It's scarcely big news in a full-employment economy, that companies are desperately looking for ways to make themselves more alluring to employees. Nearly every month, I find and write about different initiatives that employers are undertaking to deal with this critical need.
But here's a finding that caught me by surprise: The single most important variable in employee productivity and loyalty turns out to be not pay or perks or benefits or workplace environment. Rather, according to the Gallup Organization, it's the quality of the relationship between employees and their direct supervisors. More specifically, what people want most from their supervisors is the same thing that kids want most from their parents: someone who sets clear and consistent expectations, cares for them, values their unique qualities, and encourages and supports their growth and development. Put another way, the greatest sources of satisfaction in the workplace are internal and emotional.
This may sound soft and squishy, but the Gallup Organization's Marcus Buckingham, 34, and Curt Coffman, 41, have managed to crunch 25 years' worth of interviews with more than 1 million workers into a metric that clearly defines the bottom-line value of eliciting certain feelings from employees in the workplace. Simpler still, they have found that they can make strong predictions about how these employees will perform in their workplaces by asking them the following 12 questions, which they call the "Q12."
- Do I know what is expected of me at work?
- Do I have the materials and equipment I need to do my work right?
- At work, do I have the opportunity to do what I do best every day?
- In the last seven days, have I received recognition or praise for doing good work?
- Does my supervisor, or someone at work, seem to care about me as a person?
- Is there someone at work who encourages my development?
- At work, do my opinions seem to count?
- Does the mission/purpose of my company make me feel my job is important?
- Are my co-workers committed to doing quality work?
- Do I have a best friend at work?
- In the last six months, has someone at work talked to me about my progress?
- This last year, have I had opportunities at work to learn and grow?
"We had grown tired of not being able to convince executives that treating employees well makes them more productive," explains Buckingham. "We set out to prove that if your Q12 scores go up, you'll lose fewer people, face fewer worker-compensation cases, suffer less shrinkage, and earn higher profits." Sure enough, they got precisely those results.
Employees who answered "Strongly Agree" to the 12 questions were 50% more likely to work in business units with lower employee turnover, 38% more likely to work in more-productive business units, and 56% more likely to work in business units with high customer loyalty.
Buckingham and Coffman gathered this research in a book with the sort of gimmicky title that initially inspires skepticism: First, Break All the Rules: What the World's Greatest Managers Do Differently (Simon & Schuster, 1999). But in this case, you can't judge the book by its cover. The authors make a convincing case that the conventional wisdom about what employees want most from their jobs is wrong. "People leave managers, not companies," the authors write.
My initial response to the issues raised by the Q12 was to weigh them against my experiences in my own career as a journalist. As a young reporter for the New York Times, for example, I had a beloved mentor who made me feel valued, cared for, and supported. When he eventually became preoccupied by other concerns and began paying significantly less attention to me, my passion for my work waned.
Before long, I found myself drawn to a job offer from a previous boss who had begun ardently wooing me again. The job was less prestigious than working for the Times, and it didn't involve significantly more money. But it gave me the sense that I would be more valued, and it offered more opportunity to grow. I took the job and stayed in it happily for many years, in large part because of my relationship with my boss.
But how do you prove that these sorts of feelings translate across a company into higher profits and greater retention? One of Gallup's most comprehensive research projects has involved the consumer-electronics specialty retailer Best Buy. Beginning in 1997, employees at 300 Best Buy stores across the country were asked to answer the 12 Gallup questions, using a scale of one to five (with one signifying "Strongly Disagree," and five meaning "Strongly Agree").
While the stores are designed to be nearly identical in design and operation, their employees had radically different experiences. The number of employees giving a five to one of the dozen questions averaged as much as 60 percentage points higher at the most productive stores (those with the best retention rates, highest profits, and so on) than at the least productive stores. Indeed, employees at the most productive stores typically gave higher marks to all 12 questions than employees at the least productive stores. This was true even in the case of the question about whether employees had the materials and the equipment that they needed. In the most productive Best Buy location, 45% of employees strongly agreed that they had what they needed, compared with 11% in the least productive location — even though both stores had exactly the same materials and equipment. In short, the subjective perception of employees outweighed the objective reality.
In measurable terms, stores whose employees ranked them in the top 25% on the 12 questions exceeded profit goals by an average of 14%, while stores ranked in the bottom 25% fell short of profit goals by a startling 30%. Stores in the top 25% retained a total of 1,000 more employees than did stores in the bottom 25%. By Gallup's estimate, this translated into an additional $27 million in direct hiring and training costs for stores in the bottom 25%.
"You take the same company, the same system, and basically the same pay scale, and yet you get tremendously different attitudes among employees from different stores," says Brad Anderson, president and COO of Best Buy. "The only logical explanation is leadership. We knew that the human side mattered, but these questions helped us understand just how it mattered. Someone who is gifted as a manager knows how to unlock the skill sets of people who work in that environment."
Buckingham and Coffman's second quarrel with conventional wisdom is over what makes a good manager. Here they relied on the responses that they got from top managers whose divisions consistently outperform those of their peers.
The authors' most controversial conclusion is that people can't really change — and that managers who spend a significant amount of time trying to help their employees overcome deficits are missing the boat. Skills can be trained, Buckingham and Coffman argue, but talents — such as empathy, strategic thinking, attention to detail, and creativity — cannot. "If you've got someone who is constantly putting his foot in his mouth, some training in social skills and empathy might be useful," says Buckingham. "But let's call it 'damage control,' not 'development.' There is nothing more debilitating than lining up 27 competencies and trying to train people in the ones that they don't have. It doesn't work, and it breaks a person down psychologically." Far better, Buckingham argues, to focus on nurturing people's existing talents.
My own conviction is that people can change and that, while we all plainly have different aptitudes, critical "talents" such as empathy and strategic thinking can be learned and significantly improved. But there's no denying an element of truth in Buckingham and Coffman's conclusions. Change is very difficult under the best of circumstances. Typically, managers pay less attention to nurturing people's existing talents than they do to trying to fix their deficits.
Most companies, Buckingham says, aren't even playing the right game: They've confused checkers and chess. "It's a flawed assumption that everyone can be good at everything," he says. "Most companies treat every one of their people the same. They play checkers with them. The best managers play chess with their people, knowing that every person is different."
More persuasive still is Buckingham and Coffman's argument that great managers should ignore the Golden Rule — "Do unto others as you would have done to you" — and should instead treat employees as they would like to be treated. Some employees perform better with an explicit set of procedures and rules, for example, while others are less effective when faced with such rigidity.
"Our 12 questions address the most desirable emotional outcomes from people, not step-by-step guides to getting them," says Buckingham. "One person may give praise by bringing everyone together in a group, and getting them screaming and clapping. Another manager may write beautifully crafted little notes to people and never say anything to the group as a whole. If you standardize the end that you are seeking, then you don't have to standardize the means of getting there."
Still, there are precious few companies that pay significant attention to how their employees feel about their supervisors, or recognize how important that can be. In effect, the Gallup research establishes both a way of measuring the qualitative, or "human," skills of a manager and clear evidence that such skills directly influence not just employee satisfaction but also profit and retention.
"Let's stop putting leaders on a pedestal," says Buckingham. "CEOs often get caught up in grandiose images of themselves as culture builders and visionaries. They need to wake up and look at themselves as managers too. If they are not managing their own people well by getting the most out of their talents, they are sending a bad message down through the company. And, ultimately, that will cost them."
Oh, and by the way, a note to my editor: A call about how much you liked this column would be deeply appreciated.
Tony Schwartz (firstname.lastname@example.org) is the author of What Really Matters: Searching for Wisdom in America (Bantam Books, 1996).
A version of this article appeared in the November 2000 issue of Fast Company magazine.