Historically the answer was simple – money. That’s why the HR function of most companies goes to such extreme lengths to design pay packets (bonuses, team-based rewards, stock options and so on) and to decide through antiquated performance management systems who gets paid what. Indeed, it’s why they’ve been persuaded that senior leaders really are worth up to 200% more than the pay of an average employee.
Yet we have known for sometime that although pay might indeed be a valuable asset for an employee, it’s unlikely to be the driver for their motivation. Indeed, years of research have shown that this valuable asset turns out more often to be a source of dissatisfaction rather than a motivator. Most people don’t work harder, or more creatively or cooperatively because they are paid more.
So recently the search has been on for more ‘intangible assets’ that could be really valued by employees. Perhaps it’s the opportunity to work more flexibly, or the chance to work for a boss that likes you, or to work in a convivial open plan office that employees value. And indeed, perhaps it’s this combination that results in employees being engaged rather than disengaged.
I think – to use a simple metaphor – we are barking up the wrong tree. Let me explain. Over the last couple of years my colleague, the economist Andrew Scott, and I have been asking a simple question ‘What happens when most people live to 100 years’. It’s been a fascinating exploration. One undeniable truth is that if you live to 100 then you will probably need to work into your 80s. Now there is no doubt that over the course of a long working life money is indeed crucial – no one wants to look forward to an old age lived in poverty. So money is a valuable asset that a company can give to an employee.
However, across a long life this tangible asset, whilst important, has to be balanced by equally important intangible assets. It seems to me that chief amongst these crucial intangible assets is the type of work an employee is given to perform. Work that is valuable both now and as a hedge against the future has three crucial elements:
- It is interesting and allows workers to engage their mind and creativity
- It has developmental potential – particularly to in terms of capabilities that are ‘portable’ in the sense that they can be used beyond the current job
- It is non-routine so is unlikely to be substituted in the short term by robotics or Artificial Intelligence
For the sake of simplicity let’s call this ‘good work’. Now let’s play a mind game. Let’s assume that a leader in a corporation acknowledges that the intangible asset of ‘good work’ is as valuable to an employee as the tangible asset of money. If this were the case, what would we expect to see happening within the corporation? Here are five ideas:
- We would expect jobs to be analysed with regards to the extent that they are composed of tasks that are interesting, developmental and non-routine. We could even imagine that these job characteristics are rated against a common currency – let’s call this unit a ‘tang’.
- So when an employer is advertising a job, they are able to show both the financial assets the job is valued at (salary, bonus, stock options etc.) and also its ‘tang’ assets (interest, developmental potential, non-routine)
- When an employee is deciding on whether to take a job, they can balance the tangible and intangible assets it creates. They can decide, for example, that they are prepared to take a higher ‘tang’ rated job at a certain point in their career, even if the salary is lower. Or indeed take a higher paid job whilst acknowledging that the ‘tang’ value is low.
- It could be that managers who are particularly skilled at designing jobs for their team that have a high ‘tang’ value are celebrated for this sculpting skill.
- We might expect that if the ‘tang’ value of a job falls below a certain level then the whole job has to be re-designed to increase the ‘tang value’ by adding tasks that are interesting, developmental or non-routine. This re-design could be initiated by the manager, or indeed by the worker who is performing the job and who is encouraged to broaden the scope of the job to envelope more ‘tang’ rich activities.
Right now it is still money that dominates the negotiated relationship between an employee and employer. Let’s widen the conversation to include an equally important asset – good work. Perhaps by understanding the value of work with as much finesse as we currently understand the value of reward systems, we can begin to give employees a better choice about the deal they want to strike.
By Lynda Gratton
The topic of emotional vitality has recently become increasingly popular in HR circles – and the general consensus is that if you are an employee, your emotional vitality is suffering at the hands of your employers.
This might be important news to individuals, but why are so many companies interested? Why do they care if people are stressed or tired?
The reason is that as work becomes more complex, balance and creativity are becoming increasingly vital to competitive advantage – and it’s a well-established research finding that while tired, stressed people are perfectly able to do their normal everyday tasks, they are also less able to be creative.
Stress is your biggest risk
So, what exactly are organisations doing to destroy their employees’ emotional vitality? The #1 answer everywhere is stress – and there are three reasons why.
- Demands and obligations – Stressed people often cite the number demands and obligations placed upon them at work as a key cause of stress. What this tells us is that stress often originates from the design of work, with many employees finding themselves faced with ridiculous demands as a result of poor management and duplication of effort. To combat this, companies need to design work to manage the demands the demands placed on people and to reduce the amount of unimportant tasks people are required to perform.
- Discretionary time – My research shows that when it comes to stress, the issue is not the hours people work but whether they have the capacity to take time out to rejuvenate themselves. We could all work for 12 hours a day. In fact, many of us have been selected for our jobs because we have the ability to do so. The important thing is that we can’t do it all the time. What matters is not simply taking time off, but when we do it and whether we feel we can do so. There’s nothing wrong with expecting employees to be always-on as long as they know that is the nature of the job and they have ample time to recuperate.
- Constraint – If you ask what drives Gen Y workers what drives them mad at work, presenteeism is often the answer. Younger employees resent the need to stay in the office until 10pm and the constraint of having to be “seen”. In fact they find it upsetting, since working additional hours affords them little advantage. Crucially, this is not about flexible working but about job design and recuperation.
These issues matter because stress is a huge problem – one so big, it’s actually business risk. In fact next time you conduct a risk analysis, you should probably include stress on your risk list. And as you can see, job design is key when it comes to mitigating this risk.
The importance of the work-home cycle
As research by academics such as Hans-Joachim Wolfram shows, the work-home cycle also has a huge role to play when it comes to managing and combating stress. This cycle can be either caustic and draining, or positive. Work doesn’t have the monopoly on stress – a person’s home life can be stressful too – but for the most part, people leave home feeling authentic and resilient at home because it is a place where they can feel authentic and have the opportunity to recuperate in a supportive environment. However, if people leave home feeling guilty or anxious, it can affect their stress levels at work. By the same token, if an individual leaves work feeling networked, inspired by things they have learnt, this has a positive spillover into their home life: in this context, work is good and the knowledge and connections gained there can be a source of support for the family.
To get the balance of the work-home cycle right, organisations need to stop thinking about work and home as two unconnected spheres, because they are incredibly connected. Companies must think about how they support families and about whether employees have enough scope to ensure a cycle of positive spillover.