Thursday, April 18, 2013

First Minutes are Critical in New-Employee Orientation


01 APR 2013  RESEARCH & IDEAS

Employee orientation programs ought to be less about the company and more about the employee, according to new research by Daniel M. Cable, Francesca Gino, and Bradley R. Staats.by Carmen Nobel


The first few minutes of new employee orientation, if done right, can lead to happier and more productive workers and, ultimately, increased customer satisfaction. Unfortunately, a lot of companies do it wrong.
In many firms, employee orientation focuses solely on corporate culture and identity of the new workplace. There's a lecture about the firm's history and another about standard operating procedures. There's a packet of information from human resources, emblazoned with the firm's logo, and maybe a coffee mug to match.
The underlying message: Welcome. You should be proud to work here. Please fit in accordingly.
But research suggests that employee orientation ought to be less about the company and more about the employee. In their paper "Breaking Them In or Eliciting Their Best? Reframing Socialization around Newcomers' Self-expression," published in the March 2013 Administrative Science Quarterly, a research team finds that shifting the focus to an employee's personal identity leads to an increase in both employee retention and customer satisfaction.
"Organizations will talk about recruiting from outside the company because they need new ideas and new blood, but then there is this tendency to shut off the new and basically transfer the corporate culture over to the new employee," says Francesca Gino, an associate professor at Harvard Business School who cowrote the paper with Daniel M. Cable of London Business School and Bradley R. Staats (HBS MBA '02, DBA '09) of the University of North Carolina Kenan-Flagler Business School. "It was interesting for us to think about how part of your identity seems to go away as you go through that process."
“IT WAS INTERESTING FOR US TO THINK ABOUT HOW PART OF YOUR IDENTITY SEEMS TO GO AWAY AS YOU GO THROUGH [THE ORIENTATION] PROCESS.”
Previous studies have shown that employees are especially productive and happy when employers encourage them to use their individual signature strengths on the job, but historically those studies did not consider the employee onboarding process, Gino says. The researchers hypothesized that companies would see positive performance results by emphasizing employee individuality from day one, testing their hypothesis through a series of field and lab experiments.
For starters, they conducted a field study at Wipro, a major business process outsourcing company based in Bangalore, India, that provides telephone and chat support for its global customers. Traditionally, Wipro's orientation for call center employees consisted of an informational session about the company, followed by several weeks of training in which new call agents) must demonstrate proficiency in English, as well as an aptitude for following standard procedures during customer calls.
Individuality was not just discounted; in some ways it was expressly discouraged. "As a service role, the job can be stressful, not only because employees must help frustrated customers with their problems, but because Indian call center employees are often expected to 'de-Indianize' many elements of their behavior—for example, by adopting a Western accent and attitude," the paper explains.
Wipro was dealing with a big dropout dilemma; more than half of its call center employees quit only a few months after training. "Wipro presented us with the problem of figuring out whether there was anything we could do to reduce turnover," Gino says. "We thought it was the perfect environment to test whether we could make a difference just by changing something minor in the onboarding process."

IDENTITY EXPERIMENTS

In the field experiment, the researchers divided batches of new call agents into an individual identity group, an organizational identity group, and a control group. The control group went through the traditional process, focused on firm awareness and skills training. The two identity groups received the same training as the control group, but also an additional hour-long presentation, which varied according to the group.
For the individual identity condition, a senior leader at Wipro spent 15 minutes discussing ways in which working at the company would enable the newcomers to express their individuality. Next, the new call agents completed an exercise ranking the individual strengths they would exhibit if stranded on a life raft at sea; they also spent time considering how their responses might differ from their colleagues'. Then, the agents answered a series of questions about their individual strengths such as, "What is unique about you that leads to your happiest times and best performance at work?" Finally, the agents shared their strengths with their future officemates.
At the end of the session, employees in the individual identity group received fleece sweatshirts embroidered with their individual names, along with a name badge. They were asked to wear them for the duration of employee training.
For the organizational condition, new employees spent 15 minutes listening to a senior Wipro leader and a "star performer" at the company talk about why Wipro was a singular place to work. Next, the newcomers spent 15 minutes writing answers to questions such as, "What did you hear about Wipro today that you would be proud to tell your family about?" Finally, the group members discussed their answers with each other.
At the end of the session, employees in the organizational identity group received fleece sweatshirts embroidered with the company name, along with a badge. They were asked to wear them for the duration of employee training.
Seven months later, the researchers looked into whether the orientation changes affected how long the newcomers/agents chose to stay with the company. "Considering we just changed one hour on the first day of orientation, the results were amazing," Gino says.
The turnover rate in the control group was 47.2 percent higher than that of the individual identity group, and 16.2 percent higher than that of the organizational identity group. And turnover was 26.7 percent higher in the organizational identity condition than in the individual identity condition. Additionally, employees in the individual identity group had garnered higher customer satisfaction scores during the seven months than those in the control group.
To further study the reasons behind the findings, the researchers conducted a similar experiment in the controlled environment of a university lab. They recruited 175 college students for a three-hour study, conducted over two consecutive days. The students were told at the start that they would be working on a series of tasks, including data entry. All participants completed day one of the study (receiving $35 for their trouble). They were given the choice of whether to return on the second day (in which case they'd receive an additional $15).
As with the field experiment, some participants were placed in a control group, others engaged in activities that stressed individuality (creating personalized nametags, for example), and some focused on the identity of the organization (such as creating a logo for the research lab).
After the experiments, participants filled out a short questionnaire about their experience in the lab, indicating their level of agreement with statements such as, "Within this research team, I felt like a distinctive person." These were meant to measure what the researchers call "authentic self-expression."
Lab participants in the individuality group reported higher levels of authentic self-expression than those in the organizational group. Individuality group participants also performed better and faster on data-entry tasks than those in the other groups. Furthermore, those in the individuality group were much more likely to return to the lab on the second day, indicating that the opportunity for self-expression is indeed directly related to employee retention.

LESSONS FOR BUSINESSES

For employers, the implications of the findings are pretty clear: "Given that the standard, organization-focused approach of employee socialization is so common, it would benefit managers to think about an alternative approach where there's more room for newcomers' self-expression, Gino says. "This is a pivotal stage of the employee/employer relationship, and there are ways to emphasize people's individuality so they can bring it out into their jobs. To Wipro's credit, after seeing the results of the study, the company redesigned its employee orientation process such that personal identity socialization is a part of it."
NOTE TO READERS: In the next step of this research, Professor Gino and her colleagues are looking to discover which aspects of self-reflection during employee orientation are most likely to lead to a happy, effective workforce. For example, will the results differ if employees reflect on their weaknesses as well as their strengths? If you think your company would be interested in participating in a field study on this topic—and possibly improve employee retention and productivity—please write to Francesca Gino directly at fgino@hbs.edu. 
ABOUT THE AUTHOR
Carmen Nobel is senior editor of Harvard Business School Working Knowledge.

Thursday, April 11, 2013

How to Demotivate Your Best Employees


08 APR 2013  RESEARCH & IDEAS   

by Dina Gerdeman
Many companies hand out awards such as "employee of the month," but do they work to motivate performance? Not really, says professor Ian Larkin. In fact, they may turn off your best employees altogether
 
It would seem to make sense that when companies recognize their workers with awards, they are likely to see a boost in morale and perhaps even inspire them to work harder.

It turns out that sometimes rewarding employees for good behavior can actually backfire, leading to a drop in motivation and productivity.
More than 80 percent of companies dole out work-related awards like "employee of the month" or "top salesperson." Managers often view these awards as inexpensive ways to improve worker performance; many believe that when employees bask in the glow of corporate praise, they may even feel motivated to work harder over the long term.
But new research suggests that some awards may actually have the opposite effect, according to a recent paper called The Dirty Laundry of Employee Award Programs: Evidence from the Field, written by Harvard Business School Assistant Professor Ian Larkin, along with professor Lamar Pierce and doctoral student Timothy Gubler from the Olin School of Business at Washington University in St. Louis.
The researchers studied an attendance award program initiated by managers at one of the five commercial-industrial laundries owned by the same midwestern company. Perfect attendance was defined as not having any unexcused absences or tardy shift arrivals during the month.
The plant managers had all the right intentions when they implemented the award program. Absenteeism and tardiness costs US companies as much as $3 billion a year. And in the case of the laundry plant, one worker's tardiness or absence can affect another's productivity. If one team of workers falls behind on the job, for example, other workers down the line are left to sit idle.
STELLAR EMPLOYEES WHO PREVIOUSLY HAD EXCELLENT ATTENDANCE AND WERE HIGHLY PRODUCTIVE ENDED UP SUFFERING A 6 TO 8 PERCENT PRODUCTIVITY DECREASE
The plant's attendance award program began in March 2011 and continued for nine months. Employees with perfect attendance for a month, including no unexcused absences or tardy shift arrivals, were entered into a drawing to win a $75 gift card to a local restaurant or store; the winner's name was drawn at a meeting attended by all the employees. At the end of the sixth month, the plant manager held another drawing for a $100 gift card for all employees with perfect attendance records over the previous six months.
The program did produce one benefit the plant managers were looking for: it reduced the average level of tardiness and led to more punctual arrivals for the workers who participated.

AIRING DIRTY LAUNDRY

Yet when Larkin and his colleagues took a closer look at employee time sheets and records showing the amount of laundry that actually got done both before and after the program was introduced, they found that the plant—unlike the other four that didn't have an award program—experienced some problems:
  • First, employees ended up "gaming" the program, showing up on time only when they were eligible for the award and, in some cases, calling in sick rather than reporting late. Most interestingly, workers were 50 percent more likely to have an unplanned "single absence" after the award was implemented, suggesting that employees who would otherwise have arrived to work tardy on a certain day might instead either call in sick to avoid disqualification or else simply stay home because they would be disqualified from the award regardless.

    Also, while punctuality improved during the first few months of the program, old patterns of tardiness started to emerge in later months. And once employees became disqualified and the carrot of the award was out of their reach, their punctual behavior slipped back downhill. Larkin says this runs counter to what some people believe—that such an award program might instill a long-term pattern of on-time performance in workers.

    The hope is that with the award "you get them to do what you want them to do in a habitual way," Larkin says. "But we can say it's the exact opposite. There was only a change in behavior while people were eligible for the award."

  • Second, and perhaps more significantly, stellar employees who previously had excellent attendance and were highly productive ended up suffering a 6 to 8 percent productivity decrease after the program was introduced. This suggests that these employees were actually turned off—and their motivation dropped—when the managers introduced awards for good behavior they were already exhibiting.

    These workers may have believed that the award program was unfair; after all, they had been showing up to work on time before the attendance program, so they wondered why an award was necessary and why some employees who used to show up late were winning the award.

    "The award demotivated these employees," says Larkin, who interviewed workers at the plant to gain additional insight. "People believed it was unfair to recognize people who only changed their behavior because of this award. They felt that 'I'm a hard worker, and now they're giving awards for something like attendance. What about me?' "

  • All in all, the award program actually led to a decrease in plant productivity by 1.4 percent, which added up to a cost of almost $1,500 a month for the plant.

    "Having your top performers demotivated for all eight hours on the job ended up creating a much bigger productivity hit than having the extra five minutes of work from someone who came habitually late," Larkin says.
Ultimately, the researchers concluded that rewarding one behavior sometimes can "crowd out" intrinsic motivation in another.

REWARDS THAT WORK

Despite the fact that this particular award brought more harm than good, many other types of award incentives have proven beneficial for companies. But Larkin says corporate managers should manage them closely to make sure that employees aren't gaming the system and that the programs aren't fostering unintended negative effects.
"Many award programs have created value and are cost-effective for companies," he says. "Our paper shouldn't be taken as a blanket criticism of awards. You can't say awards are good or bad. It depends on how they're implemented."
This particular attendance award may have been especially flawed because rather than rewarding workers for exceptional performance, it rewarded them for fulfilling a basic job expectation.
"A lot of awards are focused on identifying people at the top of the class or people who went the extra mile," Larkin says. "This award did not recognize people who went above and beyond. It was an award for a behavior that employees should do."
Also, Larkin believes that awards are more effective when they recognize good behavior in the past, rather than behavior going forward. Plus awards for past performance aren't likely to see as much gaming, he says.
"It's motivational to hear that you've done a good job and are being recognized for doing the right thing," he says. "And it provides a good example for other people. People aren't being rewarded because they changed their behavior to match what the manager wanted or by gaming."
Larkin says that in the laundry study, the reward itself—gift cards—may have led to a higher likelihood of gaming. Sometimes it's better to keep money out of the deal.
"People respond very strongly to monetary incentives with this gaming mentality," he says. "When I talk to companies about award programs, I find myself telling them, 'Don't put in that $500 or the trip to the Bahamas.' It sounds like a nice thing to put in, but it also changes the psychological mindset people have."
Instead, Larkin says that companies may fare better just by giving people a nice plaque, sending an email to staff, or calling a meeting to recognize certain workers publicly in front of the whole crew.
"You can't put a price on that. The recognition of hearing you did a good job and that others are hearing about it is worth more than money." 

ABOUT THE AUTHOR

Dina Gerdeman is a writer based in Mansfield, Massachusetts.