Michael Houlihan and Bonnie Harvey – Workplace Culture Experts & Barefoot Wine Founders

By Michael Houlihan and Bonnie Harvey – Workplace Culture Experts & Barefoot Wine Founders

How Employee Engagement Can Be Smothered by Compensation, Compliance, and Corporate Structure

How Employee Engagement Can Be Smothered by Compensation, Compliance, and Corporate Structure 150 150 MIchael and Bonnie Harvey

Today’s C-Suiters search for ways to enhance empowerment, employee engagement, and entrepreneurial culture. They can say they want a more innovative, entrepreneurial environment, but they need the tools to get there.

Our book, The Entrepreneurial Culture, 23 Ways to Engage and Empower Your People, is a companion to our New York Times Best Seller, The Barefoot Spirit, which gives you what you need to foster a dynamic, constructive, and progressive corporate culture. The Entrepreneurial Culture speaks to corporations, giving them successful entrepreneurial tools to engage their employees.

Developing a new corporate structure from scratch isn’t necessary—these tools can benefit a company’s present structure. In order for these tools to be successful, changes must start from the top, and tip-top management must be eager to make those changes. But, a common trait of many C-Suiters is that they are terrified of change. A C-Suiter might think that change will result in legal issues, wasted money, or an employee rebellion. What they might not realize is that they can prevent employee empowerment and engagement by praising the three sacred corporate cows.

1. Compensation: Salary is the most popular method of compensation among corporations. But salary does not pay for performance—it pays for attendance. With salaried pay, a raise is not personal. It’s not based on accomplishments, good ideas, or profits; instead, it’s based on tenure. Why should an employee care what they accomplished this week if their paycheck will look the same as it did last week? This teaches employees that they are unappreciated—they are not respectable assets to the company. Two or more employees might be paid the same salary if they do the same work. So, why would either of them put in extra effort when it won’t be acknowledged? These people will leave to find employment that pays in line with production. Who can blame them? How can an employee work to their potential if the company’s compensation plan holds them back?

2. Corporate Structure: Most companies operate in a pyramid shape, functioning from the top down. Within the company pyramid are several smaller pyramids. Each small pyramid ferociously defends itself from the other small pyramids, creating an environment susceptible to turf wars. This jagged structure can prevent great ideas from moving upward, potentially stifling any chance of real breakthrough. It’s tough to expect employee engagement when their ideas will be forgotten, withheld, or altered. How can anyone feel comfortable coming up with resolutions for other departments’ challenges if they are seen as forbidden territory.

3Compliance: Compliance is designed to mitigate liability. Instead of finding reasons why things should be done, the legal department finds reasons why they shouldn’t be. Compliance is not a quick process—it creates a backlog, and employees know it. This alone can discourage them from proposing new solutions and ideas. Since the legal department is paid by the hour, they have an interest in running everything through compliance. Some legal departments go as far as to discourage public recognition for good work, fearing it could be used against the company in a legal dispute. What these legal departments fail to understand is that public acknowledgement encourages positive production, sets a standard for appreciation, and creates a respectful environment.

Want to discover how to achieve entrepreneurial culture by rounding up the sacred cows and removing the element of fear? Come back soon!

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