Chicken or the Egg

There is a rumor going around that sacrifice and hard work always precede happiness; that they are somehow harbingers of it.  This could explain the fact that over the last two to three decades, the average American has seen the typical work day grow from eight to nine and even ten hours. Somehow we began to form this collective misconception that all these extra hours at the office will equate to success, which will equate to promotions, while will equate to more money, which will equate to more happiness.  I remain unconvinced.

The problem with this kind of thinking is that it also makes the assumption that more hours always equal more productivity.  This is where we get ourselves into trouble.  I’m sure some very smart people out there could show, with years of research and some complicated math, that this is false.  I don’t really need to do all that because I know it’s false.  As our work weeks extend, so too does our burnout. Burnout causes mistakes.  These mistakes take time to fix.  This rework time has a cancelling effect on the productivity you thought you were gaining by working an extra ten to twenty hours last week.

So why even bother presenting an argument on something thatmost likely won’t change any time soon (and, in fact, while probably just get worse)?  Because the answer is a lot more simple than you might think: reverse the formula.  Let happiness lead you to success,promotions, more money and whatever else you may think will plug those holes inyour life.  Of course, this tactic may require a little bit of help from your employer, and that’s where your friendly neighborhood HR team can make themselves useful.

If we can entertain, just for a few minutes, that happiness, not a longer work week, is the key to solving organizational productivityissues, then we’ve got to start with another great TED lecture¹:

http://www.ted.com/talks/shawn_achor_the_happy_secret_to_better_work.html

In the lecture, Shawn Achor explains to his audience thatall our beliefs about the source of happiness are completely backward.  He explains that, regardless of whether ornot all this extra working is increasing our productivity, it’s not making ushappier; we’re focusing on the wrong things.

As we already know, people react to incentives.  This means that as a function, human resources, is responsible for creating systems that will incent people to behappy.  How we accomplish this willdepend completely upon the makeup of our workforce.  Remember, incentives must be individualized.

At first, I imagine, your employees won’t believe the shiftin your culture.  The natural suspicionof mankind will tell them it’s all some clever ploy to raise revenue and cutcosts.  Their suspicions are, of course,well founded, but here’s the best part: there’s something in it for them aswell; something pretty great.  They getto enjoy work!  They get to enjoy being at work and whenpeople are happy at work they work harder, get along better, team up more oftenand are far more creative (did you know that few things stifle creativity inthe workplace more efficiently than stress?).

So be bold.  Find away to get your leadership bought into a culture of happiness.  As with anything else, this won’t ever workif your GMs, VPs, SVPs, C-whatevers don’t buy in.  So don’t get too frustrated.  This kind of culture isn’t for everyone.  I’ve seen it fail miserably with the wrong leader.  But if you’re lucky enough to be surroundedby a team that believes in the power of happiness, you’ve already taken a verylarge step in the right direction.

As always, your feedback is welcome!

1. Achor,Shawn. "Shawn Achor: The Happy Secret to Better Work." TED: Ideas worth Spreading. TED, Feb. 2012. Web. 12 June 2012.<http://www.ted.com/talks/shawn_achor_the_happy_secret_to_better_work.html>.

Points the Way

If your business has never experienced the tug-of-war between absenteeism and attrition because of your attendance policy, you can probably just stop reading now.  For the rest of us, it’s a conundrum that keeps us up nights.  Where is that fair line that balances all the following questions:

1.    What’s fair to my employees?

      2.    When is it cheaper just to hire somebody who may show up to work?

      3.     How much absenteeism can the business afford? 

      4.  What am I willing to enforce?

Attendance policies are a topic that cut straight to the heart of microeconomics from both points of view: business and employee.  It all comes down to the rational behavior of the users.  If your attendance policy is far too strict and doesn’t allow for life to happen, you’re probably finding yourself with high attrition.  It’s rational, at some point, for your employees to find a job that allows them to schedule dentist appointments, stay home with sick kids and any other miscellany that life may dispense.

If, on the other hand, your policy is too liberal or is not strictly enforced, you are probably finding yourself pulling out your hair trying to figure out why certain employees aren’t showing up to work.  This is also a rational behavior as human beings will quickly figure out the balance between how much money they need to live and how much they feel like working.  Not enforcing your policy is also a fairly rational behavior for any organization that puts a high value on reducing attrition.  Turnover can be extremely expensive for any business with high cost of training and/or a high time-to-productivity rate.

There’s always going to be a complicated mathematical answer to all of these questions but, this time at least, I advocate a different strategy: eliminate your old “points” attendance policy and focus on your behaviors and your culture; put simply, terminate for attendance issues only when you, the company, are presented with no other option.  Focus on the behaviors that really hurt a business such as unapproved leaves (i.e. extended, undocumented absences) and “No Call No Shows” (which in my opinion show a lack of respect for managers).  As long as you’re consistent and address the unacceptable behaviors each time they arise, I see no reason you should ever find yourself in legal hot water.  You won’t be separating anybody for absenteeism.

Perhaps the more vital piece of this theory is your culture.  To trust that, in the absence of a policy, your employees will make the choice to come to work every day, you’ve got to make coming to work every day the rational decision.  How you do that is up to you.  Individual incentives I’ve already touched upon.  Job enrichment is a possibility (more on that topic on a later date).  My personal favorite is relationship building.  If you give your employees someone to trust in a manager that cares about them and their development, they’re going to start making the conscious, and sometimes unconscious, decision to come to work more often.

I guess this is where I add the disclaimer that I’ve never actually been able to test this theory.  I have, however, watched all the components work in little pockets.  What do you think?  Can we build workplaces that depend on such high levels of trust given in exchange for a more caring work environment?

Ex • ter • nal • i • ty

Externality.  Unintended consequence.  Positive or negative.  What you never saw coming.  Pollution.  Lower unemployment rates.  Higher unemployment rates. Success.

Failure.

There lies, in current media attempts to describe the behavior of our economy, a gross intentional oversimplification of one of the most complicated things in the entire man-made world.  In reality, nobody truly understands why we’re here now or how we get back to a better place.  Why?  Because a million tiny little things had to align for underemployment rates to skyrocket to almost 20%.  Because a million tiny little things have to align for us to replace that gaudy number with one that gets Americans back to work; and not just back to work but back to work in the jobs they deserve.

Externality.  For every decision you make as a manager, these consequences will eventually show themselves.  Firing low performers leads to an immediate increase in productivity.  Two months later your numbers are worse than they ever were before.  Maybe it’s because morale is low; maybe it’s because you fired the wrong low performers.  In either case, you certainly never intended to murder your productivity.  It doesn’t matter anymore.  It happened.

How do you avoid these things?  You don’t.

How do you at least mitigate them?  You play the odds.

What odds?  The odds hidden in the numbers of business.  It doesn’t particularly matter what business you’re in.  There are numbers.  You’ve just got to find the right ones; to filter out all of the white noise.  No matter what business you’re in, there will be people above you, telling you which numbers are the right ones.  Have the courage to figure it out for yourself.  Figure out if those are the right numbers or if they are merely symptoms.

I realize this is reading more like a monologue than an econ blog but I’m just not sure how to better convey the seriousness of the topic than with a little bit of passion.  You cannot be afraid of the externalities of your business decisions if you know the decisions you’re making are the correct ones.  Good decision making doesn’t produce success.  Conviction and consistency produce success.  Trying to make the right decision every single time will only lead to knee jerk reactions, more hard decisions and more externalities.  Why is consistency so important?  Because consistent decision making leads to consistent results which leads to fewer unexpected consequences which leads to a reduction in variation.  If you reduce your variation you’re going to find yourself with a reliable product whether we’re talking about HR processes or widget making.

And so this is supposed to be a discussion.  What do you think?  Can we take something as mind-blowingly complicated as the US Economy or even just a small business and simplify them just by finding a way to make consistent decisions?  If we play the odds long enough and endure the losing streaks, won’t the numbers eventually turn in our favor?  Don’t they have to?