International School of Management
Organizational Goals and Employee Expectations
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- Communicating With Employees
- Employee Satisfaction and Teamwork
- Employee Empowerment
- Interaction in the Workplace
- Employee Benefits
- Employee Motivation
Organizational Goals and Employee Expectations Far too often, employees are treated like pieces of machinery. They are selected, staged, and programmed to operate the way that the organization wants them to in order to achieve a certain predetermined goal or objective. The research has shown that organizations that involve their employees in setting organizational goals and employee expectations experience much higher rates of employee satisfaction than those organizations that do not. Organizations that take into account the input of their employees are often referred to as “collaborative work communities” in the research. “Collaborative work communities” can be defined as a group in which people work effectively together to achieve business results and sustain a positive work environment that includes work/life balance. In addition, collaborative organizations create structures and practices, and express values that help groups work effectively across organizational boundaries to achieve business results (Gewirtz 2005). The Hawthorne studies that began in 1927 studied the effects of different environmental inputs on employees and productivity. The studies eventually concluded that the productivity of workers increased simply because the researchers were paying attention to them and not because of an identifiable input or variable. There are many organizations that share goal setting ad the creation of employee expectations with their workforce, but arguably, none better than Southwest Airlines. Southwest Airlines has learned to capitalize on the principles of the Hawthorne Effect. “Since the company’s inception in 1971, it has been committed to employee input. In an industry plagued with business failures, it is staggering to reflect on how Southwest Airlines has consistently remained at the top of its industry, while placing a dogmatic focus on its employees’ feedback needs” (Frazee 2004). Organizations that are successful at including their employees in decisions and the goals of the organization are typically “flat” in hierarchal structure. It is hard for employees to be motivated to get the job done when they do not know how their job contributes to the overall success of the organization. Research has shown that goals have a direct effect on the morale of the staff in an organization. People gain high morale when they are challenged by organizational goals and know that they’ll be supported as they strive to achieve them (Davis 2006). Organizational structure and employee involvement in setting organizational goals and employee expectations have been found to enhance employee satisfaction and have positive effects on organizational profitability. Communicating With Employees Effective communication in the workplace is one of the most important considerations for both employees and the organization itself to consider. Ineffective communication in organizations can have dire and immediate negative effects. Communication is a powerful factor in organizational performance, in part because it is tangible evidence about what the leadership believes the values for which the leadership stands (Harshman 1999). Research and case studies indicate that much of the communication in today’s bureaucratic organizations does the opposite of what is intended; that is, it contributes to a growing sense of mistrust and erosion of credibility (and faith) in the organization and its leadership (De Greene 1982). Communication is not only an important part of every organization, it is affected and shaped by the culture of a workplace and therefore demonstrates and transmits the characteristics of a workplace culture (Communication 2006). Communication affects every element of employee interaction and satisfaction. Communication is used to convey attitudes of management, work to be done, the direction of the organization, and to share information with co-workers and management. Because there are so many forms of communication available to employees, it is essential that these methods be understood and used in a responsible manner. Specifically important in organizations is the communication that takes place between an employee and their supervisor. Studies have long shown that employees prefer to receive information from their supervisors. They like to receive information from the organization’s leaders, but they want to hear the impact on their work-group directly from the people to whom they report (MacGregor 2006). As this paper addressed comprehensively, there are three main elements involved in the communication process – a message, a sender, and a recipient of the message. However, from these three main elements involved in the communication process, many different issues can arise that corrupt or distort the process. For this reason, organizations need to be vigilant at monitoring their internal communication processes. Communication is an art, not a science and may differ from organization to organization. According to a study conducted by the human resources consulting firm Watson Wyatt Worldwide, organizations that communicated most effectively with employees experienced a return to shareholders of twenty-six percent. In contrast, those organizations that communicated least effectively produced a negative fifteen percent return. That is a forty-one percent swing between companies that communicate well and those that don’t (Holtz 2006). An essential element of the communication process within an organization concerns the ability of employees to provide actionable feedback to management. Leadership must be open to feedback. “Employees need to believe they have a voice in the company and that their input matters. Leadership can’t claim they have an open culture while discouraging two-way communication” (Varelas 2005). Just as important as respecting the employees’ feedback, is actually listening to what employees are saying. Listening is just as important as speaking, when it comes to communication. Supervisors who are good listeners are more likely to have employees who help identify and solve work-related problems (Slagle 2006). In order to elicit positive feedback from employees, there must be an avenue for this communication to occur. Employee surveys, if conducted correctly can provide a good basis of upward communication about issues affecting employees that management is not aware of. Employee surveys are an important tool used by organizations to obtain the feedback of employees on a variety of critical issues (e.g., employee satisfaction, leadership effectiveness and practices, organizational culture and climate, etc.) (Guidestar 2006). Employee Satisfaction and Teamwork Teamwork can be a source of employee satisfaction if it is managed correctly. On the other hand, teamwork can also be the source of contention, employee conflict, and counter productivity if not managed correctly. Teams do not automatically work well as an entity. Effective teams require constant attention and managerial encouragement. The strongest and most consistent factor that increases teamwork is managers encouraging teamwork. When managers help employees work together as a team, resolve disagreements and support team efforts, the groups as a whole exhibit greater productivity and satisfaction (Special 2006). The research is clear that teams can be used in organizations to help leverage knowledge and experience of the team members in order to produce better results for the company. In addition, it has been shown that employees are motivated when having the opportunity to work in effective team environments. An important factor in successful team strategies is the ability of management to allow the team to reach its own conclusions and results without inserting itself unnecessarily into the team forming process. “Critics of teamwork practices argue that despite positive images like empowerment, autonomy, increased discretion and psychological involvement resulting from team based initiatives, such strategies need to be examined closely for such practices are often used to mask the managerial intentions to control” (Sewell 1998). Management must realize that teams are their own entity and require certain stages in order to operate efficiently and for the purpose intended. Employees should be trained on the different aspects of team development and coached through the process in order to have an understanding of the intent and purpose of teamwork. Employee Empowerment An organization can realize many benefits from learning how to properly empower its employees; not all of which are strictly monetary. An empowered employee helps a company improve service delivery, continuously become more innovative, increase productivity, and gain a competitive edge (Ten3 East-West 2003). Employee empowerment comes from the individual. That is not to say that management ceases to have the responsibility to lead the group and is not responsible for performance. In fact, companies that seek to empower employees demand stronger leadership and accountability (Smith 2003). Empowerment is a tool that must be used throughout the organization and not just rest with certain employees on a random basis. Employee empowerment is the subject of many business articles and seminars today. Most organizations think they understands the benefits of employee empowerment and are interested in implementing it because they believe that empowered employees will benefit the organization. Organizations often do not pursue true empowerment because they are afraid of giving up too much control and decentralizing the decision-making process. This notion could not be further from the truth, as empowerment is allowing informed employees to act in the best interest of the organization. “Employee empowerment is a process whereby: a culture of empowerment is developed; information – in the form of a shared vision, clear goals, boundaries for decision-making, and the results of efforts and their impact on the whole – is shared” (Savage 2006). Employee empowerment is a concept that if implemented correctly, is a benefit to all those involved in the service profit chain. Organizations that cultivate a culture that consists of performance-based rewards and empowerment tend to be more nimble and adaptable to change (Clark 2006). Empowerment initiatives also force organizations to change the way they communicate with employees, as it is necessary to communicate things in greater detail and at more expedient paces. Empowering employees to improve the organization will require greater amounts of communication than ever thought possible. Management will be required to spend more time both giving and receiving information (Hildula 1996). Empowerment is not a technique, but rather a philosophy. It is a philosophical method implemented to achieve organizational goal accomplishment, requiring a deliberate and phased transformation in how organizations are designed and managed (Dimitriades 2001). Creating an environment in which employees are motivated and are able to have some ownership in their job is not an easy task nor is it a duty that will happen overnight. Empowering employees is not an overnight proposition. It begins with hiring the right people and training/developing them into the role of empowered employees (Hayes 2003). Interaction in the Workplace Interpersonal relations at work (and away) serve a critical role in the development and maintenance of trust and positive feelings in an organization. The quality of interpersonal relationships alone is not enough to produce worker productivity, but it can significantly contribute to it (Billikopf 2006). Interaction in the workplace can include such issues as workplace boundaries, co-worker relationships, management empathy, and conflict resolution. Although management may not be the source of these issues, they must understand how to identify them and subsequently, professionally address them so that they do not negatively affect the productivity of employees. Managers and supervisors can achieve greater trust from their employees by exhibiting empathetic attitudes. Empathy requires that managers suspend judgment of another’s actions or reactions, while they try to understand them. Showing empathy means listening, listening, listening, asking the right questions, and suspending judgment of the person’s fears or concerns. By understanding employees during the change process, the manager should be able to reduce resistance, counter lower morale, and generally face fewer problems (Bacal 2006). Conflict in the workplace will occur. The key for management, in order to foster greater employee satisfaction, is to recognize the issue early, listen to the employee or employees involved, and take quick and decisive action to resolve the issue. Employee Benefits With the rising costs of healthcare and other employee related benefits, benefits offered to employees is becoming one of the largest expenses incurred by most organizations. Research shows that today’s employees will move to another job just for a better benefits package, even if the pay scale is lower. Benefits can include things like medical, dental, supplemental insurances, flextime schedules, and retirement benefits. Organizations that work with their employees to secure better benefits have a more motivated and loyal workforce than those who don’t. Organizations need to realize that employee benefits are of high concern to their workforce and a very emotional subject. The management of an organization should strive to provide the maximum benefits package as feasible to their employees. Employee Motivation Motivated employees are needed in our rapidly changing workplace. Motivated employees help organizations survive. Motivated employees are more productive. To be effective, managers need to understand what motivates employees within the context of the roles they perform. The most complex function a manager must perform is motivating employees. This is inherently difficult because of the many factors and personalities involved in the process (Bowen and Radhakrishna 1991). Although there are many common factors that exist between individual employees, employees are not all motivated by the same factors. As this paper and other published research has identified, employee motivation is rooted in the field of psychology. One of the most recognized psychological theories of motivation can be found in Maslow’s Hierarchy of Needs theory. Maslow’s Hierarchy of Needs identifies five levels of needs, which are best seen as a hierarchy with the most basic need emerging first and the most sophisticated need last. People move up the hierarchy one level at a time. Gratified needs lose their strength and the next level of needs is activated. As basic or lower-level needs are satisfied, higher level needs become operative. Therefore, a satisfied need is not a motivator (Allen 1998). The basic human needs, according to Maslow are: physiological needs (lowest), safety needs, love needs, esteem needs, and self-actualization needs (highest). This is, therefore, seen as an ongoing activity, in which the man is totally absorbed in order to attain perfection through self-development (Accel 2006). The important conclusion to understand in relation to employee motivation is that it is vital for management to recognize employee motivators and work toward satisfying those motivating factors. Employees must be encouraged and willing to let managers know what motivates them, and managers must be willing to design reward systems that motivate employees (lindner 1998). In the past, managers assumed incorrectly, that all it would take to motivate employees is to pay them more. It is conceivable for an organization to have more employees than a competitor yet produce less and have disgruntled, low-output employees even though the organization is paying their employees more than the competitor. The research has clearly shown that increased motivation and satisfaction can increase worker output. Progressive, innovative managers can now achieve productivity gains with human resource management techniques that go beyond pay incentives (Increasing Productivity 2005). Customer Centricity A truly customer-centric organization is one that defines, markets and sells its products and services from the customers’ point of view. Many organizations would like to think they are customer-centric, but few really are. The key to a customer-centric organization is the ability to accurately assess customer expectations then, meet them. Many organizations that consider themselves customer-centric are really just customer focused, which is a big difference. A customer-focused organization outwardly meets customers’ needs and provides great customer service. However, a truly customer-centric organization is one that creates their strategic business plan around the customer. Rather than management, employees, or profit driving the direction of the organization, the customer and their expectations drive the organization in a customer-centric organization. As is the case with many other deeply rooted theories, becoming customer-centric does not happen overnight, but it is a philosophy that takes time and patience to implement. Customer Acquisition – Branding & Marketing Organizations must continually acquire new customers in order to remain viable, ongoing business concerns. How they do it and what they spend to do it are the keys to effective customer acquisition strategies. Companies can acquire customers through costly, but fast-acting marketing investments, or through slower but cheaper word-of-mouth processes. The long-term success of the company depends critically on the contribution that each acquired customer makes to overall customer equity (Villanueva et al. 2006). Organizations should find effective ways to measure acquisition costs and determine the profitability of an acquired customer by determining the costs associated with customer acquisition. “Whenever possible, acquisition effectiveness should be measured not by “soft” metrics of communication effectiveness (e.g., brand awareness) but by “hard” metrics of profitability” (Greyser and Root 1999). New customer acquisition is quite often the most expensive part of an organization’s marketing budget. It is therefore essential that management understand the effectiveness of these dollars that are spent in order to assess the effectiveness of their acquisition initiatives. Ad spend covers a wide range of media: TV, radio, newspaper, magazines, outdoor, direct mail, trade shows, telemarketing, etc. All, with the exception of outdoor advertising, are capable of cost-per-lead, or cost-per-customer, or cost-per-customer-per-source accountability. It is a prudent task for managers to examine the marketing expenditures that are related to new customer acquisition in order to assess the effectiveness of the money spent on the initiative (Falkson 2004). For most companies today, the recognition that the brand is indeed the reason they exist is more the norm than the exception. In fact, more and more companies today are thinking about their brands in quantifiable terms. For many companies, the brand is seen as having a measurable value and a direct correlation to the bottom line (Davis and Dunn 2002). Brands today have realizable market value and are quite often the target of buyouts. Brands are the profit generating entity that companies are willing to buy because of their earnings potential. “Unilever, one of the largest of global conglomerates, in its efforts to increase profitability, has adopted a strategy of acquiring leading global and local brands. Most recently it acquired Bestfoods, taking over such well-known brands as Knorr, Skippy, and Hellman’s. Earlier, Unilever acquired SlimFast and Ben & Jerry’s” (Gregory 2002). This example highlights the importance of brands to an organization and their potential profitability as a result of brand awareness. Marketing can take many forms and be directed at many segments of the consumer population. Companies should target their customers based on their needs and expectations rather than just blanket all consumers with the same message. Marketing investments need to show demonstrable impact on revenue. Concepts such as relationship marketing are more effective because the messages are more specific to the intended consumer. Unlike traditional advertising and promotion, the relationship marketing approach attempts to build lasting relationships by viewing customers for their long-term income potential to the business, rather than their short-term potential (Commerce 2006). Organizations that understand this and implement effective target marketing campaigns realize a greater return on each marketing dollar spent than those organizations that do not. World Class Customer Service Every organization wants to deliver the best customer service possible, but it takes more than just willing it to happen. There must be employee training, the establishment of customer service standards, employee empowerment, and a method of measurement and evaluation. A genuine service-oriented attitude is a prerequisite for delivering great customer service (Selland 2006). Customer service is an essential element in being able to sustain any business. No matter how wonderful a job an organization does of attracting new customers, they won’t be profitable long unless they have a solid customer retention and service strategy in place – and in action. It’s the actions that count – not what is said, or what the policy may say. Customers will remember what the organization’s employees have done, or not done to deliver the best service experience possible (Clark 2006). Organizations that pay attention to the basics of customer service earn their customers’ respect. Customers can usually accept that problems and errors will occur from time to time in any business relationship. What often matters more to customers than the mistake itself is how these difficult situations are handled. Customers crave the common courtesies, which is not to say that the common courtesies can make up for gross negligence or repeated problems. However, attention to the everyday, common service standards can go a long way to establish trust and rapport and create customer acceptance of the organization’s efforts to resolve problems when they arise (Wheelihan 2002). The first and most important step toward outstanding service is developing a service strategy. Strategy sets the stage and defines the constraints from all the other steps. Overlooking strategy and rushing headlong to improve is always a mistake (Klein 1999). Organizations must then openly share the strategy with their employees and be willing to train them if it is needed. One of the most important aspects of delivering great customer service is the ability to monitor the achievement of customer service delivery goals. Many organizations feel that as long as sales are growing, they must be delivering great customer service. However, it has been shown that this may not be the case at all. Research has shown that it takes up to six times the investment to acquire a new customer as to keep an existing customer. Therefore, it makes sense to measure the level of customer service the organization is delivering (Saxby 2006). There are many reasons customers quite returning to a place of business. Four percent move away, five percent change their purchasing habits, nine percent defect to the competition, and fourteen percent leave because they are unhappy with the service they receive. However, an overwhelming sixty-eight percent leave because they encounter an attitude of indifference (Selland 2006). Organizations that go about strategically improving their customer service delivery and follow-up to ensure that it is working will realize greater customer retention over time. Customer Expectations As technology improves and faster and more efficient methods of customer service evolve, customer expectations rise. Successful service efforts of the past contribute to customers’ attitudes, raising their expectations with each new technology, each new approach. Even as customer expectations continue to rise, surveys find customers and consumers find broadly based dissatisfaction with the general state of customer service (Colombo 2006). Managing customer expectations is not a straightforward proposition, as it can be a daunting task to assess what the customer wants ahead of the customer service delivery. Managing customer expectations is a tricky business because it is those very expectations that often provide a substantial competitive advantage. Customers often make choices between two or more suppliers of goods and services based on what they expect in the way of quality and service (Francese 2002). 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