Are CEOs Good at Rewarding Employees?

No doubt, employee morale is low at companies that are downsizing. So I sent a note to several people whose opinions I respect with the question: “Do you feel that CEOs acknowledge the value employees bring to the success of their companies? Can you share a personal experience you’ve had working for a company and how the company recognized and rewarded employees?” Here are several thoughtful answers (edited for space).  I start with an executive recruiter who is in a position to know what a lot of CEOs are doing to reward their people.

Stacy Lauren Musi, Managing Director
Chadick Ellig Executive Search
http://www.chadickellig.com

There have always been both many types of CEOs and leaders. The highly regarded leaders, whether CEO or a business or functional head, recognize the vital importance of their employees, and recognize and reward them … the paradigm for successful leadership in Corporate America continues to move away from the old-school “command and control” approach to an inclusive, consensus-driven, team-oriented model.

Well-regarded leaders acknowledge the contribution of their employees and seek to recognize and reward their top performers accordingly. Historically, this has been done with promotions and monetary gains. But, particularly given the current economy where money is tight and stock options are under water, CEOs and others have to be more creative in the reward systems.

So, in addition to the traditional salary increases, bonuses and equity grants, today, I am seeing other types of rewards:

• Public recognition in front of peers and colleagues. Being given an official company performance award or even just being acknowledged publicly can be motivating to the honored employee as well as to others who would want to be selected for future recognition.

• Particularly to the up-and coming generation that is hard working and ambitious, career growth opportunities go a long way towards keeping them engaged. This reward can include: being selected for a special task force; having the opportunity to participate in an off-site; being given a coveted developmental assignment; or simply being chosen to be mentored and groomed by a well-regarded leader.

• Lastly, I am seeing that more and more, rewards include a wide variety of special privileges or perks. This can include time away from the office (whether it be additional vacation time or the opportunity to work from home); a trip; a complimentary dinner or gift card, etc. This can be particularly effective with middle or lower management, and these perks often include the entire staff. For instance, one leader shared that after a successful quarter, she took her team bowling, and another leader, who was on a tight budget, closed the office at 2:00 on a Friday and threw a wine and cheese party for her staff to thank them for a good job and to encourage a team spirit.

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Amy Dean
http://www.deanpublicrelations.com

I once had the managing director at a PR agency lavish me with a big bonus when I saved a key client. I really felt that he valued and empowered me. But the trust was eroded when he lied about me to the same client months later. He didn’t want to work with the client anymore, so he blamed it on me, saying that I wasn’t happy working on the account, and his duty was to keep me happy.  It wasn’t true. When he found out I refuted his statement to the client, he gave me a tongue-lashing.  He wasn’t consistent in his support of me, so I never trusted him again.

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Bea Fields
http://beafields.com

I think that most CEOs do a pretty good job on the front of acknowledging their employees. One company I have worked with offers what is known as a “Visa Bucks” program. With the program, when an employee accomplishes something that has a positive impact on the company, they are given $50 or $100.00 Visa bucks to spend at partnering local retailers. The announcement of the “Visa Bucks” winner also receives quite a bit of public/verbal acknowledgement which, at the end of the day, is what most employees want to know…that their boss recognized their great work.

Another idea which I have recently learned from a senior pastor is an acknowledgement program known as the “Barnabas Pack.” This is actually a peer-to-peer acknowledgement program where the entire leadership team votes on the one employee who really gave 110% during the month. The award is given at the first of the month at a staff meeting and once again, is great, because it is coming from the entire team, which makes the award meaningful.

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Nina East
Founder, http://www.PersonalGrowthProfessionals.com

Some CEOs do acknowledge the value their employees bring to the success of their companies. I have a feeling this happens more often, or more visibly, in smaller companies. CEOs who recognize the value contributions, and communicate this, not only have greater business/financial success (from Megatrends 2010), but they also create a much more loyal employee team –critical in the current economic climate.

The challenge seems to be when money gets tight, revenues are down, or the CEO’s own behavior or contributions are being called into question. In those situations, which I’ve seen far too often, the leader will sacrifice another employee in order to save face or solidify their own position.

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Miriam Battson, Marketing & Sales Director
The Pettibon System, The Pettibon Institute
http://www.pettibonsystem.com

Enlightened CEO’s DO acknowledge the value the employees bring to the success of their companies.  You can also feel it when you walk through the front door.  Employees have a sense of ownership and taking pride in your work.  There is a company in Seattle that has a gym, numerous classroom/conference room for their own “university” classes, full blown cafeteria, wine bar, fitness classes, etc. , all at no charge to the employees.

In Gig Harbor, the owners of The Pettibon System have been encouraging the employees to read “the Great Game of Business” by Jack Stack.  What it’s doing is showing the way to a mindset shift of employees taking ownership in the outcome of the organization and specifically in their work.  As we begin to implement the game within the company it’s been fun to watch the communication lines open even more.  The net result is engaged and happy employees who are being proactive with customer service related issues. They are feeling empowered to do the right thing and help create the future.  As an employee, I feel very blessed.

Where Did the Employees Go?

The 2008 corporate annual reports have rolled off the presses and are on view on company websites.   I flipped through some of them online and, as usual, they are the same old dullards.  A letter from the president, a few words about the past year and what the future holds, followed by the financial results.

But you know what?  Several of the very largest Fortune 500 companies had not a single photo or story about an employee.  None. Aren’t employees the ones who make the company successful?  Where did they go?  It is a little shocking to think that they merit so little recognition.  Granted many companies have had layoffs.  Maybe they think that if they don’t highlight the employees who are left people will forget about the ones who are gone.  Or maybe it’s something else.

In a recent column, David Brooks, an op-ed writer for The New York Times cited a study “Which C.E.O. Characteristics and Abilities Matter,” by Steven Kaplan, Mark Klebanov and Morten Sorensen.  What they learned, says Brooks, is that “strong people skills…and being a great communicator…correlate loosely or not at all with being a good C.E.O….what mattered were execution and organizational skills.”  Their findings apparently were consistent with other research on the subject of successful C.E.O.’s.
Maybe that’s why employees are so little recognized in the most successful companies.  The C.E.O.’s need to be a good communicator isn’t as important as sweating the small stuff, like being attentive to detail.  OK, not all C.E.O.s think team building and communications with employees are unimportant.

But it does make one pause and wonder if companies just don’t value their employees as much as in the old cradle-to-grave days when an employee lived out his entire work life with one company.  Maybe employees are fungible.  That’s it.  Employees come.  Employees go.  Welcome to the new world.

CEO as Chief Communications Officer

The CEO has a great opportunity to become the company’s Chief Communications Officer.  This isn’t in addition to his or her regular duties.  This is the essence of the CEO’s job.
Social networks like Twitter and Facebook have the power to profoundly advance or ruin a company’s reputation.  It’s the Wild West out there with lots of misinformation flying across the web.  That’s why the CEO must be communicating regularly to employees, customers, regulators and other stakeholders with the real story.
First, there is the company’s own internal communication programs.  And, as I’ve stated before, speed is of the essence in communicating important news to employees.  If you don’t tell them they will turn to the web for the latest dirt on the company and share it with each other.  Instead, turn them into ambassadors to spread word about the good things happening in their company.
That’s why the CEO has to be talking directly to the company’s stakeholders regularly with quick takes on new developments.  Many CEOs are turning to Twitter and posting their own tweets – such as George F. Colony, CEO of Forrester Research, who is giving advice to his peers about social communities and wrote a blog “How can CEOs understand social technologies?”   If the tweets are authentic and genuinely represent the CEOs own voice, the followers will come, especially the company’s own employees.  Who would have thought just a few short years ago that the company’s chief communications channel could be Twitter!  But if that’s what it takes to get the message out, then that’s what CEOs should be doing.
A few tips for the CEO as Chief Communications Officer:
•    Write the updates in your own voice.  A 140-word Tweet that links back to the company’s own website with more information is golden.  You should be writing them yourself and not someone from the PR Department.
•    Speed is of the essence.  If something dramatic happens (think of Domino’s employees contaminating a pizza) get out there right away with a Tweet or write a blog for the company’s website.  Now, this minute.  Getting the PR department to write a press release that needs to be vetted by 10 lawyers is too late.
•    Write often. Be out there every day, if possible.  When you’re checking your Blackberry one last time before going to bed, think about something good that happened for the company and put out a 140-word Tweet.  It will take less time than brushing your teeth.
•    Encourage feedback.   That’s what so great about the social communities.  There’s two-way communication.  You can get instant feedback from customers and employees.  They will tell you if they don’t think they are getting the straight story.  So be authentic.
This is the time for CEOs to be bold and brave.  Trust your employees, customers and other stakeholders to believe you.  Be a good leader and they will follow.

The Gentle Art of Firing Someone

The news seems to get worse everyday.  Thousands of people are losing their jobs because of the economic meltdown.  Firing someone is always difficult, especially for poor performance.  But today, many employees being fired are good at their jobs.  They’re out because the company is performing poorly.  Senior management may actually be the culprits.
The Surgical Way
In large companies dozens of people may be let go in single day.  It’s surgical – like a knife slicing off a limb. And that’s how it feels, too. Don’t let them back in their office, shut down their computers and escort them out the door as quickly as possible like common criminals.  At least that’s how it feels to someone who was gainfully employed at 9 a.m. and finds himself out on the street an hour later, stripped of his ID badge and told not to try to reenter the premises.

This isn’t speculation.  It’s happening every day.  Isn’t there a more gentle way of letting people go who have done nothing more than become an expense the company can no longer afford?   Many companies are afraid that an employee may steal company secrets or sabotage the computer system.  But how realistic is this?  If an employee wanted to steal secrets or keep samples of her work, she no doubt would have done it long ago.
The Gentle Way
Everything you read about firing someone advises to make it private, to spare the employee’s feelings.  But I have a different idea.  Why not assemble all the people being let go that day in a conference room.  Tell them they are being laid off, not because of anything they did wrong, but because of the economy. Tell the assembled group, after your briefing, that you wish them well, they are good people and you are sorry they need to leave right now. Let them go back to their desks where an outplacement executive can watch as they access their computer to copy any personal information they may need and to send some emails to their friends in the company to say goodbye.  Have that person help them to pack up.  A handshake from the boss never hurt either.
Establish a dedicated website where those who were let go can share job leads, resumes and just chat about how they are feeling.  Having a virtual place to go will enable the group members to take care of each other.  Have someone in the company online for the first 30 days (or more) to answer questions.  Then you can let go of the lifeline as the group coalesces.
People laid off aren’t statistics.  They are individuals who deserve to be treated with dignity.

Communicating With Passion

Whenever change permeates a big company, resistance is inevitable.  The announcement of change itself raises anxiety levels, creates doubts in employees’ minds, and makes them feel vulnerable and uncertain.  And it raises serious questions:

•    What will this mean for me?
•    If I must operate differently, am I up to it?
•    Do I really believe what I’m hearing about the future of the company?

Sound leadership and a clear vision are required to answer these questions.  Straightforward communication is essential to calm fears and build support for change.   But most important, the CEO’s honest passion and belief in the vision will inspire people to follow.

Imagine if Martin Luther King Jr. had stood in front of the Lincoln Memorial and said, “I have a business strategy.”  King didn’t do that.  He said, “I have a dream,” and showed us what his dream was, his picture of the future.
You get more people to change by showing them something that affects their feelings than with a detailed factual analysis.

It takes passion to break out of habits.  Ask dieters.

Internal Communications Strategies for Web-Savvy Employees

CEOs don’t always walk the talk when they claim that employees are the company’s most important asset.  If that were the case, employees wouldn’t be using social communities on the web to find what’s going on in the company.  So here are several strategies to focus employees on the company’s goals through the company’s own communications network.
1.    Build a world-class, global employee communications function aligned with business strategies and goals to oversee the development of a culture of communication.  Make the director part of the management team.

2.    Create a Champion Program to ensure that the CEO is the visible leader of communications with employees and to ensure that senior management embraces and lives employee communications through appropriate rewards and incentives.

3.    Create communications processes that ensure two-way communications and that embed culture changes throughout the company.

4.    Provide training, tools and support for managers, who are the key influencers and drivers of success (or failure) of the company’s plan.  Nothing is more important than consistent communications between managers and their direct reports.
5.    Put in place measurement systems that track employee satisfaction with internal communications.  And see what employees are saying about the company on social networks so that you can adjust your communications strategy and messages.

Above all, speed is of the essence.  Nothing moves news faster than the internal grapevine.  So keep information flowing regularly and get news out quickly, feeding the grapevine with the company’s own version of events.

Employees as Company Change Agents

No question, companies are struggling to control their brand essence and key messages during this economic slump.  Communicating positive news is more important than ever in the 24/7 news cycle and with an Internet that can circulate good – and, let’s face it, mostly bad – news around the globe in a matter of seconds.  But companies are overlooking their most important advocates to the outside world – their own employees — because of a lack of internal communications.

It is employees who are most often the primary interface between the company and its customers.  But the media is an increasingly intrusive “partner” as reporters pounce on every bad piece of company news – often coming from the mouths of unhappy employees who are left out of the loop about important new company developments.  Online chat rooms sponsored by Yahoo and Vault and networking sites like Twitter, Facebook and MySpace provide a public platform for employees to vent their grievances and the media and customers are tuning in.

New technologies are transforming the way companies do business. But employees are underutilized as advocates of change. They are not being motivated to rally around the company’s mission and goals.  It’s not an overstatement to say that business transformation will only be accomplished by gaining the commitment of employees at all levels to drive growth and performance.  The key to ensuring success is consistency of communications to the right people at the right time with the right messages.

Internal communication efforts often fall short because:

•    Behaviors don’t match the message, especially senior executive behaviors
•    Communicating is not viewed as an important process
•    Communication is blocked at many levels – up, down and across
•    Complicated and lengthy approval processes prevent timely distribution of information
•    Employees don’t hear things first, thus a loss of faith develops
•    Too much is communicated and more important messages are lost in the clutter
•    Employees are turning to their external message boards for news about their own company

Companies that find their employees turning to the Internet as their primary source of information about the company they work for have lost their most important change agents.

Adding dividends with a culture of two-way communications

In a recent New York Times interview, the chairman of a private equity firm stated that he tells everyone in his organization that he is always accessible by email and will always respond within 24 hours.  He’s a leader that gets it:  that a positive culture of communication will help to drive his company’s growth.

No matter what your work environment or industry, if communications with employees is “broken,” you will never realize your corporate vision.  Broken usually means under-communicating with employees.   Without being in the know, they feed negative gossip into the grapevine, which moves more swiftly than formal communications ever can.  When employee satisfaction suffers, customer satisfaction goes down the tubes and there goes the bottom line.

Trust is the core component of a Culture of Communication.  All communications must be reliable, truthful and contain the full story.  At the heart of trust is:

Openness – there must be an unwavering commitment to and support of a healthy two-way communications environment

Simplicity – communications must be clear, meaningful and accessible

Consistency – messages should support the company’s plan and be communicated on a regular basis

Caring – you must foster concern for the individual

Sounds simple, doesn’t it?  So why don’t more companies do it?