Modern management science understands that organizations are more effective in the productive process if they engage all employees in the process. This also means understanding the objectives of workers at work, what motivates and what demotivates them as individuals in a function and as persons.
The basic view of most employees is they hope the company will do well, they keep a job and hopefully get regular pay rises as the company does well. Different workers have different skills, capabilities and needs, and their role in the company generally fits them. An unskilled worker is at one end of the scale, the CEO at the other, with various wages and packages in between. The less skilled in a job the less a worker has scope for imagination or creativity in their work, which means the less personality is involved.
However, the work a worker does is not simply the task they undertake, for instance being a machine operator or managing accounts. They work with colleagues, have lunch breaks, work in a particular environment, have employee benefits, and so on. The objective of management and organization is to ensure they do their tasks well, and they will do so if they are content in their place of work and home. The management can do much about the former, little about the latter. People bring their problems to work, as much as they can have problems at work.
The more troubled a worker is, or less engaged with their work, then the greater the likelihood of accidents, poor productivity and even theft or damage of company property. A good supervisor or manager can pick up on such problems and at least manage their performance at work as a result. If the employee has pride in their work and organization then they will be at base more productive, and at best they can play a role in improving performance by thinking of new ways to do things, and of course get promoted.
In the Victorian age of Karl Marx and the mid-20th century of Frank H. Knight, the labor process was more primitive and managers did not have the technology or approach to treat workers as well as they are today. What they did know was there was a business to be run and a process of production to meet a market demand, a market ultimately rooted in scarcity. The same challenge faces the modern company, and even the best organizations have to lay people off or fire workers for poor performance.
The workplace was not then and is not now about being a “nice” place. It is about being a productive and successful place. Recognizing the wellbeing of employees is part of the success and the productive process. In good times, this is easier than in difficult times. Managing employees in the bad times, or when there is conflict, is more difficult. This is still to a large extent done badly in organizations.
The modern technique of managing people has become the province of “HR,” the Human Resources department. The HR function is often poorly run, in part because some organizations often pay lip service to employee engagement, and in part because they do not have the backing of top management to match the HR promise with the reality of the organization. HR is a difficult task. The HR function has to look at the individual as a functionary and as a person. This means there is great scope for human error in dealing with individuals. It means managing the emotions of employees, and we live in a society where emotional management has become more central than in past times.
As an aside here, I am talking about companies in mature markets. Companies in developing markets often break the rules locally, and the problem is then compounded by the top management not managing this situation properly. I will deal with this in a future article, but back to the mature markets.
Managing the emotions and conflicts between employees and the organizational objectives is best achieved by dialogue, as it is in society generally. Dialogue is a very human activity, and we do not conduct our dialogues in a wholly rational way, they are usually touched by emotion. In good times we manage emotionally by trying to get people excited about what we are saying, while in difficult times we are trying to calm people down or deal with fear and anxiety.
Because we are not purely rational beings, emotions often block progress or change our priorities. Think for instance about when we are working on something and someone does something that angers us, and suddenly our priority is telling the other person what they’ve done wrong than meeting our objective. Likewise when we surprise people or ignore their emotional state, they will not listen to what we want to tell them or respond to our direction for them to do something.
While we know dialogue is essential in many situations, not just at work, we don’t always know how to go about it. This becomes a communication problem, and miscommunication and non-communication are frequent causes of mistakes and crisis. Effective dialogue is best done by understanding the rational and emotional elements of a situation, and by understanding that people interpret events differently and the situation we face may not be what we think it is. If you want to go deeper into this, I have created a tool called “The Dialogue Box,” and there is more information here.
This management of people and the need for dialogue are the elements of cooperation, and capitalism is a cooperative process that allows people with different experience, views and beliefs to interact and work together toward common goals. Marx and socialism believed this was to be achieved by confrontation between “workers” and “capitalists.” Knight believed this is done by dialogue, and modern capitalism is more Knightian than Marxian.
High-handed government or corporate governance, increasing regulations and other similar approaches and tools used in markets and society today are based on forcing society forward based on specific ideological principles. It is also a negative form of managing our organizations and society. I suggest we should have a more positive view that we can achieve more in capitalism and democracy by dialogue with cooperation based on understanding we are persons in conflict pursuing scarcity, and we have to cooperate responsibly through greater dialogue to manage our organizations and thus create, rather than try to dictate, a better society.