5 ways to avoid the engagement abyss

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1 WHITE PAPER 5 ways to avoid the engagement abyss Once considered soft science, engagement is now one of the most critical challenges strategic organizations are focused on. Yet we re in an abyss with a massive gulf between how important we know employee engagement is and how well we re doing achieving it.

2 Why engagement matters If you think about people as the engine that powers company progress, full engagement is a set of well-oiled cylinders that fire consistently. More engaged workers are simply more productive. According to Gallup research, companies in the top quartile when it comes to employee engagement have 21 percent better productivity and 22 percent higher profitability than companies in the bottom quartile. (Figure 1) Five Ways to Avoid the Engagement Abyss // 2 Absenteeism -37% High - Turnover Orgs. -25% Low - Turnover Orgs. -65% Figure 1 ENGAGEMENT S EFFECT ON KEY PERFORMANCE INDICATORS. Shrinkage Safety Incidents Patient Safety Incidents -48% -41% -28% Quality (Defects) -41% Customer 10% Productivity Profitability 21% 22% MEDIAN OUTCOMES BETWEEN TOP- AND BOTTOM-QUARTILE TEAMS SOURCE: Gallup 2013 State of the American Workplace Report Figure 2 WHICH OF THE FOLLOWING ARE THE MOST IMPORTANT HR CHALLENGES TO YOUR ORGANIZATION? (SELECT YOUR TOP THREE CHOICES) 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 47% Succession planning Employee engagement HR professionals are keenly aware of the connection between passionate employees and business performance, which is why engagement is at the top of their list of business challenges. In fact, according to a 2013 SHRM/Globoforce survey with more than 800 respondents, employee engagement dwarfs all other HR concerns. (Figure 2) 39% Culture management 35% 33% 31% Performance management Employee retention turnover 26% Employee enablement Relieving employee frustrations SOURCE: 2013 SHRM/Globoforce Survey 19% 18% 18% Recruitment Employee satisfaction Productivity 10% 10% Revenue FTE 4% Other

3 Engagement Scores: A Dark Picture Five Ways to Avoid the Engagement Abyss // 3 The vast majority of US workers (70 percent) are not reaching their full potential a problem that has significant implications for the economy and the individual performance of American companies. - Gallup With so many arguments for and so much attention on employee engagement, you might jump to the conclusion that companies are hitting it out of the park on engagement scores. Not exactly. In fact, not at all. That engine of business progress it turns out that most of the cylinders are either misfiring or seizing up altogether. According to data from Gallup, the state of employee engagement is dismal. In its 2013 State of the American Workplace report, Gallup reported that 7 out of 10 employees are either not engaged or actively disengaged. And that s a slight improvement over the last four years. As Gallup puts it in its report, The vast majority of US workers (70 percent) are not reaching their full potential a problem that has significant implications for the economy and the individual performance of American companies. Figure 3 EMPLOYEE ENGAGEMENT AMONG THE U.S. WORKING POPULATION % 52% 30% % 52% 29% % 53% 28% % 54% 28% Actively disengaged Not engaged Engaged SOURCE: Gallup 2013 State of the American Workplace Report

4 Getting out of the Abyss Five Ways to Avoid the Engagement Abyss // 4 Employee engagement is essential. Yet employee engagement is floundering. It s a perilous chasm, and HR is often left trying to fill that void. But needless to say, HR can t fix engagement on its own. In fact, some of the biggest engagement drivers relationships with managers, trust and belief in company leaders, having a feeling of personal accomplishment at work can be largely out of HR s control. The trick for strategic HR professionals is creating the environment, tools, and platforms that allow the organization and employee engagement to flourish. While every company is different and requires its own engagement approach, there are critical areas every company should focus on to stay out of the engagement abyss. Here s a list of five key things every company can do to bolster engagement, and tips on how recognition can play a role in each. the five key elements to engagement create a Clear Set of Company Values That Are Known & Understood Build Culture Intentionally insist on Good Manager Hygiene provide Platforms for Positivity give People Skin in the Game

5 1 create a Clear Set of Company Values That Are Known & Understood Five Ways to Avoid the Engagement Abyss // 5 When it comes to creating high engagement, having a set of company values that permeate the company is table stakes. People want to feel connected to their companies, and feeling a bond with the values of the company is one of the essential ways of creating that connection. Modern Survey, an employee survey company, conducts a bi-annual National Employee Engagement Study, in which it analyzes more than 1,000 employee surveys. We ask people a simple question: Yes or no, does your organization have a set of values that are known and understood by most employees?, explains Don MacPherson, Modern Survey s CEO. If you say yes to that question, you are 30 times more likely to be fully engaged than someone who answers no to that question. The absence of values almost guarantees employees will not be fully engaged. These are some practical tips on ensuring values are truly embedded in your organization: Those who say the company s values are known and understood are 30x more likely to be fully engaged. Have executives talk about them regularly. The company s values should be part of the company s daily vernacular. Make them part of your corporate communications strategy. Internal and external communications should contain references to the company s core values. Link daily accomplishments to your company s values. Recognition Tip A powerful way to help connect employees to values is creating a systematic way of publicly recognizing employees who demonstrate core values.

6 2 Build Culture Intentionally Five Ways to Avoid the Engagement Abyss // 6 You have no choice but to have some kind of company culture, and company culture can be a primary driver of engagement. While culture can t be built by edict from on high, smart companies are deliberate about cultivating it. The foundation of a great company culture is employee happiness. While happiness can t be achieved through an executive mandate, there are three goals we can strive for to help ensure employee happiness: 1 / Alignment: Alignment means employees understand how their specific role fits into the bigger purpose of the company. To have good alignment, it means that the person has to be a good fit for the job but also a good fit for the company. They must genuinely believe in the organization s vision, goals and values. 2 / Positivity: Positivity and happiness are flip sides of the same coin; they are mutually reinforcing. So how do you build and sustain positivity in spite of the inevitable workplace challenges we all face? Here is one way: Promote platforms of gratitude and appreciation. Showing appreciation is an essential component of positivity. 3 / Progress: We all want to feel like we are getting somewhere and accomplishing things whether it s at work or in our personal lives. Ensuring employees feel like they re achieving milestones and being acknowledged for their accomplishments is critical to their happiness. Recognition Tip A strong recognition program can help create alignment, increase positivity, and give people that sense of progress they covet.

7 3 Insist on good manager hygiene Five Ways to Avoid the Engagement Abyss // 7 As Chris Bones, a professor at the Henley Business School puts it, The line manager is the lens through which I see the company and the company sees me. Indeed, it s no secret that managers are one of the most important components of job satisfaction and engagement. There s the old axiom that people don t leave bad companies, they leave bad managers. And similarly, great managers can evoke high engagement levels. At the heart of the matter, employees want to feel that managers care about them as professionals and as people. They want to have the belief that their managers want them to succeed. That s why insisting that managers show employees they care about them is essential. Good manager hygiene is a key factor in keeping engagement at healthy levels. 5 Key Components of good manager hygiene A habit of amplifying accomplishments Strong communication skills A tendency to thank people for their efforts and contributions Ensuring people are put in a position to succeed A bias towards positive feedback

8 Figure 4 SUREVEY QUESTION: MY IMMEDIATE MANAGER RECOGNIZES AND APPRECIATES GOOD WORK Employee Engagement 60% 50% 40% 30% 20% 52% 33% Five Ways to Avoid the Engagement Abyss // 8 10% 0% Stronger Recognition & Appreciation Weaker Recognition & Appreciation SOURCE: Towers Watson, Turbocharging Employee Engagement Figure 5 SUREVEY QUESTION: WHAT HAS A GREATER IMPACT ON PERFORMANCE - NEGATIVE OR POSITIVE FEEDBACK? 100% 80% 94% 60% 40% 20% 0% 6% Negative feedback Positive feedback SOURCE: 2013 Globoforce Workforce Moodtracker Survey Recognition Tip A formal recognition program is a great tool to put in managers hands, and when recognition is given on one consistent platform across the company, you re able to pinpoint your star managers as well as your laggards when it comes to recognizing their teams achievements.

9 4 Provide platforms for positivity While it s great to have an environment in which managers and leaders habitually provide positive feedback to employees, the holy grail of engagement is when the entire organization is empowered and encouraged to recognize one another s achievements. This kind of environment blankets the organization in positivity, it broadcasts the daily achievements of the company, and it creates a pattern of something organization psychologists refer to as pro-social behavior, which essentially means that colleagues are actively looking for ways to help one another. Five Ways to Avoid the Engagement Abyss // 9 Adam Grant, a professor at Wharton Business School and author of Give and Take, says that Research shows that when you have groups of people who are engaging in prosocial behavior, you get faster problem-solving, more efficient coordination, and less variability in work, because people are willing to step up and cover for one another when they make mistakes. Globoforce research corroborates Grant s assertion. According to the 2013 Workforce Mood Tracker survey, of those who have recognized a colleague in the last month, 62 percent describe themselves as highly engaged. Of those who say they ve never recognized someone at work, only 27 percent say they re highly engaged. (Figure 6) 60% 50% 62% 40% Figure 6 REPORT BEING HIGHLY ENGAGED 30% 20% 10% 21% 0% Those who have recognized a colleague in the last month Those who have recognized at colleague SOURCE: 2013 Globoforce Workplace MoodTracker Survey Recognition Tip Creating a strategic recognition platform that promotes not only a positive feedback loop but feedback that reinforces the company s core values is a powerful tool for any organization. It also allows and encourages everyone to be the keepers of company culture.

10 5 Give people skin in the game One of the ultimate business benefits of engagement is getting maximum discretionary effort out of employees. While we d love to think that employees will always give it their all because of their emotional commitment to the company, tapping into people s own personal interests is also a great way to motivate employees. Five Ways to Avoid the Engagement Abyss // 10 It s no secret that many companies lure the best talent by giving them equity in their companies. That kind of skin in the game gives these employees extra motivation to do what is necessary for the company to achieve financial success. Many private companies offer profit-sharing plans to their people, and of course, companies spend millions on performance bonuses programs to incentivize their workforce. These are all tried and true components of the total rewards package. Recognition Tip An additional subtle (but perhaps more powerful) program to inspire people is to recognize and reward their ongoing achievements at work. In fact, in Gartner s Strategic Roadmap for Employee Performance Management report, James Holincheck writes: Leading organizations will start to move toward more bottom-up feedback, recognition and rewards. This will likely manifest itself in the shifting of budgets from traditional, top-down-determined, annual merit increases and incentive compensation to bottom-up, event-specific and more frequent rewards. The takeaway? In the end, HR needs to empower the organization and its people to create engagement on their own. Focusing on building platforms that make engagement infectious and allow everyone to participate in a healthy company culture is the smartest way to avoid the engagement abyss. Learn about the amazing impact strategic recognition can have on employee engagement. Call us at GForce.

11 According to experts, recognition is Learn the #1 driver more of about employee strategic, engagement. social recognition Contact us to and learn how it recognition can drive business can impact results employee for engagement you. at your company. Visit Our Site: globoforce.com» Read our Blog: globoforce.com/gfblog» Us: Call us: GFORCE 2013 Globoforce Limited. All rights reserved. WP ENG 0913

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