Employee Term-Limits Are NOT the Way to Create a Highly Engaged, High-Performing Work Environment

Happy Ground Hog Day to all my United States subscribers…

Earlier this week a new casino set to open in Atlantic City, New Jersey announced it will set “term limits’ for its front line employees.

Term limits and a re-application policy for frontline employees?

That is certainly one way to create a workforce.

I don’t believe its the way to create an engaged, motivated, creative workforce with a desire to go above and beyond for customer service, in one of the highest touch service industries. What do you think?

The operators of the Revel casino with policy do not seem to understand the real driver of high-performance work environment is trust.

Although trust is always a two-way street, it has to start somewhere. And, in this case it has to start with the employer. You have to first give trust to get trust. This is true with intimate personal relationships and the relationship between an employee and their employer.

The original story, which I heard on National Public Radio on Monday morning, said representatives of the company were not available for comment or an interview for the story. That tells me they may not be all that proud of their approach and really not sure how best to position it, although the statement they provided said the policy will help it, “attract the most highly professional people who are inspired by a highly competitive work environment.”

The key word in that quote is “attract.”

I’m interested to see what happens after the attraction stage takes place.

In 2005 Sirota Survey Intelligence research reported that employee morale declined significantly in the first six months after hiring date in 85% of Fortune 1000 companies. With the downturn in the economy and its subsequent workforce reductions, that figure most likely hasn’t improved any, I’m assuming.

I see this strategy making for lazy organizational leadership as it may provide a false sense of security and unrealistic expectations for company leaders. Thus, leaders or managers may  not feel the need to communicate to motivate feeling that “job security” should be the motivating factor, a very short-sighted approach that will create a “compliance culture” through “command control” leadership.

If the people at Revel read this I recommend they review my Employee Motivation Equation and look for ways to apply it to their new policy. It may help some but not as much as it would if the re-application policy rescinded.

But, that’s just my two cents. I’m sure they have high priced human resource consultants and attorneys advising them on this approach.

I’d love to hear others thoughts on this article, please leave a comment and let us know what you think?

’til next time, make it a great weekend!

7 thoughts on “Employee Term-Limits Are NOT the Way to Create a Highly Engaged, High-Performing Work Environment

  1. Shawn says:

    Turn this policy around and apply it to the leadership first, and communication and cooperation must occur for the leader to remain in their position. Exactly why the term limit idea was generated in the first place, lack of accountability to the people by elected representatives. A poor leader, who communicates poorly will easily be hidden under the employees lack of proper performance due to lack of proper instructions, training, guidance… Remove the employees not the manager or leader.

    This automatic reapplication process takes all the blame for poor performance off the leaders and managers, while encouraging them not to confront issues by just waiting out the individuals time.

    One would almost think this was drafted by a politican to easily point the finger somewhere else, not a workplace policy for public or private sector.

    They will likely see little innovative thinking in this environment, as the risk to the employee is too high in the current employer driven marketplace. This can only work in this environment since the pool of people looking for work is still high. Bring down the unemployment numbers and the policy changes or the casino cannot really enforce it because the only people applying are current employees.

  2. Jeffrey B. Senft says:

    i’m not sure I agree with the concept but it raises some interesting points. first, it’s almost like a contract employee, with a preset term that allows each other to make the initial employment agreement with no obligation going forward, on either side. second, it allows for not having to fire the employee or lay them off. the decision is we are going in another direction at this point. after the initial contract duration, if the employee works out than maybe they are hired on permanently. thirdly, for employees needed for a heavy workload on a short term basis this could make sense (see Manpower, etc.). fourth, it would allow for the ‘culling’ of marginal employees to find that truly exceptional one that will add significantly to the company culture and value. fifth, a lot of employees have the “show me first” mentality. we live in a world where the mentality is “pay me upfront and I’ll deliver later” nobody understand this better than you do with your baseball experience of long term contracts. what happen to the days of proving yourself first and then being compensated for that. remember that trust is something earned, not given or assumed (on both sides). like I said, I’m not sure I agree with it but it does raise come interesting thoughts. Jeff

  3. Renu Minhas says:

    I think job security is not a carrot for motivation. Employees performance is dependent on many other factors like systems, processes, empowerment to make front line decisions and then those who excel will not have to worry about job security and those not performing well will get to lose their jobs.

  4. Skip Weisman, Workplace Communication Expert says:

    Thanks for stopping by and for sharing your thoughts. I think you and I are of similar beliefs. I love your point about poor leaders too easily looking outside of themselves to the problem of poor employee performance and being able to hide behind that (for awhile anyway, at least as long as the 2nd round of term limits runs its course, I guess?).

  5. Skip Weisman, Workplace Communication Expert says:

    Thanks for stopping by and adding value to the discussion. You make some very valid arguments and I agree that in the right situation, a “contract” employee makes sense, and certainly having a probationary period or initial employment arrangement with no obligation beyond a certain point may make sense.

    One of my questions regarding the “term-limits” is that I’m assuming this doesn’t preclude the firing of someone under-performing inside of the limit period? It would be my assumption if this is the case and someone makes it to the full term they are a valuable employee. So, why bother with the stress and uncertainty of the term-limit?

    Technically, every evaluation period is about performance and if performance isn’t up to standards then there are consequences, coaching, counseling and the potential for release. I don’t necessarily think the “term-limits” change anything in the relationship, or shouldn’t, if performance management and employee relationship management is done at the highest levels. As such, it makes the entire concept, moot, and brings up uncertainties and issues that are unnecessary and better addressed through other systems and processes.

    I think your point to long-term baseball (sports) contracts is valid and proves the point that “term-limits” for “guaranteed” employment are not good for high-performance and developing long-term motivation. There are many other reasons why professional sports offers that model now and really aren’t pertinent to regular business/employment. And, if business leaders had systems to manage performance as well as athletic teams do, they would be able to glean higher levels of performance because expectations would be clear and regular, positively delivered, influential positive and constructive, developmental feedback would be consistently provided.

    Thanks, again for being inspired to join my discussion, here!

  6. Skip Weisman, Workplace Communication Expert says:

    Thank you for stopping by and being inspired to leave a comment. You are absolutely right, job security is not necessarily a carrot for motivation beyond being motivated to comply with the minimum performance standards to remain secure in the job, that’s for sure.

    Most employers would prefer to create engaged employees that are self-motivated and inspired by their roles and potential contribution to the firm they work for to exert effort beyond minimal standards.

    You are also correct that many factors go into being able to create that type of work environment and the trust to make frontline decisions and to have ideas valued and accepted into the organization go a long way towards that end.

    Thanks again for commenting here, and I encourage you to return often.

  7. Walter says:

    There are some interesting stduies showing that performance reviews do more damage than good. A growing number of experts talk about abolishing them. Frankly, I disagree. Without doubt, a badly done performance management process can be worse than no performance management process or review at all. But the process and review executed well builds a solid and critical relationship between the leader and the employee. When performance management is not treated as an event but rather as an ongoing dialog that sets and resets expectations, that shares struggles and praises achievements; it becomes a natural and honest foundation for the leader/follower relationship. The formal performance review becomes a summary of what’s already known, a chance to reflect and learn from the performance period and an opportunity to plan for the next one. Poor execution is no excuse for the industry to abandon something that can add so much value. Kristin thanks for sharing your forms and keep coaching leaders to do this well!

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