Our August, 2003 newsletter is entitled "Managing Your Employees." Our newsletters feature articles on various aspects of preparing a business plan and over time should lead you through the entire business planning process.  

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Managing Your Employees
Courtesy of Ralph Brown, Sequus Inc.

An important issue for the owner/manager of a small business is "What can I do to improve performance?" For the small business owner who has employees involved in running the business, this question is the essence of the manager's job.

The manager has a major effect on business performance. Yes, there are other variables involved such as the skills of the employees, the size of the budget, the type of work being done, the nature of the work site, etc. All have a bearing on performance. But the behaviour of the manager can make the difference between a business performing at a high level or a lower level.

Performance will, of course, be measured differently in each case. It may be the number of items produced, a percentage sales increase or the completion of a project on time and within budget. Regardless of the results expected, the most important influence on performance is the work culture.

The work culture defines the environment or the morale of the employees. Generally, it refers to what it is like to work in that business. In any small business where the emphasis is on productivity, management must focus on the impact it has on the work culture because it, in turn, directly affects productivity. This makes the owner/manager, more than any other factor, responsible for the performance of the work team.

The Work Culture

There are two major determinants of work culture:

Satisfaction
In a positive work culture satisfaction is high when employees are highly satisfied with themselves, their job, their coworkers and their manager. A small business with a less healthy culture is one where people may be dissatisfied with one or more of these variables.

Communication
In a positive work culture, people talk more about work performance issues than they do in a culture that is less positive. Casual conversation about non-performance issues does little to produce a positive work culture. However, the degree to which the manager directs employees to talk about performance issues on a hour-by-hour, day-by-day basis determines the degree of positiveness of the culture.

Work Culture as a Collection of Norms
A norm is a collective notion that a group holds. Every group of people whose daily life, work, or interests bring them together develops a whole set of these norms. The pattern they form is called a culture.

Workers in every business share certain attitudes and patterns of behavior. These norms can be productive or counterproductive and may either improve or injure the morale of the business. Either way, these workplace norms influence job satisfaction and determine how well workers perform.

Employees conform to norms because as long as they do what the group as a whole believes is right, they will earn the approval of their co-workers. Very few people are willing to lose the approval and acceptance of their peers. It reinforces their sense of identity and makes their place in the business seem more stable. Employees who know they are accepted by other employees find it easy to say "people think what I'm doing is valuable, I can tell by the way they treat me."

Members of a work group enforce the norms that exist in their culture. If a worker violates a work norm, the others will probably show their disapproval and perhaps put some pressure on the worker to change his or her ways.

One of the manager's main concerns should be to encourage positive norms that enhance productivity. A worker who is satisfied will perform better than one who is not. Negative work norms destroy morale and lower productivity while positive norms lead to worker satisfaction and improved performance.

Identifying Norms
As you begin to think about the norms that exist in your business, keep these things in mind:

• Some norms may be so subtle that people act on them without realizing it and without ever having put them into words.
• Even a small work group will have norms.
• Norms are dynamic; they change continuously as work conditions and personnel fluctuate.
• Not every worker is affected by norms in the same way.

Following are a number of common workplace norms. Go through them carefully to see if any of these norms are practised in your business.

Common Workplace Norms

• Do the job the way you are told, even if that is not the best way.
• It's okay to come in late.
• People with high level jobs are allowed more privileges than other workers.
• Never work so hard or so fast that you will make your fellow workers look bad by comparison.
• Always look busy even if you don't have work to do.
• Who you know is more important than what you know.
• Padding your expense account is okay.
• Never express your emotions.
• Never do anything without going through the formal organizational channels.
• Make all important requests through formal memos; don't rely on oral communication.
• Don't ask; just do it.
• Never do anything until you are told.
• Never do anything until you are told a second time - then you at least know it's important.

There are some norms that actually prevent you from discussing norms - these can be called super-norms.

• Don't volunteer information.
• Don't talk openly to management about your feelings and ideas.
• Don't say anything embarrassing.
• Be polite, even if it keeps you from saying what you think.
• Don't be critical of the way things are done here.
• Don't take a chance of making a fool of yourself in front of the group.

Managers who have a positive effect on their employees do a good job implementing what is known as the five managerial factors. These are mission, goals, feedback, rewards and support. Each of the factors relates to a basic question that every employee has about the business and how he fits into the work team. The questions are as follows:

• Why am I here?
• Where am I going?
• How am I doing?
• What's in it for me?
• Where do I go for help?

1. Mission
Mission involves answering the employee's "Why am I here?" question. The degree to which the employee identifies with the business is called having a sense of mission. This involves a sense of pride and affiliation with the work unit and the work that they do.

There is a familiar story about three bricklayers. The first, when asked to describe the work that he did replied, "I lay bricks." The second, when asked the same question replied, "I am building a wall." The third replied, "I am building a cathedral."

Needless to say, it was the third bricklayer who had a sense of mission and who was the most productive employee.

2. Goals
Managing goals involves providing members of the work team with the answer to the "Where am I going?" question. The manager should ensure that the employees understand what is expected of them. In this respect, the manager, through the use of good communication and leadership skills, encourages the development of an environment whereby individual job performance is connected to the larger goals of the business. The ineffective manager, on the other hand, leaves the "Where am I going?" question unanswered resulting in confusion. Energy is wasted trying to figure out what to do, what is important and so on, resulting in a productivity loss.

3. Feedback
Managing feedback involves providing information regarding how an employee is progressing. Good feedback answers the "How am I doing?" question for each employee. Most managers are weak in this area and often feel uncomfortable telling the employee "good news" or "bad news" about performance. The result - the employee really does not know how he is doing. With the absence of feedback, employees invent their own. In most cases this invented feedback is inaccurate and unrealistic.

Studies show that when employees are interviewed about performance, they all feel they are doing well even when, in fact, they may be a low or marginal performer.

Effective managers, therefore, need to provide the feedback employees need in order to answer the "How am I doing?" question This feedback is always relevant if it is clear, consistent and delivered frequently.

Effective managers do not view feedback as punishment. Feedback can often be completely non-judgmental. It can be like a gas gauge in the car which simply gives information about the level of petrol in the tank. It does not make a positive or negative statement about the information it is communicating.

For example, at a small trucking company the policy was to consolidate small packages into larger containers before shipping. However, when performance was measured, it was found that employees were consolidating packages only 45% of the time. To improve performance, management decided to develop a system that provided feedback. Employees were instructed to make a check on a list each time a container was used. In a single day, utilization of containers jumped from 45% to 95%!

Note that the feedback was completely non-judgmental and neutral. Employees were never told whether they were doing well or not so well.

Feedback can come from the supervisor, the employees, the job itself, the appraisal system or the employee's observations and perceptions.

Feedback should be:

• Neutral information about job performance (e.g. graphs and charts).
• Given as soon as possible after job performance.
• Frequent.
• Related to goals.
• Accurate.
• Concise.
• Usable.

Employees often get little or no feedback from the job itself. They receive very little information or data about how they are doing and how they could improve. In many cases they must rely on the owner/manager to tell them. Thus it is the manager's job to provide feedback because without it performance is unlikely to improve.

4. Rewards
Managing rewards involves answering the "What's in it for me?" question. It is important to differentiate "feedback as information" from "rewards as reinforcement." Rewards are the consequences that accrue to the employee for doing good work. Feedback is the information provided to the employee about how he is doing in terms of progressing toward the goal. Feedback, therefore, always precedes rewards.

Rewards that are personal, social, immediate and tied to specific behaviors are much more effective than those that are impersonal, organizational, delayed and not related to specific behaviors.

Effective use of rewards allows the employees to make clear distinctions between what happens to them as a high performer as opposed to what happens to them as a marginal or low performer. But, at the same time, employees want to be treated fairly and with equity.

5. Support
When a manager provides support he is addressing the question, "Where do I go for help?" In a negative work culture asking for help may be viewed as a weakness or as an imposition on others.

In a positive work culture employees know that when something goes wrong they can seek and obtain help from other employees. They realize that seeking help is the responsible thing to do if goals are to be achieved. In a positive work culture managers make sure that there are no negative consequences accruing to those who ask for help.

The Uncontrollable Factors
The five factors discussed above (mission, goals, feedback, rewards and support) are all controllable - they relate to how managers behave or do not behave. There are, however, some uncontrollable or non-manageable factors which have some influence on the work culture and therefore, performance. Here we are talking about factors such as location, the number of resources available, personal concerns of employees, the state of the economy, etc.

Although these uncontrollable factors do affect the work culture, managerial performance (which is controllable) affects it more significantly. Of all the factors that impact the work culture, the manager's behavior is the most significant. The work team will have a culture regardless of managerial actions. The effective manager, however, builds a positive work culture through his behavior, communication and leadership skills. It is this positive work culture which then yields high productivity.

Management By Walking Around
A typical manager's day is characterized by "managing by walking around." The effective manager joins in many different conversations each day. Many of these conversations are ad hoc, unorganized, and happen in the hallway, at the work site or as a result of being interrupted. Few of them are planned and often they are short and disjointed. But the effective manager relates each one of these conversations to performance and the five managerial factors thus contributing in a positive way to the culture and performance of the work team. We often refer to these activities as the "Yak Factor."

This model indicates that effective management is an active process. The effective manager does a lot of walking and talking. Talking about what? Talking about performance. Talking about mission, goals, feedback, rewards and support. A good manager provides answers to the five key questions that every employee has about themselves and their jobs.

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