Telework Research Network September 2010 Results-Based Management The Key to Unlocking Talent, Increasing Productivity A Prerequisite for Workshifting Initiatives A Business Strategy for Today’s Global, Mobile Workspace Kate Lister & Tom Harnish Principal Researchers Telework Research Network 1 Telework Research Network September 2010 Contents Background .................................3 Case Studies ..............................14 Do You Know? ............................5 Thought Leaders .......................19 Benefits ........................................6 Conclusions ...............................20 Research ......................................7 Resources ...................................21 Method ......................................11 About .........................................22 Performance Goals ....................13 Footnotes ...................................23 2 Telework Research Network September 2010 Background But how do you know they're working IN THIS REPORT if you can't see them? That question, and the fact that it’s asked so often, points to a 70% of the workforce is real problem with management today. in a fog or actively ✦Why results-based Whether your employees are down the hall or thousands of miles away, if you’re not working against success management matters measuring by results, you really don’t know who’s working and who isn’t. In his bestselling book, Drive: The ✦ Who’s doing it Surprising Truth About What Motivates Us, There’s a mismatch Daniel Pink observes that despite four between what science ✦How they’re doing it decades of scientific research on human motivation, there’s an immense mismatch knows and what between what science knows and what management does ✦What the benefits are management does. Management styles that were born in the days of sweatshops and typing pools are still pervasive in business today. For a Introduction technologically adept workforce in a Management styles global, mobile workplace those styles don’t Recent research shows than 70% of born in the days of work at best, and sabotage success at the workforce is not engaged. They’re worst. “While carrots and sticks worked sweatshops and typing either wandering around in a fog, or ac- successfully in the 20th century, it’s pre- tively undermining their co-workers’ pools still pervade cisely the wrong way to motivate people success.i They're burned out, disenfran- today,” writes Pink. chised, and over 80% are ready to jump Once considered just an HR strategy, ii ship. innovative, successful companies including Eyeing the end of the recession, em- Fortune 500 firms have embraced results- ployees are no longer happy just to have a based management and flexible work as an job. Boomers who haven’t already made essential business strategy. They’ve learned When you ignore their exit are anticipating it. Gen X-ers that when they ignore the where, when, where, when, and how watched their workaholic parents, and and how work is done, and focus on re- work is done you aren't about to make the same mistakes. sults, their people are more productive, Gen Y-ers grew up independent, tech more creative, and more successful. What’s empower people to be savvy, and were taught to question author- more, this new way of working allows more productive, more ity. Now they’re questioning their companies to do more with less—less employers. This is not your father’s work- buildings, less pollution, less overtime, and creative, and more force. less waste. Their employees are doing successful Research shows that what employees more with less too—less stress, less distrac- of all age groups want is the flexibility to tions, less commuting. For companies, that determine for themselves where, when, all translates into greater loyalty, engage- and how they work. ment, and productivity. 3 Telework Research Network September 2010 cations network, workers now own the History means to production,” writes Daniel Pink Results-based management is nothing in Free Agent Nation—The Future of Working “In an age of new or complex. In fact, it’s so simple even For Yourself. inexpensive computers, cavemen understood it. You find food, you As a result, temporary employees, eat. You don’t, you starve. contractors, freelancers, and other con- wireless handheld Pre-industrial revolution artisans, tingents play an increasing role in today’s devices, and ubiquitous farmers, and merchants understood it too. business. low cost connections to a You work, you eat. You don’t, you starve. Driven to self-employment and free- global communications Then came the industrial age. Huge lancing by layoffs and high stress jobs, capital investment in machinery offered many of those who successfully made the network, workers now new capabilities and efficiencies, and facto- switch during the recession don’t intend own the means to ries were born. Suddenly, there was no to go back to the cubicle. production.” longer a direct link between how hard you A recent poll of 300,000 vWorker worked and how well you ate. members (one of the nation’s largest free- Jobs at the time largely involved the lance job boards) found that only 10% of manufacture of goods. “Working condi- its members who turned to freelancing in dom—they want to do things on their tions were harsh. Pay was low, workweeks response to a layoff want to return to a terms. were long, business conditions were vola- traditional job.v Gen Y, grew up questioning their tile, competition for jobs was intense (due, The Human Capital Institute, a parents, and now they’re questioning their in part, to immigration) and employees global association for talent management employers. They’re confident, tech-savvy, were unquestionably subject to the doc- leadership, finds that 90% of companies happy to communicate virtually and eager trine of employment-at-will. Standardized already use contract talent and a third plan to be part of a team. They question processes and routine tasks offered little to expand their usage.vi authority, and have high expectations for need (or want) for worker creativity.”iii Employers have found that out- their employers. They’re not in it for a gold Frederick Taylor is widely regarded as sourcing can do for human resource man- watch. one of the earliest management consult- agement, what ‘just-in-time’ did for inven- The message is clear. This isn’t your fa- ants. He was the influential founder of tory management. Working side-by-side ther’s workforce. Winning companies under- “scientific management” in the early with the traditional workforce, often virtu- stand the transformation and cultural changes 1900’s and the first person to consider ally, outsourcing allow employers to obtain it demands. They’ve already taken steps to work worthy of systematic study. the best people for the job, when they need make work flexible; to manage their salaried, According to Peter Drucker, Taylor them, without taking on a fixed cost. hourly, and contingent workforce by what they was responsible for the “tremendous surge Meanwhile, the majority of Baby do, not where, when, or how they do it; and of affluence (that) lifted the working masses Boomers are at or near the highest rung of they’ve adopted the tools and technologies that in the developed countries well above any the corporate ladder they’re likely to make flexible work possible. Those that haven’t level recorded before….”iv In the process, achieve. The raises, promotions, and acco- are, or soon will be, scratching their heads and however, he turned satisfying work pro- lades that once motivated them have been wondering why more than half of their peo- duced by skilled craftsman into a series of replaced by thoughts of retirement, aging ple are looking for a new employer.viii simple tasks that left no room for creativity. parents, mortality, and “what do I really want out of life?” Seventy percent want to continue to work, but they want to do it on But Times Have Changed their terms.vii Many are eyeing self- Today’s workforce is better educated, employment as an option. more diverse, and more demanding. Rou- Gen X, the first latch-key kids, tine manufacturing jobs have taken a back watched their workaholic parents climb the seat to knowledge jobs. Low-cost technol- corporate ladder. They learned the reality ogy has removed the barriers to remote of employer loyalty from the layoffs of the work. early 80’s. They grew up with technology. “In an age of inexpensive computers, They’re independent souls because they wireless handheld devices, and ubiquitous had to be. As a result, they value free- low cost connections to a global communi- 4 Telework Research Network September 2010 Do you know? ✦1 in 4 of your highest potential employees intends to engaged—this group spends every day actively un- jump ship within a year?xii dermining what the engaged worker accomplishes. Surprisingly, the longitudinal study found the reces- ✦1 in 3 high-potential employees do not put full effort sion has had little impact on engagement.xvii into their jobxiii ✦Weak engagement translates into higher turnover, ✦In a recent poll of more than 900 workers across greater absenteeism, and lower productivity.xviii North America, Right Management found that a remarkable 60% of respondents plan “to pursue ✦Across all age groups, flexible work ranked third, new job opportunities as the economy improves in just after competitive pay and health insurance, as 2010.” A further 21% indicated that they are con- “important for happiness on the job.”xix sidering making such a move and are actively net- working as a result.xiv ✦52% of employees are currently being poached by Organizations with high levels of en- other employers.xv gagement (65 percent or greater) out- performed the total stock market in- ✦Over 70% of companies recently surveyed by Right dex and posted total shareholder re- Management say that have lost some of their top turns 19% higher than the average in talent in the first half of 2010.xvi 2009.