Other viable alternatives also exist, which begs the question, why would any firm stay wedded to such a clearly flawed practice?

How a “David” Will Almost Always Beat a “Goliath” Reply

David vs GoliathThe High Costs of Failing to Adapt – An Everyday Example

By Chris Simmons

Whether in corporate board rooms or athletic fields, large organizations around the world find themselves snatching defeat from the jaws of victory every day. Despite being stronger, more experienced, perhaps better financed, in many cases they find themselves outmaneuvered by a much small competitor. How does this happen? Because employees (or players) of the large entities don’t pay attention to the here and now.  Allow me to offer an example.

In college, I was captain of our men’s slow-pitch softball team. Unlike varsity sports, as a club team we had complete control when it came to selecting our opponents. Rather than pick like-sized schools, we did what any college athlete would do – we lined up the biggest colleges imaginable. Our schedule included Virginia Tech, North Carolina State, Clemson, the University of North Carolina, Maryland, and the University of Virginia, among others. Coming from a small military college of 1400 students, our opponents undoubtedly anticipated some easy victories. We were quick to disappoint them – and ultimately won about half of our games.

We knew every almost college we played fielded a team better than us in every regard. The Virginia Tech players, for example, were the champions of their 450+ team intramural league – and we split a double header against them. How was such a feat possible? They outhit us, they out-ran us, and they out-powered us. Our lone saving grace was that we out-thought them.

Unlike baseball, in softball, the batter WILL hit the ball. After all, it’s the size of a grapefruit – it’s almost impossible to miss. But our simple tactic, the one that so many teams failed to anticipate or counter, was our precision ball placement. We drilled relentlessly in finding gaps between the infield and outfield and dropping the ball right in the slot.

For the most part, we hit singles using this method. However, after grinding out a dozen or so singles every inning, our competitors would get frustrated and started making errors. This opened the door for us to make doubles, triples, and the occasional home runs. Some of my players were so bold we physically signaled our intent by adjusting our batting stance to line-up with the gap in their field coverage. Still, no one noticed, or if they did, they didn’t communicate it.

You would think after a few innings (or the first game of a double header), our opponents would have adjusted their fielding. You’d be wrong. They refused to adapt and stuck with what they knew. In doing so, they virtually guaranteed our victory.

Our competitors were gifted players who came together as amazingly talented teams. In contrast, we were simply good players who excelled at one very narrow facet of the game. We obsessed about ball placement because it was the only way we could successfully compete. Our method wasn’t pretty or exciting, but it consistently delivered amazing results.

Where is your organization vulnerable? Is there a single point-of-failure (like ball placement) that renders you vulnerable to a more nimble David? Even worse, does your organization suffer from multiple failure points? Could you survive the onslaught of a laser-focused competitor? How responsive is your team in identifying potential rivals? Are flexibility and change buzzwords or practiced processes?

In a battle of David vs. Goliath, it’s not a matter of if, but when. Is your organization ready?

Here’s Why Women CEOs Are More Likely to Get Sacked From Their Jobs Reply

Carol Bartz (Photo by Tony Avelar - BLOOMBERG)

Carol Bartz (Photo by Tony Avelar – BLOOMBERG)

By Jena McGregor, Washington Post

When Carol Bartz became the chief executive of Yahoo in 2009, her appointment was less seen as evidence of a corporate breakthrough for women than as evidence of another trend: the “glass cliff.”

This phenomenon, coined by researchers, describes how women are recruited disproportionately into tough jobs, where the title may be big but the odds of success are quite small. And Yahoo was certainly that: The company was struggling to grow and diversify, its stock price was suffering, and within the past year it had navigated a failed acquisition offer from Microsoft and an attempt by investor Carl Icahn to replace its board. At the time, Yahoo’s chairman called her “the exact combination of seasoned technology executive and savvy leader that the board was looking for.”

Then, like a comparatively high ratio of female CEOs, Bartz was fired. (Over the phone, many will recall.)

Strategy&, the consulting firm formerly known as Booz & Company, released its 14th annual Chief Executive Study earlier this week, and it found that women are more often forced out of CEO jobs than men who hold the same position. The study showed that over the past decade, 38 percent of female chief executives who left their positions were sent packing (rather than leaving due to a retirement or merger), compared with 27 percent of male CEOs.

Gary Neilson, one of the study’s co-authors and a senior partner at the firm, says his findings show something new about women’s so-called glass cliff. “We don’t think it’s so much that they’re put into challenging roles than that they’re more often outsiders,” he says.

His report discovered that women CEOs are comparatively more likely to hail from outside the company than their male peers are. Thirty-five percent of female chief executives between 2004 and 2013 were outsiders, compared with just 22 percent of men. (The study looked at incoming and outgoing CEOs over a period of 10 years for the world’s 2,500 largest public companies, resulting in a sample of more than 100 women at the top.)

Being CEO as an outsider “is a tougher job,” Neilson says. “They don’t have as many connections in the company to understand how things work, and their performance is not as high” as those who’ve been groomed in-house. Research has shown, for instance, that external CEOs are 6.7 times more likely to be dismissed with a short tenure than homegrown ones.

Feature continues here:  Throwing Women Off the “Glass Cliff”

 

 

The “X-Y” Theory of Motivation Reply

By Chris Simmons

American psychologist Douglas McGregor detailed the X-Y theory in his 1960 book, The Human Side of Enterprise.” While some recent studies question the inflexibility of his work, X-Y is still widely used in addressing organizational motivations and culture. McGregor suggests management styles are a simple choice between authoritarian or participatory approaches. Furthermore, Theory X (dictatorial) managers will generally experience poor results while their Theory Y (engaged) counterparts see better individual and organizational performance because of the opportunities to grow and develop.

Theory X Assumptions (Authoritarian Management)

  • The average person inherently dislikes work and will avoid it if possible.
  • Because most people dislike work, they must be coerced into striving towards an organizational goal.
  • The average person avoids responsibility, has little or no ambition, desires security over all other things, and prefers to be task-directed.

Theory Y Assumptions (Participatory Management)

  • Work is satisfying.
  • Physical and mental exertion at work is as natural as play or rest.
  • Coercion is not the only way to motivate people to work. When committed to a cause, people willingly use self-direction and self-control to achieve a goal.
  • One’s commitment is tied to the value of the perceived reward for achievement.
  • People seek and accept responsibility and will do the job based on their perception of the job’s priority.
  • The ability to solve organizational problems using ingenuity, creativity, and imagination is widely – not narrowly – found among the general populace.
  • The average person’s intellectual potential is only partially realized.

For all those currently suffering under a Theory X boss, read this offering from businessballs.com on surviving an authoritarian manager

How to Demotivate Your Employees in 4 Easy Steps 3

By Chris Simmons

Many managers, supervisors, and leaders around the world are skilled in a classic “blunder cluster” known as The Four Methods of Demotivation. These time-tested methods are virtually guaranteed to increase employee dissatisfaction, send annual turnover into the double-digits, and decrease productivity. Note: Methods are NOT necessarily listed in order of demotivational effectiveness!

1. Subvert decisions. This practice is so common that employees who haven’t been “bypassed” by a supervisor are considered “endangered species.” Managers can also issue orders to subordinates that contradict guidance provided by that individual’s immediate supervisor. Done often enough, the undercut supervisor starts deferring decisions to upper management, leaving the employee confused about who is in charge.
2. “Shooting From The Hip.” Supervisors can also stifle motivation by making a decision on a newly-presented problem “on the spot.” Done correctly, hip-shooting is inaccurate, ineffective, and includes employees who should have NO say in either the problem or its solution.
3. Making what should be a collective decision, alone and in advance. In this scenario, the supervisor seeks input from those employees responsible for implementing a decision, impacted by a decision, or simply whose insights would be informative. Subsequently, employees come to understand that the solicitation was an empty gesture and as a result, offer little commitment to the endeavor.
4. Interfering. Delegation is supposed to put projects into the hands of people qualified to execute them. These qualified subordinates are then supposed to be held accountable for the project. However, for those managers unwilling to let go, interfering is best implemented by issuing clarifications, providing periodic follow-on instructions, requiring impossible suspenses and demanding an unreasonable number of status reports.

Note to all newly promoted supervisors and managers; please understand that this is a weak attempt at sarcasm and not a policy document recommendation.

Leadership is Example: A Lesson From Legendary Coach, Paul “Bear” Bryant Reply

It Don’t Cost Nothin’ To Be Nice

By Larry Burton, Senior Writer for Bleacher Report

Here’s a reprint of an article I wrote for another publication several years ago. 

At a Touchdown Club meeting many years before his death, Coach Paul “Bear” Bryant told the following story:

“I had just been named the new head coach at Alabama and was off in my old car down in South Alabama recruiting a prospect who was supposed to have been a pretty good player and I was havin’ trouble finding the place. Getting hungry I spied an old cinder block building with a small sign out front that simply said “Restaurant.”

“I pull up, go in and every head in the place turns to stare at me. Seems I’m the only white fella in the place. But the food smelled good so I skip a table and go up to a cement bar and sit. A big ole man in a tee shirt and cap comes over and says, “What do you need?” I told him I needed lunch and what did they have today? He says, “You probably won’t like it here, today we’re having chitlins, collared greens and black eyed peas with cornbread. I’ll bet you don’t even know what chitlins are, do you?” I looked him square in the eye and said, “I’m from Arkansas, I’ve probably eaten a mile of them. Sounds like I’m in the right place.” They all smiled as he left to serve me up a big plate. When he comes back he says, “You ain’t from around here then?”

“I explain I’m the new football coach up in Tuscaloosa at the University and I’m here to find whatever that boy’s name was and he says, yeah I’ve heard of him, he’s supposed to be pretty good. And he gives me directions to the school so I can meet him and his coach.  As I’m paying up to leave, I remember my manners and leave a tip, not too big to be flashy, but a good one and he told me lunch was on him, but I told him for a lunch that good, I felt I should pay.

The big man asked me if I had a photograph or something he could hang up to show I’d been there. I was so new that I didn’t have any yet. It really wasn’t that big a thing back then to be asked for, but I took a napkin and wrote his name and address on it and told him I’d get him one and shook his hand and left.”

“I met the kid I was lookin’ for later that afternoon and I don’t remember his name, but do remember I didn’t think much of him when I met him. I had wasted a day, or so I thought. When I got back to Tuscaloosa late that night, I took that napkin from my shirt pocket and put it under my keys so I wouldn’t forget it. Back then I was excited that anybody would want a picture of me. The next day we found a picture and I wrote on it, “Thanks for the best lunch I’ve ever had.”

“Now let’s go a whole buncha years down the road. Now we have black players at Alabama and I’m back down in that part of the country scouting an offensive lineman we sure needed. Y’all remember, (and I forget the name, but it’s not important to the story), well anyway, he’s got two friends going to Auburn and he tells me he’s got his heart set on Auburn too, so I leave empty handed and go on see some others while I’m down there.”

“Two days later, I’m in my office in Tuscaloosa and the phone rings and it’s this kid who just turned me down, and he says, “Coach, do you still want me at Alabama?” And I said, “Yes I sure do.” And he says OK, he’ll come. And I say, “Well son, what changed your mind?” And he said, “When my grandpa found out that I had a chance to play for you and said no, he pitched a fit and told me I wasn’t going nowhere but Alabama, and wasn’t playing for nobody but you. He thinks a lot of you and has ever since y’all met.” Well, I didn’t know his granddad from Adam’s house cat so I asked him who his granddaddy was and he said, “You probably don’t remember him, but you ate in his restaurant your first year at Alabama and you sent him a picture that he’s had hung in that place ever since. That picture’s his pride and joy and he still tells everybody about the day that Bear Bryant came in and had chitlins with him.”

“My grandpa said that when you left there, he never expected you to remember him or to send him that picture, but you kept your word to him and to Grandpa, that’s everything. He said you could teach me more than football and I had to play for a man like you, so I guess I’m going to.  “I was floored. But I learned that the lessons my mama taught me were always right. It don’t cost nuthin’ to be nice. It don’t cost nuthin’ to do the right thing most of the time, and it costs a lot to lose your good name by breakin’ your word to someone.”

“When I went back to sign that boy, I looked up his Grandpa and he’s still running that place, but it looks a lot better now; and he didn’t have chitlins that day, but he had some ribs that woulda made Dreamland proud and I made sure I posed for a lot of pictures; and don’t think I didn’t leave some new ones for him, too, along with a signed football.”

“I made it clear to all my assistants to keep this story and these lessons in mind when they’re out on the road. If you remember anything else from me, remember this. It really doesn’t cost anything to be nice, and the rewards can be unimaginable.”

Well Coach, we haven’t forgotten you or the simple lessons you taught not just your players, but everyone who would take the time to listen to you.

Larry Burton, Panama City Beach, Florida