Keeping People Happy and Productive

Jul 31, 1995

Several times in the last few months, I’ve been asked to speak on the topic of what keeps people in A/E/P and environmental firms happy and productive. The first thing I always tell folks is that it has never been proven that happy employees actually are more productive because of their “happiness.” Behavioral scientists do know, however, that unhappy people are less productive than others who aren’t unhappy. In any event, the first time I was asked to speak on this subject, I think the volunteer representative from this particular professional society thought I’d give a nice little talk on compensation and benefits. He probably thought I’d get into matters such as the “Malcolm Pirnie case” (I think we’ve all heard enough about that to last a lifetime!), “comp” time (it doesn’t work in our business), and retirement plans (do people actually ever leave this business?). The truth is, this stuff actually has very little to do with keeping people happy and productive. Here’s what’s really important: Have a good business plan. I talked to a very sharp fellow recently about a high level management job for a client of ours. He’s young, but has already worked in several different A/E/P and environmental companies. You know what he told me? He said the only way he’d consider making a move is if the firm really knows why they are in business and how they thought that they could reach their goals. Most companies in this business do not know why they are in business and don’t really have a clear vision of the future and the path that will lead them there. And the best employees don’t like this lack of clarity in purpose and methodology. It’s demotivating to them. Get the right employee in the first place. You can use every device, every trick and tactic in the book, but as my old friend Mike Latas used to say: “You can lead a horse to water, but first you’ve got to have a horse.” Selection is critical. By and large, we don’t do a very good job recruiting in this industry. We start too late, not recruiting until the need is critical. Then on top of it, we don’t devote adequate resources to recruitment as an activity. As a result, we are always settling for less than we should. We all too often end up with donkeys and burrows instead of “horses.” And you won’t win a race against a horse riding one of these other creatures! Widespread sharing of firm performance information. I’ll probably be talking about this until they carry me out of here. This is a no-cost way to motivate your people, yet there seems to be great resistance to it. Firms are afraid their competitors will get hold of the information, but I say: “So what?” This business is so uncompetitive, they probably won’t do anything with your information if they do have it. The other assumption is that the staff will think the firm is making too much or too little money, either way, upsetting them, My experience is that if you don’t show employees how the firm is doing, they’ll either assume the firm is more profitable than it is (for a firm that is enjoying success), or, they’ll assume things are much worse than they are (for a firm going through tough times). My advice is to give every employee full and complete information on how the company is performing. Explain it so everyone can understand it. Use “formularized” incentive compensation. Believe me, there is a better way than sitting down at a table once a year with your fellow principals or managers and deciding as a group whether “Sally” gets $1100 or $1200 this year in a bonus. “Formularized” incentive compensation is extra compensation that is paid out to employees based on some kind of formula. And I’m not talking about hokey scales that require managers to rate people based on “quality of work,” “cooperativeness,” etc., and then crank out a bonus number. I like formulas that pay out bonuses based on the company’s profitability (and/or sales volume, or growth, or whatever else can be objectively measured.) If the incentive compensation scheme is formularized, a person can tell exactly how much bonus he or she has earned— there’s no subjectivity. People are happier and more productive when they control their own rewards. Get away from matrix organization structures. The matrix structure is the predominant form of organization for an architectural, consulting engineering, planning, or environmental consulting firm. It’s one where the PMs reside outside of discipline areas, and each project has a unique team assembled for it. Sounds great in theory, but doesn’t work well in practice, unless you are a Bechtel Group (San Francisco, CA) or Sargent and Lundy (Chicago, IL) or some other mega-firm that can put a team together for a job that will last eight years! Think about it— matrix organizations are too much trouble to manage. Standing teams or studios keep people happier and more productive. Provide a steady stream of work. Have you ever noticed how morale seems to go down the toilet when the workload is light? That’s when the complainers seem to come out of the woodwork, isn’t it? Effective marketing is necessary to have that steady stream of work. And to have a steady stream of work (not just one that goes up and down based on the economy or the health of our industry as a whole), you have to think about marketing in a new light. That takes process-oriented marketing and positioning. If you don’t use these approaches, your workload will go up and down like a yo-yo. I’ve talked about each of these issues in previous editions of The Zweig Letter. A computer on every desk. Just like a “chicken in every pot,” you have to have a computer on every desk. Yes, I know it’s expensive. I understand that it will cost money for equipment, software, training, and support people, but you won’t convince me there’s any alternative. I know that the computer landscape is changing rapidly, too. And I can’t tell you how to cost justify every purchase you might have to make. It takes a certain amount of faith on the part of top management to jump off the cliff and move ahead with a complete company-wide network. You need it for communications, for marketing, for project cost accounting, for sharing projects, for standard specs and reports. And by the way, the answer is not in having your employees buy their own equipment. That’s like sending soldiers out to battle and telling them to bring their own weapons! Effective leadership and healthy corporate culture. Without this, no one will be happy or productive for long. Effective leaders are honest, hard-working people who set a good personal example. They don’t get pushed around, nor do they push others around. They have faith that they can lead the group to the promised land. It’s this type of leadership that sets the tone for the culture of the firm. All of the above— and more— are requirements to have happy and productive employees. So the next time you spend days, weeks, or months evaluating a new dental plan, implementing a new 10-page performance appraisal form, or changing the matching provision on your 401(k), perhaps you should question whether this is where your priorities should be. Maybe you’ll have happier and more productive employees by working on some of these other areas instead. Originally published 7/31/1995

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