Why do Good Employees go Bad?

Why do Good Employees go Bad?

 ‘Clients do not come first. If you take care of employees, they will take care of the clients.’      --- Richard Branson.

In the movie ‘Skyfall’, James Bond has to confront the wily manoeuvres of Raoul Silva, a former MI6 agent who was captured and tortured by Chinese agents. Blaming M for his imprisonment, he sets in motion a plan to ruin her reputation before murdering her. This story has many real life parallels where we see one time trusted and efficient employees turning against their organization or their bosses and eventually leaving their jobs or getting involved in internecine activities.

Being a Professor, I get a lot of anxious calls from my students who are involved in various job activities:

‘Sir, I want to leave the job.’ They tell me.

‘Why?’ I ask.

‘Well, I work very hard, but I do not get any recognition or monetary incentives for the dedication that I show to my company.’

‘Sir, I work very hard and my boss keeps on overloading me with extra responsibilities. Whereas I see others are avoiding responsibilities but getting paid as good as me.’

‘Sir, I am afraid if I work too hard, the others will feel jealous of me. If I do not work hard, my career growth will stagnate. What should I do?’

The problems are quite serious and does need a deeper thought process and analysis to work out solutions.

In an article titled ‘Why Good Companies Go Bad’, Donald Sull argues that many leading companies plummet from the pinnacle of success to the depths of failure when market conditions change because they suffer from active inertia. They get stuck in their tried-and-true activities, even in the face of dramatic shifts in the environment. Instead of digging themselves out of the hole, they dig themselves in deeper. We have seen the collapse of behemoths like Enron, Lehman Brothers, Nokia and Yahoo who fell like a pack of cards when they could no longer cope with the changing business conditions.

Now a similar problem is occurring in the case of employee motivation that is titled as ‘Active Disengagement’. Actively disengaged employees are the ones who tend to hold a grudge toward the company. They go out of their way to disrupt operations or can even act out subconsciously to harm the organization. A study done by AON Hewitt titled ‘Workplace Prisoners’ says that 8% of the Global Workforce are ‘Workplace Prisoners’ – a small but influential outlier group who significantly impact the experience, motivation and achievements of other employees.

“Of the approximate 100 million people in America who hold full-time jobs, 30 million (30%) are engaged and inspired at work, so we can assume they have a great boss,” said Jim Clifton, CEO of Gallup. “At the other end of the spectrum are roughly 20 million (20%) employees who are actively disengaged. These employees, who have bosses from hell that make them miserable, roam the halls spreading discontent. The other 50 million (50%) American workers are not engaged. They’re just kind of present, but not inspired by their work or their managers.”

 So what makes a good and satisfied employee? Employees tend to be happy and stay longer in an organisation when they are paid well, appreciated for their work, involved in the decision making process and given a clear career path through which they can progress if they perform well. Of course, not all employees have the same set of needs and a structured segmentation process can segregate and identify which set of employees will respond positively to what inputs. The whole process can then be automated using Human Capital Analytics (HCA).

In an article on People Analytics by Henri de Romrée, Bruce Fecheyr-Lippens and Bill Schaninger, the authors cite an interesting case study. A large insurance company in USA was facing high attrition rates. Initially, they offered higher perks and financial incentives to retain the workers, but the effort was not yielding results. So, it started analysing information about their employees. They collected data about demographic profile, professional and educational background, performance ratings, and the levels of compensation to profile the employees and understand the cause of dissatisfaction.

The key findings that came out from the research were that the employees who were working in smaller teams, with longer periods between promotions and with lower-performing managers, were more likely to leave. Armed with these insights, the company made systematic and methodological approaches to convince the employees to stay. They provided greater opportunities for learning and development and more support from a stronger manager.

As a result, funds that might have been allocated to ineffectual compensation increases were instead invested in learning development for employees and improved training for managers. Performance and retention both improved, with significant savings left over—showing yet again the value of digging into the data at hand. When well applied, Human Capital Analytics (HCA) is fairer, has greater impact, and is ultimately more time and cost-effective. It can move everyone up the knowledge curve—often times in counter-intuitive ways and reduce the employee dissatisfaction.

Employee Disengagement can play a critical role in the success and growth of a company. A study done by Towers Perrin-ISR found that the operating margin was 3.74% higher for high engagement firms versus -2.01% for low engagement firms. Additionally, net profit margin was 2.06% for high engagement companies versus -1.38% for low engagement companies. It is imperative that the employees work with complete satisfaction which will lead to higher productivity and growth and HCA can play a key role in the process.