Winning Strategies

Entitlement and reverse entitlement

Identifying and eliminating the multiple faces of entitlement

By Larry G. Linne

Entitlement is a phenomenon that is becoming increasingly common in American society. Many people feel entitled to jobs, mortgages, access to government services and legal remedies for their problems. Children feel entitled to the latest MP3 players, cell phones, clothing and cars. Employees often act as if they are entitled to pay raises, profit sharing, benefits, job security and confidential company information.

Entitlement also is rearing its head in the insurance agency world. Agency owners and managers are finding that they must be careful what they give employees. That gift could quickly turn into something to which employees feel entitled.

A friend of mine owned a business that had a very successful financial year. He decided to share his success with his employees, to whom he had never previously paid a bonus. The amount given to each employee equaled between 25% and 40% of his or her salary. This was a very generous gift. The next year was not profitable, so the owner didn’t have the money to pay a bonus.

Eight of his 24 employees quit when they were told they would not get a bonus. They said they had worked just as hard and it wasn’t their fault he didn’t make a profit. They felt entitled to a bonus because he had paid it the prior year. He had to shut down a portion of his business because of the loss of these employees.

Agency owners must be careful not to create an entitlement culture among employees. This can be frustrating, because many agency owners want to do nice things for their people.

A new issue has crept its way into 21st century leadership, one that can be just as harmful to the organization as employee entitlement. Called reverse entitlement, this type of entitlement can take two forms: performance entitlement and value entitlement.

Performance entitlement

Performance entitlement happens when an owner says, “I give my employees a paycheck and a safe place to work, so they should perform.” The fallacy of this argument is that no one is entitled to results, performance or success. We must earn those outcomes. Just because we write a check for performance doesn’t mean we will get performance. In 1955, an employer had an excellent chance of receiving good performance for paying the employee, but not in 2008.

Today’s employees have many more choices and a much different attitude than did the employees of the 1950s. They have options ranging from self-employment to working for a competitor, from telecommuting to finding jobs in other industries. More new companies were started in 2006 than in any other year in history, and most of this increase came from the younger generation! Employees have become free agents, and younger employees often place a high value on independence and flexibility.

Free agency has taken full form in the world of professional sports. Athletes walk away from multi-million dollar contracts because they aren’t being motivated or treated fairly by the coach. Money is no longer the top motivator for employees in sports or business.

I know what you’re thinking: “Are you kidding me?”

I get just as frustrated writing this as you may be frustrated reading it. But we must deal with the reality. The younger generation entering the business world—Generation X and Generation Y—is a different breed than Baby Boomers. They grew up with computers, listening to iPods and looking for a place to showcase their talents.

Many have never been inside a brick-and-mortar bank or a “record store,” and most of their purchases are made via the Internet. They can make five- to seven-figure incomes from home on the computer. They don’t just need a job with pay. They want a place where they can make a difference and be recognized for it. We employers are no longer entitled to their performance or their loyalty. We must earn it. So how do we do this?

Employees’ needs have not changed much over the last 30 years, but today’s employees do have different expectations. Employees want three main things:

1. They want recognition for doing a good job.

2. They want clear expectations with frequent feedback on how they are doing.

3. And finally, they want to know what is going on in the company and how they fit into the big picture.

An employer who throws in a nice paycheck will have happy employees and will eliminate this aspect of reverse entitlement.

Value entitlement

Producers/owners are not entitled to benefit from growth in the agency’s value unless they are contributing to the agency’s growth. Each producer/owner has a responsibility to contribute to the growth of the business.

Producers who become owners in an agency after many years of production can sometimes “retire” without officially retiring. We have seen numerous producer/owners in this situation stop growing their books of business. While the agency spends money to bring in new producers and invests in new services, these “retirees” simply take more time off. The agency’s value increases, and the “retirees” reap the rewards without doing anything to add to that value. If a producer/owner decides to stop growing his or her book of business, he or she should not share in overall agency growth. If this strategy is implemented, this form of reverse entitlement will be eliminated as well.

Overcoming entitlement

The Sitkins Group has identified three different methods that can be used to successfully reduce entitlement in an agency.

Conversation: An initial conversation with producers and other employees about the concept of entitlement will bring the problem to light. Owners, producers, and other staff members all need to be aware of ways in which their attitudes and behaviors may be creating a climate of entitlement in the agency, as well as how they may have attitudes of reverse entitlement.

Clear performance objectives tied to pay: Job objectives must be clear, and pay should be tied to performance.

Communication: There must be ongoing, proactive discussion about entitlement so that employees can begin to identify it on their own. If you make these discussions a part of your culture, everyone can become part of the solution. *

The author
Larry Linne is president of The Sitkins Group, Inc., which offers the Vertical Growth Experience™ programs exclusively to a private client group known as The Sitkins 100™. These programs are delivered through training, coaching and networking experiences that literally force vertical growth in an agency. Larry’s background includes agency operations and sales management, CEO coaching, sales process consulting, performance management and leadership training.