Why It Pays to Treat Your Employees Well
by Bryan Neva & Allen Laudenslager
On May 4th, 1965, during the Vietnam War, President Lyndon B. Johnson gave his famous "Hearts and Minds" speech in which he said, "We must be ready to fight in Vietnam, but the ultimate victory will depend upon the hearts and minds of the people who actually live out there."
by Bryan Neva & Allen Laudenslager
|President Lyndon B. Johnson|
|H. Ross Perot|
Management by leadership takes work, effort, training, and the right character. Far too many managers were successful individual contributors before they were promoted beyond their training and abilities; their fallback is an authoritarian management style by fear and intimidation rather than by leadership and influence.
Where did these managers learn this style? First from their parents who said “Eat all your green beans or no dessert for you!”, then from their teachers who said, “Sit still or you will end up in detention!”, and finally from their boss who said “Do what I tell you or get fired!” Well if these got their attention and made them conform, why shouldn’t they use it when they become managers?
I (Bryan) once had a manager who used a decision tree he got from some book on how to manage employees. Can you imagine using a "cookbook" approach to managing people? As ridiculous as this sounds (and believe me, I was laughing on the inside), most people promoted into management positions don't have a damn clue on how to actually lead or manage people! We've got news for you ace, leading and managing people is not easy and can't be condensed into a decision tree or a cookbook.
Given our combined decades of experience and management education and training, we're still shocked and appalled whenever we see or hear about managers and companies mistreating their employees through archaic fear and intimidation tactics when all the management research confirms that if you treat your employees well they'll produce more for you, but if you treat them poorly they won't! It's a tried and true profit strategy that has been proven for thousands of years. In fact, you don't even need academic research to prove this: it's just plain common sense for crying-out-loud!
If you think back on your own working career you'll find this to be true: the managers that treated you well you worked harder for (even when they weren't looking), but the managers who treated you poorly you did just enough to get by and not get fired while you privately looked for another job.
Most people who work in hostile working environments where they're treated poorly usually stay just long enough to find another job. The turnover in hostile working environments is usually quite high and it's a clear indicator of poor management at all levels in an organization.
So why are so many companies and managers today regressing to old, ineffective, management tactics by fear and intimidation? We believe that the financialization of corporate America has a lot to do with it. Companies are now so beholden to Wall Street to produce short-term gains at the expense of their long-term viability that they honestly don't care about the morale and wellbeing of their employees or employee turnover; they don't care about the long-term survival and productivity of their companies; they don't care about the wellbeing of their communities where they operate; they don't care about our environment; they just want to make a profit-at-any-price! And they'll (figuratively) crack the whip on the backs of their employees, throw their own mothers under the bus, or make a deal with the devil just to make Wall Street happy!
And if you'd like more proof that treating your employees well pays-off, here's a list of several articles that support our claim:
- A 2012 Business Insider article entitled, "More Proof That Treating Employees Like Humans and Not Machines Is Good for Business," found that companies that treated their employees well had higher operating profits than those that did not.
- A 2014 article in The Atlantic entitled, "A New Business Strategy: Treating Employees Well," provides a lot of anecdotal evidence that treating employees well pays-off.
- In a 2014 Co-Exist article entitled, "The Most Unusual Strike This Year Shows Why It Pays To Treat Employees Well," workers actually went on strike to save the job of their beloved CEO.
- A 2015 Huffington Post article entitled, "Are You Treating Your Employees Like People or Processes?" provides further anecdotal evidence that treating employees well pays-off.
- From an academic standpoint, a December 2015 article in the Harvard Business Review (HBR) entitled, "Proof That Positive Work Cultures Are More Productive," provides scientific evidence that treating employees well results in higher productivity and profits.
- From a marketing standpoint, a May 2016 article in AdWeek entitled, "How Treating Employees Well Boosts Brand Value," shows how companies like Chobani and Starbucks profit from having a reputation as good employers.
- Most recently, in a September 26th, 2016 New York Times article entitled, "Wells Fargo Workers Claim Retaliation for Playing By the Rules," shows that treating employees poorly and setting unrealistic goals can adversely affect the bottom line and the reputation of a company.