Giving Employees What They Want

Employees perform better when they get what they want. You would think that is common sense, but obviously not if someone had to write a book about it.

David Sirota, co-author of The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want (Wharton School Publishing), believes far too many managers stifle employee enthusiasm across the board by using bureaucratic or punitive techniques that should be reserved for a troublesome few.

Yet his book, written with Louis A. Mischkind and Michael Irwin Meltzer, finds that firms where employee morale is high — such as Intuit and Barron's — tend to outperform competitors. The authors' research is based on the results of 2.5 million employee surveys taken since 1994.

For example, out of 28 companies employing 920,000 studied by Sirota Consulting, the share price of 14 companies — those considered to have high morale — increased an average 16% in 2004. Those prices were then compared to the companies' industry averages, where the increase was just 6%. Six "low morale" companies saw their prices increase, on average, by 3%, as against an overall industry average of 16%. Industry comparisons were based on data from 9,240 companies.

In an interview with Knowledge@Wharton, Sirota says managers should rely on common sense principles that allow workers to take pride in their work. He urges them to reject trendy, get-tough tactics that were promoted in the late 1990s, such as trimming staff even at healthy companies in order to improve shareholder value.

Management is about relationships. Actually, scratch that. Life is about relationships, and relationships are all about finding common ground and win-win (sorry for the buzzword) situations. Unless you manage robots, people skills will be your best asset.

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If you have time, go read the whole interview. It's pretty good.