A Rising Tide Raises All Ships
Situation
Leaders of a regional construction firm asked us to help them develop a way to engage all their employees shortly after they took over leadership of the company. Sure, the employees of this 60+ year old firm were good people, many were long-term employees, they showed up to work on time, they did their jobs well and a few even socialized together.
But none of the employees exhibited the kind of passion that the new leaders needed to propel the business forward. As leadership planned to grow the company more aggressively, they knew employees would need to change their behaviors. Going forward, employees would have to generate greater cost savings, be more creative, generate more ideas, communicate better with each other and, of course, create more revenue-generating opportunities. Basically, the entire workforce had to learn how to be more effective.
The leadership team was out of ideas. They’d tried bonus programs and pizza lunches with little luck. The pressure to engage the entire workforce was increasing. “We need an incentive to get everyone to be more passionate,” the CFO told us.
Passion is nearly impossible to create with extrinsic incentives. Something different needed to be put in place.
Diagnosis
During several meetings with the leadership team, it was clear they believed their employees were doing a good job and were interested in the success of the organization. Nearly every employee seemed to value their job and workplace; however, only a few were going above and beyond, even when the cash bonuses were in place.
Leadership was impatient. They wanted a universal solution on the order of “a rising tide raises all ships.” Much of the literature on employee engagement focuses on pinpoint interventions that can be separated and measured. However, the surgical approach wouldn’t suffice for an organization needing to move the needle on many fronts. A more comprehensive model needed to be developed.
It’s also common in industrial and organizational psychology to push solution development into the hands of the people who are going to implement it, and that’s the approach we decided to take. The leadership team agreed that a steering committee, representative of the employee population, would act as the group to design and execute the programs. The challenge for the steering committee is that they lacked experience in designing and implementing recognition and incentive programs. They needed fundamental knowledge in how to design programs before they could take on the responsibility to design the next big idea on motivation.
Design
The design came to life in the form of a half-day workshop, some email editing sessions and two follow-up working sessions. Their ultimate objective was to develop programs, rewards, communication tools and budgets that would engage the entire workforce.
Because most people are very poor at understanding their own motivations, the steering committee needed to understand a broader story on how engagement and motivation works. The steering committee members agreed to spend half a day, including lunch, to learn about engagement and to begin designing the programs that would engage all the employees.
With the ultimate objective of engaging the entire workforce, the workshop was developed to provide learning these areas:
Why do we do what we do? A foundation in motivation through the lens of behavioral science
What does employee engagement look like? Case studies of how companies address it
What are the best practices? Tool kits and models of what has worked well
Then, the workshop attendees generated ideas for several programs. We used as brainstorm hubs during the workshop:
Communication – what are the ways employees need to hear about launches, updates, recognition and rewards?
Rewards – what are the most effective ways of keeping salary separate from the rewards of these programs?
Recognition – what methods can the company use to ensure employee-wide acknowledgement of good deeds and exceptional work?
Measurement – what objective measures will trigger rewards and minimize gaming?
After the brainstorming, notes were edited and formatted by BehaviorAlchemy. This insured the highest adherence to best practices while keeping the steering committee in the driver’s seat of the program designs.
Solution
After the workshop, over the course of several weeks, the steering committee drafted programs with rules, rewards and budgets. The BehaviorAlchemy team acted as a sounding board to ensure the models would have the greatest likelihood of success.
Programs were developed to address both team and individual contributions. The team program leveraged two pillars of the business: First, no project is completed without a team, and every project team includes at least one member from accounting, site supervisors, site superintendents, sales and account management. Second, the company can’t sustain itself if it is not profitable. A rewards pool was created from the profits on each project to reward the teams, as long as the project was completed on time, the punch-list fully completed and a few other provisos were met or exceeded.
The rewards pool was divided into two portions: a team event portion and an individual payout portion. The team event reward from each project was stockpiled and used for quarterly events for all the teams who successfully contributed to the pool on a quarterly basis. The rewards included tickets, food and drink for team members and their guest to attend a sporting event or similar outing.
The other portion of the rewards pool went to individuals in the form of points, which they could accumulate or redeem as they wished. Each role on the team was assigned portions of the rewards pool.
Individual contributors could be rewarded separately. Supervisors and senior leaders could recognize individual contributors using a set of guidelines based on the size of the program and the impact the person had. This discretionary model allowed for top performers to be recognized by leadership using points that could be aggregated with their team earnings.
Results
The steering committee created 2 key programs that addressed the fundamentals of the business as a whole and focused the effort of the entire organization on the success of each project. Revenue growth and profitability in the first year of the programs are pacing ahead of previous years. At the same time, morale is up and a subjective glance at the ‘staying late’ crowd indicates employees are putting more time and effort into their work.
Leadership is pleased that the initiatives designed by the steering committee are delivering positive results as the business moves closer to meeting its aggressive growth plans.