Recommitting the Workforce

Excerpt from Recommitting the Workforce (Work/Family Directions). Written by Hal Morgan. Included here as a writing sample and for historical interest. This was written in 1995, at the start of a turning point in employer-employee relations—a transition from long-term employment and deep loyalty to a single employer to more of a free-agent labor market. That has played out in low levels of employee engagement at work, and, especially among younger workers, in a comfort with frequent job changes and career self-management. 

The New Employer-Employee Compact

Employee commitment in an environment of constant change and restructuring

American business is in an era where change is the norm; where stability and security are elusive and often short-lived; where global competitors push relentlessly on cost, quality, and response time. As companies gear up, scale back, or shift into new markets, many are finding that the old employer-employee relationship no longer gives the flexibility and muscle they need. As the balance of work shifts from manufacturing toward information technology and services, the nature of work has changed, and companies can no longer rely on old models to manage their investment in labor to the highest returns.

Companies are reshaping themselves to better meet customer needs. They can no longer offer employees lifetime employment, steady career advancement, and ever-increasing salaries. Yet at the same time they are asking employees to work harder and smarter, to provide better customer service, and to be ready and willing to change with a newly flexible organization.

How can companies expect employees to give their full initiative to an organization that can no longer offer job security or the promise of long-term rewards? To be engaged in and focused on their work in the midst of constant change? This is the business challenge of the 1990s, and the companies that address these questions successfully will be the winners in the years ahead. Because just as companies need to make these sometimes painful changes to remain competitive, so they must earn the full contribution of their employees in order to thrive.

Companies that pull back on old promises without offering anything new in return will be forced to operate with the cost of a full workforce but without its full contribution.

How must companies change to meet the realities of the new business environment?
Companies have already made their requirements clear to employees: the premium is now on flexibility, adaptability, new skills for new technologies, and constant improvement. They are having more difficulty responding to what employees need from them in return: the freedom and responsibility to do their work well, and the recognition that they have lives outside of work.

Handled clumsily, change can lead to a demoralized, discouraged, and unproductive workforce. Handled well, it can recharge an organization’s highest performers and focus efforts on the most productive work. The new employer-employee compact is a change in the relationship on both sides. And in may ways it is a revolutionary shift in the way work gets done.

The new deal will be different in every organization, shaped by a company’s history, culture, people, and the nature of its work, but the broad outlines of that change are emerging through research and experimentation. Adopting a new compact means rethinking benefits to meet the needs of a changing and more mobile workforce, eliminating barriers to productivity by offering benefits and supports that address employees’ most important personal and family needs. It means giving employees more control over their work, including flexibility in their work hours and location, a greater say in the business and in how the work gets done, and more responsibility for their own careers. It means focusing on employee commitment to the work, the work team, and the customer, rather than on employee loyalty to the company. And it means guaranteeing employability rather than continued employment by giving employees the skills they need to succeed in other parts of the company or at another organization.

“If you want to attract, retain, and motivate top-quality employees, you have to pay attention to and respond to the pressures they’re dealing with in the balance of their work and family life. It’s all going to depend upon our ability to be flexible and creative.”
David Potluck, President and CEO, Charles Schwab & Co., Inc.

What tools can an employer use to build employee commitment?
Benefits that address important personal and family needs. Employees will give their best performance when they feel the organization respects their lives outside of work, when they feel that their employee delivers on what matters to them. Recent studies have shown, for example, that work-life supports lead to greater employee involvement in change efforts, more employee initiative in solving problems, and other commitment-released results. To the extent that a company can show that it supports and employee’s personal needs, it can earn that extra discretionary effort. Depending on an employee’s personal and family situation that might mean help getting a teenager back on tracking school, finding services for an older relative, understanding how to look for quality child care, or support through a period of depression or other illness. These supports can improve the quality of an employee’s life by by offering expert guidance through crises as well as through life’s normal and predictable transitions. They give the employee a reason to stay at and contribute to the organization, and they help eliminate barriers to getting the work done.

Flexibility. As companies move away from the old employment guarantees, they need at the same time to replace old systems of control and performance measurement. These rigid work rules and systems are now outmoded, and can be a source of frustration and discouragement to employees. Employees no longer need to work within the confines of a fixed eight-hour day, and creative schedules and work arrangements can boost both morale and performance. With adaptability, quality, and responsiveness the watchwords of the new organization, flexibility, empowerment, and employee control are powerful tools a company can apply to make change happen.

Building commitment to team, work, and customer. With decentralization and the fluidity of new work environments, the ideal of company loyalty needs to be set aside for new forms of commitment. Jobs can be designed to encourage employee commitment to the work itself, quality programs initiated to foster employee loyalty to the customer, and teams organized and empowered to build a sense of involvement in smaller work groups. Loyalty to team and co-workers, real engagement in the work itself, and a strong commitment to the customer can combine to serve as the mortar that binds an employee to an organization.

Promise of employability. Responsibility for career development is shifting back to employees. Employees must acquire the skills that keep them useful to the organization. But businesses can still support their workers by offering opportunities for career development and skill enhancement. Training and work assignments can be arranged to give workers opportunities to keep up-to-date with marketable skills. With the rapid pace of technological change, companies need to train workers in new skills and workers need to invest their time in constant upgrading of their own knowledge and abilities. In order to demonstrate good faith and earn the full commitment of their employees, employers can also give workers training and experience that will allow them to move into jobs elsewhere in the organization, or even at other companies if the need for their skills or labor is phased out. A promise that the company won’t leave the workers unemployable can help replace the security of employment guarantees.

“Do work-and-family issues affect our bottom line? Yes. Motivated people, working creatively and productively, produce the best bottom-line results.”
J. Michael Cook, Chairman and CEO, Deloitte & Touche

The importance of forging a new deal
Employees want to do good work, they want to contribute, and they want to feel engaged in what they do. It is the company’s job to feed that fire, to eliminate the forces and obstacles that serve to dampen enthusiasm and discourage contribution. As businesses feel their way toward a new relationship with employees, they need to find ways to turn change into a positive force rather than a source of fear and anger. They need to recognize and respect employees’ needs in their lives outside of work, and find ways to support people through all sorts of change. They need to clear away old rules along with old promises, and experiment with new ways of working together.

The stakes are high. The pace of change has quickened. Competition is being felt from new directions. Companies that pull back on old promises without offering anything new in return will be forced to operate with the cost of a full workforce but without its full contribution. Those companies that rise to the challenge, that find ways to engage their workers and reapply their energies with flexibility and focus, will seize the opportunities in the years ahead.

“Our work environment must recognize that what people do is more important than how they do it; that results are more important than style or when the work is done.”
Doug Leatherdale, Chaiman, The St. Paul Companies