Do small business owners need to repay PUA benefits if they received PPP/EIDL funds?

PUA Assistance text

Last week, I started getting calls from small business owners stating they personally received Notice of Overpayment letters from state unemployment offices indicating they were to pay back pandemic unemployment assistance (PUA) benefits previously paid to them.  Based on a quick review, it appears some state offices determined these business owners ineligible for  unemployment under PUA benefits because their companies were also issued funds through either Paycheck Protection Program (PPP) and/or Economic Injury Disaster Loans (EIDL) programs.

Earlier this year when pandemic assistance efforts were first announced, one of the most commonly asked questions was around unemployment eligibility for unemployment if they too received PPP and/or EIDL funds.  The answer was yes, so long as the business owner or solopreneur is not double-dipping and EIDL/PPP assistance is being used to cover permissible expenses.  Permissible expenses for either program are as follows:

Paycheck Protection Program (PPP) permissible expenses:  Payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll)

Economic Injury Disaster Loan permissible expenses:  Working capital & normal operating expenses (ie continuation of health care benefits, rent, utilities, fixed debt payments).

Under the CARES Act, an individual is eligible for PUA benefits if he/she:

  • Is not be eligible for regular unemployment benefits, and
  • Is unemployed, partially unemployed, or unable or unavailable to work because of certain health or economic consequences of the COVID-19 pandemic.

What to do if you are a business owner who received a notice to repay PUA benefits.

If you have unintentionally or intentionally collected unemployment benefits, most state agencies provide options and in some cases enter into a repayment plan and even request a waiver or reduction in the overpayment amount.  Responding sooner than later may be especially beneficial if you are facing a high interest rate.

If you have not unintentionally or intentionally collected unemployment benefits, appeal within the timeframe indicated on the notice of overpayment letter.  Once you’ve submitted your timely appeal, follow up with your state agency on your appeal.  CARES Act relief efforts and government shutdowns related to COVID resulted in state unemployment offices backlogs.  Following up and continuing to monitor your appeal is the best way to avoid any unfavorable determination due to administrative errors.

How to appeal the determination.

Some key pieces of information on these notices are classification/reasoning for overpayment, amount to be repaid (which may a different amount than what you received if you had taxes or child support withheld), the applicable interest rate to be applied to the unpaid balance, and your appeal rights.  If you used PPP/EIDL funds appropriately (on permissible expenses) other than your own salary or wages and were eligible to receive PUA under the CARES Act because you were unemployed, partially unemployed, or unable or unavailable to work because of certain health or economic consequences of the COVID-19 pandemic, then you will need to appeal the state’s determination of overpayment.  Typically appeals must be made within a relatively short timeframe (10-15 days).  Failure to appeal within the timeframe can serve as a waiver of your rights to appeal.

Provide documentation

As part of your appeal, provide details and documentation supporting your eligibility to receive PUA benefits.  Documentation showing how PPP and/or EIDL funds were used if other than your own salary/wages can serve as proof that you, personally were not paid with small business assistance funds.  It is also recommended to engage your company’s finance or tax professional in the process to ensure your supporting documents are consistent with any documentation they use to report the use of PPP/EIDL funds to the Lender servicing your loan(s).

What happens if you fail to appeal the decision.

Consequences of not appealing the decision will result in your obligation to repay the amount due, plus interest (penalties).  Depending on the reasoning for the decision and whether the unemployment office deemed your overpayment as unintentional misrepresentation or intentional misrepresentation (fraud), offices reserve the right to take legal action.  Although extremely rare, state unemployment offices can pursue criminal charges for payments they deem fraudulent.

 

In a year that has been hard on small businesses, it’s been especially difficult on the small business owners responsible for their recovery.  Although the CARES Act helped reduce the financial and economic hardships to small businesses brought about by COVID19 shutdowns, the lasting haphazard nature of disaster relief efforts are burdensome.  Responding to PUA overpayment letters can be frustrating.  Not responding however can lead to even more frustration, and much more burdensome consequences.  If you’ve received one of these letters, take the time to respond today and save yourself the stress, time, and frustration later when it’s sure to be exponentially more taxing.

The Future of Remote Work

Remote worker

Last weekend, I caught up with some friends….in the very awkward social distancing way that we’ve grown to know in 2020.  It’s a group that has known each other for years….some since childhood.  Perhaps due to so much history, we rarely talk about work.  This time though, much to my HR-geeky pleasure, everyone seemed to have something to say about how work has changed this year in light of COVID19.  Nearly everyone, despite working in different industries, at different levels, and with varying levels of expertise, is now working remotely either some or all of the time.  Few expect to ever return to an office full-time and are now realizing what it means to work 100% remote.  Many are not happy about it.  The annoying HR person in me wanted to shout, “I knew it!”.  Fortunately though I know to keep that annoying HR voice in check in social settings.  She’s a buzzkill!

What are we missing about our workplaces?

What we miss about collocated work depends on role.  For managers – it’s seeing and knowing employees are working.  For employees – it’s the interactions with coworkers.  Ultimately though, these are two sides of the same coin, because whether managers are unsure employees are working, or employees miss interacting with peers, it comes down to our dependency on visual communication.  According to a recent survey of more than 2,300 US workers, 74% say “people” are what they miss most about the office.  As much as 93% of communication is thought to be nonverbal (Mehrabian & Wiener, 1967 and Mehrabian & Ferris, 1967), with body language and tone of voice having a much larger impact on our understanding of messages.  Although there is some debate on the extent to which we depend on tone and body language in communication with others – anyone who has worked in a remote capacity would likely agree with this information.  Emails, texts, slack messages without tone or body language, are often misinterpreted.  When stress enters the scene, communication becomes even more fragmented.  High levels of stress actually impairs brain function.  The part of the brain responsible for planning, communication, and logical reasoning suffers – leading to more frequent mistakes, frustration, ultimately leading to feelings of disconnection and loneliness. Feeling stressed, left without the nonverbal cues on which we depend to connect with others, not only our work suffers, we also suffer personally.  So while very few of us miss the commute or inconvenience of sitting in an actual office, we do miss interacting with others.  We are after all social creatures.  Yes, introverts, even you.

What challenges lie ahead?

Social isolation

A closely watched industry during the pandemic has been call centers.  Historically resistant to the work-from-home model, call centers were part of the 88% of companies to seemingly overnight switch to remote work, encouraging and in some cases requiring employees to work from home and socially distance.  Last month, J.D. Power published findings from a survey of 124 customer service organizations where 86% of companies say they plan to implement permanent work-from-home models even after the pandemic – clearly happy with how their teams are performing.  Call centers, notorious for their workforce analytics, recognized an unexpected phenomenon, increased Average Handle Time.  Average Handle Time (AHT) is a common call center key performance indicator (KPI) reflecting the average amount of time that a call center employee spends on the phone with customers/callers.  During the pandemic, 55% of companies saw an increase in AHT, despite lower call volumes.  Why?  Employees and customers alike, are lonely, more eager than normal to chat with someone on the phone – even a stranger.  Perhaps one of the few positive effects to life in quarantine, it’s not something to be ignored or monetized.  This finding serves as warning of how significant yet subtle we are to our need for social interaction and connection.

Exit, employee engagement. Enter wellbeing.

For years we have been consumed with the concept of keeping our employees engaged, certain that better engagement means happier and more productive employees.  Historically, employee engagement was a term used to identify an employee’s involvement, enthusiasm, and commitment to their workplace.  Although methods of calculating  engagement vary, most consist of qualitative data reflecting a combination of two things: 1) the extent to which an employee understands his role as it relates to the company’s success, and 2) behaviors in how an employee approaches her work.  With the pandemic however, we’ve seen this definition change, both rapidly and drastically.  Today’s definition of employee engagement has shifted toward a definition of wellbeing.  For many of us, our workplaces during the pandemic have validated what research has revealed for years, a culture of wellbeing is a high-performing culture. A 1997 study illustrates the positive correlation between employee mood and quality service interactions with customers.  A 2005 study confirms the importance wellbeing has on creativity.  More recently, a 2019 meta-analysis of 339 independent research studies related to wellbeing and either employee, team, or company performance, found positive correlations between employee wellbeing and customer loyalty (0.30) and employee productivity (0.20).  It turns out, we humans are a bit more complex than previously predicted by the traditional concept of employee engagement.  Even if we care deeply about our professional success, the success of our company, and understand and are committed to the importance of our work, the quality and output of our work can still be jeopardized by how we think and feel – even when thoughts and feelings are unrelated to work.  Health concerns, fearing for the safety and health of our loved ones, caring for our children unable to attend school or daycare, concerns about the economy, racial tensions….basically the entire 2020 human experience is taxing to both our emotional and psychological state.  And because our modern world is primarily made up of knowledge-based jobs, dependent on our cognitive ability to solve complex problems, our thoughts and emotions have a significant impact on how we work.  In times of stress, cognitive function is impaired.  Research and the pandemic serve as evidence that good work is not simply a choice as an extension of our work ethic.  Good work is a byproduct of our wellbeing.

Implications for the Future of Work

Stop obsessing on the physical and look to the psychological.

Several new terms and phrases have surfaced so far in 2020 such as social distancing, maskne, and a new normal.  Another term to surface recently is bossware – software apps that allow companies to monitor the computer and online activity of its workers that functions a lot like spyware.  While some software is more invasive, covertly capturing employee private social media passwords, others are much more overt, tracking an employee’s key strokes and opening and closing of work-related applications to then calculate and report productivity scores back to the employee, his/her boss, and his/her boss’ boss, and even coworkers.  A recent article reported two such software applications have seen a 500% and 600% increase in prospective or actual users since the pandemic!  These tools are growing in popularity serving as a reminder of Albert Einstein’s quote, “We cannot solve our problems with the same thinking we used when we created them”.  A micromanager pre-COVID will likely be a micromanager post-COVID unless she decides to develop into an actual leader.  True leaders understand leading people effectively when it comes to work, means first understanding the value of the work.  Unless a company’s success somehow depends on how many keystrokes are made by an employee in a sitting or how many websites and software applications she opens and closes in her shift, the data collected is useless.  Without a qualitative measurement, these metrics mean very little.  Something understood by most modern workplace HR professionals, if you want to identify holes and gaps in any people-facing system or structure, put down incentives and consequences.  People will naturally seek out ways to game systems to avoid pain (consequences) and achieve pleasure (incentives).  Rarely do they drive the behaviors you hoped to elicit.  Instead, today’s leaders and workplaces are best to invest in creating a high-performing culture.  Generally high-performing teams, remote or onsite, are made up of more self-aware workers and have a higher level of psychological safety within teams.  A study on high-performing and average leaders showed high-performing leaders were significantly more self-aware than average leaders.  A 2017 report identifies employee self-awareness and emotional intelligence as having a significant impact on employee performance in two different areas, contextual performanceinterpersonal behaviors or actions that benefit the organization, and task performanceusing skills, knowledge, or accomplishing specialized tasks to support core functions of a business.  So, while some managers choose to focus on driving the physical tasks associated with knowledge-based work, such as typing, opening and closing programs, etc,. others are choosing to focus on an employee’s psychological approach to work like self-awareness, emotional intelligence, psychological safety.  Research shows us that those workplaces investing in employee mindfulness and wellbeing see a much bigger return on their investment compared to those allocating dollars to bossware-type technology.

It’s a team effort

For years we have stressed the importance of leadership, making statements like “people don’t quit companies, they quit managers”.  But, in many cases the manager is simply the embodiment of the company.  Who hired and trained the manager?  Who holds the manager accountable?  And when employees don’t quit – is it only because of a good manager?  Most companies attribute their high employee retention in part to managers, but not entirely.  So, if the saying is true, how would any of this make sense?  Managers are an important part of the employee experience, but less as a standalone component, and more as a byproduct.  How individuals and teams feel and perform today has much more to do with their connection to the team, as a whole.  High-performing teams, as mentioned previously, have a higher level of psychological safety.  To measure psychological safety, individuals indicate how much they agree or disagree with statements like, members of this team are able to bring up problems and tough issues, and it is difficult to ask other members of this team for help.  While a manager can clearly impact whether a person feels comfortable speaking candidly or asking for help, peers within the team also have influence.  Psychological safety isn’t just about how individuals perceive the leader.  Psychological safety is about how individuals perceive the team.  It’s a team measurement highly reflective of a team’s potential to be high-performing.  Research on social relationships and business performance further demonstrates the importance of trust and connection within teams.  A report by Gallup shows 20% of employees say they have a best friend at work.  Based on their findings, they predict companies where 60% of employees have a best friend at work see 36% fewer safety incidents, 7% more engaged customers, and 12% higher profits.  In a separate study, 72% of workers indicate the most meaningful and memorable recognition they received came from someone other than their direct manager – placing a high value on other workplace relationships such as peers, customers, and indirect leaders.  Looking toward the future, it’s critical we look to create an environment conducive to success – where employees look to peers and leaders for support and connection.  Particularly for remote teams – even the best leaders do not have the bandwidth to serve as the sole thread linking employees together.  People perform and feel better when they support one another, can collaborate on projects, and have a network within the workplace.  Historically we have hired, developed, and rewarded leaders based largely on their ability to solve problems.  In doing so, we’ve inadvertently stifled the creativity, innovation, and success achieved when we instead empower entire teams to solve problems.  Leaders of the future will not be tactical problem solvers.  Instead, leaders of the future will be coaches, understanding how to ignite and enable teams to collaborate.

How will you remember 2020?  Spoiler alert, it turns out bad memories tend to stay with us more than the good ones.  As 2020 has had its fair share of distress, to say the least, most of us will associated 2020 with health concerns, social and racial tensions, and economic woes, no doubt.  But, how each of us changes from these events will likely differ, greatly.  In 2007, days after my 27th birthday I caught a virus and was rushed into surgery after learning my body was shutting down and that I had only a few hours left to breathe.  A month after recovering, heading home from picking up a coworker’s wedding gift, I lost control of my car and hit a concrete barricade at around 50mph head on.  Months later in an attempt to reconnect with someone I was in a relationship with earlier that year, I learned he’d been killed in a tragic accident.  It was not a fun year, but most certainly a memorable one.  Today however, I reflect on 2007 as the year that saved my life.  To that point, I’d been living a fairly shallow life. Most of my relationships revolved around parties and going out, not about connecting.  I looked to food as comfort, not nourishment.  I treated my body like a well-insured weekend rental car, not bothering to make maintenance a priority.  2007 presented me with the painful but valuable opportunity to reconsider my entire way of life.  It’s been better each day because of it.  So although 2020 has no doubt been painful for you personally as a parent, spouse, friend, and member of your community, and professionally as a leader, what will matter most is how you come out of it.  How has 2020 changed your relationship with humanity?  How will you choose to lead the future of work?

 

Interested in learning tools to help your team collaborate and connect?  Click here to learn more about Team Ethos.

Why smart teams fail to perform (and how to lead them to success)

Usain Bolt is the current 100m world record holder.  A nine-time gold medal holder, Bolt broke the world record in 2009, running the 100m race in 9.58 seconds with a top speed of 27.8 miles per hour.  It’s no mystery why he’s referred to by many as the “fastest man alive”.  In 2017 however, in what was known to be Bolt’s final race, he was unable to even finish same 100m distance.  Approximately halfway through his leg of a 4 x 100m relay, Bolt fell to the track, visibly in pain, due to an injury he later attributed to a torn hamstring.

For most of us, this is not a surprise.  Recognizing hamstrings important to sprinting, it seems natural that performance would be compromised by a tear, even for an elite athlete such as Usain Bolt.  So, why are we surprised when an employee’s work is compromised when he is in a bad mental or emotional state?  Okay – I can actually hear some of you rolling your eyes but I assure you, it’s the same.  Let’s talk brain function.

Jobs today depend mostly on a person’s cognitive capabilities and/or emotional intelligence.  Sales professionals, customer service reps, teachers, technicians, accounting, administrative work….success is contingent on a person’s ability to reason, apply logic, interact with others, and innovate.   And our ability to perform these functions is controlled by our mind.  As a rather small person with a historically weak immune system, this is great for me as physically (I’m not exactly winning any strongman competitions or powerlifting championships).  While my strength and endurance may be limited by my genetics and stature, learning new skills and managing my emotions to boost mindset is much more my speed. Unfortunately though, threats to mindset are less recognizable than physical threats as they originate in our own beliefs and perceptions.  Unlike Bolt, I won’t fall to the ground, writhing in pain when I’m feeling a down.  Since 1999, Harvard Business Professor, Dr. Amy Edmonson, has researched psychological safety’s impact on teams.  Psychological safety, a shared belief within a team that no one will be punished or humiliated for speaking up with ideas, questions, concerns or mistakes, is popular with high-performing teams.  Google, in their 2015 Project Aristotle study, confirmed psychological safety’s importance on work – finding it to be the #1 driver of high-performing teams. So, if a belief, a mindset is conducive to good work, how can mindset hinder work?

A Threat to Mindset is a Threat to Business

In the story of mindset, there is only one bad guy.  That bad guy is stress.  Stress impairs cognitive function and changes us on a biochemical level.  According to the Mayo Clinic, chronic stress impacts us physically, emotionally, and behaviorally (Fig 1).

 

Fig 1: Mayo Clinic Signs of Chronic Stress
Fig 1: Common effects of stress by the Mayo Clinic staff article, “Stress symptoms: Effects on your body and behavior”

Whether stress is due to personal reasons or work-related, when we’re in a stressful state, it’s bad, for us individually and our businesses.  We make mistakes and errors that we typically wouldn’t.  Due to cognitive biases, interactions with colleagues and managers can easily be filtered through a lens of negativity.  Comments that would normally seem harmless appear aggressive and actions seem calculated.  We can’t focus and struggle to stay motivated.  We feel overwhelmed and isolate ourselves, withdrawing from our teammates, friends, and even families, unaware we’re going further into the perception that is dragging down our mindset.  In a poor mindset, we suffer and so does our work.  It should not be assumed, but expected that any work done with compromised mindset will surely pale in comparison to work performed by the same team or individual in an optimal mindset.

Optimizing Mindset

The goal, for any leader, is to maximize mindset.  While potential will always vary person-to-person, optimizing mindset helps leaders from wondering, is it them or is it me?  Because leaders should be hiring smart, competent people, understanding how to cultivate mindset will be what separates the managers from leaders in the future of work.  Creating a climate in which employees work collaboratively and perform their best comes down to 4 key points:

  1. Prioritize team mindset. Improving or maintaining a positive team mindset should come first.  Before starting a project or work for the day, assess current and collective team mind set against mindset necessary for work to be valuable.
  2. Inspire employees to beware and accountable for their own mindset. Get employees out of a reactive state of mind by encouraging them and giving pause for self-reflection.  How are they feeling today?  What needs to change for them to be in a better mindset, conducive to great work?
  3. Use transparency to encourage trust & collaboration. Transparency empowers a team with to solve problems, creatively.  Through collaborating on solving a problem, people feel they belong, a valuable component of team psychological safety.
  4. Speak with purpose. What happens when the team doesn’t show up in a good mindset?  When people fail to be aware of their state of mind and work in autopilot?  Individually we disconnect, teams underperform, companies lose money, and customers churn.  Speaking with purpose prevents the team from confusing activity with results.

Richard Weisman, a Professor with Hertfordshire University in 1993 began to investigate the concept of luck.  Over a 10-year study of hundreds of exceptionally lucky and unlucky people, he determined “lucky” people actually generate their own good fortune via four basic principles:  1) they are skilled at creating and noticing chance opportunities, 2) they listen to their intuition, 3) they have positive expectations, and 4) using resilience they transform bad luck into good.  In short, luck is neither a gift or a curse, but a mindset.  Positive mindset teams search for opportunities to improve and succeed.  Negative mindset teams dwell on mistakes and anticipate losses.   Which employee mindset is working for you?

Does your team have high-performing potential?  Take the free psychological safety assessment here.

Employee Experience Basics Every Leader Should Know

Person walking down a hallway

“A mind that is stretched  by a new experience can never go back to its old dimensions.” ~ Oliver Wendell Holmes Jr.

What experiences have made you who you are today?  Whether good or bad, experiences can change us.  An event may change the way we see a person, or the world entirely.  Being part of or witnessing an incident can trigger intense chemical responses within us of pleasure or pain.  Our perception and response to an occurrence transforms a neutral event to a life-altering experience.  In recent years we’ve applied this understanding to our workplaces, resulting in the term employee experience, often referred to as EX.

What is the definition of employee experience?

Employee experience is an all-encompassing term used to describe an employee’s perception and observations regarding the collective events, interactions, and benefits he/she undergoes as part of the journey in working for a company.  Unlike many definitions that define the experience as simply a person’s journey working for an organization, the word experience implies the personal and emotional response to potentially neutral events.  While workplace events and communications take place in an office or around an employee, it’s an employee’s perception and/or interpretation of these events that make for his/her unique experience.

How is employee experience different from employee engagement?

The term employee engagement has been around for several years.  Engaged employees are defined as physically energized, emotionally connected, mentally focused, and indicate alignment with the purpose of the company (Loehr & Schwartz, 2003).  By this definition, employee engagement is a positive state of mind or mindset held by employees.  Research suggests companies with high employee engagement are more profitable, more productive, have higher sales, are safer, have lower turnover, and have lower employee absenteeism.  Whereas the term employee engagement is used to describe how connected an employee feels to his/her work and company, the term employee experience is used to describe an employee’s perception of a collection of events and exchanges related to his/her working for the company.  How much a person feels connected to or disconnected from their work may be a result of a positive or negative employee experience.  So, while a high level of engagement may be the goal, it is achieved by strategically improving different aspects of the employee experience.  Many metrics may be used to assess how positive or negative a company’s employee experience is.  Employee engagement is just one of these metrics used.

How is a company’s employee experience measured?

The ultimate goal of a positive employee experience is a healthy business.  So, when a company fails to perform successfully, it is often a sign of a misaligned or even poor employee experience.  Because of this, metrics used to assess a company’s operational and financial performance such as revenue, shrinkage, customer retention, and productivity also serve as valuable methods of measuring a company’s employee experience.

A company’s workforce data such as employee turnover, retention, absenteeism, and overtime per employee rates are also indicators of an effective or ineffective employee experience as these datapoints are reflective of employee behaviors driven by their experience.  The two most popular methods for evaluating a company’s employee experience are employee engagement, as explained previously, and the Employee Net Promoter Score (eNPS).  The eNPS system was born out of the customer loyalty metric, Net Promoter Score (NPS), first recognized by Fred Reichheld of Bain & Company in 2003.  Through research, Reichheld and the Bain team found customers responding positively to the question, “what is the likelihood you would refer Company X to a friend or colleague”, were very likely to demonstrate positive buying behaviors (rebuying, referring new customers, and spend more).  It was later as the concept of the internal customer (employees) grew that industry and leaders began applying the model internally giving way to the eNPS, asking employees the question, “On a scale of 0-10, how likely are you to recommend the Company as a (good) place to work?”.  Higher eNPS ratings reflect more employee loyalty, higher employee satisfaction, and suggest a more engaged workforce.  While generally this is a metric intended for internal use only, not designed for benchmarking, scores can range from -100 to +100 and generally scores in the 10-30 range are considered good, and 50+ considered excellent.

What can a company do to improve its employee experience?

To improve a company’s employee experience is to improve an employee’s perception of how the company rewards, recognizes, motivates, drives, communicates with, hires, terminates, values, supports, and develops its employees.  While an eNPS score can provide an overview of how an employee feels about and perceives the company, an eNPS rating does not identify why.  To improve the employee experience it is then important to understand both the employee’s overview of the company AND the what led to this perception.  For this reason, it is best to ask employees to rate not only their overall perception of the company (eNPS) but also ask their outlook as it relates to attributes of the employee experience (recognition, communication, safety, brand, management engagement, employee engagement, culture, compensation & benefits, and business viability).  With this data, companies can decipher what employees like and dislike about their interactions with the company as well as how heavily the different aspects of the employee experience impact their unique company culture.   For example, a media company had poor employee ratings around compensation and benefits.  Upon further examination however, compensation & benefit ratings had very little impact on whether an employee felt positively or negatively about the company’s employee experience (no correlation between comp & benefit ratings and eNPS ratings).  Instead, recognition (how employees feel rewarded for outstanding performance) and brand pride (whether employees are proud to work for the company and of the company’s impact to the industry/community) were the most influential attributes to a positive employee experience.  With this realization, the company chose to strategically invest allotted time and budget to people initiatives around recognition and employee-brand alignment, appreciating the value employees place on these aspects of their relationship with the company.  These insights allowed the company to create a much more thoughtful and unique experience for employees that resonates with its culture and helps deliver better business results.

Just as today we each are a culmination of our past individual experiences, our current workplace cultures are a reflection of our collective employee experiences.  Experiences are not based on logic.  We often don’t even realize what historical work-related events led to the perceptions we hold so firmly today.  By asking concise, reflective questions in a strategic way, we shift the employee experience from habitual to intentional.  Every workplace has an employee experience leading somewhere.  Where is your current employee experience leading you?

Learn more about surveys to capture your eNPS score and identify the critical attributes to your employee experience.

Bringing Value to Employee Reviews

Two men meeting

Are you gearing up for annual employee reviews?  And are you dreading it?  If you’ve answered “yes” to these questions, know you are not alone.  A 2018 WorldatWork survey shows 94% of companies conduct formal employee reviews annually – and a separate study suggests we hate them.  95% of managers surveyed are dissatisfied are with the process and nearly 90% of HR executives feel results are inaccurate.  A Gallup survey shows only 14% of employees feel performance reviews inspire them to improve.  So, if it’s so awful, should we just chuck the review process all together?  No.  Although there is frustration on all sides of the current traditional process, employees who have had a review in the past year are more engaged in their work than employees who haven’t.  Surprisingly, 82% of employees say they value receiving feedback (positive and negative) with 65% of employees wanting more feedback.  So rather than abandoning performance reviews entirely, here are the three ways to elevate your culture and your business by simply fixing what’s broken with our current approach to employee reviews.

1.  Increase the frequency.

Seems counterintuitive right?  Managers, HR professionals, and employees dread them, so do them MORE?  Much of what seems to be broken is that we are only talking about performance once per year.  A Gallup poll shows only 15% of employees working for a manager who does not meet with them regularly are engaged.  Consider this, what if you set an intention on January 1st to lose 15 pounds by December 31st?  Then, come the morning of December 31st you weigh yourself – for the first time since setting the intention nearly a year earlier and you instead gained five pounds.  How would you feel?  How would it have been different had you known in September that you were further away from your goal that in January?  You could’ve chosen to do something about it – but now that you waited the entire year, you’ve really painted yourself into a corner of disappointment.  Waiting to talk about employee performance is the same.  No one works their butts off only to have it all come crashing down when it’s too late.  Frequent, less formal reviews, often referred to as check-ins, allow employees some time for course correction and leaders the opportunity to evaluate employee goals and performance as needs of the business change.  Check-ins also allow for more trust to be established between employees and managers.  Social psychology identifies two types of trust, cognitive – trust based on what you know about someone, and affective – trust based on emotional connection and closeness.  It’s through frequent interaction with another that we develop affective trust in another – so long as both parties act in a trustworthy way of course.

2.  Care

Recently there has been a lot of talk, and some significant research on what makes a good boss.  Top traits include being a good coach, helping employees achieve their professional goals, and caring about employee success & well-being.  A Harvard study of 3,200 employees found employees describing their culture as caring, had higher levels of satisfaction and teamwork, less absenteeism, and better company performance.  What this means from an employee appraisal or check-in standpoint is – performance discussions should serve as a time to either support or recognize an employee depending on how that employee is doing.  Performance reviews – whether formal or informal – are not simply a time to report back performance data.  If an employee isn’t performing, work with the employee to identify why he/she is struggling – and how to fix it!  If an employee is performing above expectations, recognize the employee for a job well done.  Get to know about what is important to employees – what they love and dislike about their work.  Caring about employee success will not only make for more valuable reviews and check-ins but also make for a more open and honest relationship.  What managers did you have that cared about your happiness and success?  How did you choose to show up for them each day?  Our employees are no different.  Start each employee check-in by asking how they are doing.  Did they recently go on vacation?  Is his son graduating high school?  Did she get a new car?  Did she have a big sale?  Is it his busy time of year?  Start each check-in building rapport, reinforcing you care.  “I know you are wanting to spend every minute with your son before he heads off to college, so let’s talk about what you have on your plate and make sure we’re streamlining everything as much as possible to get you out early on Fridays.”  Empathizing with the employee and offering support to get work done in a way that benefits you both is highly effective.

3.  Collaborate on goals

The happiest and most valuable employees are the employees that understand how their work translates to company success.  They get it.  Without this understanding, an employee’s manager is no longer a manager but a babysitter or a person that barks orders.  But leaders are responsible for exposing employees to this mindset, by explaining company initiatives and describing how the employee’s work aligns to those initiatives.  For this reason, effective employee reviews happen when employees and managers collaborate on employee goals.  With a basic understanding of what the company aims to achieve for the month, quarter, year, or whatever timeframe, encourage employees to create their own goals for the period.  Aside from helping employees get more engaged in the business, there are also some psychological benefits.  Research shows that when we create our own goals, the emotional and strategic parts of the brain work together to plan for and envision the goal, turning our attention away from less productive thoughts and events that aren’t aligned to our goals.  When an employee then creates his or her own goal that a leader then reviews and/or tweaks, the employee is more emotionally and mentally committed to the goal that if we as leaders were to just prescribe them goals.  When we encourage employees to create specific challenging goals, studies show these difficult goals will actually lead to higher performance than easy goals (such as “do your best), or no goals at all.  Because mindset is critical to achieving any goal – regardless of it being personal or professional, this step is key to making a valuable performance discussion.

Like any interaction with employees, it’s more valuable to both parties when it’s an exchange, not one-way feedback.  Historically, performance appraisals were one-way discussions in which a manager advises each employee of how well or poorly he/she performed over the year.  Is it any wonder we all dread this process?  By implementing these three simple strategies in your performance management process, you solve for a healthier and more effective feedback loop in which leaders work with employees to achieve success.  More successful companies start with more successful people and feedback paves the way.

Does your performance management process need a boost?  Learn more about our tools from a Culture Engineer.

Reducing Turnover with Employee Exit Interview Data

Person holding I quit sign

I am a self-admitted feedback enthusiast, mainly because I put a high value on exerted energy.  Without feedback, I believe energy is instead spent frivolously in a manner that resembles “guessing”.  Feedback is such a huge part of my foundation and every fiber of my being that when my business coach advised me to develop a marketing strategy around imagined behaviors of my target audience, I stopped working with said coach that day.  So, it goes without saying that employee feedback and analytics are at the foundation of every Culture Engineered strategy.  Although workforce analytics are somewhat new in the world of HR, exit interviews are perhaps the most popular and widely used employee feedback tools used in business.  And it’s with a heavy heart that I say, exit interview data sucks.

Not all data is valuable.

In a Payscale study of over 38,000 people, 25% of participants indicated higher pay as their primary reason they sought out new employment, making it the #1 reason people quit.  When the same participants were asked however why they were attracted to their new role with the new company, only 16% indicated “better pay”, making it the #3 reason to accept a new position.  The #1 reason was “the opportunity to do more meaningful work” at 27%.  How is it then possible that a person would, in a single move, choose to leave a job for one reason only to then accept a new job for an entirely separate and unrelated reason?  There is an answer – but you’re not going to like it.  It doesn’t make sense because how we make decisions is complex, depending much more on our emotions than on logic.  Logically, if 25% of people quit due to low pay, 25% of people would then seek out a job for better pay.  We at Culture Engineered also conduct exit interviews and find more than 90% of those surveyed initially indicate low pay as their primary reason for resigning. Through exit interview analysis however, we find the actual percentage of resignations due to pay dissatisfaction to be closer to 10%, most of which are shortly following an annual appraisal or assuming additional responsibilities.  It’s usually a combination of reasons an employee chooses to quit.  We refer to these internal factors as push factors.  Similarly, it’s often a combination of reasons we are attracted to a new opportunity, external factors we refer to as pull factors.  The key to collecting valuable data from an exit interview is to ask valuable questions.  Ask about attributes of the employee experiences specifically to understand the person’s feelings about pay & benefits, recognition, etc.  Most importantly though – find out what event triggered the person’s decision to leave the company.  This is critical.  Like any relationship, we accept and tolerate certain flaws or frustrations.  But then one day the straw breaks the proverbial camel’s back and we’re done.  Our relationships with work are no different.  Employees are often unaware of what causes them to look for start looking for jobs, or respond to a call from a recruiter.  And even if a person is aware of the event that prompted their job search, he/she will often avoid sharing the details of the event in an exit interview because it is a painful or sometimes humiliating moment.  Getting exiting individuals to open up about this point of no return event is critical and takes practice and rapport.  But it’s worth it.  By learning about this moment your employee shifts from an “us” to a “them” mindset, deciding to separate from the company they once celebrated joining will give you the insights you need to repair and preserve your company culture’s foundation.

Getting clear on purpose

In a study of 210 companies in 33 industries, 157 had a practice of conducting exit interviews; however only 50 were able to provide even one example of how exit interview data was being used in their business.  Although unclear why data was collected but not used, it begs the question what is the purpose of exit interview data?  Data alone solves nothing.  Exit interviews like so many employer practices have become habitual, making it a harmful practice.  Each time we as leaders ask for employee feedback, we are asking employees to collaborate with us.  This holds true for performance discussions and surveys.  Have you ever had someone ask your opinion only to do the complete opposite of what you recommend or suggest?  Like me, the thought, “then why even ask me!” likely crept into your mind.  Now imagine that person is asking your opinion on something that actually impacts your life, like your job and workplace.  If I do this enough, asking for your opinion on parts of your life that I control only to then do what I feel is best without considering your suggestions, wouldn’t you just stop sharing your thoughts with me?  Would you feel like I valued your opinions or your time?  Is it possible you may even be more hurt than if I hadn’t asked at all?  If you’re being honest here, the answer is yes.  It feels terrible when someone invites you into a conversation and exercise only to then actively reject you.  This is the same feeling employees develop when we ask for feedback and discard it without ever really giving it consideration.  So, before conducting one more exit interview, or using any feedback tool, consider what it is you intend to do with the information.  Are you asking to identify any legal risks associated with difficult employees exiting your organization?  Is your company interested in identifying training needs for frontline managers using exit interview data related to management engagement?  Or are you using exit interviews as an early warning detection of culture issues lurking below the surface?  There is no wrong answer, so long as you have an answer.  Collecting it because it’s what you’ve always done is not an answer.  Attrition is expensive and one of the best ways to identify issues driving attrition in your workplace is analyzing exit interview data.  Simply collecting this data alone though solves nothing and may actually be making matters worse.

The estimated cost of employee turnover ranges from 16% annual salary for lower paying jobs, all the way to 213% annual salary for highly paid executives, making exit interview data very appealing.  But, it’s only when we take the time to ensure we’re gathering quality data that helps to solve an identified problem that data serves as a feedback tool.  Why are people quitting your company?  The answer to this question isn’t the end.  The answer is where the work begins.  Do you have the energy to solve for the problems your data reveals?

Want actionable insights to keep your best employees?  Click here. 

Giving Thanks: The Power of Employee Recognition

Employee Recognition

Appreciation is a wonderful thing. It makes what is excellent in others belong to us as well. —Voltaire

Have you ever gotten a really good thank you note?  The kind that is so good, you feel you need to send a thank you note for the thank you note?  How likely you are to help that person again?  I am HUGE on thank yous, particularly after I’ve worked hard for someone.  Employee recognition is one of the 10 attributes   I expect a lot of those that report to me and have always put a substantial amount of effort in understanding what makes them feel valued and recognizing them in the way they feel appreciated.  Sometimes it’s through professional development, sometimes through public praise, and others monetary recognition.  So, when I learned about half of leaders participating in a recent survey answered they avoid giving positive feedback (ie saying thank you or good job), I considered why this might be.  I came down to two reasons:  1) leaders are failing to see the value and ROI of employee recognition, or 2) leaders aren’t recognizing employees in a way that resonates.  Fortunately there is a significant amount of research on both topics.  Here we speak to the importance of employee recognition and how to do it.

Benefits of employee recognition and appreciation

Acknowledgment

How do you work when you feel recognized and appreciated versus not?  Chances are, your answer reflects what research has found on this topic.  In a SHRM survey, 48% of participating employees reported that management’s recognition of employee job performance was very important to their job satisfaction.  It’s no surprise then that separate research shows employees who do not feel adequately recognized are twice as likely to say they’ll quit in the next year. Because recognition is one of Culture Engineered’s ten attributes of the employee experience, we too show a significant correlation in most industries and roles between recognition and a positive employee experience.  Part of the reason, I believe, is due to our need as humans to been seen.  We have a desire to belong and part of that belonging is validated when we are acknowledged.  A study out of MIT randomly assigned students into three groups – acknowledged, ignored, shredded.  All students were given the mundane task of reviewing sheets of paper with random sequences of letters, circling pairs of duplicate letters appearing on each page.  Upon completing each page, they would then turn it into a person facilitating the study who, as the name suggests, either acknowledged, ignored, or shredded the page.  Students were paid 50 cents for their first submitted page and asked if they would then complete another page for five cents less, each following page worth 5 cents less than the previously submitted page, until payment was reduced to zero (ie 45 cents, then 40 cents, then 35 cents….5 cents, zero).  Participants were able to quit at any point of their choosing, OR continue until payment for each page was reduced to $0.00.  Which group do you think completed more pages?  The acknowledged group!  Contradictory to predictions made by researchers who anticipated the ignored and shredded groups would outperform the acknowledged group on account of there being such a low risk of cheating in these groups in particular, the acknowledged group outperformed the ignored and shredded groups by nearly 1.5 times.  The only difference?  Acknowledgment by the facilitator as the subject handed in his/her work.  No “thank you”, “good job”, nor did the facilitator even review the page.  Brief eye contact in this case produced a significant result where people were willing to work for the most basic reward – human connection.

Social worth

How do you get an employee engaged in their role?  One of the most frustrating things I hear from leaders is around people “going through the motions” of a job.  A study published in the Journal of Personality and Social Psychology conducted by researchers Adam Grant and Francesca Gino suggests gratitude may be the key to keeping employees engaged in even the jobs most prone to burnout – fundraising.  In the study fundraisers were randomly assigned to one of two groups.  All conditions were the same except the director of annual giving visited the test “gratitude” group, to thank the fundraisers for their work whereas the control group was not met with or “thanked”.  Over the course of a week, the gratitude group, having been thanked by the director, made 50% more calls than the control group having worked without thanks.  Consider those employees you feel have checked out of their jobs and those who approach their day’s work with the desire to succeed.  It’s only fair to assume you express more gratitude with employee working hard to drive your business and company forward.  But which came first – their drive or your words of gratitude?  Could a simple thanks be all the other employee needs to turn it around?

Employee recognition that resonates

Whose thanks matters most?

Historically, the higher rank the person praising you, the higher the perceived value the praise.  As our workplaces and society shift from placing a high value on authority to placing a high value on authenticity however, organizational hierarchy’s importance is not as important as it once was when it comes to employee recognition.  Data shows 24% of employees feel recognition is most memorable when it comes from the CEO, while 28% of employees feels it’s most memorable coming from the employee’s direct manager.  9% indicated peer-recognition is most notable.   If you wish to recognize an employee’s performance, the person recognizing the employee should understand the value of the employee’s contributions, capable of convincingly explaining the importance of the employee’s work.  If it’s recognizing an employee’s tenure or dedication to values, the person recognizing the employee should be a person that works closely with the employee, familiar with his/her journey and character.  Employee recognition is not transactional.  Even a “thank you” will mean more from a person that is sincere.  Have you ever received a certificate with your name misspelled?  Have you had an executive leader congratulate you on a sale you didn’t make?  Being recognized for the wrong thing can sometimes feel worse than not being recognized at all.  So, to avoid this from happening, make sure appreciation and recognition is coming from someone “in the know”.  All leaders should be looking to catch employees doing something right as often as possible.

How often?

How often leaders recognize employees will often depend on how the leader defines recognition.  Do you consider saying “thank you”, recognition?  What about one-on-ones with employees?  Or performance reviews?  According to Gallup’s Chief Scientist, we should praise employees frequently – weekly or even daily.  Similar to my feelings on the superficiality of romantic gestures on Valentine’s Day, recognition seems to resonate less with employees in the traditional and formal annual review where feedback is obligatory.  Instead, making appreciation and praise a part of your commitment to ongoing feedback and harnessing relationships proves to be a more sustainable and effective approach to employee recognition.  If you are not in the habit of regularly recognizing employee performance, create the habit by scheduling time each week to recognize your employees.  If you oversee leaders, make it a part of their weekly reporting that they meet with employees to recognize their work.  You do not need to schedule it in the employee’s work calendar (ie, “Kelly’s employee recognition time”).  Instead schedule the time for yourself, as a leader, to reflect on the good work each of your employees have done in the past week.  Then communicate your appreciate for that good work to that employee.  You will be amazed in just a few weeks how you will grow to be a more grateful leader and your employees will transform into more appreciative contributors.

What to say

Think back to that great “thank you” note you received.  What made it great?  Have you ever received a thank you note that said, thanks for your generous gift.  I have, and I immediately wished I had been less generous!  The best thank yous are specific and timely.  The thank you note you thought of likely thanked you specifically for the gift you gave the person and shared what that gift meant to them.  If you gifted them money – they may have even told you what they used it for.  If you gave them tickets to an event, they may have even included a picture of them at the event having the greatest time ever!  When you choose to say thank you or recognize someone for their great work, generosity, amazing character, it’s important to articulate two things:  the behavior or action you appreciate (specific), and what that behavior or action means to you (value) as an individual or to the department, organization, etc.  Remember the acknowledgment example we talked about earlier?  It’s not enough to say, you do great work or I appreciate your stellar attendance.  Here are some recognition and appreciation examples using the specific and value criteria:

Congratulations on exceeding your goal this month!  Because you hit your goal, we were able to meet our team goal – despite some other team members falling short of their targets.  Thank you for your willingness to give it your all, day in and day out.  You are an inspiration to me as well as the team and we are grateful for the energy and positivity you bring each day. 

Thank you for being such a reliable part of our team.  I know life is demanding of your time and energy; however, your stellar attendance and amazing consistent focus while at work have such a great impact on me and all those around you.  When you commit to something, I never doubt for a minute that you will achieve it.  Thank you for being such a great example of determination and integrity to me an all those around you.

How would you work differently if you were given this feedback?  We all want to be seen and acknowledged.  We all want to be of value.  It’s when we aren’t acknowledged and valued that we stop trying and sometimes apply our energy toward destructive behaviors.  Research shows us the historical practices of micromanaging and manipulating employees does not work.  Employees will not change until we as leaders change.  Will you rise to the challenge?

A punch to the face taught me to fight. Why a culture unafraid of failure always wins.

1996 sparring competition

I was 16 and it was my first real sparring match.  Although I started karate when I was 13, I had braces.  For safety reasons, we weren’t allowed to spar with braces, so my training in sparring was delayed, significantly.  I was three years behind everyone else my age and I was TERRIFIED of being punched in the face.  Thinking back now, I’m not sure if I was more afraid of the pain or crying in front of everyone like a baby.  To make things worse – I’d always been afraid of ending up with a nose like my dad and knew having it broken in a fight would not help my situation.  This was the day I learned how to fight…not because of any tip, trick, move, or skill.  On this day, I was punched square in the nose, hard.  A loss I still reflect on often, this is the day, the pivotal moment, that led me to go onto become the #2 ranked female collegiate fighter in the nation just three years later.

Master Shojiro Koyama,  was very traditional.  He disagreed with the decision to let women compete years before I walked into his dojo and was known to pair up young, petite female students with much larger and stronger male students in sparring exercises.  We were encouraged to challenge one another physically, it was practice after all.  But, we were discouraged from striking with full physical strength.  I was competing by the time I started training with M. Koyama but only in kata.  In class he would coach me in sparring exercises, frustrated by my over-thinking and apparent lack of instinct.  “No thinking!” he shouted at me repeatedly one day, his way of trying to get me out of my own head.  Over and over he would tell me not to flinch and to counter immediately after blocking an attack.  But, all I could do was freeze and close my eyes.  I was scared.  I had never been hit in the face before and was paralyzed by fear at even the thought of it! So, the day I had my braces off I was filled with emotion.  I had braces for FOUR YEARS, so thoughts of eating corn on the cob or biting into the candy apples at the state fair later that year were really exciting.  Realizing I would now need to spar with others who appeared unafraid of a broken nose was terrifying.  I continued to struggle in practice but the true horror set in the day of my first competitive fight.  Her name was Samantha – and she was good.  I knew her from previous competitions and she was a much better and more confident fighter.  I was toast.  I remember the punch coming at my face and I closed my eyes, as I sadly had done EVERY time in practice.  Those I trained with were shouting from the sidelines as Master Koyama had shouted at me in practice, but I didn’t hear them.  All I could do was brace myself for the inevitable punch that was now too far along to block.  Boom!  I knew she hit me because when I opened my eyes, they were watering.  Oddly enough, all that I could think of was not to let the ref see my eyes watering or she, my opponent, would get a point!  Not sure why I thought the blatant strike went unseen by the ref who was just two or three feet away from us. I refused to blink in an effort to prevent the tears from streaming down my face.  But they weren’t tears from crying.  If you’ve ever hit your nose or been hit in the nose, you know what I’m talking about here.  Tears naturally well up in your eyes following such a hit, but there’s no sobbing or lip quivering like the tears that accompany emotional or physical pain.  The ring judge saw the hit and my opponent was awarded the point.  Naturally I lost the fight.  My biggest fear had come true and it wasn’t the life altering event I’d expected!  Although my teacher tried breaking my habit of flinching and freezing for years, my fear of pain and embarrassment was stronger.  And suddenly the fear was gone.  I’ve never flinched or frozen since.

Is this really such a unique story though?  Parents, teachers, co-workers, our friends, family, bosses – we get lots of advice from those around us.  But, how much of it do we take or even listen to?  I didn’t believe my mom about drinking….until I drank too much.  That friend that everyone cautioned me not to trust – I refused to believe it, until she betrayed me.  So many painful lessons that could’ve been prevented had I just listened to the advice I was given.  And I don’t think I’m the only one who has these stories.  So, why is advice only right in hindsight?  There is no better teacher than failure.  Athletes recall every shot they miss, poker players remember the turn that led to losing a hand.  And if you’re gritty, you walk away from that failure assessing and sometimes obsessing over what you need to do to prevent that mistake from happening ever again.  Isn’t this what innovation and improvement is all about?  How much would we achieve if we made failure acceptable?  What would you try today if you didn’t fear the shame of defeat?  According to Harvard Business School Professor of Leadership and Management, Dr. Amy Edmonson, a lot.  Dr. Edmonson has spent decades studying what makes some teams effective and high-performing and others, not.  Ultimately, she discovered better teams actually are more accepting of mistakes.  In 1999 she coined the term psychological safety – the belief that you won’t be punished or judged for making a mistake.  Without this fear of shame, embarrassment, or judgment, people are more comfortable asking questions, open to learning, speaking up, taking risks, and as result, perform better.

It’s counter intuitive and scary, but failure and success are not mutually exclusive.  Part of learning to walk is falling.  We learn the value of money when we are without it.    For individuals and teams, failure can make or break us.  In 1999 I attended a national competition in Denver, Colorado.  I was competing for first place against a woman I’d competed against before.  She grew up training in karate as her father was a well-respected instructor.  She fractured my nose and I quickly countered with a punch to her ribs.  She won the point, taking first place.  I walked away for the second and final time with a loss and a bloody nose.  These are the two fights I still think of more than 20 years later despite sparring hundreds of times in practice and competition.  They’re not memories of regret, they’re not memories of sadness…..I remember them as lessons in the journey of my success.

Are You a Good Boss? Two Studies Identify Traits of Top Managers

Worlds Best Boss

Two separate studies were conducted by Google and the Royal Bank of Canada to determine what traits make for a good boss versus average or even bad boss.  Here is what they discovered….

How many great bosses have you had in your career?  For me, two stand out.  One was with a job I hated, the other was with a job I loved.  One was male, the other female.  One was a lot like me, the other not like me at all….except maybe for our sense of humor.  One was stubborn and feared by some in the organization.  The other was the friendliest person you’ve ever met, quick to put others at ease.  So, how is it that I would find these two VERY DIFFERENT people equally great?  Had I changed over time?  There were about ten years between these two bosses after all.  I’ve worked with many great people but what made these two bosses great?  There is no shortage of research on leadership; however two of my favorite studies were performed by Google (2008, then updated in 2018) and Royal Bank of Canada (RBC, 2011-2013) in separate attempts to determine what makes manager good?

What does a good boss look like?

Do you know a good manager when you see one?  Based on the findings of both RBC and Google, not at first glance.  Both studies report good manager traits having little to do with what the manager does, but how and why they do it.  Micro-managing determined highly ineffective by both groups, suggesting a good manager’s day revolves more around strategy and developing or coaching employees; however nearly all other findings relate to how a good manager engages with employees.  Being genuine and showing an interest in both personal and professional well-being for employees rate high on both lists suggesting empathy for others and authenticity are essential in making employees feel valuable.  Today this should be no surprise.  In 2017, Surgeon General Vivek Murthy wrote about the impact loneliness is having on the workplace.  A person with a poor network of friends and family, lacking support needed to push through this epidemic of loneliness in most cases will still need to work, making work perhaps their only opportunity to feel connected.  If true, doesn’t it only make sense employees respond positively to managers that seem invested in the employee’s personal journey?  Look over the list provided here.  How many listed traits do your top managers possess?  More importantly, do you feel your under-performing managers can learn the traits and behaviors necessary to be more effective?  Can a manager learn to be empathetic and genuine?

Google & RBC findings side-by-side
* Trait was either updated or revised in 2018

Why it matters

Google’s parent company, Alphabet, employs more than 107,000 people worldwide.  The company owns more than 88% of search engine market share and is in the race to join the highly exclusive $1 trillion dollar list.  RBC employs 80,000 people, and with 1.28 trillion dollars in assets is the biggest bank in Canada and the 11th biggest bank in the world.  They look for ways to excel, commit to a solution, and go ALL IN.  Google and RBC’s choice to independently research their own management practices that were proving to be effective versus ineffective and build their teams and leaders on these principles is no accident.  This research, although beneficial to many, was not done for humanitarian reasons.  Good managers drive success.  In a study, employees working for a manager identified as average when changed to a manager identified as highly effective, increased productivity by 50%!  Good bosses also have lower employee turnover and themselves also stay with companies longer than bad managers.  It’s important to note, the 2008 Google study was only after Google surveyed their own engineers to determine whether managers were at all necessary within their organization.  It was perhaps this initial project that led them to realize that a good boss is highly valuable whereas a bad boss is actually worse than no boss at all.

I stay in touch with each of my former managers.  I trust that I can call either of them today and they will still take time out of their busy schedules to help me.  I don’t know what their relationships were like with my peers or other leaders within our former organizations although I suspect those relationships were positive.  It was perhaps a year ago that one of them reached out to me in need of a favor.  I stopped everything I was doing and immediately jumped at the chance to help my former boss and friend.  It was no different when I worked for these individuals.  I cared as much about their success as I did my own.  That’s the thing about a great boss – their fingerprints from pushing you forward, catching you when you fall….are EVERYWHERE in your life!  A great boss changes your life,  But because it’s authentic and they genuinely care and love their jobs, it happens so naturally and organically.  Only in hindsight do you look back and wonder….were they working for me or was I working for them?

The Power of Internal Marketing

Marketing to employees

What do you rely on most in your world?  Water?  Your smartphone?  Coffee?  Okay, clearly these are my go-tos but whatever you find critical to your day-to-day routine, one thing holds true, all of those things are marketed, heavily.  TV and radio commercials, ads in our online publications and Google searches….our favorite celebrities and influencers posting and blogging about them….ALL methods of marketing the importance of products that we already hold valuable.  And although life without these things may seem unimaginable today, it’s likely you decided this to be the case only after they were first marketed to you.  Marketing strategies identify, articulate, and some may argue create, consumer needs aligning those needs to specific products and services.  Now consider this, how important is employee buy-in to your workplace?  Enter the case for internal marketing.

Have you ever introduced a benefit plan that everyone hates?  Or perhaps you’ve rolled out a new commission plan to a sales reps who feel commission payouts are unattainable?  If you’ve ever had the unfortunate experience of leading a company change where employees were not bought in, you’ve learned the hard way that without buy-in, successful implementation is a mere pipedream.  As consumers and employees make decisions and choices not on logic but on emotions and psychology.  Just as a good product or service is not enough to ensure high market share, a great workplace is not enough to attract and retain valuable employees.  Without marketing highlighting why our products, services, and workplaces are great – people fail to remember, and the magic is lost.  Here are some internal marketing ideas to enhance your company culture that generate a return on your investment (in people).

1.  Why you?

What drives customers to choose you over competitors?  Why do employees choose your company over any other?  If you’re having difficulty answering the second question with as much confidence as you answered the first, don’t feel bad as this is the case with most leaders I meet with.  Many have responses like “we offer a great benefits package” or “we pay top dollar”.  When challenged however, reasons just don’t hold up.  So, give pause to the question of why employees choose your company because the answer is important.  The answer should serve as the foundation to every employee initiative – recruiting, onboarding, retention, and so on.  Why people choose you as their employer reflects what your employees value most.  How well you deliver on this value ultimately determines how happy, engaged, satisfied, and successful your employees are.  You meet with employees individually to discuss why they choose you.  Because it can be a complex answer, one-on-one discussions can provide great insights.  Because anonymity can lead to more honest answers however, you may instead prefer to use an employee survey to solicit a variety of responses.  Regardless of the method you choose, asking is critical.

2. Your vibe attracts your tribe.

Knowing why your most valued employees choose you is the most important piece of information a leader can have.  A close second is how to communicate this message.  When recruiting for an open position for example – it’s important to know what speaks to your tribe.  Where do they look for jobs?  Are they even looking?  What about the job and your company’s culture is of interest to the “right” employees (“right” meaning having shared values with others in the company as well as the skills and experience necessary to perform the duties of the position).  This year for the first time since recorded, the Bureau of Labor Statistics (BLS) reported more open jobs than unemployed workers to fill them.  This means employers must actively attract candidates to fill their open positions – no more relying solely on unemployed workers actively looking for jobs.  When competition is high – marketing will often determine the winner.  Like never before, it’s important for employers to market their employer brand.  This is different than marketing your brand to end users and consumers.  An employer brand comes back to why you (as an employer)?  Passive candidates, because they are by definition not actively looking for jobs, require more from recruiting than just posting openings to a job board.  They are not looking for you.  Like marketers find consumers, employers must instead target and source candidates the candidates they want to hire.  And because educated candidates, like educated consumers, tend to be more valuable – get your online (employer) brand together.  What are current and former employees saying about working for you on review boards such as Glassdoor and Indeed?  How does your website’s careers page reflect your culture and employee experience?  The goal is not to have the most robust or most beautiful online representation.  Your goal is to have the most accurate online employer brand representation – because that is the one that will attract your tribe.

3.  Fake begets fake.

Speaking of accuracy….have you ever hired someone with the perfect resume followed by the perfect interview only to realize that it was all BS?!  That guy was never the top sales rep with his previous company!  Just days into the job it was evident he never sold anything in his life (oh – except he sold you on giving him the job – ouch!).  Take a look at your hiring process.  Is it genuine?  If you’re attracting candidates who seem too good to be true only to later disappointed when they prove to be, assess how authenticity is tested in your recruiting and hiring process.  Why employees choose you is just as important and why those who don’t belong in your company don’t choose you.  You cannot successfully be all things to all people.  So, own who your company is….and isn’t.   If you don’t believe in employees to work remotely, make it known early in your recruiting process.  If you choose to offer only one medical plan because it affords you lower premiums and makes it more affordable for all employees to cover at least themselves (rather than more coverage to less employees), say so!  An authentic message is not appealing to everyone.  With authentic messaging we appeal to desired candidates and simultaneously repel those who would not be successful with our company.  Open jobs can be costly to a business, but the wrong hire, catastrophic.  Take time on the front end to articulate who your company is, what the culture is really like, what your employee experience has to offer.  When it comes to recruiting, quality trumps quantity ever time.

4.  Consistency counts

A friend of mine works for Charles Schwab.  One day she was telling me how she was butting heads with another leader of an internal team on a project.  Then as if by magic, her frustration seemed to vanish and she said, “but we resolved it once we stepped back to consider what was best through the clients’ eyes”.  What the heck was she talking about?  I asked her to explain – and she did.  She told me this phrase is what most Schwab employees use to settle disagreements and make decisions.  I couldn’t believe it.  Charles Schwab employs nearly 20,000 people and this one simple phrase allows team members to solve problems, for the most part, consistently.  Consistent messaging sticks.  We as humans, appreciate knowing what to expect because it allows us to and predict benefits and consequences and ultimately make what we consider to be better choices.  Marketing has long time realized this concept with what they refer to as “the rule of seven”.  The rule of seven suggests people need to be exposed to a message at least seven times before they remember it.  While unsure there is any true science showing seven to be a magic number, I can say that many companies I meet with struggle to communicate with enough frequency and consistency to resonate with employees.  One of the attributes of the employee experience we at Culture Engineered test on is communication.  Of the ten attributes we test on, the communication attribute shows challenging to most companies, regardless of industry, size, or structure (flat versus hierarchical).  What we often find is that communication itself is not bad.  It’s just not done consistently or frequently enough.  One of the best ways we’ve found to resolve the communication issues in the workplace is to start all corresponding communications with the phrase, “because you asked for more effective communication, we’d like to announce (insert initiative)”.  This phrasing helps align a changed way of communicating in response to employee feedback and also helps make messaging sound more consistent.  Leaders are usually resistant at first, fearing employees will feel they’re repeating themselves.  In three nearly three years we’ve been using this approach to resolve communication issues, we’ve not received even one employee response suggesting we’re over communicating.

5.  Engage your superfans

What product or service are you in love with?  For me, it’s our vet Dr. Mangone.  We foster dogs, specifically senior dogs.  I’ve had dogs all of my adult life and am known to take in strays fairly frequently.  Most need some sort of medical attention.  Until just two years ago, I had with me my Dingo mix dog, Caleb, a rescue I took in when I was in college.  He lived to be 17 years old and our vet cried with us when Caleb took his last breath.  If our vet treated people, I’d be a lot better about going to him as my doctor.  I sing his praises to others constantly and have referred fellow animal lovers to him.  I am a superfan when it comes to our vet – promoting him more confidently and convincingly than perhaps any ad or paid advertisement ever could.  Who are your superfans that work within your company?  A few weeks ago I visited a well-known tech company here in the valley.  While they’re recognized as a tech success story here in the Phoenix-metro community, they’re also notoriously known for laying off employees annually during the holidays, despite healthy financials.  The tech community in Phoenix is a close community – so when companies with healthy profits routinely and systematically layoff the employees who helped the company to be a success, word travels quickly.  During my visit however the woman showing me around their campus beamed.  Telling me stories of the team coming together to earn bigger bonus payouts and giggling proudly as she divulged the company has a $15K per month allowance for sugary employee snacks, she seemed oblivious to how insensitive this seemed to the outside world.  To me, an outsider, it was nauseating.  Don’t get me wrong, layoffs happen and unfortunately I’ve been on both sides of that unpleasant situation – but to scale only to later layoff employees recklessly and in the same breath preach company culture and loyalty is disgusting.  Remembering the countless conversations with developers I’d had over the years who once dreamed of working for this company only to later be tossed aside without reason, her admiration for the company made me feel like I was in an alternate universe.  But then I realized, she’s a superfan.  I of course do not condone the reckless practices of this company nor am I encouraging the use of manipulation to mask unethical practices.   I do however have a question for the leaders running ethical and honest businesses out there, what would happen if you nurtured your superfan employee relationships?  Are you inviting them to collaborate on employee/culture initiatives with you?  At Culture Engineered, we’ve found the key to articulating and driving a company’s employee experience is the Employee Net Promoter Score (eNPS).  While our survey is anonymous, we are able to deconstruct the employee experience with this metric and determine what of the ten attributes of the employee experience are driving that employee experience to be positive.  High eNPS scores are the marks of your superfans.  Because of the high correlation with high eNPS scores, employee satisfaction, and performance, it’s important to understand what about your employee experience resonates and inspires your superfans.  These are your advocates….your key employees….drivers…stars….whatever term you prefer, they are as passionate about your company’s success as they are about their own success.  Today, identify them if you haven’t already done so.  Learn what makes them so dang into your business and invest in those aspects of your employee experience.  Not only will you make them even bigger advocates than they were even before, but you will attract more by focusing on creating the experience that the “right” employees value most.

 

We need to realize that internal marketing is only manipulative when we fail to be honest, ethical, or authentic.  It isn’t enough to invest in making our workplaces great – we also need to ask what our employees appreciate and commit to making what employees value a priority.  Great leaders and companies invest a lot of time, money, and energy into making the employee experience satisfying and rewarding.  But if we’re not sharing with employees our intention to make them feel more valued, and instead allow them to assume our great culture happened by chance, we’re missing the opportunity to show them how important they are to us.  We as leaders will fail.  We will mess up.  Sometimes we will be forced to make difficult decisions that employees don’t fully understand.  Be transparent and open with your intentions when you can.  This in itself has a huge impact on employee perceptions and feelings about their work – arguably more so than most bonus plans or costly perks.  Today – start incorporating these basic marketing principles into your employee interactions and initiatives and be amazed at how quickly and positively employees will respond.