The Puzzle of Motivation by Resource Solutions Group

2. THE PUZZLE OF MOTIVATION A N R S G W H I T E PA P E R • W W W . R S G - P L C . C O M

ABOUT RSG Built on over 35 years of trading history, RSG has grown organically, and through the acquisition of specialist services, into an established selection, assessment and solutions driven resource provider. RSGâ&#x20AC;&#x2122;s focus is on strong partnerships; we have developed solid relationships with our candidates and clients since our inception in 1975 and this is reflected in the repeat business and referrals that our specialist companies receive. Our family of companies, including Sanderson and Resource Management, gives us an understanding across a variety of market sectors including: permanent and contract recruitment through to executive search, bespoke recruitment campaigns, advertising campaigns and total recruitment outsourcing. This knowledge empowers us to provide our clients with an independent, innovative and proven response, every time.

ACKNOWLEDGEMENTS RSG would like to thank all Debate participants for their valuable time and contributions. In particular, we would like to thank Andrea Cartwright, Group HR Director of SuperGroup Plc, for leading the Debate and Lynn Hanford-Day, Independent HR Consultant, for reviewing this white paper.

CONTENTS 02 About RSG 02 Acknowledgements 03 Contents 04 Foreword - Andrea Cartwright, Group HR Director, SuperGroup Plc 07 Models of Motivation - Moving Motivation Strategies into the 21st Century 11 Case Study - The Candle Problem 12 Investing in Employee Engagement 14 Start Big Conversations 15 Appreciate the Little Things 16 Allow Greater Flexibility 17 Create a Greater Purpose 19 Case Study - RSG Million Makers 21 The Importance of Strong Leadership 25 Simplifying the Performance Management Process 26 Conclusion - Mike Beesley, CEO, RSG 28 Guest Profiles 30 Contact RSG

Resource Solutions Group (RSG), has secured a prestigious place on the Sunday Times Grant Thornton Top Track 250, listing the UKâ&#x20AC;&#x2122;s top midmarket private companies as published by Sunday Times Business Section.

FOREWORD From Andrea Cartwright Group HR Director, SuperGroup Plc In every HR role I’ve held over the past 20 years, I’ve rallied the organisation behind implementing performance management practices, often alongside introducing variable pay. Looking back I question, was it worth it? Has all that time and effort really delivered the outcomes we were seeking? Has it made the change in performance that we hoped it would?

Have we really delivered a return on

investment? Performance management processes tie up huge amounts of our managers’ time, yet they continue to lack the skills and confidence they need in order to motivate employees to be at their best. Furthermore, employees themselves often dread the whole process. Where differentiation of pay is concerned, I’ve found that you often gain a few happy people, but the vast majority, despite receiving what would traditionally be considered a good bonus outcome, are unhappy because others receive more than them and they question why.

Performance management processes tie up huge amounts of our managers’ time, yet they continue to lack the skills and confidence they need in order to motivate employees to be at their best.

During my first year at Nationwide, I focused my time on implementing performance management and performance related pay structures. For the majority of employees we removed the ‘profit share’ type bonus that was linked to Group performance results. In its place we implemented individually differentiated bonus payments based on the principle of a standard distribution of performance ratings. For sales consultants their reward was based around driving sales – all within the boundaries of treating

customers fairly – whilst meeting their financial needs,

that we often tread as HR practitioners and to try

of course. For this department in particular, it had a very

something different. I don’t have all the answers, I’m

beneficial effect.

not sure any of us do, but I do now strongly believe that traditional performance management is the wrong

I have since met with Tony Prestedge, COO of Nationwide,

answer.

and we debated whether we did the right thing. We both agreed that we were no longer convinced that the age

Instinctively I think we can all relate to Dan Pink’s

old theory ‘better pay drives better performance’ is the

philosophy that purpose, autonomy and mastery are

way forward in every case. We referred to the catalyst of

key drivers of the engagement utopia that has become

this debate, Dan Pink’s book entitled ‘Drive’. Pink sets

a big focus of HR in the last 5 years. David McLeod in

out the scientific evidence that performance related pay

his “Engaging for Success” work identified very similar

and ‘carrot and stick’ reward schemes, the sort many

drivers – shared purpose, engaging leaders, employee

organisations use to drive performance, actually inhibit

voice/involvement and aligned values and behaviours. I

rather than enhance performance. He cites a software

analysed the data that came as a result of an Employee

business which, having read the book, removed

Motivation survey at Nationwide and found that the

commission bonuses from their sales team, added the

key drivers of motivation were very much the same as

difference to their base pay and were astounded when

those suggested by Pink and McLeod. It was also found

sales performance increased.

that ‘big conversations’ with employees also play a significant part in understanding our people better and,

Upon arrival at my current employer, SuperGroup, I was

consequently, what really drives them.

presented with a completely blank sheet of paper as Group HR Director. What I walked in to - virtually no HR

So, how do we make these things happen in the

practices and processes to unpick and replace – was

corporate world? The concepts are easy to grasp, but

a once in a lifetime opportunity to take the very best

aren’t they much harder to deliver in the real world? To

of what I had learnt over the past 25 years and use

discuss these questions, I was invited by Mike Beesley,

it to create something amazing that could truly propel

CEO at RSG, to lead the Debate event at Bentley’s

SuperGroup to the next level of success. The culture

Oyster Bar & Grill in Mayfair, London. The evening

is quite different to previous organisations I have been

presented a rare opportunity to meet with some of the

involved with; hugely entrepreneurial, very creative

UK’s leading HR professionals who represent a variety

and more emotionally - less rationally - driven. We

of industries from Financial Services and Retailing, to

do need some process in order to be able to operate

Construction and multi-national FMCG brands. This

effectively, but I’ve found that there is a fine balance

white paper comprises the insights and ideas that

between freedom to act and leveraging an element of

were provided throughout the Debate as well as some

governance and efficiency. It has left me thinking deeply

additional research into the secret behind employee

about whether it is time to step off the traditional path

motivation in the 21st century.

For straightforward tasks that involve only mechanical skill, monetary incentives work as you would expect â&#x20AC;&#x201C; the better the reward, the better the performance. However, for tasks involving even rudimentary cognitive skill, a larger reward actually leads to poorer performance.

MODELS OF MOTIVATION MOVING MOTIVATION STRATEGIES INTO THE 21ST CENTURY For most businesses a strong employee motivation

view the modern workplace. Looking at various scientific

strategy is at the top of their objectives. The reasons

studies into how well people perform when offered

for this are clear: a successful employee motivation

different incentives, Pink found that for straightforward

programme increases employee engagement, improves

tasks that involved only mechanical skill, monetary

overall work performance, reduces staff turnover and

incentives worked as you would expect – the better

leads to a strong and loyal workforce. In addition to

the reward, the better the performance. However, for

supporting and enhancing overall company objectives,

tasks involving even rudimentary cognitive skill, a larger

a successful programme of motivation works as an

reward actually led to poorer performance. Furthermore,

attraction tool in itself – dedicated and fulfilled employees

the London School of Economics studied 51 different

will inadvertently advertise a company as an employer

pay-for-performance plans. Their conclusion: “We find

of choice. However, despite there being such significant

that financial incentives can result in a negative impact

advantages to play for, many businesses are putting

on overall performance”2.

too little focus on employee motivation, or are seeing minimal results from their efforts.

These findings suggest that for occupations which require even a fraction of creativity, bonuses, commissions

So why is this? When we ask ourselves how we can

and monetary incentives yield no positive influence on

motivate our employees, the time-honoured answer

performance. On the contrary, they have been found to

is simple – we incentivise them. The problem is that

hinder employees’ creativity and pigeonhole their ability

incentives come in many different guises and all too

to achieve their full potential. With this in mind, why

often businesses focus on money in order to drive their

do employers continually insist on taking a carrot and

staff. This concept may seem entirely logical; the more

stick approach to employee motivation when science

you pay someone for completing a task well, the better

has proved it to be an outdated and often ineffective

they will perform - great! Except that in many cases,

method of reward? What other models have been tried?

monetary incentives alone don’t work.

Did they achieve greater success?

For evidence of this we can refer to a TED Talk entitled

We must bear in mind that incentives and their

“The Puzzle of Motivation” led by Dan Pink , a bestselling

effectiveness will vary from department to department,

author committed to revolutionising how companies

role to role and person to person, but as a general

1. TEDGlobal, 2009 2. TEDGlobal, ibid

Modern models of motivation commonly allow the employee to gain a sense of autonomy, mastery and purpose; qualities that the traditional carrot and stick method is devoid of.

rule we can follow the suggestion that employees who

Council that allows them to suggest new ideas or ways

deploy innovation to complete tasks are more likely

of tackling problems, no matter what their level is within

to be motivated by using innovative techniques.

the company.

Many large corporations have employed forwardthinking motivational techniques in order to increase

Concepts for motivation strategies don’t have to stop

performance. Google’s renowned 80/20 model allows

there. More radical suggestions have seen companies

employees to spend 20% of their work time developing

employ a ROWE (Results Only Work Environment)

any project they like as long as it’s not related to their

system. In a ROWE company, employees don’t have

main work. The result has been that some of Google’s

schedules. They can work wherever and however they

most successful developments have been invented

want as long as they deliver results on time. As Pink

during the 20% free time including Gmail, Google News

summarised, the results in these situations were almost

and AdSense. Similarly, in his talk on motivation, Dan

entirely unanimous across the board; productivity goes

Pink made a reference to Australian software company

up, worker engagement goes up, worker satisfaction

Atlassian. Throughout the year employees are allowed

goes up and staff turnover goes down.

to spend 24 hours working on projects completely unrelated to their primary work. The result? Similar to the

So what do these modern models of motivation have

results found at Google, some of the company’s most

in common? They each allow the employee to gain a

successful software fixes have been produced in those

sense of autonomy, mastery and purpose; qualities

24 hours. Not only have those developments improved

that the traditional carrot and stick method is devoid

both companies’ bottom line, they’ve kept employees

of. They allow a person to take control of their own

engaged, challenged and motivated.

work, direct themselves, get better at something and participate in something that is greater than themselves.

Such models don’t necessarily determine that monetary

This encourages them to genuinely enjoy and engage

incentives cannot work altogether. Other companies

with what they do; as a result they produce greater

have found success manipulating the monetary reward

work and ideas. Reward and punishment methods have

system; John Lewis’ employee-owned partnership

been shown to work in only a very narrow number of

scheme sees company profits divided amongst their

circumstances. On the other hand, it’s been proven time

employees rather than their shareholders; therefore,

and time again that pushing our motivation strategies

it is in the employees’ own interest to perform better

into the 21st century increases employee engagement,

at work. Furthermore, all staff are members of a Staff

which will drive businesses forward as a whole.

In most cases, monetary incentives don’t work.

Against all predictions, Glucksberg found that those who were incentivised in the experiment, on average, took three and a half times longer to solve the problem.

11 CASE STUDY: THE CANDLE PROBLEM Created in 1945 by Gestalt psychologist, Karl Duncker3, the candle problem aimed to measure the influence of functional fixedness on an individual’s problem solving abilities. Participants were presented with a box of pin tacks, a box of matches and a candle. Their challenge was to fix the candle to the wall in such a way that, when lit, the candle wax would not drip onto the floor below. The solution is to tip the matches out of the match box, pin the box to the wall and use it to hold the candle. The hypothesis proposed by Duncker was that participants who were presented with the matches in the match box would not see that the box itself could be used to hold the candle; they would only see a match box. This inability to see how an object can be used for anything other than its primary function is known as functional fixedness. In 1962, psychologist Sam Glucksberg4 decided to use the candle problem to assess how incentives affect the speed at which participants arrive at the solution. He told one group of participants that he was assessing them to establish the average time it takes a person to solve the candle problem. To another group, he offered a monetary incentive whereby the highest award went to those who solved the problem quickest.

The Result? Against all predictions, Glucksberg found that those who were incentivised in the experiment, on average, took three and a half times longer to solve the problem. He later adapted the experiment further by presenting all participants with the matches out of the box, but incentivised just one group. This time around, the incentivised group performed best. Why? The candle problem is much easier to solve when the matches are out of the box. Therefore, if there is a simple set of rules and a clear set of instructions, ‘if-then’ rewards will work. However, for any task that requires a participant, literally in this instance, to think outside of the box, their creativity and overall performance will be hindered.

3. TEDGlobal, 2009 4. TEDGlobal, ibid

INVESTING IN EMPLOYEE ENGAGEMENT Employee engagement is an important term for anyone

or task gives the person, rather than the reward it will

involved in the development and implementation of

bring.

motivation programmes. An engaged workforce is a real asset for any organisation and should be the main

Extrinsic motivation is triggered by external factors. As

objective for any business leader. This section of the

soon as those factors don’t exist anymore, the motivation

white paper looks at employee engagement, how it

will be gone as well. This is where the conversation about

could be successfully incorporated into motivation

incentives and various reward programmes starts.

programmes and its role in the overall performance management process.

RSG Debate participants emphasised the critical role of employee engagement in the performance management

There is some confusion about the difference between

process. They expressed concern that an increasing

engagement and motivation. Despite some overlap, they

number of companies witness a large proportion of

don’t mean the same thing. For an explanation of this we

their talent being disengaged and demotivated with

can refer to Kees Scheffel, Motivation Incentives Expert5,

management. Furthermore, many companies have

who states that engagement comes from ‘within’. It is

found that their staff view performance management as

about having belief in the ‘cause’. Engaged people do

a negative experience.

what they do because they believe it is the right thing to do and not necessarily because there is a reward waiting

So why is this? One reason is that businesses

at the end. A prime example of engagement is volunteer

develop a robust employee engagement strategy

work. There is no payment involved, it takes up a lot

without adequately investing in training their staff and

of time and it is very often ungrateful work. Yet most

management. Additionally, organisational employee

volunteers do it with passion and perseverance. Why?

engagement strategies are often too formulaic and not

Because they believe in what they do. Engagement has

personal enough. A successful employee engagement

everything to do with commitment.

strategy must be based on truly understanding your employees

So what is motivation? Here is where the confusion

and,

consequently,

should

highly

personalised.

starts. According to Scheffel, when we talk about motivation, we distinguish two different kinds: intrinsic

Aberdeen Group’s survey entitled “The Age of Employee

and extrinsic motivation. Intrinsic motivation is in fact

Engagement”6, which aimed to explore how leading

exactly the same as engagement. It comes from ‘within’

organisations are designing and implementing their

and it has to do with the joy or fulfilment a certain job

employee engagement strategies, found that achieving

5. Engagement versus Motivation, EzineArticles.com, April 2012 6. Aberdeen Group, 2013, “The Age of Employee Engagement”

employee engagement is one of the greatest challenges facing organisations today. This is largely due to the fact that few organisations understand

what

employee

engagement

really

means and how it can drive broader corporate goals. Consequently, engagement levels are dangerously low for many organisations, which has a negative effect on organisational productivity and retention. While nearly 70% of organisations surveyed indicated that they were satisfied with their engagement efforts in 2012, only 55% felt the same way in 2013. As a consequence, the report found that an increasing number of leading organisations are investing more heavily in the way they engage with top talent. Nearly half of the organisations who revealed they have a budget for increasing employee engagement also predicted that budget to increase in the immediate future. The RSG Debate participants felt that if organisations don’t quickly re-evaluate their engagement strategy and discover effective ways of motivating and engaging talent, they are in danger of losing it altogether. Angela Baron, CIPD Adviser, comments: “If you manage people well, they are more engaged, they are more motivated to exhibit discretionary behaviours – which is the difference between good performance and excellent performance – and that feeds through into financial performance.”7 Clearly, engagement programmes should be tailored to fit the needs of each individual organisation, however, RSG Debate participants suggested that businesses should focus on the four key elements in order to achieve successful employee engagement, as detailed

If organisations don’t quickly re-evaluate their engagement strategy and discover effective ways of motivating and engaging talent, they are in danger of losing it altogether.

in the following pages.

7. Chartered Institute of Personnel & Development (CIPD) Performance Management - podcast episode 25, 27th October 2008

1. START ‘BIG’ CONVERSATIONS Consistent two-way communication between managers

Similarly, Accenture’s recent report9 indicates that the

and their staff is key to successful employee engagement.

key to effective performance management is frequent,

A large part of this communication, deemed as ‘big

honest and constructive conversations that empower

conversations’, should involve making employees feel

employees to take accountability for results and to play

comfortable enough to provide honest feedback about

to their strengths.

the workplace and making them aware of the role they play in helping the company to achieve overall business

A number of organisations involved in the RSG Debate

goals. This suggestion was also supported by the findings

revealed that they conduct regular staff engagement

of the Aberdeen Group’s survey , which highlighted

surveys as part of their employee engagement efforts

that the distinguishing factor between ‘Best-in-Class’

to find out why people come to work, what they need

businesses and ‘Industry Average’ businesses is their

in order to do their job better, what their goals and

ability to communicate engagement efforts across the

aspirations are and how they want to be rewarded. One

entire organisation. Furthermore, the report states that

of the most prevalent survey findings was a correlation

organisations must support managers in having better

between manager’s behaviour and the level of staff

conversations with their employees with ‘Best-in-Class’

engagement.

companies rating it as the most important priority in delivering organisational performance.

8. Aberdeen Group, June 2013, “Employees Performance Management. Creating a High Performance Culture” 9. Accenture, 2011, “Transforming Workforce Performance in New Reality. Accenture Point of View on Performance Management”

2. APPRECIATE THE LITTLE THINGS It was stated during the RSG Debate that employee

On the contrary, it is about noticing and encouraging

recognition

encourages

day-to-day behaviours and showing thought for your

positive behaviours. This in turn makes employees feel

employees. As RSG Debate participants commented,

valued and motivated. According to Aberdeen Group’s

small and subtle gestures such as ordering dinner or

survey , over 30% of ‘Best-in-Class’ organisations have

booking taxis for late workers can be very effective

a standard rewards and recognition programme in place

in making employees feel valued. The challenge is

compared to only 18% of others (‘Industry Average’ and

to identify the right form of recognition which works

‘Laggard’ organisations). Organisations that employ

for a particular organisation and to differentiate it by

such programmes are proven to have better retention

individuals (managers need to know what motivates

rates and revenue per employee. The key point to note

each person in their team); the ‘big conversations’

here is that recognition is not about rewarding an employee’s

mentioned previously will go a long way in achieving

greatest achievements.

this.

drives

engagement

and

Employee recognition drives engagement and encourages positive behaviours, this in turn makes employees feel valued and motivated.

10. Aberdeen Group, 2013, “The Age of Employee Engagement”

3. ALLOW GREATER FLEXIBILITY RSG

Debate

participants

agreed

that

allowing

should follow a Results Only Work Environment, where

employees to take a more flexible approach to their

all structures are abandoned and employees can work

work is often more effective in motivating and engaging

however they wish as long as the desired results are

them than financial remuneration. Employers should

achieved on time. However, allowing your employees

evaluate whether their employees’ work structure is

to have some control over how they work not only

vital. For example, does an employee need to work from

encourages better performance but also helps your

the office every day? Do they have to work 9-5, or could

company to stand out as an employer of choice.

they start earlier/later and finish work accordingly?

According to Aberdeen Group11 30% of ‘Best-in-Class’ organisations include the work-life balance as a key

It wouldn’t be appropriate to suggest that every business

component of their engagement strategies.

Allowing your employees to have some control over how they work not only encourages better performance but also helps your company to stand out as an employer of choice. 11. Aberdeen Group, 2013, ibid

4. CREATE A GREATER PURPOSE The

RSG

Debate

participants

emphasised

the

purpose and develops a sense of organisational loyalty

importance of strengthening the sense of belonging and

and pride, while simultaneously developing the business

team spirit amongst employees. Effective engagement

skills of the employees involved.

comes from an environment where personal and organisational aspirations are aligned. People enjoy

According to the Chartered Institute of Personnel and

making a difference and successful organisations will

Development12 (CIPD), building a shared sense of

engage their employees in a variety of worthwhile CSR

purpose within organisations is the â&#x20AC;&#x2DC;golden threadâ&#x20AC;&#x2122; to

initiatives where staff across the organisation work

which strategy needs to be aligned. Organisations with

to common goals. This creates high levels of shared

a sense of shared purpose outperform those without it.

Effective engagement comes from an environment where personal and organisational aspirations are aligned.

12. CIPD, December 2010, Press Release

Taking part in events such as the Princeâ&#x20AC;&#x2122;s Trust Million Makers Project is a simple, yet effective way to get your employees actively enthused and engaged with your business without resorting to monetary incentives.

CASE STUDY: RSG MILLION MAKERS Khalid Razouki, Recruitment Consultant, RSG Member of the RSG Million Makers Team When the opportunity arose at RSG to take part in

of others were just a few of the ways in which I felt I’d

the Million Makers Project (a national competition,

grown as an employee, but I also gained more tangible

challenging teams of employees to come together and

skills such as strong project management, which I could

raise £1 million for The Prince’s Trust and make a real

utilise back in the work environment.

difference to the lives of disadvantaged young people across the UK), I knew instantly that I wanted to get

One of the most enjoyable aspects of the project was

involved. Firstly, I am passionate about the Prince’s Trust

that it brought together employees from all departments

and the work that they do for young people. Secondly,

within RSG, which enabled us to interact with colleagues

I wanted to take on a challenge that was outside of my

who we don’t ordinarily work closely with. In addition, it

day-to-day working life to see what I could achieve. As

also gave us a platform to exhibit various qualities and

a team, our focus was on raising as much money as

capabilities outside of our job roles. As a result, when

possible for the charity, so I think we were all surprised

considering the progression of internal staff, senior

when we realised what we had personally gained from the

management are now aware of the abilities and potential

experience. Patience, compassion and understanding

of those employees who they may not directly manage on a day-to-day basis. If a company were to consider getting involved with an initiative like the Prince’s Trust Million Makers Project, I would highly recommend that they do it. Having stepped outside of the comfort zone of my day job, I feel like I have played a bigger part in the company as a whole, and feel like a better employee for it. Taking part in such events is a simple, yet effective way to get your employees actively enthused and engaged with your business without resorting to monetary incentives.

The quality of leadership can make or break an organisation. It also demonstrates that organisations with the highest-quality leaders are much more likely to outperform their competitors.

THE IMPORTANCE OF STRONG LEADERSHIP The RSG Debate participants spent considerable time

The UK Commission for Employment and Skills

discussing the importance of leadership capability within

has produced a range of research14 showing that

organisations. It was stressed that strong, inspirational

effective leadership and people management are core

leadership is a key driver of employee engagement.

components of high-performance working. According

According to Jim Collins (Business Consultant, who

to a CIPD and DDI survey15, the quality of leadership

created the concept of Level 5 Leadership - the highest

can make or break the success and sustainability of any

level in a hierarchy of executive capabilities)13, leadership

organisation. It also demonstrates that organisations

is not merely about possessing certain competencies

with the highest-quality leaders are much more likely to

and skills; it is also about having the ability to create

outperform their competitors in financial performance,

relationships and good working environments. Collins

quality of products and services, employee engagement

argues that the key factor that allows a company to

and customer satisfaction.

become great is by having a ‘Level 5 leader’, which he defines as an executive in whom genuine personal

However, the same survey states that today’s leaders

humility blends with intense professional will. Collins’

are not equipped to handle the challenges organisations

research included 1,435 companies, amongst which he

are currently facing. As such, just 36% of UK leaders

identified just 11 truly great ones that were all headed

and 18% of UK HR professionals rated the quality of

by ‘Level 5 Leaders’.

leadership as high16. This finding was also confirmed by the RSG Debate participants.

According to Collins, these Level 5 Leaders have humility and they don’t seek success for their own glory. On the

It is clear that people’s leadership capabilities vary

contrary, success is necessary so that the team and the

greatly; some people are ‘born’ leaders, others need to

organisation can thrive. They share credit for success

develop their leadership qualities, while some, arguably,

and they are the first to accept blame for mistakes. They

simply do not carry the qualities necessary for successful

are often shy, but fearless when it comes to making

leadership. As stated by the RSG Debate participants,

decisions, especially ones that most people consider

despite a clear business need for line managers to be

risky.

leaders, many organisations base their decisions to

13. Harvard Business Review, 2005, ‘Level 5 Leadership’ 14. CIPD Research Report, 2012, “Perspectives on Leadership in 2012. Implications for HR.” 15. Talent Management Consultancy DDI and CIPD, 2011, “UK Highlights: Global Leadership Forecast 2011” 16. DDI and CIPD, ibid

Organisations are starting to demand more sophisticated, inspirational leaders who hold a higher skill set, so that they can lead by example.

employ leaders on an individual’s technical skills or

there are still too many leaders who expect their staff

their length of service. As a result, they don’t take

to perform certain tasks without explaining the reasons

into account the essential skills and qualities that are

behind them. Such leaders primarily focus on the short-

necessary for successful leadership as all too often

term financial goals and fail to see the bigger picture.

they are deemed as ‘softer’, less vital skills. Technical

This in turn leads to low staff morale and high staff

competencies are, however, often less critical than

turnover. On the contrary, people-oriented, inspirational

‘people skills’ and promoting someone into a leadership

leaders motivate their employees and are often the

role simply because they are good at what they do in

reason that people remain loyal to an organisation.

their current role is invariably the wrong way to go about it. Instead, organisations should be asking whether the

It is evident that organisations are starting to demand

person has the ability to inspire staff, foster teamwork

more sophisticated, inspirational leaders who hold

and lead by example.

a higher skill set, so that they can lead by example. Furthermore, they will have the skills to hold ‘big

Ben Willmott, Head of Public Policy at the CIPD,

conversations’ with employees, be able to assess an

comments17: “Leadership and management capability

individual’s potential and the best ways to engage

continues to be an Achilles heel for UK Plc, despite

and motivate staff. It was also emphasised during the

mounting evidence that these are ‘skills for growth’

Debate that there is a pressing need for leadership

essentials. Our research shows almost three in ten

development and training that will equip managers with

people (28%) – equating to about eight million people

the skills they need to lead the employee performance

across the UK workforce – have direct management

management process; HR professionals should play a

responsibility for one or more people in the workplace,

key role in driving this forward. Accenture’s report on

and yet only just over half of employees are satisfied

performance management18 confirmed that leaders

with their manager. A small increase in capability across

need to show sustained commitment to performance

this huge population of people managers would have

management and should act as role models by placing

significant impact on people’s engagement, wellbeing

it clearly on the business agenda.

and productivity. However, too many employees are promoted into people management roles because they have good technical skills, then receive inadequate training and have little idea of how their behaviour impacts on others.” Clearly leadership styles can vary significantly from organisation to organisation and are determined, not only by the personality of the leader, but also by the nature and the needs of a particular organisation.

There are still too many leaders who expect their staff to perform certain tasks without explaining the reasons behind them.

However, it was noted during the RSG Debate that

17. “New research finds ‘reality gap’ in the capability of the UK’s 8 million managers, undermining attempts to boost economic growth”, CIPD Press Release, 3rd May 2012 18. Accenture, 2011, “Transforming Workforce Performance in the New Realty. Accenture Point of View on Performance Management”

If organisations improve their leadership capability, performance management will become less process-orientated, less regulated and more about relationships.

SIMPLIFYING THE PERFORMANCE MANAGEMENT PROCESS Having discussed a variety of performance management practices and solutions in their organisations, the RSG Debate participants agreed that there is a need for less formality as often formal structures and procedures overcomplicate things and restrict creativity. It was also pointed out during the Debate that there is a risk of alienating or demotivating staff by focusing on hard, measurable outputs and ignoring the softer behaviours, which

should

encouraged.

The

criteria

for

performance cannot always be measured quantitatively. According to Accenture’s research19, formal 360 degree feedback can be complicated and time consuming, so it is often better for the manager and an employee to seek less formality and more frequency. The overarching feeling from RSG Debate participants was that if organisations improve their leadership capability, performance management will become less process-orientated, less regulated and more about relationships, having ‘Big Conversations’ and replicating good leadership behaviour. It is a real leadership challenge to achieve a healthy balance between measuring output effectively and accurately, whilst preserving trust and a feeling of empowerment amongst employees.

19. Accenture, ibid

There is a need for less formality as often formal structures and procedures overcomplicate things and restrict creativity.

CONCLUSION BY MIKE BEESLEY, CEO, RSG In his TED Talk “The Puzzle of Motivation” Dan Pink20

According to Accenture research21, while a ‘one-size-

suggests that there is a mismatch between what

fits-all’ approach to performance management can

science knows and what business does. His study

be simpler to manage and administer, it is not always

into what really motivates people concluded three key

the best approach. It feels to me that all too often

things regarding traditional carrot and stick motivation

companies take this approach because they already

strategies, which I think business leaders should focus

know how it’s done; a new approach requires new

on:

thinking and time that companies seem reluctant to spend. However, organisations should ask themselves

1. They only work in a surprisingly small number of circumstances

whether they want to continue to follow lazy methods that yield minimal results, or whether they want to adapt

2. They restrict creativity more than they inspire it

their performance management strategies and, as a

3. They are completely unrelated to the reality of what

consequence, revolutionise their business.

motivates people - a desire to do things for their own sake, because we enjoy them, or because they really

Lynn Hanford-Day, one of the RSG Debate participants,

matter

commented after the event: “What surprised me during the dinner debate was the shared view of those present

When deciding on how we can modernise our

that traditional performance management doesn’t

performance strategies, we must remember that the

work, both as a process and as a tool for motivation

very nature of a performance management strategy

and engagement – I thought it was just me! A week

depends on the organisational context, which will

later I attended another HR networking dinner where

inevitably vary from organisation to organisation. A one-

the same views emerged. Indeed, a combination of

size-fits all approach is not viable for most modern day

the annual appraisal and the link to pay is perceived to

companies; some more ‘creative’ departments may

alienate and disengage about 80% of the population!

require totally different dynamics and flexibility than

If this is the case, then what on earth are we doing by

other departments in order to perform and engage

persisting with it?”

to the highest standards. Furthermore, performance management strategies could and should be tailored so

On reflection, the insights provided by the participants at

that they take into consideration cultural and individual

the RSG Debate portrayed that even those companies

differences.

which have taken small steps to change their

20. TEDGlobal, ibid 21. Accenture, ibid

performance

management

strategy

are

noticing

I would like to thank you for taking the time to read this

greater results in terms of both employee engagement

white paper. We would like to hear your thoughts and

and performance. Ironically, the strong leaders that

experiences on the issues discussed, so please join in

are required in order to push these strategies must

the debate:

themselves be motivated to drive past the carrot and stick methodology. Therefore, it is clear that an effective

- Tweet your thoughts using the hashtag #RSGdebate

performance

- Comment on the RSG blog by heading to

management

strategy

can

only

implemented by inspired, well trained managers who are

www.ceonews.co.uk

prepared to invest time into genuinely getting to know their staff. As Pink states, if we can get past this lazy

If you would like to find out more about the services RSG

ideology, not only can we strengthen our businesses,

and its associated companies provide, please contact

but maybe we can change the world.

Mike Beesley, CEO, RSG at mike.beesley@rsg-plc.com If you are interested in taking part in future RSG round table debates, either as a lead speaker or a participant, please email caroline.beer@rsg-plc.com

The nature of a performance management strategy will inevitably vary from organisation to organisation. A ‘one-size-fits-all’ approach is not viable for most modern day companies. £

GUEST PROFILES Andrea Cartwright, Group HR Director, SuperGroup Plc

Jyoti Parmar, Interim HR Director

Andrea has gained a wealth of experience as an HR professional

Jyoti is a senior HR and Business Change professional with considerable

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Andrea is a recognised leader in the

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environments. Jyoti has held senior HR roles at Lastminute.com, Airwave, BAA - Heathrow Express, Halcrow Group Ltd and Kellogg Company Europe.

Andy Hanscomb, Interim HR Director Andy has gained extensive experience of delivering global HR solutions at board level in the security and outsourcing sectors. He is an experienced and proven leader, with a strong track record of

Charlotte Sword, Partner, Global Head of HR, Foster + Partners

significantly improving profit & loss accounts across international

As a commercial HR Director, Charlotte has extensive cross-sector

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experience in areas such as Telecoms, Professional Services and

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HR teams and now specialises in Talent Management and Change Programmes. Previous to working at Foster + Partners, Charlotte held

David Morgan, Global HR Director, CSC As an experienced International HR Director, David has worked at a number of large international companies in both operational and strategic roles across a wide range of Service and Consumer Global

the position of Group Head of HR at Royal London and has also held HR Management roles at Wates, Rothschild and Caminus.

Amanda Menahem, HR Director, Hastings Direct

businesses. Earlier roles have included HR Director level positions for

Amanda Menahem joined Hastings Direct as HR Director in March

AXA, Allied Domecq, Compass and Butterfield.

2009. With a background in psychology, Amanda has always had a keen interest in people. After starting her career in Retail Management

Nick Budd, Director, NB:HR Since moving on from his role as HR Director for Mabey Bridge, Nick has since set up his own company, NB.HR Ltd which provides interim, consultancy and non-executive services. With nearly 30 years experience in the HR industry, Nick has held HR Director roles for the Trinity Mirror Group, AXA Life and Hasting’s Direct.

she moved into a Training Management role, eventually specialising in Leadership Development. Amanda then moved into general HR and has worked in a variety of Senior HR Management roles, most recently as a head of HR in the Pharmaceutical Industry.

Gillian Fox, Global Director of Talent and OE, Reckitt Benckiser

Ceri Jones, HR Business Partner, UNUM

Gillian works as a trusted advisor to senior leaders and their teams

demanding Banking, Insurance, Retail and Utilities sectors. She has a

and is known as a real deliverer with good instinct and intuition. As

Bachelor of Education and is a GCIPD. Her experience has focussed

a highly commercial HR Director, Gillian holds 18 years experience

on Strategic HR Business Partnering, leading business teams and

of working in varying types and sizes of organisations, and across

organisations through business, structural and culture change,

sectors, including small niche organisations through to multinationals.

working for companies such as HSBC, Allianz, Thames Water and

She has personally worked with client groups ranging in size from

House of Fraser. Ceri joined Unum in January 2013 as a strategic

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HR Business Partner, and plays a key role in implementing the HR

change management are counted amongst Gillianâ&#x20AC;&#x2122;s specialities.

Strategy and aligning it to the evolving business needs.

Mark Boorman, Interim Head of HR, Wates Group Ltd

Lynn Hanford-Day, Independent Consultant, Sophrentos Ltd

Mark is a senior HR professional with extensive experience gained

Ceri has gained significant HR experience working within the

from working with leading organisations across the financial sector,

Previously Lynn held the role of People & OD Director at Sovereign

media/publishing, and HR outsourcing. In his career to date, Mark

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has demonstrated his ability to perform as a permanent member of

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commercial leadership teams, and as a senior interim professional

optimised organisational capability, leadership, talent management,

with clear strengths in leadership, establishing start-up HR teams and

performance management and change management.

change management (organisational, cultural and behavioural). He

independent consultant, Lynn works as an interim executive coach

has a passion for the diagnosis, design, and implementation of the

and thinking partner, facilitator and OD strategist and practitioner

best, value-add HR solutions and has a broad toolkit.

with particular interest in strengths, appreciative inquiry and the art of

Now an

conversation as a means to involvement, engagement and effective change leadership.

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