Many employers believe that the best way to motivate and retain employees is to give them compensation and benefits. But according to researchers, your staff might want something else even more: respect.
That simple feeling of regard is something employees might value even more than extra money says Dr. Paolo Gaudiano, the co-founder, CEO and chief scientist at Aleria, a research and business consulting firm in New York City.
If companies want more diverse workforces, they are going to have to be inclusive and show more respect to their employees. It can have a measurable effect on bottom lines, too, said Gaudiano during a seminar on diversity presented Tuesday by the Financial Industry Regulatory Authority.
“In the last five decades, progress in diversity and inclusion has not been very good,” he said. Companies have focused on diversity because it’s easy to measure. But representation alone is not enough when business success depends on factors that are harder to see: respect and inclusion, which means making sure an employee feels valued.
Such factors affect workers’ performance as well as a company’s retention rates, productivity and reputation. Yet inclusion is not something being adequately measured by most firms, and CEOs have to be deliberate in trying to figure out whether they are succeeding at it, Guadiano said.
“If you are not the one being excluded, you are not going to notice,” he said. “If an employee feels his or her opinions do not matter, if he or she is always given lower level assignments or is left out of meetings where he or she knows they can contribute, the employee is not going to feel respected or included.”
One way to get a truer picture is to allow employees to speak anonymously about how they are treated. Employers should also ask employees if they feel their performance reviews are biased.
A firm owner furthermore needs to know how each manager interacts with employees. “It only takes one bad manager to negatively impact your company—even if most people say they feel included,” he said.
Aleria’s research has shown that “compensation and benefits are low on the totem pole of employees’ desires, while respect is high,” Gaudiano said. “We have to make diversity also about inclusion to be successful. It is incredible the benefits a company can garner by focusing on inclusion” for minority employees.
Those feelings of inclusion are crucial for employees trying to decide whether to stay at a firm or move on.
And a company’s diversity must extend from its general employee pool into the boards of directors, said Edward Chang, an assistant professor of business administration at Harvard Business School who also spoke during the webinar.
But token representation is not good enough. “There need to be at least three women on a board in order for them to have a sphere of influence,” Chang said. “With more women on the board, companies generally have better benefits for employees and react quicker to situations within the company.”