A new study by CEB, a best practice insight and technology company, has identified the next big driver of corporate productivity: creating a “one-company” culture that requires employees to become “enterprise contributors.”
The employee performance paradox study included of a workforce survey of over 10,000 managers and employees from various industries and regions, a survey of 80 heads of human resources and a financial analysis of organizations that completed CEB’s 2012 High Performance Survey.
The era of the star employee is over
According to the study, “The Employee Performance Paradox: Balancing Execution with Impact,” companies that implement a one-company culture boost revenue by $16,400 and profit by $2,500 per employee annually.
“Our study demonstrates conclusively that both revenues and earnings increase when a company shifts its culture to focus on effective collaboration and rewards company-wide accomplishments rather than individual performance,” said Brian Kropp, CEB’s Human Resources Practice Leader. “The era of the star individual contributor is over. The most profitable and highest-producing corporations will be those with employees who work cooperatively and are rewarded for doing so.”
Internal competition affects your profits
A one-company culture provides incentives for employees to collaborate across divisions and units so their work benefits the company as a whole. This is a significant change from today’s typical corporate practice of placing the highest value on individual results.
According to the study, 75 percent of employees report that their company’s culture and practices prevent them from effectively collaborating with others and, therefore, are cutting into profits.
“Getting this right has the potential to unlock the big increase in productivity companies have been looking for since the technology boom of the 1990s and is particularly important given the increasing complexity and size of companies today,” Kropp said.
The four paradoxes that interfere with collaboration
CEB identified four organizational “paradoxes” that prevent employees from being effective in a collaborative work environment: competition, empowerment, collaboration and motivation.
According to Kropp, the key is for companies to recognize and overcome these four barriers. “Organizations that break these paradoxes and show employees how to manage the trade-offs will triple the number of enterprise contributors in their workforce and greatly increase productivity,” he said.
Strategies to manage the paradoxes
To create a workforce of enterprise contributors, companies should adopt the following strategies to manage the four paradoxes:
- Competition: To overcome competition among employees who are vying for promotions, pay raises and opportunities, executives should change the way they approach their performance review process to focus more on “competitive” cooperation.
- Empowerment: Directing how employees work without undermining their autonomy requires that executives go beyond transparency to give their employees the context needed to prioritize work efficiently.
- Collaboration: For employees to collaborate more while also completing tasks quickly, executives should prepare their employees to expect collaboration challenges and empower them to address those challenges that may slow down the process.
- Motivation: Current financial incentives often diminish employees’ motivation to help one another so executives should use non-financial rewards to accelerate and improve performance.
