One more time, what is employee experience?

Welcome to my newsletter on multi-sided (strategic and people-centric) HR. I’ve already provided some insights on employee experience / EX (vs engagement, and as employee value for money), however, with some more inputs from a conference earlier this year, I’ve further developed my perspectives, which I hope will be useful for you (making our work more impactful, effective and efficient).

So, yes, this is an overly long post, and it’s also only the first of three parts, but I do think it’s an important one too.

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2023 has been a busy year. Most recently, I’ve been working on a couple of small projects focusing on people-centricity and employee experience (one large or two small projects is about as much as I can undertake these days, particularly on top of running the Academy, and other training and speaking etc, so apologies that I’ve not produced any newsletters for some time).

In general, these projects have reinforced the points I’ve made previously about the lack of clarity, comparatively low value and business impact provided by most EX approaches, and I’ve been helping my clients clarify and increase the value of their approaches.

Reflecting on the range of activities undertaken within the EX arena, I’ve been going back to a great conference, the New Human Experience of Work, run by Elliott Nelson ’s HX Wize earlier this year (quite a long time ago now, but since I wrote my last proper newsletter – and at least it’s still the same year!).

The most common definition of EX used within the conference sessions seemed to be the sum of all interactions with the organisation, although there were a number of other suggestions including creating desirable products for people. More broadly, I see lots of work on employee experience which seems mainly to seek to avoid truly awful products and experiences rather than to create anything more positive.

HX Wize themselves say it’s about “using analytics and frameworks like human-centred design (including design thinking, service design etc), and agile product teams to deliver better journeys eg recruiting, onboarding, performance and career development”, which I don’t personally think is as helpful as it could be. Firstly, because journeys can only be part of improving experience – there’s a lot of broader factors (including the nature of the work and employment as well as an organisation’s cultural, digital and physical environments) which will impact these too, and which aren’t going to be managed effectively by only using a journey lens to understand them. And because the rest of the definition is too deterministic – these are useful approaches, but there are lots of other options for design and delivery too. And because experience isn’t just about experiences, processes or activities taking place within recruiting, onboarding or other areas of HR or even just the rest of an organisation.

The two stand out sessions at the conference, for me, were from Dave Ulrich , and Joe Pine , author of The Experience Economy from the end of the 1990s, both providing great insights on experience, and additional perspectives on what this means.

In this newsletter, I’m going to focus on Dave’s session, so it is largely an open letter to Dave, asking for his, and your feedback on my commentary, Then, in next week’s article, I will review Joe Pine’s session. The third week I’ll review what I think these and other different perspectives mean for other things (experience activities, measurement, design of HR, etc).

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Dave Ulrich – Transition to HR 3.0

Dave sees experience as the most recent evolution in our thinking about employee sentiment. Whereas satisfaction is about how much employees like characteristics of their job, and engagement focuses on discretionary energy and enthusiasm for the job, experience deals with emotional wellbeing and mental health tied to being safe, believing, becoming, and belonging (the 4 be’s).

I think this point on wellbeing and the 4 be’s is a really important insight. The problem with the common definition of experience being about the sum of interactions is that this is basically the same as the definition of satisfaction. So focusing just on this, and using a few more tools, as in HX Wize’s definition, is unlikely to take us much further forward from when we did only focus on satisfaction 30 or 40 years ago.

The most important difference between these terms, for me, is that whereas satisfaction is usually seen to be about employee sentiments on things important to a business, experience is sentiment about things which are important to an employee. I think Dave’s focus on the 4 be’s makes this really clear.

Therefore, I suggest that EX approaches should be tied to creating wellbeing – not just to whether someone is happy with something (eg a smiley or downcast face associated with different moments in a journey). Someone can report being happy, but if that thing isn’t contributing to at least one of the 4 be’s, and ideally the last 3 of these, it’s probably not having the personal impact that we might like.

The thing which I think Dave’s definition misses, is the fact (I think most people would agree) that experience, like satisfaction, is also an antecedent of wellbeing and engagement. Experience isn’t the 4 be’s, it’s about how well management activities and the organisational environment contribute to these.

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Experience as the outcome of business success

However, Dave does provide three different logical arguments about the link between experience and broader people and business results (this is my interpretation of what he was saying). First of all, Dave’s ‘HR value logic’ is that the experience of working in an organisation which succeeds in the marketplace is the most important thing HR can give to employees. If we don’t do this, there is no workplace to be employed in. So here, experience is the outcome of business performance

.I agree this is an important link, and is why I suggest that HR being strategic is still just as important as being people-centric. I worry that a lot of experience focused organisations have forgotten this (or never understood it). However, it doesn’t really help us think about improving experience, and it clearly isn’t the end of the story.

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Experience as an input to capability

However, Dave’s ‘HR value creation logic’ suggests that HR contributes to the success of an organisation through the creation of human or organisation capabilities, consisting of talent, leadership and organisation (or for me, human, organisation and social capital). Talent can be developed by accessing competence to accomplish work; sustaining diversity, equity and inclusion; and also by improving employee sentiment – including now, experience. So by improving experience, we develop talent / human capital / capability that helps make a company more successful.

I was a bit unsure by this – if experience, like satisfaction, is only valuable when it forms part of or contributes to talent / human capital / capability and then onwards to business results for all stakeholders (including employees, but only alongside customers and investors – which are likely to receive more focus – and other groups as well) then it no longer relates that strongly to the things, like wellbeing and the 4 be’s, which are important to employees.

Or putting this the other way around, if experience relates to the 4 be’s and other things important to employees, is it really part of the capability required of a business by customers and investors? Do investors care that much about staff wellbeing, or are they just interested in the returns they receive from employees’ performance? I’m not saying there is no link between these things, but I don’t believe they’re the same thing, or even that one is part of, or strongly informs the other.

Rather than experience, Dave’s HR value logic seems to me to relate to engagement, ie someone’s discretionary energy and enthusiasm for the job. Engagement definitely is an important part of talent or capability and therefore a critical component of business success. But this is because it is defined as something which is important to a business, rather than to employees. Dave’s logic works well for engagement, but I don’t think it does for experience.

So I asked Dave about this link between human capability and EX. Dave responded that outside in and inside out are both important (ie that employee experience and business results both inform each other) which I agree is true, but not quite what I was trying to get at – my fault for not being clear about my question, and you can probably see in this newsletter that I’m still struggling to make my point that clearly even now.

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Experience as value for employees

Dave also shared his ‘total organisation experience logic’ connecting employee experience with other experiences and this makes more sense to me. This logic doesn’t suggest we’re improving EX because it’s part of human capability which we need for business performance, just that if employees have the experience they need, they’ll be more able to provide a more positive experience for customers too. I think this value we provide for employees is separate and different to talent / capability.

This is why I think experience offers so much potential as a build on or alternative to engagement. The later concept is about sentiments which are important to a business and this has therefore meant that engagement activities have tended to be rather manipulative, and so perversely, rather disengaging. Experience is about sentiments which are important to an individual, including their wellbeing and 4 be’s, things which will enable people to live better, and as part of this, to work better. We need to put ourselves in employees’ shoes, and understand what is important to them, rather than (or, as well as) think about what might create people or organisation capability for a business.

However, I don’t personally believe there’s a particularly strong link between employee and customer experience – for example, engagement is probably a more important, or at least more direct, enabler for CX than EX (see my last newsletter for more on this).

We still need a better logic to explain all of this – and show how a better experience, enabling wellbeing and the 4 be’s, leads indirectly to better performance – and which I think is multi-sided HR. This suggests that experience needs to inform wellbeing, the 4 be’s and other employee needs because this provides value for the employee. That value is likely to result in corresponding value for the business, but we can’t only invest in experience and wellbeing when we understand this will result in this business benefit. We have to take a people rather than business centric perspective on this activity.

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I love most of Dave’s thinking on experience, especially around his link with wellbeing and the 4 be’s, and with just the small exceptions above, but it was also great to see Joe Pine talk about the mass customisation of products and services into experiences, and the need to create meaningful, distinctive experiences that trigger reactions and lead to memories inside us. I’ll discuss some of this next week.

In the meanwhile, what do you think? Do one of Dave's, or my definition of experience work for you? Or do you have your own? Am I right in suggesting that we need a better definition than the sum of all interactions, etc?

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Jon Ingham, Director, Strategic HR Academy