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Feb 15 2003
Employee Equity Management - Linking employee motivation to productivity and profits PDF Print E-mail
Written by R Raghavendra Rao   
Saturday, 15 February 2003
While many theories in reams of text has been written, the subject debated among the best of ‘gray cells’ and seminars organized across the globe, managing employee equity wherein an organization can keep its people motivated and links this to organizational productivity and its bottomline…is still an enigma to many. Probably because there hasn’t been a quantitative tool available, and if there is one, then people are not aware of it.

The good news though is that recently I came across a proprietary tool that could gauge employee perceptions’ about their employer and organization and fix a number on the figure that would denote the level of motivation, which could be later used as a benchmark. Without getting into details of the tool per se, let me outline some key aspects of employee equity management and look at some basic questions/issues/facets of the organization, which, given this monologue, can’t be debated, but can at least be given a thought to. In all, there are nine to twelve parameters that exist in an organizational environment that shape employee perceptions, motivation and productivity in an organization. Some of these are detailed below.

Interpersonal relationships: This depicts the pattern of interactions employees have within the organisation. This explains the relationship between a manager and his/her subbordinate, peer equation, interdepartmental relationship etc. The correct handling of interpersonal relationships can improve an organisation’s attrition levels dramatically.

Communication within the company: In many cases, employees believe that decisions that are taken at a “corporate” level are not to their benefit. While this may be true in certain instances, it is also true that it is the management’s fault for not keeping the employees involved to whatever extent possible or permissible. While every individual in the organization does not need to be involved at the board or management level discussions, it’s imperative that the company’s vision, strategies and future growth plans be shared regularly.

Brainstorming before major decisions could be a motivator that could increase the sense of belonging for an organisation. Sharing of ideas through common forums could be another method to foster good communication across all levels of employees. Organisations that do not practice open communication could end up being blamed for lacking transparency. A blame that could represent itself through an active grapevine. This could contribute to a negative morale thereby affecting productivity.

Company image: The company image is a composite of various factors. And these are essentially perceptions. Perceptions about the personal image of senior management, stability of top management, fiscal health of the company etc. When the leadership of a company is questioned by the employees and there are no satisfactory answers, one can be rest assured that it will have an impact on the “Brand” that the employees work for.

Managing the company image is extremely critical, particularly when the employees who have joined the organisation have a certain perception of the organisation from outside. Interventions to keep up the image is critical as attrition is believed to have a keen relationship with the “brand image”.

Work climate and organisation culture Am I being treated in the organisation with fairness and respect? Does the workplace encourage ethical practices and values? Will I be awarded for good work? Do I have the freedom to express views without fear of retribution? These are the few basic questions that employees always carry in their minds when it comes to judging work climate and organizational culture. And there are many parameters that include leadership, integrity and opportunities to contribute in strategic decisions.

It’s upon the organisation and its senior managers to benchmark against what would be the expected standards from the employee perspective. It creates a working environment that people thrive in — the feel good factor of working. Usually seen as a unique identity of any organisation, there are certain basic thoughts, which, if addressed on an on-going basis, would add to the sense of security and motivation among employees.

Job content and career development: Opportunities for personal and professional growth is what makes employees stay with their current organisation, or move on to the next best one that comes along their way. However, these are not independent parameters. Once an organisation tackles the issues of autonomy in decision-making and implementation, relevance of role assigned as per an individuals’ capability, fair assignment of work load, and assignments as per interests and skills, one can see a largely motivated work force driving the company’s bottomline and topline.

Compensation and HR services: In the present day, with organisations stressing on EVA (Economic Value Added) and employees as brand ambassadors, compensation and HR services are increasing to come under microscopic scrutiny. Employees today are not only concerned about the compensation and benefits they get annually, they are also bothered about what their compensations are as per industry standards, their being paid according to their roles and responsibility, their performance linked reward systems and how progressive HR policies are in their organization. Some call it talent management, some emotional quotient, but with the employees, it’s not an independent body of thought. It works in continuum with all the factors mentioned above.

Performance management systems: This explains the yardstick on which employees are measured on their performance and classified under good/average/poor performers. This helps the management chalk out the improvement plan for all employees. Performance management systems ensure that the employees’ goals are linked directly to the business goals of the organisation.

Training and development: This takes into consideration the fact that every employee of any organisation needs to be constantly learning and improving. Training and development normally balances the personal enrichment and professional development of any employee within the organisation.

Facilities, support, tools & infrastructure

Gone are the days of industrial age when factories used to be on the outskirts of big cities or towns. They have now been replaced by “Electronic City(s)” and “Software Campuses” of various companies. What this has done is to add a slew of parameters that affects performance levels. And these are seemingly simple things, viz., physical location of office, appearance and aesthetics of a workplace, availability of facilities for recreation and access to high speed internet connections. Employees today believe that these are a given. These have become hygiene factors. But on the other hand, these are very subjective issues. Who decided what’s the best aesthetics? What constitutes a great ambience? It’s critical to gauge how important these parameters are in an employees’ mind and arrive at exactly what is required to keep them happy with the workplace. Perhaps the money that a company saves from cutting back on unnecessary frills may add its bit to the bottomline.

The motivational level of employees is a sum of many of these factors and how these are perceived. While the perceptions are bound to vary among individuals, data analysis can actually help one arrive at a conclusion on what are the exact factors that need the company’s attention from the people management perspective.

How does one do this?

Using research, an organisation can detail all of the factors mentioned above and break them into 90 – 100 sub-factors, following which the employees can rank each factor on an “Importance” and “Satisfaction Scale”. Importance signifies how important the factor is at a workplace and satisfaction signifies how satisfied they are on the given parameters with respect to the company they work for. Analysing the gap between importance and satisfaction, one can pinpoint the areas that require short and long-term solutions. This can be used to propose HR interventions that would address the concern areas and consequently, an actionable plan to boost motivation and productivity can be implemented.

(R Raghavendra Rao is a communication consultant and advisor on Employee Equity Management to Bangalore-based PeopleEquity HR Consulting, which is behind the proprietary tool. You may post queries or your feedback to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it )\n This e-mail address is being protected from spam bots, you need JavaScript enabled to view it )"

Issue BG23 Feb03


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