Employee Feedback and the Culture of 'Continuous Improvement'

Summary: This article discusses alternative organisational development methods based on ‘Continuous Improvement’ that focus more on internal, rather than external, employee opinion benchmarks as the main performance indicator to measure changes in organisational culture.

“Average ones compete with others… Great ones only compete with themselves”

Whenever I am invited to talk about employee surveys and employee engagement, one of the first questions people always ask is about external employee opinion normative databases or benchmarks: “How can I compare my employee survey results against other companies in the sector or in the country where we operate?” Yes, this is a fair question… but it is by no means ‘the’ most important question. Analysing and understanding your people data, gaining insights from the process, and translating them into meaningful actions is the ultimate goal. Many HR colleagues have now discovered that the most important questions are: what are we going to change? how are we going to implement change? and what will be the outcome of those changes?

We can forgive ourselves for wanting to compare our survey results against those of other organisations, after all, how many times have we been told: “External normative data is critical to helping you define which areas you need to target for action” or “survey data without comparisons to external benchmarks means nothing” - sounds familiar? Perhaps traditional consultancy firms overstate things to inflate a need for their normative databases and benchmarks so they can sell them to prospective client organisations?

One thing I have learnt during my years of consultancy work is that there is no one perfect approach to managing human resources. I agree that external employee opinion benchmarks will allow your organisation to compare and contrast your employee feedback against other similar organizations. It will establish a frame of reference for judging results… and yes, HR professionals tend to rely on this sort of external benchmark data to determine whether their scores are high or low in relation to these norms helping them to avoid potential knee-jerk reactions to apparently poor scores. Yes, don't get me wrong, external norms and benchmarks are relevant in employee research.

However, in this opportunity I would like to challenge the traditional HR establishment: Don’t you have the feeling these requests have simply become everyday organisational humdrum? Do we really need this sort of external comparisons to improve organisational culture? Are these external comparisons really absolutely necessary? The answer is a rotund ‘NO’.

The reality is, although important, external benchmarking is no more than a ‘nice to know / nice to have’ component of employee insight initiatives. It is not the ‘Holy Grail’ of employee engagement as many traditional consultancies would like you to believe it is. Leaders and managers should avoid solely and exclusively using external benchmark data for the purpose of making decisions about their organisations and people.

Organisations ought to concentrate on a wider variety of lenses, not only on external benchmarks, to evaluate their employee feedback. I recommend putting more emphasis on ‘internal and historical’ benchmarks. These are more reliable comparisons and are key components of ‘Continuous Improvement’ in the transformation of your organisation, your HR processes, people and culture.

Benchmarking employee opinions for a culture of ‘Continuous Improvement’

I am a firm believer in the Japanese business philosophy known as ‘Kaizen’ which became famous from Masaaki Imai's 1986 book ‘Kaizen: The Key to Japan's Competitive Success’.

Kaizen, Japanese for "improvement" or "change for the best", kai (change) + zen (good), refers to the core principle of ‘Continuous Improvement’ which is an internal self-reflection and constant evaluation of processes. It aims to identify, reduce, and eliminate suboptimal processes with an emphasis on sustainable, incremental, continual steps rather than giant leaps.

In this respect, ‘Organisational Culture’ can also be subjected to Kaizen with a gradual, permanent, never-ending change process focused on increasing the effectiveness and efficiency of the organisation’s workplace and human capital to fulfil its corporate business objectives – all to be done through careful performance measurements… such as employee opinion surveys.

When we apply ‘Continuous Improvement’ approaches to our employee surveys and organisational culture development initiatives, in terms of performance measurement assessments, we only need ‘Internal Benchmarks’ to identify all those business units or groups of employees lagging behind the ‘Overall Company’ average scores and ‘Historical Comparisons’ to evaluate trends against previous surveys to monitor our performance over time. These are the essential benchmarks necessary to define improvement objectives and actions, and to monitor the advance and alignment of your organisational culture with your business strategies. This process creates a standard to which the entire company can aspire to. Any business units that fall below this standard must find ways to rectify their performance gap.

Key features of Kaizen inspired employee surveys include:

• Improvements are based on many small changes rather than radical changes.
• As the ideas come from employees themselves, they are less likely to be radically different, and therefore easier to implement.
• Small improvements are less likely to require major capital investment than major process changes.
• The ideas come from the talents of the existing workforce, as opposed to using external research, consultants or equipment – any of which could be very expensive.
• Organisations and all employees should continually be seeking ways to improve their own performance.

The starting point for improvement is to recognize the need. This comes from the recognition of a problem. Employee surveys will help you identify those potential issues with your current organisational culture. If no problem is identified (if this happens to be the case then I would advise you to reassess the quality of your survey content) then there is no recognition of the need for improvement. This lack of recognition is Kaizen’s worst enemy: organisational complacency!!!

Achieving results just below or above the external benchmark tends to lead to this state of organisational relaxation, cosiness and comfort. There is an initial anaesthetic and numbing effect, which quickly turns into contentment and oblivious lethargy, as there seems to be no challenges being offered by external norms and subsequent need for taking any sort of corrective actions.

This sort of ‘Organisational Complacency’ becomes impossible when focusing on internal employee opinion survey benchmarks because these involve setting specific internal challenges and higher levels of performance that a company wants to reach or compare itself against.

Steps in the ‘Kaizen’ employee survey process:

1. Organise your annual survey
2. Concentrate on internal and historical benchmarks to identify areas of weakness
3. Identify problems and key areas for action
4. Set up clear improvement objectives
5. Define and implement the necessary plans and corrective actions to attain the agreed objectives
6. Monitor progress vs. internal and historical performance indicators (i.e. via short real-time pulse surveys)
7. Repeat the cycle again

External benchmarks are just ‘nice to have’ but not crucial for triggering and encouraging your continuous HR improvement programmes. In the Kaizen inspired survey processes, external benchmarks simply become additional lenses against which you can compare your results, a convenient temperature check to give you an outward sense of your survey scores.

Why you should prioritize the use of internal benchmarks?

The most useful benchmarks an organisation can use in terms of employee surveys are their own internal standards. World class organizations strive to maintain their own internal continuous improvements in the workplace. These organizations strive for continuous organisational development improvement regardless of whether or not they are currently scoring higher or lower than an industry or geographical norm average.

Internal employee opinion survey benchmarks involve looking within an organization to find best practices and standards of excellence, setting indices and targets for improvements that can be monitored and tracked. These allow internal comparisons across the organisation to assess specific business units, job roles or demographic groups in relation to overall organisational scores. This practice highlights high and low performing business units, which you can look at more closely to see what those higher-performing areas are doing differently and seek to replicate their success elsewhere in the organisation. This process benefits from the more successful business units being able to mentor the weaker performing areas, it is in this aspect of constant organisational learning where the real value of internal benchmarking can be seen.

The main advantage of this type of employee benchmarking is that since internal sources are used to find the best practice, companies can be confident that the level of performance is achievable and that these provide extremely reliable contextual comparisons. If your organisation uses its own internal results to benchmark against, it will have a consistent and trustworthy base from which you can compare and contrast your performance. An organisation knows exactly what is included in their own internal benchmarks and indices, from what was the exact question wording employed in the questionnaire, what the business environment and employee population was like in the previous survey, to exactly how many employees responded to each individual question items and under what circumstances.

It is important to highlight that when all your results are noticeable lower than those provided by external norms, then internal benchmarks become even more relevant. You can only operate within your internal boundaries – so focusing on what someone else is doing may not be right for you.

Internal employee opinion survey benchmarks become more useful when organizations compare and contrast their historical performance. This process allows companies to track their performance over time and analyse and employee opinion trends in themes that are key to the organisation’s success.

So, if your company conducts employee surveys on a regular basis, I may advise to create your own set of internal norms that are specific to your organisation and what you aim to achieve. Averaging item-level results across several work groups or departments within your company will produce solid internal norm scores:

• Internal historical benchmarks: This is the simplest and most commonly used employee opinion data which is applied to compare your current survey results against previous years’ results. This allows for a meaningful, longitudinal perspective to be taken. Scores may increase or decline following organisational changes, actions taken or initiatives undertaken by your different business units in response to internal or external environmental factors.
• Overall company internal performance benchmarks: These norms refer to the average of all survey responses in your organisation for each survey item. These scores enable internal business units, departments and/or divisions to determine whether their item-level results are higher or lower in relation to the rest of the organisation and / or their regional peers. This allows for high and low performing hotspots in the organisation to be identified, and thus the opportunity to take corrective action, share best practice, knowledge and experience.
• Internal ‘Best-In-Class’ benchmarks: These norms refer to the average score obtained by business units who made it within the top 10 percentile of the entire organization in the survey. This ‘Best-In-Class’ approach will help dissuade low performing managers from believing that there is a ‘ceiling effect’ where certain levels of performance are only attainable outside the organisation. It provides proof to those disbelieving managers that better results can in fact be attained within the organisation and with existing resources.

Each organisation has its own very special culture and is not an exact replica of any other business in the industry or geography where it operates, so why do you want to compare your results to those who do not share the same culture, tradition, ambitions and purpose? My recommendation would be to stop prioritising organisational comparisons to other companies in your industrial sector or geographic region and focus more on your very own improvements and internal performance indicators. Internal benchmarks celebrate your uniqueness, be proud of your own internal organisational accomplishments and always aspire to becoming better.

Some final thoughts…

Creating a culture of ‘Continuous Improvement’ in any organization is a pillar of effective employee engagement. Leadership must recognize that ‘Continuous Improvement’ strategies and methods can be used to create a highly motivating place to work and organisational culture.

Companies have long embraced ‘Continuous Improvement’ methods as a way to increase efficiency and reduce costs in operational areas. Many of them are now finding great value in implementing ‘Continuous Improvement’ strategies in their efforts to retain a talented workforce as well.

Employee opinion surveys provide clear means to measure the success of your efforts for continuous improvements in the workplace by focusing on three key features: What are we doing that is right and acceptable to employees? What needs to be changed to improve the quality of our HR processes and organisational culture? What changes and improvements would employees like to see in the future? Surveys measuring these aspects of business can be confidently evaluated through internal and historical assessments without resourcing to external benchmarks. Using external normative databases (i.e. industrial sector, country) as the sole way to evaluate post-survey decisions is not fully accurate and therefore not recommended.

To grow you need to break out of the vicious circle of competitive external benchmarking and imitation. If you want to be truly innovative, concentrate on your own continuous improvement, your own internal benchmarks and not on those of other organisations that do not share anything in common with your people, your mission, values and organisational culture. Do strive for continuous organisational development improvement regardless of whether you are ranking higher or lower than your industry or geographical norm averages.

Remember, external benchmarking only provides an inventory of creative changes that other organisations have already enacted.

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Disclaimer: The views expressed in this blog are solely those of the author in his private capacity and do not in any way represent the views of any other entity.