This case study describes the development within an Austrian SME with around 300 employees using the example of “salary adjustment”.
In the past, this issue was handled in such a way that team leaders once a year drew up proposals for salary adjustments in their teams and communicated them to their head of department.
The latter then forwarded the proposals to the management. Management conducted a review of all proposals at a GF meeting and shortened them dramatically.
In the end, only about 10% of the employees named by the team leaders received a salary increase. To this end, the management has adjusted the salaries of some employees who have not been appointed by the team leader but who have recently been very present at the management level. This approach has been established in the company for many years.
Effects and consequences
The approach of the management led to great frustration among the team leaders. They had the feeling that they had little influence on the salary development of their employees.
The even worse consequence, however, was that the personal responsibility of the team leaders was greatly reduced. Voices like: “We can’t decide anything anyway and are constantly overruled by the GF” were the order of the day. As a result, more and more decisions were “delegated” to the management, which again led to dissatisfaction among the management.
My assignment, which arose from coaching with one of the managing directors, was to strengthen the personal responsibility of the team leaders. I then conducted a workshop with the team leaders to reflect on their view of the topic and develop initial improvements.
One result of this workshop with the team leaders was a high level of dissatisfaction with the salary adjustment process. This was prioritized by the team leaders as the most important topic. The following proposal for improvement was then developed by the team leaders:
- Management defines a budget for salary adjustments for each department
- The department heads agree a budget per team with their team leaders
- Team leaders create a proposal within this budget
- GF commits itself to change this proposal only slightly (max. 20%).
This proposal was presented to the management by a representative of the team leaders. After a brief discussion, the management was able to understand that its previous behaviour (the “overruling” of the proposals) had made a significant contribution to the reduction in personal responsibility.
The management then accepted the proposal of the team leaders.
Development → Collegial leadership
It is interesting to note that over the next few years it has become apparent that, in the context of salary adjustments, hardly any changes have been made by the GF to the team leaders’ proposals.
This increase in responsibility was – among other measures – the impetus for a process that led to a significant increase in the team leaders’ personal responsibility.
Other processes were examined according to the same pattern and criteria were also defined within which the team leaders were free to decide.
The responsible handling of the new opportunities by the team leaders ultimately led to an improvement in cooperation and to a strengthening of trust throughout the company.