Identification and motivation of high potentials to keep their intellectual property in the company

DEDICATION

Thank you to the most important pillars of my life: my girlfriend, my sister and my parents.

Lea, you are everything for me. Thank you for your love and understanding.

Katrin, you are the best sister I could have. Thank you for all the advice you always give me.

Mom, thank you for everything. You always run errands for me.

Dad, thank you for everything, too. I remember you saying ‘always do your best’.

I think I have done it to our satisfaction.

Now we get to the next step…

Further I want to thank Prof. Dr. Andreas von Schubert for coaching me. Thank you for giving me the opportunity to be a small academic participant to the intellectual property management of high potentials.

Thank you, Prof. Dr. Kai Neumann for all the important advice. It has been an honor to learn from you.

ABSTRACT

21 percent of employees have no emotional attachment to the employer, 66 percent will be the call of duty.^[1] The figures have almost doubled since 2001.^[2]

To counteract this trend, it is important to identify and motivate high potentials to retain them in the company. This primarily concerns the highly dedicated staff, but also the tacit knowledge of the employees that is not explicitly written down.

The author chooses the following title for his Master-Thesis, to take up this subject of economic scientific: Identification and motivation of high potentials to keep their intellectual property in the company.

On this occasion, it is started in the introduction to the subject and the problem is explained, the objectives of the Master-Thesis are presented and it will set a demarcation issue.

Then it is shown how a simple method can identify high potentials.

Chapter 3 describes the proper motivation of A-staff. This chapter includes case study.

The following chapter is about keeping the previously identified employees in the company in order to exploit the existing potential. The top 10 employee retention tools are presented therein. This topic will also be completed by a case study.

A final conclusion collects all the previously mentioned points and ventures a prognosis for the future.

Appropriate literature used to work on this Master-Thesis is present. A corresponding list of references can be found in section IV: Bibliography.

The author chose the above topic, as it is becoming increasingly difficult in the future, to find, identify and motivate good employees, to keep them in one’s own company. The demand for high potentials is unimaginably high. In the end, it is in the interest of the company itself, not to lose the high potentials.

Therefore there is always the same principle: “Companies are only as good as their employees”.^[3] So it should be a prioritized ambition for every company, to employ and retain the best of the high potentials.

TABLE OF CONTENTS

DEDICATION

ABSTRACT

I. LIST OF FIGURES

II. LIST OF TABLES

1 INTRODUCTION
1.1 INTRODUCTION TO THE TOPIC AND PROBLEM STATEMENT
1.2 OBJECTIVES OF THE MASTER THESIS
1.3 TOPIC DEMARCATION

2 IDENTIFIACATION OF HIGH POTENTIALS
2.1 SYSTEMATIC IDENTIFICATION OF HIGH POTENTIALS
2.1.1 ABC APPROACH TO EMPLOYEE CLASSIFICATION
2.1.2 EXAMPLES OF BEHAVIOR, PERSONALITY TRAITS AND SOCIAL SKILLS OF DIFFERENT EMPLOYEE GROUPS
2.2 IMPORTANCE OF APPRAISAL INTERVIEWS
2.3 MANAGEMENT BY OBJECTIVES

3 MOTIVATION OF HIGH POTENTIALS
3.1 HOW MOTIVATION WORKS
3.2 EMPLOYER BRAND
3.3 OVERLOAD AND BURNOUT
3.4 EXECUTIVES AS ENERGY MANAGER
3.5 THE LAW OF SERENITY
3.6 CASE STUDY ‘HOW TO INCREASE THE MOTIVATION OF HIGH POTENTIALS’

4 KEEP THE INTELLECTUAL PROPERTY OF HIGH POTENTIALS IN THE COMPANY
4.1 EMPLOYEE RETENTION
4.2 TOP 10 RETENTION INSTRUMENTS
4.2.1 OPPORTUNITIES FOR ADVANCEMENT AND DEVELOPMENT
4.2.2 PROFESSIONAL TRAININGS
4.2.3 RESPONSIBILITY SCOPES
4.2.4 RECOGNITION AND APPRECIATION OF JOB PERFORMANCE
4.2.5 OPPORTUNITIES TO CO-DECIDE AND PARTICIPATION
4.2.6 PERFORMANCE ORIENTED PAYMENT
4.2.7 WORK LIFE BALANCE
4.2.8 EXCELLENT WORKING ATMOSPHERE AND ENVIRONMENT
4.2.9 INTERNAL COMMUNICATION
4.2.10 HONESTY AND CREDIBILITY OF THE COMPANY
4.3 CASE STUDY ‘HOW TO KEEP INTELLECTUAL PROPERTY IN THE COMPANY’

5 CONCLUSION

III. BIBLIOGRAPHY

IV. APPENDIX / LIST OF LAYOUTS

V. PRESENTATION TO COLLOQUIUM

I. LIST OF FIGURES

1 Gallup Engagement Index

2 360 degree feedback

3 Pyramid of needs

4 Two factor theory

5 Employer brand experience

6 Sick days on the basis of burnout

7 Reasons for absenteeism of employees

8 Development from demotivation to motivation

9 Opportunities for advancement are most important

10 Cycle of professional training

11 Cycle X and cycle Y

12 Recognition and appreciation

13 Performance oriented payment

14 Work life balance index of OECD

15 Measures to improve the internal communication

16 How to create a credible corporate communication

17 Graphical definition of high potential

18 Cycle of continuous improvement process

II. LIST OF TABLES

1 Ability profiles

2 Processes and stages of an appraisal interview

3 Big five personality traits

4 Process of management by objectives

5 Ranking: DAX companies compared – burnout

6 Reasons for retention of employees

7 Questionnaire for an exit interview

8 Development and action planning, case study II

9

1 INTRODUCTION

Nowadays the shareholder value is more important than the employee. But many studies show it again and again: The critical success factor for very good and successful companies is, to find, identify, develop and keep the high potential employees.^[4]

A further fact is that misacts are very expensive for the company. However, companies, which recruit the most talented, the best and the most qualified employees will profit in every way. A very special gain is these people for the costumers. Long-term employees are usually employees, who are able to bind customers in a particularly way. The reason is very easy, but interesting: Companies have an image of humanity that also deemed to employees as to customers.^[5]

As the title suggests, the full recruiting of high potentials needs three steps:

- Recruitment of high potentials

To avoid spending money unnecessarily, it is important to recruit the right staff. Employees, who leave the company after a few days or months are very expensive. There are many several tools in order to find the suitable staff.

- Identification and developing of high potentials

Chapter 2 describes how to identify the high potentials. There is an easy method to split the employees to different groups, in order to identify the best staff. Actually not many companies use the ABC approach to identify the As, Bs and Cs.

Further it is important to develop all employees’ skills – if possible – especially the high potentials. There are also a lot of tools. The most effective methods are appraisal interviews and management by objectives.

- Keep the high potentials in the company

It is a special ability to bind especially the A-employees to the own company. It increases the value of a company tremendously, when they have long-term employees. We remember the words, which are also written in the abstract: “Companies are only as good as your employees.^[6] Currently, unfortunately most of the time only the big companies can manage this topic. Mostly they have an own development department, especially for this mission. In the future there will be almost no company without development department.^[7]

1.1 INTRODUCTION TO THE TOPIC AND PROBLEM STATEMENT

It creates not only bad mood and stressed working atmosphere, if an employee adopts. It is also expensive for the company. The main reason for a mental notice is a deficient human resources management.^[8]

The increasing time and performance pressure,^[9] which is deplored by many employees and labor advocates, calls for maximum performance of staff and executives. Is it possible to call up this desired performance day by day?

There are 63 percent of staff, who have no real commitment to the company and 23 percent of staff, who are actively uncommitted.^[10] If we believe in these facts and figures, every fourth person has noticed internally. Annually the German economy pays about 122 billion Euros for the missing motivation of the employees.^[11] Employees without direct commitment to the company are frequently ill and spread their displeasure. Only 14 percent of the staff has a high commitment to their company. Therefore it is most important to identify and select this 15 percent. These are the employees who are responsible for the success of the company.

Accordingly there are three problems to be solved by the company:

- Find, indentify, develop and keep the 15 percent staff
- Try to improve the performance of the 63 percent staff
- Detach from the 23 percent staff

The following chapters show how to do this. Also there are two case studies to understand step by step how it works to identify, motivate and keep the intellectual property of high potentials in the own company.

illustration not visible in this excerpt

Figure 1: Gallup Engagement Index

Source: Own representation, in dependence on: Gallup, One in four employees has noticed internally, 2011

1.2 OBJECTIVES OF THE MASTER THESIS

The main objective of the Master-Thesis is to show how important it is to have an integral recruitment. In most companies the process of recruitment is only: Hire an employee and let him / her work. Of course – but there are not absorbed in the topic at all – everybody can imagine that this way of recruiting will end in a termination.

Therefore it is my personal objective to sensitize the employees and employer that there is more to this than just hire and fire. At the beginning it is important to select the right employee. Try to get him / her in the 15 percent group, the commitment group. Then it is really important to motivate the employee to keep him / her in the own company.

Imagine: There is an employee who has been working already 20 years in the same company. In order to work 20 years in the same company there must be very good motivation. But if the employee decides to change the job or the company – you will lose him / her. It is expensive for the employer. The company will not only lose a (A-) staff member, the company will also lose the intellectual property of the employee. Hereby the company will lose all the information which is not written down. This is the reason why it is so expensive to lose a (A-) staff member.

So it is an objective of this Master-Thesis to discuss identification and motivation of high potentials and how to keep their intellectual property in the company which is important to any interested managing director or human resources manager. I hope a lot of managers will read it, think about it and operate with the case studies in their own companies.

1.3 TOPIC DEMARCATION

The following Master-Thesis is about identification and motivation of high potentials to keep their intellectual property in the company.

As the title already indicates, the text is divided into three main chapters:

- Identification of high potentials

It is not the object of this Master-Thesis to work on direct recruitment threats. Starting point is that the company has already recruited their employees. At this point the author starts to show how important it is to know what kind of employees are working in his / her own company. Hereby it will show an easy method to arrange the employees in three groups. This arrangement will prove with some examples relating to behavior, personality traits and social skills. Concluding this chapter the author shows how important are these two special management tools: Appraisal interviews and management by objectives – for the employer as well as for the employee.

Further topics, like how to find the right recruitment strategy or how to handle a job interview are not topics of this Master-Thesis.

- Motivation of high potentials

Most studies want to show how the employer can motivate the employees. Nowadays everybody knows the things with which one you can motivate the employees – for example: short-term with money, or long-term with opportunity for advancement.

Therefore in this Master-Thesis the author thinks outside the box and shows even some facts which are basis for motivation. It is really important to understand how motivation works and under which preconditions.

In a case study the author gives a guidance how the employer can increase the motivation of high potentials.

It is not a topic of the Master-Thesis to select suitable motivation tools. Neither it is a topic of the Master Thesis to demonstrate the effects of motivation.

- Keep the intellectual property of high potentials in the company

The most important fact in this chapter is to show that it is very essential to keep the intellectual property in the own company. There is a lot of knowledge which is not explicitly written down. When the employee leaves the company, he / she also takes the intellectual property. In most cases it is very expensive for the company. Therefore it should be one of the most important tasks in each company to keep the high potentials in the own company – and also their intellectual property.

In this chapter the author does not write about terminations of employees which are not important for the company. Certainly in each company there are a lot of employees who only come to get their money at the end of the month. Sooner or later the company should break away from this kind of employees, but it is not a topic of this Master-Thesis.

The author declares the top 10 of retention instruments. Also some of these tools are motivational tools. In this chapter the author only uses retention instruments. The author summarizes this chapter with a case study about how to keep intellectual property in one’s own company. The case study should be used as guidance for all human resources mangers or managing directors in order to realize how important it is not to lose the A-staff.

The Master-Thesis does not show the effects of losing A-staff. In order to demonstrate how important it is to keep the high potentials in one’s own company, the losing A-staff topic will broach. But it is not a separate topic in this Master-Thesis.

2 IDENTIFIACATION OF HIGH POTENTIALS

The introduction already suggests that the correct identification of high potentials is one of the most critical facts for the company’s success. According to a study of Gallup Business Consulting there are on average only 14 percent of high potentials in each company. This group is the A-staff. Further there are 63 percent followers. They work to rule. Most of them could also be A-staff member, but there is missing something. So the employer has to try to improve their work performance. Last but not least there are 23 percent of employees who have already terminated emotionally. Each employer has to detach from this C-staff. They harm the company.

Therefore it is critical to success to identify the A-staff, B-staff and C-staff in order to make right decisions as a managing director.

In order to classify the groups the author uses the ABC approach. Further tools in this chapter are the appraisal interview and management by objectives.

2.1 SYSTEMATIC IDENTIFICATION OF HIGH POTENTIALS

High potentials tend to rise up out of the crowd and achieve stellar results relative to their peers. But to identify them formally, managers must generally communicate, utilize multiple methods of assessment and compare the results with known criteria that are associated with a specific leadership level. The results of these assessments provide guidelines for training and mentoring a high potential to take on greater leadership responsibilities and build strengths. In a further chapter the author shows that there is an easier method to define the high potentials of a company, the ABC approach. Certainly the most managers use the old standard tools, but nowadays there are instruments which are faster, easier, cheaper and more effective.

Employees who are part of high potential development programs often find themselves under continuous scrutiny.^[12] These aspiring leaders face one of the most challenging stages of their professional life as they try to understand their environment, set goals and prove their worth.

Therefore there are conflicting opinions over whether it’s beneficial to inform employees of their high-potential status. Informing employees is a powerful indication that the company values their contributions to the business and believes in them enough to invest in their future. This opinion is furthered by the suggestion of a greater risk that if not told the employee will resign and move on to an organization that will recognize and develop their talent.

The motivation for confidentiality of high potential status also is compelling. Companies risk creating a three class system: A-staff, B-staff and C-staff. The employer or manager creates divisive resentment throughout the company. Either way, high potential employees even tend to know their potential, whether they are officially told or not. Most organizations today are of the opinion that if the high potential is not told by them, someone else eventually will.^[13] This could be the way to lose an A-staff member. Therefore the actual research status says to be open with all employees in every sense.

2.1.1 ABC APPROACH TO EMPLOYEE CLASSIFICATION

For the assessment of customer value in marketing customers are often categorized as A-customer, B-customer and C-customer.^[14] The largest revenue and profit will realize with the A-customers. The B-costumers usually form the majority and are regular loyal customers with an average revenue and profit. C-customers are often customers with small or micro transactions, a lower company binding and staff attrition rate.

a. Tenability of ABC approach

Basically, the ABC approach raises the question if the method is ethically permitted.^[15] Can and is it allowed to classify employees like customers – maybe this is the question on which critics can get a word in edgewise.

But why not – with such a tool companies pay not the patter merchant but the high potential. It is a fact that high potentials are the people, who are responsible for the success of the company. Employees, who are identified as C-staff are counted as losers, because they damage the company.

The ABC approach should not be used as a tool for rating the human himself, but it should be used as a tool for rating the performance of each employee. This is indeed a big difference.

A further critical point is that the team building is just a task of the manager. The manager decides by himself which employee should be in which group. There could be some facts why an employee is certainly a B-staff member or C-staff member. For example, the employee has not yet the right qualification to do the job or the performance is not yet good enough to be an A-staff member. There could be also a lot of soft facts, like being worried about the job, psychotic topics or personal difficulties. Of course, there are many more facts why employees are not yet in the A-staff category. In this case, the crucial fact is that a good and socially competent manager will search for the reason why exactly this employee is a B-staff member or C-staff member. The managers have to seek the dialogue to the employee, help to eliminate problems and try to increase the performance of the employee’s work, provided the employee is willing to do this.

b. Difference between cannot and do not

According to the last sentence in the previous section, it is really important for the manager to find out if the employee is unwilling to rise up to a higher group or if the employee has not the ability to rise up to a higher group. The latter can be changed. Employees who are not able to deliver the expected performance should get some help or easier tasks. Employees who are unwilling to work are often conscientious objectors. In this case the manager should break away from the relevant employee.

At this point it should be mentioned again, that the ABC approach is not a list of naming and shaming. It is only a management tool to identify the A-staff, B-staff and C-staff. Therefore it is not appropriate to post a list with the groups and names on the bulletin board.

c. Criteria of the ABC approach

In an economic study Prof. Dr. Rolf Wunderer found out, that there is following classification:^[16]

14 percent co-entrepreneur: They are entrepreneurial qualified and motivated.

31 percent follower: They are entrepreneurially motivated, but not yet qualified enough.

39 percent routine workers: They do their work to rule, earn their money, but they not do more than required.

16 percent internally termination: They damage the company and do not contribute to value creation.

In this Master-Thesis the author refers to an ABC classification. Criteria to get an excellent classification could be hard facts and soft facts.

- Hard facts: Knowledge, individual skills, experience, qualifications, core competences, etc.
- Soft facts: Personality, character, working morale, social skills, personality traits, etc.

These are some facts which can be used to classify the A-staff, B-staff and C-staff.

Certainly there is the rule: 20 – 70 – 10.^[17] The top 20 percent of employees are rewarded with bonuses encourage the middle 70 percent, fire the poorest 10 percent. An extreme form of performance evaluation, but the principle is correct.

Leaders must ensure that their team pulls together. And they need to reward performance, as consistently as they have to punish the opposite. Because one lazy person could be enough to demoralize the whole team.^[18] One of the latest studies about this statement comes from the psychologist Benjamin Walker, Australian School of Business. He had 158 students in 33 teams to solve various tasks. Result – even it was only one dissenter, who destroyed the discipline of the other members. At first worsened the performance, then the mood. Even if the remaining team members are highly motivated, the loafer had not be compensated. Manager should primarily consider following three characters:^[19]

- Freeloaders: They always submerge in group projects.
- Permanent whiners: They always badmouth the group projects.
- Intriguers: They always denouncing other group members.

Even if it is uncomfortable: Leadership means just to punish repeated misconduct.

In this context Jack Welch makes the statement that a C-staff member is too expensive for any company even he / she works free of charge.

Also, the author backs the prejudice that A-staff always are managers, B-staff always are operators and C-staff always are assistants. You can find an A-staff member in each position in the company. A simple example for understanding: A manager, who is convinced by appearance and eloquence in the first impression, can also be only a B-staff member or C-staff member, when he / she does not react to others’ ideas and the interests of the company are not as important as the own career or any salary increases. On the other hand there could be a call center member, who always enthuses the costumers with affability and service knowhow. This call center member is able to win angry customers back. He / she is a figurehead for any company. Essentially the call center member – even he / she is not a manager – can be more important for a company than an executive.

Certainly there are many companies with just a few A-staff members. These companies try to get rid of the best employees. Often the managing director thinks that A-staff is most expensive, career oriented and claim too much leadership. Often they say B-staff is more important. B-staff do their work, shut up and are more easy-care. But when you think about the top lines, you will arrive at the decision that average companies want average employees and average employees treat their customer just averagely. This is one of the reasons why it is most important to keep the A-staff in one’s company.

In order to find the high potentials of the company the managing director has to answer the following questions:^[20]

- Which employees are valuable for the company?
- Which core competences are required for which position in the company?
- Which requirements are critical to success of the company?
- Who is right for the team and for the managers?
- Which social skills and which expertise are important?

d. A-staff

A-staff members are the top employees of the company. They have above average willingness to perform and a high identification with the company and its products or services. They have an above average commitment, they are action oriented and interested in their advancement. Their motivation is not only monetary, but also satisfaction in the work. It is also these people who are responsible for the working climate and they are always there if you need them.

A-staff members are the most important employees for every company, even in many cases indispensable if the loss of an A-staff member damages the company. Basically every employee is replaceable. But the intellectual property of the high potential is lost. In order to keep them in the company, there must be special plans and targets. The author writes about these facts in chapter four.

High potentials often have a high and pronounced motivation. A distinction is drawn between intrinsic and extrinsic motivation. Intrinsic motivation comes from inside, extrinsic motivation depends on external factors and incentives. This is further explained in chapter three. A-staff employees have a very pronounced intrinsic motivation. They have a special inside drive, because they are enjoying their work.

There is a further classification inside the A-staff group, made by Jim Collins:^[21]

- Business leader: Personal modesty, professional assertiveness to sustainable excellence and strong entrepreneurial
- Effective manager: Engagement, successful implementation of a clear and compelling vision, stimulating higher performance standards and action and results oriented
- Competent manager: Organizing people and resources for the effective and efficient implementation of specific targets, successful planning and organizing, encourage employees to performance
- Team member: individual ability, effective team member, strong team player and enthusiasm for new project targets
- Talented employee: productive contributions, good work ethic and takes more satisfaction in execution than in leadership

In order to identify which A-staff member corresponds which group, you can create an assessment form with all the above points. Following that you assess the criteria with high gear, average or little discernible.

e. B-staff

Members of the B-staff provide robust and reliable performance. This kind of work corresponds with the specification and it is expected from them. Even they have social skills, which do not cause problems. You cannot find particular enthusiasm assets, boisterous standing up for new ideas or own training proposals, as with the A-staff members. B-staff build the core of each company. They are usually 60-70 percent of the employees.

Since the B-staff is the middle class of the company you have to distinguish:^[22]

- B+ advancement potential

Some examples to identify a B+ member could be: An employee shows eligible talents in a project, an employee shows a rising performance curve, targets are exceeded, positive feedback of customers and suppliers, etc.

For good and all stamp B-staff as average staff is not the right way. You always can find B-employees with the potential to become an A-staff member. Often there are just private or situational reasons which prevent them. The reasons could be varied. It is the business of the line manager to find out if it is possible for the employee to advance or relegate.

- B- relegation potential

Managers should give B-employees prospects in order to prove themselves. Regular talks, exact target agreements and inclusion in promotional programs are some tools to advance even the B- employees. Some examples to identify B- employees as willing to rise up are: Active and increasing interest in further education, increasing initiative, submitting proposals, active participation in meetings, etc.

Generally there are also B-staff members who want neither to become an A-staff member nor become a C-staff member. Furthermore they are the group who just work to rule – no more and no less. Often in this group there are also employees who have set their targets in life and priorities in another way.

f. C-staff

This group of employees is also called as Low performer or nine-to-five jobber. Characteristic for this group are low motivation, work is rather annoying rather than a challenge. The only reason to work is to get money in order to support their livelihood. Vacation plans or overtime payments are even more important than work.

The proportion of C-staff should not be more than 10 percent in each company, but often it is a lot more.

Generally the manager has to think about the application range of the C-employee. Often they are used incorrectly. The manager has to maintain the dialogue – maybe it is possible to use the employee otherwise. Following tools can be used to a judgment: talent oriented trainings or conveyor measures, job rotation or job enrichment, inclusion in project groups, new tasks, etc.

illustration not visible in this excerpt

Table 1: Ability profiles

Source: Own representation, in dependence on: IHK Potsdam, ABC analysis of employees

2.1.2 EXAMPLES OF BEHAVIOR, PERSONALITY TRAITS AND SOCIAL SKILLS OF DIFFERENT EMPLOYEE GROUPS

Specific behaviors often illustrate and characterize the differences of performance better than old profiles or assessment models.^[23] Following the author shows some occurring daily behaviors of A-staff, B-staff and C-staff.

a. A-staff

- Welcomes new suggestions and ideas, stands behind it and know how to implement
- Visits disgruntled customers personally – even after work – and try to satisfy the customers and win his confidence with specific measures
- Prepares for meetings, asks interesting questions and are interested in the impact of the work
- Wants to learn more about objectives and impacts of the operation, are interested in developing and improving the talents and potentials and wants to work practically
- Interprets criticism as a learning opportunity and improves the performance in practice
- Knows that excellence is only possible in a committed team and considers the success as a team effort
- Accepts mistakes and failures, tries to find out the reason for failure and tries to make it better next times, does not call the others to account – rather oneself

b. B-staff

- Says often why new suggestions and ideas are not feasible and always finds reasons against them
- Apologizes for failures to the costumer and talks to costumers well
- Considers meetings as a required course, takes note only a minimum to do the work
- Perceives trainings as strenuous, doubts about positive impacts, the motivation is average but generally could increase
- Perceives criticism as rebuke and unwarranted, can be easily discouraged
- Appreciates a good team climate, provides average contributions, fun comes first – commitment to objectives comes last
- Investigates failures in the team, from managers or the company, submits reasons why something can / does not work

c. C-staff

- Seldom pipes up relating to new suggestions and ideas, always wishes that it is closing time
- Are not particularly interested whether a customer is lost – calls it pitch and fate, Are again Mondays at leisure or weekend plans
- Perceives meetings as annoying, fears about more work and more responsibility, never asks questions
- Perceives learning and trainings as unnecessary, considers learning efforts as compulsory exercises and special efforts
- Accepts criticism passively, quickly feels personally offended, feels like victims – guilty are the others always
- Behaves negatively in teams and is at distance, Esteems A-staff and B-staff as careerist, who only live for profession and work
- In retrospect they always have predicted failures, likes to take these as an opportunity for passive behavior and poor working morale

2.2 IMPORTANCE OF APPRAISAL INTERVIEWS

The appraisal interview should inform the employee specifically how the manager assesses the employees’ professionalism, personality and performance – strengths as well as weaknesses. Even there is also the possibility for the employee to evaluate the manager, the company and the own field of activities.^[24]

The appraisal interview is one of the most important tools of leadership and advancement. It is notable for a modern and employee oriented performance management. Even it is an excellent instrument to find out the high potentials as well as keep and motivate the A-staff in the company.

A good interview includes the holistic observation, registration, analysis and appraisal of the performance and potentials of employees in order to achieve the targets.^[25]

It is a function of the appraisal interview to go about delicate and personal problems and to deal with the relationship. After the interview the manager should summarize the conversation and seek feedback from the employee, whether the central issues were specifically understood and interpreted. An appraisal interview can also induce management by objectives – read more about this topic in chapter four – or training measures. At any rate there should be a protocol of each interview and a catalog of measures that the interview gets a mandatory character.

a. Function of a appraisal interview

A holistic hold appraisal interview also includes further aspects to achieve an efficient and targeted cooperation. These aspects could be:^[26]

- Establishment
- Confirmation and recognition
- Criticism and relationship improvement
- Clarification of ambiguities
- Agreement of targeted advancement (read more about management by objectives in chapter 2.3)

b. Processes and stages of an appraisal interview

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Table 2: Processes and stages of an appraisal interview

Source: Own representation, in dependence on: H. Janssen, Find, develop and keep the best employees, 2012, page 47

c. Various forms of assessment

- Self-assessments^[27]

Self-assessments should help the employees to find the ideal work environment, explore their interests, discover themselves, know their opinion and make a good decision.

The self-assessment is a structured but informal way of getting to know what you really want, what options are available and how to make the best decision for your career.

- Appraisal interview

Talks between employee and manager happen on an almost daily basis. The appraisal interview however offers the opportunity to systematically discuss especially the following content:

i. Discuss work and performance – tasks, work conditions and cooperation
ii. Resolve problems and misunderstandings
iii. Mutually voice acknowledgement and criticism in a factual matter
iv. Agree on measures to boost development and further education
v. Mutually agree on long term targets and focus points

- Big five personality traits^[28]

Just like all the other personality tests, the big five was established in order to help in identifying just who you are psychologically in the belief that you cannot change who you are and better still, you can only deliver best if you choose a career that augurs well with your personality traits. As the experts scrutinize the big five personality test, they agree that it is not only universal but that it is also biological.

Norman Warren, a psychologist, formulated this test back in 1963. It has continued to gain momentum and today, many experts and employers agree that it is the best test that brings out the true personality of a person. The five dimensions that this test tends to place an individual’s personality are:

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Table 3: Big five personality traits

Source: Own representation, in dependence on: N. Warren, The big five personality test

- 360 degrees feedback

“Horses have always understood a great deal more than they let on.”^[29]

This kind of assessment is very interesting, because it includes both objective assessments and subjective perceptions of the entire work environment. In this method manager, colleagues, employees and customers give feedback about the behavior and the individual performance of the employees who are to be assessed.

Following main objectives pursued by the 360 degree feedback method:

i. Determining the current performance status of various organizational units, such as divisions, departments, teams, etc.
ii. Derivation and implementing strategic measures to develop the performance of specific units
iii. Identification of high potentials of the company
iv. Derivation and implementation of demand driven and sustainable programs for managers and employees
v. Development and implementation of targeted incentives and reward systems

illustration not visible in this excerpt

Figure 2: 360 degree feedback

Source: S.-J. Clegg, 360 degree feedback, 2009

2.3 MANAGEMENT BY OBJECTIVES

Management by Objectives is a concept expressed by Peter Drucker more than 50 years ago.^[30] This strategy for managing people, which focuses on managing teams based on their ability to complete individual and team targets, has been used in larger organizations since its inception. Small to midsize organizations, however, can also benefit from adopting this strategy, particularly if you also take on the S.M.A.R.T. (specific, measurable, attractive, realistic, and time linked) method of implementation.

There are various objectives which can be pursued:

- Targets of standards and performances

The products, the services and the processes are unchanged for standard and performance targets. A standard target will be defined in order to increase the performance of employees and the result of work. This type of assessment is very important, even interesting, for the company. There should be a high rate of achievement of objectives and consistent results, standards. But to define standard targets is only possible if the performance is measurable. Therefore it is often used for dispositive activities.

- Targets of development

Targets of development which are most important for A-staff have highest priority, because these targets are motivating and performance enhancing. Reason for developing targets is to bring the employees to a level which guarantees that the demanded performance can be provided. The effect should be to keep and improve the economy of the company.

- Targets of methods

If the performance results cannot be clearly defined and the focus is more on labor input, there are often method targets. Sometimes these targets are assigned to the behavioral objectives – because targets of behavior even try to get a better result by changing the operation.

- Targets of behavior

These targets result a strengthening or change in behavior in order to act cooperatively and effectively towards costumers, colleagues or employees and managers – even in order to work more structured and more efficiently. Often behavioral objectives are confined in work objectives. These targets have been classified as development objectives.

- Targets of leadership

Management targets often affect the leadership and are classified in such cases as behavioral objectives. This also includes the initiation and control of projects, strategic realignment of business units and general management of change management processes.

- Targets of cooperation

Working in a team with a good climate is a prerequisite of efficiency employment, pleasure and motivation. If the team is perturbed defined objectives can be the first step to improvement.

For any conversation it is important to know that A-staff, B-staff and C-staff generally have different attitudes compared with management by objectives.

- A-staff

A-staff members are not afraid of performance measurements and liabilities. But that is exactly the opposite. For them targets are a welcome and desired challenge and an opportunity to show their ambitions, talents and abilities. High potentials have an athletic attitude. They want to top the targets.

- B-staff

B-staff members are generally sceptical about management by objectives. They lack courage and ambition to compare themselves with targets. Often their performance is accidental. Targets are not a motivation, but a control of the manager and a chore.

- C-staff

C-staff are always not interested in management by objectives. They refuse to participate because they know that the targets will not be reached.

Management by objectives is an excellent tool to keep high potentials in the company and to motivate them. Most employees – even B-staff members – have a desire to know whether they meet the expectations and whether the manager is satisfied with their performance. Management by objectives replies theses questions in an exact and cooperative way. The most important thing is that the targets are not commanded, but the targets are agreed. This proves that there is a corporate culture which counts on cooperation, respect and consensus.

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Table 4: Process of management by objectives

Source: Own representation, in dependence on: Dr. W. Schröder, Personnel systems, November 02, 2011

Before closing this chapter it must be mentioned that A-staff are always looking only for A-companies. More attractive and efficient a company is, so much more is the chance to get the best employees.^[31]

The best companies maintain values which are very attractive for high potentials. Companies find themselves in the role of candidates. High potentials decide for the company which is most attractive, most credible and most interesting with respect to prospects and challenges.

3 MOTIVATION OF HIGH POTENTIALS

High potentials are important to the company. Their motivation is essential. High potentials are leaders and are worthy of investment. They are highly motivated, they are looking for advancement and they are impatient and they are looking for rapid development.

Due to the fact that the theories of motivation are generally distributed and partially implemented in the companies, the author describes in this chapter how motivation works, the importance of employment branding and reasons which can cause demotivation. The chapter concludes with a case study about motivation of high potentials.

3.1 HOW MOTIVATION WORKS

Everybody knows the writings of Maslow, Herzberg, McClelland, etc. As already indicated in this Master-Thesis there is a distinction between intrinsic and extrinsic motivation.

Intrinsic and extrinsic types of motivation have been widely studied, and the distinction between them has shed important light on both developmental and educational practices. Intrinsic motivation remains an important shape reflecting the natural human propensity to learn and assimilate. However, extrinsic motivation is argued to vary considerably in its relative autonomy and thus can either reflect external control or true self-regulation. The relations of both classes of motives to basic human needs for autonomy, competence and relatedness are discussed.^[32]

Maslow's famous pyramid of needs shows five levels of needs: Physiological, safety / security, social belonging, ego esteem and self actualization. Maslow would probably suggest increasing the social belonging of high potentials by encouraging them to buy into the company with their hearts. Collect them together in one room and have them discuss major issues, or let them meet in outings and in communities. Their egos are so high that they will tend naturally to self Actualization.^[33]

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Figure 3: Pyramid of needs

Source: J. Finkelstein, Maslow’s hierarchy of needs, October 27, 2006

Herzberg's two factor theory involves hygiene factors like salary, security and fringe benefits and motivational factors like challenging work, recognition and responsibility. Herzberg notes that the lack of hygiene factors can be strongly demotivating. He suggests that we ensure the hygiene factors like salary, security and fringe benefits are safe and secure for the high potentials. That is the irrefutable base. They need challenging work, recognition and responsibility. Give them these and they will be motivated.^[34]

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Figure 4: Two factor theory

Source: Penn State, B.-R. Redmond, Herzberg’s two factor theory, November 11, 2012

McClelland's theory is also about needs. According to him needs are: Affiliation, power, need to achieve. High Potentials have high expectations of themselves.^[35]

To motivate the best employees again and again, it seeks something else: Often A-staff manage to inspire and motivate B-staff and C-staff, especially in team work. In order to get also an acceptable performance of B-staff and C-staff now it is important to motivate even the A-staff more and more.^[36]

3.2 EMPLOYER BRAND

The most important brand relationship in your life is unlikely to be your choice of breakfast cereal, mobile phone or car, but the brand you work for, your employer brand. Who you work for represents an extremely important brand choice. This is the brand relationship that takes up most of your time. It’s probably the brand with which you’re most intensely involved, the brand about which you have most to say (good and bad), and if you’re lucky it’s a brand with which you’ll proudly identify for the rest of your life.

From the organization’s perspective, the employer brand sums up the key qualities current and prospective employees identify with you as an employer, whether economic (compensation and benefits), functional (e.g. learning new skills) or psychological (e.g. sense of identity and status). Whether you’ve defined it or not, you already have an employer brand. The key question is whether you’re clear about the distinctive benefits you’d like people to associate with you (commonly described as your Employee Value Proposition), proactive in communicating and delivering against this promise, or happy to live with an unclear and inconsistent employer brand by default.

How people feel about their employer brand is increasingly critical to business success or failure. Leading companies realize its importance in attracting and engaging the people they need to deliver profitable growth. They are also beginning to recognize that creating a positive brand experience for employees requires the same degree of focus, care and coherence that has long characterized effective management of the customer brand experience.^[37]

Thoughtful employer brandings answer many key questions of qualified applications that have high demands on their employers:^[38]

- Good and positive image of the company
- Identification with the own qualifications and personality
- Modern and relevant for the future branch
- Advancement and development opportunities
- Dynamic, growth oriented, innovative
- Possibility of personal introduction and development
- Positive and respectful idea of man

In Chapter four the author describes what exactly constitutes the attractiveness of the employer.

One of the main principles of a good and positive employer branding is that the values are lived. Customers have a very keen nose for the inauthentic, and they will notice just as fast as your employees if there is something phony in the personality you are trying to project if it is not deeply rooted in how the organization feels.

It is one thing to establish the nature of the company’s employer brand – what it is and what it needs to be to achieve the business objectives, but it is quite another issue to ensure that it is managed with the same care and coherence as employees would a customer brand. If the employer fail to put in place the management systems and the senior management support for them then the whole employer brand initiative may wither and result in nothing more than some tinkering with recruitment advertising. The marketing concept of the brand “mix” (incorporating all of the controllable elements that contribute towards people’s experience of a brand) is just as useful to apply internally as externally. From this perspective, recruitment and internal communication represents only two aspects of the employer brand mix that you may need to address. While the exact constituents of the mix will vary from company to company, the following provides an illustration of some of the most powerful employer brand touch points:

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Figure 5: Employer brand experience

Source: R. Mosley, Employer brand, 2009, page 12

It should be added that there is a pleasant effect when a company has a good and positive employer branding. “Since introducing the first global employer brand strategy in 2006, we have not only improved our league table ranking from 45th to 15th in the world’s leading ‘employers of choice’ ranking, but also made a 75 percent reduction in our overall recruitment costs.”^[39]

3.3 OVERLOAD AND BURNOUT

In this chapter the author writes about overload and burnout. Because burnout often is a disease of the hardworking employees, more and more companies are trying to prevent the loss of motivated employees.^[40]

Normally the readers expect in this chapter motivations’ tool. According to the author these motivations’ tools are known by the managers. Therefore the author consciously decides to write in the following chapters about ‘bad habits’ in many companies. Especially the A-staff members, the high potentials, try to improve themselves day by day. Continuously to be better or the best can fast and easily end in overload and burnouts.

Hardly would a director, manager or employee publicly admit, that he / she and his / her forces are at the end. Although the numbers have long been pointed out, that this statements could not be true.

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Figure 6: Sick days on the basis of burnout

Source: Own representation, in dependence on: BKK health insurance, 1.800 percent more sick days on the basis of burnouts, 2013

Companies often try to compensate the financial setbacks primarily through cost-saving measures, restructuring projects and job cuts. As a result, it comes to intensification of work for the remaining managers and employees at the same steady increase in complexity within and outside the company. All these factors combined contribute to an unhealthy culture, the employees are confused and it can make them mentally ill in the long term. This problem has worsened again since the last crisis in 2009.

To show the seriousness of the situation in many companies now there is evidence for the first time after an investigation of Asklepios, Europe's leading private hospital chain. Based on the number of its in-patients Asklepios doctors have estimated the amount of people suffering from burnout symptoms to employees of DAX companies in Germany.^[41]

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Table 5: Ranking: DAX companies compared – burnout

Source: Own representation, in dependence on: Konsensus-analysis Asklepios, Annual report, mm-research, 2012

In sum, the number of burnout patients is alarmingly high. The aim of the author is to raise awareness. Manager should re-think some motivational tools. Sometimes it is more motivating to get more time to perform instead of giving a higher bonus for extra work. In this connection the obligation of the manager to its employees is very important. There should be a healthy mix between renewed motivation and life balance. It is not always easy, but it is an important responsibility of the supervisors.

3.4 EXECUTIVES AS ENERGY MANAGER

Energy performance in office buildings is part art, part science. Too often, firms place particular emphasis on the “science” – replacing equipment, focusing on new technologies, and relying on sophisticated energy management systems. But the reality is that day-to-day decisions and operations by individuals have as much of an impact on energy performance as the equipment, if not more. Finding ways to motivate, acknowledge, and reward these individuals in a way that aligns their contributions with overall energy goals is critical to a successful effort. This is also an important function of the director or manager.

a. Encourage and discourage at the same time

Every Monday, Tuesday, Wednesday, and Thursday the manager has a tendency to point out how employees can work more efficiently, what else they can do for the company, and how they need to be creating more aggressive revenue goals.

Over the years it is important to learn that criticizing people four days a week does not help them work harder, but at the same time it can push them to quit. So every Friday, the manager should make sure to compliment them on how well they are doing their job and how happy he / she is to work with them. Good managers also do the same thing over the weekend through text messages and emails, which makes them ecstatic and ready to work harder on Monday.

The reason to compliment on Friday is because it is usually a deadline day in which everyone is trying to hit all of their weekly goals. So by saying how well of a job they did, it shows that you appreciate them as well as give them a sense of accomplishment.

[...]

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^[2] Gallup Study, Gallup Engagement Index, 2011

^[3] Technical university Cottbus, Our claim

^[4] H. Janssen, Recruit, develop and keep the best employees, 2011, page 8

^[5] T. Tomczak, J. Kernstock, F.-R. Esch, An. Herrmann, Behavioral branding, 2012, page 348

^[6] Technical university Cottbus, Our claim

^[7] PricewaterhouseCoopers, The future of work in 2020, May 2010

^[8] I. Young, Mental models, 2011

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^[12] R. Rodriguez, Latino talent, effective strategies to recruit, retain and develop Hispanic professionals, 2008, page 151

^[13] R.-M. Fulmer, J.-L. Bleak, The leadership advantage, 2008, page 90

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^[17] J. Welch, General Manager of General Electric, 1981-2001

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^[19] B. Walker, Extreme personalities in teams, Annual meeting of the academy of management, 2011

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^[21] J. Collins, Summary: Good to great, November 01, 2011

^[22] J. Collins, Summary: Good to great, November 01, 2011

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^[24] R. Müller, Systematic performance appraisal and management by objectives, 2005, page 126

^[25] IHK Nordwestfalen, Guide for assessment and appraisal interview, page 3

^[26] R. Müller, Systematic performance appraisal and management by objectives, 2005, pages 126-127

^[27] T. Breisig, performance appraisal, 2003, pages 40-45

^[28] N. Warren, The big five personality test

^[29] D. Adams, Dirk Gently’s holistic detective agency, 1994, page 2

^[30] P.-F. Drucker, Management, 1974, page 336

^[31] PricewaterhouseCoopers, Strategies in the war of talents, April, 2011

^[32] R.-M. Ryan, E.-L. Deci, Intrinsic and extrinsic motivation, 1985, page 1

^[33] A.-H. Maslow, Maslow on management, 1998, pages 88-95

^[34] F. Herzberg, B. Mausner, B.-B. Snyderman, Motivation to work, 2009, pages 68-74

^[35] D.-C. McClelland, Human motivation, 1987, page 221

^[36] Centre for European Economic Research, Specific measures for older employees and late career employment, March 14, 2013

^[37] R. Mosley, Employer brand, 2009, page 4

^[38] H. Janssen, Recruit, develop and keep the best employees, 2012, page 86

^[39] P. Voser, Chief Financial Officer of Royal Dutch Shell, 2004-2009

^[40] L.-J. Gitman, C. McDaniel, The future of business, 2008, page 325

^[41] Konsensus-analysis Asklepios, Annual report, mm-research, 2012