There's a scene from a long-forgotten film that has stayed etched in my mind. It's a scene set in an office, where the boss is endlessly haranguing the hapless office assistant who gets kicked around by everybody.
After getting an earful for his faults, both real and imagined, the boss orders the assistant to get him a cup of coffee.
Cut to the pantry where the assistant is preparing the coffee.
His face contorted with hatred, he goes about the motions with extreme force. Then, as a coup de grace, he adds something to the coffee which for reasons of decorum we will not mention. Cut again to a close-up of the boss sipping the coffee, and smacking his lips in appreciation.
Though this story is fictional, its message is clear. If employees don't have positive control, they'll find a way to exert negative control, say Adrian Gostick and Chester Elton, authors of The Carrot Principle and The Orange Revolution.
They conducted a large study of employees at American organisations over a decade on this very same subject: whether managers in companies do a good job of recognising employee contributions.
What Gostick and Elton, who beside writing books also conduct training programmes on the power of recognition and team-building, learnt was not encouraging: 79 per cent of employees who quit their jobs cite a lack of appreciation as a key reason for leaving. Even more disheartening, 65 per cent of North Americans report that they didn't receive recognition at all in the previous year.
Gostick and Elton began their research together in 1999. "We were consultants with a recognition company, helping some of the world's leading companies build employee engagement strategies," they explain.
"We had a lot of practical knowledge on what works with employee engagement, but not a lot of data, so we conducted a ten-year study for The Carrot Principle, and another two-year, 350,000-person study for our new book on teamwork, The Orange Revolution."
Over the years their work has evolved from helping managers be more effective, to now also helping teams work together more effectively. "The economy has certainly impacted our research, as our latest data shows the decline in employee morale as companies work employees harder with fewer rewards," they point out.
The authors' first hypothesis, based on their consulting work, was that organisations that effectively recognised their employees were more profitable. "But we didn't have the research to back up that claim. In 2007 we published The Carrot Principle with a 200,000-person study that showed organisations that were effective at recognising excellence were three times more profitable than their peers."
That data gathered a lot of attention in the press. "We then followed that up in 2009 with a global second edition of the book with a new 10,000-person research study conducted in 13 countries. This proved that recognition is not just a North American need, but a driver of employees in Asia, Europe, South America and around the world."
Their latest research has been encapsulated in their second book, The Orange Revolution, that was published in September 2010. "We wanted to establish the characteristics of the world's most effective teams. The research is rock solid, and shows that effective organisations have a greater number of effective teams. They keep those teams together longer, and help them establish rules to help them function effectively."
Gostick and Elton conducted three surveys in the past few years to establish their postulates. "We also have visited more than two dozen countries, taught seminars to almost a million people, and have spent thousands of hours consulting with leaders of Fortune 500 titans," they relate.
Through that time, the authors say they have repeatedly witnessed the power of recognition to improve not only morale but business results as well. "But what we really needed - and what drives businesses in general- is unmistakable empirical evidence," they say. "That evidence is what makes our books unique."
The authors say they gained quite a few insights from their research. "For instance, in response to the question ‘My organisation recognises excellence,' the organisations that scored in the lowest fourth overall had an average return on equity (ROE) of 2.4 per cent, whereas those that scored in the top fourth had an average ROE of 8.7 per cent."
In other words, companies that most effectively recognise excellence enjoy a return that is more than triple the return of those that do so the worst.
The teams and offices rated most highly by employees in response to, ‘My manager does a good job of recognising employee contributions,' also typically place in the top scores for customer satisfaction, employee satisfaction and retention.
Of the people who report the highest morale at work, 94.4 per cent agree that their managers are effective at recognition. In contrast, 56 per cent of employees who report low morale give their manager a failing grade on recognition; and only 2.4 per cent of people who have low morale say they have a boss who is great at recognition. The big question that most managers have is how do they boost their staff morale. In their book, the authors talk of ‘light-bulb moments'. What does a light-bulb moment have to do with teamwork?
"Think of it this way: Charles Batcheldor was a machinist; John Kruesi was a clockmaker; Ludwig Boehm was a glassblower; Francis Upton was a mathematician; together, they shared a light-bulb moment with the inventor, Thomas Edison. After all, the commercially viable incandescent light bulb was the product of an entire team, not the single inventor we were taught in fifth grade. In fact, our research about teamwork shows that there are no great leaders without great teams."
What have been Gostick and Elton's light-bulb moments?
"We have had two major light-bulb moments in recent years," the authors say. "The first came in 2007 with the publishing of The Carrot Principle. We were the first authors to find empirical evidence showing that when managers recognise great work, they have higher levels of employee engagement and profits. That was a counter-intuitive message for most managers, many of whom believe that tough, no-nonsense leaders get the best results. Not true.
But what was most enlightening for us was not the influence of recognition - most enlightened leaders know appreciation is a powerful motivator - but the true light-bulb moment came when we found that recognition was strongly linked to four other leadership characteristics.
Managers who are strong recognisers are also seen by their employees as better communicators and goal-setters, they are more trusted, and they are better able to hold people accountable for great work. We discovered that recognition alone is only powerful when it added to these four other characteristics of leadership. Then recognition becomes an accelerator - creating stronger business results. We called that formula the Carrot Principle - goal setting, communication, trust and accountability + recognition = engagement."
Their second light-bulb moment came in 2010 as Gostick and Elton completed work on teams for The Orange Revolution.
"There is a lot of research in that book, in fact 350,000 people were surveyed, and what we found was simple yet profound," they say. "We discovered that great teams - the ones that truly create breakthroughs in their industries - set rules that they follow. The language on the rules varied slightly from great team to great team, but the most common were these: Wow, No Surprises and Cheer.
In other words, breakthrough teams have a commitment to world-class results (wow) and extreme clarity around the behaviours to get there; they are diligent about open communication and a no-surprise culture; and they root (cheer) for each other. Simple yes, but these rules are the foundation upon which effective teams operate. Most teams are pretty dysfunctional, but great teams use the rules to facilitate how they operate."
If making a great team is as simple as that then why don't more managers recognise their staff's work? Gostick and Elton have their answer pat: "We believe exercise is good for us, right? Then why don't we do it more often? Because we are too busy, because we believe disease won't affect us, because our back hurts, and so on. We all have excuses.
"In the business world, most managers know they should recognise their employees. Among the most common excuses are: I don't have time, I don't know how, I don't know what to give for what accomplishment, it's not part of our culture, I'm afraid of jealousies on the team, I'm already good at it (no you're not), etc.
"By this point, most managers know they should recognise more, but don't for one reason or another. We try to reach these managers in our training, teaching them how. Still, our global study showed there are 32 per cent of managers who are negative on recognition. These are by far the least productive managers, those with the lowest employee engagement scores and profitability. It's very difficult to get through to these managers without a leadership intervention."
Gostick and Elton, however, firmly believe that managers can be trained to recognise. Their programmes are designed around one simple idea: recognition should be frequent, specific and timely. "In other words, the most effective recognition is informal and low cost (frequent). We find that in the best teams recognition is happening about every seven days.
"Next, appreciation should be specific to your core values as an organisation. And finally, recognition should be close to the action (timely) - you shouldn't be waiting weeks or months to congratulate."
Gostick and Elton take managers through role plays and different situations to help them understand it isn't rocket science. "We teach them the ‘why' of recognition, the ‘how' and get them to ‘commit' to a plan going forward to give it a try. It's amazing how many emails we receive saying ‘this has changed the way I manage my team.' That's wonderful to hear."
The truth is there are no great leaders without great teams. But how many leaders accept this?
"The leaders we've spoken to who understand this actually find great relief in it," say the authors. "They are sharing the accountability for success with their teams. They play a role, but no great a role than other team members. And because of that, these leaders are very respectful of their employees. They give them credit for their success. One of the most common phrases we heard from great leaders was this, ‘It's not me that accomplished all that, it was my team'."
The problem comes when there is a confusion about the manager's perception of his or her responsibility. "When we ask leaders to draw up a list about their duties, most of them miss the point," say Gostick and Elton.
"We find that the majority of a manager's attention is spent focused on completing their own work or addressing the needs of clients and senior management. The majority of managers still view themselves as either the senior ‘doer' on a team, or as the task master who gives daily assignments. On the other hand, within an Orange Revolution Model their primary role is as facilitators, who smooth the pathway forward."
Recognition strategies
From their work with some of the world's most successful companies, authors Gostick
and Elton have identified four areas of recognition focus that make up the backbone of a healthy recognition culture. They are, day-to-day recognition which are the pats on the back, the handwritten notes, the team lunches, on-the-spot award certificates, the gifts of thanks, and other day-to-day ways you praise and express gratitude to employees. This is often low-cost, but always high-touch recognition.
Second, is above-and-beyond recognition. This happens when your people go above-and-beyond, they deserve a more formal response from the organisation.
These awards provide a structured way to reward significant achievements that support the company's core values and business goals - whether the achievement of a sales goal, the implementation of an innovative idea, providing exceptional customer service, and so on.
Third is career recognition. Most organisations provide a formal programme to recognise their people on the anniversary of their hire date, giving managers a prime opportunity to highlight cumulative contributions. In most organisations, this is the most under-utilised vehicle for rewarding and engaging employees.
Last but not least is celebration events. These celebrations reinforce your brand and thank everyone in a team, division, or an entire organisation. Events to celebrate include successfully completing a key project, achievement of record results, company anniversaries, or new product launches.
What leaders should do
"The most important thing about the new model we introduced in our book The Orange Revolution is that it takes only the lightest touch by a leader to maintain success," say Gostick and Elton.
"To facilitate this type of team, motivated and skilled leaders must ensure the right people join. Great managers insist on finding the necessary personnel and help the team consider candidates for their technical skills, integrity, empathy, personality, and, of course, for their ability to work well with the rest of the team."
They should also translate corporate goals. By helping employees understand the big picture and their collective role in furthering the Cause, managers help lead the team towards goals with the most impact.
Good managers should facilitate rule setting. Effective managers help pave the revolutionary road by gathering their teams to establish a collective code of conduct that will become the blueprint for all decisions and interactions.
Management also includes promoting a culture of appreciation. Not only do great leaders recognise above-and-beyond achievements, they also facilitate peer-to-peer recognition and make their teams visible to those around the organisation.
In today's global economy, Gostick and Elton are frequently asked where their work stands in today's multicultural world? It's a question they asked themselves when they started applying their findings practically. "We did actually find some fascinating differences across cultures in our work, many of which we keep in our vest pocket to use when we consult with organisations," they reveal. "However, one thing remains consistent whether your employees are in the Middle East, the US, South America or Europe: people in every culture want to be appreciated for their great work. ‘Thank you' is a term that is found in every language, and yet it is a phrase that is all too often forgotten in business.
"While the method of delivery of recognition may vary from country to country, and from person to person, the need remains. And the organisations that are most effective at appreciating great work are the most productive and profitable. The research shows this, as does pure common sense."
By the way... Multi-national giants such as American Express, Pepsi Beverages Company, Avis Budget Group, and DHL are using the Carrot techniques to great effect.
Facts:
79 per cent of employees who quit their jobs cite a lack of appreciation as a key reason for leaving. Info courtesy: The Carrot Principle
For more on this http://carrots.com
The website gives details on the authors and their books.
