Research from more than 400 companies globally highlights employee enablement as the missing link to productivity.
THE crisis surrounding Australia's sagging productivity has moved beyond a traditional focus on improving employee engagement. While engagement levels are certainly important, it can be argued engagement is now merely the entry point for productivity success, not the overall driver of that success. Hay Group research from more than 400 companies globally has highlighted employee enablement as the missing link to productivity.
On average 15 per cent of employees in any organisation are engaged but not enabled, which leads to frustration. This has serious financial implications as previously engaged employees find roadblocks to being productive and often leave. The good news is there are multiple drivers for both engagement and enablement that come down to what Hay Group calls the nine drivers of productivity. They are:
1. Clarity and direction Improvement in employee engagement and productivity starts with a clear direction, strategy and ''line of sight'' to an individual's role. Organisations that clearly communicate their goals and directions and make their expectations of employees clear are more likely to have strong engagement and better productivity.
2. Confidence in leaders Leaders play an important part in ensuring that work is well structured and staff are clear about where the organisation is heading and how their contribution fits in, providing the crucial ''line of sight''. The most significant impact on a team member's ''discretionary effort'' and willingness to go the extra mile for the organisation is their view of their direct line manager. Therefore, a key starting point for organisations wanting to raise productivity is to strengthen the capability and impact of their leaders on the teams they manage.
3. Quality and customer focus Improved sustained productivity isn't about a quick fix. Many companies look too much at a ''names in boxes'' approach to examining how they can restructure a business and hope that does the trick. The reality is that long-term substantial performance improvements can only come through examining fundamental organisational design change. That means a clear focus on what the customer wants and creating the most sustainable structure to meet customer needs.
4. Reward only the best - respect and recognition Managing remuneration expectations is key to improved productivity. Organisations must learn to reward the best and manage all employees. That doesn't mean paying everyone more, it means better differentiating and identifying the best performing staff - and retaining them.
5. The ROI on reward - compensation and benefits It's time for all organisations to recognise that there should be a return on investment (ROI) on reward. Every company has an ROI on almost all of its other activities and it should look at pay as an investment and view reward as a mechanism to stimulate employee performance for the longer term, in line with the strategy. The bottom line is financial incentives work - so let's use them better. Pay is one of a company's strongest communicators of what is valued.
6. Performance management Linking individual performance to the organisational strategy and business plans is easier said than done, but essential if you are to execute the strategy. Australian business leaders struggle with managing the link between individual and business performance and, more importantly, having courageous conversations to lift performance improvement. Performance management is a key lever in productivity and a great opportunity for local business leaders to drive organisational performance.
7. Your workforce is critical - empowerment and authority Creating a more effective workforce is within the means of every organisation. That process requires combining employee engagement and enablement. Leaders must create their own checklist when it comes to giving their employees the tools and incentives to improve their own productivity. Employees want empowerment and authority to act in the best interests of the organisation - having the confidence to let team members lead is a great way to unleash potential and performance.
8. Collaboration Innovation is a critical lever of productivity. A more diverse workforce, well managed and enabled, can unblock performance and strengthen collaboration that helps the organisation achieve innovative breakthroughs in customer focus and process improvement.
9. Structure, work and processes The biggest impediments to business performance are often internal - systems that are too complicated, too technical and lack transparency. Another typical barrier is people operating within silos, overcomplicating processes that should be delivering value to customers. As highlighted in the CEO discussions, a well designed organisation recognises and often automates the key systems and processes that add value. A good design works to simplify these systems and processes across the organisation. It ensures greater productivity when servicing the customers, as opposed to the common complaint of servicing the silo or ''feeding the corporate machine''.
The role of culture
The bottom line is that culture eats strategy for breakfast. For organisations to take the next step in productivity improvement, encouraging a culture that focuses on sustained and long-term improvements is critical. Culture needs to start at the top and is a composite of all of these levers including structure, leadership, systems and processes - so it's up to all leaders to recognise the challenge of creating an enabling culture and embrace it.
An edited extract from Hay Group general manager Henriette Rothschild's essay The Nine Drivers of Productivity, the Hay Group's latest Focus publication.