How Not to Motivate Your Staff

Managers have always wondered how to motivate employees to do their jobs. Studies have shown that management’s idea of motivation is very different from that of their employees.

A recent situation about a Kansas City company and a controversial e-mail has provided a rare opportunity to take a real-life employee motivation problem and turn it into a case study. The name of the company and the people involved are not as important as the lesson itself. (But if you’re really curious, I’ve provided references at the end.)

The Company

This case study concerns a fast-growing health care software development company that had more than $400 million in revenue last year. The company employs 3,100 associates worldwide. Senior management tries to avoid bureaucracy by operating in small teams. 95% say they have a lot of responsibility. The company provides on-site fitness and child-care centers.

The Problem

The CEO is a hard-driving individual who arrives at work early and leaves late. His management style reflects his rural upbringing that stressed hard work. Lately, he has been concerned about productivity at the company. His fears are confirmed when a long-time associate mentions that the work ethic is declining.

That same day, the CEO sent a scathing e-mail to his 400 managers berating them for letting employees slack off on the job. His memo listed six punishments. Because some employees weren't working hard enough, he threatened a staff reduction and the installation of time clocks. He wanted to see teams working until 7:30 p.m. and cars in the parking lot at 8:00 a.m. and after 5:00 during the week and on Saturday mornings. He gave his managers two weeks to take care of the problem.

Apparently, someone who received the e-mail was offended by its content and belligerent tone, and posted it to a computer bulletin board on the Internet. Its readers included analysts and investors who thought the company was having sales problems and would fail to meet its quarterly profit targets.

The Consequences

Instead of seeing increased productivity, the CEO saw the company stock drop nearly 20% in two days. The company's market cap fell $270 million and the CEO's net worth dropped by about $28 million during that time.

The message spread like wild fire and the media fanned the flames. News stories from national publications began popping up in print and online. Five days after the e-mail was leaked to the Internet, the company's stock was still falling.

There were other repercussions, too. Word about the e-mail spread through the local pubic relations community and even the PR firm that handled the company's account was quoted as saying, "That's beyond help." There were also reports that a local recruiting firm had received 65 resumes from company employees. The e-mail made its way to a Wisconsin Public Radio show called "Wad'ya Know" where it was read by host Michael Feldman in a live broadcast.

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