A new McKinsey & Company study, which analyzes the practices of over 230 businesses around the world over the past four years, provides evidence for the wisdom of a broad approach to organizational intervention which makes as much sense for the realm of Human Resources initiatives as it does in the broader business context. The results of this study are featured in an article Managing Your Organization by the Evidence in the October issue of the McKinsey Quarterly (2006 No. 3) (registration required to read full article).
There is a tendency for organizations and their leaders, the study tells us, to rely on "one big visible intervention", implemented in isolation, to propel improvements in organizational performance. With their new research as their basis, the authors contend that "strong organizational performance is really fueled not by isolated interventions but by a combination of three or four carefully selected complementary ones".
We would do well to heed this advice, even within the narrow realm of reward practices and programs. Developing and rolling out new reward programs while ignoring the influence of the bigger organizational systems in which they operate and the other practices to which they are connected is no recipe for success. A few salient examples come to mind:
- Don't design and implement an employee incentive plan and expect it to spur results if you fail to address the needs for more open communication about organizational performance matters and education/coaching about how individual employees can make a difference within their assigned roles.
- Don't expect a new performance management program to have a real impact if you don't take the steps to ensure that supervisors/managers have the skills needed to address employee performance challenges and if you overlook the fact that there are no consequences for supervisors/managers who pay only lip service to the process by indiscriminately giving all employees a rating of "meets expectations".
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