The question was, “What is the biggest challenge your company faces today?”
There were the usual responses — increasing revenue, decreased sales and the economy. But the top challenge facing the 239 Northeast Ohio employers who responded to the Smart Business Network/Employers Resource Council Workplace Practices Survey is recruiting, motivating and retaining top talent.
This is the fourth year of our regional human resources issues survey, and the top challenge facing the diverse group of employers who responded has been roughly the same in each of the previous three years.
This year was different. Motivation worked its way up the list to join recruiting and retaining top talent as a concern facing employers.
It’s understandable. All the concerns faced by employers are related to employee motivation. If profits are down, it affects employee morale by crimping bonuses or profit-sharing. When the economy is tough, employees can be concerned about their future with the company and not focused on the job. When health care costs increase yet again, employers are often forced to pass those costs on to their workers, decreasing morale.
Motivating employees during rough economic times is difficult. Just ask Jack Pickard, CEO of FedEx Custom Critical, which recently opened a new headquarters in Green. Pickard’s business — door-to-door ground shipping service for critical deliveries such as hazardous or temperature-sensitive materials and high-value products — is directly related to the health of industrial production.
According to FedEx Corp., Custom Critical’s revenue slipped 24 percent in both 2002 and 2001, yet during that time, the division was named one of the top 99 workplaces in Northeast Ohio by the Employers Resource Council, and the entire FedEx organization was named one of the “100 Best Companies To Work For” by Fortune magazine.
Pickard, who took over as CEO in June 2001 after Bruce Simpson retired, joined FedEx in 1986 and held positions in sales, marketing and operations before he was chosen to lead Custom Critical’s 2,800 employees and contractors.
Although Pickard has several decades of corporate experience, he says his best training for motivating and managing people came when he was a company commander in the U.S. Army during the Vietnam War. Pickard ran a combat engineer group stationed in Germany.
“Our job was to go blow things up when the Huns came through the folded gap. If I told you any more, I would probably have to kill you,” he says, laughing.
That kind of down-to-earth, accessible style is the hallmark of Pickard’s management and an important aspect of motivating his employees. Although he altered his style when he entered the corporate world, he has found that many of the motivation tactics used in the army apply even in today’s less hierarchal, less rigid corporate world.
“You have to give people a sense of worth in whatever it is they’re doing,” Pickard says. “The job has to be challenging for that individual, and they need to be recognized. When I say recognized, it’s not just pay. They’ve got to be recognized for their job. … If you create the climate, hopefully the people will become motivated themselves, because motivation ultimately has to come from the individual.”
Only 53 percent of employers who responded to our survey reported using a newsletter to communicate with employees, and 40 percent don’t have a company intranet.
That’s too few. The most important aspect of employee motivation, Pickard says, is consistent communication, not only about the company but about the individual performance of employees.
“I don’t think you can ever do it enough,” Pickard says. “Key leaders and managers at all levels have to be focused on making certain that their employees are recognized, and in order for it to be meaningful, it’s got to be personal.”
Obviously, with more than 2,800 employees and contractors, Pickard couldn’t talk with every one of his workers every day if he wanted to, but he uses several tools to keep them informed about what’s going on with the company and to open lines of communication among employees.
Every month, he writes the lead article in FedEx Custom Critical newsletter, and employees receive daily e-mail updates about what’s going on not only with their division, but with the overall $23 billion FedEx Corp.
Every other month, Pickard holds “Heard it in the Hallways” meetings, with employees randomly chosen from all departments. The meetings usually run about two hours and are a chance for employees to talk with the CEO and the human resources vice president directly.
“It’s not for me to talk, it’s for them to talk to me about what’s on their minds,” Pickard says. “They do it without having to go through the chain. That seems to be very effective. And the notes from that are published and sent around the organization.”
FedEx’s new 182,000-square-foot headquarters located on 20 acres in Green was designed for collision. The sprawling complex is arranged so hallways leading to and from various departments converge into larger open areas to encourage impromptu meetings between workers.
“The hallway meetings are sometimes the most effective ones you can have,” Pickard says. “As you’re walking back to a work area, there’s a little area where, if you get into a conversation, you can sit down next to a coffee table, and there’s a white board right there if somebody wants to make a note. We’ve tried to build areas where people will collide with each other.”
Employees get stale doing the same thing every day if they are not learning new skills or offered new responsibilities. To help top performers improve their skills, Pickard formed a Customer Response Team program, in which team members who have expertise in one operational area like logistics or customer service are placed on a team to serve the company’s most challenging customers.
To offer variety, workers are offered an operations rotation in which they are pulled out of their department and placed for a short time in a new area where they might not have any experience. For example, a customer service employee could join the marketing department, or an employee from the financial team could learn how to handle logistics issues.
“When they go back to their organization, they have a different view of things,” Pickard says. “I can’t tell you how many times they’ve told me, ‘Thanks, I really appreciate it.'”
Money is often the best employee motivator, but you have to carefully monitor how your bonuses — whether it’s commissions, profit-sharing or stock — are awarded. Employees tend to get very focused on the cash, and other aspects of their job are neglected.
“Sometimes there are some unintended consequences,” Pickard says. “You could come up with a wonderful plan, and it may work very well for a time, but I’ve not yet seen any kind of financial plan that does not need changing almost constantly.”
That said, FedEx Custom Critical uses a Management By Objectives system to financially reward its employees.
“If you talk to some of the HR gurus around the world, a lot of people think an MBO is old school,” Pickard says. “It does go back quite a few years, but everybody in the company, including me, has a significant portion of their income based on achieving certain objectives over a course of the year.”
One of Custom Critical’s objectives is high scores on its customer satisfaction survey, in which customers who have used its services in the prior month are called to find out about their experience. Answers are tallied on a five-point scale between very satisfied to very unsatisfied.
“We get an actual numerical result of the relative joy of our customers over the last month,” Pickard says. “Based on that, a portion of our income is paid to us in the form of an MBO bonus. Everybody understands very clearly that we value satisfied customers. That provides a certain degree of motivation.”
Another employee-wide objective is a company profit goal, but there are also personal goals negotiated between employees and their manager.
“Obviously, we hear people saying, ‘What can I do? I’m just a so-and-so clerk. I can’t control the profit,'” Pickard says. “The fact of the matter is if that’s true, I could say ‘I’m just the president, I can’t control the profit, it’s what you people do out there.'”
Above all, the most effective motivation is personal recognition. Singling out someone’s achievement — even if it just a simple compliment — is meaningful to an employee, and it doesn’t cost a thing.
“Motivation, in the final analysis, is up to the individual,” Pickard says. “If you’re concerned about motivation, you build the climate that allows for it. Make certain that the person is doing worthwhile work, so they have some sense of achievement in whatever they’re doing.
“If you reward them properly for that, and recognize when they do a good job, they’re going to have to motivate themselves. If you give them all that stuff and they’re still not motivated, then they’re probably not right for the job.” How to reach: FedEx Custom Critical, (234) 310-4090 or customcritical.fedex.com
Even in these enlightened times, there are still employee motivation myths that linger in workplaces all over the country. Carter McNamara, president of Authenticity Consulting LLC, debunks five common employee motivation myths.
Myth No. 1 — I can motivate people.
Not really — they have to motivate themselves.
You can’t motivate people any more than you can empower them. Employees have to motivate and empower themselves. However, you can set up an environment where they can best do that.
The key is knowing how to set up the environment for each of your employees.
Myth No. 2 — Money is a good motivator.
Certain things like money, a nice office and job security can help people from becoming less motivated, but they usually don’t help people to become more motivated. A key goal is to understand the motivations of each of your employees.
Myth No. 3 — Fear is a good motivator.
Fear is a great motivator — for a very short time. That’s why a lot of yelling from the boss won’t seem to “light a spark under employees” for long.
Myth No. 4 — I know what motivates me, so I know what motivates my employees.
Different people are motivated by different things. I may be greatly motivated by earning time away from my job to spend more time my family. You might be motivated more by recognition of a job well done.
Again, a key goal is to understand what motivates each of your employees.
Myth No. 5 — Increased job satisfaction means increased job performance.
Research shows this isn’t necessarily true. If the goals of the organization are not aligned with the goals of employees, then employees aren’t effectively working toward the mission of the organization. Source: Authenticity Consulting LLC, (800) 971-2250 or www.authenticityconsulting.com