Raising Engagement

8/3/2019 Raising Engagement

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RAIS INGE N G A G E M E N T

By Adrienne FoxA vast majority of employees say they are disengaged or notengaged, creating an unproductiveor, worse, toxicworkenvironment.The August 2009 Gallup Employee Engagement Index re-ported that only 33 percent of workers are engaged in their jobs, 49percent are not engaged, an d 18 percent are actively disen gaged.The Gallup Organization defines the categories as follows:

Engaged employees work with passion and feel a profoundTTie author is contributing editor and ormer managing editor of HR Magazine.


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^ fil 11

$350BEstimated annual cost ofdisengaged workers for

U.S. businesses

connection to their company. They driveinnovation and move the organizationforward.

Non-engaged employees have essential-ly "checked out." They sleepwalk throughworkdays. They put in time but don't ap-proach their work w ith energy or passion.

Actively disengaged em ployees aren't just unhappy at work;they're busy acting out their unhappiness. Every day, theseworkers undermine w hat engaged co-workers accomplish.

Gallup researchers, who base the Employee EngagementIndex on a survey of nearly 42,000 randomly selected adults,estimate that disengaged workers cost U.S. businesses as muchas $350 bulion a year.

Whe troubling, these figures could also be viewed as anopportunity to re-engage a large percentage of disengagedworkersand reap financial benefits. Other research shows thatcompanies with highly engaged employees perform better: Gal-lup's 2009 analysis of 199 surveys found that business units scor-ing in the top half on employee engagement double their oddsof delivering high performance compared to those in the bottomhalf Tho se at the 99th percentile are nearly five times m ore

E n g a g e m e n t F u e ls P e r fo r m a n c eBusiness units at the highest level of employee engagementin The Gallup Organization's database have an 83 percentchance of performing above the company median whenit comes to measures of customer loyalty, profitability,productivity, turnover, safety, absenteeism, shrinkage andquality. This compares to a 17 percent chance of performingabove the company m edian for units at the lowest level ofengagement. So, it is possible to achieve high performancewithou t high employee engagem ent, but the odds of doing soare nearly five times lower.

EmployeeEngagement PercentileAbove 9 9%

959080706050403020105

Below 1

Percentage AboveCompany Median

8 3 %757063585450464237302517

Source; Gallup's T h e Relationship Between Engagement at Hfefk an dOrganizational Outcomes.

likely to deliver high performance than those the 1st percentile.

In a subsequent study in Jan uary of this yeaGallup researchers found that companies in thtop 10 percent on employee engagement bestetheir competition by 72 percent in earnings pshare during 2007-08. For com panies that score

beneath the top quartile, earnings fell 9.4 percent below thecompetition.

And in a September 2009 study of 50 multinational compnies, the London office of Towers Perrin, now Towers Watsodocumented the impact of engagement on financial perfomance. The report found that during a span of 12 months, companies with high levels of engagement outperformed those wiless-engaged employees in operating incom e, net income growrate and earnings per share growth rate.

"Our research shows that the cormection between employeengagement and business performance is [a stronger] indicatothan any other measure of employee attitude and business peformance," explains Julie Gebauer, m anaging director at Tow eWatson in New York. It "m2ikes a difference in terms of dollaand cents."

Reports such as these have piqued the interest of executiveseeking to move the needle of engagement in their favor. Hprofessionals are now bombarded with a multitude of salpitches for survey tools, models, books and technologyapromising to deliver improved employee engagement.

Yet "Employee engagement is not an expensive undertakingsays David Zinger, a consultant based in Winnipeg, ManitobCanada.W h a t E n g a g e m e n t Is ... a n d I s N o tZinger founded the Employee Engagement Network, an onlincommunity where people in a variety of professions, includinhuman resources, can discuss engagement. Membership hgrow n to 2,000 in two years. He says the different vocabu lariand models confuse people.

"Some people say engagement is only discretionary efforothers say it's all about retention or productivity, while stothers say it's just a score on a survey," Zinger notes. "I saemployee engagement is about connection."

Gebauer adds that the connection has three tenets: "ration a l , emotional and motivational. I call it cormecting at thhead, heart and hand. An engaged employee understands whhe or she must do to add value to the company, has a sense opride, feels connection to the company mission, and is willinto put those thoughts and feelingsdiscretionary effortinaction."

Engagem ent is not the same as satisfaction, though many Hmanagers change the names of their surveys without changin


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Satisfaction is fickle; measurements vary widely. In contrast,"Engagement figures remain steady," notes Brad Federman,a consultant at Performancepoint in Memphis, Tenn. And,satisfaction and engagement surveys measure different things."For instance, you would ask about satisfaction on pay. But, anengagement question would ask about the transparency and fair-ness of the compensation system ," Federman says.

Engagement, satisfaction, motivation and drivethe termsare used interchangeably, experts lament. To a manager withsales targets, Zinger notes, an "employee engagement 'initiative,'if it's presented that w ay, ma y no t go over well, especially if youor your comp any h as chased fads over the years."He points to consultants who oversell engagement surveyswith all the benchmark data, and bells and whistles, but don'tprovide road maps for solutions. Consultants overpromise, say-ing, " 'If we move the needle one or two points in this direction,you win see productivity go up by X.'

"If you treat employee engagement as an annual survey thatdemonstrates you 're not as bad as your competitors, then you'vemissed the point," Zinger adds. "Engagement is a business im-perative, but only if it's tied to the business."

Bettina Kelly, senior vice president at insurer Chubb & Son'stalent strategies group in Warren, N.J., says keeping an eye onwhat behaviors relate to your business takes "fad" out of theequation. "Know your people and what's important to them,"Kelly advises. "You have to know what you do well, what mat-ters to your business strategy and where you want to go, and pullthose levers."W h a t E n g a g e s E m p lo y e e s ?Leaders commonly m isunderstand employees' engagement driv-ers. Last year, Teresa Amabile, a management professor at Har-vard Business School, asked 600 managers to rank workplacefactors that they thought engaged employees. "Recognition forgood work" topped the list; "progress" came in dead last.

Amabile then compared themanagers' rankings to what shehad concluded from a multiyearstudy tracking day-to-day activi-ties, emotions and motivationsof hundreds of knowledge work-ers in a variety of settings.

Her findings? Progress ran kedNo. 1 on the list of eng agementfactors related to performance.Analyzin g 120,000 journ al en-tries, Amab ue found that workersreported feeling most eng aged ondays when they made headwayor received support to overcome

R e c o g n i z i n gp r o g r e s s in m e a n i n g f u lw a y s r e p r e s e n t s ane n g a g e m e n t l e v e r .ported feeling least engaged when they hit brick walls. Smalldents in work meant as much cis large achievements.

"Progress is the biggest employee engager," Zinger agrees.Setting small goals in add ition to long-term g oals can result in

more-regular progress. Recognizing progress in meaningful waysrepresents an engagement lever that Gebauer calls "knowledgeadmiration."

For instance, "If you know your employee is looking tomove up in the organization, specify your feedback on how theemployee's performance will lead to other opportunities," shesays. "Another employee may want better work/life balance. Ifappropriate, reward the performance with a half-day off to go toa baseball game with his son." Both employees receive recogni-tion, but the delivery depends on what each employee w ants.

Gallup's research points to a basic factor in predicting en-gagement employees' u nderstanding of how their roles fit withthe business strategy. "People forget to go back to the basics,

especially after major

Employee Engagem ent Br ings in the B ucks12-month change in operating income:High employee engagement:Low employee engagement: -3 2.712-month net income growth rate:High employee enga gement:Low employee engagement:12-month earnings per share growth rate:High employee engagement:Low employee engagement: -11.2

Souice: Towers Watson.

+19.2%

+27.8

changes such as mergers,layoffs or salary freezes,"says Jim Harter, G allup'schief scientist of work-place management andwell-being in Omaha,Neb.

Many employees feelthey aren't making a con-tribution, agrees DanielPink, author of Drive:The Surprising TruthAboutWhat Motivates U s (River-head Trade, 2009). "They


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S l o r y :

U nde rs ta nd ing th e M is s ionIn 200 7, Uni ted Hea l th Group integrated disparateheal th care serv ices into one company under onem i s s i o n : Helping People L ive He al th ier L ives, Lor iSweere, execut ive v ice pres ident of human capi ta lat the Minneapoi is -based headquar ters , led theHR ef for t fo revamp com pens at ion, per formanceappraisals , recogni t ion and t ra in ing, and t o i n te-g r a te them i n to the m i ss ion .

For s i x m onths , Sw eer e ana l yzed pas t em -p l oyee su r veys w i th M er cer . S h e m e t w i t hm a n a g e r s a n d e m p l o y e e s , a n d e v e n r e a c h e dou t t o peop l e w h o had i e ff t he o r gan i za t ion . Ther esear ch and m eet i ngs " gave m e a c l ea r p i c tu r eo f w ha t t o f ocus on , " Sw eer e says .

M anager s ' pe r fo r m ance , com m un i ca t i on andu n d e r s t a n d i n g o f h o w e a c h e m p l o y e e ' s jo bc o n t r i b u t e s t o t h e b u s i n e s s s t r a t e g y w e r ei den t i f i ed as a r eas fo r i m pr ovem ent t ha t cou l de n h a n c e e m p l o y e e e n g a g e m e n t . N o w , " I havep e r s o n a l a n d m o n t h l y c o m m u n i c a t i o n s w i t ho u r 6 , 0 0 0 m a n a g e r s a b o u t h o w t o e n g a g ee m p l o y e e s , s u c h a s h o w t o t a l k t o e m p l o y e e sabou t pe r sona l and bus i ness cha l l enges i n t hee c o n o m i c d o w n t u r n , " S w e e r e s a y s . " W e g i v em a n a g e r s t o o l s t o t r ans l a te bus i ness s t r a tegyf o r e a c h e m p l o y e e . "

In tw o year s , engagem ent h a s i ncreased6 points f o 7 2 percent . She cor re lates fhat i n -c r ease to : A dr op i n t u r nover by 9 per cen tage po i n t s . A dr op i n t u r nover o f key em pl oyees by 6 per -

cen tage po i n ts . An i n te r na l p r om ot i on r a te tha t i nc r eased by

13 per cen tage po i n t s f o 35 per cen t . A d r o p in " qu i c i < qu i t s " peop l e w ho l eave

i n t h e f ir s t 1 2 m o n t h s b y 1 0 p e r c e n ta g epo i n ts .D ur ing tha f t i m e , the com pany a lso has seen

increases in customer and prov ider sat is fact ionscores and has posted higher revenue.

Another way Uni ted Heal th Group dr ives en-gage me nt i s by us ing a Facebook-s ty ie tool cal ledU - U n k t o he l p peop l e connec t . Em p l oyees fo r mgr oups , and Sw eer e w r i f es a b l og and answ er sques t i ons , " Peop l e becom e engaged by p r om ot -ing fhei r brands and hav ing access to peoplethey never had access fo be fo r e , " Sw eer e says ," W e have 15 ,000 te l ecom m uter s w ho need th i stechno logy fo connec t w i th o ther s . W e ii sf na m e,f i t l e , w her e they w or k . Peop l e can vo l un teer t oadd more to thei r prof i les . And people can searchfor exper f i se,"

they don't understand or see how their work drives the business.That is a form of disengagement."W h o ' s R e s p o n s i b l e fo r E n g a g e m e n t ?A manager's role in employee engagement is hotly debated.Studies showing that people leave managers, not companies,have led some HR professionals to hold supervisors responsiblefor engagement survey results. Managers' bonuses may even betied to engagement scores.

No t everyone agrees with this tactic. "Engag emen t is every-one's responsibility, and, unfortunately, it hasn't been treatedthat way," Federman argues, "If managers' bonuses are tiedto the score, it sends the subtle message to everyone else that'if I'm not engaged, it's my manager's fault, ' We create a vic-

responsibity for engagement needs to be shared from top tobottom.

Adds Zinger: If HR professionals "shift responsibity tmanagers and hold them accountable for the engagement levelsmake sure they have the tools to do their jobs and that their employees have the necessary tools."W h a t E n g a g e m e n t F a c to r ?Progress, contributing to the business, development, recognitionempowerment, purpose, trust and autonomy factors often showup in survey findings as issues that affect engagement. The challenge: identifying factors that are right for your businessandmanaging them.

Federman explains that a company turning a profit based o


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engagement differently than a com pany looking to reduce unionactivity.

San Antonio-based Rackspace provides web-hosting andinformation technology solutions to its clients, but that roleis secondary, says Wayne Roberts, vice president of humanresources. "Our mission statement is to be among the world'sgreatest service companies."

Engagement drivers at Rackspace relate to improving cus-tomer service and increasing customer loyalty, thereby affectingthe bottom line. It starts with recruiting and being honest aboutRackspace's culture, Roberts says. "We do strengths assessmentson each recruit or employee and assign them the right job for themin the company. It's not uncommon for candidates to come to usfor one j o b , and we hire them because their values align with ours,but we place them in a different role."

Giving people the opportunity to do what they do best fos-ters engagement at the company. Good job fit has translated in-to lower-than-industry-average turnover and a connection withcustomers. Quarterly performance reviews stress employees'contributions to business strategy. "Discretionary effort comesfrom an employee understanding the con-nection between the 'fanatical' customerservice she provides and th e overall healthof the organization" and how that ties toher future, Roberts says.

Rackspace employees also want trans-parency, so senior leaders hold monthlyopen-book f inancia l sessions, Robertssays.

He adds that Rackspace doesn't tie managers' bonuses orsalary increases to engagement scores; the scores are looked atonly for promotions. "I wl not use our engagement surveys asweapons," Roberts says. "We want candid, open and unfilteredfeedback. Engagement is a team sport, and the scores are reflec-tive ofth e team , not just the manag er."E m p o w e r m e n t a s a L e v e rDiscovering that highly engaged teams demonstrated higher per-formance at fi-anchisees prompted Erank Saitta, senior direaorof brand performance support at Homewood Suites by Hiltonin Memphis, Term., to pay more attention to em-ployee engagement.

On regular visits to the 290 franchised hotelsthroughout North America, he gathered bestpractices and helped develop a "service suitcase"that was rolled out to all the hotels to improveengagement. The suitcase provides general man-agers with tools on leadership, communicationsand training.

Empowerment is the key driver of engage-

a 100 percent money-back guarantee if a guest isn't satisfied.Any employeefiom housekeeper to managercan make goodon that guarantee; they don't have to seek approval or argue.And, the guest doesn't have to go through a chain of commandto have a complaint resolved.

"The return we get on every dollar refiinded is 20 to 1,"Saitta says, based on repeat business and referrals fi'om thosereinded guests. The return on having engaged employees "ismuch higher."

For this to work effectively, though, Saitta says Homewoodtrains employees on how to gauge a guest's experience by initiat-ing conversations, actively listening and reading body language.Because Homewood has extended-stay hotels, housekeepershave more interaction with guests than managers do, so it isimportant that every employee is empowered to handle prob-lems quickly. This type of training and authority is not typicallygranted to hospitality employees below the managerial leveland Saitta suspects it makes a difference.

Homewood ranks and publishes hotel performance on score-cards. Results fi'om use of the service suitcase have been impres-

sive: "We had a Texas hotel move fi-omthe bottom third of the scorecard to thetop 30 after using the suitcase for sixmonths," Saitta says. From 2007-09,guest loyalty scores increased fiom 68.6percent to 70.4 percent, satisfactionwith service inched up 2 percentagepoints to 78.2 percent, and "return in-

tent" scores grew fiom 75.3 percent to 77.7 percent.These increases, Saitta says, translate into dollars on the bot-

tom line. He correlates them directly to emp loyee engagement.D e v e lo p m e n t a s a L e v e rIn 2005, Daphne Utilities made sweeping changes that broughtdifferent operating unitsgas, recycling, water and sewerageinto one company. Rob McElroy came in as general managerwith a goal to improve engagement among employees, whoserve approximately 25,000 customers in Daphne, Ala., andsurrounding areas.

Leaders at the utility strive to provide employees with a so-cial purpose through environmen-tal programs, such as a biodieselfuel effort. In addition, workplacesafety and whole-family health andwellness programs have resultedin a reduction of insurance ratesfor the company and employees ineach ofthe last three years.

Engagement is achieved throughcross-training in recruitment, de-

Online ResourcesTo discuss employee engagement andfor more information, see the onlineversion of this art icle at vtww.shrm.org/hrmaqazine.


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lobby receptionist cross-trained as a meter readerand she lovedit," McElroy says. "She is a natural outdoorswoman but wouldnever have thought to apply for that j o b . Now she does part-timereception and part-time m eter reading, an d it saved us from hav-ing to hire a full-time meter reader."

Even when people don't succeed in a cross-training exercise,it is not viewed as a faure. "It's good information to have,"McElroy says. "I don't want to promote someone to supervisor,find out he didn't have the natural abity to manage, and thendemote him and humiliate him."

McElroy views the employment relationship as a mutuallybeneficial contract. Daphne will give an employee many oppor-tunities to learn skills, enhance those skills and develop throughnew roles. In return, the employee will be engaged, connectedand motivated to contribute. "When the employee feels likehe has learned au he can here, and the development lever isn'tengaging him, he will move on," McElroy says.S e l f - D i r e c t i o n a s a L e v e rChubb & Son uses its intranet to connect 10,300 employeesworldwide and enhance engagement through innovation. HRprofessionals implemented a program called "Motivate, Driveand Deliver." For two months in 2008, anyone could post anidea for a new product or service online and others could com-ment and im prove on the idea. Users posted 607 ideas and 2,341comments. Senior executives selected 24 people to present theirideas, and about a half-dozen concepts are being implementedby the employees who proposed them. Executives look forwardto future roun ds of orine innovation.

"It's no t just an en gagem ent initiative; it's a business initiativeto get ideas for grovrth and opportunity that leads to engage-ment," Kelly says.

Chubb also has tapped into a new phenomenon of creatinga personal brand through inexpensive technology that can beleveraged to increase engagement.

Says consultant Federman: "We are in a world with newtechnology and a new generation of people who want peer

'P e o p le d o n ' t g o t h e e x t r am i le b e c a u s e o f b a s ep a y o r h e a l t h b e n e f it s o rl i f e i n s u r a n c e . '

D a v i d Z i n g e r

recognition and instimt recog-nition. Collaboration, recogni-tion, brand budingall of itcan be facitated with socialmedia ."

Behind the personal brand-ing phenomenon lies the prem-ise that lifetime employmentdoesn't exist and jobs aren'tsecure, so employees are look-ing to bud their expertise andreputation for subsequent jobs."Employment has to be mutu-ally beneficial to the organiza-tion and the employee so that the employeewhe therecando h is job we, bud his expertise and brand, and stay there untit's no longer mutually beneficial," Federman says.

Zinger argues that even negative branding can be turnearound. "I had a client whose employee started a mycompanysucks.com web site, and, instead of fning him, the companbrought him in to find out what his gripes were. Now, he ithe first person new hires meet. Here's a person who obviouslhad passion about his work. At first it was negative passionpoisonous disengagementbut it didn't take the company lonto turn it into positive passion."P a y Is N o t a L e v e rWhe HR professionals leverage different factors to enhancengagement depending on their cultures and business strategiescompensation is not one of those factors. "People don't go thextra mue because of base pay or health benefits or life insurance," G ebauer says. "They go the extra mile because of leadership's interest in their well-being, development opportunities orecognition."

Think about the last time you got a raise or bonus, Federman notes. "How long did that feeling last? One, maybe twopaychecks? It's not sustaining."

That may explain why, during the heart of the recessionfrom July 2008 to March 2009, Gallup found only slight changein overall engagement. In July 2008, 31 percent of employeewere engaged, 51 percent were not engaged, and 17 percenwere actively disengaged. By March 2009, the results changed to30 percent, 52 percent and 18 percent, respectively.

Daphne Utities, which pays employees slightly below thmarket and industry average, had voluntary turnover of threpeople last yearout of 70 employees. "If you bud your entirrelationship with employees on money, and then the economysours or you have a bad year and you can't give raises or bonuses, then the basis of the relationship is gone. When thahappens to us, we have many other reasons for them to stay,


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