Managers frequently look to make their workplaces more productive. Tools for doing so can range from asking staff to work harder, faster, or longer. Rarely though do we stop and consider just what we mean by a high-performing workplace, and indeed just why we want one and how to achieve it.
UNSW Australia Business School has conducted a two-year study into these high performing workplaces, and we came to some surprising conclusions.
We already knew that leadership capabilities of managers at all levels of organisations have the highest correlation with profitability and productivity.
Drilling down into this, one thing that stood out in terms of performance difference was people management, was that leaders in high-performing workplace are spending more one-on-one time with staff, mentoring and encouraging team members and involving people in decision-making processes.
Leaders in the high-performing organisations also showed themselves to be more responsive to customer and stakeholder needs. That should be obvious – but they also made their staff feel valued by enabling them to take advantage of their skills and instilling a sense of pride in their job.
Our research focused on the services sector for several reasons. Unlike traditional companies, service firms rely on intangible resources – such as people, relationships with customers and other stakeholders, information and communications technology and innovation – to produce economic output. This intangible aspect has implications for management and for operating successfully and profitably.
The three most-significant barriers for both higher and lower-performing workplaces included motivating the workforce to assume greater responsibility; being able to retain highly talented individuals; and creating a flexible and responsive workplace culture.
However, the lower-performing organisations faced additional barriers to performance. They needed to improve by more closely linking employee pay with performance; providing employees with greater involvement in deciding how work is done; bettering the people management skills of managers and supervisors; securing resources to invest in developing employee skills and capabilities; and enhancing employee productivity.
Investment in innovation is another area where higher-performing workplaces excel, rating 25 per cent higher in creating new products and services. More resources and mechanisms are also put in place to capture and encourage ideas from employees.
Innovation succeeds in organisations that make an effort to listen to their customers and to question their existing services, processes and methods.
High-performing workplaces were found to not only enjoy better quality leadership, but were also linked with heightened levels of what we called “authentic leadership”.
Authentic leaders are understood to know the goals for the future, to be clear about the importance of those goals, and to show integrity in how they conduct themselves and carry out their leadership activities. They come across as credible individuals, who “walk the talk, live the values” and “practise what they preach”.
Authentic leaders are also receptive to feedback, even criticism, and see this as a learning opportunity to improve their leadership skills and performance.
Of course, different managers have individual styles. Some emphasise results, their people or coping with change. The study finds all three approaches can make a high-performing workplace. The one style that doesn’t work is the “control” culture.
Micro-management is incredibly divisive, and it just doesn’t work to get results. If you think about, in an office would you rather have your boss breathe down your neck, or have a manager explain why something had to be done, and then allow you to take pride in what you are doing?
We were keen to know how people felt about the workplace. We are emotional at home, with our partner and with our children. Emotionality is also something that exists in the workforce. We get hurt when the boss lets us down and excited when we get acknowledged.
The more emotionally attached the employees are, the better the performance of the firm. Committed employees are willing to exert more energy and effort, they care about their work and spend more time in their jobs. Being able to really develop a sense of belonging, feeling valued and being proud of the place you work for comes through as really important, and it pays off for leaders who manage to do this well.
Depression and anxiety were more prevalent in lower-performing workplaces with 25 per cent of respondents saying they felt depressed, whereas in higher-performing workplaces, it was 15 per cent.
So one in every four feels depressed in lower-performing workplaces, whereas it’s one in every eight in higher-performing workplaces.
That’s quite a difference. For leaders and managers, that is something to reflect on. If you are on the tram to Causeway Bay, or indeed anywhere in Hong Kong, you might just want to stop and look around you at the offices and business you pass.
Some are high performing, and some definitely aren’t but many on the outside look the same. Why? Well perhaps we should also remember that old maxim that workers don’t leave jobs – they leave bosses. Quality management means they stay.
The workplace is at the heart of the productivity debate because it is the performance of people at work that determines much of the productivity performance and output rates of the economy. If we can lift performance by even a few per cent, then the overall productivity gains to the economy are significant. It is certainly an opportunity for more firms to develop their leadership capability.
The key message for underperforming workplaces is awareness and generating that knowledge is the first important step. The second step is having the courage to have the hard conversation and reflect on the areas that offer the greatest opportunity for improvement.
So in conclusion, high-performing workplaces with progressive leaders are up to 12 per cent more productive and three times more profitable than their peers. That’s mainly because leaders of high-performing workplaces prioritise people management, have high levels of responsiveness to change and develop emotional connections with their colleagues,
Quality leadership pays dividends, literally.
Christina Boedker is a lecturer at the UNSW Business School