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Building the Productive Workplace

by Gregory P. Smith


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Gregory P. Smith is the author of The New Leader and How to Attract, Keep and Motivate Your Workforce. He speaks at conferences, leads seminars and helps organizations solve problems. He leads an organization called Chart Your Course International, a training and management development company located in Conyers, Georgia. His article, Managing Time or Is Time Managing You, received a Award as one of the best articles on the Internet discussing management issues for small business.

“Someone call 911 . . .the traditional workplace is dead.  No matter what industry you find yourself in, you are feeling the difficulty of attracting, keeping, and motivating your workforce.  Businesses today not only have to compete against other businessess, but now they must compete for the best workers.

In Breckenridge, Colorado there are more help wanted signs than workers.  Because of a worker shortage, many businesses there are forced to close their doors early. An equipment dealer in Ohio can’t find a person to fill a secretarial job. One Atlanta company lost 420 of the 431 employees they hired this year.

Compete or Become Obsolete

The truth hurts.  There are fewer qualified workers available in today’s job market.  With unemployment down to 4.7 %,   job seekers can afford to be more selective.  For the first time in decades, businesses are trying to attract and recruit college grads with computer and business degrees. They are giving them signing bonuses, gifts and treating them like professional athletes. For high-demand career fields, the employee is driving the employment train.

Today’s crazy environment requires new ideas or face becoming roadkill. Why do we need to change? The answer is simplesurvival.   Who is more important?   For the past two decades we have preached customer service. At the same time, many businesses have failed to provide the same amount of energy to our employees.

Successful businesses of the future will only be those that provide the best benefits and the best work environment that attracts, keeps and motivates its workforce. The glue that holds it together is leadership.

Changing Trends & Generation X

Intellectual capital is the fuel that powers today’s economy. They call those people “Gold Collar” or knowledge workers. Their knowledge brings gold to the employer.  

Generation X-- those 45 million people born between 1965 and 197-- represent the group of today’s educated young American worker.  Fortune magazine says this group is about self-fulfillment. They want jobs that are fun, cool, and let them discover who they are. Generation X is temperamental, more demanding and picky.  They grow frustrated with the traditional path of advancement many of us followed. This younger generation is and is far more likely to jump ship for a pay raise or for better benefits.

To keep their technicians, one computer company allows workers to bring their pets to work. In Atlanta, computer programmers are in such hot demand that one company leased BMW Z3 roadsters for their 40 programmers. The CFO realized that leasing a BMW is probably cheaper than pay a headhunter $70,000 to find a replacement. Now employees will think twice about leaving the company because they must turn in the car. Have these companies lost their minds? Dealers must change their recruitment tactics so they can attract the younger generation. 

Building the Attractive Workplace

Benefits have become just as important as the pay workers receive. In 1960, businesses only spent $23.7 billion on benefits. In 1980 $266 billion and in 1994 businesses spent $747 billion on benefits.

William M. Mercer Inc. conducted a survey and asked 25,000 employees at nine, large companies their opinion of 65 potential benefit programs, policies and practices.  The top-five popular benefits’ employees said they might use:

1. 401(k): 91%
2. Dental plans: 88%
3. Coverage for preventive health care: 87%
4. Employer stock purchase plan: 86%
5. Pension plan: 83%
6. (tie)Medical insurance: 83%
7. Vision care: 82%
8. Life insurance: 74%
9. (Tie) Flex time: 74%
10. Events or outings: 71%

Of those who said they would probably use or might use a particular benefit, here are the top five that they said would most influence their choice of employer.

1. 401(k): 76%
2. Pension plans: 72%
3. (tie)Medical insurance: 72%
4. Clear sense of organizational purpose: 64%
5. A “no layoffs” policy: 53%
6. Dental coverage: 51%
7. (Tie) Flex time: 51%
8. Medical coverage for domestic partners: 48%
9. A comfortable, attractive work space: 47%
10. Coverage for preventative health care: 44%

Of those who said they would probably use or might use a particular benefit, here are those that they said would most influence their productivity.

1. Flex time: 90%
2. Clear sense of organizational purpose: 89%
3. Employee provided or subsidized office equipment for work at home: 87%
4. A comfortable, attractive work space: 86%
5. Telecommuting: 84%
6. On-site fitness center or subsidized health-club membership: 78%
7. Work schedule compatible with school calender: 75%
8. Career planning and appraisal: 74%
9. Child care center at or near work site: 73%
10. Job sharing: 72%

It is interesting to notice that “Flex time” and “Clear sense of organizational purpose,” scored so highly.  Besides flextime, what is more true today than ever before is people are looking for a purpose in their lives and their jobs.  There are no simple solutions, but a few answers can come from changing our thinking.

The Five-Step PRIDE Model

A work environment that attracts, keeps and motivates its workforce is one that gives workers a sense of pride and purpose in what they do.  Supervisors/managers have the sole responsibility for creating this work environment. They have to provide the leadership that holds everything together. Leaders can improve motivation within their organizations by following the PRIDE model: 

Provide a positive working environment
Recognize, reinforce, and reward everyone's efforts
Involve everyone
Develop skills and potential
Evaluate and measure continuously

Provide a Positive Working Environment

Happy employees make productive employees.  One of the most important factors is the work environment itself. . .how employees “feel” about the company.

Sears conducted an 800-store survey that showed the impact of employee attitudes on the bottom line. If employee attitudes improved by 5%, customer satisfaction will jump 1.3%, consequently increasing revenue by one-half a percentage point. Seeking ways to motivate and build worker morale pays dividends to any business or organization.  The motivated worker is more committed to the job and to the customer. On the other hand, demotivating jobs force workers to vote with their feet. 

Providing a positive work environment pays off financially. Most employers do not know how much turnover is costing them. A company experiencing high turnover faces a financial crisis. It costs anywhere from $4000-$15,000 to recruit, hire and train a new employee, depending on their skill level.  One Atlanta company lost 420 of the 431 employees they hired this year. If, for example, it cost them $4000 per employee, that equates to a $1.7 million loss.  Taking care of your employees saves money. 

Many businesses are providing more family-friendly benefits.  The Families and Work Institute released the "Business Work Life" study  (  that  provides a benchmark for corporate work life policies and practice. The study focused on companies that employee 100 or more workers.

Ninety percent of the 1,000 companies surveyed allow workers to take time off to attend school events. Half let workers stay home with mildly ill children without using vacation or sick days. Two thirds permit flex time defined as allowing employees to adjust work hours on a daily basis. Nine percent offer child care at or near the workplace. Thirtythree percent offer maternity leaves more than 13 weeks. Twentythree percent offer elder care resources and referral services and half provide dependent care assistance plans. Fortyfour percent hold supervisors accountable for sensitivity to their employees work/family needs.

Recognize, Reinforce and Reward Everyone's Efforts

Mark Twain once said, "I can live for two months on a good compliment." 

Money may attract people to the front door, but something else has to keep them from going out the back.  Another survey showed the number one reason people quit their jobs was for a lack of recognition and praise.  Compensation fell into second place. Nothing can replace personal recognition and sincere appreciation. It is a powerful tool in keeping good workers.

The Gwinnett County Tax Commissioners’ office, located in Lawrenceville, Georgia, has one of the most innovative reward and recognition programs I’ ve seen.  The program is called “Shining Stars.” They practice peer recognition where co-workers reward each other for doing a good job. “Shining Stars” has taken off like a rocket. 

Since this is a local government, pay raises and promotions are limited. Katherine Sherrington, the Tax Commissioner, realized she needed something to bridge the gap.  She also realized that the employees themselves know who works hard and who deserves recognition. Managers can’t be everywhere all the time. Therefore, the employees are in the best position to catch people doing the right things. 

"Shining Stars" is a printed form they give to each other for doing a good job.   Workers have an unlimited supply of the “Shining Star” forms and employees hand-write a little note about what their co-workers did and hand it to or send it through distribution to the awardee. 

Throughout the walls, doors and cubicles, employees proudly display their form. For added recognition, monthly the office formally recognizes the employee who received the highest number of forms.  They get a special gift from the commissioner.  Then all the forms given out during the month are put in a basket and names are randomly drawn for additional prizes. The forms are read aloud and recognition given to both the awardee as well as the person submitting the form. Then the winner draws for his or her prize from another basket. This simple, but powerful program insures everyone gets some form of recognition.

Building a motivating reward and recognition system such as the one in Gwinnett County follows what I call the FAST-FUN formula:

F- Focus on the behavior you want to reward

A- Avoid bureatcratic judging and committees

S- Simplicity: do not make your program too complicated or formal

T- Team ownership: let the employees run it and own it

FUN- Make it fun: as entertaining and spontaneous as possible

Involve Everyone

Studies show that having workers involved at all levels has a major impact on improving profit and productivity.  A good example is Guardian Industries, an 800-person glass plant in Indiana. They decided to start listening to their employees to find their opinion on how to staff the plant’s 24-hr work shifts.  The employees decided that instead of working rotating day and evening shifts, they would rather work permanent 12 hour shifts. The result--turnover fell by 50%.

Wainwright Industries, located in St. Peters, Missouri created a total employee involvement program which increased trust, equality and ownership.  Wainwright faced a severe recession in the 70s and 80s.  Sales dropped and operations slowed to three days a week. The workers were frustrated and a riff was growing between the workers and management. So they started changing.  

The first step was to start calling the workers, "associates." This one small change lead to even larger changes. They eliminated time clocks and everyone was put on a salary. Today, associates are paid even if they miss work and paid timeandahalf for overtime.  A team of associates developed a profit sharing program that covers everyone at Wainwright. The team consisted of one manager and seven non-management associates. Ownership developed, propelling them down the track at a faster pace. 

What impresses me most is Wainwright’s Continuous Improvement Process. (CIP)  In 1994, associates submitted and implemented more than 8,400 improvement ideas. They presently average 300 ideas a week from 146 associates. The associates - not management - totally run this powerful process. This works because associates at Wainwright have authority to make any improvements, without permission up to $1000 in cost. If their idea or change exceeds this amount, they fill out a form to for approval. 

Each week the names of those submitting ideas are eligible for cash awards.  Four names are randomly drawn. Two people win $50 each for safety CIPs (Continuous Improvement Process), and two people win $50 each for regular CIPs.  The previous week’s winner makes the drawings. The company also has quarterly drawings for a $300 gift certificate, and it comes with a catered luncheon for everyone who submitted a CIP during that quarter. The final results--profits grew from $5 million to $30 million.

Despite these success stories, most businesses do a terrible job listening to and involving their employees. A Towers Perrin survey of  3300 employees show an increase from 25% to 30% last year who say supervisors has ignored their interests when making decisions that affect them.

Develop the Potential of Your Workforce

The German poet, Goethe, said, "Treat people as though they were what they ought to be and you will help them become what they are capable of being."  Well-trained employees are more capable and willing to assume more control over their jobs. They need less supervision, which frees management for other tasks.  Employees are more capable to take care of customers which builds stronger customer loyalty.  All this leads to better management-employee relationships.

It doesn’t take a tremendous amount of money and elaborate fitness centers to provide a positive and attractive work environment.  Take for example Rodger McAlister, who owns Bobcat of Kentucky, a construction equipment dealership in Louisville, Ky.   His turnover is almost nonexistent.  This is quite an accomplishment in an industry that is over 60,000 technicians short. 

His employees and six service technicians share a profit-sharing plan that could possibly mean $700,000 upon retirement. They are eligible to participate after one year and become fully vested after six years.  Bob adds, that he hasn’t lost anyone after they become vested. To help his employees, he brings in a financial advisor to help the employees pick stocks, plan for retirement or how get advice on how to go about buying a house.

Family members receive 100% of the health insurance after the spouse is on the job for five years.  Every year employees celebrate their work anniversary with a cake and receive $100.00 for each year employed made out in a check to the Snap-On tool company.  

Bob’s wife thought of this idea. Twice a year employee’s children receive a $50 savings bond when they bring in their “all A’s” report card. They reward employee’s safety record with what they call, “Safety Bonus Program.”  Each employee’s driving record is screened twice a year.  Anyone who has a citation during the year is removed from the program.  At the end of the year the ones who remain get to split $2000.00.

To minimize the we-they syndrome, every Friday employees rotate jobs for one hour.  The person in the Parts Department gets to be a service technician and visa versa.   This builds a stronger team and improves communication within the company.

Evaluate and Measure Continuously

Continuous evaluation and never ending improvement is the final step of the PRIDE model.  Another way to keep and motivate your workers is to hire the right person in the first place. Hiring the wrong person spells havoc for everyone. Hiring the right person saves everyone a lot of headaches. Important point-You must go beyond the basic interview and try to find out more about the candidate before you know if they is going to be a good match between them and the company. Person to person job interviews fails to give you enough information to make a good selection.  Anybody can put on a “show” during an interview.  

You ask, “Are there valid and legal ways to screen out low performers before you   hire them?”  According to the Atlanta Journal-Constitution, the American Management Association completed a survey showing that now 29% of American companies are conducting personality assessments on all job applicants--up from 19 percent from the previous year. . .a growing trend.  These assessments show you if the person is reliable, have a good work ethic and provide good customer service.

These assessments can show you if the person is dependable and responsible.  It will also evaluate the likelihood if this person will stick around for more than three months.  The “customer service scale” shows if this person is courteous, enthusiastic and if they will tolerate rude customers calmly.  The “sales scale” of the assessment shows you if this person will be a good sales person and make you money. 

One bank using assessments selected people who sold $60,000 more services and products annually.  A manufacturing company, using the assessment, hired people who generated $21,600 more per year than the company average and $42,000 more than those who received failing scores with the assessment.  Ritz-Carlton hotels use a version of the personality assessment and reduced their turnover from over 100% to less than 30%.   Assessments may give you more assurance and create a win-win for all concerned.  

If you are more careful with your hiring practices you also need to evaluate why good people leave your company.  Tampa is a very competitive job market.  Tom Daraude, the Regional Senior Vice President of USAA in Tampa, Florida has a good policy.  He conducts an exit interview with each and every employee who leaves his 1700 person company.  He tells them three things:

  1. He sincerely thanks them for working at USAA
  2. He tells them they are welcome to come back, no questions asked.
  3. Then he asks them why they are leaving.

Daraude says, his second statement brings tears of thankfulness to some employee’s eyes.  Many employees actually do return when they realize that the grass is not greener on the other side.

Change or Be Changed

Winston Churchill said, America always does the right thing, after they try everything else first.”  Today is clearly not the way it was yesterday. The magic of keeping and motivating good people today isn’t about magic, nor is it only about money. Today’s leaders have to be environmentalists. They have to create a work environment where people enjoy what they do, feel like they have a purpose and feel they are reaching their potential.  It requires more time, more skills and managers who care about people. . . true leadership.  You may not like it, but this is the way it is.

If you would like a copy of the author's article, “Beatitudes of Leadership,” please fax your letterhead with the words “Beatitudes” to 770-760-0581. More information and articles are available at By either emailing or telephoning him at (770) 860-9464, you can obtain a free monthly newsletter.

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