Here is an excerpt from an article written by Michael Beer for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.
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Employee trust in management and commitment to the company have been in decline for decades. Yet we know that trust and commitment are essential for high individual and corporate performance. Only a minority of companies have managed to buck this decline and have built companies worthy of the human spirit. How do they do it?
Let’s start with what doesn’t work. Incentives or other extrinsic rewards—individual bonus schemes, promises of nice offices and titles, and other tangible benefits—create transactional relationships, not deep bonds to an employer. Indeed there is a good deal of evidence that using such individual incentives actually creates self-interest, lowers trust, results in poor teamwork, and diminishes commitment.
On the other hand, a sense of purpose, real responsibility, meaning, caring, fairness, and authenticity have been shown to increase commitment. To create a company culture that evokes these human emotions in your employees, you can’t simply copy policies and practices from another company – though knowing about them is helpful. They must be consciously designed to your business’ values and cultural objectives.
Nevertheless, there are some key principles that are common to companies that engender the commitment of all those who work for them.
It takes a careful mix of mission, management, and culture.
First, it must start with the CEO. He or she must believe in and articulate a “higher ambition,” as we call it at the Center for Higher Ambition Leadership. It must be deeper than only making money for shareholders and managers. Becton Dickinson, a global medical technology company, has made its purpose helping all people live healthier lives. Whole Foods Market’s purpose is to promote healthier eating. Barry-Wehmiller’s purpose is to enable all team members to have meaningful and fulfilling jobs. Lacking a product or service that inspires, Essendant, a distributer of office and industrial supplies, made its selfless purpose to help their partners succeed. A higher ambition purpose must articulate some meaningful contribution to the world so people to feel their collective efforts will make a difference.
But to inspire changes in behavior, a higher ambition must be much more than an aspirational statement. It must be lived by top management as exemplified in their behavior and in the design of their management and human resource policies and practices. Without a set of policies and practices that reflect the human values of love, responsibility, authenticity fairness and trust, a firm has the name but not the game.
Second, companies that engender commitment from employees are dedicated to high individual and organizational performance. They create standards of behavior and performance and hold people accountable for them. They recruit, select, evaluate, promote and terminate people based on their alignment with company purpose and values. Though they value bright and competent people and try to hire the best in a given field, their recruitment and selection process starts with an assessment of the individual’s character, and their alignment with company purpose and values. Managers are trained, developed and evaluated to lead people in accordance with the human values top management espouses. Managers whose leadership is inconsistent with corporate purpose and values are asked to leave, though even this last act is done with caring. These practices have allowed Southwest Airlines to develop high employee commitment, to be admired for their customer service, and to outperform the industry. Southwest’s profits are larger than the profit of all other airline companies combined.
Third, firms driven by values of commitment, teamwork, caring and fairness prevent hierarchy—differentials in perceived power—from undermining performance. Employees are given a voice through a number of means—employee surveys, open employee forums and open door policies. And when circumstances demand layoffs and cost cutting, senior management takes a significant cut in pay.
Finally, high commitment companies work hard to sustain their culture—they realize that protecting it is as much of a challenge as building it in the first place. Several types of practices help to keep a company and its many leaders on the journey. Employee engagement surveys can help assess alignment of leaders’ multiple business or geographic units with company purpose and values. As CEO of Campbell Soup between 2000 and 2010, Doug Conant employed quarterly engagement surveys to assess and develop high commitment in the company’s multiple business and operating units. Hewlett Packard’s senior management employed skip-level meetings to hear the truth from lower levels. Becton Dickinson and others have employed a method that my colleague Russ Eisenstat and I developed—the Strategic Fitness Process—to enable employees to speak the truth to management safely about the alignment of the organization with strategy and values.
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Here is a direct link to the complete article.
Michael Beer is Chairman of TruePoint Partners, the Cahners-Rabb Professor of Business Administration Emeritus at Harvard Business School, and author or co-author of 11 books. His most recent books are High Commitment, High Performance and Higher Ambition (with Russell Eisenstat, Nathaniel Foote, Tobias Fredberg, and Flemming Norrgren).