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The Real Costs of People Problems
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The Real Costs of People Problems



Learn the results of our five-year research study that examined the impact of people problems at hundreds of companies around the world. Find out how they manage their people problems and how your ...

Learn the results of our five-year research study that examined the impact of people problems at hundreds of companies around the world. Find out how they manage their people problems and how your company’s strategies and tactics compare.



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The Real Costs of People Problems The Real Costs of People Problems Presentation Transcript

  • Welcome to The Real Costs of People Problems Presented by
  • You are viewing this presentation because you have people problems in your company. How many times have you said or heard someone else say: “If it weren’t for the people, I’d love this job.”
  • Conflict is killing your productivity
    • How much money does your company waste on unresolved conflict?
    • How many of you like conflict? Many of us can deal with it when they must but few of us actually like it. Most of us avoid it. Stop and really think about how much unresolved conflict costs your company.
    • What are the signs? Silent meetings, people avoiding eye contact—each other! What work isn’t getting done because people are trying to protect themselves or make an “enemy” look bad?
  • You have new managers with technical know-how but lacking in leadership skills.
    • “ We leave the hardest part of the job to chance.”
    • You would never let an engineer design a new technical process without the proper technical training. But employees with little or no leadership skills are routinely put into management roles. And that is high risk!
  • You’re fed up with investing in training that doesn’t produce results
    • You’ve spent money on every conceivable “buzz-word” training program but not much has changed.
    • People are still cynical and skeptical.
    • Training can cost a lot of money—if you’re not getting the results, you need to change the way you are approaching it. It may be the wrong training or some other error.
    • Whatever the reason, resentment may be building at your company from a series of failed attempts.
  • What’s in this presentation for YOU?
    • You will learn:
    • to recognize the common mistakes people make in choosing training.
    • why these mistakes are costly.
    • how to avoid them.
    • how to make your training dollars produce real, quantifiable and lasting change.
  • Our agenda in this Presentation:
    • Provide some valuable information about how to solve people problems.
    • Help you avoid making costly training mistakes.
    • Provide guidelines for choosing training that works.
    • Introduce you to some of our solutions.
  • Who are we?
    • We are Gordon Training International and our founder, Dr. Thomas Gordon (and Nobel Peace Prize Nominee), was the author of 9 books on how to solve people problems.
    • We have over 1,000,000 graduates worldwide of our training programs.
    • We’ve been around since 1962.
  • Bad leadership affects the bottom line The case that we are going to make is that poor leadership skills costs your company money. Leadership skills can be learned. You don’t have to settle for mediocrity in your leaders.
  • What is bad or good leadership?
    • Bad Leadership
    • Non-supportive
    • Poor listeners
    • Limited input from team members
    • Unilateral, arbitrary decision making (autocratic)
    • Avoids conflict or uses power to impose a solution
    • Good Leadership
    • The opposite!
  • Effects of leadership trickle down (good and bad)
    • “ Monkey see, monkey do.”
    • (If you’re productivity is
    • low, look up.)
  • Remember the Space Shuttle Columbia accident investigation? Their own board wrote:
    • "NASA's organizational culture and structure had as much to do with this accident as the external tank foam.“
    • “ The attitudes and decision-making of shuttle program managers and engineers during the events leading up to this accident were clearly overconfident and bureaucratic in nature.”
  • Bad leadership causes people problems like these:
    • High turnover
    • High absenteeism
    • Stress
    • Sabotage
    • Poor upward communication
    • Unproductive competition
  • Turnover
    • Many people leave their jobs because of bad bosses.
    • Recruiting, hiring and training new employees is costly.
    • High turnover also has many hidden costs.
  • These numbers are the turnover rates in various industries. In government, 38% of the people quit, retired, were fired or laid off each year—in private industry, that percentage was 43%.
  • “ These calculations will easily reach 150% of the employees annual compensation figure. The cost will be significantly higher (200% to 250% of annual compensation) for managerial and sales positions.” Aubrey C. Daniels, Ph.D., Bringing Out the Best in People: How To Apply The Astonishing Power of Positive Reinforcement
  • “ ...let's assume the average salary of employees in a given company is $50,000 per year. Taking the cost of turnover at 150% of salary, the cost of turnover is then $75,000 per employee who leaves the company. For the mid-sized company of 1,000 employees who has a 10% annual rate of turnover, the annual cost of turnover is $7.5 million !” Aubrey C. Daniels, Ph.D., Bringing Out the Best in People: How To Apply The Astonishing Power of Positive Reinforcement
  • If you use the 40% figure from the Labor Department, the cost for that same company would be $30 million due to turnover.
  • “ Surveys consistently show that more than 40% of people who quit do so because they feel they weren't appreciated for their contributions” Aubrey C. Daniels, Ph.D., Bringing Out the Best in People: How To Apply The Astonishing Power of Positive Reinforcement
  • Absenteeism Bad bosses make people sick.
  • “ As much as 60% of absenteeism is due to stress. If an organization has autocratic management, it is likely driving absenteeism costs up.” “Approaching Change” Chrysalis: Performance Strategies January 2003, Vol. 3, No. 5
  • Stress
    • When people are stressed out:
      • they make mistakes
      • their productivity is lower
      • they may use poor judgement
      • they may make bad decisions
      • they get sick
  • A study of 10,000 civil servants working in traditional hierarchies (conducted over a 20-year period) found that those lower in the hierarchy with little control over their work have four times the risk of developing coronary heart disease and depression than those at the top. Dr. Sir Michael Marmot Whitehall Study I and II, 1978, 1991
  • Total cost to business in the U.S. related to job stress is $150 billion per year . Joe Robinson, Work to Live: The Guide to Getting a Life What might this mean to your company’s bottom line?
  • Sabotage
      • Intentional and unintentional
      • Petty theft
      • Malicious obedience
      • Undermining perceived rivals
  • 86% of employees working in traditional hierarchical organizations coped with that culture by reducing the quality of their work. Linda Duxbury Carleton University School of Business
  • Traditional Hierarchies Reduce Upward Communication
    • Productivity suffers
    • Decisions are made with insufficient data
    • Serious problems go unnoticed
    • The boss is the last to know
    When people are reluctant or afraid to bring up problems or ideas…
  • Competition and Rivalry
    • When people fight with one another:
      • less work gets done
      • good ideas are kept hidden
      • grievances increase
      • HR professionals spend up to 45% of their week dealing with conflicts
      • the cost to replace an employee who has to be dismissed because of conflict costs 160% of that person’s salary
      • companies dealing with conflicts through litigation might spend $10k to $30k to fix small problems
      • if the employee leaves or files a grievance, the costs become huge
  • We’ve all tried to fix these problems
    • Many of our efforts have failed.
    • Many training programs promise a lot but don’t deliver.
  • There are thousands of training programs. How do you choose the right ones for your company?
  • 6 Biggest Mistakes in Choosing Training
    • Quick fix
    • Motivational programs with no staying power
    • All theory - no skill development
    • Hodgepodge approach
    • Lack of follow-up
    • Lack of accountability
  • Mistake #1 Too short, looking for quick fix
    • The need for speed (“give me the 30 second version”)
    • Dependency (“Give a person a fish…”)
    • Illusion of low risk (doesn’t cost much or take much time)
  • Mistake #1 – Cont’d.
    • It is an illusion that shorter classes are always
    • cheaper. Even though there may be higher initial
    • costs with a longer class, if the participants are more
    • thoroughly prepared to put their new skills to work,
    • the long term cost will be less if you have to:
        • Do the training over
        • Recover costs from poor implementation
        • Overcome cynicism and skepticism generated by the perception that leadership is looking for Band-Aids instead of real solutions to problems
  • Mistake #2 Motivational; high initial enthusiasm, no staying power
    • The “sugar buzz”
    • Everyone “feels good” but have not learned how to change their behavior
    • Low retention
    • Addictive
  • “ ...87% of the knowledge and skill acquired in a training program is lost within 60 days after training.” Huthwaite, Inc., Building Interactive Skills
  • Mistake #3 No skills, no real change
    • People learn “what,” but not “how.”
    • The advice of “You should listen to
    • your people,” doesn’t tell you HOW
    • to listen.
  • Mistake #4 Hodgepodge, no system or model
    • Training not connected to a clear business need
    • Program-of-the-month syndrome
    • Programs can teach contradictory ideas
    • Piecemeal approach
  • Mistake #5 Lack of follow-up
    • The “coffee cup and three-ring binder” syndrome
    You go to training and everyone knows you’ll learn new “buzzwords.” They will be skeptical and on guard—they’ll watch to see if you “act funny.” They may even sabotage your efforts—you may be tempted to give up and say, “This doesn’t work!”
  • Mistake #6 No accountability
    • “ It’s nobody’s job to make it happen.”
    • Insufficient planning
    • Lack of assessment
    • Not measured
  • People Skills Training
    • Are leaders born? Or made?
    • People skills can be learned.
    • People skills are not just attitudes or attributes but specific behaviors that can be observed and measured.
    • Organizations are systems of relationships.
  • How do people learn a new skill? How do we change our behavior?
  • The Learning Stages (We refer to these stages in our workshops—the following slides will explain them in more detail.) Unconsciously Unskilled 1. Consciously Unskilled 2. Consciously Skilled 3. Unconsciously Skilled 4.
    • You don’t know what you don’t know.
    • The new material is completely unfamiliar to you.
    Unconsciously Unskilled
  • Consciously Unskilled
    • You know what you don’t know.
    • You recognize the skill but you cannot perform it.
  • Consciously Skilled
    • You know you know it.
    • You can perform the skill but it requires concentration.
    • It still feels awkward.
    • It is at this point that people sometimes give up.
  • Unconsciously Skilled
    • You use the skills automatically.
    • They are integrated. You don’t need to think about them.
    • This stage comes only with many repetitions.
  • How long should training take?
    • Long enough to:
    • ensure understanding
    • allow time for practice
    • apply to real situations
    • build confidence
  • What should the content be?
    • The content should:
    • address a clear business need
    • be consistent with the organization’s vision and values
    • scratch beneath the surface
    • hang together
  • Why are skills important?
    • Skills:
    • go beyond attitude change
    • produce behavior change
    • reduce dependency
    • increase confidence and self esteem
    • improve productivity
    • improve relationships
  • Why do you need an integrated model?
    • An integrated model:
    • gives you the tools you need to address many problems
    • helps you make good decisions about when and how to use the skills
    • gives you confidence to put your skills to work
  • Why is follow-up important?
    • You are more likely to get lasting change.
    • Your investment pays off.
    • You reduce cynicism.
    • You increase the credibility of the leadership of the organization.
    • The new skills are integrated into the day-to-day routine.
  • Why is accountability important?
    • If people are expected to use new skills, they need to know how they will be measured.
    • Measurement is a “signal” of the importance of a new skill.
    • It creates an expectation that people will master the new skill (go through the learning stages).
  • Imagine that your organization’s leaders have the people skills to build more productive relationships.
  • Imagine that you are the employer of choice…
    • People don’t want to quit.
    • They are productive in spite of problems.
    • They volunteer for difficult tasks.
    • They are willing to go the extra mile.
    • Recruiting, hiring and training costs are lower.
  • People want to come to work
    • Absenteeism is low.
    • People are healthy (less need for mental health days).
    • Health costs are lower.
    • People are “fully present.”
  • The climate is positive!
    • People are energetic and enthusiastic.
    • People stick to their tasks.
    • People are free to perform at a high level.
    • People are creative and resourceful.
  • “… a considerable body of research has shown that…the opportunity to participate substantively is associated with reduced stress. Having greater autonomy or control over one’s job, in particular, has been linked to lower incidence of health conditions such as coronary heart disease.” Peter Berg & Arne L. Kalleberg The Effects of High Performance Work Practices on Job Stress: Evidence from a Survey of U.S. Workers
  • You can trust your people
    • There is less need for supervision.
    • Your leaders are seen as trustworthy.
    • People want the organization to be successful.
    • People spend their time being productive.
  • Communication is effective
    • Problems are identified and solved sooner.
    • People speak up freely and honestly.
    • Leaders have better information about the business.
    • People make better, more well- informed decisions.
  • There is a climate of cooperation
    • People work as a team.
    • People want each other to be successful.
    • People are more productive on tasks that require teamwork.
    • There are fewer grievances.
  • A 10-year study published in 1996 demonstrated that “…organizations that consistently practice good people management create an environment that reduces - even eliminates - significant workplace stressors...have higher sales, profit, growth and margins...” Dennis J. Kravetz People Management Practices and Financial Success: A Ten-Year Study
  • Companies that improved PMP (People Management Practices) added [on average] $294 million in profits per company, a gain of 60% over three years. Dennis J. Kravetz People Management Practices and Financial Success: A Ten-Year Study
  • The Six Principles for Choosing Training that Works:
    • Make sure that the training is:
    • long enough
    • substantive
    • skill-based
    • based on an integrated system or model
    • contains plenty of follow-up
    • designed to hold people accountable
  • Here is one solution that will reduce the cost of people problems and increase productivity…
  • Gordon Training International’s People Productivity Process Leader Effectiveness Training is at the core of The People Productivity Process, a six-step, four-tool process that focuses on solving people problems. Based on the pioneering work of Dr. Thomas Gordon, this process is a proprietary system that delivers measurable results, increases productivity, reduces friction among employees and leaders, and minimizes the damage to morale and energy that are associated with lingering, unresolved conflicts.
    • needs analysis
    • pre-assessment
    • skills training course
    • e-newsletters, tips, assignments
    • post-assessment
    • follow-up
    The six steps of the process:
  • Step 1 - Needs Analysis
    • Together we will discuss your concerns and needs as they relate to your company’s people problems.
    • If appropriate, we’ll introduce our process for solving them.
  • Step 2 - 360 Pre-Assessment
    • Assessments capture data from all angles -- leader, his/her direct reports and boss.
    • Focus is on the future, not the past.
  • Step 3 - Skills Training Workshop
    • Leaders participate in a comprehensive, intensive workshop.
    • They learn to use and apply the communication and conflict resolution skills for solving their people problems.
    • It’s Dr. Thomas Gordon’s Leader Effectiveness Training (L.E.T.) program -- we’ve been offering it for over 43 years.
  • Step 4 - E-Newsletters, Tips, Assignments
    • Course graduates reinforce their skill training by practicing a specific skill each month via The Graduate Connection , a free e-mail service.
    • Your newly-trained leaders can opt to meet together once a month to discuss and practice their skills.
  • Step 5 - Post-Assessment
    • At specific intervals after the course, both the leader and his/her direct reports and boss assess the leader’s progress.
    • An L.E.T. Trainer meets with each leader focusing on successes and areas that need improvement.
  • Step 6 - Follow-up
    • To ensure your company’s training success, we will customize follow-up training specifically for your leaders to assist them in refining and integrating their new skills.
    • Follow-up could include: refresher courses, one-on-one coaching and/or consulting.
  • Would you like to take the next step?
  • Contact us For more information about our People Productivity Process and our L.E.T. Workshops, call or e-mail us: 1.800.628.1197, ext. 308 [email_address] www.gordontraining.com