If your company needs or wants to do a better job of investing in your workplace to attract the best young talent, the 2011 Cisco Connected World Technology Report that the networking and communications giant released today is required reading.

An important global study of over 2,800 respondents who are college students as well as professionals in their 20s, Cisco found that the "new workplace currency" -- that by the way matters as much as or even more than salary -- includes:

• Open work environments,
• Accommodates and encourages social media usage,
• Communications and mobile device freedom, and
• Remote work options that both fit their lifestyle and foster innovation.

In light of this new research, I thought it would be helpful to pull together employee engagement strategies we've previously shared here that align with the "new workplace currency" productive workplace practice areas above that Cisco's report highlights.  So here goes:

• Open environments: Five CEOs Who Eschew Offices to Work Alongside Employees, and Why
• Social media in the workplace: Businesses Need to Apply Lessons from Alcohol Prohibition to Social Media Usage
• Device freedom: 4 Tips for Securing Your Mobile Workforce from Kroll Fraud Solutions
• Remote work arrangements: 10 Best Practices: Transitioning to Work at Home

Under these four areas, what best practices or lessons learned would you add?

Christopher Wallace is Vice President of Sales and Marketing for Amsterdam Printing, a leading provider of personalized promotional pens and other personalized items such as imprinted apparel and mugs and customized calendars. In the following guest post, he details how you can show appreciation as part of your employee engagement best practices to strengthen your workplace culture and improve business results.

Think back to the worst job you've ever had. Whether it involved greasy food, dirty hands, or unclogging sewage, chances are, you didn't feel worthwhile. There's a common denominator when it comes to feeling unsatisfied with your job, and it has everything to do with morale.

Even the grossest, seemingly unpleasant jobs can be alright when you feel appreciated for doing them.

Gratitude starts at the top. If you're the owner, manager, or supervisor, it's important to let your employees know when they've excelled at their job. A culture of 'thank you' will take a company much farther than one where employees harbor quiet resentment and distrust. If you're looking for genuine ways to thank your employees, consider these suggestions:

1. Give Them Something They Really Want

   Gifts don't have to be just for the holidays, and sometimes a thoughtful item can be more effective from a management standpoint than even a small bonus on a paycheck. Do you have a salesperson who is always excited about the office March Madness basketball pool? The next time he closes a deal, get him a pair of tickets to his team's next home game. Is everyone always raving about one employee's homemade lunches in the break room? Surprise your foodie employee with a gift card to that buzzed-about new restaurant.

   Gifts can be more than just a generic, obligatory thank you. Personalize your gratitude. Which brings us to tip two:

2. Get to Know Your Employees

   Years ago, on my second or third day of a new job, the company owner appeared at my desk and handed me two tickets to a new night club's grand opening. He said he'd be there and hoped I could come. Of course I made the effort, enjoying an open bar and free dinner, not to mention getting to know my new boss in a comfortable atmosphere.

   In the three years that I worked there, we also went fishing together and played golf. When the company took a downturn and a large chunk of the staff, including myself, had to be laid off, I knew it was an agonizing decision for him. Although we weren't 'friends' like I am with my college buddies, we understood each other and I knew he cared about helping me find a new job.

   It's important to know the people you work with. If you don't even know an employee's name, how can they believe it when you say 'thank you?' Learn the basics. Ask about their family and their hobbies. When a person knows you care about them, they'll work harder because they know you appreciate it.

3. Have Contests, but Don't Discriminate

   An employee of the month program can be a great motivator, but chances are, one or two 'teacher's pets' will end up always being the stand-outs. Have a 'once a year' policy for the winners if you go this route.

   For sales teams, goals and rewards are a great way to motivate. If your entire staff has a motivator beyond their usual commission to sell the most product in a period of time, you'll undoubtedly see higher sales figures than you would without the additional incentive.

4. Take Them Out On the Town

   Food is a universal currency. It's amazing how a treat in the break room can change your employees' day. Donuts and muffins are the easy go-to items in the morning, but consider being a little more thoughtful. Did a new BBQ restaurant just open down the street? Surprise everyone on Friday with a catered lunch. Did you have a particularly strong quarter? After-work happy hour (with the boss picking up the tab) is a huge morale booster, and it brings your staff closer together.

5. Set the Mood

   We can't get every employee a corner office with wall-to-wall windows, but a few small items can improve the aura of any workplace. First on the priority list? Plants. The simple presence of our living green counterparts seems to sooth the soul, especially in otherwise sterile, fluorescent-lit environments. If space allows, create a break room with comfortable seating and space to congregate. Finally, consider letting employees be casual in their dress. If clients don't come by the office, letting them know it's okay to take their shoes off at their desk can add to comfort levels. Casual Friday is always a plus. Taking any sort of initiative to increase worker comfort shows that you're thinking about their best interest and grateful for their hard work.

Everyone wants to feel appreciated, and a good business leader will recognize the value of happy employees. Let your staff know you're thankful for all they do, and the rewards will come back tenfold.

Related: To see these tips and others in use at an Ohio-based communications firm, click here.

Some of our past posts have stressed that it's a good idea for you to improve employee engagement and other people practices in your organization by adding a formal social media policy.  Reasons for taking this step include enhancing your ability to engage both existing and potential customers as well as promoting better cross-generational communication among your workforce and avoiding employee litigation.

But what does a comprehensive and effective social media policy look like?  Dr. Sarah Elaine Eaton of Eaton International Consulting shed a lot of light on this last week in a post for Social Media Today.  Based on her review of over 150 such policies for a wide range of firms, including both for- and not-for-profits, she shared 16 dimensions in a "lessons learned" context.

What I find especially noteworthy about a number of Eaton's policy considerations is how they align with the building blocks of a Winning Workplace.  For instance:

• "Encourage honesty and transparency" and "Respect others" promote Trust, Respect and Fairness
• "Encourage a conversational tone" and "Seek permission and ask for help" promote Open Communications and Learning and Development
• "Discourage disputes" promotes Teamwork and Involvement
• "Time allocation" promotes Work/Life Balance

As our research and that of others who study highly productive workplace cultures show, to the extent that companies can reinforce great-workplace characteristics in their policies and procedures, they tend to enjoy better business results as they inform, enrich, and empower their people.  Eaton's social media policy framework is one example of this phenomenon in action.

Related: We recently shared this video by social media marketing expert Laura Roeder on our Facebook page, in which she argues that you will best engage existing and potential customers (and convert that engagement to sales) by turning to current employees.  This approach, of course, hinges on having in place a useful social media policy.

The following is a guest post by Drake MacDonald.  Drake's brief experience in construction introduced him to the field's many shortcomings.  As an online writer and editor, he works to promote construction management education in the hopes of improving industry standards of communication and organization.

In the construction business, it is crucial for supervisors and employees to have a symbiotic relationship in order to build a healthy work culture.  However, in order to create such an environment, each construction management company must consider what can be done to develop a supportive workplace, how to inspire trust and leadership within the team, and how barriers that may inhibit productive transactions can be removed.  While this process sounds complicated, in actuality it is fairly easy to implement.  Simply utilizing the following ideas will allow you to establish a work environment that is not only healthy, but efficient and productive at every level.

The first step in creating a healthy work culture is for both employees and supervisors to be open to hearing and utilizing the ideas of any member of the construction team.  To ensure that all ideas are being heard, construction owners can encourage workers and supervisors to submit their ideas formally to the construction office.  Company owners should also encourage employees to share their ideas with their supervisors and other team members.

Secondly, although purpose is important to construction, it is also important that supervisors and employees utilize a process approach to managing each construction site.  When construction management is focused on process, team members are much more likely to meet the expected standards and complete each stage of construction with success.  Furthermore, the process approach allows construction work to be completed with greater efficiency and quality.

Thirdly, it is important that team members on the construction site have peer support and trust during the building process.  This can be facilitated by following through with all work orders and process standards.  Likewise, all members of the construction team should learn to cooperate and collaborate with each other on a day-to-day basis.  This means that each team member needs to be accountable for their work and must treat other members of the team with respect.  However, even with the most agreeable team, it’s inevitable that issues will arise that interfere with the construction process.  When such an instance occurs, it is crucial that the issue is addressed promptly with the entire team.

Ultimately if you incorporate collaborative behaviors, open communication, and a process approach into your construction company, you can easily build a healthy and profitable workplace culture.  Remember that construction teams can also focus on creating healthy work environments by utilizing economically green tools and materials that benefit the industry, workers, and clients.  With such a culture, construction safety is inevitable.  Furthermore, when you utilize these techniques, you can be confident that your team is giving their best.

Related: For even more employee engagement and team building strategies aimed at increasing job satisfaction and overall performance within the construction sector, click here.

This is a little late coming, but I wanted to supplement the takeaways I've shared on Twitter from our Leadership Conference last month with Inc. Magazine (see these five recent tweets) with a post here with even more on what I learned and got a refresher on when it comes to investing in your workplace for greater employee engagement, team building, and other profitable people practices.

I'm also happy to share some of the great photos Inc. took of the sessions.  My thanks to Rachel Kovar, Inc.'s Events & Conferences Manager, for supplying them.  Rachel and her team are busy getting ready for the 2011 Inc. 500/5000 in September.

Back to the June Leadership Conference...

June 16, 2011

The Five Dysfunctions of a Team

Patrick Lencioni of The Table Group gave a rousing review of the successful business practices he puts in a real-world context in his book of the same name.  He gave all attendees a copy of it – it's a great, short read, which I finished on my flight from Dallas back to Los Angeles.

His premise was that all the company smarts that CEOs care about and work to improve from day one – strategy, marketing, finance, technology – are only half the equation for successful firms.  The other half is creating a healthy workplace culture, with minimal politics and confusion, but high morale and, thus, productivity.  "Healthy is the multiplier of their smarts," Lencioni said.

A Top Workplace One Year Later: The New York Jets

Some of what Matt Higgins, EVP for the Jets, shared in this session – which took place just over a year after the team was named one of our 2010 Top Small Company Workplaces – was reflected in the Success Story we wrote on the company last July.  This includes the inclusionary leadership of the owner and head coach and the pervasive focus on listening to lower-level employees.

What was new here, to my ears at least, was how the Jets are being productive in their version of a particularly "down" time – the NFL lockout.  Higgins said they've taken it as an opportunity to send some of their staff to shadow people in other professions, ranging from firefighters to politicians, to promote continued employee leadership development.

June 17, 2011

How to Get Ferocious Commitment from Your People

I hadn't previously been exposed to the speaker of this session, Stan Slap, author of Bury My Heart at Conference Room B: The Unbeatable Impact of Truly Committed Managers.  He spent a good deal of time explaining the differences between leaders and managers; while both work hard on consistency and passion, Slap said, what distinguishes managers from leaders is that the former can get away with faltering on these qualities, but the latter simply cannot afford to do so.

Also, based on what I've seen and written about in terms of the highly specialized, tight knit cultures of many of our award-winning small workplaces, I liked that he emphasized family as a core value that helps create more open, honest communication – which, of course, promotes better business results.

Creating a Culture of Customer Service

Since Winning Workplaces previously enlisted the expertise of one of our honorees, Headsets.com's Mike Faith (who moderated another session at this year's conference), to speak on this topic in one of our webinars a few years ago, I didn't think I would pick up many new tips.  Boy, was I mistaken.

Christopher Zane, founder and president of the wildly successful Zane's Cycles, said one of his main areas of focus is improving and leveraging relationships with his business customers in between sales by surveying them on potential new product features.  He also shared the story of how he fired one of his customers after the person unnecessarily berated one of his employees.  This made clear his belief in the long-term good of working with quality folks in all parts of their product lifecycle – not just employees.

Related: This conference was the culmination of our 2011 Top Small Company Workplaces award process.  We're gearing up now to launch our 2012 competition.  Click here for the latest news on it.

Barry Moltz, author of the well received, customer service-oriented book BAM!, has a new post on The Small Business Blog in which he offers up his list of the 20 most important words in small business.

While one of his words – Empowerment – is directly attributed to employee engagement performance, Moltz frames the other 19 squarely in a customer satisfaction context.  That serves his readers well, particularly those who have a primarily customer-facing role.

However, many of them can also be applied to internal people practices for a more productive workplace culture.  In addition to Empowerment, I found four other words in Moltz's list that small businesses in our network are using to get better results from their employees, with consequential and favorable financial impact:

Empowerment: Winning Workplaces' weekly, bottom line-improving tip for Sept. 15, 2010 was all about this word, used by our 2010 Top Small Company Workplaces award finalist LoadSpring Solutions.  Here's what the company told us in their award application, which we shared with our email subscribers: "Our employees are empowered to make decisions that make their jobs easier and more effective with the net result being that in 2009 we successfully supported customer growth of 500% over 2006 numbers while decreasing tech ops personnel expense as a percentage of revenue for the same period."

Feedback: From our profile of success on Kahunaville Management: Feedback from surveys and informal meetings have ... helped [Director of HR Joy] Macon understand what motivates cast members.  "We found that more than half of our employees thought respect, fairness and openness were their top motivating factors," says Macon.  "So we knew that if we were motivating by incentives that just pass out dollars, we'd miss more than half of our employees."

Happy: I wrote a post back in December 2009 on the OPEN Small Business Forum's coverage of our 2009 Top Small Workplace Bailard Inc.  "OPEN's VP of Brand Management, Marcy Shinder, shows how Bailard's communications team building practices result in tangible business outcomes," I said then, including multi-year client retention of 98% and best-in-class (among our award winners that year) average employee tenure of 13 years.

Mistake: Sharing a management takeaway I have heard him say several times since we wrote our profile of success on his 2007 Top Small Workplace award-winning firm Gentle Giant Moving Company, their CEO and Founder Larry O'Toole advised, "I think a big part of [problem solving] is allowing people to make mistakes.  You want people to be able to learn from that without feeling they'll be castigated."

Voice Mail Jail: Graham Weston, our 2006 Best Boss who serves as Chairman of Rackspace Hosting, delivered probably the biggest "wow" moment at our 2009 annual conference when he demonstrated by having an attendee place a call to his company the revenue-enhancing impact of making the bold choice to eliminate a voicemail system, and have all calls be answered by a real person within a few rings.  I recounted this in this post.

Related: See this post for a video featuring Moltz's take on how entrepreneurs can get back on track (or stay on track) in a down economy.

As I have written about several times here, including in this post last May, undue employee stress costs companies, big time.  A figure that is often cited is that the lost productivity as a result of it adds up to over $300 billion a year.  Not the kind of backtracking we want to have happen as we work to further our economic recovery.

As many a CEO and HR director know, one of the biggest sources of undue employee stress is bullying, or harassment.  In fact, one incident of bullying can do double damage to the workplace culture; Catherine Mattice has an insightful new post on the No Workplace Bullies blog in which she cites a study finding that 15% of respondents who reported misconduct were bullied as a result of their actions.

Clearly, companies can do themselves the most good in terms of maintaining a good team building atmosphere – and save on related costs of staff time for investigation and resolution of claims – if they're proactive in creating an environment in which it's taboo to engage in such behavior in the first place.  Hiring for attitude and fit is a good start.  But beyond that, here are some approaches for curbing workplace harassment used by applicants for Winning Workplaces' 2010 small workplace award that you can adapt for your organization, once people are on board:

1. Buffalo Exchange - 38-year-old, Arizona-based retail trade firm with 672 employees: "We are serious about having a harassment-free workplace, resulting in a happier, more stable and more productive workforce.  The Predictive Index is a development tool we use that measures the natural talents and motivating needs of employees.  Managers can use the Predictive Index in determining effective methods of management and motivation for individuals based on those needs."
2. Duro Textiles LLC - 9-year-old, Massachusetts-based textiles firm with 239 employees: "We have a learning initiative in which we provide our supervisors and managers training in documentation of employee records and harassment.  We have provided computer training to employees through a Workforce Training Grant."
3. EthicsPoint - 12-year-old, Oregon-based software provider with 128 employees: "In 2008 we launched an online based training platform consisting of two base modules, Code of Conduct and Insider Trading.  In 2009 we incorporated additional modules to be deployed on a monthly basis, including Diversity Training, Preventing Workplace Harassment, Integrity and Careful Communication.  These modules were customized for EthicsPoint and are therefore more engaging to our employee base.  All new employees are provided the two base modules upon hire and then are integrated into the annual training program.  The training supports our core values and culture of compliance and makes ethical conduct an integral part of everyday company practice."
4. Hammer Packaging - 99-year-old, New York-based printer/publisher with 392 employees: "Every three months an outside corporate attorney or consultant is engaged to train associates on a number of potentially incendiary issues.  Over the past year, some of the topics disccussed included Problem Solving, Violence in the Workplace and Sexual Harassment."
5. Harvest Investments, Ltd. - 20-year-old, Illinois-based financial advisory firm with 62 employees: "Harvest provides numerous management and supervisory training programs throughout the year.  These programs focus on goal and objective setting, performance management, open communication, team building, conflict resolution, and diversity and anti-harassment issues."

If you excel in ridding your workplace of bullying and harassment as a means to keep your bottom line strong and maintain competitive advantage, we'd like to hear from you – tell us your story and at the same time apply for our 2011 Top Small Company Workplace award.  Hurry, our 2011 application period closes on January 14.

Tanveer Naseer has a thought-provoking post on his blog this week in which he emphasizes the importance of celebrating the traditions that define your firm's workplace culture.  He says company traditions are worthwhile because they:

• Make your organization stand out from the crowd,
• Foster a sense of shared identity, and
• Remind us of past challenges and of how far we've come.

In businesses, tradition is commonly thought of as parts, or the whole, of special events that bring employees together and help with building trust in the workplace.  One example is this practice at Rackspace Hosting, a 2006 winner of Winning Workplaces' annual workplace award.

But it can also serve as a benchmark for how you want your firm to be unique, or at least different than your competition, in your processes and people practices.  This is apparent in the feedback shared by the following four winners of our 2010 Top Small Company Workplaces award:

Award application question: How do you work with employees to help them grow in their jobs?
Response: In 2008, ALL4 made a significant change to our performance review system by eliminating the existing system and replacing it with what we call our Continuous Improvement Program (CIP).  Our old process was a traditional annual performance review and we made salary adjustments based on the results of the review.  We felt that this system was not consistent with our company culture, or our matrix-type organizational structure, and it relied on feedback that was not always current or geared to affecting positive personal growth.  We migrated to the CIP system which we created.  The system involves soliciting more consistent and current feedback from everyone involved with project execution.  At the beginning of each year, all staff take part in a "Create the Year" exercise where each person develops their own annual goals and objectives (aligned with company goals and initiatives, where applicable).  Each employee also identifies their personal "breakthrough" objectives.  Additionally, employees are able to give and receive performance feedback using a web based system.  Staff meet with their group coordinator on a regular basis (at least 1/quarter) to discuss feedback and their progress to date on their goals and objectives that were developed in their "Create the Year" form.  All group coordinators act as "career coaches" and maintain an "open door" policy at all times.

Award application question: Describe the culture of your organization and the key people practices that support that culture.
Response: I can best describe Biomark as a group of individuals that use an organic approach to management.  While there's reference to a traditional organizational chart which outlines Biomark and its hierarchy, Biomark practices the idea of individual contributions and self management.  It is this that defines our culture.  We've found that by empowering and EXPECTING personal input at all levels people become vested.  It IS their ideas and actions that are moving our business decisions forward and albeit they may not always be the right ones, they're input directly affects the health of the business.  We've been fortunate over the last (2) years to become 100% employee owned (ESOP)and this move has solidified the belief in every one of us that it is "our" company and what we do wholly affects it.  We have been and continue to be the best at what we do and our execution both physically as well as financially has proven it.  There are examples of this practice and their positive outcomes that occur frequently.  Production staff have recently taken steps that have both improved quality and output (productivity improvements) of a product we make.  This is not done at the urging of management or supervisors.  This is done because these people care about what we do and want to see their team and the company succeed.  Trust can cost an organization but we believe that oversight can be even more costly.  We prefer to work in an atmosphere of trust.

Award application question: How does the organization encourage employees to participate in important business decisions?
Response: Dealer.com has a flat organizational and management structure, rather than a traditional hierarchical structure.  This format was adopted to facilitate communication among all employees, regardless of title, department or tenure.  All senior executives have an open door policy that encourages any employee to ask questions and share thoughts.  Team leaders also sit with their groups in "pods," instead of being located in separate offices.  This allows for immediate and continuous communication between team members and leadership.  When employees have suggestions, criticisms or new ideas there are numerous communication options.  They can schedule a meeting with a team leader or departmental manager, email their thoughts, or talk to them via the internal chat tool.  Open discussion about the majority of important business decisions is encouraged and taken seriously by management.  Senior management also regularly communicates information, both good and bad, via the company wide "earthlings" (Dealer.com's nickname for all employees) meetings.  The weekly meetings also showcase the company's successes, news and development stages of various projects so that all employees can see how their job responsibilities fit into and contribute to the overall organization.  Even more frequently, executives write and send informal emails to all employees to keep everyone up to date regarding new business and company developments.  In addition, president and CEO Mark Bonfigli sent out a company-wide email stating that he wants to get to know all employees better, as Dealer.com has been growing so rapidly.  He offered to take all new employees out to lunch on an individual basis.  The feedback from employees is that it has been wonderful to get to know the president and CEO on a personal level.  Mark encourages everyone to express their opinions and share new ideas about how Dealer.com could be an even better company and workplace.

Award application question: How does your organization develop employees for leadership roles?
Response: We think that Open Book Management challenges employees to be responsible for the outcomes that they control in our organization.  Those that are in leadership positions at Ginger Bay Salon are asked to consider all the sources of information they have (appointment books, vacation schedules, previous results) to predict future revenues.  These are tasks that are traditionally executed by very few people in small business, let alone front-line leaders.  Because the information is shared across the entire team, all of our employees are in a better position to lead should the opportunity arise.  While we use this system to help run our business, we can't help but believe that Open Book Management also helps build our employees' resumes.  Ginger Bay may not be the last stop in some of our employees' careers, so helping our team understand our business puts them in a better position for the future.  Our sincere hope is that none of our employees are ever in a situation where they are at the mercy of a small business owner and unaware of what they need to do to help build value in a business.

Does your small business do things that buck tradition when it comes to your staff engagement activities?  If so you may be a contender for our 2011 Top Small Company Workplaces award.  Learn more here.

Winning Workplaces conducts employee engagement research annually via our Top Small Company Workplaces award with Inc. Magazine.  The 2011 award application period is open now and will close in 10 days, on January 14.

Many small firms are eager to "throw their hat in the ring" based on the prize: the 2011 winners will be featured in the June issue of Inc. Magazine.  But applicants, especially newcomers, are also pleasantly surprised to learn how the award helps them understand and improve their workplace – and thus their business.  This is a benefit they get from applying even if they're not named a winner in the magazine.

Here's what some executives whose firms applied in 2010 have said about what they got from the experience of applying for our award:

How the process informs the workplace culture...

• "I like doing a process like this because it reveals what processes we have done in the past that the team failed to do in the current year.  It also makes you think of several things you could do in addition to help build a team and better culture." (CEO, 17-year-old financial services firm with 87 employees)
• "Your application helped us see that we needed to spend more time on sharing company financials and developing a program for flexible work schedules." (HR director, 21-year-old consulting firm with 25 employees)
• "With the questions about how we performed against others in terms of revenue, it made us seek out some benchmarks.  It also prompted us to put down on paper about our corporate culture in sort of a manual." (President/Owner, 10-year-old software firm with 23 employees)
• "I found the application prompted several questions about the environment and leadership roles within our company." (Marketing director, 8-year-old consumer goods manufacturing firm with 26 employees)
• "There were some statistics that you asked for that we were not tracking to date.  It was a good exercise to go back and record this information and track it going forward, especially in terms of employee and hiring stats." (Business development director, 21-year-old professional services firm with 35 employees)

People practices launched or revisited as a result of the application process...

• "As I was answering your questions I started thinking of more things we could do to show the employees we care about them." (Owner, 16-year-old product benefits provider with 39 employees)
• "We are going to be having bi-monthly meetings with all employees vs. quarterly.  We also have implemented a Director’s team to work with their departments and identify employee development activities and open communications through departmental meetings.  This will increase our communications across the company." (HR VP, 16-year-old Internet/information services provider with 49 employees)
• "Going through this process has helped us cement a plan to develop a clearer reporting structure." (HR manager, 20-year-old home restoration firm with 44 employees)
• "We are adding two new bulletin boards in our lunch room where many team members come and go during the day.  These boards will offer information in areas where we feel more understanding might be needed." (Marketing director, 56-year-old industrial goods manufacturer with 84 employees)
• "It became apparent that we don’t have a robust Childcare Assistance Program.  That would be fairly easy to implement and one that could really assist our employees.  That will definitely be an HR to-do for 2010-2011." (Talent acquisition manager, 9-year-old consulting firm with 50 employees)

Identify what works and what you can improve upon in YOUR organization – apply today for the 2011 Top Small Company Workplaces award.

On her blog last week, Harvard Business School's Rosabeth Moss Kanter identified setting clear expectations about everything as one of four things groups want that leaders can't provide.  She writes,

No matter how much leaders try to define expectations, lay out the nature of likely events, or describe the steps that the group will be going through, it's not enough.

My question is, while it may not be enough to fully satisfy groups of employees for ideal workforce effectiveness – is it enough to move the business forward in a meaningful way (even if that means not sliding backward in a recession)?

The workplace team building and employee engagement experiences of 8 small businesses that applied for our Top Small Company Workplaces award this year – including 2 winners – show that building clear employee expectations from leaders into the strategy contributes to organizational success.  Consider that the companies I'll tell you a bit more about below:

• Have been in business an average of 13 years,
• Grew revenue more than $5 million on average from 2008 to 2009,
• Went from 50% being profitable in 2008 to 75% being profitable in 2009, and
• Decreased average turnover by close to 3% from 2008 to 2009.

Specifically, here's who the firms are and how they maintain their success, in part, by being intentional about setting clear expectations:

Awarepoint - Real-time awareness technologies to monitor equipment and people - San Diego, CA
"Awarepoint helps managers get the best out of our staff.  The in-depth performance review helps managers and employees have better conversations, set clear expectations and build useful development plans.  This method also helps our leaders learn to identify poor performance so that it can be dealt with quickly, while developing the solid performers and building the business."

Enhanced Recovery Corporation - Financial Services - Jacksonville, FL
"The Owners, VPs, Directors, Department Heads, and Operations Management Team are all committed to the continued success of all ERC employees.  From Peer to Peer feedback to our Open Door Policy, employees of ERC always have clear expectations and development opportunities.  All departments at ERC are committed to ensuring constant development of employees at all levels within the organization."

FMYI - Software - Portland, OR
"We have done a lot more than what's expected of a small company such as providing medical benefits from day one with only a couple of employees even though it wasn't required by Oregon law.  We also want to be more authentic and fully integrated with our sustainability commitment.  We will sustain employee culture through ongoing sustainability discussions (via Northwest Earth Institute courses), clear expectations written into job descriptions and reviews about our doer/helper culture."

NouvEON - Consulting - Charlotte, NC
"NouvEON's Talent Management and People Care Division has several platforms that allow us to set goals, dialogue throughout the year, establish clear expectations, and perform 360 reviews, as well as measure and track potential.  We map Performance AND Potential and communicate to our employees where we see strengths and gaps.  It is through open communication and candid conversation that we help individuals grow in their jobs."

NY Jets (Winner) - Professional football team - Florham Park, NJ
"When our current management development initiative started, the Jets were in the planning stages of our relocation from Long Island to NJ.  HR was able to add in a special section on managing change that prepared mangers for the huge changes employees faced with our relocation.  The training sessions consisted of 6 modules: The Role of the Manager, Setting Clear Expectations, Feedback Skills, Delegation and Motivation, Handling Performance Issues, and Managing Change. The initiative proved to be highly successful for all managers; the learnings from the trainings are still used by the managers today."

Portico Systems Inc. - Software - Blue Bell, PA
"People succeed when they care share their ideas, build their skills, collaborate with others, and move into the realm of confidence that comes with mastery.  The masters become mentors and guide others with wisdom and a desire to enable others with positive reinforcement.  This is the environment that Portico is cultivating as we grow the organization and the people who are working to succeed.  Employees are provided with clear expectations, direction and feedback from supervisors, and opportunities and monetary and non-monetary ways incentives to succeed."

Red Door Interactive (Winner) - Advertising - San Diego, CA
"Our culture has been one of open dialogue, learning and progression since the company was formed eight years ago.  The family and team oriented environment at Red Door Interactive fosters open communication, leadership, clear expectations and teamwork.  A visit to Red Door Interactive will clearly display the open environment since the office is completely devoid of doors; even the CEO. Internal committees encourage feedback and collaboration to maintain our culture and engagement."

Sierra w/o Wires - Computer systems and related services - Pittsburgh, PA
"Regular and real communication is essential to establishing any corporate culture, community and collaboration.  In our organization this type of communication ranges involving employees in the project planning and estimating, to regular team and one-on-one update meetings, and also establishing clear expectations for each employee on what needs to be done, when."

How clear are the expectations in your organization?  Do your people practices help or hinder this?

I enjoyed this post by Susan Fronk on the America's Best Business Practices blog.  In it she argues that the one thing that can most positively impact your small business – over and above measures to grow revenue, cut costs, and deliver excellent customer service – is finding and keeping great employees.

She provides more value later in her article by sharing three ways small businesses can build a more productive workplace culture by attracting and retaining great employees:

• Do a good job of recruiting and hiring,
• Create a great working environment, and
• Build relationships with your employees and foster relationships among employees.

I thought I would expand upon Fronk's informative post by sharing with you some specific ways that Winning Workplaces' 2010 Top Small Company Workplace award winners find and keep great employees:

1. Hire slow.  It's not uncommon for job candidates to go through as many as 8 interviews before a hiring decision is made.
2. Hire for cultural fit.  This includes not just when a position is open, but generally when someone looks like a good fit for the organization; a number of firms prefer to keep their feelers out and plug someone in when they come across that person.
3. Grab top talent from competing firms.  Top talent is top talent, and our winning small companies are unabashed about leveraging a bad economy that has forced competing firms to shed staff to their advantage.
4. Systematize the orientation/onboarding process.  Many companies do a good job during the middle period of an employee's tenure, but few are exceptional at the beginning, a critical time for new hires.  Our Top Small Company Workplaces really excel here by doing things like mentoring and scheduling meetings with the CEO to ramp up the new employee's understanding of and commitment to the organization.
5. Managers have frequent contact with their subordinates.  For many small companies, managers only interact one on one with employees, to review performance and also their top concerns/hurdles, every three months.  Our award-winning firms typically do this every two weeks to a month.  This helps better engage employees for greater commitment, and also helps firms react to emerging issues sooner.
6. Invest in employee leadership development.  The Top Small Company Workplaces share a belief that they are best served when their top talent stays to fill and create roles of increasing responsibility, and they have seen results from their action on it including process improvement, product innovation, and better customer service – not to mention mid- and top-level employees who stay longer, keeping recruiting and training costs down.  As far as their specific leadership development strategies, see this post.
7. Give employees a voice in the decision making.  Lots of companies have an open door policy, but this no longer cuts it if you want to foster two-way communication that results in greater employee engagement and productivity.  Our award winners give their employees a voice by holding daily huddles and frequent (at least once a month) all-hands meetings.  In addition, many of them open up their books and explain the company finances so people gain a crystal clear understanding of how their role affects the top and bottom line.
8. Do employee recognition.  I've blogged before about how recognizing your staff can be meaningful and still inexpensive.  Often times a simple, face-to-face thank you or small gift personalized to the employee can make a powerful impact.
9. Be generous in providing time off.  More employers need to come to the realization that being flexible around employees' personal and family obligations makes for a more committed and productive worker.  Paid time off should be a primary consideration, but if that's not in the budget, being flexible – especially for unanticipated obligations – through measures like cross training will help immensely with retention.
10. Empower workers down to the lowest levels to make good spot decisions.  This involves a lot of trust from leaders and some additional training, but when it works it makes a dramatic impact on business results.  Just think how much happier you've been when you've called a vendor and you didn't need to be transferred up the phone/responsibility chain to have your issue resolved.  The same sense of satisfaction can mean the difference in whether your customers or clients come back to you and refer you to others.

Is there a measure you think should be in this list?  If so, I welcome your comment on it below.

The business justification for employee engagement focused on their continued, on-the-job learning is easy to understand.  It's a win for employees who increase their skills and become more marketable in their careers; and the company wins because their talent has a greater ability to perform at top levels and to innovate, and it's less of a risk and more of an opportunity to promote from within (saving money on recruiting from outside).

Yet, there are myriad options when it comes to educational employee development strategies.  Where should a small business start?  Maybe a more important question is: Considering each investment in this economy needs to generate several times its amount back in returns, what learning initiatives are most effective for small firms?

Luckily, Winning Workplaces has some real-world answers to these questions to share with you to help you decide how to invest when it comes to this important area of human capital strategies.  Our 2010 Top Small Company Workplaces award application asked applicant companies to give an example of a learning initiative they found to be particularly effective.  Here's how our 20 winners this year responded:

1. A Yard & A Half Landscaping: We spend the equivalent of 1-2 weeks per year offering paid training days for field employees.  Because of the democratic educational setting, by the end of the day, people were helping each other across work crews, and on two occasions, younger employees stepped in to coach crew leaders on machinery that was still unfamiliar to them.
2. All4: For our staff that are in the beginning of their careers and are developing their core consulting and technical skills, we have developed a skills matrix which allows them to know exactly what metrics must be met in order to be promoted to the next position. 
3. Alternative Solutions HomeCare: One interesting program ASH put into place in 2009 was the Dream Manager Program.  Tackling head-on the growing problem of employee disengagement, the program explores the dynamic collaboration that is unleashed when people work together to achieve company objectives and personal dreams.  We had so much positive reaction to this program that we will be continuing it in 2010.
4. Biomark: A couple of years ago we did a several-day team building training.  The effect is that when we employ an idea or theory from this training in our everyday work environment, everyone knows what we are trying to accomplish and is engaged in the process.  This has paid dividends in workplace happiness, turnover, and job performance.
5. Chroma Technology Corp: A few years ago Chroma underwent a full company Lean Manufacturing initiative.  Every employee attended a 2-day workshop and seminar about the fundamentals of Lean Manufacturing.  In addition, 25% of the company was directly involved in two different Lean Mapping and Value Stream courses and projects.  This resulted in $1 million material savings in the first year.
6. Daphne Utilities: We include a large number of our employees in public events involving interaction with our customers.  Here, they work side by side with upper management in events like street festivals and charity fundraisers.  This helps them hear the message being put out from the highest levels, allows top management to get to know each employee a little better, and helps to motivate our workers to take public pride in their work and their company.
7. Dealer.com: We launched uFuel in 2009, a customized online learning management system that was implemented over a 14-month period.  uFuel contains interactive simulations, measures success and knowledge gaps, and creates training programs for areas of improvement.  This learning initiative has been extremely effective at keeping all employees at the leading edge of online marketing best practices and ensuring consistent service for clients.
8. Dixon Schwabl: Our employee development includes an initiative launched by our CEO in 1998 to enhance overall employee communications and allow employees to appreciate each other's differences.  Based on Myers Briggs indicators, it helps frame leadership development, coaching, internal training opportunities, and cross-training.
9. Ginger Bay Salon & Spa: Beginning in 2008 and throughout 2009, we spent significant time with our leadership team opening our books and helping employees understand our financial statements and review our financial performance.  We believe that Open Book Management is likely the main reason that we were able to post results that were not only stronger than our competition, but reflect growth in all areas of our business.
10. MAYA Design: Teaching – many of our employees teach at local universities and we find that allowing this as a paid benefit helps employees learn more about their jobs, how to manage and work with others, and better communication skills.
11. NY Jets: In 2008, the Jets embarked on a first of its kind management development initiative entitled "Take It or Lead It".  Both Business and Football managers partcipated in the sessions.  When this program started, the Jets were in the planning stages of our relocation from Long Island to New Jersey.  HR was able to add in a special section on managing change that prepared mangers for the huge changes employees faced with our relocation.
12. Optimax Systems: The implementation of Job Instruction Training which ensures direction provided from internal trainers is consistent and measurable for effectiveness.  This has allowed us to make sure that people "get it" when instructed on a specific task.
13. Patagonia: Our Employee Development Program temporarily assigns employees to other positions in circumstances where an employee may be out on an extended leave (e.g., maternity leave, an environmental internship, etc.).  Employees participating in this program attain new job skills, have the opportunity to meet more people in the Patagonia community at a new location, and significantly ease the transition back to work for the employee they've replaced.
14. PortionPac Chemical Corp: For 22 years we have held a "Front to Back Day".  Management, office and sales staff spend the day working in the factory.  The "Front" staff gains an appreciation for the skills, talent and physical work that go into making PortionPac, while the factory staff are able to showcase their accomplishments and the attention to detail that goes into making each Pac perfect.  The event fosters communication and suggestions that go back and forth as to how our products can be made better and how the "Front" staff can make life easier for the "Back".
15. Red Door Interactive: We believe that promoting opportunity to change your role at Red Door has prevented talented employees from leaving the company to pursue interests and additional responsibility elsewhere.  Emergent practice areas such as social media and search marketing now comprise over 30% of our total service revenue, and those practice areas are led by people who identified new opportunities and invested in becoming experts by playing to their strengths.
16. Return Path: Most recently our CEO developed and delivered an "Effective Presentations" course.  Content is broken down into small, easily absorbed chunks and reinforced to create a solid foundation that is common for all new hires.  This builds not only a shared vocabulary in our unique business, it builds a shared context.
17. Tarlton Corporation: Our most innovative training program is called Increasing Human Effectives (IHE).  The philosophy behind this training is to help our employees grow personally through this process, which will allow growth professionally.  If they believe in themselves, anything is possible!  Happy employees are productive employees.
18. Tasty Catering: We have 11 advisors/consultants that work with our teams.  Advisors are in the following areas: Banker, Financial, CPA, HR, PR, Marketing, Legal (one for the company and one for the shareholders), IT, Culinary, Dietician and Sales.  The staff benefits by receiving advice from a recognized expert in the field who has larger and smaller clients.
19. The Sky Factory: To further our understanding and experience of the creative process as it applies to our daily work and to the building of the company, we prepared an all-company course with an art historian.  After viewing hundreds of art images and engaging in extensive dialogue it became evident that the process of building a company can (and should) be the same as that of creating a beautiful and lasting work of art.  This notion became practical when a designer aptly observed the skill of a production worker's multiple LED solders.  The fine quality of his work was especially significant because of a recent multi-million dollar fire caused by sloppy work from a competitor's LED system.
20. Van Meter Industrial: One effective learning initiative in our organization is our Foundations training program.  New employees attend this day-and-a-half course near their 90-day milestone anniversary with our company.  Feedback from employees has shown this is fun, interactive, and important training that provides a true insight to our culture, gives the basis for understanding what is important to our company, and sets the tone for who we are and what we represent.

Related: Dive even further into learning activities that will benefit your workplace culture, and your bottom line, by reading our Success Story on ShoreBank.

Image credit: Wikimedia Commons

Some of the most (and most vociferous) comments I've seen related to the announcement of our 2010 Top Small Company Workplaces last week in the June issue of Inc. Magazine – firms whose human capital strategies contribute to their revenue growth and profitability – appear in response to this post by Manish Mehta on The Jets Stream blog, on NYDailyNews.com.

There are 87 comments to Mehta's post on the NY Jets as of this writing.  Here's what Bob from garfield had to say:

Evidently, no one at Inc. is a Jet season ticket holder.  If Inc. really wants to see how the Jets PSL sales staff do their job, they should view the movie “THE BOILER ROOM”

I've seen that movie and the Jets' sales environment is about as far from what's depicated in it as can be.  For one thing, the salesmen (I don't recall seeing any women in the workplace in the film) were given zero autonomy in their work.  In contrast, here's how the Jets answered the question in our award application, How does the organization encourage employees to participate in important business decisions?

The Jets culture, which is very employee centric and collaborative, enables the senior management of football and business to encourage all employees to share ideas and contribute even in important business decisions.  There are number of ways that we foster this participation.  The most important way is actually in the design of our new facility.  Before we moved to NJ, we had two offices in NYC and Long Island.  The distance between the offices made communication and collaboration challenging.  In the layout of our new building, open workspaces and open door policies reign supreme. The results have been phenomenal.  Managers and employees from different departments can work in small or large groups to develop creative ideas and solutions to important business issues.  A great example of an idea generated from this workspace collaboration is the "Opportunity Knocks" sales campaign for our season tickets and seat licenses.  With such a well known brand, the Jets needed to let the public know of the rare opportunity available to buy season tickets in our new stadium.  Opportunity Knocks was the result.  In the football world, our General Manager encourages his staff from pro personnel assistants to the Assistant General Manager to be actively involved in player decisions.  The scouts, as they are called, study players from college and other professional teams to develop suggestions and recommendations on who should be drafted on Draft Day or who should be signed as a free agent.  There have been many times that an employee will feel passionately about a player that they feel is worthy of the Jets uniform and the decision will be made to go after that player even if the GM is lukewarm on that particular player.  On both sides of our business and both sides of the ball, we would not be able to be as successful a football team if the employees were not encouraged to voice their opinions, share their creative ideas or be enabled to think "outside the box".

Further down in the comments to Mehta's post, greenjohnny wrote:

Sounds nice, should look good on a belt buckle but who really cares.  It's [sic] pretty good that they can make all their employees take two weeks off without pay and still get an award for best place to work for.

This relates to the Jets' answer to another, topical question in our application, Over the last year, what kind of impact has the economy had on your business? Please briefly explain how your company has responded?  Here's how the NFL franchise responded:

Football is not immune from the economic downturn and recession that has gripped the entire country.  Our local revenue comes primarily from ticket sales and sponsorships.  Our fans (customers) have been affected by layoffs, salary freezes and reductions in work hours.  Our sponsors have seen a dramatic decrease in budgets for spending on advertising.  Consequently, the Jets have been affected by a slowdown in revenue generated by ticket sales and sponsorship deals.  Over the course of 2009, we were challenged to find ways to decrease spending and cut costs.  Since our employees are the key to our success, this exercise needed to be done with layoffs as an extreme last measure.  Many teams around the NFL in the early part of 2009 were laying off their employees to save money.  ...  We froze salaries for the year.  Since we still needed to find extra savings, we made a crucial decision to furlough business employees for 2 weeks versus eliminating positions.  The furloughs were scheduled for the slowest time in our year at the end of June and beginning of July.  Employees had to choose 2 out of 4 weeks to take their furlough.  The response from employees was positive.  They were extremely grateful that they didn't have to say goodbye to a friend.  Our senior management participated as well, which made the program very credible.  It was tough for our employees to lose 2 weeks of pay, but overall the furlough program worked successfully.

In short, the Jets took a page from several of our previous honorees faced with tough decisions and chose to share the pain rather than lay anyone off.  The fact that senior leadership participated speaks volumes and, as you can see, helped maintain their productive workplace culture of ownership and high employee engagement.

I should mention that as part of our employee engagement research for our award, we conducted interviews with staff from different levels within the Jets' organization, and everything they told us about their employee practices, including what's excerpted above, checks out.  Especially for their industry, they are truly a Winning Workplace.

Related: For more on the Jets' new workplace environment, including some great pictures, check out this feature from the June Inc. Magazine.

Photo credit: Nikolas Koenig/Inc.

In Winning Workplaces' Top Small Company Workplaces award application, we ask small businesses whether they engage employees as part of a wellness and fitness program and, if yes, to tell us about how this program works in their organization.

Tasty Catering, a Chicago area provider of corporate catering solutions that's one of our just-announced winners of this award for 2010, provides such a program.  I thought their essay on how this program works was great because it shows how the 54-employee firm has created a virtuous cycle that is good for employees and, at the same time, good for the business.

Here it is:

All full time staff are entitled to company paid health club membership at the local fitness center.  They must attend 26 times a quarter (twice a week) or pay $5 for each time missed.  This encourages use and fitness.  TC also has a consultant who is a registered/licensed dietician and designs healthy menu programs for staff and for clients.  Free meals are provided to staff every day.  These meals include salads, fresh fruits, lean proteins and other such healthy foods.  Each meal has a heart healthy, vegetarian and vegan offering.  After work sports teams which contain a majority of Tasty Catering staff are sponsored by the company.  These aforementioned programs have led to healthier staff and lower priced insurance premiums.  Insurance are paid at 33% because the majority of the staff have insurance policies provided by their significant others.  The savings from having to contribute a larger portion of insurance for a few staff has allowed the company to spend more money for all staff in the form of health club membership, healthy meals and sports sponsorships.

Do you see what's going on here?  In brief:

• The company makes an initial investment in a set of health- and wellness-themed employee engagement best practices.
• Healthier staff as a result of these practices are less dependent on the features of a typical medical insurance plan, which lowers future company premiums.
• Some companies might add the savings to their cash reserves, or invest it in some other part of the business, so it's beneficial no matter what.  In Tasty Catering's case, they reinvest it in the same area so they can encourage even better participation in health/wellness initiatives – which further lowers medical insurance premiums.

As with all of our award winners for 2010 – and our past honorees, for that matter – this cycle implies open and honest communications team building.  How else could the company get a sense of how many of their staff are covered by significant others' plans, for leadership to know how they should renew with their provider for direct employee coverage?

Related: This post shares 16 common features of wellness programs as used by three-fourths of the winners and finalists of our 2010 small business award.

For months I've been sharing employee engagement research trends of Winning Workplaces' 2010 Top Small Company Workplaces award finalists – the 40 organizations out of nearly 500 that applied for our award this year.  Many of those blog posts ended with a reminder to look for the June issue of Inc., which would feature the winners of our award.

Well, now the issue is out, as is our press release on the 2010 winners!  Actually, most if not all subscribers already have the issue in their hands; it will be available on newsstands starting tomorrow, June 8.

So now that news of the winners is out, I'm excited to provide more value for you here, in the form of both trends when it comes to the payoff of employee engagement that the winners see, and – perhaps even better for your company – specific best practices that you can learn from and adapt to help grow your business.

In that vein, below are ROI metrics for each of the 20 winners.  Click on a company name for more information about the firm on our website.

• A Yard & a Half (landscaper, Waltham, MA): employee development strategies helped reduce the company's indirect expenses.
• All4, Inc. (air quality consultancy, Kimberton, PA): training and a flat organizational structure have helped the company grow its market share in a down economy.
• Alternate Solutions HomeCare (home health care services for the elderly, Kettering, OH): A focus on creating highly individual employee development plans has helped ASH consistently score higher than the average EBITDA of four of the largest publicly owned home healthcare agencies in the country.
• Biomark, Inc. (electronic ID technology supplier, Boise, ID): Funding growth using internal methods while keeping debt to a minimum has helped Biomark grow while their competitors are shrinking.
• Chroma Technology Corp. (precision optical filter manufacturer, Bellows Falls, VT): The company's focus on customer service and creating outperforming products has helped it grow revenues in a tough economy.
• Daphne Utilities (water and natural gas service provider to the City of Daphne, AL): A pay for performance system, cross training, and coaching have had a triple bottom line impact on the company.
• Dealer.com (online marketing solutions provider for the automotive industry, Burlington, VT): Employee practices such as job rotaton and internal mentoring have increased customer satisfaction, and have also led to awards like Deloitte's Technology Fast 500, which have aided recruiting.
• Dixon Schwabl (Advertising and PR services, Victor, NY): A focus on identifying new hires that will best fit their workplace culture and a strategic talent management program has helped the company to earn a profit in a challenging economy.
• Ginger Bay Salon & Spa (salon and day spa, Kirkwood, MO): Leadership's reliance on employees to revise its service offerings based on declining customer visits helped the firm realize continued revenue growth, and with no layoffs.
• MAYA Design, Inc. (design consultancy, Pittsburgh, PA): Innovative benefits including funding viable, employee-created, complimentary companies has kept productivity high and turnover low.
• NY Jets (NFL member franchise, Florham Park, NJ): Strong benefits and a skills-training program for both business and football managers has increased performance on the fan side (four playoff appearances in 10 years) as well as advertising, merchandising, and other sales.
• Optimax Systems, Inc. (prototype optics manufacturer, Ontario, NY): A strong focus on continuous improvement and other workforce investments helped Optimax to achieve its higest number of bookings ever in 2009.
• Patagonia (technical outdoor clothing and travel gear designer/distributor, Ventura, CA): Though the economy worsened and competition increased in 2009, Patagonia grew revenue thanks partly to people practices including job shadowing, promoting from within, and open-book management.
• PortionPac Chemical Corp (industrial packager/marketer of environmentally sustainable liquid cleaning detergents, Chicago, IL): Practices including executives working on the factory floor and giving workers autonomy helped the company to grow revenue and keep all staff in 2009, while competitors suffered losses and shed jobs.
• Red Door Interactive (Internet/e-business strategy solutions provider, San Diego, CA): An investment in employee development geared toward learning new competencies and practices in emerging technologies helped the firm win related business representing a third of their revenue in 2009.
• Return Path, Inc. (spam-avoidance solutions provider for email senders, New York, NY): Practices including an extensive on-boarding program and learning and team building activities in the workplace have helped Return Path achieve a 70% market share in their sector.
• Tarlton Corp (general contractor and construction management, St. Louis, MO): Extensive training and open-book management helped Tarlton to finish 2009 with a Safety Total Incident Rate below the industry average.
• Tasty Catering (Corporate catering solutions provider, Elk Grove Village, IL): A focus on promoting from within and communicating business performance and activities via weekly, bilingual newsletters were factors in Tasty Catering earning revenues above the industry average in 2009.
• The Sky Factory (factory-direct product manufacturer/distributor, Fairfield, IA): Team building strategies including, most notably, involving all employees in all major decisions contributed to revenue growth in 2008 and 2009, when domestic markets experienced major declines in new construction.
• Van Meter Industrial (wholesale products distributor, Cedar Rapids, IA): Practices such as a program that encourages staff to make small changes in work habits to improve processes as well as incentives including performance bonuses have helped the company consistently rank in the upper quartile performance of financial measurements.

You can learn more about how to build a profitable and productive workplace at the Creating Competitive Cultures (C3) conference that Inc. Magazine is hosting in Denver in October.  Go here for more info on this event.

Will this week go down as a low point for performance reviews?  Since The New York Times asked on one of its blogs on Monday if it's "Time to Review Workplace Reviews," workplace researchers and business leaders alike have jumped on the bandwagon of questioning their effectiveness, and even their place among other, common employee development strategies.

The main criticisms of performance reviews, as Palo Alto Software Founder and President Tim Berry echoes from the NYT article on Small Business Trends, are that:

• They add signficantly to employee stress, and
• They can be so subjective in some cases as to render them meaningless.

Winning Workplaces' own employee engagement research shows that, at least in small businesses (which is to say, most businesses), performance reviews are not only an integral part of the people practices strategy, but they're delivering results.  The term "performance review" showed up 71 times in the 497 company applications we received for our 2010 Top Small Company Workplaces award competition; 9 out of 10 of these firms are profitable, they've managed to stay in business for an average of 16 years, and they save on recruiting costs by filling 1 out of 5 of open positions from within (contributing to respectable average employee tenure of 4 years) (source).

So in playing devil's advocate and working under the assumption that performance reviews are a worthwhile investment for an organization, here are 10 ways to make them meaningful, for employees and especially for the company.  These tactics are drawn from reporting on our award-winning firms on our website, presentations leaders of some of these firms have given at our past annual conferences, and other posts on this blog.

1. A goal of the review should be to build a relationship between managers and subordinates.
2. SMART goals – especially the Measurable and Attainable attributes – help make managers' feedback more objective and less subjective.
3. If employees' expectations of a raise following a review are causing stress, separate the pay element from the review.  If you plan for and communicate regular, periodic (normally once a year) salary adjustments, the persistent question of "When will I get a raise?" will disappear.
4. The more closely an individual's goals can be connected to an organization's performance goals, the more significant they become to the employee.
5. Too many companies fall into the habit of having reviews be the main one-on-one, in-depth dialogue between managers and subordinates.  Ideally, managers should be having far more frequent conversations with subordinates that address progress toward key goals.  This makes the feedback in a review setting much more palatable and less surprising for the employee.
6. Along the lines of "no surprises" for the employee as mentioned above, if you do tie reviews to compensation and/or bonuses, using open-book management – in which employees see the company's financial statements and, in many cases, are trained to know what the numbers mean – delivers value come review time, insofar as employees will have a much better idea whether a pay increase or bonus is fair; and also why they're not getting one, if that's the case depending on company performance.
7. Put employees in the driver's seat: empower and train managers to task employees with setting their own individual goals at the end of a performance review, when planning ahead for the next one.  While the goals employees present to managers will probably not be good to go straight away, even if they're adjusted, the sense of self-empowerment employees feel from being actively involved in their role will not diminish, and in fact it can make them more committed and productive.
8. An alternative to the above tip that's also proven to work well is to use a mix of individual, deparment, and overall organizational goals.  At Illinois-based ShoreBank their "magic ratio" for this is 70%/20%/10%.
9. Another approach is to move from individual reviews to group-based reviews.  Our 2010 Top Small Company Workplaces award finalist Cargas Systems, based in Pennsylvania, does monthly "stop light" reviews, allowing groups to gauge areas in need of improvement and provide an outlet for all to share opinions and stay involved.  This can be particularly effective when combined with tip #3 above.
10. If your company core values emphasize the greater community in some way, try incorporating the related value(s) in a goal in your reviews.  You may find the extra productivity that comes with an employee seeing his employer as caring about him as a whole person, and not just as a business asset, produces more revenue than a more traditional, numbers-based goal.

How do you approach performance reviews as a means to create a more productive workplace culture?

Photo credit: Chief Happiness Officer blog

Longtime readers of this blog who remember posts like this one understand that the leadership practices that make up a thriving, productive workplace culture – including employee engagement and team building strategies – greatly increase the likelihood of benefiting from repeat business and referrals.

I was happy to see this connection reiterated in marketing expert John Jantsch's guest post on social media guru Chris Brogan's blog today.  Drawing from his new book The Referral Engine, which is based on his study of "the habits of numerous organizations that generated most of their business by way of referral," Jantsch says common traits of these companies include:

• Building a culture of trust (as in the Winning Workplaces building block of Trust, Respect, and Fairness).
• Employees as customers – just wrote about this aspect here on Tuesday.
• Hiring for attitude and fit over skills.
• Openly communicating the business financials to all employees – Jantsch references ESOPs, but many of our honored small firms go further by practicing open-book management and even doing financial literacy training so employees really understand what's behind the numbers, and how their work impacts them.
• "Give to get mentality" – another way to say, operating by the Golden Rule.

One more trait of successful, "referral engine" businesses, Jantsch says, is offering products or services at a premium price.  As we have written about in conjunction with our small business award winners, they share this tendency to compete on service rather than price.  Rackspace Hosting and Gentle Giant Moving are great examples of this.

Interested in using The Referral Engine to tweak your business practices to improve your results?  Get 55% off your copy at Amazon.

Last week on the Blogging Innovation site, business speaker and strategic advisor Stefan Lindegaard suggested that,

Perhaps we do not have to break down silos to drive more innovation.  Perhaps we should just accept the silos and work around the issues they can create on innovation.

I think there are some instances where working around silos, which can hamper communications team building, is warranted.  However, if your business is on the smaller side – especially if it has 100 or fewer employees – you really should be working to completely break them down and prevent them from being built back up.

Why?  Winning Workplaces has seen in our employee engagement research and consulting and training work inside small firms that getting rid of silos promotes stronger employee engagement.  This, in turn, helps organizations achieve desirable, bottom line-enhancing metrics like those listed here.

There are two major strategies that I've seen companies use, sometimes in tandem, to break down silos:

1. Purposeful workspace design, and
2. Innovative workplace team building.

What follows is brief descriptions of how seven small firms in our network succeeded in breaking down silos in their workplaces, organized under the above two strategies for doing so:

Workspace Design

Decagon Devices
Office doors are seldom closed and work spaces are grouped together without barriers at this Washington-based firm, which facilitates more of a free-flowing brainstorming atmosphere into the work itself.  However, Decagon takes it to the next level.  They believe that leading departments and work groups should be a rotating assignment, not a permanent title with an attached office.  Their structure is much more fluid and open because it leads to greater ingenuity, and risk taking.

Jackson’s Hardware
This California-based company, which has grown from 5,000 square feet and five employees to 50,000 square feet and 63 employees, operates with a totally open office floor plan.  Every manager including the President and CEO has his or her desk in the open platform office.  With this type of floor plan, Jackson's managers are able to give guidance and support for almost every project or task instantly.  This allows them to draw upon the unique talents and strengths of all of the different managers and results in efficient problem solving.

Jump Associates
Another California-based company, Jump's work environment, known as JumpSpace, provides dozens of different work spaces, such as Zen Rooms, Project Rooms and a black-box theater Performance Space, that support a wide variety of interactions and working styles.  Employees comment that this kind of playful, open-hearted space makes it safe to explore, because everyone who works there is committed to each other’s success.

Phenomenex
Yet another California-based firm, Phenomenex’s work environment is designed to breed familiarity, comfort and collaboration.  All work areas have stimulating and comfortable open floor plan designs filled with color, antiques and modern art.  They have an on-site gym and game room that are in constant use.  In addition, to relieve stress and recharge their hardworking employees, the firm has set aside a quiet room for them to
take naps, read or meditate.

Resource Interactive
This Ohio-based firm with 261 employees demands constant collaboration among staff.  Their employees express a great deal of pride in their work environment, in large part because it was designed with a considerable amount of their input.  Among other things, their workplace is dog friendly and is dotted with skateboards and satellite radios.

Team Building

American Speech-Language-Hearing Association (ASHA)
A decade and a half ago, the staff at Maryland-based ASHA was struggling to work as a cohesive team.  Executive Director Frederick Spahr referred to the silos that had developed as "fiefdoms."  Spahr and his associates developed a facilitating team composed of him and five chief staff officers to oversee the office.  Employees regrouped into teams and clusters led by coaches instead of managers.  These changes created a flattened hierarchy with no more than three layers to the top.

The Redwoods Group
According to an employee of this North Carolina-based firm, "The traditional insurance industry is known for working in silos of underwriting, claims, loss control and actuarial services. But at Redwoods, it’s all about the team.  We intentionally formed regional multifunctional teams reporting to regional vice presidents, instead of technical vice presidents, to break down barriers.  The result is common ownership of results and compensation based on company results.”

Has breaking down silos improved your workplace culture and productivity?  I invite you to share your experience by commenting below.

This new article on the Knowledge@Wharton site caught my eye.  In it Charles "Ed" Haldeman, Jr., Freddie Mac's CEO for close to a year, shares facets of the management style he's using to try to turn around the federal home loan mortgage corporation that, along with Fannie Mae, were propped up by the government in fall 2008 as a result of the subprime mortgage crisis.

If you scroll about halfway down the article, you'll see points from Haldeman's "template" for what he sees as effective management – for any organization.  Note how many Winning Workplaces building blocks it includes:

• Open Communications
• Teamwork & Involvement
• Trust, Respect & Fairness

At least three of our six building blocks are represented.  Digging a bit deeper, Haldeman stresses a number of hallmarks of a productive workplace culture that we often echo, including constantly communicating the mission and making sure employees understand it, empowering people to make decisions at lower levels, and managers practicing MBWA.

Could Freddie Mac join the ranks of our award-winning small businesses?  In some sense, they already have – they've historically offered strong employee benefits, prompting Working Mother magazine to name it among the 100 Best Companies for Working Mothers in 2004.

The real trick, I think, will be getting this midsize-to-large company (in 2008 it had over 5,200 employees, according to Wikipedia) to act even more like one of our honored small firms in terms of further breaking down silos and building trust in the workplace as a means to make it more nimble, which will help it keep pace with consumer demands and trends.

Related: We've written Success Stories on more than a dozen real estate businesses, tapping into how they see a payoff of employee engagement.  Check them out here.