INTERVIEW

INTERVIEW

September 3 2007
INTERVIEW

INTERVIEW

September 3 2007

INTERVIEW

Trom a boomer’s perspective, Generation Y look like slackers. They have an expectation of feedback from video games.'

BOB NELSON, AUTHOR OF ‘1001 WAYS TO REWARD EMPLOYEES,’ TALKS TO KATE FILLION ABOUT WHY MONEY MEANS LESS AT WORK THAN THANKS

Q You wrote your Ph.D. dissertation on informal recognition in the workplace, your latest bestseller is 1001 Ways To Reward Employees, and you’re known as “the guru of thank you.” Why isn’t the paycheque enough, why do employees need praise and thanks?

A: The No. 1 reason people leave their jobs today is that they don’t feel recognized for the job they’re doing. Peter Drucker, who’s the father of modern management, once said that money is always used initially to reward performance, but in no time at all it becomes an expectation and eventually it becomes an entitlement. People expect to get a raise just for sticking around another year. And in the typical organization, only three per cent of the base pay separates average from outstanding performers; there’s no alignment of compensation around performance. But not everyone gets recognition, and that’s partly why it means so much, and why if someone’s getting it, they’ll think twice about leaving that job. You can pay people well and give good benefits, but if the experience employees have is that they’re not valued, they’re not learning, they’re never asked their opinion, they’re never supported when they make a mistake—well, there’s nothing to stay for. Part of the issue, I think, is that in fast-moving, dynamic times, you can’t hang your hat on the predictability of what’s going to happen 20 years from now, you can’t trust that

an organization is going to take care of you. That means it’s more important what the here and now looks like, which is why being thanked, and having access to a manager is much more important.

Q: So it’s quid pro quo: you give them recognition in order to get them to stay?

A: The most important principle of management is that you get what you reward. It’s a common sense notion: what you recognize and thank people for, you will get more of. Although everyone knows that, most managers don’t do it very well because they’re focused on other things, and they end up taking their best people for granted.

Q: How do you avoid it feeling corny or phony if people are being praised all the time?

A: There are actually four types of praise: personal, written, electronic or public. It’s one thing to be praised to your face, but another to get a written note you can post on your wall or take home to show your family. And yes, if you’re praising people the same way all the time, it tends to lose some of its value, particularly if you’re praising in an undifferentiated way: “Everyone’s doing a great job, thanks for being here.” After a while that doesn’t mean anything, you start thinking, “Why are you saying the same thing to Gary, when you should be firing him? I cover for him half the time!” But being thanked is just a starting point; recognition comes back to what’s important to employees. It might mean job-sharing, telecommuting or giving someone Tuesday afternoon off to attend

their kid’s school play. When you support someone to do something like that, you know they’ll be there when you need them to work late or take a project home.

Q: But not everyone should get the same privileges, right?

A: Fewer things are as unfair as equal treatment of unequals in the workplace. Good management differentiates around the extremes, rallies around the performers who are making things happen and takes on those people who aren’t performing by saying, “If you’re not up to it, you have to find a different place to work.” And you need to set up things that are valuable to employees in such a way that you will get from them a better response. A Canadian example: I was working with a newspaper in Vancouver and they bartered ad space with the local gym and gave all employees memberships. But when you give something to everybody, it doesn’t mean anything to anybody. I told them to stop doing that and instead make memberships available only to top performers, and suddenly more employees would strive to improve their performance, and it would be an elite performers club hanging out at the gym and more and more people would want to do that.

Q: A lot of people have the impression that entry-level employees have a greater sense of entitlement and are more high maintenance than in the past. Are there really generational differences, or have managers always been saying this about juniors?

A: There are definitely generational differences. Today there are four different generations in the workplace, and they each have a different value set. If you’re managing other people using the values you hold dear, there may be a disconnect.

The oldest, the Silent Generation, includes employees currently above the age of 55They tend to be traditionalists. They’re there to do the job, often view it as a job for life, and they’re comfortable working alone and knowing you trust them to do a good job. Next are baby boomers, born 1946 to 1963, who account for just over half the workforce in many organizations. They’re a little more me-focused, more individualistic, more likely to be workaholics and to be seeking workfamily balance. Then there’s Generation X, born 1964 to 1981, who can be a pain in the butt though they’re much more resourceful and tech-sawy. Personal relationships are much more important to them, as is time with the boss and the ability to participate in volunteer activities. Last is Generation Y, which is much more comfortable having the whole job wrapped around them and their lifestyle, even to the point of doing 100 per cent telecommuting. They’re excited about what they’re doing every day and who they’re working with, the money isn’t the top thing. Paying them more doesn’t do it for them, but giving them the flexibility to take a three-day weekend so they can do something with their friends just might.

Q: What’s causing these differences? The self-esteem movement in the schools, or the fact that the two youngest groups grew up watching kids make fortunes in dot-coms and that gave them higher expectations?

A Those are both factors. From the perspective of a boomer they can just look like selfish slackers who come to work late, but from their perspective, they want to feel they’re making a contribution, not just working for an organization that’s making money. They’re unbelievably skilled with technology, they’re used to wearing many different hats and working fast—those are some of the attributes we most need from employees today.

Q: But what about this recent research finding that college students are 30 per cent more narcissistic today then they were in 1982? Isn’t that borne out in the workplace?

A: I don’t find them narcissistic as much as having a high expectation of feedback. From a behavioural standpoint, playing a video game, which all kids grow up on today, the amount of feedback averages 60 times a minute. You take the same kid who’s had years of that type of instant feedback, drop

him into a job and tell him to say, “And do you want fries with that?”—of course he’ll be bored out of his mind from the very first day, from the first hour. You can say that’s kind of an attention disorder and you’ve got to constantly be stroking them, but it’s very practical too, because feedback is how you learn and grow, instead of being stuck in a cubicle and told to work on a stack of stuff and not feeling connected to something larger than yourself.

Q: But somebody has to make the coffee and do the photocopying.

A: Sure, but you need to position that within the greater context of the potential of what they have to offer. I was recently working with 300 franchise owners of Pizza Hut in Wisconsin, and they were bemoaning how you can’t get people to work today, you can’t pay them that well and they don’t stay, and initially I was sympathetic. But then I said, “Raise your hand if you ever made a pizza.” Every hand went up. “Raise your hand if you ever delivered a pizza.” Every hand went up. They’d all held those supposedly dead-end jobs, and they were actually stepping stones to a great future. That’s the story managers need to tell. The role of a manager is to take someone in their first position of responsibility and line them up to be something. That’s what Starbucks does. And instead of saying “we’re going to save a bundle on benefits by using part-time people,” they give people benefits at 20 hours, so they’ve got a piece of ownership symbolically and that’s very important, to feel you’re on a team and your ideas are valued. For that reason you’re more likely to feel a sense of connection to people at Starbucks. It’s not uncommon to hear from regulars that their drinks are made as they’re walking in the door.

Q: Can you quantify the effects of praise and recognition using hard measures?

A: Probably the strongest area where the connection is made is through employee retention, though there’s also an effect on performance and ultimately the ability to attract employees. I recently worked with Bank of America where, by focusing on recognition, they were able to move employee satisfaction over a five-year period from 58 per cent to 85 per cent. They cut their employee turnover in half, which meant that last year, they didn’t have to interview, hire and train 94,000 new employees. So there’s more stability in the individual branches and they can focus on delivering good service to the customer, who in turn is now more likely to stay with that bank and open more accounts. The soft, fuzzy notion of recognition has a huge bottom-line impact.

Q: Is there something particularly North American about needing so much of it?

A: There are big cultural differences. In the Far East, the typical way to reward employees is with extra months of pay based not on individual performance but on how well the company did, and also how long they’ve worked for the company and how large their family is. That’s fine unless you’re in a world economy where other countries are better at driving performance because they reward a performer’s results. I’m doing work in China right now, where there are basically two types of workers: those who come to work and that’s their life and they do whatever they’re told, and the younger employees who are highly savvy, highly technical, single children who are extremely spoiled and who quit in a heartbeat. Because of population growth and the mandate that you could only have one

'Sixty per cent of Canadians say they don't get recognition from managers when they do a good job’

child, there’s a whole society of single, favoured children who now are in the workforce, and no one has any idea how to manage them.

Q: How does Canada stack up versus the U.S.?

A: Canada is a kinder, gentler place, but about 60 per cent of Canadians say they don’t get recognition from their managers when they’ve done a good job, compared to 58 per cent in the U.S. Still, I think it’s easier for Canadian managers to deliver recognition than in the U.S., where they tend to be hard-charging and to feel they don’t have the time, they have to make their numbers. I think in Canada there’s more respect for the worker. M