Creating Loyalty in a Free Agency Workplace
I am a big sports fan and generally listen to sports radio on my way into work in the mornings. Every day, during every sports season cycle, I hear stories about how professional teams in the NFL, MLB, and the NBA sign free agents (players not under contract with another team). Consider that this practice is not dissimilar to what we experience in more mainstream business. We can learn a great deal from how different professional sports franchises are run and how that applies to employee engagement and cultivating loyalty within a sales organization.
Some teams are huge players in free agency. They sign high-profile, top-dollar players. However, despite signing all of these free agents, some continue to struggle and fall short of making the playoffs. Other franchises grow their organizations from within. They draft well and then develop the talent on the team, and they recognize and reward good play, commitment, and tangible improvement. Many that follow this model have been some of the most successful organizations in major league sports.
What can we learn from these two approaches? The first is you can't go chasing every new idea or hope to hire that one great employee who is going to turn the organization around if the culture of the organization is not healthy. Second, you must have a very specific employee engagement plan for your organization and be willing to follow it no matter what is going on around you.
Finally, you must have some degree of employee loyalty so they want to be part of the organization and are willing to exhibit the behaviors that will help make the company successful. Recent 2011 Towers Watson research on 10 major global companies found a high correlation between net levels of profit margin and high levels of both engagement and enablement. Thus, enabling employee performance increases the positive impact of engagement on business success.
But what does that have to do with free agency in today's workplace? To perform at their best, employees need healthful environments that help sustain high energy levels. For example, clear priorities, effective teams, respectful colleagues, and a balance between performance expectations and job pressures all contribute to employees' sense of well-being on the job.
Without these work environment characteristics, employees will not exhibit behaviors that will help make the organization successful. This starts with leadership at the top setting the tone that focuses on having an organization and culture where people want to be and aren't feeling stuck there just because of their contract or need for a paycheck. This also means that you bring in talented individuals and then give them the training and development along with opportunities to be successful in the organization. You grow your young talent while supplementing an occasional business need with outside talent.
Achieving this has gotten increasingly difficult in a 21st-century workplace where the younger mind-sets have become a strong force challenging corporate cultures and rejecting the traditional button-down management policies and procedures. And, just when companies were learning how to adjust to the Gen X workforce (now 24-39 years of age), along comes the next wave of workers: Generation Y (16-24 years old). These workers are the self-esteem generation. Their independence isn't fierce, it's casual. They know they'll have to take care of themselves and they're not worried at all about it. And, since employers no longer offer job security, employees of all ages are starting to think like free agents. The free-agent mind-set is possibly the biggest challenge that employers have ever had to deal with.
Nowhere is this more pronounced than within sales organizations that are direct- and channel-structured, where employees come and go frequently, hurting performance, limiting team cohesion, and sucking the value away from training programs. The workforce has changed dramatically, but ultimately, performance improvement programs can give employees the skills they need to succeed in a free-agent economy, which is exactly what will motivate them to stay put.
When it comes to compensation, both Gens X and Y expect to be paid what they think they're worth. The main difference between the younger generations and their Baby Boomer predecessors is the period or interval at which incentives or rewards are expected. These groups don't tolerate annual bonuses or reviews. They want instant gratification from a financial standpoint, as well as feedback on performance. In addition to monetary compensation, Gen X and Y agents value frequent recognition and rewards programs that are monthly, weekly, or even daily.
Increasingly, recognition catalyzes inspiration, especially for these younger generations. If you reward someone for "doing the right things, right," it is like having an insurance policy that assures you will get better results. In fact, a culture of recognition can actually reverse a downward spiral even during a down economy. Numerous business experts have studied and reported that companies that recognize their people outperform companies that don't by 30 to 40 percent. Recognition and incentives can also change a company's culture, encouraging loyalty, engagement, and enthusiasm.
Research from the Gallup Management Journal states individuals who receive regular praise and recognition:
- Increase their individual productivity.
- Increase engagement among their colleagues.
- Are more likely to stay with the organization.
- Receive higher loyalty and satisfaction scores from customers.
- Have better safety records and fewer accidents on the job.
Intangible rewards seem to increasingly motivate more than tangible ones. All the studies we've seen about today's younger workers, Gens X and Y specifically, point to the fact that money really is a byproduct and usually a secondary one at that, for this age group. Emotional sources of motivation are more powerful, and they are best convened informally in an organization through the respect of peers, the admiration of subordinates, the approval of one's personal network and community and the like. Money becomes the default motivator because it is measurable, tangible, and fungible. Trouble strikes when the prospect of a lot of money becomes the primary goal. That usually feeds a very self-serving emotion: greed.
This is not to suggest that money doesn't motivate. Certainly it encourages self-serving materialism. But those who rely on money as their sole or primary motivator are on perilous terrain, particularly if they ignore other more powerful emotional sources of human motivation. Similarly, feelings of relatedness and fairness are motivators. They are determined more by informal interactions social networks and daily encouragement than by money or formal promotions.
Think Big. When defining programs to engage and motivate, we suggest that it is the right combination of these factors: interactions, experiences, and context that create and nurture enduring, profitable relationships.
Why is this important? People who are customer-facing are gaining greater control over how brand values are communicated. Realizing the potential this represents requires objectivity, perspective, and creativity. Go through a formal process of evaluating where your engagement levels currently are and determine how big the gap is between that point and where you want those engagement levels to be. This is a critical step in identifying how to tap into the emotional connection that people have with their jobs. The goal is to ignite passion resulting in greater participation. But, we emphasize that merely inciting passion is not a substitute for good, solid planning. Whatever your process, know why you're doing it.
Innovate Freely. Look for that pressure point: a little discomfort that causes tension, stimulates innovation, and results in the "stretch" for good ideas. Closely evaluate the critical marketing and sales pain point you are dealing with and produce a creative experiential solution that hits a bull's eye.
Achieve Anything. What we call the bull's eye is a metaphor for a reawakening of the sales force in a way that acknowledges they are just as critical to you as your customers. What you create must build excitement and stimulate their desire to take it to that extra degree that makes a difference whether the water boils or not. Hitting the bulls eye (the emotional and relevant connection) with sales teams and channel partners is how you find the "sweet spot" of engagement and harness the creative idea that must lead and resonate.
At the end of the day ask yourself: Am I really connecting with my younger workers in a way that will keep them loyal and excited about the job they do, every single day? Close examination of your answer may surprise you.
Tom Wessling is executive vice president of Performance Plus Marketing, an incentive-based company that designs, implements, and administers short- or long-term custom loyalty promotions through Web-based platforms.