You’ve noticed a peculiar phenomenon in your company.
Star employees leave, but they don’t go to a competitor.
Instead, they’re striking out on their own as independent consultants or starting their own businesses.
As you conduct exit interviews and talk to managers, you learn something a little more unsettling.
Many of these employees didn’t leave because of a lifelong dream to be entrepreneurs, but because they were fed up with the company’s outdated processes and procedures.
When they introduced new ideas to the business, they were routinely shot down.
When they asked for a more flexible work schedule, despite a consistent track record of high performance, they were told the company didn’t yet have a program for flexible work schedules.
The trouble is that your company needs these self-starters. You need their energy, enthusiasm, and creative thinking.
But if you’ve built a culture of outdated thinking, your best players will choose to start their own team. As the cost of entry into business ownership decreases thanks to technology, more employees will cultivate their ideas on the side and leave when their day job isn’t necessary to pay the bills.
What’s the problem here?
The problem is a lack of employee autonomy within your organization.
What is employee autonomy?
Employee autonomy is an employee’s ability to do their work when, where, and how they do it best.
At a basic level, this could mean everything from letting employees work from home, allowing flexible schedules like 7 to 3 instead of 9 to 5, or measuring employees based on crystal clear KPIs rather than passive facetime.
At a deeper level, it’s about giving employees the freedom to finish work on their terms, but in pursuit of a common goal.
This way, your organization allows freedom and flexibility, without becoming a glorified co-working space where everyone is working on their own projects.
Smart organizations combine trust with operational discipline without going too far in either direction.
Blind faith in employees’ abilities to self-direct leads to confusion, uncertainty, and an inability to execute on business strategy and goals.
Rigid, hierarchical management leads to a bulky business that stifles creative talent and is unable to adapt to new business opportunities.
Instead, the goal is a combination of the two where senior leaders communicate what needs to be done, provide employees with the tools to succeed, and then trust them to do the rest.
In the current economy, where innovation is a matter of business survival and digital transformation is unavoidable, it’s essential for business leaders to embrace employee autonomy for the following reasons.
Companies can use employee autonomy as one factor for understanding team performance.
With the right tool, like Sparkbay’s performance prediction engine, managers can evaluate how employee autonomy impacts personnal KPIs. This let managers decide whether they should focus on employee autonomy to drive performance in their team.
Understanding the impact of employee autonomy is a worthy investment of time. It has an impact on companies in the following ways.
Employee autonomy keeps your company competitive
Employees who wait for managers to tell them what to do will not contribute to a competitive business. As world events put a strain on the economy and technology amplifies the importance of innovation, companies need employees who conceive and execute great ideas.
Unfortunately, most employees don’t feel comfortable contributing to their company this way.
They exist in a state of disengagement or work in a culture where speaking up, suggesting improvements, and expressing ideas is not actively encouraged.
So even if a company possesses brilliant employees, they don’t feel comfortable sharing that brilliance.
Employee autonomy fuses wellness into work
In Deloitte’s 2020 Human Capital Trends Report, well-being was the top reported trend.
That said, Erica Volini, Global Human Capital Leader at Deloitte, says there’s a troubling gap between the importance of well-being and companies’ level of readiness to implement well-being.
“Unfortunately, 79% of respondents said their organisation’s engagement strategy does not explicitly seek to integrate well-being into the design of work—a huge missed opportunity,” Volini told The Economist.
Volini says that incorporating employee wellness into work can help reduce the amount of money companies invest into addressing things like burnout or turnover.
She specifically points to the importance of employee autonomy. Employee autonomy, she says, is an effective way to incorporate employee wellness into employees’ work.
She recommends revisiting assumptions about “how, when, where, and by whom” work is done and increasing the amount of control employees have over their work.
In this way, employees don’t have to shoehorn their talents into an outdated 9 to 5 model. Instead, they can work when and how they are most productive.
Employee autonomy boosts employee accountability and alignment
Why do companies hesitate to give employees autonomy?
One big reason is a lack of trust.
Managers and senior leaders worry that their company will enter a period of chaos, where everyone works independently and activities are not aligned with the company’s objectives.
After all, repeatability and processes (aka “operational discipline”) are a critical component of successful, sustainable businesses.
This is the reason why the traditional hierarchical structure that puts managers in charge has reigned supreme for so long.
In reality, the idea that employee autonomy leads to employee disorganization is a misconception rooted in fear.
In fact, employee autonomy can lead to greater employee accountability and – if implemented correctly – stronger employee alignment with company objectives.
To be implemented correctly, however, senior leaders must put in the work to create the conditions for successful employee autonomy. As illustrated by Harvard Business Review, this means:
- Clearly defining what the goals and objectives are. Employees must know what the expectations are and what they will be evaluated on. They also know what the “guardrails” are, so they can comfortably experiment without fear.
- Defining the problems the company wants to solve: Management’s job is not to breathe down the neck of employees. Their job is to understand and clearly articulate the problems the company wants to solve, so that employees can be autonomous while appreciating the larger context and working towards a common goal.
Spotify took this approach and has since grown into a company with 2,000 employees, 30 million paying subscribers, and $3 billion in revenue.
They did this by creating squads with full ownership over product features.
Chapter leaders would help squads align their work to the company’s overall problem. Squads would take this knowledge and become responsible for experimenting in a way that contributed to the Spotify ecosystem.
Employee autonomy increases employee engagement
When an organization successfully engages employees, they feel a sense of belonging and a willingness to contribute their best ideas.
In fact, two key drivers of employee engagement are a shared sense of purpose and no micromanagement.
When companies promote employee autonomy correctly, they reconcile these seemingly counterintuitive ideas.
Earlier, when we discussed Spotify’s focus on employee autonomy, we mentioned the importance of alignment.
Alignment happens when managers effectively communicate the problems the business wants to solve and the criteria upon which teams will be evaluated.
If your company hires motivated, intelligent people, once the problem is communicated, the work happens on its own, without micromanagement.
This focus on successful employee autonomy leads to a positive work environment that creates those two conditions for employee engagement: a shared sense of purpose and no micromanagement.
This creates a work dynamic where people feel free to share ideas openly and where they are judged on their results rather than their personal approach to work.
Employee autonomy is integral to creating agile, innovative companies
McKinsey defines an agile organization as, “a network of teams within a people-centered culture that operates in rapid learning and fast decision cycles which are enabled by technology, and that is guided by a powerful common purpose to co-create value for all stakeholders”.
Let’s unpack this definition.
First, this definition doesn’t dismiss the historical success of traditional organizations.
Traditional organizations are known for their rigidity and their strong skeletal framework. This structure has created stability for a long time.
Unfortunately, this composition makes it difficult for these organizations to adapt and adjust to changes.
This structure treats change as an annual phenomenon, not a weekly or monthly phenomenon that’s critical to the business’s day-to-day success.
It also considers change a phenomenon that is communicated from the top down, not weaved into the company’s organizational behavior.
On the other hand, agile organizations focus on both stability and dynamism. They do this by focusing on people who learn quickly and demonstrate good judgment. Crucially, these individuals are “guided by a powerful common purpose to co-create value”.
Creating such an organization is impossible without employee autonomy. Without employee autonomy an organization lacks:
- A people-centered culture, since employees deal with micromanagement and limited opportunities to pursue and develop new ideas
- The ability to capitalize on rapid learners, since existing fast learners in the organization are not encouraged or directed to apply this skill to critical projects
- The ability to facilitate fast decision cycles, since new ideas are stifled by legacy decision-making processes and employees do not have the context or freedom to understand the business context and use this context to make judgements
- The ability to generate stakeholder value using unique employee ideas, since employees don’t have the freedom to pursue these ideas or given an opportunity to tie their unique skill sets into the company’s objectives
In start ups, it’s easier to create agile organizations, because leaders often have no choice but to let their employees be autonomous.
Their business hasn’t existed long enough to create complex decision-making processes and legacy behaviors.
This is why encouraging autonomy and creating an agile environment is harder for legacy companies.
As Patty McCord, human resources consultant and former chief talent officer at Netflix, put it in an interview, “The problem for large institutions is that it’s not just that the rules are there. It’s the institutional behavior attached to it.”
An illustrative example: One Netflix employee told Wall Street Journalreporter, Shalini Ramachandran, “I can come up with an idea at 9 a.m. and get out the code for it by noon without approval.”
This kind of culture is credited with allowing Netflix to pivot (from DVDs to streaming) and disrupt legacy industries (movie theatres and rental companies).
Employee autonomy increases employee morale
Morale is the enthusiasm, confidence, or loyalty that people have while working on a specific task.
These are all traits managers want their employees to have when working on job-related tasks, and it’s why employee morale has been directly linked to productivity.
Unfortunately, there are companies that don’t think it’s their job to manage the overall emotions of their company.
They see it as noise and irrelevant to the job at hand. Instead, these individuals wish to focus on facts and data.
Turns out, these leaders are looking at data the wrong way, says Wharton management professor Sigal Barsade.
In reality, he claims that emotions are data. They don’t just dictate how employees feel about a situation. They dictate how employees will behave, and this is something that managers cannot disregard since how people feel at work significantly impacts how they perform.
In other words, improving employee morale is worth senior leaders’ time and energy.
Notably, one of the best ways to boost employee morale and satisfaction is to provide more employee autonomy.
Employees who report minimal micromanagement, schedule flexibility, and the ability to choose when they work remotely report higher levels of morale and job satisfaction.
Of course, employee autonomy goes beyond offering employees remote working options or easing up on managerial oversight.
As we’ve discussed elsewhere, successful employee autonomy requires an understanding of what the business’s objectives are and how people will be rewarded and held accountable.
This all comes together nicely considering a common purpose and clear goals and objectives are also factors that boost employee morale and job satisfaction.
Employee autonomy is a strong intrinsic motivator
Interestingly, research shows that money isn’t always the most effective motivator, especially for knowledge workers. Compensation is definitely important, but it isn’t the whole story.
For starters, performance-based compensation prevents demotivation but it doesn’t necessarily motivate people to work beyond their current levels.
Receiving equal pay for equal work reduces feelings of unfairness and resentment, but it doesn’t encourage a person to work more. They just view the money as fair compensation for doing their job.
In addition, studies show that beyond a certain level, money doesn’t increase happiness.
Since knowledge workers are highly compensated, they are likely secure from a financial point of view and looking for more intrinsic motivators within their companies. If in-demand workers can’t find these intrinsic motivators, they’ll look for them at one of the countless companies vying to recruit them.
Employee autonomy is a powerful intrinsic motivator.
In his book, “Drive: The Surprising Truth About What Motivates Us,” Daniel Pink identifies autonomy, master, and purpose as the key sources of motivation over traditional motivators like rewards, punishment, or money.
As a side note, recall the earlier explanation from McKinsey of what makes an organization agile. Consider how Pink’s motivators fit into McKinsey’s definition.
“A network of teams within a people-centered culture (autonomy) that operates in rapid learning (mastery) and fast decision cycles (autonomy) which are enabled by technology, and that is guided by a powerful common purpose (purpose) to co-create value for all stakeholders”.
There’s a relationship here between what really motivates employees and what successful companies of the future will look like.
Not only does autonomy get companies the results they want by giving them the freedom to apply their skills, it also fuels them to contribute above and beyond what’s expected of them in the workplace.
Which brings us to another reason why autonomy can be a greater motivator than money: It eliminates one of the main weaknesses of compensation structures. Companies often have complex compensation structures that are linked to other factors within the organization – business unit performance, department performance, overall corporate performance.
The result is that people either wind up not receiving a bonus because of factors outside their control or people receive the same bonus as everyone in the organization.
Both scenarios create a “why even bother?” effect among employees.
As Jonathan Westover, a professor of organizational leadership and ethics explains, lack of control over outcomes leads employees to feel less motivated in their work.
Offering employee autonomy helps attract and retain the best talent
An employee value proposition (EVP) – sometimes called an employer value proposition – is what employees get in return for bringing their skills and experience to a company.
In some cases, it’s what employees think they’ll get in return.
An employee value proposition plays an important role in employer branding which in turn is a fundamental component of recruitment marketing.
Effective EVPs are employee-focused EVPs. They don’t come from the top down in the form of meaningless platitudes and statements.
Instead, they start off as an organic reflection of the company’s culture before being shaped into a message that’s shared with candidates on the job market.
Why does this matter so much? Can’t your recruitment marketing’s messaging be whatever your marketing team decides it should be?
Nope, and we say no for a few reasons.
To begin with, employees talk and if you’ve recruited valuable people, there’s a high likelihood their network consists of other talented people you’d like to employ.
If your existing employees disagree with your employer branding – or worse, have negative things to say about your company – this story gets out.
Sure, you’ll still be able to attract candidates, but they won’t be those high quality candidates.
Second, we are living in the information age, where people can access employee reviews with a few keystrokes.
Candidates are savvy enough to recognize when a review is from a disgruntled employee, so they won’t judge your entire company on one-off comments. Instead, they’ll look for common features in online reviews.
Consider this. Suppose you’re promoting your MSP firm as a great place for tech talent to work. Your goal is to attract ambitious, talented individuals through your messaging.
Since these individuals possess in-demand skills, they have the luxury of choice, so they conduct their research before responding to your recruiter.
Reviews online are not overtly negative, but a lot of them talk about the high levels of micromanagement, the lack of career progression opportunities, and unclear direction from the company’s leaders.
When this candidate reaches out to an old classmate, they hear that the place is simply “okay”, but not a forever job. Since this candidate wants to build a career at a great company, they decide this organization is not for them.
In other words, it takes less than a scathing review or a workplace scandal exposé to compromise your employer brand. Just because you don’t have an awful reputation doesn’t mean you want to have a mediocre reputation either.
Cultivating a culture that values employee autonomy, trust, collaboration, and no micromanagement can elevate your recruitment efforts.
Consider companies like Google, Amazon, or Netflix.
They’ve become famous for having high-performance cultures that reject traditional management styles, that understand their employees are smart, and that trust their employees to do good work.
As a result, their employer brand easily wins over other companies that may be doing similar work or offering similar pay.
All of these points apply to employee retention as well. Employees want to stay where exciting things are happening, where their skills are respected, and when their autonomy is supported. Embracing employee autonomy allows companies to reduce employee turnover rate in addition to boosting recruitment outcomes.
Interested in using data to boost employee autonomy and performance within your organization?