Employee Engagement made easy

Among one of the more misunderstood concepts in organisations, Employee Engagement has to rank up there near the top. Today’s post looks at how companies can break the Engagement hoodoos many are stuck in, thereby enabling them to significantly boost financial performance and employee wellbeing. Employee Engagement has been found to be the lever for both of these outcomes.[i]

No, Engagement is not a score

One of the mistakes almost all companies make is to assume that if their Engagement score is high, their employees must be engaged and the organisation must also in turn be reaping the rewards of this ‘Engagement’.

This fallacy is not helped by consultancies, such as Gallup or Kincentric, making claims that the workforce is disengaged or engaged, respectively (see here for one example).

The whole point about having engaged employees is that doing so adds value to an organisation through, among other things, lower staff turnover and increased productivity or innovation. Thus, the actual engagement level of an organisation’s employees cannot be determined without also considering these underlying drivers.

As an example of this, I have worked with organisations where Engagement levels have been very high. Yet when the underlying data is obtained, voluntary turnover rates have been as high as 30%. Or when the grievances data was unearthed, it was also found to be high. On the ground level, the organisation was also toxic.

This tells us that sometimes the highest engagement scores can be given in the most disengaged cultures – what’s often happening here is that employees are fighting for survival, or subtly being coerced, and thus high scores prevail – it’s the ‘Say Five to Stay Alive’ effect. What good is having high scores if a third of a company’s workforce is walking out the door every year? This is in no way shape or form an engaged company, no matter what the scores may say.

This explains why ‘a score alone’ is simply lacking and instead a coherent and comprehensive approach needs to be followed in order to achieve the benefits Employee Engagement has to offer. Here’s how to do that…

4 Key Practices of implementing effective Engagement

We can follow the practice of effective Employee Engagement with reference to the graphic below.

1.?????? Organisational Value

The first element is to identify organisational value. We need to answer questions like - What is the company’s current rate of regrettable attrition? And - How much is the replacement cost? (For most companies, this will come into the millions, if not tens of millions).

Next, we need to calculate productivity costs as well as inability to achieve strategic goals – even moderately engaged companies of a certain size will find costs here at the tens of millions level.

Done well, this Practice will give you a handle on the value your Human Capital is really delivering you (this is the P&L of Human Capital described in my previous post ).

Yes, to do this you will need the help of your company’s Finance Team, and you may also need the help of the CEO gets them onside. At the end of this Practice your Finance Team will be able to tell you:

·?????? The impact of Engagement on the company’s Operating Margin %

·?????? The impact of Engagement on the company’s Profit per Employee

Be prepared to be shocked, because these numbers can turn out to be very large. Which is why it’s kind of surprising that so few companies do this.

2.?????? Operationalisation

With this information in hand, you are now ready to operationalise. What does this mean? Here, you need to undertake an analysis of, among other things, employee exit interviews, grievances and ?Engagement surveys (all fun stuff!) and codify these into actual Engagement Factors (I have my own in-house dataset gleaned from dozens of companies worldwide which I constantly test and update).

What you need to determine here is what is actually motivating employee behaviour, not simply taking on trust what they ‘say’ is motivating them in the Engagement Survey. From here, you need to hone your survey question set, zeroing in on those factors that are antecedents to these behaviours. You will need to constantly hone this process – also making sure the question set doesn’t go above 25.

The point here is that the Engagement Questions must closely reflect behaviours that drive organisational value and that actually happen among employees. ?

3.?????? Development

So let’s say you have now identified there’s $8m to be had simply by getting the company’s attrition rate down to median industry level. You now need to shift the Engagement score via development.

Yet if you can’t move the score, there’s really not much point measuring it at all. How to move it then? Well here are some critical design factors that, again, almost all companies do not do:

·?????? Double down on manager development early (manager behaviours are approximately 70-80% of all downstream employee engagement – but test this in Practice 2 above). Don’t be reactive here. You need to do manager development early, comprehensively and consistently. Companies often fall down here by playing ‘whackamole’ through ‘Action Planning’ – basically identifying the factors causing disengagement in the past, rather than ensuring all Engagement Factors are honoured (for the future and all time).

·?????? Robustly link manager development to Engagement Factors (don’t teach your managers chemistry when they’re being asked to sit a biology exam – another mistake companies do here). Development must be closely targeted to the Engagement Factors, and not just ‘any old thing that’s developmental’).

·?????? Ensure there is follow up with clear accountabilities (don’t do sheep dip / hit and hope / spray and pray – again something that The Training Journal have found 90%+ of companies do).

4.?????? Psychology

Oh la la. We’re now into another realm where companies are mostly hopelessly lost – the use of accurate, meaning valid and effective, psychology.

In a previous post I touched on how the psychological principles used by companies is largely nonsense, and the CIPD itself has found that HR Professionals really don’t care at all for sound, evidence-based practices. Marc Effron 's post here is also worth a read on HR approaches to psychology and practice.

Here’s the problem with that: if you are trying to work a machine, and the operating manual is either flawed or for another machine, what are the chances that you will be able to get the machine you are using to work?

Likewise, if we train managers and the psychology we give them is flawed, how can we expect them to make the shift towards more engaging behaviours?

To be fair, this is a problem in society at general (Steven Pinker says we are living in ‘a pandemic of poppycock’). Still, as professionals we really need to take more care in this area and, as the CIPD had found, most companies don’t.

Summary

If we really do want to make the shift to a more engaged organisation, all four practices described above must be attended to consistently. Drop the ball on any one and the whole project will fall flat.

Unfortunately, almost all organisations…

·?????? Do not identify the organisational impact and value of Engagement in financial terms (Practice 1)

·?????? Do not operationalise Engagement effectively, by joining up behavioural drivers to question sets (eg retention and productivity), and question sets to behaviours that actually make the difference (Practice 2)

·?????? Do not develop based on Engagement effectively, either fixating on ephemeral things (such as ‘Comms’) or ignoring the significant role managers have towards Engagement, and the perseverance needed to change behaviours in this area (Practice 3)

·?????? Do not use accurate psychology to enable those behavioural shifts to happen (Practice 4)

These failures in practice are not only preventing companies from being able to maximise their business and financial opportunities, they’re also negatively impacting wellbeing and the development of a vibrant company culture free of toxicity.

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[i] Motkyka 2018 - Employee engagement and performance: a systematic literature review; Schneider et al 2018 - Workforce engagement: What it is, what drives it, and why it matters for organizational performance