Posted 25. 11. 2019
Squeezing employees out in times of economic growth and dismissing them when recession starts is becoming increasingly short-sighted approach which more and more companies leave behind. On the other hand, well-being and potential development are gaining in importance, and companies want their employees to work with internal motivation stemming from enthusiasm, not from the prospect of a quarterly bonus. At least, this was one of broad agreements among the Human Capital 2019 conference’s participants.
The main ideas of the program revolved around key performance indicators. How should we set up and measure our KPIs? And – which was very provocative for many people sitting in the hall of the Czech National Bank – should we use them at all? Or, in a case we use them, is it good to make them transparent and accessible for all employees?
“Do we set any KPIs in our marriage or partnership? So why should we do this when we start a business? ” Tomáš Vodenka from VORK Consulting asked the audience. According to him, across-the-board implementation of these metrics hampers team performance and actually it serves only as a pseudo-control tool if management does not trust its employees. "The real key to business growth is people who know what to do, but above all why they should do it and they have to have the opportunity to do it on their own," he added, saying wringing people when things go well and dismissing them during the crisis is costly. "You should invest to your employees’ development in the time of economic growth, and they will anchor you in worse times because they will know that you will take care of them," Vodenka added.
No premiums, no cry
Alena Střížová from the drugstore chain dm drogerie markt shared her experience with a corporate strategy without performance-related wage premiums. “In the early 1990s, when the chain entered the Czech market, it seemed that this employment policy could not stand-up in the post-revolutionary environment. But it was successful,” Střížová said, talking about trying to stimulate people's internal motivation, especially through careful communication. "Every warehouse worker or shop assistant knows exactly what to do, why and whom to ask for help in a case of a problem. That is the only way for us." And it works, apparently. According to internal surveys, 86 % of people rated the company as a good employer. Although, according to Střížová, an equal pay for all the employees on the same position does not motivate everyone and for 5 % employees this is the reason to quit , in recent years the fluctuation has been continuously decreasing by 2 % year-on-year.
Even the Lidl grocery chain does not have a variable wage component. As the HR director Simona Hryzáková summed up, the aim is to accentuate internal motivation and an effort to do a good job with the help of the whole team. “When a few people are missing due to illness and you, as a store manager, need colleagues to take a stand-by instead of their time off, it is better if they do it working for team spirit. The prospect of bonus could also change dealing with your colleagues in a direction that is not desirable in a long-term perspective,” Hryzáková explained. In recent years, Lidl has been known for a significant wage increase for all its cashiers and employer branding campaigns. It compensates the absence of variable wage component by other benefits.
From colleagues to community
The question of corporate belonging is also the topic of the upcoming Deloitte research which will be released next year. "The results have not been completed yet, but everything suggests that most companies feel the need to focus on it, but they do not know how to strengthen this feeling in employees," Pavel Šimák, the Head of the Human Capital Advisory Team at Deloitte, revealed during his presentation dedicated to conclusions of the Global Human Capital Trends study for 2019.
The Starbucks coffee chain has a variable pay component and relies on carefully built and adhered corporate culture and strives for employees’ unity. No matter the management discusses openly who, how much, and why – every month. Key performance indicators are also commonplace here. “We have never fired anyone because of undelivered KPIs. It has always been related to non-compliance with our corporate culture and our core values,” Petra Kolářová, the Starbucks HR manager, commented about her long-standing experience in the company.
Find your own rocket
The conference showed how attitudes of companies to employee benefits and other ways to motivate their people can vary. “Our developers have a nice starting salary, a variable component, they get shares and our company well-being have plenty of possibilities. For example, the employees have found a masseur who comes to our offices regularly,” Šárka Vernerová from Red Hat said. “Benefits like this are something you won't find in SpaceX. Because when you pass by a rocket that has just returned from space on your way to your office every morning, it's so cool that you don't need anything more. That is why you burn the candle at both ends for half a year and the result of your work takes 24 minutes. The rocket launches successfully and it is all over, but the feeling is worth it,” David Pavlík, a CIO at Kiwi.com, shared his unique experience. He headed to the USA years ago from the Czech Microsoft subsidiary and he continued through Amazon and Netflix up to SpaceX. For the rest of the day “Having your own rocket” became an often mentioned metaphor symbolizing the discussed employees' internal enthusiasm.
According to analyzes by BehavioLabs, there are 13 % of people in Czech companies who are real enthusiasts. “It's neither too much nor too few. But the fact is that there are three times more enthusiasts in the public administration, which, despite a continuous shift to the better, cannot compete with the private sector in terms of wages,” Lukáš Tóth, a behavioral economist and a co-founder of BehavioLabs said. According to him, local companies make several basic mistakes. “For example, we don’t know how to praise. A mass e-mail saying ,last month we succeed in this and that and it wouldn't work without you’ is totally meaningless,” Tóth explained. Another shortcoming concerns leadership: “As a specialist, you are accustomed to having a boss, at best, giving you a good feedback. But then you promote. And not only will the company lose an expert in the current position. Suddenly, you have to be able to lead other people, no one will tell you anything, only the results of your team are expected and nobody praises you for success. That's why a third of directors want to get back in junior position after some time,” Tóth added.
Performance vs. Potential
BehavioLabs' findings complemented one of the previous lectures on the ability to seek and develop talents. In the Deloitte study, 69 % of respondents thought talent search was an important issue, but only 6% thought their organization had the best practices and technologies to do so. Barbora Riedl Černíková from SHL Talent Assessment presented this topic. She focused on the relationship between performance and potential, and surprised the audience by statistics: 85 % people with high performance do not have high potential at the same time. According to Černíková, talent and potential have three components: motivation (“I want”), intelligence (“I can”) and skills (“I do”). And to succeed a combination of all three is needed. “If only two of them meet, it usually grinds somewhere. A capable person who can lead people but has no motivation will quit sooner or later. A motivated person with knowledge but with a lack of ability to lead people cannot stand a crisis,” Černíková outlined. Therefore, SHL offers a combination of motivational and value questionnaire, cognitive test and personality questionnaire. "The results can then be compared with the rest of the population, which is always better than a comparison just within the company," Černíková added.
Intoxicate your employees with your own zeal
The Human Capital 2019 conference program also touched on internal mobility, which is closely related to the development of talents and unveiling employees’ potential. According to Pavel Šimák of Deloitte, 67 % of the respondents of the previously mentioned research found it easier to find a new job than to be relocated within an organization. At the same time, 54 % believed internal mobility increases employees’ engagement. In the words of Simona Hryzáková, Lidl carefully monitors the correlation between external and internal "resources" when filling positions. “In many ways it is better to raise your own talents. We are pleased that in some positions we could turn off external recruitment completely because we are able to find the right person inside the company,” Hryzáková said. Petra Kolářová from Starbucks added an example from her own ranks: "We have a district manager, in charge of nine cafes in Prague, who has started as a part-time barista."
Strong employee engagement is, in addition to the possibility of growth, unequivocally linked to corporate openness, access to information and knowledge of their context. For this purpose, Roman Cabálek who has many years of experience at Microsoft, including the post of the General Manager for the Czech Republic, had opened his own KPIs for other teams and departments. "It was not usual, but I allowed others to come to me anytime and say ,your KPIs don't suit me, I need to set them differently‘," Cabálek, now working as a coach in Better Decision Making Group, said.
Some people do not have the courage to reach such a degree of openness, for the others it is the best way. “We were wondering how to ,intoxicate’ our employees with our own zeal we felt as founders and owners. We defined what made us enthusiastic to work,” Martin Bazala, co-founder of a development firm Raynet from Ostrava, described the experience in the company. They found that it was primarily access to information and knowledge of causality. “It means to understand exactly whetehr there was a profit or lost last month and why. At the same time, it is also necessary to be able to influence these causalities, to have a voice and respect. And then money, of course,” Bazala added. It took a while at Raynet and the changes took place in gradually. Today, after 15 years, the company has made all employees' wages public within the team, they exchange feedback regularly. The debate was also triggered by the rule of "undismissness" introduced by the company. The aim is to give employees a sense of security and the ability to express their opinion about anything openly. “After three years, people either leave us or get a contract amendment. We are legally dealing with it by a generous golden parachute, but our goal is never to use it,” Bazala said. According to him this policy implemented six years ago has been successful so far.
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