Why Executives Have to Take Responsibility for Healthcare

Pay Transparency Can Push Reward Inequities Under the Table

By Daniel Butcher

Performance-based pay—including merit-based salary increases and bonuses—can be complicated by pay transparency rules that make the details known to coworkers, according to Academy of Management Scholar Peter Bamberger of Tel Aviv University.

A reaction to that can lead to pay compression—when wages for low-skilled or low-performing workers and wages for high-skilled or high-performing workers move closer together—or an increase in requests for deals with special perks, also called idiosyncratic deals or i-deals. I-deals are non-standard work arrangements that individual employees negotiate to get remote work or flexibility, training opportunities, special assignments, and even performance benchmarks that would trigger bonuses. I-deals are often used to reward high-performing candidates and employees who have specialized skills in the hopes of retaining them long-term.

“You can imagine, if you’re a star performer and your bonus or merit-based raise is lower than it’s been before, you’re likely to think about leaving that organization and going to work somewhere else—and that’s exactly what some economists have found, that where we have pay compression, the star performers actually pick up and leave,” Bamberger said. “I recently published a paper that also shows the same thing, that pay compression very quickly leads to star performers’ departure.”

So what can organizations’ leaders do?

“What we find is that employees don’t necessarily push for more money; they make their requests for other types of rewards, primarily benefits as part of what we call idiosyncratic deals, things like the number of days per week that they can work from home or the number of weeks per year that they can work from Hawaii,” Bamberger said. “There’s a large body of literature on i-deals in management, and they include various types of benefits packages.

“What we find using data from about 120 organizations in China is that where pay is more transparent, the differentials in the pay of higher and lower performers are more compressed,” he said. “Perhaps because such a situation could drive higher performers to look for alternative employment, when pay was more transparent, employers rewarded the higher performers in other, less observable ways using these idiosyncratic deals. If fact, higher performers asked for these types of deals, and in 50% of cases where they ask for it, they got it.

“What’s actually happening is that transparency is shifting the pay differential from where it can be seen, annual raises and bonuses, to those types of rewards where it’s not transparent, that is, idiosyncratic deals.”

Young Heavy Drinkers in Non-STEM Jobs Earn More Money

By Daniel Butcher

There is no meaningful correlation between levels of alcohol consumption and compensation among early-career professionals working in roles focused on science, technology, engineering, and mathematics (STEM). But heavy drinking is associated with higher pay for non-STEM professionals who are recent college graduates.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said that he and colleagues have researched levels of alcohol consumption and compensation of STEM professionals versus those working in non-STEM fields.

“We were looking at the link between consumption patterns and income growth in the initial years of employment after graduating from college, and surprisingly, what we found is a positive relationship between drinking and income growth in non-STEM roles,” Bamberger said.

“The findings are actually capturing the dynamic that, if you’re not in a STEM job and you want to move up in the organization, you need to engage in these social practices that often revolve around alcohol, and the more you do that, the higher your growth in income is going to be,” he said.

That finding is—at least in part—tied to the prevalence of non-STEM professionals working in sales, marketing, distribution, customer-service, and business-development roles who routinely partake in adult beverages while meeting with clients and prospects.

“A lot of non-STEM people are engaging in marketing and sales and support in building and maintaining relationships with customers,” Bamberger said. “In STEM roles, they’re working in a lab or in front of a computer terminal coding, so there’s less of a role for alcohol as a basis for increasing your salary—drinking is not going to do a hell of a lot for your career if your role isn’t client-facing, right?

“But early-career non-STEM salespeople who drink on the job with clients may be more likely to get promoted and rewarded financially,” he said. “That was the logic behind the research, and that’s what we actually found.”

However, there’s an obvious caveat. Bamberger noted that recent research shows that daily alcohol intake—even in moderate amounts—increases drinkers’ risk of health issues.

“There have been a couple of studies that have come out recently that that directly contradict the line that’s been pushed a lot by a lot of the alcoholic-beverages companies, which is that having some wine with your meal every day is going to prolong your life—it’s healthy,” Bamberger said.

“You’re best off not drinking any alcohol whatsoever, not so much because of its implications on mental health, but rather largely because of its implications with respect to alcohol as a carcinogen, specifically as a leading cause of esophageal cancer,” he said.

“Many younger employees nowadays recognize the risks in drinking; a lot of young people are actually picking up on those problematic implications of drinking alcohol even at the lowest levels and understanding that health risk.”

Sharing Info, Workloads, Positive Feeback Boosts Productivity

By Daniel Butcher

Leaders who can install processes for effective, timely information-sharing, fair workload distribution, and civil communication—including positive feedback—foster the best collaboration and productivity among team members.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said that lackluster productivity is often a result of poor information-sharing and workload-sharing behaviors.

“Team processes are hard; people can’t always pick up the signals that they need to,” Bamberger said. “For example, if they have a piece of information that someone else needs, when should they pass it on to this other person? A nurse has a test result; when should she pass it on to the to the team leader or attending physician?

“If she passes it on too early, she’s going to disrupt what they’re doing, which clearly affects their performance, but if she passes it on too late, it could be deadly, so timing and synchrony of such tasks are crucial,” he said.

Incivility and rudeness also undermine productivity, while civility and kindness tend to boost it.

“In research on medical teams, we demonstrated that when people experience gratitude at work it can often, but not always, have beneficial implications,” Bamberger said. “A lot depends on the source of the gratitude and the nature of the task at hand.

“In one experiment, we had the three teams: a control condition, one that viewed a video before they started the day from a senior neonatologist talking about how grateful he is to everybody in the field for doing the wonderful work they do to save these babies, which had nothing in terms of a productivity boost, but then we had a third group where we had a mother of a preemie talk about how grateful she was to the medical team that saved her child, and that had massive positive effects,” he said.

“We demonstrate what that does to the team interaction through the implications based on a theory in cognitive science called [Fredrickson’s]broaden-and-build, which explains how positive emotions have beneficial effects on people’s ability to be flexible in their thinking, to absorb more information, and things like that.”

Bamberger and colleagues also demonstrate that the effects were much stronger when a mother expressed gratitude than when a senior colleague did.

Sharing positive customer feedback

Business leaders and managers can leverage these insights to improve their effectiveness.

“They can demonstrate gratitude themselves; it does make intuitive sense that if managers and leaders behave with civility and politeness, then that may set an example for the rank-and-file employees to do the same, but they can encourage customers and clients or patients to say ‘thank you’ directly,” Bamberger said. “If you like the way a flight attendant treated you on a flight, you’re supposed to write the company, but what if you were actually put in direct contact with the flight attendant and were able to express the gratitude directly?

“Our evidence suggests that that’s going to have a much stronger effect than a manager saying, ‘You got three positive letters this week,’” he said. “Setting up systems for customers to directly express positive feedback has the potential to significantly boost employee morale and performance.”

Why Retirees Change Their Alcohol Consumption

By Daniel Butcher

Whether people increase or decrease the amount of alcohol they drink after retirement depends on a range of factors, including what role and industry they retire from.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said that he and colleagues studied the implications of general work-related transitions on health and well-being, with a particular focus on subjects’ behavior with regard to drinking alcohol, before and after retirement.

“We actually started with people as they move towards retirement, and we did a 10-year study,” Bamberger said. “The research was finding mixed effects of retirement on alcohol consumption; some studies found that retirement is a great way to address your drinking problems, because you’re often removing people from a high-risk environment where people around them drink a lot.

“But other studies were finding that people go into retirement and move into a retirement community and happy hour starts at noon,” he said.

Bamberger’s and colleagues’ question was, ‘Is retirement good or bad with regard to alcohol consumption or misuse?’ They were looking at various factors that determine when a person’s level of drinking goes in one direction and when it goes in the other direction.

“A simple finding is, if you’re coming out of a high-risk occupation, for example, iron workers, people who build skyscrapers—this is an occupation that has its roots with very heavy drinking communities, so if you joined that occupation, at least in the past, you were likely to adopt those patterns, or you wouldn’t stay in the occupation,” Bamberger said. “So retiring from that is obviously going to be beneficial, because you’re taking yourself out of a social context of high alcohol consumption.”

But there are other variables to consider, including relationships with friends, family, and spouses. A best practice for retirees is keeping busy with hobbies, volunteerism, or even some part-time work, any activity aimed at staying engaged and connected and ensuring a continuing sense of self-worth and contribution.

“We looked at some of the factors that are associated with retirement, like financial stress and marital strain, with one member of a couple working the other one not, and we can find implications there as well for drinking,” Bamberger said. “The routine is disrupted; there’s more free time for one partner in the relationship but not the other.

“There’s a vast array of moderating and conditioning factors that determine when retirement has one implication—more drinking—versus another—less drinking,” he said. “Retirees who plan how to structure their time post-separation from work tend to have better health outcomes.

“Overall, work-related transitions can be difficult for people, and our current research has aimed at exploring the mental-health implications of other such transitions, including for students and soldiers transitioning into career employment for the first time.”

Rudeness Doesn’t Motivate Workers—Quite the Opposite

By Daniel Butcher

Some business leaders and managers resort to barbs or even shouting to motivate staff members, but research shows that a coercive leadership style is counterproductive. In fact, civility leads to improved team cohesion and performance, while rudeness hurts workers’ performance.

Academy of Management Scholar Peter Bamberger of Tel Aviv University said that several research papers on the subject explore the implications that emotion-laden events in organizations have on interpersonal relations and team dynamics. In a nutshell, rudeness creates a huge distraction that undermines productivity.

“For example, why can’t you text and drive at the same time? When you’re driving, the reason you don’t text is because—aside from it being against the law—you’re distracted,” Bamberger said. “It’s a complex process to text—it takes your attention, so you have limited cognitive resources, and driving is also complex.

“Whatever goes to the texting is not available for driving, and the result could be death,” he said.

What’s the connection between texting while driving and leadership style, as well as interactions between coworkers? Rudeness and even mild incivility are actually highly emotional events that occur frequently in the workplace.

“Many, many employees experience rudeness at work, and it’s rather ambiguous,” Bamberger said. “It’s not like being bullied or attacked physically, but in response to rudeness, you’ve got to try to figure out what is threatening to some degree, but you don’t know how threatening it is.

“And precisely because of that, and largely unconsciously, your brain is engaging and trying to determine the degree of threat,” he said. “That’s not a mindset that’s conducive to analysis, attention to detail, or any type of thought-demanding work.”

If You Do Employee Surveys, Listen to Respondents

By Daniel Butcher

Conducting regular employee surveys is a best practice that leads to better engagement, morale, retention, and productivity. But it isn’t enough to simply collect responses, according to Academy of Management Scholar Quinetta Roberson of Michigan State University. It’s important for leaders to actually listen to respondents’ thoughts and feelings and take action to correct problems.

Roberson said that she was working with a large organization as a diversity consultant to develop a strategic plan and objectives. A key step was to collect feedback from its employees, some of whom were ringing alarm bells.

“In their employee survey, they had people who were talking about interpersonal incidents with their coworkers, and they felt bullied and harassed,” Roberson said. “Particularly members of certain groups didn’t feel a sense of belonging and would project that they only had a year left in the organization.

“And so I said, ‘That is really bad; we’ve got to address this … let’s talk about how to address this problem that people say they felt bullied and harassed,’” she said. “I didn’t say this as my own personal opinion; I was literally looking at the responses to their employee survey.

“And they said, ‘We don’t want to say that because it might make other people feel like they are harassed or bullied, and so their whole communication approach was to say, ‘We’ve got some good stuff going on, but we don’t want to talk about the bad stuff.”

While focusing on the positive is an understandable impulse, by not prioritizing the negatives, leaders and managers miss opportunities to make improvements that boost employee engagement, morale, retention, and productivity.

“It isn’t easy work to do, but if you put in the time and the investment, it also isn’t rocket science, so people have to be willing to do the work and get into the stickiness of it,” Roberson said.

“That’s the kind of conversations that I have, because if they’re not willing to do that hard work of thinking about ‘What do we do to fix our problems? What should our goals be? How do we want to be better? How could we be better? And how could we measure that?’ then I’m not the person to work with them, because that’s where I do my work at that strategic level,” she said.

“And that’s just a personal thing from my research and my background where I say, ‘If we don’t have those conversations about formulating strategy, developing dashboards, and creating processes to drive change, then we’re not going to get anywhere; we’re just putting a band-aid on stuff.’”

The Evolution of Corporate Social Responsibility

By Daniel Butcher

Academy of Management Scholar Herman Aguinis of the George Washington University School of Business, one of the most influential management professors and researchers, said corporate social responsibility (CSR) is about three Ps—profit, the planet, and people—the “triple bottom line.” The following is an overview of how CSR has evolved, reflecting changing societal expectations and business practices:

1. Robber barons whitewash their image with philanthropy:

In the 1800s and early 1900s, ultra-wealthy industrialists such as Andrew Carnegie and John D. Rockefeller engaged in charitable activities. The idea of businesses having responsibilities beyond profit maximization was out of favor among the politicians and business leaders of the day, but began to spread among academics and social critics.

2. Businesspeople have social responsibilities:

In 1953, economist Howard R. Bowen wrote Social Responsibilities of the Businessman, recommending that companies should focus on business ethics, contribute positively to their community, and do good things for society, not just make money. Urging business leaders to consider stakeholders other than shareholders and look at outcomes beyond profits was out of step with the post-World War II era, but that concept gained influence in the following decades.

3. Strategic CSR and stakeholder theory:

In the wake of the publication ofR. Edward Freeman’s 1984 book,Strategic Management: A Stakeholder Approach, thathighlights the interconnected relationships among a business and its customers, suppliers, employees, investors, communities, and other stakeholders, and the U.N.’s 1987 report,Our Common Future, CSR started to become integrated into more companies’ strategic-planning processes in the 1990s. As the turn of the millennium approached, more businesses recognized that socially responsible practices could enhance reputation and boost profitability.

4. Globalization and standards:

As globalization accelerated in the 2000s and 2010s, businesses faced increasing pressure to adopt CSR practices to improve their environmental effects, pay and treatment of workers, and ethical governance. Frameworks such as the U.N. Global Compact (introduced in 2000) and the International Organization for Standardization’s ISO 26000 standard (released in 2010) provided guidelines for sustainable and socially responsible policies. In addition, corporate transparency and reporting gained traction as more companies began publishing annual sustainability and CSR reports.

5. Integration of CSR and ESG:

CSR has increasingly become intertwined with sustainable business management, emphasizing the importance of environmental, social, and governance (ESG) criteria. More investors, consumers, and regulators are demanding greater accountability in charting progress toward achieving CSR objectives and quantifying the effects of organizations’ operations on climate change, social justice, and sustainable development.

Tips for Managers to Avoid Team Burnout

By Daniel Butcher

Managers should be on the lookout for signs of burnout in their team members, and a sudden decline in work performance, missed deadlines, or increased errors could be an indication that an employee needs help. Burnout leads to reduced productivity and increased turnover, which is expensive for organizations and causes headaches for managers.

Academy of Management Scholar Sean Martin of the University of Virginia said there’s evidence that many people’s views of the workplace are pretty bleak right now.

“I saw some statistics indicating a lot of folks are feeling a high level of burnout—two-thirds of people would rather get a new boss than a pay raise; they’re just tired of dealing with their boss,” Martin said. “I recently saw another poll that said more than half of people would trust a stranger more than their boss.”

Worker stress has remained at record high levels since the pandemic, with 52% of employees in the U.S. and Canada reporting that they experienced a significant amount of stress on the previous day, according to Gallup. Managers who want to help avoid or mitigate burnout on their team need to realize that people are dealing with stressors both in and out of work and, in response, demonstrate flexibility and empathy.

“There’s a lot of things that are going on in someone’s life like managing family dynamics, extracurriculars, maybe they have care duties for young kids or older parents, so burnout is likely to be present in some form on your team,” Martin said. “If that’s the case, recognize that it’s not always just because of what’s going on at work, although it certainly could be.

“We could either be the kinds of leaders who say, ‘I don’t care—this is work—check all of that stuff at the door and do your job, ’or we could say, ‘I want to deal with a whole person and be the kind of leader that, when people are finished working with me, they view their time with me as time well spent and believe that I had a positive impact on their life and their career,’” he said.

“If you want to be that, then you have to recognize that burnout is an ever-present threat, and when you see people starting to experience it and start seeing the telltale signs of stress, such as retreating into oneself and performance issues in terms of objective measurables, be willing to ask, ‘What can I do? How can I help? ’to start mitigating the burnout that people can feel.”

Performance Management Needs to Be Well-Defined

By Daniel Butcher

As crucial as performance management is to make sure that organizations’ decisions about compensation, promotions, hires, and cuts are aligned with organizational goals, it can be difficult to define. Leaders first must define performance before they can measure it and evaluate their organization’s performance-management processes and procedures.

That’s according to Academy of Management Scholar Herman Aguinis of the George Washington University School of Business and author of Performance Management for Dummies, who said executives at various organizations have asked him about performance issues, complaining that their employees weren’t performing at the level they should have been. In response, when he asked them how they define performance, they typically fell silent.

“Sometimes leaders don’t do a good job of measuring performance because they don’t define performance well, so the first advice I would offer is to be able to make sure that you define performance in alignment with the strategic goals of the organization, the performance goals for individuals, units, teams, and departments all have to be aligned with the strategic goals of the organization,” Aguinis said.

Aguinis argued that performance evaluations shouldn’t be a once-a-year event. Organizations need to train supervisors on how to provide good feedback, measure performance in an unbiased way, have honest professional-developmental talks with employees regularly, and use performance management as a tool for spotting star performers, skills development, and performance improvement.

“If you’re a manager, your top responsibility is to manage the performance of the people in your unit, because if they do well, then the company does well, and you look good, so performance management should not be pushed by HR only; rather, it should be something that every manager and supervisor is doing,” Aguinis said. “Performance evaluations shouldn’t be just as a tool for punishing and rewarding past behavior, but also as a tool for motivating future outstanding performance.”

Many Execs Talk a Good Social Responsibility Game but Fail to Walk the Walk

By Daniel Butcher

Whether it was the board, the CEO, or others in the C-suite who decided to put a corporate social responsibility (CSR) plan in place, it’s instructive to examine their motivations. Do their ideologies and values cause them to legitimately prioritize business ethics, sustainability, and CSR? Do they want the company to look good in the eyes of consumers and convince shareholders they’re doing the right thing? Was it a self-serving or cost-saving decision to implement a CSR program? The answers are keys to understanding whether organizations’ CSR initiatives will be perceived as genuine or contrived.

That’s according to Academy of Management Scholar Herman Aguinis of the George Washington University School of Business, who has conducted research for more than 20 years looking at how individuals decide to be involved in organizations’ CSR mission and who actually participates in CSR initiatives, from the C-suite to rank-and-file employees.

“In some cases, there are external stakeholders who see the organization’s CSR initiatives as genuine, while others complain that it’s just ‘CSR-washing,’ an attempt at PR on the part of a company to burnish its reputation,” Aguinis said. “We recently wrote a paper on how to avoid being labeled as a CSR-washer, which is important because it can take a lot of money and time and effort to overcome an incorrect perception, so we describe things that companies can do to minimize that risk and avoid being unfairly labeled as a CSR-washer.

“One is to involve employees: You should not have a top-down process, but rather a bottom-up process to encourage employees to participate actively, not just enacting the CSR process and intervention, but also in strategizing and creating it, because then they will be the best supporters of the CSR initiatives,” he said.

“They will talk to their families and friends about how good the company is, and that will help attract employees to the company, and its CSR efforts will be seen as more genuine and not just a PR [public-relations] plot.”

Translating CSR strategics plans and goals into action

As crucial as it is for leaders to make strategic plans and set objectives informed by CSR, it’s challenging to translate policies or missions into practice.

“Usually these nice, big strategic goals don’t cascade down, because, in many cases, frankly, it is a statement on their website or some memo or email about a strategic plan that employees don’t read, aren’t aware of, or don’t really care about,” Aguinis said. “In fact, if you ask employees about their companies’ strategic goals, not just about CSR, but in general, they typically don’t know them.”

One way to raise awareness about CSR objectives throughout an organization is through performance management. Leaders need to ask themselves, what are the specific goals regarding CSR for each of the organization’s units? And what are the specific CSR goals for individuals in terms of behaviors and results? Then leaders can start measuring key performance indicators (KPIs)and rewarding employees who perform well on those specific criteria.

“A lot of companies need to do two critical things to improve: number one, involving employees bottom-up in the design of CSR initiatives, and number two, embedding CSR goals within the performance-management system,” Aguinis said. “If you do just those two things alone, you will go a long way in ensuring that CSR is taken seriously and embedded, not just peripheral.”