Coping With Change

I tell you, all hell is going to break loose, Dave!” The face of Tony, our company’s human resources manager, reflected the displeasure he was feeling. He was normally a pretty laidback sort of fellow – but not right now. “People are going to say this damn staff survey is my idea! But, like all of us, I have to do what I’m told to do, even if it is a dumb idea,” he added huffily.

Four of us were sitting in the empty auditorium of the “All Kids Place” after a Saturday spent in repairing, restoring and cleaning. The building was an old inner city cinema that had been converted into a downtown youth center with the financial help of several companies, my own insurance company being a lead sponsor. Twice a year a group of us showed up in our jeans and work boots to repair or replace broken items, to clean and refurbish the kitchen, and to put down some fresh paint. We had worked hard since early morning and we were ready for a break.

Today was supposed to give us all a lift, but company circumstances had changed our mood. One major reason was our new president’s decision to conduct an “all staff survey”. It was to be conducted in every one of our offices right across the country in just two weeks’ time. Sitting beside us were two of our company colleagues – Fred Wilson, the genial and capable manager of our downtown branch office, and Judy our senior underwriting manager, known for her tough decision-making as well as her explosive temper. She had spent the morning scouring out the kitchen and her shirt was now spotted and stained. She tossed her work gloves on the floor and nodded to Tony. “I’m with you on this. No-one denies there is a place for staff surveys, but the timing of them is critical, and in my view the timing of this one is lousy!”

We all knew what she was talking about. Our company’s personal lines’ results had been unusually poor for the second year in succession, and as the company’s senior marketing representative, I was in the thick of that battle. Then, during the past year, our commercial business had also gone straight downhill. To top off these poor underwriting results, interest rates had hit historic lows and our company’s investment returns had simply drowned in a sea of red ink.

Our previous president had retired after the first bad year (the rumor was that he had been gently encouraged by the board of directors to move on) and the top job was now filled by a man who had moved swiftly up through the ranks to the presidency, leapfrogging ahead of several longer-serving senior executives. Our new president had taken aggressive action to try to turn our company around. His first move early in the year had been to announce widespread staff cuts. Over a hundred staff members had been released – twenty from our own branch office. Then, the president had decided to trim our volume of business. This had been achieved in two ways: first, we had simply stopped writing a number of lines, and second, we had slashed our independent broker force by canceling the contracts of some 60 brokers.

Now, in the midst of this turbulent time and hot on the heels of chopping our staff, word had come that our president and the company’s senior management team had fixed on a “strategic” course of action. They had announced “a refocusing of company priorities and goals” , with this process beginning with the announcement of the all staff survey.

Fred Wilson scratched his nose thoughtfully. “I think we’re all a bit uneasy about what’s going on right now,” he said evenly. “But let’s face it, we have to start somewhere.” Judy replied hotly, “of course we have to start somewhere, but why do a staff survey when you’re up to your armpits in alligators? Fred looked across at her, “well, I guess your point raises the obvious question: do you do a staff survey only when times are good?”

Beside me, Tony shook his head. “Of course not, if you do that you may get a nice rosy picture that’s not accurate. Most people feel comfy with the status-quo, and staff responses reflect that. So, management gets the answers it expects, everyone relaxes, and nothing changes.”

“Maybe the reverse is true when you hold a survey during bad times,” I pointed out. “You get flawed results because the staff are angry or upset. You might also get a lot of negative comment and finger-pointing because people are worried about their jobs and management is always a handy target.” Fred Wilson sighed. “True enough, Dave, but surely there’s a greater incentive to fix things when everyone can see there is something wrong.”

Tony cut into the debate, “and, staff are more likely to be motivated to fix problems when everyone can see they exist! Doesn’t it make sense to ask staff to help you pinpoint these problems? Seems to me the worst thing we could do is to simply tell staff that certain problems have been identified, and then tell them how they’re going to be fixed. That’s a return to ‘old-style’, ‘top-down’ management.” Judy responded with her usual passion, “I agree with you, but we’d better act fast after the survey because there’s an expectation from all staff that a survey should result in changes pretty damn quick. If things don’t change, people get even more cynical.”

That brought a quick nod from my boss. “That’s the other edge of the survey sword, Judy,” Fred said. “Of course it should show what staff likes about the company, but the whole purpose of a survey is to uncover what they don’t like. If they’re done properly, a survey should draw a consistent picture of how staff see the company. Ideally, what you get is a road map for the way ahead and some potential new directions.”

There was a sudden clatter of feet as a crowd of youngsters went running down the hallway behind us, then silence fell again on our little group. “I hope management doesn’t forget another factor,” I said emphatically. “You can’t do a staff survey without letting everyone know exactly what it revealed.” Tony responded to my comment, “you’re right, Dave. And, one more thing, you can’t just ‘cherry-pick’ the good bits and ignore the bad stuff. There are cases of companies that tried to do that when the survey uncovered some unpleasant truths, but the news always leaks out, and it’s deadly for morale.”

That brought a snort from Judy. “You just hit the nail right on the head! Look, I don’t think we need an expensive staff survey to tell us what the company’s number-one internal problem is right now. It’s morale. There’s not a whole lot we can do to control our external problems of soft markets, tough competition and low interest rates, but we can do something to improve morale.” Fred shot her a quizzical smile. “Maybe an extra week’s holiday? Or a big bonus for everyone? Or even a shorter work week? What have you got in mind to boost morale, Judy?” I saw our underwriting manager take a deep breath as she shook her head at Fred’s questions. “None of the above,” she said quietly. “But, I do have a couple of other ideas.” She sat forward on the bench and put her two hands up in front of her as if warding off opposition. “Now don’t get all hostile with me – but first off, I’d like to see our president stop writing all these personal messages to staff. I think we’ve lectured and hectored our staff to death over the last few months. I think if I get yet another ‘special message’ from the president’ telling us of the tough times we face in our industry, and about the need for us all to put our shoulders to the wheel to work together as a team and to work smarter not harder, I think I’ll puke!” She paused to look around at us, then continued, “and secondly, I’d like to see us scrap our annual performance reviews on all staff.”

There was a moment’s silence. Then Fred cleared his throat. “I agree with you on the first, Judy. In our branch I can see eyes glazing over when yet another presidential message pops up on their monitor, or is dropped on their desks. Marginal employees ignore it, and good performers don’t need exhortations to work efficiently.” He scratched his chin reflectively. “Maybe our new president sees these messages as a way for him to put his p ersonal stamp on the company – but do they achieve anything tangible? I doubt it.”

Tony opened his mouth to speak, but Fred held up his hand. “I can’t agree with you about annual performance reviews though. You have to have some way of assessing and monitoring staff.” By this stage, Tony’s head was nodding like a tree in a windstorm. “Absolutely!” he said forcefully. “I know that managers, team leaders, or bosses – whoever is the person in charge – hate staff performance reviews because, of course, it’s a long hard job when you have a couple of dozen to do. As well, it forces them to rate each member of their staff. It also forces them to be firm and objective, and sometimes they have to come down hard on people they might like as individuals.”

“Just my point!” Judy cut in quickly. “Doesn’t all this activity have a negative effect on morale? I think a lot of people hate the feeling they’re being graded on a sheet of paper like a piece of meat. We all know that the tension in our offices at performance review time can be pretty awful.” Fred leaned back in his chair and brought his fingers together. “Well, it’s true that the individual evaluations we make on people aren’t ever going to be the perfect management tool. Let’s face it, human nature gets in the way at times. On the other hand, they should allow managers to develop a ‘base-line’. From that base-line, minimum levels of performance can be set for every staff person. I think that’s fair, and fairness should be a big part of running a company.”

Judy took a quick swig from the water bottle she had brought with her to the center. “Hey, I’m not saying the whole exercise has no merit. But look at what’s happening, since they redesigned our staff performance review form, the human resources department has been staging two-hour seminars for managers on how to properly complete the damn things! Seems to me that by trying to find the perfect way to categorize our people, we’ve made the task even more complex and time consuming than ever.” She thumped her water bottle back on the floor. “Don’t tell me that’s a more productive use of my time!”

Fred Wilson leaned forward and shook his head gently. “But surely, Judy, if it helps you do a better job of assessing your staff, then I’d suggest it’s a necessary use of your time.” Tony jumped into the fray again. “Hey, I’ve heard this argument about scrapping annual staff performance evaluations before. Some management gurus throw it up as a solution to office stress.” He sat back in his chair and scratched his head. “But, what would you replace individual performance evaluations with, Judy? How could managers monitor the progress of the people they’re responsible for?” At this point, I added, “and let’s not forget that a series of good performance evaluations can be the black-and-white evidence to support promotion, or bonus”. Judy shot a quick look at me and smiled. “Glad you brought that up, Dave, because it leads me to my next argument. Look, we pass out increases to staff based on the results of their performance reviews. But the system’s flawed, to my way of thinking. It’s supposed to be ‘performance rated, but what happens?” She cupped her hands in front of her. “Managers and department heads get a fixed amount of money to distribute as raises. And we all know that if a manager has a couple of ‘Wayne Gretzky’ performers on his staff, he could justifiably give them the whole amount between them, so they would be properly rewarded for their productivity, their attitude, and their outstanding work habits. But we all know that’s definitely not what happens. They would need a department full of chronic under-performers to allow that.” She shrugged her shoulders again. “Instead, the manager divides up the money pie as best he or she can, to try and keep most people – except the odd hopeless case – happy. Result? The two top performers get much less than they deserve, and the under-achievers get more than they deserve. Those top performers get de-motivated and the under-achievers see that they don’t have to worry.”

I could see Fred shaking his head. “If that happens, Judy, it’s simply poor management, because most companies today, and ours is one of them, give managers or team leaders a good range of options besides salary that they can offer to outstanding employees. For example, performance bonuses, additional vacation time, use of company property or facilities, admittance to special career training programs, or access to mentoring. The people who run companies decided a long time ago that it’s much less expensive to keep high performers happy than it is to replace them.” He gave us a quick, wry smile. “And as we all know, there just aren’t enough high performers to go around.” He climbed to his feet, and stretched his lanky frame. “Fortunately, looking after them properly is one of the things our company got right.” Fred favored the rest of us with one of his slow, good-natured smiles. “You know, I think we could keep this debate going all day. But like the rest of you I do have another life, and this after all, is Saturday. But let’s open up this discussion again some time soon.”