Employers today face an epidemic of workplace stress and depression that takes an enormous toll on employees and company performance. In late 2019, the American Institute of Stress pulled together "42 Worrying Workplace Stress Statistics" from a variety of sources, including Gallup, Korn Ferry and the American Psychological Association. Some of the most troubling revelations:
83% of U.S. workers suffer from work-related stress
In 2018, a third of US-based respondents visited a doctor for something stress-related
16% of workers have quit their jobs due to stress
And then there’s depression: The American Psychiatric Association reported that depression "significantly impacts productivity" (along with stress, it also leads to absenteeism, presenteeism and turnover), and the World Health Organizationnoted that it’s one of the leading causes of disability. But that’s not all: Numerous studiesshow that depression has physiological repercussions and can increase the risk of heart disease, insomnia, weight gain and other unexplained aches or pains. No wonder employers are placing more focus on employees’ mental and physical health.
But to make a difference, they—and we—need to acknowledge the causes. Research has uncovered some principal sources of workplace-induced stress, anxiety and depression:job strain resulting from a combination of high job demands and low job control,long work hours, economic insecurity due tojob loss and scheduling uncertainty, low wages that produce economic insecurity, work-family conflict, workplace bullying and harassment, perceived unfairness or a sense of injustice and a lack of social support. So how do we go about fixing these issues?
Redesigning Jobs and Work Environments to Fix the Problem
Many of the factors causing stress and burnout can be at least partly remedied if companies stop taking existing jobs and organizational arrangements as sacrosanct and engage in serious redesign initiatives. Below are two examples of businesses doing just that:
Removing Unnecessary Distractions
When I wrote a case on SAS, the largest privately owned software company in the world, I interviewed co-founder and CEO Jim Goodnight about the company’s 35-hour workweek and what made it possible. Goodnight, his VP of HR and many other SAS employees all had the same response: Few people work 35 productive hours in a week.
SAS successfully reduced distractions that wasted time by providing employees with high-quality help for their life issues. This included on-site childcare, assistance with elder care, a chief medical officer to help choose the best health providers and select health plans that didn’t bog people down with paperwork and adoption assistance.
An emphasis on employee trust and the decentralization of decision-making also eliminated endless "check-in meetings" and the need to get approval from layers of management—processes that unnecessarily consume much of people’s time.
Using Automation to Relieve Burdens
Recently, I met with the CEO of a company that is redesigning the primary care experience for both patients and providers. To be successful, he needs to reduce physician turnover and burnout (a massive problem within the industry) and to provide an outstanding patient experience by increasing doctors’ level of engagement. Doing so requires addressing a dramatic rise in bureaucratic tasks, too many hours spent at work, and the increasing computerization of practice—what some people call desktop medicine.
The company is doing something that any organization can do to reduce the wasted effort that makes long hours necessary and work stressful. I describe it as "user-centered work design." User-centered product design, which was more or less pioneered by IDEO, has become de rigueur and typically includes an almost anthropological observation of people’s product experiences.
User-centered work design takes the same form. The company has hired more than 100 software engineers—and does not use off-the-shelf software. Instead, the engineers engage with physicians to figure out what tasks can be automated to reduce doctors’ workloads and to provide doctors with software designed to be easy to use and helpful. Groups of people from all jobs and levels at the company now meet regularly to determine how to allocate work in ways that reduce stress. This helps the employees figure out what practices, tasks and operations can be eliminated without any adverse consequences.
Making a Real Commitment to Change
The number of unnecessary work tasks performed in a given day is pretty astounding. Many activities are simply leftovers from long-established policies that no longer serve a purpose. Certain processes, including some owned by human resources—think job requisitions and the now-disappearing annual performance review—do not add significant economic value. And many companies take current job designs and work arrangements for granted, thereby foregoing opportunities to seriously reduce workplace stress.
Some of my colleagues from Stanford’s School of Medicine and I conducted more than 20 interviews with supposedly leading-edge companies that have embraced a holistic definition of health and well-being and claim to understand the connections between health and economic performance. We found that most organizations consider their work environments and habits necessary and never question what they are doing or how they are doing it. For instance, one financial services firm never even considered the idea that its 100 hour work-weeks were neither mandated by law nor useful in attracting or retaining talent. No wonder workplace stress is not only high, it’s on the rise.
Job redesign to reduce stress—and thereby increase health and productivity—is not a formulaic activity. Just like product design, it requires observation, employee interactions to ascertain how to remove unnecessary tasks and consultation with the people who do the work every day.
Mostly, it requires people who refuse to accept workplace stress and depression as unchangeable and who don’t apply Band-Aids like yoga classes and stress-reduction workshops to the problem. Any organization can accomplish this if, and maybe only if, it’s willing to place employees at the center of the job redesign process.
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A New Poseidon Adventure: Flipping Succession Planning Upside Down
Organizations make significant investments in efforts to hire the right candidates – the people who have the right experience and cultural fit. By carefully managing the performance and potential of these people over time, the organization can grow its leadership pipeline, keep a steady inventory of needed skills and competencies and remain nimble in the face of change (which we have plenty of all around us these day) – all of which can have serious impact on the bottom line. However, much of this pie-in-the-sky stuff relies on being able to locate and cultivate high-potential and high-performing talent across the board. Without an integrated succession management solution, recognizing and developing talent can be an ever-elusive process. The questions we are seeing asked today include: does the traditional top-down approach to succession management still make enough of a difference? Does managing succession for a slim strata of senior executives take full advantage of the kinds of talent data we now have at our fingertips? It doesn’t have to be so. Succession management can be an interactive process between senior leadership, managers and employees at all levels of the organization. And, if we trust them, we can actually let employees become active participants in their own career development. (Shudder.) Career Management (Succession Planning Flipped Upside Down) This "bottom-up" approach is gaining momentum because who better to tell us about employee career path preferences than employees themselves. Organizations actually have talent management and other HR systems in place that allow for collecting and analyzing a whole slew of data around: Career history Career preferences Mobility preferences Professional and special skills Education achieved Competency ratings Performance scores Goal achievement Training and certifications Etc. In short, pretty much everything we’d want to know to make well-informed succession planning and talent pooling decisions. For some, the leap is simply putting some power into the employee’s hands. The talent management system of 2011 is capable of displaying a clear internal career path for employees and then, on the basis of all that data bulleted out above, showing a "Readiness Gap" – what do you need to do to make the step to the next level? And if your talent management environment comes armed with a real Learning Management System, you can take it to the next level with a dynamically generated development plan that gets the employee on the right path to actually closing those gaps. Faster development, faster mobility. Organizations that seriously favor internal mobility don’t just make employees stick on pre-defined career paths – they can search for ANY job in the company and check their Readiness levels. I might be in accounting today, but what I really want to do is move to marketing. Giving employees the chance to explore various career avenues within the organization helps assure that "water finds its level" – that is, that the right people with the right skills and the right levels of motivation and engagement find the right job roles internally. Employee participation is key, but make no mistake – managers play an important role in this interactive process. They must be prepared to provide career coaching, identify development opportunities and recommend employees for job openings. The candid discussions require that employees have open access to information so they can best understand the criteria necessary to move to the next level. A Two-Way Street Employee-driven career management is just one tool. The more traditional top-down approach to succession management remains indispensable. But organizations that value talent mobility and the ability to be able to shift and mobilize talent resources quickly will find that attention to career pathing can be vital. For employees, of course, the impacts are immediate and include boosted levels of engagement, higher retention, increased productivity and more.
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The Hidden Costs of Ignoring Your Talent Management Strategy
Building and maintaining a successful company hinges on having the right people to execute projects and drive results. People, we hear time and again, are your company's most valuable asset. But their success — and HR's ability to recruit, engage and retain them — depends on HR pros who are strategic decision-makers, armed with the proper tools to let them excel at their jobs. Modern HR professionals manage much more than payroll and benefits. But their technology tools, in many cases, haven't evolved past basic productivity software like email or Microsoft Word. HR simply can't be strategic with old-school tools that reduce people to statistics and give little insight into what the numbers mean. Emails and spreadsheets were not designed to deliver meaningful insights into people's performance, suggest when employees should be promoted or highlight skills gaps in a company. For that, HR needs a broader, more strategic set of talent management tools, which lets professionals manage every aspect of the workforce, from training and performance reviews to collaboration and succession planning. Yet, research shows that less than 25% of companies use a unified, holistic approach to their talent management. The Real Costs of "Doing Nothing" As a Talent Management Strategy The critical relationship between business strategy and HR strategy too often gets overlooked by senior leadership. While it may seem like the company is saving money by managing recruiting, training, performance and succession via manual and paper-based processes, in reality it’s costing your business more than you know. For example: Without a talent management strategy, a company with 2,000 employees is losing almost $2 million every year in preventable turnover alone. Businesses that don’t invest in learning suffer from decreased employee performance and engagement to such a degree that they can expect to realize less than half the median revenue per employee. That’s a direct impact on the business. In employee performance management, organizations without a focused strategy waste up to 34 days each year managing underperformers and realize lower net income. To learn more about the business impact of talent management and how to start building out your strategy, check out the eBook Why Your Nonexistent Talent Management Strategy is Costing You Money (And How to Fix It) and register for the March 19th webinar, Building the Business Case for Talent Management.
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The Return of the Moderate Merit Budget – Wreaking Havoc on Pay for Performance
With the economy now on steadier ground, most organizations have returned to administering a merit budget to the pre-recession levels of 3 to 3.5%. In the years immediately following the economic downturn, many merit budgets were eliminated entirely or were reduced significantly and reserved for a select segment of the employee population. Pay for performance has become a necessity for many organizations that are expected to accomplish more with fewer resources. I often get asked: "How can I truly award my top performers with such a limited budget? Should I do so at the expense of my ’Meets Expectations’ performers? What if I need to retain my ’Meets Expectations’ performers and giving them 0% to 2% increase puts me at great risk for turnover? But if I don’t recognize my top performers, don’t I risk losing them...?" These are difficult questions to answer, however you can determine the best solution for your organization by considering the following: Are your employees paid at market pay levels? Is your organization’s performance management process mature? Does your organization have other compensation programs in place to reward top performers (e.g. variable pay)? Market Pay If turnover is a concern, and your organization needs to maintain ’bench strength’ in order to achieve its strategic objectives, your biggest priority should be to ensure that you are paying your employees at market pay levels. Why? Historically, as the labor market strengthens, organizations become vulnerable in terms of losing people. Hiring and onboarding replacement talent is not only costly to the organization, but can also cause dissension among existing employees since new hires may be getting paid more. Be sure to stay abreast of market pay levels and trends, and use the merit budget to correct disparities. Performance Management Process Organizations vary significantly in terms of the maturity of their performance management process. Closely examine your organization’s process and look for ways to improve it. If there is a perception that one management team is an ’easier grader’ than the others, the process is inherently flawed and any pay for performance program will not be viewed as credible and fair by employees. A good place to start is to get a calibration process in place and communicate broad guidelines on expected distribution ratings. Variable Pay Programs Variable pay programs (e.g. bonuses) have become increasingly more popular across all industries and career levels. These programs provide the opportunity for employees to share in the organization’s success while not adding to fixed payroll costs. Some plans have an individual performance component which can be a very effective means to recognize top performers. However, in order for this type of program to be successful, individual goals and targets must be well documented and communicated. Again, this is largely based on the maturity of the organization’s performance management process which takes time to evolve. What are the best steps to avoid wreaking havoc on your pay for performance process? First ensure your pay levels are keeping pace with the market Continue to evolve your performance programs with calibration among managers and a rigorous goal setting process Promote variable pay plans to reward high performers without adding to fixed pay roll costs It’s not always an easy journey but, in the end, it’s best to use a measured approach that is based on business needs and a realistic assessment of your current programs and processes.