Moving Beyond Compliance

By Roman 3 Academy

Table of Contents

All businesses need to meet the legal standard of compliance for their region in order to legally operate. This involves ensuring that your business complies with the appropriate labour laws, safety standards, equitable treatment requirements, and reporting mandates. It is something every business understands as a requirement and is the basis for the foundation that every business needs to adhere to.

Following basic compliance is not difficult, especially at the beginning of a business’s journey. When a business is small and the demands are manageable, compliance is likely not something many owners and managers put a lot of thought into. However, as the business grows, the compliance demands grow also. There is a greater need to protect yourself from legal problems, a requirement to improve operations and safety, a need to create better public relations, and ultimately increase employee retention. Meeting legal compliance will help a growing business achieve these requirements.

However, most businesses do not see the need to prioritize compliance, or they only prioritize parts of it. Many businesses focus on responsibilities, such as paying the minimum wage, but may neglect other responsibilities, such as fair recruitment procedures that do not discriminate against someone according to equality laws. It is important to stress that is it critical for a business to meet all elements of compliance. If these elements are not met, the responsibility ultimately lies with the owner, chief executive or HR Director. If there is need for legal action, it will usually be these individuals who are held responsible if their organization is found to have failed to meet its legal obligations.

The consequences of a business not meeting compliance can be significant. This is why businesses that understand the importance to meet basic legal compliance will place significant efforts and support to ensure the fulfillment of their responsibilities. However, this push to meet compliance often creates a new problem.

Your government and regulators will be happy with your efforts to meet basic legal compliance. However, there is a much more significant group who do not think that merely meeting basic legal compliance is enough – Employees.

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Using HR solely for compliance and recruitment is like using an iPhone to just make phone calls. Yes, it does it well, AND that was its original purpose and function, but it is a massively wasted opportunity.

Do We Need To Move Beyond Compliance?

The importance of meeting legal standards to avoid liability often overshadows the fact that meeting the basic level of protection set by the government does not create the level of respect and fairness that promotes a positive work environment. The government will let you operate, but the employees may not be satisfied with their jobs.

According to the Human Resournces Council, an HR Department’s responsibilities are supposed to allow organizations to:

  1. Reinforce compliance with legal requirements
  2. Support active and positive approaches to working with employees
  3. Contribute to a fair and equitable work environment.
  4. Integrate with standards that support organizational excellence in governance and accountability.
  5. Act as a foundation for individual learning and organizational improvement.
  6. Provide tools that will build organizational effectiveness.

Of the 6 outcomes, meeting basic legal compliance is only one. Unfortunately, this is often where most Human Resources (HR) efforts stop . Many people, even current HR professional, think HR is strictly for recruitment and labour compliance. However, this is not the case. HR is supposed to be about the Human Captial of an organization. Legal compliance and recruitment are certianlly part of that, but not nearly as large a part as is commonly understood. In fact, many senior executives feel HR is too focused on compliance when in reality HR departments and the organization as a whole should be focused on moving beyond compliance.

A 2017 Forbes article titled; Going Above And Beyond Compliance, stated:

Workplace compliance is about so much more than just being safe from fines. The most important thing is to make sure employees can work in a safe environment that minimizes risk and maximizes emotional health. Whenever possible, create a positive place where you’re actively respecting, listening to and evaluating employees.

Beyond compliance is about creating the workplace that employees are expecting. A workplace that allows them to feel respected, heard, and emotionally as well as psychologically safe. This is the workplace experience and culture that employees expect when they start a new job and is what will encourage them to provide their best work. When businesses and organizations create programs and policies that go beyond compliance and minimum requirements to meet the needs of their employees, it sends the message that employees are a valuable part of the organization.

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The Importance of Equity in the Workplace

A major element that moving beyond compliance provides is a much greater commitment to equity in the workplace. Basic legal compliance does mandate equity laws and standards that prohibit discrimination. However, there is a major difference between not meeting the legal definition of inequity and being intentional and open to your commitment to equity in the workplace. The need to create true equity in the workplace becomes essential when organizations are actively seeking ways to increase their diversity and inclusion (D&I). Many companies feel that working toward compliance with equity laws is the ultimate goal, consequently neglecting the bigger picture of becoming an inclusive employer. While it is important that your organization meets the legal requirement for employment equity, it is just as important that you communicate that D&I of all employees is the end goal, not simply compliance with a government mandate.

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How Compliance Isn’t Good Enough: A Practical Example

Let’s take a look at the Canadian hospitality industry as an example of how meeting basic legal compliance is not providing the factors and conditions that people require for decent work.

Since 2020, there is a growing need for organizations to rethinking how they view the standards and practices that they provide. Both their current employees and what future employees will come to expect from them. There is a lot of talk about the “labour shortage” and the lack of work ethic present in the labour market today.

A 2021 survey by Restaurants Canada found that 80 % of foodservice operators were finding it difficult to hire kitchen staff and 67% were having trouble filling serving, bar-tending, and hosting positions. This struggle is seen and felt across other parts of the hospitality industry, as well a vast majority of other sectors and industries. The reaction to this struggle from many business owners is to place the blame on employees and make claims like; “no one wants to work anymore.”

However, the reality is much more complicated. A Statistics Canada study found that hospitality workers have the worst job quality out of any industry. Largely they have insufficient wages, little to no job security, no paid sick leave, and struggle to take time off. Many restaurant workers spend at least eight hours a day on their feet with no time for breaks or meals. Workers are also required to forgo their social and family life by having to work late nights, weekends, and holidays. Many restaurant workers almost never know precisely when their shifts will end and tend to be placed on unpredictable split shifts or “on-call” shifts to save labour costs. Add to that it is the frontline staff that are required to enforce mask mandates and proof of vaccination requirements.  The animosity from customers only adds to the concern of an unsafe work environment. However, these working conditions are considered to be minimum labour standards. They meet the legal requirement for minimum wages, acceptable working hours that allow for rest, and the required safe working environment.

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The World Has Changed, And So Have People’s Expectations

The result of the disruption from COVID-19 has given the employees of the world a chance to examine their lives and the opportunity to explore their options to find work that will better provide more a sufficient quality of life. The time off and supports provided to combat COVID-19 did not take away employee’s work ethic, it gave them the chance to reflect and see their lives from a new perspective. Many people were struggling with a low quality of life and dealt with job dissatisfaction in jobs that complied with the legal requirements and standards, and they now see that those laws and standards as not being good enough anymore. Employees now expect their employer and their jobs to move beyond compliance and strive to become satisfied with their work.

Employees are still motivated to work, but are no longer satisfied and motivated by jobs with employers who only strive to meet the legal minimums. People want to work, but they have higher expectations that employers need to understand and work to meet if they want to be an appealing option in the labour market.

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Why Employees Leave

How Do We Motive Employees In This New Reality?

First, it is important to look at employee motivation and the factors that create job dissatisfaction. One of the most well respected theories of employee motivation is Frederick Herzberg’s Motivation–Hygiene Theory, also referred to as the Two Factor Theory.

A quick summary of this theory, is that there are factors in the workplace that create job dissatisfaction and different factors that create job satisfaction. You cannot create job satisfaction by only fixing the factors that cause dissatisfaction. When you address the dissatisfaction and resolve those factors what you end up with is just lower dissatisfaction, which is where you need to be to actually create a workplace that can build higher employee motivation.

According to Herzberg, the factors that create job dissatisfaction are when the extrinsic elements such as; company policy, working conditions, salary and benefits, and job security, are not well managed.

This really does make a lot of sense. If an organization doesn’t address employees’ pay, job security, or working conditions properly, then those employees will be dissatisfied with their job, ruining their motivation and productivity with it.

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The Factors that Cause Job Dissatisfaction

As good as Herzberg’s list of factors that cause dissatisfaction is, we at Roman 3 feel there are a few important elements that need to be included.

Wellness. It is important to address mental and emotional health when deconstructing job dissatisfaction. The relationships with co-workers and managers are part of Herzberg’s theory, and they are extremely influential when talking about job dissatisfaction. We get into the specifics in the interpersonal side of the workplace when we talk about Psychological Safety. When we are addressing the factors that cause job dissatisfaction, we approach them more from a compliance and work environment perspective. Wellness, as a factor of dissatisfaction, is about the attention and support that is offered to employees to help them maintain their wellbeing and handle the inherent stress that naturally exists in their work, without unnecessarily adding to it.

Safety. In Herzberg’s theory safety is often an element of the policies and working conditions. However, in a world since COVID-19 the focus on safety needs to be more intentional and deliberate. Safety addresses the level of both risk and risk management that exists in the workplace. Are all necessary precautions taken to reduce the risk of serious harm? Are the fear of harm addressed to allow workers to avoid the actual harm and perceived harm on a daily basis?

Consistency. The specific tasks that an employee completes each and every day are often the biggest factors that inform an employee’s level of motivation. While the actual tasks are determined by the nature of the work and the operational requirements of the organization, the level of consistency in the tasks is determined by the employer. This consistency speaks to how work is inline with one’s expectations. When you were hired were you fully and prepared for the daily tasks? Were the job duties transparently explained and what you expected to be hired to do?

Consistency also speaks to the predictability of the tasks day to day.  Are the tasks consistently and reliably within your training and skill set? Are you able to build competency in the tasks? How comfortable are you with the variety in tasks day to day? Consistency is about making sure employees are doing the work they were being hired to do.

These three additional factors expand on the four work environment factors described by Herzberg. His original four are:

Conditions. The physical climate and setting that the workplace and the daily tasks find themselves in. It’s the workplace reality, things like location, temperature, and physical requirements.

Policies. The documents and rules that govern the workplace. Things like HR policies, legal or otherwise, written statements of authority, limitations, and official regulations.

Compensation. The official reimbursement of work. Things like wages, salary, benefits, perks, privileges, and rewards.

Job Security. The amount of protection afforded a person’s position or compensation. Is the work seasonal, temporary, part time, precarious, subject to disruption or a likelihood of being replaced?

Combined they create the 7 Dissatisfaction Factors of the workplace:

  • Wellness
  • Conditions
  • Policies
  • Compensation
  • Job Security
  • Safety
  • Consistency

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“Employees who believe that management is concerned about them as a whole person – not just an employee – are more productive, more satisfied, more fulfilled. Satisfied employees mean satisfied customers, which leads to profitability.”

— Anne M. Mulcahy

The Expectations of the Workforce

These 7 Factors are crucial to understanding job dissatisfaction. Employees have specific expectations that they require workplaces to meet.

Broadly, these expectations fit into 3 categories.

The first is about being Competitive. Are the factors, conditions, and environment at their job competitive with other workplaces, either in their industry or in their geographic region? Is this workplace at least on par with other similar workplaces?

This is something we all understand, but it is important to truly understand that competitiveness goes beyond compensation and is critical in all 7 Factors.

The second is about being Sufficient. Are the factors, conditions, and environment at their job sufficient to meet their needs? Does what this workplace have to offer sufficiently meet the employee’s needs and requirements?

The need to be provided accurate payment of wages, adequate training, safe working conditions, comprehensive explanation of all company policies and especially of your job responsibilities and sufficient supports for wellness is something that is hard to argue against.

The third is about being Equitable. Are the factors, conditions, and environment at their job equitably accessible to everyone? Is there a sense of fairness between all staff including between workers and management?

Equity in the workplace is something that is legally required but meeting the legal mandates doesn’t always allow workers to be treated fairly and have workplace policies applied consistently.

These 3 expectations are how employees are viewing your workplace. The workforce expects that the 7 Dissatisfaction Factors will meet the standards of the 3 Expectations.

For your business to address the standard required to inspire employee motivation and to be an organization that can successfully attract, hire, and retain employees; your workplace needs to address the 7 Factors by the 3 Expectations. What we call The 7X3 Rule.

Businesses that follow The 7X3 Rule will have a clear blueprint of how to adjust the factors, conditions, and environment of their workplace to eliminate job dissatisfaction, create a more appealing workplace, and step up and embrace the new reality caused by COVID-19.

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The 7X3 Rule and The Workplace Culture Hierarchy

Roman 3’s Workplace Culture Hierarchy starts with a foundational level of compliance. This level is required to be sufficiently met before an organization can move on to the next stage. To move beyond compliance, an organization needs to adhere to the 7X3 rule. Basic legal compliance is not good enough. In order for an organization to incorporate Stage 2: Psychological Safety, it must address the 7 Factors of Dissatisfaction by the 3 Expectations. Being Competitive is a key factor in a workplace being appealing in the labour market. Being Sufficient is essential for employees to have what they need to be successful. However, to truly move toward Psychological Safety, then on to Inclusion, It is critical that a workplace is Equitable.

Equity in the workplace is required to move up the Workplace Culture Hierarchy. For employees to feel free to speak up and free to make mistakes, they need to know that they are seen as important and valuable as everyone else and that they will be treated fairly.

Every organization needs to commit to moving beyond compliance, following the 7X3 Rule, and creating equity in the workplace if they want to find true success in this new reality we all live in.

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