Research suggests that typically within an organisation 20% of employees give everything, 60% would give more, if there was something in it for them, and 20% give no more than is required to keep their jobs. In other words, 80% of staff aren’t as productive as they could be. That can have a huge impact on the bottom line. So how could this 80% be better engaged to release that ‘discretionary effort’?

Individual and collective discretionary effort is probably one of the best hidden assets an organisation can have at its disposal, and it is a source that can be continually tapped into using differing methods and tools. The primary objective is to influence the middle 60% to deliver more and to reduce the size of the lower 20%. Research suggests that those within the upper tranche tend to be self motivated and ‘wired’ to deliver optimum performance on a regular basis. However, they must not be overlooked or taken for granted; ineffective recognition could result in some sliding back towards the middle. Obviously, no organisation’s results or performance can be achieved without harnessing human behaviour. But what methods do successful organisations utilise to enhance the efforts and engage that 60-80% of their workforce?

Creating the right culture and environment
Releasing discretionary behaviour depends very much on creating the right environment. In this respect, leadership is an important contributory element as one critical aspect of a leader’s role is to establish an effective working environment and culture that delivers the maximum from employees.  Successful leaders have recognised that eliciting and supporting the ‘right’ behaviours from employees triggers discretionary effort. In this situation, the leader’s role is to (a) identify the required behaviours and (b) reinforce them through effective coaching and support.

Providing behavioural coaching to influence employee performance focuses, as you would expect, on positive reinforcement, which has been shown to improve performance in organisations by more than 25%.  Successful leaders follow a scientific and proven five step model, focusing on relevant behaviours:

1. Pinpoint – specify the results and behaviours that positively influence the results, and make sure they are under the control of the performer;
2. Measure – test the pinpoints to make sure they are measurable and then develop a mechanism to track them;
3. Feedback – provide a visual representation of progress on results against behaviour;
4. Reinforce – create a plan to positively reinforce critical behaviours and celebrate along the way;
5. Evaluate – continually monitor and evaluate progress, adjust or change pinpoints (both results and behaviours) if results are not being achieved .

Ensuring that the right pinpoints are established is critical to success, as is measurement. The importance of measuring and demonstrating small, but successful changes in performance and behaviour reinforces the coaching activity, as well as the learning and development experience of the employee.

ER Consultants’ work associated with assessing and developing future leaders builds on a series of similar steps to those outlined opposite. Such individual’s coaching and subsequent development is proving very successful within the organisations in which we operate.

Influencing discretionary behaviour
Once an organisation has created the right environment, it is in a better position to influence discretionary behaviour. Research carried out by John Purcell at Bath University shows that the following elements positively influence discretionary behaviour, which in turn results in the engagement of discretionary effort. Discretionary behaviour arises from having a positive psychological contract between the employer and employee, and high levels of organisation citizenship behaviour, which are elicited through increased commitment to the organisation, and high levels of job satisfaction leading to increased performance; therefore performance is a function of AMO, where A = Ability, M = Motivation and O =Opportunity.

Releasing discretionary effort is therefore dependent upon organisations ensuring that each of the elements (AMO) is properly understood, effectively communicated and subsequently delivered. All too often, the assumption is made that these elements adequately exist when organisations are designing and delivering performance or incentive schemes.  However, some schemes do not always deliver the required results – often due to inappropriate or inadequate diagnosis – e.g. if an employee lacks ability, then appropriate training must be deployed. Addressing motivation requires employee involvement, and understanding their concept of ‘AMO’ significantly improves the success of both design and delivery of the scheme. Employee engagement is best served by asking employees, on a regular basis, what influences their desire to (a) work at one level and (b) unlock their discretionary effort. This can be through employee surveys or established employee forums.

Unlocking discretionary effort
Usually it is the employer who creates the environment for employees to extend their capability and engage their discretionary effort. However, more benefit may be gained through encouraging employees to take the lead in undertaking additional related activities. Getting employees to think through their day to day activities, how they may contribute more to supporting the business objectives and how they might enhance their role in order to improve their personal relationship with work, will stimulate discretionary effort. In addition, if roles can encompass areas of employee self-interest (obviously related to the organisation), they will endeavour to deliver in those areas because of their enthusiasm for such activity.

Interestingly, an individual’s self perception and sense of worth can significantly influence the amount of discretionary effort they may exhibit. Developing a ‘can do’ culture within an organisation is a clear way of leveraging positive attitudes and diminishing the self doubt that sometimes occurs when faced with new challenges. This additional performance may be reflected in increased promotion prospects, performance related pay, some form of recognition or even just the satisfaction of getting a good job done.  It is important that the individual can illustrate their enhanced activity. As Mike Thackray’s article, Appraisal Time Again? illustrates, the employee should use the appraisal process as a vehicle for capturing that additional commitment beyond agreed targets, objectives and behaviours.  Whilst we expect managers to notice all the activity and effort expended by subordinates, the opportunity for the individual to reinforce their activity should not be overlooked. Obtaining or providing formal and informal feedback offers the most effective impact on discretionary effort. Regular informal feedback has been linked to a 40% rise in employee performance and a 20% increase in discretionary effort. However, discretionary effort can be effectively achieved in five steps (see Discretionary Effort Unlocked below).

Give more, to get more
Based upon the research we started out with, for the 60% who would give more, their discretionary effort is arguably dependent on some form of reward – financial or non-financial. We all accept that an employee’s financial reward is a necessary element in the psychological contract. Hopefully, we also accept that recognition factors and personal and professional acknowledgement is a key element in rewarding employees. All of these mechanisms are relevant in releasing discretionary effort. Praise for a job well done is probably the most powerful, least costly, yet most underused employee engagement tool – how often do we provide it?

Discretionary effort can also be realised through incentive and gain sharing schemes. An incentive scheme rewards individuals based on measured achievement and results, which is illustrated in

the case study below. Gain sharing is a bonus mechanism based on a formula which allows groups of employees to share in the financial gains resulting from increased productivity. Both of these mechanisms are built upon motivational principles of reinforcement theory of discretionary effort, which can be modified or influenced by reinforcing desired behaviours.  Whilst the theory is simple enough, introducing and implementing reinforcement systems is complex, requiring sufficient knowledge and experience in their design. ER Consultants’ experience suggests that most difficulty is encountered in defining what performance of the ‘system’ actually means and the resultant payment mechanism.

Worth the effort?
Business leaders are, or should be, aware that releasing employee discretionary effort will have a significant impact on improving productivity and performance. Tapping into discretionary effort is not a ‘one-hit wonder’; it can be re-used time and time again. The key is to understand what mechanisms are most likely to succeed at this present time in order to influence the 60%-plus of employees with untapped potential. Realistically, one would not expect to release all this potential through a single activity – employees will move in and out of the discretionary tranches – the challenge is to build and maintain employee effort and reinforce the top tranch. Our question to you is, how are you addressing the 60%?

A Matter of Performance: Case Study
An organisation within the utility sector, was suffering from excessive labour costs and employment overheads. The CEO wanted to improve on-site productivity of industrial staff and reduce associated employment costs. This was to be achieved through the design and implementation of a suitable and sustainable incentive scheme that addressed issues in work planning, daily productivity levels and ‘limited’ employee engagement with the customer. ER Consultants was approached to help develop effective incentive arrangements that would engage employees and ultimately improve performance. One of the measures employed was through gain sharing – a scheme that rewards individuals based on measured achievement and results – as explained opposite.

The results: By implementing such suggestions, not only did the firm’s performance improve by 19%, but it also saw a dramatic fall in direct and indirect labour costs.

Discretionary Effort Unlocked
There are five steps to unlock individual discretionary effort. They are:

1. Understand how the role contributes to the organisation’s goals.
2. Encourage staff to achieve a business goal every day.
3. Encourage and improve employee self perception.
4. Make the current role more interesting.
5. Ensure frequent and relevant feedback is provided.

For more information, contact: chris.legge@erconsultants.co.uk

References:

^1. Behaviour and Coaching: A Leader’s Competitive Edge, by Aubrey C. Daniels, Founder & Chairman, and Joseph Laipple, Senior Vice President, Aubrey Daniels International, published by Business Management.
^2. This forms part of John Purcell’s research carried out at Bath University; 2003-2004

© er consultants Topics Issue 3, 2007