UPMC administers surveys to all 80,000 employees across 20 different hospital systems, doctors’ offices, clinics, and long-term care facilities to understand the employee voice.
(As conveyed in the book, The Employee Experience: How to Attract Talent, Retain Top Performers, and Drive Results) The Contract is a concept, a mental construct that we use to understand and tweak the expectations at stake in any relationship, whether it’s business or personal. Every relationship has a Contract. The Contract is the totality of explicit and implicit expectations that define the operating rules of the relationship, whether we are aware of them or not––every relationship comes with a Contract.
The Contract is the totality of explicit and implicit expectations that define the operating rules of the relationship. Every relationship has a Contract.
Some Contracts are explicit, visible, and understood by all parties in a relationship, such as a written statement of work from a vendor or the offer letter to a new employee spelling out the job description, benefits, bonus structure, and the you-do-this-I-give-you-that details. Like the tip of an iceberg, these Contracts are seen by all parties and well-understood. The expectations are out in the open and clearly defined. We call these the Brand Contract and Transactional Contract, but what’s underneath the water. We all know the iceberg has a larger mass that dives deep into the water yet remains unseen. We call this the Psychological Contract. These are the implicit expectations that aren’t openly or clearly defined yet exist within every organization and relationship.
The Three Contracts
Every contract is made up of three sub-contracts, as mentioned earlier:
Brand Contract
The Brand Contract is how we are viewed publicly or are seen by others. It consists of the promises that our brand identity––what we profess to be and what we stand for as an organization or team––makes to the people who are exposed to it.
Transactional Contract
The Transactional Contract is the mutually accepted, reciprocal, and explicit agreement between two or more entities that defines the basic operating terms of the relationship.
Psychological Contract
The Psychological Contract is the unwritten, implicit set of expectations and obligations that define the terms of exchange in a relationship.
Why is The Contract between employee and employer like an iceberg?
Like an iceberg, only part of the Contract is openly visible to all parties involved. Not every expectation makes its way into the written Contract. The implied part of any Contract is what carries the weight of the subconscious, unspoken expectations that each party brings to the relationship. These implied Contracts are the type your grandfather meant when he talked about doing business based on a handshake back in the day––nothing formal, other than the mutual belief that each party would act with the best interest of both sides at heart. With this Psychological, or implicit, Contract, trust is everything. Without it, there’s no deal.
So a Contract is really like an iceberg: You might see the written, express part bobbing above the water, but the larger part––the implied part––is submerged. The implied component is the most important section of any Contract, and that’s where things can go sideways. This is where Expectation Alignment Dysfunction runs rampant.
The Employee Experience: Your Organization Is Your People
Your organization is your people. Always has been, always will be. If you want performance, loyalty, low turnover, and a legitimate passion for excellence among your workforce, you can’t approach communication or relationships as though you’re dealing with an organization, because you’re not. You’re dealing with individuals with differing desires, backgrounds, dreams, expectations, and levels of understanding, brought together for a common purpose. When you understand this fundamental, key fact, you will start to see the nature of your Expectation Gaps, so you can start working on ways to promote alignment. When you view your organization not as a legal construct but as a network of people and relationships, it’s easier to see why managing expectations and building strong relationships matters so much.
Your company doesn’t really exist. It’s a name-branded intellectual exercise. Your company is your people. Always has been, always will be.
It’s Your Responsibility
We have found, through both research and our own (often sad) experience, that Expectation Gaps are often at the core of employee disengagement and discontent. As we coach individuals, we frequently find that it’s not a lack of desire that holds them back from stellar performance. It’s also not lack of skills that keeps them from engaging. It’s the Expectation Gap. They simply don’t know what’s expected, or their expectations differed from those of their supervisors. It’s hard to hit a target you didn’t know existed.
Right now you might be thinking “it seems like this puts all the responsibility on managers—all on me? What about the times employees misinterpret management’s expectations or believe they’re entitled to something nutty? Where’s their responsibility in all this?”
Fair questions. Often, employees are the problem, like when they cling to unrealistic expectations or misread a company’s actions out of cynicism or self-interest. We will talk about the employees’ role in all this. However, since management’s paying the bills (and getting paid by the customer), the onus is on you to have your finger on the pulse of what employees and customers feel and believe.
If you and your employees have a meeting of the minds, alignment of what both sides expect occurs, and everyone feels that promises are being kept and respect given, you’ll have an EX that results in fully engaged employees who will also deliver a brilliant CX.
3 Management Styles that Kill the Employee Experience
The war for talent is fierce. Employers cannot underestimate the effect a negative Employee Experience (EX) has on attracting, retaining, and engaging their workforce. Employers are now realizing that they need to create a place where employees not only need to work but want to work. Managers are key contributors to EX. More than ever, managers are balancing the need to get results from employees and achieve company goals, while creating an engaging work experience for employees.
But when team performance falls below expectations, the best intentions to motivate can sometimes jeopardize success. This creates a negative effect on organizational health and the employee experience. Here are three examples of common management styles that can backfire when trying to motivate employees.
The Overly-Optimistic Manager
Optimism is a strong factor that generally increases motivation and creates a positive EX. But sometimes hard tasks are just that—hard. The difficulty employees face in tackling challenging tasks needs to be acknowledged, and not simply minimized or pacified with a weak pep talk. When a team struggles, managers need to lead by introducing helpful ideas and strategies. But then, as leadership educator and author Liz Wiseman advised, “Remember to hand the pen back.” It’s beneficial for a manager to help employees get back on track, but then remember to place the responsibility back on the team to find the solution.
The Pacesetter Manager
Some managers try to set the pace for their teams by being an example in areas of quality, innovation, customer service, or even amount of work delivered—and there may be nothing wrong with that. By modeling the high standard, they hope the team will follow their example and meet the pace. But Wiseman observes that sometimes the result is the exact opposite of the desired effect: “It creates spectators instead of followers.” Instead, “take time to recognize the unique gifts and talents of individuals who participate on your team,” recommends executive coach, Sara Canaday. Understand that team members can make the best contributions at their own pace.
The Endless-Idea Manager
In an effort to achieve more, these managers generate a mountain of new ideas that “need to be implemented immediately.” These managers think this approach inspires their team with new and exciting work opportunities. Instead, employees are often overwhelmed by the barrage of ideas and varying agendas. Wiseman warns that too many ideas can torpedo an organization. Collective creativity shuts down, and efforts to chase after the volume of ideas and strategies places workers right back where they started. No progress. No development. No skill-building.
A manager’s role is constantly paired with expectations. The secret to meeting goals lies in a manager’s ability to utilize the talents residing in the staff. Nurture those skills by avoiding blind optimism, creating a healthy pace, and encouraging creativity from staff.
5 Influences Trump Will Have on the Employee Experience (Article originally published here on SwitchAndShift.com)
There are many pieces of legislation or policy matters affecting the Employee Experience that are likely to be in flux during the first part of Mr. Trump’s presidency. At stake are the following five key topics:
Changes to the Obama Administration’s Overtime Rule
Modifying the Affordable Care Act
Changes to Family Medical Leave
Increasing the Minimum Wage
Closing the Gender Wage Gap
1. The Overtime Rule
The 900-pound gorilla in our mix of issues is the overtime rule that was put into place by the Obama administration. President Obama’s executive order increased the minimum salary threshold for certain overtime exemptions from $23,660 to $47,476 (the “Overtime Rule”). However, right before the Overtime Rule was set to go into effect (December 1, 2016) a federal judge issued an injunction blocking its enactment. The injunction’s upshot is that the old threshold of $23,660 still applies. With a new administration set to take over, many workers are left wondering what President Trump will do with the Overtime Rule. Considering President Trump’s political mandate, it seems likely he will look to amend the Overtime Rule to make it more business friendly (i.e., reducing the threshold number). Nonetheless, our best guess is some increase to the minimum salary threshold will happen, as the qualifying level has not been adjusted in years.
On a side note, other small businesses might have faced what we did at our firm a few weeks ago. In anticipation of the Overtime Rule going into effect, in July we started working with our employees to manage the transition. By November, we had increased a few salaries and had spent time training our employees on a new time-tracking system.
Suddenly, with the injunction blocking the Overtime Rule, we were left with the option of going back to our prior policy or moving forward based on the new expectations that had been formed by our employees. Knowing that aligned expectations and the psychological contract we maintain with our employees is the cornerstone of a well-built Employee Experience, we chose to keep the salary increases and to track and pay overtime even though we were not legally obligated to do so.
For us, keeping trust was most important. We had already sent the message to our employees that we could afford the increases. So, regardless of the legal technicalities, we felt they would view our decision to delay as benefiting management’s pocketbook and not theirs, which is never a good place to be when building a strong company culture.
2. Modifying the Affordable Care Act
It goes without saying that the Affordable Care Act (ACA), sometimes referred to as “Obama-care,” is one of the most complex pieces of legislation ever passed by Congress. There are several key provisions that remain popular, and it seems unlikely that an outright repeal will take place. For example, while Trump has indicated he supports the ACA’s full repeal, such a push would come at a cost, with 30 million Americans losing their health insurance coverage.
Our best estimate is that in the next six months, not much will take place with the ACA, but Congress will eventually attempt to eliminate some of the legislation’s more unpopular provisions, such as the “Cadillac Tax” on high-cost healthcare plans.
As it relates to the Employee Experience, changes to the ACA are more compliance-oriented. Therefore, we advise employers to take a “wait-and-see” approach; they do not need to do much more than monitor what is happening.
3. Changes to Family Medical Leave
Mr. Trump’s campaign platform included a proposal to increase paid family medical leave. Paid family medical leave is an initiative that is popular among the general population. Who knows whether a Republican-led Congress is willing to look at this issue since it’s a proposal typically championed by the left.
As it impacts the Employee Experience, however, employers should give serious consideration to how they can incorporate the spirit of this initiative into their compensation packages. Whether it’s time to care for a loved one undergoing cancer treatment, or the chance for a parent to welcome a newborn, family medical leave represents a way for employers to acknowledge the whole employee, not just whatever value can be extracted from their workforce.
4. Increasing the Minimum Wage
As you would expect, the most recent presidential campaign featured both candidates advocating that the federal minimum wage be increased. Some want to see it raised to $15 per hour, while Mr. Trump supported an escalation to $10 per hour. The federal minimum wage is currently $7.25 per hour and was last raised in 2009. Many states have laws on the books that establish a minimum wage higher than the federal minimum.
Even though some states are pushing forward with increases, this remains a difficult outcome to predict. The policy debate over the minimum wage is intense, and it’s safe to say there are few consensus points.
For those whose wage structure is significantly impacted by the minimum wage, we suggest you work on your employer brand and employee value proposition to gain insight and understanding into who you hire, why they want to join your organization, and what you can do to attract, retain, and engage the best talent at various levels across your compensation structure (i.e., across your pay-bands).
5. Closing the Gender Wage Gap
Still, there is no reason for organizations to wait for government officials to mandate a solution. Business leaders should take the initiative on this issue and demonstrate real leadership.Politicians are all over the map on this issue, depending on their audience. But the reality is that women earn 77-79 cents for every dollar a man earns. President Trump’s stance on this issue is unknown. Consequently, this is another area where we advise our clients to take a “wait-and-see” approach.
For your Employee Experience to be effective, it must be built on trust and on properly aligned expectations. Nothing is more damaging to these principles than for an organization to allow a pay discrepancy to exist among its workforce with no legitimate rationale to support the disparity. It’s simply not right. We advise all business leaders to make 2017 the year in which we eliminate the gender wage gap, without being required to do so by the government. Let’s do what’s right, just because it’s the right thing to do.
In Conclusion
Whether you love him or hate him, one thing is for sure with a Trump Presidency: change will happen. Over the past few years, we have proclaimed that we have entered the “Age of the Employee.” Employees have more power and options than ever before. It may be that the Trump Administration will implement efforts to turn the tide in favor of the employer.
Regardless, we don’t think regulators and government officials have enough influence to alter this power shift. We are in a knowledge-based economy where technology gives workers greater flexibility, information and, ultimately, power. Thus, it is imperative that business leaders work hard to build an Employee Experience that helps their organizations attract, retain, and engage the type of talent that will help them succeed in 2017 and beyond.
It all begins with your employees. Creating a wonderful, profit-boosting Customer Experience is like gardening. You can’t order up the results you want––healthy plants––just by waiving your hand. Gardening is a process-based activity; you attend to the components that create the desired outcome and then hope for the best. That means using soil amendments, watering, and weeding. The gardener can’t do much more than that, but if he or she does it well, the odds of a strong, plentiful harvest are high.
Growing an organization works in the same way. Success comes through quality products, sensible pricing, strong customer support, and employees who care personally about delivering an extraordinary experience every time. When an organization creates a top-notch Employee Experience, the likelihood of a superior Customer Experience increases exponentially. When Employee Experience is poor, chances are the customer will see the effects.
Your employees are the soil and nutrients in which your Customer Experience grows. If you have a workforce of engaged people who feel respected and appreciated, and if they trust their leaders enough to take risks and invest emotionally in the organization, your Customer Experience will take care of itself.
Conversely, if you don’t have that foundation of great people who care about providing a terrific experience and making customers’ lives better, all the technology and systems in the world won’t keep your Customer Experience from being a money-losing mess.
