Companies thrive on happy staff

The Sunday Times 19 September 2004

The secret of making workers proud of your firm is not great products or a charismatic leader but treating people well, says Roger Eglin

MANY employees are disgruntled with their work. Often they are bored and, given the chance, would move to another job. They have a dim view of the leadership qualities of their company's managers and have little respect for them. This gloomy picture has in the past been reinforced by regular surveys of corporate life.

Two newly published surveys have found, however, that life at work may not be quite as bad as some of the doomsters say.

In the spring, Penna, the human-resources consultancy, asked 500 people if they were happy at work. Eight out of 10 respondents said they were and painted a cheerful picture of business life.

The second survey was carried out last month. Explorandum, a market-research company, interviewed 1,158 employees on behalf of Colette Hill Associates, a specialist business-to-business PR consultancy. Its findings -that people had "a surprising degree of pride in their work"-seem to have taken its authors aback as much as anyone else.

Almost 60% of respondents believed their job was making a difference to their organisation's success. However, they said the important factor that generated pride in an employer was not working for a business that had great products, an outstanding name, or market-leading brands. What counted was "having a reputation for treating staff well", said 61% of the respondents.

The Colette Hill survey went further by asking respondents for which employer they would most like to work.

Virgin's go-getting, youthful image took it to the top of the list, but there is room for management in other businesses to think about whether the approach to young recruits in Sir Richard Branson's group is the only one.

British Airways came fifth in a poll conducted in August when the company's staff problems were peaking. The most popular sector was retailing, with the familiar name of Tesco in third place and a dozen other retailers among the top companies, which had Amazon second, and Microsoft fourth.

In the Penna survey, researchers concentrated on what sort of image middle managers had with their staff. They found that workers praised them for their role in achieving business success. "The findings certainly disprove the notion that middle managers aren't up to the job," said Bill McCarthy of Penna.

"It dispels the view that middle managers are mere carriers of news. Employees value middle managers much more than we realise."

Robert Ingram, of Cap Gemini, the IT consultancy, said he was pleased to see a report that nailed the myth that most people disliked work and were only in it for the money. "Work is a very satisfying part of life. The Penna report demonstrates that people aren't just coin-operated," he said. "Pay is only one of a number of elements."

Tesco, which has more than 1,500 middle managers, said their performance was crucial to its success. David Fairhurst, personnel director, said: "Increasingly, customers see service as a major part of the shopping trip and the figures show that in stores that get this right sales per square foot are higher."

Tesco now has what Fairhurst calls a "bottom-up strategy", which is designed to encourage performance among store staff. "Fire fighters" -volunteers at the bottom of the chain -work at getting colleagues to embrace new ideas.

At the top end, store directors and managers have been to leadership workshops, studying service delivery. They also have a key role in motivating people. They are icons whose behaviour can create an atmosphere in which staff can use their initiative to change the way they work. "They develop more confidence in using their soft skills to get hard benefits," said Fairhurst.

The authors of both reports emphasised the importance of treating staff well as part of a company's retention strategies. Tesco, for example, has a series of initiatives designed to encourage young employees. Debut is a website aimed at the 30,000 students aged between 16 and 24 currently working for the company. It offers them discounts, career and financial advice as well as training and development opportunities.

The group is also trying out a new scheme, Debut pass, which guarantees flexible working hours and minimum pay to 200 student employees.

With 237,000 UK employees and 326,000 in the group internationally, Tesco is a sounding board for new initiatives designed to make young employees feel part of the team.

McCarthy at Penna stresses the importance of treating middle managers as major contributors to performance but cautions against going too far.

"The media tend to focus on the charismatic senior leader who is seen as a make-or-break figure. These people are expected to be superheroes. However, it is more holistic than that. If the manager does not share your view, you are not going to achieve results," he said.

What cannot be over- estimated is the role middle managers must play in leading and motivating colleagues, particularly through periods of change. "People need to be managed and the middle managers in most companies know them quite well," said McCarthy.

"Banking on charisma alone cannot overcome people's scepticism and set the agenda."

Fairhurst believes it is a mistake to believe managers know automatically how to lead teams through change. "They need to be given the skills to do it well," he said.