In order for managers to effectively meet their strategic goals, they must also have the cooperation and commitment of the employees. To achieve this, companies must work to keep the employees motivated through the use of incentives and strategy-supportive motivational practices. Additionally, they must work to establish a work culture that does not impede on their strategy’s success. Finally, they must find an effective balance between rewards and punishment .
Management tools and employee commitment
Studies show that financial incentives alone (i.e. pay increases, bonuses, profit-sharing plans, stock awards, and 401-K contributions) do not create a long-term willingness of team members to put forth their greatest effort. In fact, the self-determination theory of motivation notes that behavior that is motivated by extrinsic factors (i.e. pay increases, bonuses, profit-sharing plans, stock awards, and 401-K contributions) must serve to increase the individual’s feeling of being connected to others (relatedness), their feeling of being competent enough to perform the required tasks (competence), and their understanding of how the task relates to the strategic goal.
However, by combining financial rewards with nonmonetary motivational approaches, managers can gain the cooperation of their team towards achieving their strategy goals . These nonmonetary motivational approaches include: public recognition of high achievers, the offering promotions from within, inviting and acting on ideas from employees, and a work atmosphere where there is a genuine caring and mutual respect among the workers. Furthermore, employee commitment is strengthened when the company’s management states the strategic vision in inspirational terms and shares information about the company’s overall financial, strategic, operational, competitive, and market conditions.
Creating balance between rewards and punishment
When organization leadership makes decisions about salary increases, incentives, promotions, assignments, and their reward and recognition programs, they must also consider the ways and means of how they will hand out punishments. Typically, organizations that foster pressure-free/consequence-free working conditions do not generally achieve superior strategy execution and excellence in operations. Even companies such as General Electric and McKinsey & Company have instituted programs in in which employees are expected to either move up the ladder of promotions or they will be systematically be move out of the organization. On the other hand, managers must also make sure that they do not put so much pressure on the employees that their efforts become more counterproductive. By incorporating more positive motivational processes than negative elements, team members will be more likely to respond enthusiastically to their strategic efforts.
Pitfalls of a strong work culture in strategy execution
Strong corporate cultures may also have a significant effect on a company’s strategy execution initiatives. Since the culture may or may not be aligned with the strategic vision of the organization, the impact of that culture on the organization can vary greatly. Further, when the culture conflicts with the activities that are needed to achieve the strategic goals, then having a strong work culture is can actually prove to be counterproductive to their efforts. Several types of cultures fall within this unhealthy category including: change resistant cultures, politicized cultures, inwardly focused cultures, and those with greedy-unethical.
In today’s competitive market it is a challenge to meet the company’s strategic goals, particularly if the employees are not on board. Managers must work hard to motivate the employees without over-rewarding or over-punishing the employees. They must also create a work culture that encourages the types of attitudes, behaviors, and practices that complement the organization’s strategic vision. Finally, they must maximize the use of nonmonetary motivational practices in order to also create a team that is committed to the strategic process for the long-term.
Thompson, Jr., A. A., Peteraf, M.A., Strickland III, A. J. & Gamble, J.E. (2012). Crafting & Executing Strategy (18th Ed.) New York: McGraw Hill/Irwin.
Ryan, R. M. & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development and well-being. American Psychologist, 55(1), 68-78.