Engagement is the new black!
Employee engagement is the hot topic in the modern business world. This is due to the popularisation of engagement by many leading business development consulting companies such as Blessing White, Gallup, Hewitt, Towers Perrin and the popular business press. According to the extensive Gallup research (and PR machine) there are strong positive correlations that engagement drives increased performance in key business indicators such as customer loyalty/engagement, profitability, productivity, turnover, safety incidents, shrinkage, absenteeism, health and safety, and quality. But there remain some key and somewhat contentious questions:
- What is engagement?
- Does it result in productivity and performance step change?
- How should it be measured?
- How relevant is it on the operational shop floor? (i.e. away from the bright lights of head office!)
Read on for some of my interpretations and experiences...
Gallup report that only 29% of U.S. employees are actively engaged, with 54% employees not engaged, and 17% of employees actively disengaged (Gallup, 2007). This research also suggests that disengaged employees cost organisations across the US alone over $300 billion per year in lost productivity.
Engagement runs the increasing risk of being labelled as just the next fad if its relevance and implementation is not executed in sync with the business needs and culture(s). If ineffective implementation occurs then the organisation runs the risk of actively disengaging employees – which is counterproductive to the intent. Actively disengaged employees are poison in that they actively undermine organisations. In short disengagement has negative implications for profitability, productivity, safety, staff turnover, and employee theft.
The first issue is defining just what is the definition of engagement – both scholars and the business world continue to debate this. A careful formal definition of employee engagement is an employee’s emotional and cognitive motivation, self efficacy to perform the job, perceived clarity of the organisation’s vision and his or her specific role in that vision, and belief that he or she has the resources to get the job done (McShane, Travalione, & Olekalns 2011). This links to the widely known MARS model of individual behaviour and performance. In my simple view a layman’s definition would be the extent to which employees are willing and able to contribute discretionary effort to the organisation and to go the “extra mile”.
The increasing commercial emphasis on employee engagement is primarily due to the compelling performance linkages provided by Gallup and other organisations. Gallup’s work is based on over 30 years of research across more than 17 million employees and is widely published and quoted in popular management press. This commercial view is also upheld by wider research and meta analysis that supports the view that engagement promotes the well being and productivity of staff and results in improved business results (Baumruk, 2004; Harter, Schmidt, & Hayes, 2002; Shaufeii, Saianova, Gonzaiez-RomSi, & Bakkers, 2002). So in simple terms – if you do not get too hung up on definition then engagement does increase productivity and performance.
The question of what comes first - performance or engagement – is often challenged by managers in the real world – again some academic work has explored the question of what comes first employee attitude, or organisational market and financial success/performance. Schneider et al (Schneider, Hanges, Smith, & Salvaggio, 2003) found some support that aggregated attitudes were related to organisational performance, and concluded that organisation financial and market performance cause some aspects of employee’s attitudes or provide the potential for a reverse causality. Given the potential gains associated with an engaged workplace proactive managers should not sweat the small stuff...and should get on with the development of sound engagement implementations.
Again given the wide range of engagement definition, the measurement methodology remains fragmented and largely un-validated by academic workings – in short it is not clear how best to measure engagement. Commercial engagement measurements have been developed by the different consulting companies like Blessing White, Gallup, Hewitt and Towers Perrin. Amongst these the most widely known application has been developed by Gallup - the Q12 index or Gallup Workplace Audit (GWA). Alternatively some organisations choose to develop in house questionnaires and engagement surveys. To keep with the theme of simplicity perhaps the only application of engagement measurement that can be applied in the workplace is to choose a measurement approach and continue to apply the same methodology in a consistent manner. While the academic validation may be lacking – this will at least provide a consistent benchmark as your organisation embarks on its engagement journey.
Employee engagement can be correlated to the amount of involvement that employees have in their work processes (Lockwood, 2007). This aligns well with another modern manufacturing theory – lean manufacturing. Lean manufacturing is based on the Toyota production model across the two values of continuous improvement and respect for people. If followed as per the original Toyota intent, optimisation occurs via structured processes and actions that have a heavy focus on the direct engagement of employees.
The author has experienced the integration of engagement initiatives embedded within a lean implementation in a factory environment with some success. The key aspects of the engagement and lean process integration can be summarised across a simple four stage process;
- the operations change team developed a call to action – a compelling reason for change
- a commitment was made to stay the course of the implementation plan
- this was backed up with a simple, coordinated and consistent communication plan
- the application of a simple Plan-Do-Check-Act (PDCA) process was employed to monitor and tweak the implementation plan with regular review
In the interests of simplicity the engagement measure that was adopted was the Gallup Q12 survey as this provides a consistent measure from a “quick and dirty” 12 point questionnaire which did not threaten to alienate a low to medium skilled workforce.
The result of this implementation was that over a period of 12 months a significant movement in the selected engagement benchmark measure was recorded. This favourable engagement trend continued into the second year of operation at which time all operational productivity targets across health and safety, cost, quality and service were achieved.
The key to the success was the simplicity of the plan – staff engagement occurred via the implementation of a continuous improvement program that included applications of improved communication, teamwork and focused improvement initiatives. While the Gallup measurement was applied as the benchmark to monitor progress the metric was not the end game target. As a result the engagement initiatives became embedded in the culture and became part of everyday business processes.
Finally, on reflection it is the writers considered opinion that engagement is not just the “next fad” but that in the modern business world the development of engaged workplaces will provide an increasing competitive advantage as the right mix of conditions for an engagement is not easily identified or developed, and is very difficult to replicate due to the complexities and need for relevance within the business culture.
Baumruk, R. (2004). The Missing Link: The Role of Employee Engagement in Business Success. Workspan, 47(48-52).
Gallup. (2007) Retrieved September 2012, from http://businessjournal.gallup.com
Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2002). Business-Unit-Level Relationship Between Employee Satisfaction, Employee Engagement, and Business Outcomes: A Meta-Analysis. JOURNAL OF APPLIED PSYCHOLOGY, 87, 268-279.
Lockwood, N. R. (2007). Leveraging Employee Engagement for Competitive Advantage: HR's Strategic Role. [Article]. HR Magazine, 52(3), 1.
McShane, S., Travalione, T., & Olekalns , M. (2011). Organisational Behaviour on the Pacific Rim (3rd ed.). Australia: McGraw-Hill.
Schneider, B., Hanges, P. J., Smith, D. B., & Salvaggio, A. N. (2003). Which Comes First: Employee Attitudes or Organizational Financial and Market Performance? JOURNAL OF APPLIED PSYCHOLOGY, 88, 836-851.
Shaufeii, W., Saianova, M., Gonzaiez-RomSi, V., & Bakkers, A. B. (2002). The measurement of engagement and burnout: A two sample confirmatory factor analytic approach. . Journal of Happiness, 3, 71-92.