How to motivate people in CEE countries

62 Step 1: Develop “no constrains” plan – develop organizational options without taking talent constrains into account

Step 2: Identify bottlenecks – identify critical point concerning personnel/talent issues

Step 3: Develop “realistic” options – develop realistic options and the select best one on talent availability

Step 4: Define next steps – monitor talent availability over time and keep directing the company to the ideal structure as defined in Step 1.

In order to avoid the lack of talent problem, many companies started organizing management trainee programs. The principle of this program is to address fresh university graduates, select the one with highest potential and best fitting into corporate culture and grow him up within the company. The successful candidate is given proper training preparing him since the beginning for a managerial position. There is naturally a certain risk related to this approach.

Companies invest huge money to select the proper person and grow him/her up. But the trainee is usually not obliged to stay in the company when the training is over. It might sound illogical, but it is favourable for both parties involved. Having that kind of clause in the contract could discourage the best candidates from applying; secondly, if the trainee does not like the company, he would leave after the fixed period anyway and for the company he would represent just another sunk cost.

63 appreciated. Benefits and bonuses were given automatically regardless personal contribution.

Over all, there were many weaknesses which companies entering CEE had to bear in mind.

Firstly, employee were reworded by benefits and remuneration which were not related to their performance and results. Replacing this system by a new one, usually bringing more advantages, was unaccepted and remuneration strategy which was in use all around the MNC had to be modified for CEE countries (it was impossible that company would not provide employees with e.g. food vouchers, also variable part of income was perceived very negatively. However, it has been changed over past decade and employees gradually accustomed to the new system).

Secondly, it was very difficult to make people act proactively. Being active in the past, meant collaborating with the regime, and reporting colleagues to communist authorities. These

“active reporters” were often disrespected by the working team. It took a long time and lot of effort to change this perception and prove that acting proactively is a positive element beneficial not only for the person with higher performance but also and foremost for the whole team.

As resulted from the research, companies use a very similar set of managerial tools to motivate employees and help them to achieve higher level of corporate engagement.

The generally implemented strategy contains several elements which are necessary to be put in place in order to address the problem of motivation effectively. One of the crucial issues is pushing the decision down the hierarchy. Decentralizing the decision making power (not only in relation to headquarters–country level but also within the local operations) makes people who are down in the structure more accountable and more engaged.

Once the decision has been pushed down the hierarchy, particular roles and positions have to be clearly defined. The exact responsibilities and accountability should be set for every position and all possible overlaps have to be clarified. This is a critical point when creating

64 the system of motivators for the CEE region since the local people are very good in delegating problems to the others. That can be eliminated by defining strict borders between roles and positions.

An extra attention should be paid to internal communication between local employees and foreign managers. The insufficient communication very often causes misunderstandings and discontents between counterparties.

The following quotations demonstrate the communication gap between foreign top management and local managers and other employees from CEE. All of them were recorded in two MNCs .

Top management frustrated by the reluctance of employees to take responsibility:

“Generally people do not want to make decisions. This should be changed.”

“I have never heard anybody in this organization say that he or she is responsible for something.”

“People are afraid to take the responsibility. They do not want to make decisions and want to lower the risk. There is no sense of urgency and ownership in the organization.”

“We’ve gone through a rapid expansion in Russia. We have to delegate more responsibilities now.”

The organization believes that Top management does not want to delegate:

“The power is only at the key positions and delegation is very low. There is also some lack of trust in the organization.“

“We need to have clearly defined levels of responsibility. I have heard somewhere that I can approve expenditures of up to $X but I haven't seen it anywhere in writing.”

65 “The line of authority to make decisions that exceed budget is not drawn.”

“To my mind it is ridiculous how little managers can decide – I do not understand why we have to approve every decision with Top Managers.”

Source: Sabolova. E: Boston Consulting Group, Global survey. 2007

One possible way of internal communication improvement is the implementation of a system of regular meetings (strictly respected). These meetings with pre-defined agenda assures that all problems are discussed on regular basis and all information is communicated to all employees. That solves the disputes about willingness to delegate and bear responsibilities.

As a next step, a detailed motivational scheme shall be introduced.