A few years ago, I was doing consulting work for a well-known department store chain. They were doing well and were also looking to cut costs. One of the ideas was to contract out their delivery drivers. After some discussion about the numbers, I suggested that doing so would be a mistake. Their customers only interact with 2-3 people (retail sales, phone customer service, and the delivery team) from their stores. These touch points are what the customer remembers when deciding to shop with them again and/or talking about their experience with friends and family. Why would they want to lose the ability to manage that? They chose to keep the drivers.
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I bring this up because there has been a lot of discussion lately about contractors vs. employees, especially in the sharing economy (see a general discussion here). Some employers are looking for ways to reduce labor costs and finding ways to classify people working for them as independent contractors is just one. However, by doing so they are setting the stage for less engaged people to be delivering their products and services. Telling the people working for you they are disposable sends a strong message.
Some start-ups are bucking the contractor approach and are viewing employees as the best people to deliver their products and services. As one business owner puts it, “The vision says that it’s really smart to make them employees, so we can get the best people to deliver the best service.”
The quote implies a few things:
- While there are talented people out there who want to free-lance, the majority of job seekers want the benefits that go along with being an employee. I remember being in several call center staffing meetings and hearing managers rationalize their contractor status model with statements like, “Single moms will appreciate the flexibility of our part-time schedule.” That was, of course, a bunch of crap. Every single mother I know wants the paycheck and benefits that come with full time employment.
- There’s a strong relationship between the quality of your talent and the quality of the service that’s delivered. Why? Because you can apply valid pre-employment test techniques in hiring employees to ensure you are hiring people with the knowledge, skills, and abilities for the job. Also, when a company treats people like they are part of the mission, rather than a commodity, they are more engaged. More engaged employees are more likely than contractors to feel as if they are part of the brand and they want to build and protect it.
There is very little always or never to the contractor vs. employee conversation. I’ve had Uber drivers who are retired and just like making a few extra bucks here and there and others who will drop the gig as soon as they find full time work. Of course, part of the brand is that you’re just catching a ride with a friend as opposed to hiring a professional driver, so the contractor model works well for both sides.
However, the best way to ensure that whoever delivers your product/service to the end user is committed and engaged is to hire them as employees. Why would you trust your brand to someone who is not as invested as you are?
For more information on using pre-employment tests to hire engaged employees, contact Warren Bobrow.
I had the opportunity to provide individual 360 feedback to a group of middle level managers group last week. As I’ve written before, I find many things intriguing about the process. I also try to learn the lessons of other research when providing the feedback so it is less painful for participants who do not have favorable reports.
There’s always some expectation of “surprise” from the ratings as not everyone is a great social monitor. However, where I do not understand this is when participants say they are surprised by their manager’s ratings. This feedback is more valuable for the manager (why aren’t you having these kinds of conversations with your direct reports?) than the participant. If the 360 process opens up this dialogue, then it has been at least a partial success.
Of course, people whose reports are generally good are more accepting of the areas where they can improve than those with poorer results. But, even among the latter group it is always interesting to see the level of acceptance of the feedback. It generally ranges from “My manager just doesn’t like me” (see above) to “I work primarily by myself, so I don’t see how my peers could evaluate me” to “I think people used Neutral instead of Not Applicable. That’s why the ratings are so low.” One can only assume that this ability to dismiss/rationalize data is one of the contributors to the lower job performance.
The organization had done good leg work in preparing this group for the process, including having the executive team go through it first. That established sufficient trust in the confidentiality of the data. Seeing that, and the subsequent development activities, established buy-in. However, HR will still have to prove itself to others, which is to be expected from such a large group.
My message to the participants was that the 360 was the beginning of the development process, not the end. While insight is nice, action (classroom training, special assignments, shifting behaviors, etc.) is what leads to change. I hope that they took it to heart.
For more information on the 360 feedback process, please contact Warren Bobrow.
There are some basics to being an effective leader. As this interview reminds us, recognizing success is one of them. While financial rewards work well for some people and for some tasks, letting people know they are appreciated is an across-the-board motivator. But why?
The interaction between performance, intrinsic motivation (I work hard because I love the work) and extrinsic rewards (I work hard for the extra money) is complex. However, recent research and thinking indicates that the key issues surrounding the effectiveness of pay-for-performance (extrinsic rewards) are:
- How equitable rewards are perceived and
- Whether they reinforce a sense of competence.
The latter is important as it leads to intrinsic motivation. Saying “Thank you” and recognizing achievement also reinforces feelings of competence and people rarely get tired of hearing it (if it’s sincere).
What’s the best way to navigate these tricky motivational waters?
- Use validated pre-employment tests to hire people who are intrinsically motivated to do the work at your company. Or, if you are convinced that extrinsic motivators are critical to your business success, hire people who thrive on them.
- If using individual pay-for-performance, be sure that the rewards are directly linked to what that person does and that they perceive it as fair.
- Regardless of whether you have pay-for-performance, recognize achievement whenever possible as this will increase intrinsic motivation.
- Don’t take intrinsic motivation for granted! Make your workplace one where people who have passion for the work can pursue it.
Please contact Warren Bobrow if you like to discuss other ideas about increasing motivation at your company.
Whether or not you are a soccer fan, you’ve likely heard about the scandal at FIFA (the world body that oversees the sport). The long and short of it is that executives in the organization, leaders in some country soccer committees, and sports marketing companies are accused of accepting bribes. They alleged payments were made to FIFA to ensure that tournaments were played in specific locations, including perhaps for votes for the site of the World Cup (the international soccer championship held every 4 years).
Things like this can happen for two reasons: Lack of transparency/poor governance and support by the organization’s culture. The latter comes from the top executives, which is why the President of FIFA resigned yesterday. Many feel that he jumped before being pushed by sponsors (it always comes down to the money) or the FBI. This culture he established led the organization to be arrogant and be closed to scrutiny.
How does one change a culture which is damaging to the brand? There is not any good science behind this, but one train of thought is that a sick patient cannot heal itself. In the link above, it’s suggested that there be a mea culpa through a truth commission so that all of the dirty laundry can be aired. Another thought is to have the bylaws and governance policies be rewritten by an outside organization. Both of these remedies would perhaps satisfy (to an extent) outside observers, but they also paint those who remain (and didn’t participate in unethical activities) with a brush of suspicion. This could lead to the exodus of top talent. However, in a sport as large as soccer, I have to believe that there are talented people outside of FIFA who could run it well.
I believe that a commitment from a top executive to change may help a culture shift in some cases. I’ve been working with a client on their team building. One barrier to them moving forward is a terrible mistake made by the president last year. It genuinely affected the trust between her and her team an among the team members.
When presented with this before a planned offsite, her first reaction was surprise that people were still bothered by it as she had previously apologized. At the time I thought this attitude would be a significant barrier in improving the team’s performance. Something must have clicked in her mind because at the beginning of the offsite she addressed the issue head-on. She took ownership of the error and for being the reason for the break in trust. Without being defensive, she outlined a path forward and what she would be doing to win back the trust. Her statement lifted a dark cloud and allowed the group to make progress during the session.
Does culture change in a day? Of course not. But this leader had the courage to shift it and, just as importantly, modeled accountability and humbleness to her staff. It’s a good beginning.
For more thoughts and insights into organizational change and employee engagement, contact Warren Bobrow.