What are the major challenges in the management of people in 2012? How would you address them?

I recently stumbled on the following problem and I had to give my view, and the view of Robopartans about the major challenges in the management of people in 2012 and how we address them. So I decided to also share this with you.

One of the major challenges in management of people for the current decade is closing the gap between what science knows and what business does mainly in the fields of reasoning, motivation and compensation.

We generally think of us in terms of “what we do” instead of “how we do”. Conversations with strangers for example usually start with a short introduction of your profession and what we do for living. And it would take long, before the conversation moves to other important subjects like family, hobbies, sports or even politics. Humans are irrational creatures and our job is much more important for us than just feeding ourself and our family. Our job gives as reason, most of the time motivates us and help us feel at least a little significance. Or does it?

As Dan Ariely describes in his book, The Upside of Irrationality, large portion of us more often than not fall in something known as Sisyphean condition. Fairly paid, working with nice people and well insured, but we might fill like pushing a rock up a hill only to see the rock falling down. Here the analogy comes from the Greek myth about king Sisyphus, punished by the gods “to roll an immense boulder up a hill, only to watch it roll back down, and to repeat this action forever” without ever seeing the results of his work. Remember for example the last presentation and contract you have prepared for an important sale meeting only to have the whole sale cancelled. Or the last marketing, design or software project you have put a lot of efforts in preparing and which will probably never bring any value after it was postponed or cancelled in the last moment.

This is one of the places where the next generation manager should step in. Our job is not only to find and stick to the Fundamental Motivation behind doing our business, but to also find the small motivations that would keep the whole team happy with what it is doing. There are a number of Small-M steps we could take to help other employees be more passionate about their job and that could have a significant impact on the result from our work. This list includes things like paying attention to the small everyday achievements of team members, letting everyone take credit for their work and reducing the times where the work is just shredded apart.

If we could unite part the Small-M steps with a well constructed compensation we could achieve greater results. One of the most important findings, after numerous researches in the field of social science, have shown that ones the team job involves even “rudimentary cognitive skill”, a larger reward “leads to poorer performance” (D. Ariely, U. Gneezy, G. Lowenstein & N. Mazar, Federal Reserve Bank of Boston, Working Paper No 05-11, July 2005; NY Times, 20 Nov, 08). This are results confirmed by major universities throughout the world including even The London School of Economics. Probably not surprisingly for many people this is also one of the most neglected findings ever.

The way I address this two problems Is directly aligned with the goals of the organization I am currently running and could assist employees from many organizations. It is to give professionals the opportunity and ability to find motivation, reason and compensation in a whole new approach. Will two of our team members still be in the office, Saturday evening at 20:15 o`clock, while I am writing this article if they had nothing to believe in and they were not driven by a little ego motivations for being part of making the world an even better place.

I doubt it.

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