Ellen Galinsky, president of the Families and Work Institute, writes in a new article on the Harvard Business Review HBR Blog Network about how to prove to skeptical employees that results matter more than time worked. To read the original article, please click here.
Every smart employer knows that results matter more than face time. Judging employees chiefly on the number of hours they log in at work is not only demoralizing but does little for company performance. In fact, sixty-nine percent of employers report that supervisors at their organizations are encouraged to assess employees' performance by what they accomplish and not just by the hours they work.
This statistic — from the 2012 National Study of Employers conducted by Families and Work Institute (FWI) — indicates there is movement in the right direction. After all, it's obvious why employers encourage supervisors to focus on results. In this competitive, 24-7 economy stretches across the world's time zones, adhering to the notion that presence equals productivity is simply out of date.
But there are two problems: One, employees don't fully buy it. And two, many managers don't really know how to do it. About two in five workers think that if they focus on achieving results instead of punching the clock, their careers will suffer, according to FWI's Workplace Flexibility in the United States. Moreover, managers don't have the tools they need to accurately measure results.
So what can companies do to prove to skeptical employees that results really matter more than time worked and give managers the data they need? Here's what one company did.
Ryan, LLC - Getting rid of a sweatshop culture
Ryan, a global tax firm headquartered in Dallas, Texas, had a business problem. CEO G. Brint Ryan started the company in 1991, growing it from a two-person organization to a 1000-person one. He was proud of the business's track record, helping Fortune 500 and Fortune 100 companies solve complex tax problems. But in 2007, a disturbing trend developed. "We started experiencing a rapid loss of talent. And I'm not talking about just general talent — I'm talking about the stars," Ryan says.
He realized his firm had developed a "sweatshop reputation". People felt they were working long hours even if it wasn't necessary to get the job done. Ryan and his leadership team decided to experiment with re-focusing the company on results. He describes what they were aiming for:
We wanted a results-based work environment where if you meet financial results and you meet client service scores, you can work whenever you want, wherever you want . . . work when you're most productive, when you're most engaged. And we'll change the culture so that what really matters are results.
This was a radical change for the company. And required they rethink how they measure performance. Managers were skeptical. "The biggest concern was the fuzziness of flexibility. They simply didn't know how to manage teams when traditional boundaries were removed," says Delta Emerson, the company's executive vice president and chief of staff. Even Brint Ryan himself was concerned. He admits that he and his partners were "scared to death" the organization would fall apart.
Still he felt it was a bet they had to make. So they spent considerable time creating a system to support the new culture. The tool, called Success Measures, allows employees to easily track their own performance through an online dashboard that aggregates client service scores, revenues, leadership, core competencies and other firm-wide initiatives.
Each functional team has its own team page in the dashboard that displays the team's "scores" based on performance in key areas such as meeting financial goals and client service. Each employee's overall score in these key areas contributes to their team performance, similar to a baseball team's individual averages and statistics.
The employee's overall score is a weighted average of his or her scores in the areas of client service scores and financial goals (which account for 80% of the score), and firm-wide initiatives, leadership management and core competencies (20% of the score). Employees are only scored in categories that are relevant to their position.
This system worked. Since 2008, when the initial tool was introduced, voluntary turnover dropped from an average of 18.5% to less than 10%, compared with the industry average of 21%. At the same time, client service scores increased — 97% of clients rated them as good or excellent in the performance of their service.
"Probably the most remarkable statistic — the one that I think I would share if I had one thing to share with any CEO," says Ryan, "is this: in 2009, in arguably the worst economic conditions in my generation, we posted record profits and revenue. And then in 2010, we beat it again."
There are four things any company looking to change its culture of face time can learn from Ryan's experience:
- Base it on a real organizational need. In this case, it was the loss of top performers. Brint Ryan knew he had to do something to stop the turnover or the company would be in trouble.
- Create a way to measure individual and team performance. This is the crux of their success to date. As described above, instead of tracking hours spent at work, employees are held responsible for their performance.
- Don't adopt a results-focused initiative off the shelf. Although the company shopped around for programs that could plug and play, it settled on a customized approach, recognizing it needed something to fit its unique needs and culture.
- Fine-tune the process. In addition to employee surveys, Brint Ryan and Delta Emerson, hosted town hall meetings to hear directly from employees and gauge how the new system is working. After a town hall, leadership posted the problems employees raised on the company's intranet site along with action steps to resolve them.
What does your company value more: the hours you work or the results you produce? If you work in a company with a results-focus, please share your story of how it is working.
To read the original article, please click here.