Building a Culture that Recognises Employees

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Home > Articles > Building a Culture that Recognises Employees

 Building a Culture that Recognises Employees

Tan Chee Teik | General
February 18, 2014
Some companies adopt a human resource policy of promoting staff from within. They not only recognise competence and good performance but this policy also helps to perpetuate their corporate culture.
 
A constructive culture encourages risk-taking and focuses on performance. Managers encourage their people to be less apprehensive about taking calculated risks. Constructive cultures reward employees who innovate. A passive culture focuses on people and individual compliance rather than group or company achievement. Anyone not complying with the norm will be punished. This tends to discourage employees from taking initiative.
 
An aggressive culture focuses on individual tasks and internal competition rather than long-term group and organisational performance. The setback may be that this culture tends to forget the value of its people. It tends to be more task-driven than achievement-oriented.
 
Lenovo-IBM Culture Clash
 
In a case study of the Lenovo Group Ltd-IBM merger, “Lenovo-IBM: Bridging Cultures, Languages, and Time Zones,” Professor GK Stahl and researcher Mr Andras Lenyel studied how Lenovo overcame the cultural clash to become a successful global player. Although the Chinese personal computer maker bought over the IBM personal computer company, shortly after the merger in April 2005, Mr Steve Ward, a former IBM executive, was appointed as the new chief executive officer (CEO) of Lenovo. The company intended to be a global player, so it was natural to find a global CEO.
 
The integration of the two companies was ambitious. It aimed to combine the best aspects of two very different companies that operated across 12 time zones. Instead of having two headquarters, the main office was based in the United States and the Asian office was in Beijing. Soon after the merger, cultural issues arose. Employees who were used to the Big Blue culture found it difficult to immerse themselves with the Chinese business culture. Cultural issues among the management team also triggered frequent changes to the board and restructuring efforts. In December 2005, former Dell computers executive Mr Bill Amelio replaced Mr Steve Ward as CEO.
 
Although Lenovo was doing fairly well by August 2012, its CEO at that time, Mr Yang Yuanqing, was not satisfied with initiating strategic and structural changes. He identified a need to strengthen the corporate culture to become a more values-driven company. Lenovo decided that all divisions, no matter in which time zone they were located or which nationality they represented, should share the same set of values. Principal among them are:
 
·         Serving customers,
·         Trust and integrity,
·         Teamwork across cultures, and
·         Innovation and entrepreneurial spirit.
 
For companies to progress, corporate culture must start from the top and trickle down to the lowest level. Today, Lenovo is doing fine and is prepared to make quick changes in tandem with the changing marketplace.
 
Recently, Lenovo purchased IBM’s low-end server business for S$2.9 billion. The company went on to purchase Motorola Mobility from Google Inc for S$3.67 billion. With the purchase, it is ready to be a competitor in the smartphone market.
 
Collaboration
 
Cooperation is a common way of working with other parties. Cooperation simply means working together with others for a common cause, purpose, or objective. Collaboration on the other hand suggests working cooperatively with groups from opposing sides (opponents and/or competitors).
 
Managers should instil the principles of collaboration into the company culture. Such culture comes with self-recognition. There are many tasks which cannot be completed alone. A company has little place for loners. Staff who are trained in the skills of teamwork appreciate working with others, respect others’ views and skills, and are happy to collaborate in order to continuously add value.
 
The latest trend for cooperation and collaboration at the workplace is hot-desking—where employees are not tied to their personal workstations. There are comfortable corners and spaces for them to hold discussions and do their work with privacy if necessary. Such agile workplaces are supposed to improve staff cooperation and teamwork. In reality, one principal reason is that the company wants to beat the increasing rentals in prime office areas.
 
Job Design
 
As modern organisation structures become flatter, the compensation system has fewer salary scales and generally wider salary ranges. Employees are placed in salary bands without minimum or maximum salary and they are all treated as equals.
 
Career banding promotes cross-functional problem-solving and increased flexibility. Employees are recognised for the number of skills they possess on the job and rewarded for their contributions to the overall welfare of the company.
 
Compensable factors under career banding vary from firm to firm but they may include value-added contributions to the company, skills developed and used, measurable outcomes, exceptional services provided, problem resolution, interpersonal effectiveness, and creativity.
 
More forward-looking companies practise open-book management. This is the concept of opening the firm’s financials to employees and sharing operational information. Employees are provided with training to understand the significance of the information, and how to measure the financial value of their work in respect to the company’s performance. By sharing such information, management shows that it trusts the employees.
 
Some managers are wary about giving out sensitive information to all employees. They are afraid that it may be passed on to the competition or that employees are not entitled “to know everything”. It has been found that if employees are clear about the company’s financials, they know exactly where the company is heading, and if necessary they will save the firm from going under if the profit numbers are low.
 
Many American companies use Mr Peter Drucker’s management by objectives (MBO) performance appraisal system. The whole system of management by objectives was based on formal feedback regarding objectives jointly agreed upon and progress made towards achieving them. Based on a cybernetic control-by-feedback philosophy, it was deemed to spread a results orientation throughout the company. In Cultures and Organisations, Mr Geerte Hofstede et al think that MBO reflects an American value position in that it presupposes the following:
 
·         That the subordinate is sufficiently independent to have a meaningful dialogue with the boss,
·         That both superior and subordinate are prepared to accept some ambiguity, and
·         That high performance is seen as an important goal by both.
 
Rewarding Staff
 
If companies adopt the communist doctrine that all workers are equal, then there is little motivation to work harder than the other co-workers. Under the capitalist system, those who work harder should get better increments and should be promoted faster. For companies with few opportunities for upgrading and promotions, the employees will look elsewhere for jobs with better rewards otherwise they will stagnate.
 
Some managers fail to reward the worker as he has reached the top of his salary scale. If the worker does not want to take the risk of joining another company, he will remain in his post and his low morale will affect his colleagues.
 
Rewards in financial terms are important as workers have families to support and they have to keep up with inflation. Rewards can be in the form of recognition of jobs that are performed well. Managers can provide opportunities for employee involvement in decision-making. Workers are always pleased if they are asked for their views before something new is implemented.
 
They should be given ample autonomy or freedom to act in the best interests of the firm. Training to improve their skills is much appreciated. They enjoy being in committees as they feel that they are part of a team. They respect authority and expect managers to respect them in return.
 
 
Management Thinker
 
Mr Jim Collins Finds out How Great Companies Succeed
 
Mr Jim Collins is an expert on how great companies succeed after spending over 25 years studying the topic. He has authored and co-authored his findings in numerous business books and articles to share his research findings.
 
In his publications, he explains how great companies grow, attain superior performance, and how good companies can become great companies. He began his research and teaching career on the faculty at the Stanford University Graduate School of Business. In 1995, he founded a management laboratory in Boulder, Colorado, where he conducts research and consults with executives from the corporate and social sectors. He has degrees in business administration and mathematical sciences from Stanford University.
 
Mr Collins has worked with senior people and chief executives of over 100 corporations. His recent book co-authored with Mr Morten Hansen is Great by Choice: Uncertainty, Chaos, and Luck—Why Some Thrive despite Them All. It looks at why some companies thrive in uncertainty, even chaos, and others do not. The book focuses on the types of unstable environments faced by current leaders.
 
His other bestsellers are Built to Last, Good to Great, and How the Mighty Fall.
 
In Good to Great, Mr Collins defines five levels of business leadership. Level 1 leaders are highly capable people who make productive contributions through talent, knowledge, skills, and good work habits.
 
Level 2 leaders are contributing team members who contribute individual capabilities to the achievement of group objectives and work effectively with others in a group setting.
 
Level 3 leaders are competent managers who organise people and resources towards the effective and efficient pursuit of predetermined objectives.
 
Level 4 leaders are effective leaders who catalyse commitment to a vigorous pursuit of a clear and compelling vision, stimulating higher performance standards.
 
Level 5 leaders are executives who build enduring greatness through a paradoxical blend of personal humility and professional will.
 
In Built to Last, which Mr Collins co-authored with Mr Jerry Porras, they dispelled some of the former myths:
 
·         A great idea is needed to start companies,
·         Visionary organisations need charismatic leaders,
·         Maximising profits is the dominate goal with visionary companies,
·         Visionary companies focus on beating competitors, and
·         Hiring outsiders as chief executives is the best way to spark an organisation.
 
 
Mr Tan Chee Teik is a consultant with Surwin Associates and he is a regular contributor to Today’s Manager.
Copyright © 2013 Singapore Institute of Management

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