Discretionary Contribution and the Philosopher’s Stone

What is Discretionary Contribution

For those of you out there that are managers or team leaders, do you think you get 100% contribution from your people?

The chances are you don’t, in many cases the contribution you get is only 50-60% and yet you pay them 100% salary, so the question you should be asking is why such a low return?

What is going wrong? Most people really want to do a good job, they want to go home at the end of the day or week feeling good, feeling like they made a difference in a positive way. Nobody wants to go home and tell their husband/wife/partner that they only gave 50% of their ability, or they really screwed things up for their company. So why does this happen and how can you as a manager tap into that discretionary contribution?

Despite the title you don’t need to practice Alchemy however if you get it right it really does feel like you have turned base metal into gold!

However why do people not give 100% when they would be more fulfilled by doing so?

Industrial Revolution and the Division of Labour

Businesses are collections of people and in the Industrial Revolution there was great emphasis on the organisation of work and the division of labour. The principle was simple, to produce goods efficiently there needed to be an organisation of labour and tasks were split down such that specialists could do elements of work which when brought together enabled goods to be produced consistently and with measurable output rates. This division of labour compartmentalised people and meant that they worked to defined scopes with defined skills. If you have an annual appraisal system in your business you will be basing your assessment of your staff on exactly these principles which were established by Adam Smith in 1776! Most of us design businesses around the organisation chart with each box bearing a title and a job description. All our appraisal process does is measure how well the person fits and performs in that perfectly prescribed box, this would be great if we were designing robots to automate a production line but people don’t fit well into boxes and the appraisal process makes sure any shortcomings are filled by training and anything outside the box is ignored.

How much better would we do if our organisations were less rigid in structure, what if we moved box boundaries to reflect the skills and attributes of people, what if we leveraged from their strengths?

Division of Labour

Happy Employees deliver more

Which would be the happier employee?

  • one made to fit precisely in a job specification through annual appraisal or:
  • one where the employer took time to understand the real attributes of the employee and flexed the job to play to their strengths?

In general a happy employee gives their all, i.e. 100% contribution, a constrained employee doesn’t just not do what you don’t ask them to do but the work that is within their job spec and their capabilities is done with a less happy outlook and therefore less optimal contribution.

So how do we turn base metal into gold? Try these 7 simple tips

1. Grant as much autonomy as possible to your team, open this up over days or weeks but not months or years.

2. Get to know your team members, find out what makes them tick, what really motivates them and what their frustrations are. How do you do this? Just talk to them and ASK! This isn’t just you finding out about them its your entire team finding out about each other and you.

3. Flex your organisational structure, you don’t have to throw away your organisation charts and appraisals but you can give your team special responsibilities outside their job spec.

4. When you do appraisals, don’t just think about filling the skill gaps by training, think about redefining roles

5. Make your business plans and strategies appealing by making sure that everyone understands their contribution and why it is important. If they don’t get it you won’t achieve it!

6. Make it fun, everyone is more productive in a fun environment but make sure you keep a balance of work, rest and play.

7. Remember as the leader/manager everyone looks to you, they assess your mood, your timeliness, what you wear, how you talk and the things you say, never forget the impact of what you do and say on the effectiveness of the organisation.


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