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Innovative Office or Pay Rise?

© Сollage by RIA NovostiAgree or Disagree with Marina Dzhashi
Agree or Disagree with Marina Dzhashi - Sputnik International
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As international companies fight to stay competitive HR managers world over struggle to work out ways to motivate staff and increase productivity at work. How to make your employees more engaged? What is workplace innovation and what does it take to stimulate and empower personnel?

As international companies fight to stay competitive HR managers world over struggle to work out ways to motivate staff and increase productivity at work. How to make your employees more engaged? What is workplace innovation and what does it take to stimulate and empower personnel?

Innovative Office or Pay Rise? part 1
Innovative Office or Pay Rise? part 2

Peter Totterdill, professor, CEO of UK Work Organisation Network, and director of Workplace Innovation, and Luc Jones, a partner at Antal, Russia's leading recruitment company discusses those and other issues on Radio VR’ Agree or Disagree.

Does workplace innovation equal higher employee productivity?   

Peter Totterdill: Workplace innovation isn't the latest management fad. Bringing together workplace practices that we've known for a very long time, when you bring all those together into a system of mutually reinforcing practices, that you really get the benefits for productivity.

The two most important characteristics are: first, high levels of employee involvement and participation – that's employees at every level of the organization – and secondly, the producer’s benefits, both in terms of increased productivity, but also in terms of enhanced levels of innovation in the organization and products processes, services, and also in terms of  employee well-being and health. Those are the important things.

Luc Jones: You've got to look at things also on a practical level. In Russia under the Soviet system work was very much a place that you went to, as opposed to something you did. Regardless of your place of employment, you clocked in in the morning on time and you clocked out when you left, and things like productivity were hardly measured. One generation ago, it was a completely different situation the way we have today.

Even in the UK many people in the late 1980s were saying that the entire world will be working from home within a matter of years, which, as we all know, hasn't happened.  I think it really needs to be taken as a basis for what works best. For some people it works brilliantly and for some companies. Also it depends very much on the corporate culture of the organization and the people themselves.

Phillips is the company that is experimenting with new ways to increase work performance. They are now introducing the concept of workplace innovation in their Moscow office. Here is what they are going to do. The employees won’t have a fixed desk any more. Even their director general will not have his or her office or desk. You can start your day in the morning or later in the afternoon and take any available desk. The number of hours spent in the office should equal the time that is really necessary to complete the project. This approach, they hope, will help the company to eliminate the concept of just being present at work. By implementing some of the new ways Phillips hopes that it will save the company 20 million Euros annually. Do you think this is going to be really effective?

Peter Totterdill: Yes, this is the model that Phillips has used across a lot of their European offices. I saw a presentation of them doing something similar in Lisbon recently. I think the point is, yes, it helps, because it breaks down demarcations between the different departments. You don't have those kinds of walls between different parts of the organization. It does encourage mixing.

But that only really works when there is a management and leadership culture which is about trust. That implies moving away from micro-managing what people do on a day-to-day basis and really allowing people to get on with it.

Luc Jones: This will work in certain countries a lot better than in others. In the Western world, by nature, we tend to automatically trust people from the beginning, unless there is a reason not to. In Russia old habits die hard and it often is very much the other way round.

The other point is that letting people work from home is much less the norm here, partly because culturally it has never been the norm. Also, people by nature don't like change. I generally find that Russians like the camaraderie they have at work and people still do want to have a coffee with colleagues at times.

How do you build trust between leadership and employees?

Peter Totterdill: What we know from the evidence is that managers who mistrust their employees lead to disengaged employees. Employee disengagement costs the economy billions. Disengaged employees don't do anything more than they are told to do by their boss. They just do what they need to do, to keep out of trouble and they may even actively sabotage things from time to time. There are a lot of studies around this.

When there is trust, and trust takes a long time to build, people come out with lots of ideas how to improve performance. I think most people come to work because they want to do a good job. And it is usually distrustful managers and organizational systems that get in the way of that.

If we look at the geography, we can see that the highest productivity is spotted in Asia and the US, where people work long hours and have very few vacation days. What do you think of that?

Peter Totterdill: We did some work for the Korean Government and somebody rather senior in the Ministry of Labour there was saying that, in a sense, following the American model of long working hours, of command and control ways of working had got them to a certain level of economic development, they were pleased with that. But they thought it was unsustainable on the longer term.

When I worked in Japan I had the impression that people there live to work. Even when they are ill, they are not supposed to be away. Now I can see the same sort of practice here in Russia. Luc, do you agree or disagree?

Luc Jones: I disagree with that. In Russia one of the biggest complaints that expatriate managers have about the Russian employees is the copious number of sick days they take. And honestly, in all the times I’ve been recruiting, I don’t think I’ve ever seen somebody actually worried about losing their job through anything like illness.

What I like about what Phillips is doing, is that they are trying to take the emphasis away from just the number of hours you physically sit in the office. In the UK people often reply to the e-mails at 7 o’clock in the morning on the train in and then they are in the office working. But at five past six it is like the Mary Celeste. I mean, the place is dead and everybody is either on their way home or in the pub. In Russia people will stroll in at ten in the morning and say – oh, sorry, I'm late, I’ve overslept or there was a traffic jam. Yet people will burn the midnight oil and stay later.

Let's talk about time management. Some employees stay at work overtime because they really need to work on projects. But others stay in the office longer because they were distracted during the day. I would say that 8 hours is enough to get your work done.

Peter Totterdill: Yes, just being in the office but not being very productive is a major problem. One of the critical things is how we manage performance. A good manager really gets to know what motivates and what gets in the way of performing well for each individual person within their team, and work with them and the team as a whole to try and address those kinds of obstacles.

What we find even in the Western European countries is that performance management is a seriously underdeveloped skill or set of practices in most companies. And that really holds back even the most progressive companies. So, really looking at team leadership skills, coaching skills of line managers is absolutely critical.

Luc, do you think that 8 hours is enough to get your work done?

Luc Jones: It's partly about how you structure your day. Some people concentrate on work, have a 15-minute lunch break and do not have tea. Others want to socialize. So, it does not matter to me if people do their work in 7 or 12 hours, as long as there is a result.

Peter Totterdill: I think we are looking at it from a one-dimensional perspective. Do you want people to come to work and simply do their tasks and, even if they can see a way of improving the business, just to keep quiet about it; or do you want them to share their ideas?

One Dutch study shows that 75%  of innovations in products, services and processes happened by people actually talking to each other in  the work place over coffee, over lunch  or in formal settings. Any business today to be competitive has to continually reinvent its products, services, processes, has to be really on the ball to get the competitive edge.

I've noticed that companies that embrace the concept of workplace innovations are mostly IT companies, like Google, Yahoo. You really want to stay longer in their offices. Why is it, that IT companies innovate more than any other corporations?

Luc Jones: I've been in Google offices and they are incredible in terms of innovations. But I would guess that most people who work for them are probably in their twenties or their early thirties and don’t necessarily have families. They would be quite happy to stay and socialize, be it during the day or later. There are other types of people who may be slightly older and have different interests. So, the key is very much the flexibility, that not everybody is the same and no one wants the same thing.

How to motivate your staff, what needs to be done to improve work performance? Is it bonuses and higher salaries or a pleasant atmosphere at work?

Peter Totterdill: Personally, I would go to a place where work is a little bit more fun. You are spending at least 8 hours a day in the work place. It is an enormous chunk of your life. So, given the choice, I think people would always go for rewarding jobs that were interesting.

Luc Jones: In the end, companies are investing a lot more into you, than they are getting back from you, especially in the first few years. But as things go on, it’s got to be something that you enjoy doing. The worst thing is that if you are not engaged and you don’t enjoy your job, the statistics show that once you reach a certain level you could pay people a lot more money, but you really wouldn’t get a lot more out of them, unless they enjoy what they do and where they do it.

Talking about fun, I would doubt that bosses of big banks or finance companies would actually invest in the fun factor. Luc, do you agree or disagree?

Luc Jones: I agree, it is unlikely. Law firms are another good example of this. There are some professions that are considered to be a bit boring, but they attract a certain kind of people.

Peter Totterdill: There is a company in the Netherlands called Finex, it's a finance company. The guy that set it out worked for some American finance company and got fed up with the command and control culture there, and just thought it wasn't being productive. Finex now employs 150 people and they have no management structure. They kind of just reach decisions collectively, but nobody quite knows how they do it. But they are extraordinarily successful, because it gives people the ability to find the team that they want to work with, to think of the ways of working that work for them.

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