Wrong stimuli: The German Employment Bureau and what businesses can learn from it

not for students not for graduates not for beginners for professionals for executives

 

One of the most renowned measures of the state of a national economy is the unemployment rate. Luckily, living in Germany we have had some luck during the biggest financial crises in 2008/2009 which resulted just in a slight increase of unemployment rate. Nowadays, the unemployment rate is as low as ever: Five percent was announced several days ago. Surely, there were some measures in place at the right time. The most effective measure was the reduced-hour work helping to buffer the layoff of the workers. This is something for another blog entry. Nevertheless, it is interesting to take a peek into the stimulus of the German Employment Bureau (Arbeitsagentur). What is their aim? How do they handle their goal? And why is the way they do it usually wrong? A small discussion about wrong stimuli in fixed processing systems.

Unemployment vs. underemployed

It is common to differentiate between unemployment (German: “arbeitslos”) and underemployed (German: ”unterbeschäftigt”). A person which is unemployed has no work, one could say “there is nothing to do”. However, a underemployed person has no job but still “something to do”. This could be further education or integration measures. In principle, it makes sense to educate unemployed persons to help them get into the labour market but as usual one can find here downsides to this system.

Because what will happen, if you find yourself to be rated against the unemployment rate and not the underemployment rate? There are three options to get the unemployment rate down:

  1. Help them to find a job
  2. Convince them to not claim the “unemployment state”
  3. Push them into the “underemployed state”

The first solution is the best for long term wealth. You win as a ministry and the person wins because there is work. Still, the customer can choose not to take a job for which he or she is overqualified and wait for a better option. A problem arises if you are then pushing them into such a job by threatening disciplinary actions or they do this on purpose regularly.

The second solution is a simple bitch move. No other word to say about it.

The third solution is a nice trick. Because you can create a second job here by pushing the person into education lessons. You virtually get rid of two persons: One teacher and one pupil. But since there is no repeated, basic tracking of quality on these measures (at least in Germany), you might get taught some unnecessary things. And your teacher might be worse educated than you.

A system without help

Because the system of helping unemployment people is mainly focusing on low-educated customers rather than graduates. This will lead to some “omg”-situations: The ministry worker cannot judge on your abilities as a academically taught person and will not be able to help you to find a proper job. It is just out of his or her horizon. This being said it will get more delicate when they put you on further education. They put you on an education because it is the easiest way to boost their statistics. And they can put you in such measures for a very long time if they please, several weeks to several months.

And here we go with the actual problem: The person that should be helped in the first place will get very frustrated and might complain. Then the agency will punish them. This happened quite a lot lately.

Still, we have some lessons to learn here for our leading skills.

A lesson for stimuli in appraisals

Being responsible for the well-being of your employees means to take care of their further education. I have had the pleasure of sitting in educational measures on my own and being bored to death (basically my whole university course was like this …). But this is how we can try to be better as a executive. You are now in charge. So what to do.

1. Put in regular meetings with your personal. At least half a year, better each quarter, optimum each month for their long term development.

2. Actively find together with them something in which they are interested in to develop. Otherwise, they will not take any benefit out of their lessons.

3. Define a target, a vision that you see your personal in and share it. Find out whether they are here on the same side or you can find common ground.

4. Work in the interest of your employee and not of your company’s KPIs. The KPIs of a system can lead you to bad decisions.

5. Find a common teaching standard for your group. Try to find lessons that they all should pick and be educated in within one or two years, so that they will have the same standard of knowledge. This will be your teaching plan for every new comer.

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