Is it possible to bring Money, Dignity, and Pay to your life while working???
On the last days of 2023, HBR Türkiye held a 2-day meeting called Business Summit 2023. I wasn’t able to watch it but some of my friends shared their notes with me, telling me they believed I’d find them quite interesting. Later, I summarized these and interpreted them in my own way for you. You know, knowledge grows when shared.
Zeynep Ton, MIT Professor and the author of the book Good Jobs, made a research that could serve as a leadership guide to create “Good Jobs” that offer the choice of excellence, a living wage, satisfaction, and opportunities for growth and published it in the form of a book. Especially in the post-pandemic era, organizations of all kinds, from healthcare centres and call centres to factories, restaurants, and retail stores worldwide, have been having a hard time finding and/or retaining employees because the tasks they wish to employ people for are failing to offer “meaning” to employees and the pay is low, the stress level high, and offer little chance to achieve more and build a solid career, says Ton.
People want to work at good jobs and many leaders want to make good job offers. However, they don’t believe they can offer higher pay and more motivating jobs unless they give up on their decisions and even go into the red.
Zeynep Ton highlights that in many jobs, the leader’s top challenge is employee turnover, caused partly by low pay. Then she addresses a range of service and operational problems. Essentially, the author aims to demonstrate how “good jobs” along with strong operations bring higher productivity and competitive power to break this vicious cycle.
Adopting “a good job system” has led many companies to become more competitive organizations that can retain their dedicated employees and enjoy higher customer loyalty. Zeynep Ton gives some real-life examples.
Inadequate investment in people actually costs more as it creates direct costs of change, says Ton.
Case: Company A does anything to make its customers happy while Company B does anything to ensure stakeholder satisfaction rather than customer satisfaction. Making customers happy would require operational improvements. However, the stores of Company B were full of problems as the part-time employee turnover was high. The needs of 18 percent of customers who asked for help from a Company B employee were not met; the inventory system said the product was in stock but no one could find it. Company B was up against the wall with all the disappointment on the part of customers, sales losses, high inventory, and labour costs.
It costs more not to invest adequately in employees. Companies get stuck in a Vicious Cycle.
Cutting down on expenses for competition, the financial expenses brought by bad business, and direct costs of change (recruitment, onboarding, orientation, training, and the time needed to achieve full capacity productivity) fail to yield the results organizations expect most of the time.
The author, Zeynep Ton, starts by studying four low-cost retailers operating with high performance in an efficient cycle created by high investment in employees, namely, Mercadona -Spain’s largest supermarket chain; Trader Joe’s -an American supermarket chain; and two American market chains, QuikTrip and Costco. She observes all four of them make four operational choices that distinguish them from their counterparts which operate in a vicious cycle.
These four operational choices are listed below:
- Focus and simplify,
- Standardize and empower,
- Cross-train,
- Operate with slack.
In the case of Costco, the company delivers the cheapest and the highest-quality products in the market to its customers, and its employees earn more than those of the other companies in the industry. What the other markets have in common with Costco is that their turnover rates are very low and they are very low-cost retailers.
Ton also mentions similar cases from Toyota and The Four Seasons.
For example, at The Four Seasons hotels, all department managers hold “setback meetings” every day to talk about the problems their customers had the day before and find ways to satisfy them.
At Mercadona, in all processes including recruitment and training, there is the process owner who listens to the employees working in the forefront in stores.
QuikTrip has employee groups to discuss common problems and then exchange ideas.
At Costco, warehouse managers report a list of customer questions and problems to the company every day.
You don’t have to be the best in problem-solving to achieve operational excellence and maintain continuous improvement. You only need a consistent team of solid employees who are willing to learn and master the essence of the business and disciplined enough to keep doing this every day to keep advancing.
Even if companies are understaffed or suffer from high turnover rates and unqualified staff, they must make sure they never compromise on the following:
• Recruiting the right people and training them well.
• Equipping and trusting the employees in the forefront with the skills to solve customer problems or implement improvements.
• Matching the labour supply to the workload; that is, managing well.
• Training strong unit managers and ensuring their loyalty.
• Retaining employees who have high expectations.
The founder of Trader Joe’s, Joe Coulombe, says: “I get asked over and over why no one can successfully imitate Trader Joe’s. My answer is that nobody is willing to offer the employee pay or social benefits we do at Trader Joe’s, that’s why they can neither attract nor retain employees, unlike us. The others seem to make more effort to cut down on the payroll rather than the costs of the products they sell. But doing the latter brings at least five times more opportunities to save money.”
Money is not the only thing that employees need. But it doesn’t seem likely that employees who always have a hard time making ends meet can focus on their jobs. If you are worried about making ends meet all the time as an employee, unable to focus on your job, fail at your job before the customers daily, or feel you or your skills are not respected, it is hard to find meaning in working there even if you consider the company’s purpose or the actual social benefits it enables.
But how to get off this spiral? When you boost efficiency by making the right operational choices, this means lower cost, higher gross margin, and, of course, higher sales. Zeynep Ton explains the details of the model she suggests and implements at her institute as follows:
1- Start by investing in people to implement the Good Job System vs. the Bad Job System
Good job system: Invest in recruiting and retaining the right people. Aim to promote instead of recruiting first.
Bad job system: Minimizes labour costs by comparing the market. Recruits “smart” managers externally.
2- Focus and simplify
Good job system: Maintain discipline as you keep doing what adds value for the customers. Take into account the effects of your decisions as the higher management on the employees working in the forefront and how they improve their productivity and customer service skills.
Bad job system: Focuses on how to treat customers to reach new customers and boost sales for what it’s worth. Higher management functions implement local optimization and ask the employees in the forefront to execute the decisions with no discussion.
3- Standardize and Empower
Good job system: Leverage the knowledge, time, and talents of the employees in the forefront; set standards to help them become more consistent, productive, and authorized. Listen to the voice of the staff in the forefront.
Bad job system: Commands and controls. Adopts standardization to minimize failures and bad decisions. Higher management cannot easily or clearly hear the voices of the employees at the forefront.
4- Cross-train
Good job system: Design the job to balance specialization, flexibility, and motivation. Make sure that all employees embrace the job whether they interact with the customers or not.
Bad job system: Designs the job to minimize labour costs, asking for both specialization and to do everything.
5- Operate in slack
Good job system: Make sure employees have opportunities to serve customers, do their job right, and develop. Minimize burnout.
Bad job system: Employs fewest possible people to minimize labor costs and focuses on getting them to do as much as possible.
I found Professor Zeynep Ton’s views highly significant. They opened up my horizons concerning similar problems we have encountered recently.
Now, let’s inspect the beam in our eye before the mote in the others. For instance, business owners want to have low labour costs for competitive power, particularly for higher export rates. But nobody thinks about what the real pay should be. Likewise, when inflation is high, people ask for raises higher above the inflation rate but this just boosts inflation further. Clearly, there is no simple solution for society’s happiness and well-being. In any case, a “win-win” approach would be the best.
It is a must to rapidly implement the “good job system” suggestions in organizations with high turnover rates. But still, everyone needs to analyze their category well. We need to sail out to the blue seas to build a good job system. Finally, to answer the question in this article’s title, “Is it possible to bring Money, Dignity, and Pay to your life while working???”: Yes. As long as you have a job, a work environment, where you can produce with heart and soul, experience the blue seas, and share the happiness with your team! You know what we always say: #makehappybehappy!
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