Sunday, March 25, 2012

3 Reasons Why Employees Are Frustrated & 3 Things You Can Do About It


That's the common theme I see running through much of the research and news I read lately. And the frustration seems to run along three levels:

1) Employees sense more barriers to getting the work done, even as they are asked to do more with less.
I can do no better than to cite the excellent work of Hay Group Analysts Mark Royal and Tom Agnew on this point in their new book The Enemy of Engagement: Put an End to Workplace Frustration – and Get the Most from Your Employees. Frustrated employees are also engaged employees. If they weren't engaged – committed to the success of the organization, they wouldn't be frustrated. These highly engaged employees know they can do so much more, but feel shackled by processes, procedures, bad bosses, poor communication or other minutiae that keeps them from doing what they know they can do and what they know the team, the customer or the company needs from them to succeed.

2)  Companies sitting on loads of cash and not reinvesting that back into the workforce.
The news has been full of stories in the past few months of companies hoarding cash, reporting that "even accounting for a massive safety cushion, at least $1.4 trillion of those reserves should be considered excess."

The reaction from "average employees" in large part seems to be one of anger, dejection and an ever increasing loss of loyalty to the organization. It would be disingenuous to express surprise at that reaction. When the recession first hit, employees who survived rounds of layoffs overcame their survivor's guilt and took on the roles of laid-off colleagues. After three years, these employees continue to do yeoman's work covering multiple roles, but don't see any end in sight.

While research reports show employees are working at highly productive levels, employers seem to think they can keep working at that level indefinitely. So employees who "took one for the team" are now frustrated to see loads of cash hoarded instead of reinvested into hiring to backfill those positions and help the company (and the economy) grow.

3) Executive compensation and bonus structures that make no sense – not even to investors.
More and more investors and average Joe's alike are demanding reward transparency, and it's easy to see why based on this latest research out of Towers Watson:

"Are companies in denial when it comes to executives' annual bonuses for 2011? Judge for yourself. Among 265 companies that participated in a newly released Towers Watson survey, 42% said their shareholders' total returns were lower this year than in 2010. No surprise there, given the stock markets' flat performance in 2011.

"Yet among those that reported declining shareholder value, a majority (54%) said they expected their bonus plan to be at least 100% funded, based on the plan's funding formula. That wasn't much behind the 58% of all companies that expected full or greater funding.

"'It boggles the mind. How do you articulate that to your investors?' asks Eric Larre, consulting director and senior executive pay consultant at Towers Watson. Noting that stocks performed excellently in 2010 while corporate earnings stagnated — the opposite of what has happened this year — he adds, 'How are you [the executive] going to say to them [the investors], "We made more money than we did last year, but you didn't"?'" 

So what do we do about it? The answer is fairly simple:

1) Knock down the barriers. Trust the people you've invested in to do the job you hired and trained them to do. Yes, supervise their activities, but be sure you're not instituting "processes" for the sake of processes.

2) Spend the cash and hire people already. If your organization is sitting on a huge cash reserve as a hedge against a double-dip recession, you're inadvertently contributing to that eventuality. Notice how overworked and stressed your employees are. Help them out already and loosen the purse strings. Hire the talent you know you need to grow while giving your current staff room to breathe and refocus their efforts and skills where they can truly excel.

3) Eliminate ridiculous bonus structures and bring compensation (at all levels) into alignment. Sure, I know this won't happen overnight. But someone has to start somewhere. Towers Watson has done a brilliant job of calling this to light in their most recent research, now what are you going to do about it?

What's causing you frustration in your organization?

As Globoforce's Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. His articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management.

Thanks to Derek Irvine / Compensation Café


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