What Workers Want—The Big Picture

This chapter is from the book

Enthusiastic Employee, The: How Companies Profit by Giving Workers What They Want, 2nd Edition

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This chapter is from the book

This chapter is from the book 

Enthusiastic Employee, The: How Companies Profit by Giving Workers What They Want, 2nd Edition

Learn More Buy

The Specific Evidence for the Three-Factor Theory

We make rather strong claims—some might say startling and unbelievable—about the pervasiveness of the three sets of goals. We claim that the goals are nearly universal, applying to roughly 85 to 90 percent of a workforce. (That’s just about any workforce.)

Our assertions might appear to go against common observation and common sense. After all, managers and employee-relations experts talk endlessly about differences: the differences between individual workers and between categories of workers (such as males and females, older and younger workers, professionals and nonprofessionals) and between workers in different countries. Are we saying that this is hogwash? Yes, in large measure.

Consider the following questions in relation to the three factors: do you believe that an entire category of workers—demographic (age, sex, race, and so on), occupational, or national—does not consider being treated fairly by their employer—say, in wages—to be of very high priority? Do you believe that a category of workers exists in which the overwhelming majority does not want to take pride in their work and in their organization? Do you believe that there is a category of workers for whom having congenial and cooperative co-workers is unimportant? Of course, there are individuals to whom these rules do not apply—even individuals who willingly allow themselves to be exploited economically by their employers—but never more than a very small minority in any category.

Are there no major demographic, occupational, or national differences in these needs? Not in the fundamentals we have described (the desire for equitable treatment, achievement, and camaraderie). The differences emerge largely in what will satisfy these needs, which vary because of differing objective conditions and expectations. Let’s consider a few examples of this:

• The work itself. In Chapter 9, “Job Challenge,” we discuss the satisfaction people seek from the kind of work they do, and we say that workers want to be proud of their work. Pride in work has numerous sources, among them the employees’ feelings that their intelligence and skills are being used; that, in turn, is partly a function of the latitude they have to exercise judgment in doing their jobs. We know that the latitude given to, say, the average engineer is normally going to be much greater objectively than that given to a blue-collar machine operator. Despite this difference, the machine operator may experience the same degree of satisfaction—which is subjective—with his job autonomy. The machine operator doesn’t expect—indeed, would consider it inappropriate—to have the engineer’s latitude. But he doesn’t want to be treated as an automaton; that is, he wants to exercise the judgment that makes sense for that job and for his skills, and that latitude can be considerable (as the reader will see in Chapter 9). People at work are not stupid and do not have outrageous expectations. Machine operators—no less than engineers—have a need to be treated on the job as intelligent human beings, but the standards by which this is judged are obviously somewhat different.
• Job security. Chapter 3 discusses job security. How an organization treats employees in this respect is a key source of employee morale, but what is considered fair has shifted greatly in the United States over the past few decades. Although employees in quite a few large corporations previously expected lifetime job security, today’s workers rarely expect that. They understand that the business world has changed, but this does not mean that their desire for security has diminished. The change has been in the criteria that employees use to judge the fairness with which the issue is handled by organizations. Organizations differ greatly in this regard—for example, in whether layoffs are treated as a last resort instead of the first action taken—and these differences have a profound impact on the morale and performance of a workforce.
• Vacations. A concrete and visible example of a cultural difference is that between the vacations enjoyed by workers in the countries of Western Europe and those received in the United States. On average, Western European countries have much longer vacations, with even new employees receiving at least a full month. (Vacation time is five weeks in France, Sweden, Austria, Denmark, and Spain.) This certainly is a major difference, with profound cultural meaning and probably significant economic effect, but what are its implications for our argument regarding the commonality of the major needs? Are European workers lazy? Are they less interested in doing a good job? Do they find their jobs less interesting? There is absolutely no evidence for any such assertion. By virtue of broad historical and social trends, different countries evolved different patterns of employee relations, including different vacation time expectations. These differences result in different subjective standards of what is “fair,” but in no way undercut our proposition regarding the fundamental goals of workers.

Similar comments could be made about the satisfaction of many other goals and subgoals: employee expectations in the United States regarding the benefits an organization provides, such as medical insurance, have changed greatly, and what might have been considered unfair a decade or so ago, such as a large corporation not paying full medical-insurance premiums, can be entirely satisfactory today. Operating in the opposite direction is equipment, where the tools people use on their jobs improve continually, so what was satisfactory before is rarely satisfactory today.

Our argument, then, is not that there are no demographic, occupational, or cultural differences or that the differences are unimportant. It comes down to this: when we say that workers want to feel pride in their work, we mean almost all workers, whoever they are, whatever they do, and whenever or wherever they do it. The fundamentals are constant, but knowing how to satisfy those fundamental needs often requires knowledge of the expectations of particular groups of workers. As an extreme example, suppose an American multinational corporation decided to halve the vacation time of its European workers based solely on the assumption that their fundamental needs to do a good job and to be treated fairly are the same as American workers. That organization is in for big trouble.

But don’t make the opposite error—namely, to assume that the obvious cultural, occupational, and demographic differences in expectations and standards signify major differences in basic goals. For example, treat a blue-collar worker as if all that interests him is his wages—that exercise of his judgment on the job doesn’t matter—and you wind up with an indifferent or hostile employee. At the other extreme, treat engineers and scientists as if wages don’t matter—that all they want is an opportunity to be creative—and you wind up with hostile engineers and scientists (if they stay with the organization at all).

Table 1-5 summarizes a representative portion of the strong quantitative evidence on which we base these claims about the pervasiveness of employee goals. As we will explain, the table shows that employee morale relates strongly to the degree to which each of the three needs is satisfied, and the relationships are extraordinarily similar across all demographic, occupational, and national groups. There are no differences in the strengths of the goals to speak of; they are, indeed, nearly universal.

Table 1-5. Evidence for the Near-Universality of the Three Factors

How do we know, in a systematic, quantitative way, whether a goal is important and how universal it is? One way is to correlate employees’satisfaction with it with their overall satisfaction with the organization. Table 1-5 shows these results. Overall satisfaction is a product of the degree to which employees feel their specific goals are being met, so the higher the correlation between satisfaction with a specific goal and overall satisfaction, the more important we can assume the goal to be. If an employee doesn’t care much about something—say, the color of the walls where she works—liking or not liking it would have no impact on how she feels about the organization as a whole. Compare that to the importance of how she feels about her pay or her boss. This reasoning is identical to how the performance approval rating of the president of the United States—determined from political-opinion polls—is a function of how Americans feel about specific aspects of the president’s performance, such as his handling of the economy, of national security, and his perceived interest in the well-being of the average American. The stronger the correlation between a specific aspect and the overall approval rating of the president’s performance, the more important that aspect is.

The relationship between variables (such as between overall satisfaction and satisfaction with pay or the color of the walls) can be assessed in various ways. In our analysis, it is measured by a statistic called the correlation coefficient, whose symbol is“r.” The higher r is, the stronger is the relationship. r can range from .00, which means no relationship, to 1.00, which means a perfect relationship. (r can also be negative, in which case, the relationship is inverse: the higher on one variable, the lower on the other.)

Our basic finding is that there are highly significant positive correlations between the questions on our surveys that tap the three needs and overall satisfaction. These correlations hold up in all demographic, occupational, and national groups and at approximately the same level. Illustrations of these correlations are shown in Table 1-5, where the following questions are used to tap the three needs:

• For equity. “How would you rate your organization on taking a genuine interest in the well-being of its employees?”
• For achievement. “Do you agree or disagree: my job makes good use of my skills and abilities.”
• For camaraderie. “How would you rate the cooperation and teamwork within your work unit?”

The question measuring overall morale is “Considering everything, how would you rate your overall satisfaction in [organization] at this time?”

The correlations shown in Table 1-5 were calculated using data from the many thousands of employees we survey in organizations where the four questions were asked in identical ways.

This table contains the correlations for three demographic breaks: race/ethnicity, gender, and tenure, and for occupations and regions of the world. Those familiar with correlational data, will, we trust, be amazed at just how similar the patterns are. In every instance, the item measuring the equity goal correlates in the .50s or .60s with morale, that measuring achievement in or near the .40s, and that measuring teamwork in the .30s and .40s. The possible reasons for the differences in sizes of the correlations—why equity should be the highest and teamwork the lowest—are discussed later in this chapter. Suffice it to say for now that not only are all the correlations highly significant statistically, which verifies the importance of the goals, but, to all intents and purposes, they are the same for all categories of employees.

Which aspects of work do we find not correlated with overall employee morale? They tend to be what might be termed the “frills” of work. Although senior management often spends much time on them, they don’t really touch on workers’ basic goals and what goes on in important ways in their daily workplace activities. We refer to matters such as the aesthetics of the physical work environment, recreational activities (such as holiday parties), various formal “programs” (such as suggestions programs), and formal communication mechanisms (such as the company newsletter). It’s not that employees don’t care about these at all, but that they matter much less than other, more fundamental concerns. It matters much less to them, for example, that there be a well-designed company newsletter or a suggestions program than that their immediate supervisors communicate and listen to them. We are in no way suggesting that the frills be dropped—almost everyone likes a holiday party—but that they be seen as supplements to, not substitutes for, the more basic policies and practices that we discuss throughout this book.

Similar findings are obtained in analyses of answers to the open-ended questions, questions such as what workers “like most” and “like least” about their organizations. The things employees spontaneously write in about almost invariably involve the three factors. These findings are given as examples throughout this book. The frills are almost never mentioned in answer to these questions.

How the Three Factors Work in Combination

Our analyses show the three factors interacting with each other in a somewhat complex way. The Three Factor Theory asserts that employees seek to satisfy three needs—equity, achievement, and camaraderie—in any employment situation. It further asserts that when all three needs are met, it results in enthusiasm directed toward accomplishing organizational goals. As we have said and will more fully explain in Chapter 2, enthusiasm is not just about being happier or more content—it is employees feeling that they work for a great company, one to which they willingly devote time and energy beyond what they are being paid for or what is expected and monitored. A great company for employees is one that largely meets all of their needs for equity, achievement, and camaraderie. Until that happens, it is no more than a “pretty good” company, one with which they are “moderately satisfied.”

Statistical support for this idea can be seen in the way individual satisfaction of the three needs interact to produce overall satisfaction. They don’t just add to one another in their impact, but multiply each other’s impact. Figure 1-1 shows how employees respond to the question, “Considering everything, how would you rate your overall satisfaction in [organization] at this time?” The percentages shown are just those saying “very satisfied,” the highest possible response to the question. The percentages are shown for four categories of employees: those whose satisfaction with all three needs is relatively low (labeled “None”), those who have just one need being satisfied, those who have two, and those for whom all three needs are being satisfied (labeled “All Three”). The questions used to assess satisfaction with the three needs are the same as in the correlational analysis shown in Table 1-5, namely, “How would you rate your organization on being concerned about the well-being of its employees?,” “My job makes good use of my skills and abilities,” and “How would you rate cooperation and teamwork within your immediate work unit?”

Figure 1-1. The exponential impact of the Three Factors.

It can be seen that as more satisfied needs are added, the percentage of very satisfied employees increases exponentially. When all three needs are being satisfied, the percentage is 45! What would you think of as a great company in which to work? It’s probably not just having very good pay and benefits, or challenging and enjoyable work, or having terrific co-workers. It involves all of these needs, and when all of these needs are satisfied, something unique happens to many employees and their relationship with the organization... It is what we call enthusiasm. This finding is essential to keep in mind in reviewing our data and arguments. While, for example, 74 percent of employees say they are treated respectfully by the company—so aren’t they therefore enthusiastic?—that, by itself, is insufficient to generate enthusiasm. Say, they are on a boring job and they want challenging work to do. Or, perhaps they are having difficulties with their co-workers, and that is aggravating to them. Enthusiasm requires satisfaction with all key areas of working life.

A second important complexity is the special effect of equity. More in-depth analysis suggests that although all the needs are important, equity has a certain basic importance. That is, if people are dissatisfied with the fairness with which they are treated, satisfaction of either of the other two needs has a relatively minor effect on morale. On the other hand, feeling fairly treated does have a fairly significant impact even when one or both of the other needs are not being satisfied. That is the reason the correlations of overall satisfaction with the equity need are consistently higher than the correlations with the other two factors.¹⁷

The moral of the story is that it can be difficult to get employees excited about a company that, say, gives them challenging work to do (part of the achievement need), when they have a basic sense of inequity as to how they are treated. But equity alone is not enough to create enthusiasm: the impact of fair treatment is greatly magnified when all three needs are being satisfied.

These analyses and conclusions hold up in an amazingly consistent way across demographic groups, occupations, and world regions. The finding about the exceptional importance of equity—especially job security—is fundamental to our understanding of the impact of the Great Recession, to be discussed in Chapter 5, “The Impact of the Great Recession: Flight to Preservation.”

Racial/Ethnic and Gender Differences

In the first edition of this book, we said very little about differences between racial and ethnic groups and between women and men. Our readers communicated with us repeatedly about this, and we include this new section here to help remedy that oversight.

We showed (in Table 1-5) that the importance of the three factors varies hardly at all for subgroups: the correlations of the factors with overall satisfaction are virtually the same for the subgroups, including those defined by race and ethnicity and by gender. But, are there differences in the satisfaction levels of these subgroups?

First, here is some “objective” data. We know that a great deal of progress has been made integrating minorities and women into the workforce. For example, women make up 47 percent of the workforce today according to the Bureau of Labor Statistics, compared with 30 percent in 1950. But, using just one criterion of advancement, only 4.2 percent of the CEOs in Fortune 500 companies in 2012 were women. Minorities now constitute a growing 33 percent of the workforce, but less than 1 percent of them hold CEO positions in the Fortune 500 companies. Although many minority entrepreneurs are leading some of the nation’s most successful small businesses,¹⁸ it is clear that, with regard to both women and minorities, quite a bit remains to be done.

We turn now to the attitude data: the overall satisfaction scores on our surveys for minorities and women can be found in Table 1-6. Because there are disproportionately large numbers of men and whites in management, we have divided the data so that management and non-management can be seen separately.

Table 1-6. Overall Satisfaction with Company: 2004–2012 (% Favorable)

Table 1-6 reveals, first, that the differences between racial/ethnic and gender groups are quite small: all of the percentages are in the 70s and the 80s. Among the differences we do find, albeit not very large, are these:

• First, regarding management and non-management: not surprisingly, for every line of data except one, management is more satisfied than non-management.
• The differences between men and women are inconsistent: men are sometimes more positive, sometimes less so, and the two are sometimes equal.
• Asian managers—both males and females—show almost no difference from their Asian non-management counterparts. The reason, the data show, is that Asian managers’ scores are somewhat depressed, the lowest of the management groups.
• The most favorable groups of all are Hispanic women—both managers (especially) and non-managers.
• The least favorable group of all is white males in non-management.
• Blacks show no particular pattern of differences in their levels of overall satisfaction.

Now, let’s see how the different groups compare on a question dealing directly with diversity. The question is, “To what extent do you agree or disagree: the company has created an environment where people of diverse backgrounds can succeed,” and the responses can be found in Table 1-7.

Table 1-7. The Company Has Created an Environment Where People of Diverse Backgrounds Can Succeed: 2004–2012 (% Favorable)

Here, as can be seen, some larger disparities emerge:

• Contrary to the overall satisfaction data, the differences between management and non-management are not consistent on this question on diversity: for some racial/ethnic and gender groups, managers are more favorable, for some the same, and for some less favorable than their non-management counterparts.
• Also contrary to the overall satisfaction data, women are, in just about every comparison, less favorable than men. By and large, the differences in attitudes between men and women—with women less favorable—are larger in management than in non-management.
• Blacks—whether in management or not and whether male or female—stand out as the least favorable group on this question. Although it would be inaccurate to call them negative, they do see the least progress toward diversity.
• The most positive groups are whites—that is, they report seeing the most progress. White men in management are especially favorable.
• Asians and Hispanics consistently score somewhere between blacks and whites on this question.

Considering both the overall satisfaction and the diversity attitudes, the data are both surprising and unsurprising. It may come as a shock that the overall satisfaction levels of the various groups show such small differences, considering the issues that women and minorities have faced in our society, including the workplace. But those issues are reflected in answer to the question directly about diversity where the results are, perhaps, more predictable: women are less favorable than men, and blacks are less favorable than whites and the other minorities.

How can workers be—as blacks and women are—less positive toward the progress their companies have made on diversity but not, on average, much different than others in their overall satisfaction with their companies? And, how can the reverse be true for white, non-management males who are more favorable regarding the amount the company has done for diversity but the least positive of all the groups on overall satisfaction?

As we have said, overall satisfaction is the resultant of a number of different, specific forces and these can balance each other. We therefore analyzed the attitudes of these groups on a host of other, and more specific, survey questions. (The full analysis can be found on our website at www.sirota.com/enthusiastic-employee.) The highlights of this analysis are as follows:

• In line with the diversity findings, blacks do tend to be less favorable than the others with regard to various equity or fairness issues, such as pay, benefits, and favoritism. But they turn out to be more favorable regarding effectiveness matters, whether on the immediate job (such as having the resources—tools, information, and so on—needed to do the job), or broad company performance (such as the company being effectively managed overall, effectively responding to change in its business environment, and satisfying customers). That is, blacks are more impressed than others with the company’s business management but less with their own treatment on matters of equity—resulting in an about-average level of overall satisfaction.
• Hispanics are, by far, the most favorable racial or ethnic group. Among all the many specific questions we examined, they are consistently less favorable on just one: “My manager is sensitive to my work/life balance issues.”
• A distinctive characteristic of the attitudes of Asian employees is the lack of difference between those in management and those not. Asian management employees are the least favorable of the racial and ethnic management groups on the great majority of specific questions we examined. In contrast, Asian employees holding non-management positions are, on average, among the most favorable of the non-management groups (three exceptions: benefits, fairness of pay, and training, where they are among the least favorable). Because the attitudes of management employees are, in general, more positive than those in non-management, the result is that Asian managers and non-managers are very similar to each other in their attitudes.
• The pattern for whites is also quite distinctive: white managers—whether male or female—are quite similar to the other ethnic and racial management groups, but white non-management males are consistently the least, or among the least, favorable cohort overall. It is not easy to discern the reason for their relative discontent; among the larger differences in a negative direction are those relating to the effectiveness of higher management, such as the overall effectiveness with which the company is managed, having a clear sense of direction, and responding to change in its business environment. That is in direct contrast to blacks, who tended to be more favorable in those respects. Also, in direct contrast to blacks is that white non-management males are among the most favorable on the progress the company has made toward diversity. Based on other research we have done, that attitude may be a two-edged sword, with some portion of these employees feeling that, in effect, too much progress has been made.
• Taken as a whole, women tend to be less favorable than men on a majority of the specific questions. The questions on which they are more favorable are those dealing with benefits, the training they have received, and a number of aspects of company effectiveness. Among our more interesting findings is that women are especially—and quite consistently—less favorable than men on “openness” in their companies, such as the company confronting and solving problems; employees’ ability to express their opinions without fear of retribution; people accepting a variety of ideas and perspectives; top management encouraging employees to report information up the line even if it’s bad news; and management acting on employee ideas and opinions. Perhaps these results about openness reflect women having higher standards than men about what open communications means. Or, they may feel that, as women, they are less a part of the communications network in their companies. Women are also less positive on being valued as an employee and knowing a career path they can follow.

  Women in management show an interesting pattern: the differences between them and men in management are greater, and more unfavorable, than the differences between non-management women and non-management men. In addition to the attitudes mentioned earlier (where, on the whole, their differences with men are greater than those of women not in management), they show rather large differences with regard to the reasonableness of their workloads and their ability to maintain a reasonable balance between their personal and work lives; their authority; the degree to which high levels of performance where they work lead to greater advancement opportunity; the consistency with which policies are administered; and, favoritism. To be clear, we are not saying that women in management are less satisfied than women not in management. To the contrary, people in management—including women—are generally more satisfied than those not in management. It is that women, when promoted to management, do not appear to gain as much morale benefit from that advancement as do men. In fact, in certain respects, it might be a disadvantage, as in their ability to achieve a balance between their personal and work lives. On the “balance” question, not only are women less positive than men in management, they are also less positive than their non-management female counterparts. We surmise that moving into positions of greater responsibility, has not, for many women, resulted in an equivalent reduction of responsibilities outside of work.

To summarize, we can say that, in general, the progress of minorities and women in our surveyed companies has undoubtedly been quite substantial—otherwise, the attitudes of these two populations would have been quite negative—but the survey data, as well as what we know from other sources, also indicate that there is still a way to go. Women and minorities (especially blacks), while not necessarily negative, are less sanguine about progress toward diversity than are whites. The review we did of an array of more specific attitudes showed the following: less sense of fair treatment among blacks on many of the equity questions; relatively depressed attitudes of Asian managers; some possible backlash among whites, especially among male non-managers; and a number of concerns of women, such as work/personal life balance (especially among women in management jobs).