Almost all managers have heard of (and likely used) both carrots (rewards and recognition) and sticks (punishments or censures) as methods to work with your employees. In this column we draw on a recent book titled, The Carrot Principle, by Adrian Gostick and Chester Elton who base their recommendations on a 10-year study of 200,000 managers and employees — where they state that top managers (as measured by performance of their firms on Return on Equity, Return on Assets and Operating Margin) rely more heavily on the use of recognition to engage their people, retain talent and accelerate performance. Their data and suggestions are convincing, and below we highlight some of their findings and add some of our thoughts on possible applications in your grain elevator or feed mill. Their book is well worth reading, and we find the lessons are applicable to both large and small businesses.
Almost, closer, nearer
Gostick and Elton start out by stating that a manager who sets clear goals, communicates openly, respects people and creates trusting relationships — almost has it right. They further posit that a firm where people are coming to work on time, doing their job and feel satisfied — is close to achieving its full potential. Finally, they talk about management theories which promise to transform your business from ordinary to extraordinary, which will push you nearer to your goals than ever before. But — they argue that “almost there” is a frustrating place to be — and that you need what they term an “accelerator,” and that this accelerator is purpose-based recognition.
The authors quote a statistic that 79% of employees who quit their jobs cite a lack of appreciation as a key reason for leaving. Their solution to this issue and a better strategy to motivate and retain employees is to use “carrots,” which they define as something used to inspire and motivate your workforce. Their comprehensive research shows that when employees know their strengths and potential will be praised and recognized — they are significantly more likely to produce results.
Survey says ...
Gostick and Elton cite a study first conducted by Lawrence Lindahl in 1949 — who researched human behavior at work — and which has been replicated several times since. In these surveys, managers were asked to name what they thought employees wanted and then this was contrasted with a similar list prepared by employees. Every time, managers guessed that good wages and job security would top employee lists, but their people always cited “feeling appreciated” and “informed.”
They go on to write about a Watson Wyatt Reward Plan survey of 614 employers who employed 3.5 million employees. This study found that the average turnover rate of employers with a clear reward strategy was 13% lower than that of organizations without one.
Leadership is key
Gostick and Elton discuss leadership quite a bit. They offer some interesting insights, and outline what they call the “Basic Four” areas of leadership. They cite their 200,000-person study, and report that it confirms managers who achieve enhanced business results are significantly more likely to be seen by their employees as strong in goal setting, communication, trust and accountability. We will not discuss all of these areas, but there are some nuggets of wisdom we will pass on.
Communication within your feed and grain company is going to happen with or without your active participation as an owner or manager. Employees are talking about customers, processes, rules, office romances — everything — and all the time. So if you fail to constantly and openly communicate about what your firm is and what is important — the conversation does not stop, you just aren’t a participant, much less leading it. Thus, you need to communicate regularly and openly to keep things on track. Do this in person, via emails, with company newsletters and via mid-level managers.