Performance Management: Motivation by the Experts

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Through our training and development studies, we have learned that motivation is a critical component for on-going employee learning. If there is nothing that provides motivation for employees to learn, then professional development, productivity, and growth will not happen. Motivation can be both positive (reward driven) or negative (error driven), but in either case it provides the prompt for an employee to alter their job-related performance.

HRM Online provides a Human Resources perspective on effective motivation in the context of performance management processes.

Click here to watch a video of Human Resources panelists discussing effective motivation-based performance management strategies.

As noted by the experts in the video, part of culture of continuous learning is a culture of continuous conversation. Employees want to know how they are progressing in their jobs and they look for more than just monetary rewards in order to feel valued in the workplace. As such, it is critical to teach leaders how to have discussions regarding on-going employee development.

The simple motivation of a one-time monetary reward wears off quickly and is often forgotten by the next payday. To counter this, each of the professionals in the video provides a perspective on the value of an ‘always on’ communication focus, and a relationship-based approach for effective employee motivation and performance management. Furthermore, the panelists note that while there is a trend to have only goal focused (‘feedforward’) interactions with employees, people still want to know from their direct manager what was successful in the past and what was not. In order to shape the future in a different way, employees learn from what they have or have not done successfully, and they want to hear this from the person they report to.

Talking to employees may be easy; having effective conversations with them may be much more challenging. However, the result is value that stems from both the motivation and the reward of positive relationships.

 

Discussion Questions:

  1. Which one motivates you the most in a working environment — effective working relationships, or annual monetary rewards? Explain your rationale.
  2. Why are structured performance ratings important in a regulated industry or profession?
  3. As an HR practitioner, identify four motivational elements from the video clip that you would include in an effective performance management program.

Paying the Price

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When is the last time you had to ask for a pay increase? For many Canadian workers, approaching their employer to ask for more money is not high on the list of job-related things they enjoy doing. While there are many valid reasons that an employee might have for requesting a pay increase, there is no guarantee that the response from the employer will be one that meets the needs of that request.

A recent study by the American-based PayScale compensation software firm, offers an uncomfortable set of findings based on a wide-reading survey exploring issues around pay raise requests.

Click here to access the summary of PayScale’s survey.

The results of this survey are analyzed in a corresponding article posted recently by Harvard Business Review.

Click here to read the article.

From a compensation management perspective, some key messages emerge about the connections between constructive/pro-active compensation strategies versus negative/negligent compensation approaches and their direct links to employee retention. Unsurprisingly, the survey provides statistical evidence showing that when an employee is denied a wage increase, there is a high probability that the employee will be on the path to exit from that employer.

While the survey and the results are based on American companies, they show an alarming connection between race, gender, and the denial of pay increases—this contrasts with much lower rates of pay-increase denial for white males. As Canadians and as pro-active Human Resources practitioners, we must take these statistical results seriously and consider them in relation to our own workplaces to ensure that our compensation practices, especially as they relate to race and gender, do not follow the same statistical paths.

Good compensation planning must be neutral, pro-active, and fair so that Canadian workers can focus on the things they do enjoy doing.

 

Discussion Questions:

  1. Based on your own experience as an employee, what would you do if your request for a pay increase was rejected by your employer?
  2. From the perspective of an HR professional, develop a script for supervisors/managers to use when telling employees why they will not be receiving the wage increase they have asked for.
  3. Identify three positive and three negative aspects of a differentiated compensation system (wage increases granted or denied based on individual requests).
  4. Identify and explain three key compensation methodologies that can be used to ensure an objective, fair, and pro-active approach to individual wage requests.

The HR Pressure Cooker is Heating Up

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Wages have always been at the forefront of any HR Department’s concerns, but it seems we are now approaching boiling point and that something may blow. Recruitment company Hays notes in its 2018 Salary Guide “a building pressure and awareness around compensation that [they] have not seen in previous years.” (Hays 2018 Salary Guide, p. 20.)

What does this mean for HR Departments? It is clear that they are feeling the pressure. Eighty-five percent say they want and need to improve their compensation plans in order to hire and retain top employees, but according to the Hays study, only 24% of HR Departments are allowed to offer more than a 3% compensation improvement.

Here is where the pressure is building for HR Departments — in recruitment. Compensation challenges and an inability to hire locally sourced talent is making it very difficult for HR departments.

The pressure is on, then, for HR to develop sophisticated, integrated strategies that address compensation levels, organization culture, and recruitment challenges. Perhaps HR professionals will increasingly need to show evidence-based research to convince senior leaders that they may have to increase their compensation budgets in the very near future.

 

Discussion Questions:

Research companies that lead the market with their compensation strategies. Identify why they have pursued these strategies.

Develop a 3-minute presentation to convince a Chief Financial Officer that an increase in the compensation budget is needed.

 

Tack You – You’re Welcome!

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IKEA’s business model works very well, with its focus on low cost, flat packing, and distinctive style. However, there’s something else at IKEA that’s working very well — their employee compensation model. In 2015 IKEA raised its minimum wages.

Click here to read about IKEA’s wage boost.

IKEA is committed to providing its employees with a living minimum wage. It also understands the benefits of performance bonuses. Recently, the company created an employee loyalty program it called Tack!, which is Swedish for “thank you”. The following milestones suggest IKEA is doing something right with its Tack! program:

  • IKEA has increased its total revenue from 20 billion euros to over 36 billion euros
  • It is the number 1 furniture retailer in the world
  • It is the number 5 retail brand in the word.

David Hood, Country Retail Manager of IKEA Australia, describes the program as “build[ing] something for the future and giv[ing] something back … by building a long-term relationship with employees.”

IKEA’s basic compensation program has wages that are above the jurisdiction’s minimum wage — they provide benefits and now, with the expansion of the Tack! program, all full time and part time employees with over 5 years’ service will get an annual bonus based on IKEA’s performance in that country of operations.

Click here to read more about IKEA’s Tack! program.

In Canada, the Tack! program has paid out $145 million to its employees this year.

Click here to read about the Tack! program in Canada.

IKEA is an excellent example of an organization that understands that compensation, benefits, and bonus systems are key tools in a successful business.

 

Discussion Questions:

  1. Identify the pros and cons of paying front line retail workers a minimum living wage when it is above the minimum wage required by law.
  2. Research and identify the cost of high staff turnover and the relative benefits of employee retention in the retail environment. Summarize your findings by creating a 5-minute presentation.

 

 

Brain Learning

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Human beings have amazing brains. We are able to think, create, and produce at an astounding rate thanks to the thousands of cell-based activities that take place in our grey matter. Most importantly our brains allow us to learn, and to keep learning, well into mature adulthood.

In his article, Inside the Learning Brain, Nick Dam provides a framework for effective corporate learning based on the theories of cognitive neuroscience – brain learning.

Click here to read the article.

In order for corporate learning to take place, Dam confirms that adult learners must have an environment that allows for focused attention, high engagement, and single-tasking. At the same time, the environment that supports adult brains for effective learning is shifting rapidly through the ever-increasing intervention of external technology, especially social media.

The impact of this type of environment and its effect on learning is explored in the following clip: What the Internet is Doing to our Brains.

Both the article and the video clip support a common premise that we need to embed information into memory in order for learning to take place. This is called memory consolidation, which allows us to build knowledge; built knowledge allows for new learning to take place. This type of learning happens when our brains are allowed to be peaceful and focused. As we see in the video clip, memory consolidation and learning is becoming more challenging as our technology-driven brains crave the external stimulus of constant interruptions.

From a training and development perspective, the challenge for the Human Resources practitioner is to create the conditions and the space that enable effective learning to happen.

We need to work hard to figure out how to do this — but first, one more cute kitten video.

Discussion Questions:

  1. How much time per day do you give yourself for quiet contemplation, with no external distractions?
  2. Thinking of your own learning patterns. How much information have you retained from yesterday’s Internet searches?
  3. Are your work or study patterns focused on single-tasking or multi-tasking? Which pattern is easier? Why?