Why employee management is out of control

David Hassell is the CEO of 15Five. This post originally appeared on the 15five blog.

Sweatshops, child labor, unsafe conditions and poor wages. Thankfully, these are largely just bad memories for the American workforce. A better life for employees did not come easily, as laborers fought managers and owners for many years to win these basic rights.

We are now on the cusp of a new revolution — something we’re dubbing: Employee Rights 2.0. “Labor” is breaking free of traditional management structures to experience unprecedented autonomy. Today’s knowledge workers demand freedom from micromanagement and the punch-clock.

So how will you manage to manage them? Will employees have all the control?

Labor pains

If you look up the origins of the word “labor”, the definitions you discover are quite unsettling — “work hard, toil, struggle, have difficulty, endure pain and suffering…” Is it any wonder that the first organized labor unions formed nearly 250 years ago?

For the next couple of centuries, a power-struggle ensued. Controlling business owners and managers were little better than slave-masters.The American Federation of Labor (AFL) was founded on the belief that self-organization along occupational lines and a concentration on job-conscious goals would “furnish workers with the weapons which would secure industrial emancipation.”

The AFL succeeded and ultimately won a shorter workday, safer conditions, a fair wage, and health benefits for subsequent generations of employees.

But like many oppressed groups, these workers eventually became the oppressors. By setting higher wages and influencing laws that required union labor in specific industries, business owners were forced to raise prices and sometimes lose their competitive advantage in the marketplace.

We now live and work in an age where employment can be decentralized, incentives are far more than monetary or benefit-based and technology drives innovation at a lightning pace. The demand for top-talent has never been greater, so how do employers stay atop a rapidly shifting workplace landscape?

Eyes on, hands off

That all depends on how business leaders adjust to cope with staffing changes in a competitive global economy:

• Access to a talent pool the world over including off-shoring, outsourcing and remote work.
• Always-on communication where mobile technology has created the 24-hour workday.
• A new generation of workers with different demands and desires.
• Consumer awareness and the dawn of social media. A world where consumers have significantly more insight into the way companies do business and treat employees, with the power to react and heavily influence others.

Workforce.com reports that half of American employees will be completely independent by 2020. This includes those on fixed-term contracts, independent consultants, those working through temporary agencies, and those who own a business with less than five employees.

The traditional employee-manager relationship is massively shifting. In fact, the future ‘worker’ will largely have to manage herself through self-discipline and time management. Technologies like cloud based computing, mobile devices, and a variety of communication applications have created an environment that supports these remote, independent workers.

Technology can also support managers and owners to keep a finger on the pulse of people they may never meet in person but who are squarely responsible for work that contributes to the growth of their businesses. Rather than leaving things to chance, regularly asking employees questions and soliciting feedback is a sure-fire way to maintain visibility for the manager and autonomy for the employee.

True power is surrender

Traditional managers are struggling to keep power in the age of the employee. From a manager’s perspective, power is the capacity to produce an outcome.This is a fading paradigm where managers feel that they need to have tight control over employees.

Looking at these relationships in terms of power or control is the first thing that needs to shift. Control in the form of micromanagement is actually a decrease in power for everyone involved.

When every detail of the employee’s work is scrutinized, managers don’t have the bandwidth to perform their own necessary tasks. And employees are never given the autonomy to grow so that they can become masters of those particular duties.

When managers give up control and provide employees with an opportunity to step up, both parties become more empowered. When employees can assume the myriad responsibilities that company leaders have to delegate out, everyone wins.

The new demand curve

As the nature of employer/employee relationships shift, you still need to attract the best talent and experts. If you remove the traditional model, how do you attract the best of the global talent pool? How do you keep them, even when you’re working primarily with consultants?

The best people always have a lot of options and leverage. Those who can create and produce at the highest level generally get to create some of the terms for how they are going to work — remotely, as a contractor, or sign on full time and demand a high salary, equity and benefits.

They are really good at what they do and are scarce relative to the demand for their services. Demand also increases exponentially at higher levels of knowledge, skill, and experience.

Usually considerably more pay or equity is required to attract or retain the top percentage of talent that can differentiate your company in a highly competitive marketplace.

Isn’t this starting to look and feel like the shift that we saw following the victory of labor unions?

Finance vs. fulfillment

Some people are driven by money and may seek to take advantage of you. But you have to know that when they are given a better financial opportunity, they are going to quit and subsequently erode your culture.

Today’s new workforce is not just looking for financial gains. They are looking for flexibility and alignment with purpose. You can present an uncommon opportunity where they are so passionate about what your company does, that they will sign on merely because they are inspired by the company mission and alignment with the core values.

Some are so passionate about making a difference that they will join your company even if they can make more money elsewhere. Those who are truly inspired will even be in it for the long term.

Take for example, IDEO’s world-famous culture which provides the opportunity for designers to solve problems with enormous impact. IDEO attracts the best people who want to be part of their human-centered approach and will sacrifice a salary for the opportunity to change the world.

And you can bring in one or two experienced independent workers to solve an immediate short term problem. They are ideal to join for two to three months and show your full-time committed team how to rebuild the site on a new platform or teach a new sales strategy.

Get the team up to speed with best practices, transfer 70 to 80 percent of their knowledge, and then pass the torch to a team that you can afford — one that believes in the mission and who will stay on board for as long as it takes.

There are many ways to use the transforming world of work to your advantage, so don’t be afraid of shifting away from a traditional hierarchical management structure. You can instill faith in your company mission instead of instilling fear in your team. You can wield the power of asking questions instead of wielding a stick.

This latest shift in human resource management may give employees unprecedented rights, but that doesn’t have to come at the expense of management. In this brave new world everyone wins — employee, manager, company, and customer.

Do you feel like you are losing control of your workforce? Are you all about inspiration or do you demand perspiration?

Read next: The future of work is already here