There is a great expectation among consumers and business people alike about what is fair and what is not. In America, the sense of fair play has long been a standard for measurement of behavior. The "dirty deal," "hitting below the belt," and "kick them when they’re down" can all be recognized as examples of unacceptable behaviors.
Today, Americans are voicing their demand for fairness more loudly than ever. That’s what all the customer service emphasis is about. Customers are clearly discriminating among alternative suppliers based upon where they are treated most fairly. Part of their treatment perception is based upon how they feel about the honesty of the supplier’s transaction with them.
Then, why have these scandals rocked their companies? In 1986, Pacific Bell sold products to customers which the customers really didn’t need; Chrysler Corporation sold some demonstrator cars as new, having turned back the odometers to make them look new again; virtual bankruptcy of the Savings and Loan Industry Insurance Fund, due to questionable management practices and outright misappropriations; Anderson accounting giving endorsements to client’s financial statements which were false or misleading; Enron executives appearing to line their own pockets at the expense of employees and shareholders. The list goes on.
What went wrong in those businesses? Why did these scandals happen? Where was business honesty and the "fair-deal" in these cases?
Answers come from several sources. First, deregulation of many industries has contributed to some people believing they have the latitude to make any decision they choose. Second, competition has increased dramatically in recent years – globally. We are told that success in business today demands that you be better, quicker, cheaper, or … less honest than your competitor. Third, lack of training for managers and employees contributes to their confusion about what is acceptable and what is not.
Most of us know embezzlement of funds is a criminal activity. We also know that cheating on income tax records can bring heavy penalties. Yet, ethics is not a question of criminality. It is a question of doing what is right and fair.
Ethics should be a consideration even in the most mundane business decision. If the printing job contains more than the normal number of faulty pieces, does it go back to the press for more acceptable output, or get passed off to the customer without comment? If the bill sent to one of your customers contains an error in your favor, do you call the customer to correct it, or wait to see if they discover the mistake? When an employee asks to take a couple hours off for personal reasons, do you have to tell them they will not be paid for the time, or just deduct that time from their paycheck? All opportunities to test your business ethics.
Here is an easy way to determine if your decision is an ethical one. You can apply this approach to any situation. Try this test.
"The Headline Test" – Ask yourself if you would like to see your name in the headlines of your local newspaper along with words describing your actions or decision. Could your decision stand up to that much public scrutiny? If you are willing for your family and friends to read about your decision in the headlines, you will have little difficulty with ethical questions. Train your employees to use the test, too.
The "bottom line" is this:
How outsiders perceive your business practices will depend solely on the example you set for your staff and the expectation you give them for considering ethics in their own decisions. As a leader in your business, it’s up to you. Treat people fairly – ethically – and you will find they come back for more. Your business will benefit and so will you.
After a paycheck and health insurance, what else does a company have to offer an employee? If you are a manager with an understanding of human motivation you will know that employees also want to be happy working where they do. They want a high level of satisfaction with a job well done.
It is amazing how many employees will make the "extra effort" to get a rush project completed or to get a special order processed. Most employees, it seems, want to feel they are doing something worthwhile … that they can make a difference.
American management schools have long taught that control is the most important management function. They have inculcated a belief among students of management theory that a boss is someone who carefully checks to ensure employees are doing what they are assigned in a fashion which is expected. Close, over-the-shoulder, supervision has been advocated as the only way to run a business. It is based on the assumption that employees are basically lazy, dull creatures requiring constant external motivation.
Enlightened managers have realized for a long time that such is not the case. Employees are always self-motivated. And, what motivates them most is the knowledge that their supervisor believes they have done a job well. That knowledge is created through supervisor recognition in one form or another. Employee motivation to perform well is increased because the supervisor’s recognition felt so good.
The logic in developing reward and recognition programs is fairly simple. It is consistent with formal research which indicates clearly, that people who feel appreciated work harder, are nicer to customers, and deliver a higher level of performance.
In companies which get high marks for customer service, we generally find a structured program for recognizing employee accomplishments … for telling employees they are important. Employees who meet performance expectations in such organizations are given some form of positive payoff. Those who exceed performance standards are held up as role models and heaped with financial and emotional rewards.
Recognition is a daily process. Anyone who thinks meaningful recognition can be given once a year at appraisal time should discard the thought. It won’t work. Recognition, and rewards, must be handed out liberally each day as supervisors observe employees doing both what is expected and going beyond.
Why reward somebody for doing the job they are being paid to do? Because people need it. The business will benefit … and, it’s fun.
Reward systems vary in content and structure. You don’t have to limit a reward, or incentive system, to sales personnel. Service workers are easily provided incentive programs as well. A substantial amount of thought should be given to what rewards will be appropriate in any given situation, however. A poorly designed reward program is potentially more damaging than none at all. Careful consideration must be given to what rewards may be valued by employees. Factory workers may not value a free dinner with the CEO, and could be very uncomfortable in such a "pressure" situation. That same dinner might be just the thing for rewarding a different type of worker. The point is, the reward must be seen by its recipient as having value.
Some businesses have found the answer in a combination award system. They allow both customers and managers to give out kudos for behavior which supports company goals and meets customer expectations. Some use certificates, others use coin-like tokens. In some cases these can be converted into merchandise of the employee’s choosing after a predesignated quantity of certificates or tokens has been earned. Again, the choice of merchandise must be seen as having value by the employees involved.
An interesting phenomenon has occurred when this approach has been tried in some service companies. Employees have been eager to keep and display their certificates and tokens rather than turning them in for offered merchandise. The symbols of the recognition they received meant more than anything else.
Promotions, prizes, cash, stock, and paid time off are all examples of rewards which say the company takes such a program seriously. Yet, they must be seen as serious by the employees to work effectively.
Want to get your employees to believe you when you say you want them to pay more attention to customer service? Start rewarding everyone you see giving the kind of customer service you believe is required. Catch people doing things right, and reward them for it. Their behavior is likely to continue for a much longer period than if you try to break someone of a bad habit by punishing each occurrence of unwanted behavior.
If you choose rewards carefully (or let employees choose), those who receive them will be envied and emulated by those who have yet to receive them. Everyone in the organization can be caught up in the desire to perform at the level necessary for the reward. If that happened in your company what would you think might occur to revenues and company reputation?
It is never too late to begin giving employees recognition. It doesn’t have to cost anything if you start with supervisors thanking their workers for doing the right things. Tell an employee how much you appreciate them doing such a good job in a specific situation. Tell them what a difference it made to the customer they dealt with. Let them know they are important to the continued success of the company because of their performance. Simply say thank you.
Formalizing a reward program can follow easily enough. But, first, allow your supervisors to get comfortable with the positive style of employee management. When it is time to design your more formal program, get your employees involved in the process. That way, your chances of continued success will increase.
Once committed to any formal reward program, recognize that you must be in it for the long term. Canceling a program after a short-run can leave your employees with unmet expectations and bad feelings.
With so much to be gained, why wait?
All you have to do is begin.
Ever wonder why your good employees sometimes seem to slow down in their work? Have you ever experienced a period of increased worker tardiness or absence? It could be that you faced the equity theory in action.
Far from a new idea, J. Stacy Adams first published the theory in a 1963 article entitled, "Toward an Understanding of Inequity." It probably explains more workplace employee upset than any other theory in existence. In his article, Adams maintains that workers continually compare the quality of their inputs and the level of their outcomes against those of their co-workers.
When workers perceive an unfavorable ratio between their contribution and their reward, they experience a tension caused by that imbalance. They will make efforts to reduce the tension by personally making adjustments to bring the ratio back into balance.
If an employee perceives that she is more qualified for her job than are her co-workers, but she receives the same pay, she might produce less work in order to reduce the inequity. If one person violates work rules, by being repeatedly late for work, a state of inequity is created. Other workers view themselves as making a greater contribution because they are at work on time.
Usually, people expect the supervisor to restore equity by imposing discipline on the offending individual. Those who don’t are described by subordinates as someone who “lets people get away with murder.”
When supervisors fail to recognize, and act on the need for discipline, employees will eventually move to restore equity to the situation by their own actions. They may also fail to abide by the same work rule. After all, they reason, if nothing happens when Harry is late, why should I come in on time?
Employees view their contributions to the equity formula to include such things as education, skills, experience, dedication, motivation and so forth. On the other side of the equation, outputs are the benefits they derive from the job such as compensation, status, insurance, and a sense of self-worth.
In our American society, the first thing we tend to ask one another when meeting is, "What do you do?" Our work plays such a major role in our feelings about ourselves that it is critical that we feel we are treated fairly when at work.
Years ago, a construction company we know of got into financial trouble. Before any formal announcement was made to employees, the rumor mill was processing all sorts of stories about an impending bankruptcy. In a matter of days, the company began losing its tools and equipment. The equity theory in action. Employees felt betrayed by the situation, believing they were soon to be without jobs. After all they had done to help this company be successful, their reward was to be unemployed. Well, they would balance the scale themselves. The method they chose involved pilfering the companies assets. Sure, it was theft. Of course, it wasn’t right. In other circumstances these same people would have condemned someone else for doing such a thing. Yet, they stole from their employer as their way of relieving the tension of equity imbalance. The tools and equipment became a substitute for the compensation they wouldn’t receive when the company folded.
American workers maintain a strong sense of what is fair and right. American managers have a tendency to make decisions based on what is most profitable. Sometimes the two don’t coincide. On those occasions, the managers’ actions are likely to create an imbalance in employees’ equity index. If the stress of that imbalance continues for too long, employees will take the situation into their own hands and find a way to compensate themselves. Frustration will always eventually lead to an action which re-establishes the balance of worker contribution and worker reward, usually at the employer’s expense.
What can you do about the equity index if you can’t see it? After all, people normally don’t walk around with a formula written on their foreheads to display their sense of equity. The answer is twofold.
First, be scrupulous about the enforcement of your work rules, whatever they are. Be uniform in your treatment of everyone. There should be no favorites. More forgiving treatment of favorite people causes wild swings in other people’s equity index.
Second, pay attention. Pay attention to what’s going on around you and among the workforce. Are your office supplies disappearing faster than usual? Has the absence rate increased? Have production levels taken a sudden nose dive? Any of these may be indications that people in your organization believe there is inequity in employee treatment.
When you become aware that the equity theory is at work in your organization, take some action to surface the issues and deal with them. Conversations with employees, individually and collectively, are a good way to start. It may be hard to hear a bunch of gripes, but if you don’t make the effort to listen, you can be sure your employees will send you a stronger message.
Critics of traditional education say our country’s system is in a sad state today. To prove it, they point to the volumes of materials produced in recent times about, "Why Johnny Can’t Read."
Shortfalls there may be. But, talk with any business owner or manager, and you will hear how important job experience is to employee performance. Perhaps we should re-examine the roles of academia versus business training.
There is a revolution underway in our business world. It is a revolution fueled by technology. We’ve long since passed the time when machines were considered because of their labor-saving contributions. That’s not enough anymore. Contemporary upheavals in the workplace are coming from the drive for quality improvements. Machines are now considered investments in product and service quality. Better quality means better customer satisfaction, which in turn means sustained business growth.
How many of us, though, are able to unlock the front door and flip on a switch that activates our totally automated factory? Not many, to be sure. Our business is still, by and large, dependent upon people to run the equipment or produce the services we offer. How will our people get the skills necessary to run this new equipment or react to increasing service demands, if not on the job? What school could possibly teach all the necessary knowledges required in today’s jobs?
On-the-job training is still the vital link between new employee and skilled worker. The pace of transition is awesome. We live in a time of unpredictable changes. And, having workers who are flexible enough to react favorably to those changes is the key to continued business success.
In the textile industry, the steel industry, and the business forms industry, can be found ready examples of how worker re-training has become the order of the day. For generations, people in these three industries have had "hands-on" involvement with the product as it was produced. Generally, skill requirements were low. Not any more. Now, with micro-processor computer control of production equipment, employees must read and write to understand what is happening to the product, and to control the process. "Statistical Process Control" requires sophisticated levels of math and reasoning skills. Business forms are no longer laid out on a drafting table, they are set up on sophisticated computer programs that can sometimes output directly to production equipment. The unskilled worker of yesterday just won’t qualify to do today’s jobs. And, because every industry has different requirements, you won’t find a universally acceptable employee graduating from our school system. You have to "grow your own" qualified individual through job skill training programs.
As the airline industry knows all too well, oversight agencies from the government can be very specific about what must be taught to employees and, sometimes, even how it should be taught. Each time there is an air disaster, the Federal Aviation Administration (FAA) augments its requirements that flight employees be trained to cope with such crises. Practicing the use of protective breathing hoods and emergency escape chutes are two examples.
In the steel industry, as in so many others, safety considerations play an enormous role in job training curriculum. For the printing industry, it is no less important. The Occupational Safety and Health Administration (OSHA) aggressively oversees safety training and hazardous substance handling. Employers are told by state and federal laws what specific training they must provide to workers if those workers handle any of over eight hundred substances.
If your employees visit customers or suppliers at locations where these substances exist, they should also know how to interpret signs and read warning labels.
The Department of Transportation has imposed requirements on employers to test professional drivers for use of drugs. Managers in many companies are now being trained in how to recognize the signs of drug abuse in employees.
In the nuclear power industry, plant operators are required to obtain licenses issued by the Department of Energy. For every five weeks of work, the operators spend one week in training…on job skills development.
Business in general has always been involved in worker training to some extent. The amount of involvement has grown in recent times, and you can expect that growth to continue. Plan your budgets accordingly. Employee training is no longer the "safe" line item to strike from company budgets during an expense cutting binge. It is now a required investment if we are to comply with regulatory requirements and meet customer needs.
You will have a cost effective and beneficial training program at your company if you:
- Identify all regulatory and legal mandates for training in your business. Establish training programs that meet or exceed these requirements. You can’t stay in business and ignore these needs. It’s rather like having to pay taxes.
- Identify changes which will impact your business by staying in close contact with both customers and suppliers. Every conversation should include questions about what is changing for them. Knowing that, you can better identify the job training requirements for your people.
- Put employee training at the same priority level in your management thinking as raw materials investment. With time, inventory or raw materials will run out if not replaced. The same is true of people’s skills. With time, current skills will fail to meet the job needs of tomorrow unless they are replenished through training.
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