After introductions, the presentation began with two definitions of motivation and also looked at some popular myths – one of which was that a happy worker was a productive worker. The point was made that it may not matter how happy a worker you are – if the environment doesn't allow for people to be productive.
When it came to discussing pay, a comment was that pay was often viewed as feedback. Sue added that a good bonus was an indication of achievement and that to some extent, the view of pay was conditioned by the environment. She said that her sales team expected low salaries and high bonuses and that this had sex appeal for them.
It was suggested that these pay structures were time limited – that you would need to change them regularly to keep them fresh for employees. Sue felt that while her organisation's culture was bonus driven, it was probably not possible to generalise the way that employees reacted to pay.
A comment was made that after a while, people switch off to the motivating effect of money and that then it was necessary to find a new way of working, of achieving things – in effect, job redesign.
Dani thought that the blue collar environment required team effort and that sometimes it's recognised by employees that their individual effort won't make a difference, regardless of money.
Peter thought the public sector was different too, and that instead of performance related pay, behaviour related pay would be more influential, as it took more account of the public sector ethos – and that people were less likely to consider money as a prime motivation. George added that in his organisation, 40% of an appraisal is based on how you do the job, and that this is judged through 360º feedback from peers, supervisors and direct reports.
Gary commented that companies sometimes pay on the basis of capability – for example, if employees are multi-skilled; so if an employee can operate all the machines on a floor, they would get paid more. George said that this was the case for his company and that the competencies developed matched NVQ standards and were externally validated – providing, as Sue pointed out, recognition and an incentive.
When it came to discussing senior executive pay and the motivation to produce better company performance, George said that in his Singapore-based parent company, salaries are driven by performance measures that originated in the UK – on safety, profit, growth and the development of people. There is a percentage weighting to each of the sections. Profit is measured on a sliding scale, safety is measured through the number of accidents and time off for accidents, growth is measured through divestments and acquisitions, and the development of people is measured through the achievement of the competency framework and NVQs.
The people development was particularly important, he added, because the environment in which the organisation operates is constantly changing – new legislation, green initiatives etc all require employees' skills to be completely up to date.
In addition, employees are incentivised to keep their skills up to date, being paid only 85% of available pay on joining, but this rises as employees develop skills and gain qualifications.
Sue thought that the motivation of money was heavily dependent on context, and noted that 9,000 contractors working for Spring considered money to be a key element, but that the 1,100 staff working in the organisation considered money to be much less important. In a recent employee survey she told us, out of more than 500 workers returning questionnaires, money was only mentioned by six.
George commented that geography also played a part – and that on Teesside, where his organisation is based, money is key.
It was generally agreed that one size certainly doesn't fit all, but one thought was that if employees thought that an effort was being made to give rewards that were valued by employees, this in itself was motivational.
An interesting discussion ensued over the Maslow and Herzberg theories ; despite much research and very little evidence, people felt that the theories were intuitively “right” and remind management that people have different needs.
When the conversation moved onto expectancy theory , Diane made the point that many support staff in professional services firms don't have “agency” – i.e. the view that if something they had done had a positive outcome, it was down to their efforts, rather than luck. This was, she thought exacerbated by the fact that they were managed by fee earners and partners who didn't recognise their efforts, or indeed, recognise the issues they faced in delivering their work.
Moving onto goal theory , Dani commented that she was perhaps unusual in that she set her own goals and targets, was largely independent, and had a lot of flexibility in terms of meeting her objectives. She felt this was a bit disconcerting to begin with, but motivating for her because of the large degree of freedom she has. She acknowledged that this approach might be lonely, but that it depended on the personality of the individual.
George thought that flexibility in goal setting was essential or the process was likely to become regimented and to all intents and purposes, meaningless as goals were set independent of the changing business environment.
When we looked at what could go wrong when considering employee motivation, particularly in relation to performance-related pay , we discussed that there might not be sufficient money to reward employees who performed well. Keith made the point that in terms of the NHS, the Treasury define the budget 2 or 3 years in advance, which leaves little scope for increasing payments for performance, regardless of the effort made by employees. This inevitably leads to sandbagging.
He also agreed with Peter that the intrinsic reward is very important here and felt that public recognition of the role of public servants was often missing, and this in itself was de-motivating.
When we talked about management motives and trust, Sue remarked that Spring had just launched a learning and development programme at Ashridge for more than 100 managers, a big investment. The participants had been hand-picked, but there was still a concern that the programme was a means of assessing their performance.
Gary suggested that this group had two experiences of goal setting – one where goals were self-set and one where the goals were more directed within parameters and asked the question where should the balance be?
The group felt that guidelines and a light hand were possibly a good way forward, but that it would depend on the individual – newcomers, for example might be less comfortable setting their own goals. Certainly, organisational requirements need to be taken into consideration when setting goals – otherwise what would be achieved organisationally?
ETOL case study
ETOL (now Sembcorp) is a service provider as well as a utility provider. Previously owned by ICI, the business was sold to a global energy company and George commented that at time of the change project it was like a child being taken away from its mother. He mentioned that many of the employees grieved for the loss of their original company, and that they have kept their old ICI overalls as a mark of their affiliation.
The drivers for the change programme were a clash between the old ICI culture and that of its new owner, significant and continuing competitive pressures which were environmental, price-driven, about demand and about new entrants to the market. In addition, relationships with the three recognised unions were adversarial. These led to a management view that only through partnership could the organisation progress.
Gary detailed the change process which aimed to tackle the relationship between the unions and management, and said that the employee workshops ran on a bottom up approach, giving rank and file employees the opportunity to become involved in how the company should be structured, would be run and also as a platform for new ideas. These ideas were implemented as soon as possible after the workshops to demonstrate that change was indeed, afoot.
A group of change agents were “semi-volunteered” – sort of pressed into service. George commented that for some of the change agents it was difficult to represent non-union staff, which constituted roughly 40% of the workforce.
For “big” changes – for example, on terms and conditions – there was a joint partnership team. Unusually, Gary was allowed to represent the company in the working groups which George said was vital to get the negotiations through the barriers of trust. He commented that everyone had free access to Gary to ask questions. Gary made the point that he was put into a position where it was easy to trust him.
Discussing communications, George said that the intranet became a flagship for the communications programme, and to ensure a unified message, communications was controlled by a representative group.
In addition, free access was given to a tremendous amount of confidential information. George commented that people were treated as adults, rather than children. He noted that some of his colleagues had been worried about this respect. He mentioned that a very good non-executive director, who was respected by shop stewards was very helpful here.
After the Enron scandal broke, George said that although the directors of ETOL couldn't talk publicly, the employees took up the cudgels on behalf of the company with the local community. They were, he said, “brilliant”. Union representatives talked to suppliers to stop them pulling out of the company, and it was here, George said, that partnership really worked – in effect, the employees took on a director role. When someone feels really passionate about something – they'll do something about protecting it, he commented.
When ETOL was bought by Sembcorp, it was bought as a going concern. A project to build a new gas turbine, shelved at the time of the collapse of Enron, was bankrolled by Sembcorp, and despite the hiatus in building work, was completed in time and to budget.
Remaining issues
Despite the success of the partnership agreement, where the benefits have already been significant, there are still issues. Currently, explained George, work/life balance is very high on the agenda, and the company has introduced flexible working – where employees can accrue time over a year to take as annual leave. He believes that 90% of this is done honestly. However, there has been a 17% hike in working hours – from 36 to 41 – and there is still resentment about this, especially with shift workers.
Poor performance, however, is still an issue, and some of the softer skills are not valued and rewarded as much as they should be. In addition, some of the managers are still not convinced that partnership works and act, said George, as “terrorists” in the organisation. He also said that not all the workers too, are not engaged, and that he estimates that roughly a quarter are not bought in to the changes.
Another issue the management faces with staff is that of market level salaries – if salaries in the marketplace don't rise, then there's no change at Sembcorp. At five percent, sickness absence is still high, said George and they'd like to get it to below 3%.
His final view was that the organisation has to tolerate difference – not everyone will be on your page.
The partnership approach adopted in ETOL has been emulated by a number of the other ICI companies on the site and a number of other organisations, including Sainsburys, have seen the company as an example of best practice.
