Showing posts with label psychological contract. Show all posts
Showing posts with label psychological contract. Show all posts

Tuesday, December 18, 2018

Of employee engagement and the 'survivor syndrome'


Employee engagement has been one of the key themes that we have been exploring in this blog (see Employee engagement and the story of the Sky Maiden, Passion for work and anasakti, The curious case of the object and subject of employee engagement, Appropriate measures for organizational commitment , The series on salary negotiations and psychological contract , Architects of meaning & Of owning and belonging for some of the examples). In this post, let’s look at employee engagement in the case of survivors of corporate restructuring/downsizing exercises(who often suffer from the so called ‘workplace survivor syndrome’ with symptoms like anxiety, depression, decrease in performance, poor morale and increased propensity to leave)  

At the heart of the survivor syndrome lies two emotions- guilt (“I didn't deserve to survive when my friends didn't”) and fear (“Next time, it could be my turn”). So, when it comes to employee engagement, the organization's best response is to help the survivors to deal with these emotions so that while the scars can't be erased, productivity can be restored to a great extent.

Guilt can be reduced by convincing the survivors that they deserved to survive (e.g. by following a transparent process for restructuring and for identifying the employees to be separated) and by ensuring that the employees who were separated have been well taken care of(e g. by providing a generous separation package & adequate transition support).

Fear can be addressed to some extent by publicly communicating (if possible) that the staff cuts have been completed and there is no such possibility in the foreseeable future. Providing the survivors the opportunity to receive psychological counseling/ stress management training with a focus on coping  strategies can also help. Of course, constant communication with the employees at all levels that addresses the stated and unstated concerns has to be continued. Another type of fear is regarding increased workloads and new skill sets required. This can be addressed through careful work planning and capability building. People managers can be trained to look for signs of stress in the employees and to manage the employees in a supportive manner. Of course, any tendency among the people manages to use the residual fear to drive productivity ('blackmailing' employees to work harder) should be curbed.

What is perhaps irreversible from the employee engagement point of view (especially for the next few years) is that the employer- employee relationship moves to a purely rational plane (whereas most definitions of employee engagement include the aspect of deep emotional connect that the employees have to the organization). This is because, layoffs are often perceived as a breach of the psychological contract. This would be more so in those organizations that have been communicating messages like ‘our company is one big family’ to the employees.

This would mean that, after the restructuring, companies would have to rely more heavily on rational means to retain and motivate employees (e.g. highly competitive salaries & performance-linked incentives, gain sharing schemes etc.) as well as investment in capability building to ensure 'employability'. Yes, the emotional connect can drive discretionary effort and lead to remarkable (business) results. But, organizations should engage the emotions of the employees only if they are willing to look at employee engagement as a relationship (and not as a tool) and are willing to reciprocate (in terms of going out of the way to care for the employees, beyond what the employment contract requires)!

In a way, the way out of the survivor syndrome is through a psychological transition process. So, actions that can facilitate the transition process like clearly explaining the need for restructuring and the process that would be followed, helping the employees to acknowledge and deal with their feelings of fear and guilt (as detailed above), clearly articulating the new vision for the organization and the possibilities it creates for the survivors and getting the survivors actively involved in rebuilding the organization and the social networks within the organization(that would have suffered because of the loss of social capital) are perhaps the highest leverage actions that organizations can focus on!

Wednesday, April 25, 2018

The curious case of the object and subject of Employee Engagement


"You should join us only if you fall in love with our company”, said the HR Head to a group of summer interns from premier business schools.

“I don’t think my exit should be considered as attrition; the company that I am leaving is very different from the company that I had decided to join”, said the OD Manager during his farewell.

I heard these statements quite some time ago. But they pop up in my mind whenever I think about employee engagement. The first statement (made by the HR Head), makes me think more about the appropriateness (or the lack of it) of the various metaphors used to describe employee engagement. The second statement (made by the OD Manager)  makes me wonder who or what exactly is it that the object of employee engagement and if employee engagement is a one-way street. Let’s explore these in a bit more detail in this post!

Employee engagement is a concept that is very popular these days as there is a significant amount of research that indicates the positive impact that employee engagement can have on business performance. Yes, like many fashionable things, employee engagement often gets trivialized into (‘fun and games’) activities that misses its core (See ‘Employee engagement and the story of the sky maiden’ for more details). While there are many definitions of employee engagement, a ‘strong emotional connect’ that leads to ‘discretionary effort’ is the central theme in most of these definitions. Also,  it is this ‘strong emotional connect’ that is one of the key underlying factors in the two statements that we started this post with!

Let’s start with the statement of the HR Head. He definitely had a point. Any transition to a new organization (especially when it is from campus to corporate) will have its own share of frustrations and if one develops a strong emotional connect to the organization (during the summer training, in this case) it becomes easier to overlook these frustrations.It also helps in not getting distracted at the workplace. The metaphor he used (that of falling in love, in the romantic sense of the term ‘love’) has remarkable similarities with the ‘strong emotional connect’ that we found in the definition of employee engagement sense. Yes, romantic love is a great enabler for 'pair formation' (and for recruiting one into the organization). Yes, this type of love can also lead to the employee putting in discretionary effort. 

The main problem is that people fall out of this kind of love, that too fairly quickly. To put it in another way, while it is a great enabler for pair formation, romantic love is not so effective when it comes to 'pair maintenance'. Also, as we have seen earlier in ‘Appropriate metaphors for organization commitment’, metaphors that are used to talk about the ‘employer-employee’ relationship often create complications because a metaphor is not an exact comparison and hence inaccurate/misleading meanings and assumptions creep in into our understanding of the relationship. Of course, metaphors have tremendous rhetorical value and hence leaders are tempted to use them for ‘motivating’ the employees (Please see ‘The Power of carrot and stick’ for a discussion on if there is any difference between motivation and manipulation)

Falling in love can lead to attachment or even possessiveness which can be counterproductive (see ‘Passion for work and anasakti’). Also, if the employee falls in love with the organization (and the organization doesn’t fall in love with the employee), it can lead to an exploitative relationship. Love that is not reciprocated often turns into hurt and hate very quickly!

Yes, there are other definitions of love, like the one Scott Peck uses in 'The Road Less Traveled' ('extending oneself for the spiritual growth of another') that can lead to discretionary effort without the complications mentioned above. But, those types of love are not something that someone can 'fall into' as it requires aspects like a higher purpose and conscious decision-making. 

This brings us to the interesting discussion on if it makes sense to (re)define engagement as conscious decision that the employees make instead of being an emotional reaction/outcome of emotional connect. While this sounds promising, this type of engagement (which is a deliberate decision) might not so easily lead to discretionary effort if the returns of that discretionary effort (which can very well be in terms of satisfying the higher order needs like esteem or self-actualization in the Maslow's hierarchy in addition to satisfying lower order needs like physiological and safety needs that are usually met by salary and job security). 

Yes, I have heard employees making statements like "I keep myself engaged regardless of what the organization does or doesn't do", though I am not sure if they used the term 'engagement' in the sense of discretionary effort (or just in the sense of keeping oneself focused on one's job). If it is the promised 'magic of employee engagement' (creating something out of nothing, like getting extra work done without paying anything extra for it) that get employers excited about employee engagement, then this definition can create complications! 

Now let’s come to the statement made by the OD Manager. Here the key issue is ‘what exactly is the ‘company’ that the OD manager was referring to when he talked about 'the company he joined' and 'the company that he was leaving'?’’ Is it the legal entity, is it the company brand , is it the products and product brands, is it the immediate manager, is it the team, is it the senior leaders, is it the CEO, is it the some higher purpose (other than making money) served by the company or is it the way get things get done in the company (company culture)? Most of the studies indicate the 'immediate manager' as the most important player in the game of employee engagement. But it could also be because the manager represents the organization for the employee and the organization's 'sins' are often incorrectly attributed to the managers (like when we say 'people leave managers and not organizations'; see 'Blame it on the managers' for more details). So, when it comes to the object of employee engagement, there are many possibilities and also many combinations of these possibilities!

If we examine the above list of possibilities (objects of employee engagement), we will find that most them can change and that some of them do change frequently in many organizations these days. This also indicates that the loss of social capital/breaking of working relationships during reorganizations can have an adverse impact on employee engagement. Again, it is possible that the employee’s preferences/factors that engage the employee changes during his/her tenure in the organization. So there are many moving parts here, on both sides of the equation, and that makes keeping the employee engaged quite challenging. Hence, employee engagement becomes a continuous activity and it requires a deep understanding and careful management of the evolution of the psychological contract!

 At a more fundamental level, the issue here is about the 'reciprocity' aspect of employee engagement. Why is it only about the employees feeling emotional connect to the organization (and putting in discretionary effort)  and not also about the organization reciprocating the feeling (and going out of the way to do something for the employees). Yes, as we have seen in the above paragraph, the 'object' of employee engagement can vary and hence the issue of who or what exactly is the 'organization' that is supposed to reciprocate  can further complicate things. May be, we can just say that all those who benefit from the the discretionary effort put in by the employee should reciprocate. While it is very clear that employee engagement benefits the organization, it is not very clear if it leads  to employee happiness or even employee satisfaction in the long run. 

So what does all this mean? To me, (employee) emotions are precious (or even sacred) and they should not be trifled with. Yes, emotions are also highly powerful in driving discretionary effort and they can lead to remarkable (business) results. So, organizations should engage the emotions of the employees only if they are willing to reciprocate (in terms of going out of the way to care for the employees in various ways depending on the context). If the idea is just to increase performance or to create accountability, there are other ways (that works on rational commitment and are well within the scope of the employment contract without getting into the domain of psychological contract) like goal alignment, performance management, gain sharing plans and performance linked incentives that can align the interests of the employer and the employee and hence address the 'principal -agent problem' (see 'Of owning and belonging' for more details). 

Hence, we should leverage the power of emotional connect (and the discretionary effort that comes from it) only if we are willing to look at employee engagement as a relationship (and hence a two-way street) and are able to consistently respond in a manner that respects and nurtures the relationship! Otherwise, we run the risk of the (perceived) intent of our employee engagement efforts resembling that which is often depicted in the cartoon strips on employee engagement (e.g. tricking the employees into 'gladly putting in extra effort without getting paid anything extra in return')!

Any comments/ideas?

Wednesday, September 13, 2017

The OD Quest: Part 4 – Totally Rewarding!

"I don’t have an opening in my OD team now. But, you can join our recruitment team and do recruitment in the OD way”, I heard the Senior HR Leader telling a candidate who was hell-bent on joining the OD team. This was my fifth ‘encounter’ with this gentleman (See 'Passion for work and anasakti ‘, 'Appropriate metaphors for organizational commitment ‘ ,‘To name or not to name, that is the question’ and ‘A Mathematical approach to HR’ for the outcomes of my previous interactions with him).

I was a bit taken aback by what I just heard. I knew that often these kind of ‘solutions’ will end in tears or worse. However, similar to what had happened during my previous encounters with him, this interaction forced me to think a bit more deeply about the underlying issue - the application of OD(Organization Development) to the various functional areas in HR (Human Resource Management). That, in turn, has prompted me to write this series of posts on 'The OD Quest' where we will look at the possibilities  that arise when OD ventures into other parts of the people management terrain.

In the first post in this series (see The OD Quest: Part 1- Mapping the terrain) we did a cartography of the Human Resources (HR) and Organization Development (OD) domains to map out the current world (the terrain) inhabited by HR and OD and also the evolving worldviews in HR and OD (ways of looking at the terrain). In the second post (see The OD Quest Part 2 : Doing Recruitment in the OD way) we made a visit to the land of Recruitment and explored the value OD can add to Recruitment. In the third post (see The OD Quest: Part 3 – Rendezvous with L&D) we covered the Rendezvous with L&D
. In this post, let’s take our OD Quest to the land of Rewards that is also known by names like ‘Compensation & Benefits’ (C& B) and by more interesting ones like ‘Monies & Goodies’.

If we look at Rewards essentially in terms of compensation surveys, compensation structures and benefits the possible value addition from OD is not apparent with exception of facilitating deeper discussions around the compensation philosophy (the ‘why’ of what we do in Compensation &a Benefits and its alignment with the company values). However, when we look at Rewards as a tool to drive appropriate employee behaviors to achieve a particular set of business results, the possible value addition from OD  becomes clearer.  

Employee behaviors (and also employee engagement and performance) are driven by the ‘total employee deal’ offered by the company that include (in addition to compensation and benefits) factors like the organization culture, work environment, development & growth, meaning & purpose etc. OD plays a key role in enhancing these aspects. Most importantly, the underlying messages conveyed by the Compensation & Benefits provided by the company must be in sync with the messages conveyed by the other parts of the total employee deal. For example if an organization wants to provide a highly collaborative environment the Reward system should also support that. 

One of the ways to enhance the alignment between Rewards and OD is to jointly create a coherent and internally consistent ‘Employee Value Proposition’ or a ‘Total Rewards Statement’ that include all these dimensions. This would ensure better integration between the transactional aspects (traditionally the domain of Compensation & Benefits) and the relational aspects (traditionally the domain of OD) of the total employee deal. Please see ‘Of Rewards, OD and Passing the buck’ for more details. For example, it creates cognitive dissonance when the organization looks at salary purely as a 'matter of supply & demand' and at the same time wants the employees to develop a deep emotional connect with the organization beyond the rational connect  (or even consider the organization as their extended family).


Reward systems must focus on what is valued in the organization (stated values of the organization). Clarifying these values is an area where OD can help. There must be a clear connection between the valued behaviors and the Rewards. Money speaks louder than words! So if there is a disconnect between the espoused values of the organization and what is actually rewarded, the employee behaviors would be influenced by what is rewarded. It is also a sure way to lose credibility and trust.

Another very important contribution that OD can make is to better manage the formation and evolution of the psychological contract. While salaries are more in the domain of the employment contract, the way salary negotiations are conducted during the various phases of the employee life cycle can have a huge impact on the formation and evolution of the psychological contract and hence outcomes like employee engagement, performance and retention. Please see ‘Of Salary negotiations and Psychological contract’ for more details. Also, how Reward decisions are handled (especially when the organization is not doing well or when the organization can afford to drive a hard bargain with the employees) with both shape and reveal the organization culture and values.


OD can help in facilitating better change management around the changes made to compensation and benefits (especially on tricky ones like discontinuing a benefit or redesigning incentive/variable salary schemes to derive more value). Of course, it works the other way around also. When OD is driving an organization-wide change management effort, Rewards can be of immense help by rewarding the desired (new) behaviors/ways of working and hence facilitating them to take root. For example, if the organization wants to build a more performance-driven culture, increasing the level of differentiation in Rewards for the various levels of performance can be a key enabler.


So where does this leave us? OD can add a lot of value to Rewards. OD can help Rewards to evolve from Compensation & Benefits to Total Rewards! We can say that the application of OD makes Rewards better just like ‘sugar sweetens milk’ in the famous story* about Parsis. Of course, it is important to keep working on the Rewards & OD partnership to take it to higher levels of excellence and to ensure that things doesn’t fall through the cracks (or fall in ‘no man’s land’). Considering that we are on an OD quest and not a conquest continuous exploration of the possibilities of the Rewards and OD partnership definitely fits into the spirit of the OD quest!

 The story goes something like this.: Parsis came to India fleeing from persecution in their Motherland Iran and landed in Gujarat. There they approached the local king Jadi Rana and requested asylum. Jadi Rana motioned to a vessel of milk filled to the very brim to signify that his kingdom was already full and could not accept refugees. In response, one of the Parsi priests added a pinch of sugar to the milk, thus indicating that they would not bring the vessel to overflowing and indeed make the lives of the citizens sweeter. Jadi Rana gave shelter to the emigrants and permitted them to practice their religion and traditions freely. Parsis are still adding “sugar” to our lives!

Any comments/thoughts before we take our OD quest to the next domain in the HR land?!