Tuesday, October 18, 2011

Taylor - Motivation and the 2008 financial crisis - lessons for the future (part 3)

This is the third article of a sequal about how business and managers responded on the financial crisis of 2008. In the first article I wrote about Frederic Taylor – the father of lean management – and his believes on how employers and employees should work together to get to the stage of excellence.
In the second article I wrote about when and how we became interested in all people, about the great motivational theories and made a link towards decisions taken during the crisis.

In this third article I will make the link towards motivation today. Before I do so, I will make the distinction between intrinsic and extrinsic motivation.

Intrinsic motivation

When I talk to managers and ask them how they try to motivate people, they always come up with extrinsic motivators like salary, company car, smart phone, bigger office, better chair, personal parking place, … Off course this is a rather difficult and expensive motivator. And before your give them to en employee, think twice, because maybe one day your employee one day becomes de-motivated, and then it is really difficult to take these extrinsic motivators away. The only “flexible” extrinsic motivator is bonus.

If you look beyond all those extrinsic motivators, you go to an individual level and there you find intrinsic motivation. The same employee who is eager to get a raise because he believes he’s not paid enough, might be a passionate club member of a football team. He is so passionate about it that he spends all of his weekends organizing events, cleaning up club-houses, selling tickets or travelling across the country, just to be with the team. And what does he earns at the football club ? Zero, nada, nothing at all ! But why is he doing it ? Because he gets recognition of the other club members, because he is passionate about the team, because he believes he’s doing the right thing. And that my friend is the unlimited energy source of intrinsic motivation.
Watch out, intrinsic motivation can also become negative, if the club starts abusing his willingness or doesn’t appreciate him anymore and the “free super member” becomes de-motivated and drops the team.
A good definition of intrinsic motivation can be : “the pleasure one gets from the task itself or from the sense of satisfaction in clompleting or even working on the task”. (like me, why am I speding hours writing on my blog ? J )

Self Determination Theory by Ryan & Deci

One of the most interesting theories that deals with intrinsic and extrinsic motivation is the Self Determination Theory (SDT) by Ryan & Deci. In this theory the authors argue how autonomy, competence and relatedness foster the most valuable and high quality forms of motivation and engagement for activities, including enhanced performance, persistence and creativity. They even go further and say that if any of these three elements is unsupported or ignored, it will have a big impact on the wellness and motivation of that person.

Research shows that :
·         More than 50% of all employees doesn't get any recognition at work.
·         38% lacks autonomy
·         33% of all employees who suffer stress, has intentions to leave the company sooner or later.
·         In 2010 we counted 9.139.770 absenteeism days due to stress and demotivation

What can we learn from this ?

In my previous blog-news I wrote how many managers behaved like a X-manager during the 2008 financial crisis. The believes of the X-manager (people should be controlled, they are lazy and stupid, …) are completely opposite to what is described in SDT as basis for further growth, creativity and motivation.

Although those manager believed they would survive the crisis by putting high pressure on employees, they in fact attacked people’s intrinsic motivators and through that, they had a negative impact on further growth and creativity of the organisation.

Even in times of crisis, employers should respect the autonomy, relatedness and further development of their employees. If they don’t, the waste the most valuable resource they have in had (as was mentioned by Frederic Taylor).

What’s next ?

In my next blog-post I continue with more facts and figures about the impact of demotivation. In the 5th blog post I will give you my advise how you can prepare yourself for the next crisis and properly react when it breaks out.  

Saturday, October 15, 2011

Taylor - Motivation and the 2008 financial crisis - lessons for the future (part 2)

In my previous article I wrote about Frederic Taylor and his believe in the competences of people. People were considered as the biggest national resource for further development.
Unfortunately his believes were twisted by many industrialists at that time. Most industrialists tried to maximize the profits and refused to share this with their employees. At that time most welfare was in hands of a few families who didn’t consider the working class as equal men.
When did we become interested in the working class ?
Before the world wars there was a new political change in Europe ; socialist parties appeared and defended the working class. During the world wars there still was a big distinction between the rich and the poor. The poor men often sent to the most dangerous places and were sacrificed for the glory of their country (read the rich). During WW I in Belgium one of the dying soldiers wrote with his blood on a wall the legendary words “I give you my blood, when do you give us our rights” (hier ons bloed, wanneer ons recht).
After the two world wars Europe needed the working class to recover and to rebuild the cities, factories and welfare. Even more important, in many European countries more and more people got the right to vote for elections. And that was the big turning point when industry and politics became interested in all people.
At that time a lot of motivational theories were developed. Some of them are still very much alive in management classes today, despite the fact that they are often very high-level academic.
Maslow – what do people need ?
Abraham Maslow developed the “Hierarchy of needs”. In this pyramid he describes 5 levels of what people need and it starts with physiological needs (food, water, sex, home, …). One level needs to be fulfilled before someone can develop towards a higher level.
This hierarchy of needs is still often used in management classes, but it is also criticized because of the lack of empirical support.

McGregor theory X & Y
Another theory was developed by Douglas McGregor, Professor at MIT School of Management. He created a continuum with on the one side X-management and on the other side Y-management. Today X&Y are translated in hard & soft management style.
·         Employees are lazy and will avoid work if they can
·         Employees show little or no ambition
·         Money is the most important drive for employees
·         Managers need to follow-up employees closely and use control-systems
·         Employees are motivated and ambitious
·         Recognition and personal development are equally important than money
·         Since employees exercise self control, managers don’t need to follow them up

Maslow, McGregor and the 2008 financial crisis
During the crisis many people lost their jobs and were facing great difficulties to find a new one. This resulted often in lower self-esteem, loss of friendships and sometimes even in a lack of food and other basic needs.  Before the crisis we lived in a very prosperous economy. Most people’s needs were fulfilled. As from one day to another the hierarchy of needs was attacked and thus also motivation of people.
On top of that, many managers managed in a pure X-management style. People were squeezed like lemons and if they were of no more use, they were thrown away. Taylor would have considered this as big waste of national resources and capability to grow.
People were often treated with few respect. Because of that the motivation-level dropped tremendously but people stayed in their job, because they were afraid to not find a new job anymore.
What can we learn from this ?
Today, due to the high number of vacancies, many people leave their bosses and companies, which causes a big brain-drain of expertise in those companies. The number of job-leavers is in many companies 10 times higher today than before the crisis.
Because of the disrespect of people’s needs and the way people were treated, many companies lost a lot of their resources and they now need to re-invest to recover.
Did they learn from it ? I don’t know. If we go to a new financial crisis I truly hope that managers will think twice and I hope they’ll remember the lessons they learned from the 2008 crisis.
Next time :
In my 3th article about this topic, I will first show you some statistic data and end with lessons we can learn from the past, to be better prepared for the next crisis.

Sunday, October 2, 2011

Taylor - Motivation and the 2008 financial crisis - lessons for the future (part 1)

Mid 2008 the financial crisis erupted all over the World. It had such an ampact on every country and company worldwide that was never seen before. Most companies quickly developed strategies to survive the financial crisis, sometimes based on lean principles. The basis of lean management was made by Frederick Taylor, exactly 100 years ago and the concepts are still very much alive today.
In 2010 – only two years after the breakthrough of the crisis – with a recovering  economy (eg look at the dazzling number of job vacancies in those same companies who were firing people only two years ago) those companies werre healing their wounds. Today, we might face yet another worldwide crisis. Did we learn from the previous crisis ? I don't know. I hope so, because we made some mistakes in the 2008 crisis.
Managers who didn’t take into account the motivation and recognition of employees, were facing a high number of drop-outs in 2010, low motivated employees and as a result low efficiency and high costs.
In the following weeks I will share my ideas and opinions on how companies reacted on the financial crisis, what the impact was on employee motivation and what we can learn from it for the future. 
The heritage of Frederic Taylor
Frederic Taylor lived in the beginning of the 20th century and is known as the father of “process automation” and lean management. Exactly a century ago – in 1911 – he published his book “The Principles of Scientific  Management”. Taylor truly believed in people and the possibility to develop competences. He said
“… it follows that the most important object of both the workman and the management should be the training and development of each individual in the establishment, so that he can do (at his fastest pace and with the maximum of efficiency), the highest class of work for which his natural abilities fit him.”
Taylor was well aware of the fact that this believe was rather utopian, but he made a point saying that we should keep on investing in our people to get the best out of them. He considered competent men as one of the most important national resources.
Another strong belief of Taylor was :
“The principle object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee”.
He believed that if a company merits through the efforts of workmen, the the workmen should benefit as well. Despite this believe, Taylor was very much aware of the fact there is a lot of slow work by employees in our organizations and not that many employers are willing to share the extra benefits.
Taylor anno 2011
Today, 100 years after Taylor published his book, the economy is recovering from the financial crisis. If we look back upon the last 3 years, we see that many companies stopped developing people during the crisis to decrease costs. Training budgets were minimized. Many companies let people go, based on general rules like age, first in – first out, cut x% in every department, … Through these abstract and non-human rules, they lost some of the best employees and de-motivated people who stayed. As a result the efficiency decreased even more.
On the other hand a lot of companies put the salary reviews in the fridge and blocked bonuses, despite big efforts from the few motivated people who stayed in the company.
Today, economy is recovering. There are more job vacancies than ever before in Belgium and other countries in Europe. Competent people who felt mis-treated during the crisis are now looking for new opportunities outside their company, which causes even more fall-out of competences. Unfortunately we might be facing a second, even stronger crisis, often due to bad management.
What can we learn from this ?
Even during crisis companies need to invest in people. They are one the most valuable national resources. Development is not always a cost. If you invest in the right people, through the right competence development, your company will benefit from it. And if your company benefits from it, don’t forget to let your employees share in it.
Even in times of crisis, people can make the difference when they are motivated. If you de-motivate them, they’ll become your biggest cost centre.

This was the first in a line of articles about lessons on motivation, we can learn from history. I hope you’ll keep on following me.