Entitlement Programs Kill Corporate Productivity

In articles I’ve written over the years, I have used “laissez-faire,” a term more frequently used to characterize governments than businesses, to describe a rather laid-back management style. When I use this term, I am referring to management personnel who put very little pressure on employees to achieve their full potential by pushing them toward peak performance levels.

Laissez-faire managers had much rather maintain a stress-free relationship with their personnel than face the antagonistic environment that sometimes arises when employee confrontations become necessary. They rarely “push” their people; they allow each employee to set his or her own performance standards.

Now Judith M. Bardwick, a psychologist and management consultant, has used another typically government-associated term to describe an equally costly corporate malady; this time it’s entitlement. I believe that entitlement is deeply rooted in many businesses in our industry.

Barwick describes business entitlement programs as “giving people reasonably good jobs without documenting what the company gets in return, resulting in people either not working, or people thinking they are working when, in reality, they are not adding anything of value to the business.”

Just a couple of examples of entitlement that I observe take place when employees make remarks like, “It’s January 10th and I haven’t received my raise yet.” Another is, “I received my Christmas bonus last week and all they gave me this year was a check for a lousy $200.”

A willingness to accept mediocre performance is also deeply rooted in the culture of many businesses. North America has been blessed with such an excellent economy over much of the last two decades that many managers have gotten away with this attitude and still done reasonably well.

When managers allow employees to put in 40 hours while the company receives only about 20 hours of productivity, the bottom line almost invariably takes it on the chin. Managers cannot continue to allow employees to do things “the old way” or “their way” when their performance is dragging down the overall productivity of the company.

Toleration perpetuates entitlement. In her book, Danger in the Comfort Zone, Barwick says, “Organizations have failed to educate their employees that their work is not just the jobs they perform, but their ability to add value through their position in the company.”

Value equates to earning capacity by the employee for the business. Neither employees nor management can afford to become complacent by believing that they can continue to live off the successes of the past. If they do, the competition is likely to strip them of several of their best customers.

How do you eliminate or prevent the entitlement mindset? Begin by defining individual performance goals and clearly communicating them in measurable terms. Then review results, reward accomplishment and take swift action with those who refuse to participate in the program.

Performance goals must be measurable. They can be measured daily, weekly, monthly or via annual standards. How frequently you give measurable feedback depends on the job function, but what is most essential is that you keep score. Otherwise, how can you possibly know the degree to which each employee is contributing.

To make this point, I often ask my audiences sports-related questions. What’s the magic batting average that a position player must achieve in baseball to be considered a cut above? The answer is .300. How many RBI must a player achieve in a season to be considered a cut above? The answer is 100. Or how about keeping score among pitchers? How many games must pitchers win to set themselves apart from the pack? The answer is 20.

There are examples from all sports. In football, how many yards must a running back gain in a game, in a season or on a carry? The answers are 100, 1,000 and 5, respectively.

If I were to tell you that I am an incredibly good golfer, what questions might you ask me to determine my degree of excellence? Your questions might include: What’s your handicap? Or, what do you typically shoot?

Back to business. One rule that I have always believed to be important is to provide feedback to all employees on a consistent basis. But the lower an employee’s pay range, the more frequently I recommend that managers not only provide feedback, but also to reward more positive levels of performance.

The days are gone when businesses can sit back and wait for their salespeople to pick up the phone. Every salesperson must meet minimum standards both in maintaining product penetration among current customer accounts and in bringing in a budgeted amount of fresh new business.

Operations managers, as an example, can no longer allow their drivers set their own work pace. The individual productivity of each person must be measured and minimum standards established. When an individual employee consistently falls below the minimum performance levels that have been established, that employee must be counseled.

Virtually every company has employees who have made it their life’s work to beat the system. The bigger the company, the more prevalent this mindset. Too many such entitlement holders eat away at the bottom line and set a costly example within the organization.

I don’t believe that there is any doubt about it, if you want to earn a satisfactory amount of profit, management must be tough minded, but fair. When I single out clients who put the most money on the bottom line, they almost invariably set high performance standards for both themselves and the entire organization. They don’t put up with mediocrity.

As you begin a new business period — month, quarter or year — I encourage you to discipline yourself to help your employees be all that they can be. Push them. Encourage them. Measure them. Reward them. And remember, if you continue doing the same things year after year that you have always done, you’ll most likely get the same results you’ve always gotten. If you want different results, you must do different things.