Law firm and law department managers who are using “caring” management strategies in response to the economic downturn are examples of playing nicely in the legal sandbox. And research demonstrates that, again, being nice pays off.
According to a recent study by Grdinovac and Yancey entitled “How organizational adaptations to recession relate to organizational commitment,” published in The Psychologist-Manager Journal, smart leaders use “caring” measures as they adapt to hard times because caring will pay off in greater organizational commitment and performance over the long run.
And what would those caring ones be?
In the recent economic crisis, according to a survey cited by the authors, “short-term cost-cutting goals” have driven most executives’ decisions, with the most common strategies being attrition, hiring freezes, layoffs, cutting employee hours, salary freezes, and reducing or eliminating benefits such as health care coverage, pension plans, retirement plans, and flexible work programs. All of those practices fall in the “uncaring and callous category” of management strategies, they contend. A second category, called “caring and humane,” included cutting senior management bonuses and reducing or restructuring executive compensation.
The researchers found that the three most frequent responses companies reported with respect to the recent downturn–maintaining full benefits, maintaining a 40 hour work week, and eliminating nonessential costs from budget–aligned with a caring attitude, while laying off employees, having employees pay more for their health care benefits, and hiring more temporary or contract workers constituted the uncaring adaptations employed most often.
According to the authors of the study, uncaring change initiatives impair the unwritten psychological contracts people have with their workplace, which include an “affective-based agreement.” Violations of this agreement negatively effect members’ affective, or emotional, commitment to their organization, making them more likely to become emotionally detached and dissatisfied. Strong affective commitment in employees not only produces loyalty, but also makes for a workforce that has higher mental well-being, less stress, and better physical well-being. For further elaboration on the study, see Dan DeFoe’s excellent post on his blog Psycholawlogy.
The researchers concluded that “employees who form a powerful bond with their organization are likely to produce positive organizational outcomes.”
To help organizations test the effect of their strategies, the team developed a new tool, the Caring Intervention Scale, which assesses the impact on organizational outcomes of worker reactions to company decisions relating to the psychological contract. While a new instrument, it has been carefully designed and tested extensively.
Law firms and law departments have all been in the vice of having to make short term financial cuts over the last few years and they are often able to endure uncaring or at least imprudent adjustments because they enjoy a buyer’s market when it comes to young legal talent. But it isn’t surprising that some of these firms and law departments have built up a wave of resentment and dissatisfaction among their troops. The affective-based agreement has often not been recognized, let alone respected.
The all-too-frequent fallout shows in the number of their keepers who leave to lateral in at another firm where they feel a better “connection.” Not where they necessarily get more money, but where they feel more affective commitment.
But then who in law cares about that soft emotional stuff?