Roadmap To Engagement

Transcription

1 white paper Roadmap To Engagement Practical steps businesses can take to increase employee satisfaction.

2 Characteristically, an engaged worker puts forth additional effort in a manner that promotes the organization s best interests. Employee Engagement has been an increasingly popular buzz word and human resource initiative throughout the last decade. Yet the metrics and application of this topic can be complex. Depending on the researching entity, the word engagement can relate to different factors within an organization such as employee motivation, job satisfaction, organizational commitment, discretionary effort, productivity, company culture, management support, retention, and many others. Employee Engagement can be defined as: the affirmative or adverse emotional attitude an employee holds toward their work or employer; it determines the level of effort that person applies when performing their job. Thus, the primary factor that seems to separate an engaged employee from just a satisfied employee is this effort component. Characteristically, an engaged worker puts forth additional effort in a manner that promotes the organization s best interests. While it used to be a Human Resources (HR) challenge to convince executive leadership that there was a direct connection between employee engagement and ROI performance, hundreds of research studies now irrefutably confirm this assertion. These studies link higher engagement with higher discretionary effort, innovation, customer loyalty, quality, profitability, earnings per share and productivity to name just a few. More recent studies also provide quantifiable evidence of high engagement/high performance reciprocity: Best Buy has successfully connected improved employee-engagement scores to store performance, finding that for every 10th of a point it boosted engagement scores (on a five point scale), its stores saw a $100,000 increase in operating income. 1 Gallup has proven that companies with world-class engagement have 3.9 times the Earnings per Share growth rate, compared with organizations with lower engagement in the same industry. Gallup also found that organizations with higher than average proportions of engaged employees were less likely to see a decline in earnings per share in 2008, the year after the recession officially began. Hewitt Associates found that firms which experienced higher than average engagement had a total shareholder return 19% higher than the average in Those organizations with lower than average engagement however, experienced a shareholder return 44% below the average that same year. Engaged Employee Improved Business Performance Higher Discretionary Effort 2 trinet.com

3 Many employers take the the more the better approach and keep piling on costly initiatives that may or may not have a valueadded impact at a particular time. So, if an engaged worker exhibits a higher discretionary effort which has a proven, direct link to improved business performance then understanding what a company can do to increase engagement is vital. The Employee Engagement Report 2011 from leadership development firm Blessing and White, shows that the average company s percent of employees that fall within the highly engaged category is 33% vs. the actively disengaged category at 17%. These averages have not differed much from the original percentages cited by Gallup and other pioneers in the field. This phenomenon begs the question of how companies suffering from a downturn in the economy have been able to maintain virtually the same levels of employee engagement despite cost-saving ventures. Additionally, companies are searching to discover the actions they can take to turn the 52% of employees that are neither actively engaged nor disengaged into engaged employees, and what to do to ensure that their currently engaged employees remain that way. There is no shortage of hypotheses on what the most important factors are to heighten and maintain employee engagement. Many leading contenders of engagement surveying use a pyramid tool suspiciously similar to Maslow s famous hierarchy of needs to decipher the different levels of engagement through which an employee s motivational needs may be met. While this structure is valuable to understand the basic levels and drivers for motivation, it may also falsely imply that engagement is a continuum upon which employers can build to work towards increasing levels of employee engagement. Operating under this notion, it is easy to see why employers get confused, since often there is no clear direction to indicate whether initiatives such as career development, manager training, or increased communication would have any impact on engagement at any given moment. Many employers take the more the better approach and keep piling on costly initiatives that may or may not have a valueadded impact at a particular time. Employee Engagement Hierachy How can we grow? Opportunities to learn and grow Progress in last six months What do I get? What do I give? Do I belong? I have a best friend at work Coworkers committed to quality Mission/purpose of company At work, my opinions seem to count Someone at work encourages my development Supervisors/someone at work cares Recognition last seven day Do what I do best every day I have the materials and equipment I need to do my work right I know what is expected of me at work Copyright The Gallup Organization, Princeton, NJ. All rights reserved. trinet.com 3

4 Organizations must therefore put into effect higher-level objectives that nourish the employee s sense of achievement and wellbeing, in order to work towards a higher level of engagement within their workforce. Psychologist Frederick Herzberg s work challenged the initial motivational framework by postulating that the factors that cause dissatisfaction are inherently different from those that cause satisfaction. Therefore, the two feelings cannot be treated as opposites of one another. Applying this to a work context, suggests that an employer can work to change base-level needs that sap into an employee s feeling of safety, security, and trust in the workplace. Once these concerns are eradicated, the employer may simply be left with employees that are no longer dissatisfied. Organizations must therefore put into effect higher-level objectives that nourish the employee s sense of achievement and well-being, in order to work towards a higher level of engagement within their workforce. Stated another way the opposite of dissatisfaction is not satisfaction or engagement; it is simply being not dissatisfied. 2 Organizations wishing to work towards heightened engagement within their workforce must first pay close attention to eliminating the things in their work environment that are actively contributing to dissatisfaction. A noteworthy finding in Blessing White s study indicated that 13% of North Americans surveyed did not plan to remain with their current company during the next 12 months, which was nearly double the 2008 response of 7%. This underscores how important it is that workers be actively engaged. Therefore, trying to increase engagement through costly initiatives when an employer s workers are dissatisfied may be a well-meaning but fruitless effort. According to Blessing and White, four tips to begin the process of ensuring that your workers are not actively disengaged are: 1. Pay Appropriately an employee s compensation is linked to their sense of security. Without ensuring that this security need is met, it will be difficult for a company to motivate an employee to be a top performer regardless of the engagement program they try to implement. Adding engagement initiatives such as training and development within a company that is not paying the average market wage can actually work against the company by increasing dissatisfaction. Employees may resent that the company is using funds frivolously, feeling that they should have gone towards salaries instead. 2. Limit Workforce Reductions or Re-Organizations a company s first strategy in combating a dissatisfied workforce, should be to avoid layoffs and job eliminations whenever possible. This can be hard to do in a depressed economic climate where employers are challenged to do more with less. One solution that many companies have found effective is to solicit cost-reduction ideas from the workforce itself to see if those affected can come up with creative ideas to reduce costs without eliminating positions. Employees that fear the loss of their jobs are at the base level of lessened trust and security. This makes it impossible for them to evolve to an engaged status. If you must lay-off employees, remember to treat both employees impacted, and the employees who remain, with respect. Strive to be as transparent as possible, notifying remaining employees when the all clear on lay-offs is over. 4 trinet.com

5 Once an organization has taken steps to move employees out of the dissatisfied zone, they can then begin to identify and target specific areas to increase engagement. 3. Manage Organizational Change a shift, particularly leadership shift, brings a level of uncertainty throughout the organization which may lead employees to question their job security. Though companies certainly cannot avoid change, they can do things to make the change less likely to create actively disengaged workers. When change happens, it is important for companies to promptly and professionally communicate the reasons why it occurred. If possible, companies should make employees an active part of the change through selection committees, employee surveying, and round tables. When employees have a platform to voice their opinions and feel involved in the process, it works to decrease their fear of change. 4. Increase Trust a basic sense of mistrust, whether of executives, direct supervisors, or the decisions that drive the organization in a certain direction, can thwart the best laid engagement efforts. Trust within the organization is an essential element that can help an organization overcome some of the employee dissatisfaction. An organization that has developed an effective communication program should recognize that effective follow up communications are every bit as important as initial ones. Executives must also recognize that they need to be visible and accountable to their employees. They must also demand that all executive levels within the organization adhere to the same visibility and accountability guidelines. As a testimony to how trust can erode engagement, recent studies have found that employers that conducted engagement surveys, but then did nothing to either communicate the results of the survey or develop action plans to heighten engagement after the survey, actually suffered significant losses in engagement levels the following year. In essence, research indicates that employees in such situations ended up less engaged than they would have been had the company done no engagement survey at all. Once an organization has taken steps to move employees out of the dissatisfied zone, they can then begin to identify and target specific areas to increase engagement. WorkUSA data shows that engagement starts off high among new employees but tapers off throughout their careers. The average employee engagement drops by 9% in the first year alone. Almost three-quarters of employees on the job for less than six months say that they are motivated to do their best work every day but this number drops to 57% after 6 months. While some decline is inevitable, this study noted that if companies identify and take action at key engagement-building opportunities, they can minimize or potentially even reverse the decline. trinet.com 5

6 The pathways used to increase engagement can be structured and formal, such as new hires onboarding, performance management, and benefits enrollment; or they can be informal such as coaching, mentoring, and casual recognition. Employers can learn to recognize the moments of opportunity that offer particularly fertile ground to build employee engagement. The pathways used to increase engagement can be structured and formal, such as new hires onboarding, performance management, and benefits enrollment; or they can be informal such as coaching, mentoring, and casual recognition. Further examples are noted below: Formal Opportunities Recruitment and onboarding Benefits enrollment Training Leadership and strengths-based development Informal Opportunities Coaching and mentoring to empower Career development discussions Ongoing performance feedback Personalized communication (praise, anniversary date acknowledgement) Performance reviews and goal setting Managing change (downsizing, mergers, new leadership) Communication by senior leaders (employees should learn about the organizations plans and progress) Employee surveys Recognition and rewards programs Goal creation that aligns with the company s mission Informal networking Teamwork collaboration Feedback solicitation (one-on-one or suggestion box) Company social events Charitable volunteer events Support during personal crises Advertising and public relations Although there is no one-size-fits-all answer to increasing employee engagement, one strategy that can help is to encourage its development in core contributors a segment that represents 60 percent of the typical workforce. 6 trinet.com

7 Ultimately, the success of a company s efforts to build and maintain employee engagement will depend on the establishment of a planned methodology, consistent communication, and endorsement at all managerial levels. A well thought out employee engagement strategy begins by listening to your employees and then acting upon the feedback you receive. Consider using an independent third party to administer a survey consisting of a set of base questions that can indicate the current status of the company s engagement initiative. Employees should be able to complete the survey anonymously. Each survey should also take into account the company s unique culture and other pertinent organizational insights. Key areas to promote and sustain engagement will vary based upon the organization s current engagement level, as well as the make-up of its workforce, types of positions, and industry category. A trained consultant can assist your organization in interpreting your survey results. Often, they will employ benchmarks by industry type which enables them to interpret the raw data results from the survey in order to make recommendations. The trained professional can identify which unique opportunities will have the greatest impact upon your organization s overall engagement levels each year. Engagement surveys should lead to a customized strategy which promotes continual incremental increases in your employee engagement levels over time. When approached correctly, heightened employee engagement can be your organization s most important strategy and a source of competitive advantage not easily duplicated by your competitors. Ultimately, the success of a company s efforts to build and maintain employee engagement will depend on the establishment of a planned methodology, consistent communication, and endorsement at all managerial levels. For more information about how TriNet can help you engage your employees and invest wisely in your most valuable organizational asset your people please contact your TriNet Human Capital Consultant or engagement@trinet.com. 1. Scott Leibs. Measuring Up. CFO Magazine. June Jean Scheid. Herzberg s Motivation Theroy. Bright Hub. articles/92551.aspx. Accessed March 22, trinet.com 7

8 About TriNet TriNet serves as a trusted HR partner to growing companies, helping them to contain costs, minimize employer-related risks, relieve administrative burden, and keep focused on their core business functions. From routine employee benefits service and payroll processing to high-level human capital consulting, TriNet s PEO expertise is integrated with every facet of a client s organization. Its solutions specialize in serving fast-moving companies in fields such as technology and professional services, who recognize that top-quality employees are the most critical competitive asset. For more information, visit Disclaimer The contents of this white paper have been prepared for educational and information purposes only. The content does not provide legal advice or legal opinions on any specific matters. Transmission of this information is not intended to create, and receipt does not constitute, a lawyer-client relationship between TriNet, the author(s), or the publishers and you. You should not act or refrain from acting on any legal matter based on the content without seeking professional counsel TriNet. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. July Learn more at TriNet.com or call Ambitions Realized