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Employees Say Management Practices Need to Change If Their Companies Are to Meet Future Challenges

While Americans who work at larger organizations are optimistic about their companies' prospects and express a commitment to helping management identify and solve problems, most workers say management practices need to change if their companies are to meet future challenges, according to a survey sponsored by HCL Technologies.

Employees surveyed identified a disconnect: The majority say it's rank-and-file employees, as opposed to top management, who bear the greatest responsibility for ensuring the quality of products and services to customers, but they say company leadership values employees the least, compared with customers and top management.

Titled “Employees First,” the national study involved 704 American employees of private sector companies with 300 or more employees and was conducted during June 2010.

"American workers seem to have an intuitive sense that current command-and-control management structures may be outdated and that companies would do better if they were to shift their focus to empowering employees to solve customer problems—in part, by making management accountable to the employees, who are the real creators of value, just as those employees are responsible to management," said HCL Technologies CEO Vineet Nayar, author of the new book Employees First, Customers Second: Turning Conventional Management Upside Down (Harvard Business Press, 2010).

American Workers are Optimistic—and Eager

According to the survey:

  • 83% of American workers still believe their companies will emerge from the downturn as industry leaders.
  • 78% say they're confident their top management can create an environment that values employee ideas and suggestions.
  • 72% are confident that management can create an environment of transparency where all employees are aware of the true challenges facing the business.
  • 59% of workers indicate they often see problems at their companies that management is not aware of, and 87% say they will contribute their thinking when they see ways to improve the business.

But Leadership Apparently Under-Leverages--Even Under-Appreciates--Employee Enthusiasm and Engagement

  • 60% of employees say customers are the most valued group at the company, followed by top management (20%) and then, at the bottom, employees (15%). (Nearly half—48%—say, explicitly, that employees are the least valued group at the company.)
  • A fifth of workers say that when they present their supervisors with a business problem, the supervisors say they'll deal with the problem and don't actually address it.

"This dismissiveness when it comes to employees is counter-productive, I believe. Most employees—52% overall, and the percentage is 60% in the vast $30,000 to $50,000 annual salary bracket—believe the rank-and-file are most responsible for quality service to customers, and they are probably right: Employees, particularly those who are involved in the interface with customers, know where the real problems lie and how to fix them," said Nayar.

Signs of Employee Frustration with Current Leadership Attitudes and Actions

The survey results show that American workers' confidence in company leadership—at least the status quo—and engagement with work may be eroding, especially among Gen Y and Gen X employees, who represent the immediate future.

  • A little more than half of the workers—55%—believe management practices will need to change in order for companies to effectively confront future challenges. In fact, nearly two-thirds (64%) of workers in their 30s and nearly as many in their 40s hold that view.
  • While 47% of workers overall say they're committed to staying with their current companies, more than a quarter (27%) of workers age 29 or younger say they're not committed to the company.
  • 39% of employees in their 30s describe the mood among colleagues as one of pessimism and uncertainty.

"Leaders must recognize, particularly in the era of social media and the democratization it brings to all dimensions of society, that the key to success and growth is getting employees to tell you what's really going on—to identify the elephants in the room that no one was willing to acknowledge—and that the key to doing that is making employees believe that you, as a manager, are willing to listen and take action. The findings of our survey suggest that most companies are just not close enough to that level of democracy. I see it as a warning," said HCLT’s chief executive officer.

The survey was conducted to test among American workers some of the ideas in Nayar's new book Employees First, Customers Second, which tells the story of how he turned the management pyramid upside down at HCL Technologies, giving more power to employees closest to the customer and making management accountable to them. Doing this radically increased HCL Technologies' ability to compete and grow. During a five-year period beginning in 2005, HCL, which has a workforce of 60,000, increased revenue by 3.6 times and operating profit by 3.4 times. Further, HCL Technologies was one of the few companies in the world to grow during the 2008–2009 recession: Revenue grew by 23.5% in 2009, and the company added headcount in both the U.S. and Europe during the downturn.