Introduction: The Management Problem
AlMassaleh Real Estate Company is a publicly listed company in the Kuwait Stock Exchange, although three-quarters of the share currently belong to one family. Founded in 1989, AlMassaleh Real Estate Company soon became one of the most prominent real estate businesses in Kuwait. The initial idea behind its foundation was to developing and managing residential and commercial complexes in Kuwait and the neighboring countries. However, nowadays the company has ceased to seek new development projects and is only managing its existing facilities.
In 2015, the management chose to take a “lean and mean” approach toward human resources management in the pursuit of cutting expenses and revitalizing business. In particular, the company underwent drastic restructuring by merging certain departments and laying-off almost half of its mid-level employees, such as assistant managers and alike. It continued doing business with the strict minimum number of employees, creating an imbalance between the amount of work to be done and the existing employees to handle such workload.
However, it soon became apparent that the decision was rushed. What AlMassaleh Real Estate Company did not take into account is that now laid-off mid-level employees formed the link between the company’s management and the low-level employees (maintenance team, cleaning, and others), service providers, and tenants.
The radical restructuring of human resources has had a significant negative impact on the remaining mid-level employees who were forced to take additional responsibilities without getting any benefits in return, be it monetary or non-monetary rewards. For example, the finance assistant manager now had to handle tenants and service providers’ non-finance-related queries because other departments do not have enough staff to handle all such queries. The pressure on those employees has become unbearable; their salaries have been the same for more than six years now and the management is no looking to giving any salary increase anytime soon. Most of such employees are demotivated, unhappy and are considering moving out of the company.
Because employees’ performance is in decrease, business is suffering as well. Graph 1 shows that the year 2015 when restructuring took place was the worst in the time period between 2014 and 2020 both in terms of sales and net income. Though in 2016, the company partly recovered, soon the numbers were down again, which indicated a concerning trend. As the head of legal and compliance of the company, my department is being highly affected by the performance of other employees, especially those who must provide adequate reports to helping me keep the company in good standing.
The Research Question
The first step in undertaking research is developing a research question that is consistent with the identified problem. Research questions are important because they help to locate the focus of research as well as break down the project into manageable parts. Essentially, a well-posed research question reflects what the researcher wishes to discover about the problem. Researching recent changes in human resources management at AlMassaleh Real Estate Company shed light on apparent employee dissatisfaction that might have already compromised the longevity and sustainability of the business.
Once I did identify the management problem, I was able to translate such a problem into a research question with the use of the worksheet provided in the study guide of Unit 5. This worksheet provides well-structured guidance where we start with describing the problem our management is facing and step-by-step start to narrow down the problem into one single question after pinpointing the key characteristics of the problem.
Following the completion of this worksheet, and with the guidance and support of the lecturers throughout the module, I was able to finally formulate the following research question: “Can non-monetary rewards improve employees’ performance in a small-to-medium enterprise?” The above-mentioned research question falls under the process type of questions. Process questions are meant to deepen the understanding of a subject (organizational management) and how its various components, such as human resources management, contribute to its functioning. Below are the five elements (the PICOT elements) of my research question (Table 1).
Table 1. PICOT question.
The Research Evidence
The sources for the literature review were mainly found on Google Scholar using relevant keywords and their combinations. Firstly, I researched employee satisfaction factors on the whole, without specifying countries, cultures, organizations, or the level of management. It was critical to understand the very concept of employee satisfaction and study its various aspects and facets. The scope of the further search was then narrowed down to mid-level management as it is applicable to the current situation at AlMassaleh Real Estate Company. Because employee satisfaction is often a cultural phenomenon, I identified sources that concerned human resources management in the MENA (the Middle East and North Africa) region in particular. Lastly, studies that tested interventions in the form of non-monetary rewards were reviewed with a special focus on systematic reviews and meta-analyses as their findings are better inferred.
Employee satisfaction can be defined as the degree to which employees like their jobs and perceive their characteristics as meeting their expectations. Though different studies utilize different definitions, the phenomenon can be generalized as “the scope of the work and all the positive attitudes regarding the work environment” (Staples and Higgins, 1998, p. 220). Küskü (2001) adds to the argument by point out that essentially, job satisfaction is a function of the harmony between the rewards that an organization has to offer and its employee and the kind of rewards that the said employees actually want. Therefore, the question arises as to what constitutes employee satisfaction.
To answer this question, researchers developed employee satisfaction dimensions that help with understanding the complex concept. General job satisfaction refers to work conditions, working time, and the reputation of the company (Antoncic and Antoncic, 2011). Küskü (2001) argues that while job satisfaction and employee satisfaction are often used interchangeably in the literature on the topic, employee satisfaction is a broader term because it goes beyond the concrete job itself. The relationships dimension includes both the bonds between employees and trust in management. The latter is connected to employee loyalty which is another employee satisfaction dimension (Antoncic and Antoncic, 2011). Lastly, the dimension that is most pertinent to the present paper is remuneration, benefits and organizational culture.
However, one cannot make generalizing conclusions about employee satisfaction factors without discerning what satisfaction means for various levels of management within an organization. Mid-level managers are the backbone of corporate structures and a valuable link between the other levels. They are also in the position that many see as enviable because they enjoy the flexibility inaccessible by entry-level employees and are free of the responsibilities burdening the senior management. However, contrary to popular belief, multiple studies found that mid-level managers are the most depressed compared to employees, managers, and owners at different levels.
Wilkie (2020) cites a 2015 US study that discovered that 12% of blue-collar workers and 11% of owners and senior executives were depressed. In contrast, depression symptoms were found in almost every fifth (18%) mid-level manager (Wilkie, 2020). A separate study carried out in Utah showed that mid-level management fell in the bottom five percent when it came to job satisfaction, engagement, and commitment (Wilkie, 2020).
The authors of the study wrote that at first glance, one may think that those managers were inadequate employees to begin with, which is why they were neither engaged nor happy in the workplace. Yet, when the researchers put together a portrait of a typical unhappy mid-level management, they learned that that person had a college degree, has been in the industry for five to ten years, and has received good performance evaluations.
It is not fair to blame mid-level employees for incompetence when they might as well be merely mismanaged. Zenger and Folkman (2014) surveyed 320,000 mid-level managers at hundreds of organizations and analyzed the responses of those who showed the lowest levels of satisfaction. The researchers were surprised to learn that monetary rewards were the least of the respondents’ concerns (Zenger & Folkman, 2014). What caused their dissatisfaction was being unheard, feeling unappreciated and unnoticed in the workplace, no career or promotion opportunities, and the lack of flexibility. It is safe to assume that non-monetary rewards should aim to address such problems.
Admittedly, the purpose of non-monetary rewards is to make employees feel recognized and cover their needs, from the most basic to high-order ones, such as self-actualization. Though the hierarchy of human needs may be universal, the need for particular resources and opportunities may be contingent on the culture. The research by Andreassi, Lawter, Brockerhoff, and Rutigliano (2012) that covered 48 nations shows that different cultures look for different benefits in terms of career. For example, individualist cultures prefer rewards that benefit the self (flexibility, work-life balance, rewards based on individual performance) more than collectivist cultures. Based on these findings, it seems important to understand the satisfaction factors that are most relevant to Kuwait.
The 2015 Job Satisfaction in the Middle East and North Africa survey gathered responses from more than eight thousand workers in the MENA region. Apparently, the MENA workforce is at its lowest in terms of satisfaction (Al-Masri, 2015). What should bother employers is the worker’s general willingness to “hop” jobs and the conviction that they can easily find a similar vacancy (Al-Masri, 2015). Eighty-three percent of respondents from Kuwait pointed out the lack of job opportunities. Following closely is the sense of achievement, freedom of self-expression, and flexibility (Table 1) (Al-Masri, 2015). The data show comprehensively that non-monetary rewards are as important remuneration, if not more important.
Before introducing non-monetary rewards in the workplace, it is worth asking whether the evidence suggests that they are truly effective. Abdullah and Wan (2013) presented a systematic review that suggests that the relationship between non-monetary rewards and job-satisfaction is well documented in the existing literature. Job satisfaction that arises from the fair appraisal of one’s work is negatively associated with job absenteeism, turnover intentions, and turnover rates (Abdullah & Wan, 2013). As for job performance, non-monetary rewards should be a part of the general positive work environment (Abdullah & Wan, 2013). In particular, the literature indicates that recognition, awards for good performance, and autonomy are conducive to enhanced performance.
The Stakeholders
Table 1. Internal and external stakeholders of AlMassaleh Real Estate Company.
The Organisational Evidence
Admittedly, addressing a problem as complex as employee performance and satisfaction requires a data-driven approach. Therefore, it is important to identify the types of organizational data that may guide any further decisions. The Society for Human Resource Management (n.d.) states that employee satisfaction surveys are generally helpful with obtaining useful information. Conducting a survey itself may be part of the solution because it already shows that the company cares about its employees and intends to amplify their voices when planning a human resources management strategy. However, senior management should be fully committed to actually perusing the results of the survey to prevent employees from feeling deceived or given false hope.
The question arises as to what a good employee satisfaction survey should entail to adequately measure all dimensions. The Society for Human Resource Management (n.d.) identifies three types of employee satisfaction surveys. Employee opinion and satisfaction surveys also referred to as “climate surveys”, are meant to gain a deeper understanding of employee views, attitudes, and perceptions of the company. Employee culture surveys capture the point of view of employees, which, in the case of AlMassaleh Real Estate Company, should also include desired non-monetary rewards and benefits. Lastly, employee engagement surveys assess such dimensions as commitment, motivation, a sense of achievement, and a sense of purpose. Together, all three surveys will “take the temperature” of mid-level management and identify managers’ preferences regarding rewards.
At the moment, AlMassaleh Real Estate Company does not have the required data. Therefore, surveys need to take place sometime in the nearest future. The Society for Human Resource Management (n.d.) explains that there are two approaches to conducting a survey. It can be done in-house by the human resources department or outsourced to external vendors. Both ways have their own benefits and drawbacks: in-house surveying helps to tailor instruments to the needs of the organization, but external vendors leverage years of opinion when addressing human resources issues.
Recommendations
The following information will be disseminated by email to executives and senior management at AlMassaleh Real Estate Company. While AlMassaleh Real Estate Company has multiple stakeholders, the majority of them do not have enough leverage and visibility on the inner workings of the company to trigger change. Kuwait’s society, investors, and customers pursue their own interests when working with or using the products and services of AlMassaleh Real Estate Company. They are not interested in the internal change as long as their demands are met. In contrast, executives and senior management work directly with mid-level management and can influence their workflow and work environment when a situation calls for it.
Dear Sir or Madam,
It has come to my attention that the current situation at AlMassaleh Real Estate Company with regard to mid-level management has become untenable. As per statistical figures, the 2015 reorganization did not yield the desired results. Instead, it overburdened mid-level managers due to staff shortages and uneven distribution of work responsibilities. Modern evidence allows me to assume that there is a link between managers’ satisfaction and the company’s performance on the whole. I am well aware of the fact that currently, the company is not in the position to raise salaries or hire more mid-level managers. However, it would be highly beneficial to introduce non-monetary rewards that would increase employee satisfaction and, in turn, their performance.
My recommendations regarding the ongoing situation fall into three categories: providing learning prospects and opportunities, offering more flexibility, and appraising employees’ achievements. Regionwide surveys have shown that the absence of a clear career development track bothers many employees. The problem is especially pronounced among mid-level management who may feel “trapped” in-between organizational levels. Therefore, I suggest AlMassaleh Real Estate Company lunch learning programs for managers that help not only with vertical mobility but also changing specialization.
Flexibility is another non-monetary reward that has been made among the most desired by MENA and, in particular, Kuwaiti employees. Decreasing the workload while AlMassaleh Real Estate Company is weathering hard times is not an option. Yet, what we can offer our employees is more autonomy regarding their schedule. In particular, starting and finishing time can be arbitrary, unless there are important meetings and events where mid-level management have to be present. The Covid-19 pandemic has made us divert many work activities online. Even when the pandemic is over, I suggest we use this blueprint to allow employees to do some work from home. Provided that all tasks are accomplished, not having to leave the work environment may decrease the stress that mid-level managers are experiencing at the moment.
Lastly, it is unfair to demand more commitment from mid-level managers without showing recognition for their hard work. Senior management could make more effort to raise awareness of mid-level managers’ contributions to the firm. The appraisal could be in the form of giving credentials publicly to people behind ideas, contracts, and events. On a larger scale, AlMassaleh Real Estate Company needs to develop a feedback system from senior to mid-level management to give the latter a sense of accomplishment.
However, first, we would have to gather feedback from the mid-level management themselves. I would prefer to conduct a survey that would measure their satisfaction with work, commitment, and the job attributes that they wish for.
Once again, I would like to emphasize the importance of managing human resources in a more efficient way. Looking forward to your thoughts on these three ideas.
Best regards,
Your Name.
Leadership Lessons
This project taught me the basics of action research and gave me experience in carrying out the most important steps, such as posing the right question, reviewing existing scientific literature, and proposing intervention. What made this assignment especially relevant is my choice of an actual problem at my current workplace. Job dissatisfaction is insidious: it comes in stages and becomes a destructive force affecting job performance and, in the long-term perspective, the longevity and success of the company. It was especially compelling to learn that employee satisfaction is a multidimensional concept. In a way, working on this assignment helped me to further debunk the assumption that remuneration is the end-all-be-all of employee satisfaction. It became evident that good rewards appeal to the deep psychological need to be heard, noticed, and appreciated. Indeed, work is an indispensable part of human identity, which is why the lack of appraisal leads to demotivation and disengagement.
While working on this project, I rethought my leadership style. I am confident that these insights will impact my future professional activities. Now I realize that servant leadership that takes into account the follower needs might be something that can help a company survive difficult times. As a servant leader, I plan to take more interest in what lacks from the work environment and how it can be changed to foster human potential.
When it comes to leading people, there is not a single one-size-fits-all strategy. Therefore, an adequate intervention has to consider many aspects ranging from cultural to organizational. When developing my leadership strategies, I will not jump to conclusions regarding what it is like to play a particular role in the organization. For instance, mid-level managers have their own set of challenges and not as happy as many think them to be. Thus, I will seek to gain feedback from employees first and include them in the decision-making process as much as I can.
Reference List
Abdullah, AA & Wan, HL. 2013. ‘Relationships of non-monetary incentives, job satisfaction and employee job performance’, International Review of Management and Business Research, vol. 2, no. 4, p. 1085.
Al-Masri, R. 2015. Keys to job satisfaction in MENA: factors contributing to Middle Eastern workforce discontent. Web.
Antoncic, JA & Antoncic, B. 2011. ‘Employee satisfaction, intrapreneurship and firm growth: a model’, Industrial Management & Data Systems, vol. 111, no. 4, pp. 589-607.
Federal Reserve Bank of St. Louis. 2021. Non-oil revenue for general government for Kuwait. Web.
Kuwait News Agency. 2020. Kuwait real estate to flourish in ‘20 – experts. Web.
Küskü, F. 2001. ‘Dimensions of employee satisfaction: a state university example’, METU Studies in Development, vol. 28, no. 3-4, pp. 399-430.
Oxford Business Group. 2019. Kuwait economy diversifies with growth in non-oil sectors. Web.
Oxford Business Group. 2017. Kuwait’s real estate market remains healthy and records price increases. Web.
Society for Human Resource Management n.d., Managing employee surveys. Web.
Staples, DS & Higgins, CA. 1998. ‘A study of the impact of factor importance weightings on job satisfaction measure’, Journal of Business and Psychology, vol. 13, no. 2, pp. 211-232.
Wilkie, D. 2020. ‘The miserable middle managers’. Society for Human Resource Management. Web.
Zenger, J & Folkman, J. 2014. ‘Why middle managers are so unhappy’, Harvard Business Review, pp. 2-6.