Implementing Regulatory Change In Ways that Engage Employees

  |  November 1, 2017

Managing Organization Change to Engage Employees

There are times when, in the pursuit of two seemingly unrelated and legitimate goals, a company finds itself at cross purposes. One such situation is the dilemma created when the desire to create a culture of engagement clashes with the need for regulatory compliance.

Managing organization change successfully has a lot to do with engaging team members and employees in ways that allow them to come to their work with purpose and buy-in and energy. We also recognize and respect the importance of safety, human rights, and environmental protection, and the need for regulatory compliance to ensure these things for all stakeholders. However, there are times when the necessity of following certain—often legislated—rules can create barriers to engagement.

Unintended Worker Engagement Consequences

For example, the Department of Labor has put many regulations in place to protect employees. The vast majority of these—including regulations addressing such things as sexual harassment and discrimination as well as laws that protect employees’ rights to fair compensation and reasonable working conditions—are legitimate guidelines that are there for good reason.  However, at times the institution of such regulations can inadvertently undermine the worker engagement that organizations need and want.

To use one example, many workers value flexibility in the workplace.  They appreciate being able to set their own hours, to work from home all or part of the time, to opt in and out of employee benefits, to jump from project to project (or job to job) and so on. Flexibility and choice can be extremely powerful incentives that can greatly boost worker satisfaction and engagement.  Even within these confines, organizations have options they can provide workers. However, the unintended consequence of some employment laws and regulations is that options can become limited for workers.  Organizations in turn may make policy or programmatic decisions that ultimately limit worker choice, thus undermining in subtle ways the engagement needed to drive performance.

A key topic in employment circles right now is the idea of the gig economy, where people can move from project to project working on what interests them. However, there are laws in place that define what it means to be an employee. While intended to protect the worker, at times these regulations make it difficult or impossible for a company to hire gig workers without taking them on as full-time employees subject to all the rules and restrictions as well as the benefits of employment—even when the workers themselves prefer to maintain independent or freelance status.

Safety is another area where a well-intended regulation can become so restrictive that it actually hampers people’s ability to do their job. For example: “I went to work today planning to contribute but we didn’t have the proper safety permits so we wasted the whole day sitting around in the truck.” Too many experiences like this will significantly dampen an employee’s enthusiasm for their job and for the organization of which they are a part.

Yes, with planning, it may be possible to balance the regulatory demands placed on organizations with the worker engagement outcomes needed.  Perhaps, organizations or workers can speak up and highlight the engagement implications as regulations are being considered. Even so, it seems that a tension will exist.

We have seen some organizations try to tackle this tension by positively addressing two areas: one is in the process of setting internal regulations/policies and the other is in how organizations communicate regulations and policies to people.

Setting Policy With Engagement in Mind

Any time you set a policy within your organization it runs the risk of either enabling or disabling worker engagement. Even if the policy makes good business sense or encourages a greater societal good, it’s worth asking, what will this do to the mindset and engagement levels of our people?

For example, one client we recently worked with implemented a new approval process. It made perfect sense to do from a practical standpoint. Unfortunately, some people in the organization interpreted the policy to mean “we don’t trust you.” Even though that was by no means the intent (it was really about risk management, following the advice of an auditor), it had an impact on employees and workers because they felt they weren’t trusted.

In retrospect, what could have been done before implementing this policy to prevent the unintended, but demotivating signal from being sent to employees?

  • Could the new policy have been introduced to employees in terms of the underlying value of why appropriate risk management is in the best interest of people, including themselves?
  • Could the organization have thought more holistically about the messages it might signal to employees when the policy was implemented?

Thinking about these questions in advance might have changed the way the policy was communicated or even implemented.

I’ve witnessed this approach in action, and it can work beautifully. I worked with a client once who, when they made some changes to better adhere to safety regulations, made it absolutely clear they were doing it because they cared about people’s safety. They were not doing it just to comply with laws or regulations. Instead, they couched it in terms of the human value that the legislation was meant to address. The result has been very positive employee engagement around the issue.

It’s really easy to make decisions based on the best interests of the company, and at the end of the day that’s what you have to do. But if you really want to create a culture of engagement and you’re not thinking about the impact of your choices (even ones that have been mandated) and managing organization change accordingly, that’s a problem. Before forging ahead with your changes, it’s not a bad idea to stop and ask “are there any unintended consequences to doing this?” And if there are, to proactively take steps to ameliorate the issue.

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