Three Organization Design Principles – Why Engagement Sits at about 20 Percent
By Michelle Malay Carter on May 28, 2008
Organizational Engineering
At PeopleFit, we consider ourselves organizational engineers.? Meaning, we use scientific knowledge and natural laws in order to design and implement structures, systems, and processes that realize a desired objective and meet specified criteria – i.e. we design requisite leadership systems which produce work enabling organizations rooted in trust, fairness, and accountability.
It’s As Easy As 1, 2, 3
When we understand some scientific basics about work levels and human capability, we can apply that knowledge toward effective design.? This is what engineers do.
Here are three organization design principles that we use:
1. Employees should occupy roles that match their current cognitive capability
–PeopleFit research shows this design principle is violated an average of 35% of the time.
2. Employees should report to managers who have cognitive capability one level higher.
-PeopleFit research shows this design principle is violated an average of 39% of the time.
3. Roles in any given stratum should report to a role within the next higher stratum.
-PeopleFit research shows this design principle is violated an average of 17% of the time.
The average percentage of employees who have all three principles satisfied in their current work situation?is 17%.?
Tying this to Employee Engagement
Can you connect the dots as to why current employee engagement figures show about 20% of employees describing themselves as engaged?
The Solution to Employee Engagement
We can continue to bribe employees with bonuses and provide spiffs and perks, but instead, we could just fix the design of our organizations.? What people really want is satisfying work and satisfying leadership.?? Science-based design is the way to achieve this.
I’m OK.? You’re OK.? Let’s fix the system.
Filed Under Accountability, Corporate Values, Employee Engagement, Executive Leadership, Managerial Leadership, Organization Design, Requisite Organization, Talent Management, Work Levels
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7 Responses to “Three Organization Design Principles – Why Engagement Sits at about 20 Percent”
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I appreciate your designs on engagement!
StrategyDriven contributors believe organizations act in accordance with the shared values of the people that comprise them. What an organization values is represented by the rewards sought in return for its products and services, the organizationally defined acceptable methods of reward pursuit, and the manner in which benefits realized are parsed to the organization?s members. Therefore, organizational accountability, the timely and consequential pursuit of mission goals, is driven by the ability of the organization to quantifiably measure earned rewards and the culturally determined method of assessing and recognizing employee performance.
Organization type determines the general reward basis driving accountability and the associated assessment difficulty. Types of organizations, their value drivers, and assessment difficulty are:
For-profit: organizations providing products and/or services in return for compensation exceeding the cost of production. The amount of profit, typically one of the primary goals of these types of organizations, becomes the reward driver and is the value most easily assessed.
Non-profit: organizations providing products and/or services in return for little or no compensation, typically viewed as acts of charity. The amount of benefit provided, representing the organization?s reason for existence, becomes the reward driver and is a value that is moderately difficult to assess.
Not-for-profit: organizations providing products and/or services at a cost equal to production. These are often membership organizations. Combinations of reduced production cost and increased production at no cost becomes the reward driver if such changes are demanded by members and are often the most difficult to measure.
Note: There exists a presumption that rewards will be sought in a legal and ethical manner.
While organization type determines the reward driver, culture defines in large part how individual contribution to reward realization is assessed and subsequently the apportionment of both positive and negative recognition. Since, as we have previously defined, the accountable organization is a meritocracy, some cultural value positions will make achieving accountability extremely difficult. Cultural value positions and their contribution to driving accountability include:
Performance-based: performance is assessed against accomplishment of the reward driver while exhibiting legal and ethical behavior consistent with the organization?s values. Performance-based contribution assessment is the values position most directly supporting establishment and maintenance of an accountable organization.
Position-based: performance and value contribution is credited based on the individual?s hierarchical position within the organization with little or no regard to actual performance. These organizations assume position, representing span of control and experience, necessarily equates to the value a person adds to the organization which may or may not be the case. Thus, position-based assessments do not directly support establishment and maintenance of organizational accountability.
Tenure-based: a person?s value contribution is based on the length of time he/she has been a part of the organization. As with position-based valuation, performance has little or no contribution to an individual?s value assessment. This valuation assumes time with the organization equates to experience and that this experience necessarily translates proportionately to performance. Tenure-based valuation does not directly support and is often counter to creation and maintenance of organizational accountability.
Time-based: a derivative of tenure-based personnel valuation, an employee?s time served in relevant positions at like organizations is in some proportion added to his/her tenure when assessing overall individual experience and subsequently value. Time-based valuation does not directly support and is often counter to creation and maintenance of organizational accountability.
Time, Title, and Tenure
The fallacy associated with time, title, and tenure based value assessments is twofold. First, these types of assessments assume time necessarily equates to experience. The error in this reasoning is best illustrated by the law of diminishing marginal returns. As suggested by this rule, the amount of learning and proficiency gained from repetitive performance of an activity diminishes to a point where no additional benefit is realized. Subsequently, after a given number of repetitions, an individual gains no more value adding experience, negating the premise that total time is directly and proportionately related to experience. Second, these assessments assume an individual is capable of perfectly synthesizing and translating their experience into job performance. As is evidenced by the differing grades of school children participating in the same class, no two individuals experiencing the same event will translate the learnings from that event into equal job performance.
Performance-based assessments eliminate a time, title, and tenure assumptions and their associated fallacies. Subsequently, performance-based personnel evaluation against predefined measures of performance helps establish the meritocracy that serves as the foundation of organizational accountability.
Final Thoughts?
Cultural value drivers exert the most influence over the difficulty and often the degree of organizational accountability achieved. Organization type defines the relative difficulty of performance measurement but it is organizational culture that determines how credit for value achievement is distributed. While possible to have accountability in all four cases, those organizations valuing time, title, and/or tenure require active top-down rewards, both positive and negative, to achieve accountability. Combining time, title, and/or tenure-based valuation with a relatively weak performance driver, such as in not-for-profit organizations, makes achieving accountability an act of the will on the part of the CEO and board of directors.
The many differing drivers of accountability in combination create a spectrum of challenging situations through which leaders must navigate when establishing and maintaining organizational accountability. Further complicating these conditions is the tendency of organizations to have components representing two or more of the organization types and a mix of individual valuation preferences within their culture. Because organization type cannot usually be changed, culture becomes the variable leaders must use to heighten organizational accountability.
Leaders seeking to establish accountability within their organizations should pursue reinforcement of behaviors and implementation of processes rewarding performance. While labor contracts may increase the difficulty in distributing performance-based rewards, non-compensation recognition can often be used to reward represented employees. Similarly, for non-represented employees, a performance-based rewards system should displace and ultimately replace time, title, and/or tenure valuation. Finally, because of their weak performance drivers, not-for-profit organizations seeking to improve accountability need to clearly define and consistently apply a value measure against which an individual?s performance contribution is assessed.
The StrategyDriven website (www.StrategyDriven.com) is dedicated to providing leaders with the strategic planning and tactical execution tools and techniques needed to create greater organizational alignment and accountability for the achievement of superior results. We hope you’ll consider visiting the StrategyDriven website and participating in our conversation today!
All the Best,
Nathan Ives
Principal Contributor and
co-Host, StrategyDriven Podcast
StrategyDriven
http://www.StrategyDriven.com
Hi David,
Good to hear from you. Thanks.
Michelle
Hi Nathan,
Welcome to Mission Minded. Thanks for sharing your thoughts.
I am very interested in the subject of accountability as well. What do you suppose would happen if we made employees more broadly accountable than simply accountable for measureable performance? What if we made them accountable for being effective – their output and “numbers” would be in input into the effectiveness judgment, but not the sole determinant.
Have you ever had a situation where an extremely competent and effective employee missed his “numbers” due to no fault of his own? Much of an employee’s situation is outside their control, it seems cruel to hold them accountable for performance numbers, and doing so will likely fuel corruption.
If we hold employees accountable for being effective, we are not just looking at numbers we are looking at decision making, judgment, context and circumstances as well. To me, it seems to give a more balanced view.
Regards,
Michelle
Hi Michelle,
I too believe individuals should be held accountable for more than just ?meeting the numbers.? In today?s increasingly competitive world, we need to be equally interested in how the numbers are achieved. At StrategyDriven, we advocate holding individuals at all levels of an organization accountable for the achievement of agreed to results in a manner consistent with the values of the organization and of society.
One fundamental of accountability that I advocate is the ability to objectively measure that which an individual is held accountable for. To your second point, I see, all too often, outstanding employees penalized for not ?meeting the numbers.? In these cases, I find the reason for the shortfall is that the individual is being held accountable for something he or she is not in control of; often incorrectly described as managing up. When establishing performance metrics and goals, it is critically important to assign metrics to those whose actions directly affect the measures? outcome. To do otherwise is a misdirection of performance accountability that diminishes trust, damages teamwork, and will usually lead to the attrition of an organization?s best people.
There is another item I believe is important to note. We all find ourselves in awkward positions where two or more measures of performance conflict and the decisions to be made become a selection of either the most value-adding option or the less of two evils. In these cases, I advocate focusing on values rather than the numbers when holding people accountable. Organizations and individuals remaining true to their convictions will ultimately be rewarded in the long-term.
Thank you for your engaging response to my comment. I hope you and your readers will have the opportunity to visit the StrategyDriven website (www.StrategyDriven.com) and will take the opportunity to continue to engage our community in the accountability discussion.
All the Best,
Nathan Ives
Principal Contributor and
Co-Host, StrategyDriven Podcast
StrategyDriven
http://www.StrategyDriven.com
Hi Nathan,
Thanks for the comment. You bring up some interesting points here.
Managerial leadership is about judgment. When we can articulate all the considerations that went into a judgment or decision, they are not judgments, they are calculations. Judgment is ineffable. It cannot be measured only judged.
A large piece of performance management will include judgment. It cannot be completely objective or measured. I’m not sure we are disagreeing. I’m not against measuring things, but I think it is overrated as an input into performance management and compensation.
We deceive ourselves when we think we can remove judgment (subjectability) from performance management and managerial leadership.
This is why selection becomes so important – understanding work and human capability to do work and carefully matching the two. Because if an organization is going to give another person the authority to make judgments, not calculations,judgments about my work,that person better be credible in my eyes to do so, i.e. have a bigger picture view than I, add value to my thinking.
I’m enjoying the dialog.
Regards,
Michelle
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