Dear Dave: I work at a Rochester restaurant. Our manager believes all employees are dispensable and can be used up and thrown away. He tells us things like, “If you don’t like it, leave” or even, “You should be lucky you have a job!” I know it is difficult to find a good job, but I don’t think our manager should threaten us and treat us like we are instantly replaceable. – P

Dear P: It is crucial that your employer treats you and your fellow employees like you are a team for the long term – especially because you are the face of the restaurant. Rather than having a replacement mentality, your boss needs a more collaborative, respectful, and strategic approach to developing and retaining his most precious resource, his employees.

Sadly, there can be a very damaging “employee mistreatment ripple effect.” Disgruntled and stressed-out employees often wear their emotions on their sleeve, and it becomes obvious to customers, too. In that vein, it makes good economic sense for managers to treat employees with compassion, kindness and encouragement.

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Research has shown a high correlation between employee job satisfaction and well-being (happiness), and employee idea and feedback contribution. Essentially, employees want to work for an organization where their input and ideas are sought – and possibly may be implemented. Conversely, employees will stop submitting cost-saving and quality improvement ideas if they think they will only be insulted or ignored if they do. And guess who loses?

Making employees nervous about being fired for small reasons, or no reason, is poor management. That pressure will cause them to make more mistakes. Worse, if employees are tense and jumpy, they will isolate themselves and the whole concept of teamwork has been destroyed. Simply, employees need a sense of security and they need to be able to communicate with their team and their managers. Why is this so hard to understand?

The true costs

Loyalty cannot be taken for granted. According to one survey, over half of the employees queried said they expect to leave their organizations voluntarily within 2 – 3 years. What is lost with every person who leaves are valuable elements, including essential customer and business knowledge.

When [good] employees leave, both the open and hidden costs are substantial, including a reduction in operational efficiency, a loss of intimate knowledge of customer care, the cost of recruitment and selection, the position coverage and the manager’s time, the cost of induction and training – and add to this list the decreased morale of those who remain.

Employees wonder

Whether managers know it or not, employees constantly ask themselves these questions:

  • Am I rewarded fairly? In pay and in gratitude (thank-yous)?

  • Is there an investment in my training and development?

  • Does my manager listen to my ideas?

  • Does the company give me authority to solve problems – especially customer issues?

  • Does my manager respect me as an individual?

This list of questions tells us that motivating employees goes beyond incentives such as pay and working conditions. Research reveals that employees are more likely to quit their jobs if they do not have a sense of purpose in their work. The greatest sense of purpose comes when both management and employees create and nurture a shared purpose – and that mindset is maintained on a daily basis.

A whole new thinking

Achieving success through people means fundamentally altering the way managers think about employee relationships and the ways they communicate with them. In this period of intense economic challenges, companies are asking more from their employees. That’s OK, as long as the employees feel they are treated fairly and with respect.

Satisfied customers start with satisfied employees. “Management by threat” can provide short-term compliance at the expense of long-term commitment. Simply, managing by intimidation will not work long term, even though some managers insist that they must create a “fear culture” and believe the only way to motivate their employees is by keeping them on pins and needles.

No matter what economic conditions exist, an organization’s employees – how they think and work – remain a crucial differentiating and competitive factor. While the culture and management practices that drive an effective workforce might not be readily visible to outsiders – such as customers – these factors can be as important as a company’s products, reputation, or marketing practices.

By implementing management practices that place real value on employees, companies can achieve a strategic advantage. Those companies that foster an atmosphere of commitment and mutual trust will receive the most dedication and loyalty from their staff. On the other hand, organizations that regard their employees as dispensable are unlikely to garner their commitment, loyalty, or willingness to expend extra effort for the organization’s benefit.

In summary, employees want and need managers who provide strong, positive leadership that inspires them and does not intimidate them.

Contact Dave Conrad with questions or comments at conradd@augsburg.edu. Conrad is an associate professor of business at Augsburg University in Rochester.