Creating the climate to get the most from your team

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1 Creating the climate to get the most from your team Helping leaders to create high-performing organisations NOVEMBER 2011 SHARON CRABTREE MICHAEL DODDS

2 About Hay Group

3 Our objectives today Look at what we mean by organisational climate Consider how different styles of leadership have an impact on climate Discuss your own experiences Think about how you might be able to improve some elements of the climate experienced by those around you 3

4 Organisational climate is how it feels to work in a particular environment. It has a direct impact on the bottom line performance. 4

5 Climate is powerful Small changes in climate have substantial impact on important business indices: A 10% improvement in climate yields a 7.9% increase in net operating income Multinational petrochemical company A 12% improvement in climate yields a 5.9% increase in sales Multinational FMCG company A 10% improvement in climate yields a 2.4% decrease in people turnover Various organizations 5

6 Climate matters because... Extended periods of poor climate commonly lead to Absenteeism, turnover, early retirement, demotivation, low performance Bottom-line, satisfaction, motivation, productivity TIME 6

7 The power of leaders Leaders create the climate for success Individual competencies Leadership styles Organisational climate Results 50-70% of variance in organisational climate can be explained by differences in leadership styles Up to 30% of variance in financial results (profits and revenue) can be explained by differences in organisational climate 7

8 Me at my most energised Think of a time when you felt particularly energised at work What was going on? What made you feel this way? What was the impact on your performance? 8

9 Six dimensions of organisational climate Flexibility Responsibility Standards Rewards Clarity Team commitment 9

10 Flexibility Flexibility Responsibility Standards Rewards Definition Lack of constraints in the workplace No unnecessary rules, policies, procedures, or practices New ideas are accepted freely Questions to ask Do employees have to fight against unreasonable constraints? Is it easy to innovate/get new ideas accepted? Are there many cumbersome rules and procedures? Clarity Team commitment 10

11 Responsibility Flexibility Responsibility Standards Rewards Clarity Team commitment Definition Employees have a lot of authority delegated to them Employees have freedom to make decisions about doing their own job Employees are held fully accountable for the outcome of their work Questions to ask Are important tasks delegated to employees? Are employees encouraged to take initiative? Are individuals encouraged to take risks based on their own judgment? Are employees allowed the opportunity to experience the success or failure of their own efforts? 11

12 Standards Flexibility Responsibility Standards Rewards Clarity Definition The emphasis employees feel management puts on improving performance and doing one s best The degree to which people feel that challenging but attainable goals are set for individuals and the organisation The extent to which mediocrity is not tolerated Questions to ask Does the performance bar rise every year? Can employees get away with doing less than their best? Is mediocrity tolerated? Team commitment 12

13 Rewards Flexibility Responsibility Standards Rewards Clarity Definition Rewards and recognition linked directly to performance Rewards and recognition differentiate levels of performance People know where they stand in terms of their performance Questions to ask Do rewards outweigh punishment? Are rewards tied directly to the quality of performance? Is there a broad reward portfolio? Does good performance lead to increased opportunities for personal growth? Team commitment 13

14 Clarity Flexibility Responsibility Standards Rewards Clarity Definition Employees know what is expected of them Employees know how those expectations relate to the larger goals and objectives of the organisation Questions to ask Do employees have a clear idea of what is expected of them? Do employees know how they personally contribute to the mission? Are goals, policies, procedures and lines of authority clearly articulated and understood? Team commitment 14

15 Team commitment Flexibility Responsibility Standards Rewards Definition People are proud to belong to the organization Everyone provides extra effort when needed There is trust that others in the organisation are working toward a common objective Questions to ask Do individuals and teams cooperate effectively to get the job done? Do conflicts get resolved effectively? Do feelings of trust, pride, and organisational loyalty exist in the workplace? Clarity Team commitment 15

16 Situation cards 1. Pick a card and read through the scenario 2. Discuss the impact of this with your neighbour 3. Together, think of one thing that you each might do which could raise that particular climate dimension in your own part of the business 16

17 Leadership styles Behaviour = f(person; situation) Patterns of behaviours used across a wide range of managerial and leadership situations Leadership styles have the biggest impact on organisational climate The breadth of a leader s styles determines his/her effectiveness 17

18 Factors that impact appropriate use of styles Experience of employees Employee strengths and weaknesses Complexity of tasks Time pressures Risk associated with deviation from performance Resources available 18

19 Six leadership styles Coercive Authoritative Affiliative Democratic Pacesetting Coaching 19

20 Coercive style Coercive Authoritative Affiliative Democratic Pacesetting Coaching Primary objective: Getting immediate compliance Gives lots of directives Expects immediate employee compliance Controls tightly Relies on negative, corrective feedback Motivates by stating the negative consequences of noncompliance Questions to ask Who controls the work? What is the nature of performance feedback? What is the nature of the work of the group? 20

21 Authoritative style Coercive Authoritative Affiliative Democratic Pacesetting Coaching Primary objective: Providing long-term direction and vision for employees Develops and articulates a clear vision; sees selling the vision as key Solicits employee perspective on the vision Persuades employees by explaining the whys in terms of employees or the organisation s long-term interest Sets standards and monitors performance in relation to the larger vision Questions to ask Is there a vision for the group or organisation? Are employees committed to the vision? How is the leader perceived by his/her direct reports? 21

22 Affiliative style Coercive Authoritative Affiliative Democratic Pacesetting Coaching Primary objective: Creating harmony Is most concerned with promoting friendly interactions Places more emphasis on employees personal needs than on goals and standards Pays attention to the whole person ; stresses things that keep people happy Avoids performance-related confrontations Rewards personal characteristics more than job performance Questions to ask What are the predominant employee/employee and employee/leader interactions? What is the nature of performance feedback? How are goals and standards represented in this organisation? 22

23 Democratic style Coercive Authoritative Affiliative Democratic Pacesetting Coaching Primary objective: Building commitment and generating new ideas Trusts that employees can develop the appropriate direction for themselves and the organisation Invites employees to participate in the development of decisions Holds many meetings and listens to employees concerns Rewards adequate performance; rarely gives negative feedback Questions to ask How are decisions made in this organisation? How is poor or less-than-satisfactory performance dealt with? Who provides the direction in this organisation? What is the level of competence of the employees in this organisation? 23

24 Pacesetting style Coercive Authoritative Affiliative Democratic Pacesetting Coaching Primary objective: Accomplishing tasks to high standards of excellence Leads by example Has high standards Is apprehensive about delegating Takes responsibility away if high performance is not forthcoming Has little sympathy for poor performance Questions to ask What happens when work is not performed to expectations in this organisation? Does the leader feel comfortable delegating his work to others? What is the pace of work in this organisation? What is the level of competence of the employees in this organisation? 24

25 Coaching style Coercive Authoritative Affiliative Democratic Pacesetting Coaching Primary objective: Supporting the long-term professional development of others Helps employees identify their strengths/weaknesses Encourages employees to establish long-range development goals Reaches agreement with employees on mutual roles in development process Provides ongoing instruction as well as feedback May trade off immediate standards of performance for long-term development Questions to ask Do employees have development and/or career plans? Are employees supported in achieving their professional development goals? Are employees interested in their own personal development? 25

26 Leadership styles The key to being an effective leader is using a broad repertoire of styles in the right situations Each style has its purpose, although some have more positive applications than others The six styles which have the greatest impact on the climate you create are: Coercive Directives nor directions Authoritative Selling ideas Affiliative People first, task second Democratic Involving others Pacesetting Follow me; do what I do Coaching Long-term development 26

27 Unlocking employee potential 27

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