When discussing wages, Adam Smith points out, ‘The workmen desire to get as much, the masters to give as little as possible.’ Unfortunately this division between employer and employee is as relevant today as it obviously was then. Stereotypes of ‘them and us’ still don’t help anyone.
DEFINING IDEA…
A spoonful of honey will catch more flies than a gallon of vinegar.
~ BENJAMIN FRANKLIN, ONE OF AMERICA’S FOUNDING FATHERS
The archetypal characters in this age-old play involve, on one side, the hard-done-by worker, who finds new and novel ways to waste time, laze around and actively sabotage the company’s success. On the other side is the tyrannical businessman, who pays as little as possible, and sees his workforce as nothing more than cogs in a profit-making machine. And yet in truth neither is wholly true. There is good and bad on both sides, but modern business is discovering that the only way to prosper is to value the role everyone plays and reward good performance. Smith writes, ‘it is in vain for [anyone] to expect [help and cooperation] from benevolence only. [An employer] will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them.’
Scores of management theories focus on reward for good effort rather than punishment for bad performance. One such theory - Open Book Management - was developed by Jack Stack of the Springfield Remanufacturing Corporation (SRC) in the US: along with twelve other executives, Stack made a management buy-out of the business in an attempt to save the 119 jobs from certain redundancy. There wasn’t time to restructure and so Stack, an avid sports fan, created The Great Game of Business to save the company. Essentially the business was set up like a game - everyone knew their position, they were familiar with the rules and everyone understood that they would share in the rewards of success and the consequences of failure. What he found was that when people were personally motivated, not only to keep their job but also to share in the financial success of their hard work, the business was radically transformed.
Creating an empowered workforce is not for the faint-hearted. It requires trust and courage, but the rewards can be significant. The award-winning US study, ‘The impact of human resource management practice on turnover, productivity, and corporate financial performance’, concluded businesses practising workplace empowerment are more profitable, generate more sales per employee and have less staff turnover.
Treating staff badly results in low morale, high staff turnover and escalating recruitment costs, so it’s far better to join forces and offer a slice of the profit pie to employees who consistently deliver.
HERE’S AN IDEA FOR YOU…
Investigate some of the profit sharing, collaborative management styles on offer and find one that could work for your business. It doesn’t need to involve elaborate re-structures or expensive culture change consultants, start small, involve your people and see what happens. To encourage business improvements create an ‘improvement fund’ and offer a percentage of cost savings or a cash incentive to staff.