"What Gets Measured, Gets Done"
- Anonymous - Ancient Hospitality Industry Proverb
I'm sure someone said it first, but I have neither the time nor the patience to figure it out. In any case,
what was probably once some hotel General Manager's brilliant original thought is now an aphorism, coopted
by hackneyed philosophers in any industry that can measure some element of their business on an
ordinal scale. With this in mind, I would like to start this article with two disclaimers, both referring to slight
inaccuracies within the headline.
Disclaimer #1: This article is less about linking
performance to recognition, more about the kind of customer experience-focused
culture that thrives with that link.
Disclaimer #2: Putting "Money" in a headline is probably the second best way to get people's attention,
and I couldn't figure out a legitimate way to include "sex" in the topic. This article is more about
discovering alternative means of recognition that create a true culture of accountability, less about doling
out cash bonuses.
Now that we've level-set your expectations (and I apologize to anyone who was seeking a treatise on
creating performance scorecards - "now should financial performance count for 32.5% of the bonus and
customer service metrics 17.5%....or is it the other way around?"), let's talk about the single most crucial
element of a culture where accountability rules. Where employees not only understand the metrics on
which they are judged, but understand their profound, direct impact on those metrics. Where customer
experience matters and the customer is anyone you touch on a given day, from the guy in the cubicle
next to you to your biggest corporate account.
Information.
In the words of Jan Carlzon, the celebrated former
CEO of SAS Airlines, "An individual without
information cannot take responsibility. An individual who is given information cannot help but take
responsibility."
With that thought as the guiding philosophy, Carlzon
took a moribund state-run airline and turned it into an industry model
for service and profitability. By flattening out the carrier's management structure, he
made every employee keenly aware of the impact that all company metrics - financial, customer service
and otherwise - would have not only on the company but on them directly. Thus, the metrics in question
became far more than disembodied scores on a balance sheet or year-end review - they became directly
linked to flesh and blood interactions that each and every employee had each and every day. Hence the
title of Carlzon's best selling book - "Moments of Truth."
So maybe it's time to update the standard cliché - perhaps it's more accurate to say, "What is clearly laid
out as an expectation, is communicated effectively throughout the organization, and is suitably important
to empower employees to address…gets done."
This model does not apply strictly to service industries.
The May 1, 2006 issue of BusinessWeek told the story of Nucor ("The Art of Motivation," by Nanette Byrnes), a steelmaking company where a "flattened
hierarchy and emphasis on pushing power to the front line led its employees to adopt the mindset of
owner-operators." And what goes hand-in-hand with that culture, you might ask? Simple - "radical pay
practices, which base the vast majority of most workers' income on their performance." Hmmm. An
empowered workforce, with the mandate and incentive to perform to the highest levels, equipped with the
proper tools and resources to do just that. Sounds like a pretty good recipe for all involved.
Nucor steelworkers made an average of $91,000 last
year; Nucor shareholders have realized a 387% yield over the past five
years. And in 2005, Nucor shipped 20.7 million tons of steel in the U.S.,
the most of any other company, indicating that there were plenty of customers
tickled with the product and service. After all, if a defective batch
of steel is shipped to the customer, the workers that produced the steel
not only forfeit a bonus, but lose three times that amount. And that might
not be the worst loss of all, as the loss of face with fellow workers
and plants might be even worse. As the article explains, "there's a healthy
competition among facilities and even among shifts."
In companies like Nucor, where employees and management
alike share the same information and goals, all in the interest of best
serving the customer and reaping the related rewards, everyone wins. It's no
coincidence that Nucor shareholder returns were so astronomical during a period where "Big Steel"
struggled to keep pace. According to The Philadelphia Inquirer, a recent study published by the University
of Michigan's Ross School of Business found that companies that are aligned around serving the
customer and rank highest in the American Customer Satisfaction Index (ACSI) outperform the market.
The Inquirer article noted that "the hypothetical portfolio [of companies ranked highly in the ACSI]
generated a cumulative 40 percent return from its starting date. to its end date. The portfolio
outperformed the Dow Jones industrial average by 93 percent, the S&P 500 by 201 percent, and the
NASDAQ by 335 percent."
Assuming some level of employee participation as
company shareholders, this phenomenon creates a de facto monetary reward
and recognition program, dictated by performance on customer metrics and
fulfilled over time by the financial markets.
While this sort of organic reward program is the
ideal for company, customer and employee, sometimes it's necessary to implement a program that's a bit more formal. OK, you're thinking, now here's the catch.
Rush is going to outline how we have to provide cash bonuses to employees who extend common
courtesy to a customer, stock options for those who truly provide a meaningful service and even a
Starbucks gift card - the true "token" of appreciation - for those who can manage to avoid physically
assaulting customers in the course of doing business.
Not quite. It turns out that some of the more valued
employee rewards are of the non-monetary, decaffeinated
variety. Dr. Gerald Graham, a professor at Wichita State University, conducted
a study of the relative popularity of 65 different typical work place
rewards, and the following ranked highest:
1. Cash Bonuses
2. Stock Options
3. Starbucks Gift....JUST JOKING!
The actual rank order was:
1.
A Personal Thank You
2. A Written Thank You
3. Promotion Based on Performance
4. Public Praise
5. Morale Building Meetings
With the exception of providing promotions willy-nilly,
there is nothing on that list that costs a dime, and in
our work with clients, we see the impact of these activities
(or lack thereof) time and again. In fact, we’ll
take Dr. Graham one step further. You can put a serious
charge of reward and recognition into an
employee’s step not necessarily by writing the employee a note,
but by penning a few words to that
employee’s child/spouse/pet/ house plant thanking them for the time
they allow mom/dad/husband/wife to
spend at work and describing how he/she excels in the workplace.
Set expectations and disseminate
that information so that accountability is a way of doing
business, not
an "IT’S PERFORMANCE REVIEW TIME" rarity borne of panic.
Constantly assess performance against
those expectations. For those who excel within those expectations,
reward and recognize in ways that
span the spectrum from serious to silly. Wash, rinse, repeat.
And tying performance on those
expectations into a cash windfall of some type…well, that doesn’t
hurt
either. Just keep in mind, that in this instance, cash
is not always king!
Reprinted with permission from www.hotelexecutive.com |
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