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In This Chapter

▶ Uncovering what employee engagement is

▶ Recognizing why engagement is important

▶ Exploring ways to best impact engagement

Employee engagement has become an ever elusive holy grail in the management of human resources. It seems that the more companies strive to attain it, the more it slips from their grasp. But the quest continues because the topic is too important to ignore. Without an engaged staff, managers have a tough time accomplishing anything‚ let alone the best work possible. To reach and surpass business goals, managers and executives must make sure their employees are active, inspired, and feel good about their work.

Despite its importance, few organizations understand what employee engagement is and how it can drive business outcomes. According to the Aberdeen Group (a research firm specializing in employee engagement), engagement levels are dangerously low for many organizations. Now is the time to fix that. In this chapter, I give you a general overview of employee engagement and explore how some of the best organizations are addressing this topic with much success.

Why Engagement Is Important

Some say that employee engagement is simply the use of discretionary effort by employees. Others say it’s all about employee connection or productivity or retention. Still others say that it’s simply a score on a survey. I feel employee engagement is the alignment of individual and organizational goals and values to better drive business results.

Engagement leads to productivity

As human resources consulting company Towers Watson has noted, “Four out of every five workers are not delivering their full potential to help their organizations succeed.” A big reason for that is that workers aren’t fully engaged. According to the Gallup Organization, when you compare nonengaged employees to highly engaged ones, you see that the highly engaged employees are

✔ 27 percent less prone to absenteeism

✔ 62 percent less likely to be involved in job accidents

✔ 51 percent less likely to leave their jobs

✔ 31 percent less likely to leave in high-turnover organizations

Organizations that make employee engagement a priority see increased organizational productivity, flexibility, and employee retention. Productivity doesn’t depend on the number of hours someone spends at work; what really matters is how engaged your employees are during those hours. Employees who are engaged in their work have a greater desire to work harder and are thus more productive.

Engagement creates trust

Most organizations need greater flexibility and agility to handle a changing competitive landscape. Employee engagement creates trust between the organization and its employees so that employees are more apt to be flexible and adapt to changing business circumstances and needs.

Sixty-five percent of hires in a recent year were contingent employees, that is, part-time or project-based workers. This trend is projected to represent 30 to 50 percent of the workforce in the future. In addition, 75 percent of all current organizations have employees who work remotely, and 45 percent of companies anticipate increasing that number. This increase in independent workers is forcing organizations to consider how best to manage both full-time and contingent workers within the same organization. Regardless of how their work is structured, organizations will continue to need workers who are engaged and dedicated to do their best to meet or exceed the needs and expectations of their jobs (I talk more about engaging contingent and other nontraditional workers in Chapters 4 and 5).

Engagement helps you retain top talent

As the U.S. economy continues to improve, and as current employees seek new job opportunities, holding on to talent will be critical, and doing so can have a major impact on the success of any organization. Engaged employees are more likely to stay longer in their jobs and bring resilience to their organizations. Top employees who are truly engaged remain more committed to staying in their organizations and are less willing to seek other opportunities. Head to Chapter 17 for more on how to better engage and retain high-potential employees.

A few definitions

Here are a few key terms related to employees and the workplace that you’ll see throughout this book. If you are uncertain of their definitions, read on:

Engagement: The simplest definition is tapping into employee discretionary efforts, that is, an employee’s willingness to go above and beyond in doing his or her job. A definition that’s a bit broader is offered by Wikipedia: “Employee engagement is a property of the relationship between an organization and its employees. An ‘engaged employee’ is one who is fully absorbed by and enthusiastic about their work and so takes positive action to further the organization’s reputation and interests.

Recognition: Recognition is a positive consequence provided to a person for a behavior or result. Recognition can take the form of acknowledgment, approval, or the expression of gratitude. It means appreciating someone for something he or she has done for you, your group, or your organization. You can give recognition as someone strives to achieve a certain goal or behavior or upon completion of that goal or behavior. Using recognition, organizations can build engagement and drive success for the company, including all stakeholders. Recognition comes in all shapes and sizes, but the major categories of recognition include the following:

✔ Interpersonal recognition: A personal or written thank you from one’s manager or peers.

✔ Social recognition: Acknowledgement, public praise, or thanks provided on social media such as Facebook, LinkedIn, or Twitter.

✔ Tangible recognition: A certificate, plaque, trophy, paperweight, coffee mug, or other memento.

✔ Intangible recognition: The granting of more involvement in decision-making, autonomy, flexibility, or choice of working assignment.

Reward: Something with monetary value (but not necessarily money) that is provided for desired behavior or performance, often with accompanying recognition. A reward can be an item or an experience. Harvard Business School professor Rosabeth Moss Kanter defines a reward as “something special – a special gain for special achievements, a treat for doing something above-and-beyond.”

Incentive: Recognition or a reward that is promised in advance for an anticipated achievement that meets certain criteria. Incentives create anticipation and excitement and thus can result in stronger, clearer motivation.

Motivation: The internal human energy available to inspire a person to act.

Motivator: Anything that increases motivational energy.

Demotivator: Anything that reduces motivational energy and/or triggers negative behaviors.

Looking at Factors Impacting Employee Engagement

There are many factors that impact the design, rollout, and effectiveness of employee engagement efforts. Here, I present an overview of six drivers of employee engagement; in Chapter 2, I discuss specific strategies and actions that companies are taking to most improve in these areas.

Employee fit: Alignment of employee’s goals with organizational goals

The number one factor impacting employee performance and engagement is how well an individual employee’s performance (and personal) goals align with the overall organizational goals, mission, and core values. This factor is so crucial, in fact, that it might be hard for you to gain support for engagement initiatives unless they are directly tied to performance goals that drive the organization’s success and profitability. Therefore, as a manager, you have to act as a liaison to connect the organization’s strategic mission with individual values and behaviors of employees.

Having a process in place by which employees and managers agree on performance goals helps drive significant organizational performance. Top-performing companies even support managers with tools and technologies to help initiate performance and goal-setting conversations that better result in this link between individual efforts and organizational goals.

Moving toward a more engaged, accountable workforce doesn’t happen overnight. It requires continual and ongoing effort to change ingrained beliefs and behaviors about the role of employees and leaders in an organization so that employees eventually can say – and truly believe – the following:

✔ “I play a vital role in this organization and am responsible for what happens here.”

✔ “If I see a problem, it is my duty to fix it.”

✔ “My job is justified only if I make a valuable contribution.”

Employee communication

Communication is the lubricant of any well-run organization, and it’s especially vital for successful employee engagement. In my research, communication ranked highest (95 percent) of all motivational factors that employees most want in their jobs today. Communication needs to be consistent, bidirectional, involve all levels of the organization, and cover all lengths of time (here-and-now, upcoming, and long term).

Of course, managers and executives must be willing to receive and truly listen to honest and open feedback from employees regarding what they, the employees, most need to be engaged. All staff members should be informed about things critical to the company’s success and how they each can contribute to that success. Through strong communication, employees feel a sense of responsibility for the success of the organization and can better champion the organization’s mission and values, as well as its products and services.

Employee expectations

“What do you expect from me in my job?” is the starting point for all performance and engagement. Therefore, setting clear goals and expectations is vital. These expectations typically come from one’s manager. We know from research that the best goals have these characteristics:

✔ They are few in number and specific in purpose: After all, any of us can only focus on one thing at a time.

✔ They are “stretch” goals: That is, they are not too easy and are not too difficult. Instead, they have a good chance (some studies suggest about 70 percent) of being achieved with a dedicated focus by the employee.

✔ They are collaborative: They involve one or more discussions between the employee and his or her manager.

The days of just telling employees what to do and expecting it to be done as expected are pretty much over. To motivate employees to do their best work, you need to explain to them the “why” of their work – its significance and relation to the organizational goals and customers – and engage them by asking them what they expect of themselves (and of you, their manager!). The process of collaboratively setting clear employee expectations creates a strong bond and motivation between managers and employees.

Employees today are inherently motivated to do a good job where they work. I’ve never yet met an employee who gets up in the morning and says, “I hope I make a mess of things at work today!” They want to help the organization be successful and prosper as best they can, but they can’t do this in a vacuum. They need the leadership and support of management to help create the context for their success.

Employee support

Studies have shown that the most important relationship for an employee at work is the relationship between the employee and his or her direct manager. “If you have a good boss, you have a good job” rings true around the world. If employees don’t have support from their managers to be fully engaged, they won’t fully engage. Therefore, as a manager, your primary responsibility is to support your employees. This could mean modeling engagement and recognition, being there when they want or need to communicate, being available to discuss problems, finding ways for your employees to get extra training and development, and so on.

As a manager, you are also the primary communication link between your employees and the rest of the organization and, as such, can help employees develop so that, over time, they can take on new roles and responsibilities in the organization.

Employee development

Although all development is self-development – that is, employees have to have the ambition, motivation, and skills to want to learn new things in their jobs – your employee engagement strategies should incorporate development opportunities for employees. In most organizations, the role of employee development increasingly falls to one’s manager, with the human resources and training and development departments providing guidance as needed.

Employees are more likely to invest in an organization that invests time, energy, training, and so on in them. Career development is the way individuals manage their career paths. It requires the involvement of their managers and others in the organization to help structure opportunities for their learning and growth. Career development is thus a collaborative effort between the organization and the employee that, ultimately, creates greater engagement.

Employee recognition

Employee recognition is fundamental to ongoing support and motivation of any individual employee or group. As I explain in the upcoming chapters, the key to driving an engagement culture is to systematically recognize employees based on their performance. Although money and other forms of compensation are important to employees, what tends to motivate them to perform at their highest levels are the thoughtful, timely, personal kinds of recognition that signify true appreciation for a job well done. Yet managers and organizations struggle to create an organizational culture that systematically recognizes employee performance when it happens. This book will help you to address that challenge.

Employee recognition programs are quickly becoming one of the fastest growing areas of talent management and a key driver of business success.

I discuss employee recognition extensively throughout this book, and I examine the link between recognition and employee engagement much more thoroughly in Chapter 3.

Why Employee Engagement Is So Elusive

As indicated in the introduction of this book, the percentage of engaged employees in the workforce has remained roughly constant at about 30 percent for at least the last 20 years, even though an increasing amount of time, energy, focus, and financial investment has been exerted annually to expand that percentage. Why is this?

Assuming that organizations sincerely do care about their employees and not just about business success and profits, four reasons come to mind: 1) measured engagement variables are too intangible and subjective, 2) the focus of corrective actions are misplaced, 3) one size does not fit all, and 4) the management of change is too complex.

Measured variables are too intangible

Assessing engagement often involves measuring intangible variables, such as employee perceptions, and this may explain why engagement has lagged. Measuring individual perceptions is a slippery slope. The scoring is subjective and can vary due to many circumstances, yet the aggregate scores are treated as objective facts.

How do you systematically impact employees’ perceptions of engagement variables like "At work, my opinions seem to count." A company can do 100 things that it hopes will impact employees’ perceptions with no guarantees that any of those efforts will work. Quite likely, the company would need to do different things for different people to get a more favorable response. One person may just need to have a comment validated by a manager or executive ("Great insight, Gary!"), while another employee may not believe his opinion counts until a manager acts on the input or idea that was provided.

These observations may explain why organizations are moving away from traditional engagement surveys as the primary means of managing engagement strategies. Although surveys are a valuable way to gauge engagement levels, they do not always yield the kind of information that enables organizations to improve their recognition and engagement efforts. In Chapter 8, I talk more about how to measure recognition and engagement in meaningful and useful ways.

Corrective actions are misplaced

Measuring one set of variables but then focusing elsewhere to try to impact those variables seems like a fool’s errand, yet this is exactly how most engagement strategies are structured. Placing the onus of action on the organization and its management rather than the employees themselves with managerial support is a no-win proposition.

Suppose, for example, that you ask employees, “Are you using your full potential at work?” and they report, “No, I am not.” How can any manager alone fix that situation? Any potential solutions will at best be a guessing game, and it makes it a little too easy for employees to report, “No, you still haven’t got it right – try again” the next time they are surveyed.

Notice how the picture changes if you recast the question to, “Are you taking measures to use your full potential at work?” The focus for change is now on those individuals whose negative perceptions were the driving force behind your decision to take action to begin with.

A better strategy is to focus on the behaviors you want to see more of in employees. You can do that by systematically recognizing and reinforcing behaviors that have the greatest impact on this particular variable.

When writing your engagement survey questions, consider changing the focus of the questions from being passive to being active so that the questions focus more on your employees’ actions. Instead of a statement like, “I’m given adequate information on issues of importance to my job by management,” include this statement: “I seek the information I most need to do my job.” This rewording puts employees front and center in driving those variables you are most trying to impact. Unless you place focus on the actions of those who are reporting the need, you’ll end up chasing potential solutions indefinitely.

One size does not fit all

Another challenge of engagement programs is the tendency to have a one-size-fits-all approach to engagement and, particularly, to recognition. Companies put in cool programs to drive engagement that are created around the things the person or committee planning the programs finds motivating. Yet, research shows that no motivation strategy or incentive tends to appeal to more than 40 percent of a typical company’s employee population. And often, the organization only has the budget to create a recognition program that can appeal to 70 percent of the employee population.

Engagement strategies thus need to be individualized around the personal motivations of each employee, and every manager needs to make the necessary connection with those employees that report to him or her. If you hire a workforce that is universally motivated and engaged by the same approach, that is great, but when does that ever happen in real life? Many companies assume everyone is motivated equally by the same things (such as greater pay), which we know is not the case at all.

Management of change is too complex

As you look at the key factors that impact employee engagement (refer to the earlier section “Looking at Factors Impacting Employee Engagement”), they are each relatively clear and are elements that you can easily focus on for improvement. Often, however, managers and executives make two key mistakes:

✔ Over-complicating these issues, sometimes to the point of measuring one thing but focusing on something completely different as a potential solution.

✔ Being too ambitious about what they can really change in any given time period.

The result of these errors? The impact of any actions taken become blurred or diminished, and the degree of complexity explodes. The problem is compounded when you overlay the solution on your organization’s annual planning and budgeting process, and the speed of change grinds to a halt.

To combat these tendencies, select one thing to focus on and do it right. Clearly focus on a critical area for improvement and then strive to make true inroads in changing that dimension. You’ll move much closer to being a culture of engagement if you do a deep dive on just one variable and stick with it over a significant period of time rather than trying to improve a dozen variables across the board. The further your focus drifts from the variables you are specifically measuring, the fuzzier the results you are apt to obtain, and you’ll end up about where you started, with no discernable improvement, year after year.

Much has been made over the years of the service-profit chain model where engaged employees lead to engaged customers. However, what is often overlooked is the reverse of this relationship. One research study showed customer satisfaction impacted employee engagement at a much greater rate than the opposite. If an otherwise engaged, motivated employee is constantly dealing with frustrated customers, the employee’s engagement level drops quickly. Gallup used to say that if you put a good employee in a bad system, the system wins every time. Employee surveys often ignore these cultural aspects and focus more on the employee’s internal satisfaction. For example, are employees empowered to resolve customer concerns on the first contact? Are employees forced to deal with policies that frustrate customers? Do salespeople promise things they can’t deliver? These, and other cultural factors, can make or break employee engagement.

Engagement: A Process for Improvement

The best way to think about planning, executing, and improving engagement is a concept I draw from the work of W. Edwards Deming and the total quality management movement. It’s called the Shewhart Cycle, and I’ve adopted it here as the PDRI cycle, which stands for “Plan, Do, Review, and Improve.” Read on to find out how it applies to improving your engagement culture and head to Chapter 8 for more details on this approach.

Plan

When you think of planning, you likely envision something elaborate and well-documented, but that is not necessarily what I’m talking about here. A plan can also simply be a desire or intention to take a particular action. You might just ask yourself the question, “If we could do one thing to most improve our department’s or organization’s effectiveness, what would that be?” or “How can I best make a motivational impact on my employee or work group?” Obviously, the more complex the activity, the more important a formal plan will be, but regardless of the complexity, the greater the commitment to action you have, the more likely the plan will be implemented.

Start with the end in mind. What is the end-state that you want to create in your organization? Focus on desired behaviors and actions needed to move toward that end state. Create measures that will track progress toward your desired end state.

Until a skill or behavior is habitual, some planning is necessary. Although about 80 percent of our behaviors are habitual and require little or no thought, all new behaviors require at least some amount of advance thought, planning, and commitment to instill the behavior in individual practice.

Do

Doing turns intention into action. Many people have good intentions but never follow through on them. If intentions alone were sufficient, everybody would be successful! The best performers understand the difference between intention and performance; they are action-oriented. They know that without focused action everything is just theory. Although their actions at first might be ineffective, they know that it is important to get the learning-by-doing process started. As the famous Nike advertising slogan proclaims, “Just do it!” Systematically recognize and reinforce those behaviors and actions that you’ve identified could most impact the success of your goals.

Review

After you have engaged in a recognition activity, review it to see what kind of effect it is having. Gaining feedback through a program review is a critical step in the learning process. A review answers such questions as

✔ How well was the recognition received by the recipient? How did it make him or her feel?

✔ Was the objective of the recognition met?

✔ Were there any unintended positive or negative consequences?

With an evaluation incorporating the metrics you established beforehand, access what worked well and what didn’t. This review can be elaborate or very simple. Sometimes you’ll do this review yourself, based on direct observation, and sometimes it can be a larger evaluation effort that a group takes on with input from employees, management, and any service providers that may be helping you.

After your review, you can do one of three things: Stop giving recognition (fortunately, most people will not choose this option), continue to give it exactly the same way going forward (this option means you felt your efforts were successful), or decide to learn from your experience and improve the way you give recognition to others (the most likely scenario).

Success is an opportunity for positive reinforcement, but we usually learn more from behaviors that fall short of the mark, so failure is an opportunity to learn and improve.

Improve

In this step, you implement the lessons you received during your review, making improvements in your own performance. The more you engage in an activity, review the results of your actions, and improve on them, the better you become at that behavior. Using the PDRI model and the additional recognition knowledge contained in this book, you will get better and better at giving recognition. As you recognize others more often, you’ll become more competent and confident in doing so, increasing your skill and effectiveness. The PDRI cycle helps you get better until recognition becomes an ingrained habit. Adjust your plan accordingly and repeat as necessary.

Routines are good, but they do have a downside. They can seem mechanical, insincere, or out-of-touch. Consider these examples:

✔ The president of a large manufacturing company walks through his plant once a month to say hi to his people. This makes him feel like he’s a great manager. If you ask his people, however, they see this behavior as little more than a joke. Says one front-line worker, “Each month, Mr. Johnson asks me how my family is. And each month, I tell him ‘I’m still not married, Sir.’”

✔ In another company, employees report that upper management tends to recognize them more as a show for the benefit of their peers rather than for the employees themselves. In their management team meetings, company managers will talk about the great job one of their employees is doing, but the comments rarely get back to the actual employee being acknowledged.

✔ In another organization, employee-of-the-month awards are handed out in management meetings, at which the employees being recognized are seldom if ever present. The manager running the meeting traditionally concludes his congratulatory remarks with a comment along the lines of, “If someone runs into Larry, please tell him that he was named employee of the month.”

Who best drives employee engagement?

Who should be responsible for employee engagement in the organization? Ideally, senior leaders and the HR department should design and lead the efforts, and then managers should implement them. But who is the “owner” of the effort moving forward? Who should drive the efforts?

According to the Aberdeen Group, for 63 percent of the Best-in-Class organizations the group surveyed, CEOs are the primary champions of successful programs and value motivating employees and supporting engagement initiatives. Yet many CEOs aren’t always in the best position to own and execute the organization’s engagement strategy, so it often falls to the managers themselves with the help and guidance of the human resources department. When managers are responsible for employee engagement, they are more likely to link these strategies to performance and results desired by the organization.

Ultimately, organizations have to select drivers that make the most sense for their companies. The key to making sure those driving the initiative are successful is to ensure that they have the necessary resources and authority and embrace the task.

Keeping a Clear Focus as You Improve Your Engagement Efforts

A number of organizations have contacted me for help in improving their focus on just a single variable of employee recognition. They know they need help, based on survey responses to questions such as “I feel valued for the work I do.” My first task is to get them to realize it’s difficult to change anything based on feedback from just a single variable. It’s like trying to guess the shape of a golf ball by looking at a single dimple. You need to expand on that variable to develop a more robust understanding of what is needed. In this case, what does recognition mean to those answering this question? Who is providing (or not providing) recognition? How often is recognition provided? Does recognition vary over time? Does recognition vary with different circumstances? At the very least, you should create an expanded index of variables that all lead to better understanding what employee recognition means for your employees.

I’ve seen people (somewhat comically) try to interpret what a variable means without this broader understanding of the context (“I think what employees are saying by making this variable low is that … ”), but why guess on the meaning of the variables you are measuring when you can simply clarify by asking additional questions, conducting some employee focus groups or a pulse survey, or all of the above? The further you drift from the specific variables you are measuring, the more difficult impacting those variables will be.

The thing to remember is that not only are there all kinds of work-based variables to measure and consider, but there are also personal or demographic variables that play into what makes engagement successful. In the chapters that comprise Part V, I go into detail about different issues that impact engagement and recognition.