New Methods of Management Can Boost Employees’ Morale

When executives discuss the tenor of business these days they invariably use words like "stressful," "lean"
and "tough." While an economic recovery beckons, orders for products and services are still hard to come by
and many companies are adhering to hiring freezes or staff cuts.

By CAROL HYMOWITZ Wall St. Journal

So how can executives inspire employees who must work harder to woo new business, plus do the work once
handled by larger staffs? They can’t rely on traditional financial incentives. Instead, they must use creative and
inexpensive perks — all handed down using solid leadership skills.

Like other advertising agencies, J. Walter Thompson is weathering the worst recession since World War II, with
big corporate marketers slashing ad budgets. Although the agency cut staff only minimally, it lost some big
accounts and has had to compete hard for new ones.

Bob Jeffrey, president of the agency’s North America division, says he motivates his staff by relying on "simple,
old-fashioned values, such as recognizing people and making sure they feel connected to the company."

That model has involved making sure he knows the challenges employees face in their personal lives as well as
on the job. When he learned that one employee was going through a divorce, he helped her out. "I decided we’d
do everything we could to give her some air cover for a while," he says.

He also tries to ensure that all employees feel a sense of ownership in the agency. "Our receptionist is an
important person because the way she answers the phone influences how clients feel about us," he adds.

His sees his biggest challenge since coming to J. Walter Thompson after running his own small agency as
trusting people to have his high standards. The trust breeds commitment. "I want people who want my job," he
says.

Another motivating tool: health and fitness perks. Employees can work out and relax in a "de-stress room," get
free massages and yoga or nutrition lessons, join a company sports team, and consult with a personal trainer.
Mr. Jeffrey is a compact man with a weight lifter’s torso who downs protein shakes during staff talks. "I wanted
to share my solution," he says.

The fitness perks have boosted productivity and generated goodwill at relatively little cost. "We’re totally
dependent on the ideas and talent of our people, so we have to help them feel great about themselves," he
adds.

At FelCor Lodging Trust, the Irving, Texas, hotel real-estate investment trust, Chief Executive Thomas J.
Corcoran cites open and frank communication with employees as "the best motivator."

FelCor, owner of the largest number of Embassy Suites, Crowne Plaza and Holiday-Inn branded hotels in the
U.S., has been hurt by the travel slump since Sept. 11 and canceled merger plans with MeriStar Hospitality. As
a result, "bonuses were thin in January," Mr. Corcoran says, and stress at work and home is higher than a year
ago.

He has responded by trying to keep his staff of about 65 employees informed. Since last year, for example, he
has shared with staffers the monthly report he used to give only to company directors. "An employee
suggested I do that, and I thought it was a very good idea — a way to help everyone feel more a part of things,"
he says. "I’ve always hated bosses who keep their doors closed. When you do that, your staff is going to get
paranoid and worried about what is going on, even when there’s no cause."

Mr. Corcoran also relies on a novel method for building bonds: Once a month he either cooks lunch for his staff
or selects a cooking team to prepare a meal in the company’s well-equipped kitchen. Together, they have
shared gourmet dishes, sandwiches and fat-free lunches that accompany Weight Watchers meetings.

"This isn’t a gourmet contest," says Mr. Corcoran, who loves to cook. "It’s about serving good food and sitting
down together. People work better if they like where they work and feel part of a community."

At Interpublic Group of Cos., the New York advertising holding company, Mark Dowley, head of the sports and entertainment group with almost
4,000 employees, says it was "painful and gut-wrenching" to have to lay off scores of employees in the past year.

To sustain morale and productivity, he concentrates on keeping people "focused on moving forward" to make sure they’re well-positioned for the
recovery. In brainstorming sessions, his employees are devising new business models such as deals between entertainment stars and big TV
advertisers. "Economically this hasn’t been a great time," he says, "but trying new things has been fun."

E-mail [email protected]. To see other recent columns, go to CareerJournal.com.

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