Employee engagement

EPISODE #199 TRANSCRIPT

In the last 20 years, employee engagement has become the dominant method of understanding and measuring job satisfaction - or “JSAT” as this is known in HR lingo. There are a few well worn engagement surveys from companies like Gallup and Aon Hewitt, which have global reach, and lots of historical data that can be used for statistical analysis and benchmarking. Many companies run an annual engagement survey and they pay close attention to the results as if it were a key predictor of people performance - some even reward their leaders based on improvements in this simple metric. 

Like the Net Promoter Score, which purports to be the single most important measure of customer satisfaction, employee engagement purports to be the single most important measure of JSAT… which supposedly translates into the performance of your people. But there are certainly pitfalls in placing too much stock in an engagement metric. So, I’m going to dive deeper into the reality of employee engagement, and whether it really leads to better outcomes from your people. 

WHAT IS EMPLOYEE ENGAGEMENT?

Like many leadership clichés, when we hear someone say that employees who are engaged perform better, we nod sagely, “Of course they do!” It sounds like it should be true, doesn't it? It has all the nobility of other virtue signals that I’ve previously discussed. “I want my employees to be happy and engaged because happy workers are productive workers, right?” I’ve said before that this is complete bullshIt. It may be true, but it's not necessarily true because there's a massive difference between correlation and causation. 

So according to Investopedia employee engagement is: 

A human resources concept that describes the level of enthusiasm and dedication a worker feels towards their job. Engaged employees care about their work and about the performance of the company and feel as though their efforts make a difference. An engaged employee is in it for more than a pay-check and may consider their wellbeing linked to their performance and thus instrumental to their company's success.

That's a really good definition. I like that one. I also read an interesting article by Stephen Jolley, who went into a little more depth, giving a pretty practical and holistic definition of the 12 Elements of Engagement, which I found quite useful: 

Employee engagement is described as an emotional commitment an employee has to an organization or, simply put, are your employees happy at work and satisfied with your company? 

I think the most useful approach is to deconstruct one of the industry standard models for engagement. Since I came across this for the first time in the form of an Aon Hewitt engagement survey, I'll take a closer look at that. This model has six dimensions that contribute to engagement: 

• Work 

• People

• Opportunities

• Total reward 

• Company practises

• Quality of life 

Overall, this is a pretty good fly over the top of the things that make a difference to people's JSAT. The crucial link, and the place where I get a little lost, is the belief that the things that make people happy are the same things that motivate them to perform. And furthermore, that this motivation actually translates into better outcomes. 

Just think of it this way: imagine a business where the workforce was well paid, the business offered total job security to its people, demanded little, satisfied every request for resources, allowed its people to take time off whenever they wanted - so their work/life balance was about life not work, and whose leaders pandered to their employees’ every whim. Understandably, this would result in a pretty high engagement score. But how do you think that would work out for performance?

THE DANGERS AND PITFALLS OF MEASURING EMPLOYEE ENGAGEMENT

1. Oversimplifying the measure 

This is a problem with any sort of testing, but a lot can be lost in the averages. If you use a single score and say “Our company has global best practice engagement because we have an overall engagement score of 78%.” Well, okay. That's one thing. But remember the metaphor of the statistician who had his head in a lit oven and his feet in a bucket of ice, who said, “On average, I feel pretty good!” If you don't drill down to the lower level components, you may draw all the wrong conclusions. 

I had a close friend in the organizational behavior field who taught me a very important lesson about engagement. She once shared an anecdote with me about a client who just completed an employee engagement survey. Now, this organization was truly bottom-of-the-barrel when it came to performance, efficiency, and customer service. But it managed to post a really high engagement score. So she drilled down on this by confidentially interviewing a number of employees, and eventually the picture became crystal clear. One person said to her: 

“Why wouldn't I be engaged? This is the best job I've ever had by a mile. I'm really well paid. I earn way more than I could in any other job in this city for my level of experience and education. The boss is never on my back - in fact, since we brought in self-managing teams, I'm essentially my own boss. If I'm ever tired on a shift, I can just sleep in the crib room. In fact, when we're on night shift, we each take turns to rotate through and rest up. I've got total job security, and if I'm ever a little low on cash, I can just work some overtime hours at higher wage rates to get some quick money.” 

Take a moment to think about this in terms of how the employees feel about the company: 

• Being overpaid will boost the score for the total rewards dimension of the engagement model. 

• Unrivaled job security will boost the score for the quality of life dimension. 

• Autonomy without consequences will boost the score for the work dimension.

• Access to seemingly unlimited resources will boost the score for the company practises dimension

• Leaders who stay away and don't demand anything will boost the score for the people dimension. 

These scores could easily outweigh and swamp other elements of the survey that may be a little bit more indicative of performance. Of course you're going to get a high employee engagement score, but the performance of that business would be appalling - as it was in this case.

2. Employee engagement measures the mood of the employees you have, not the ones you might want or need 

Several times in my career, I was brought into a company to change the culture and performance of one of its divisions - and of course, in CS Energy, it was to change the whole company. Often an underperforming business is characterized by underperforming people - I’m talking about the leaders here, not the rank and file employees. People will generally do what leaders allow them to do, so in my view, every problem in any business is a leadership problem. 

To make any change in a team like that, you have to disrupt the status quo. Now, this isn't always viewed favorably by the people who have well paid, secure, undemanding jobs - particularly when you stop accepting “The dog ate my homework" excuses that people are used to trotting out for this perennial under performance. Accountability and empowerment are key to execution excellence, and for the people who hang around long enough to see the outcomes of this, they reap the benefits both personally and as a team. But those who want to spend every waking minute protecting the status quo and subverting the change may view it very differently. 

An organization whose culture is very dependent, avoidant, approval-based, perfectionistic and conventional is almost always going to return a low employee engagement score. As you push to improve performance, push these people through change and remove the unwilling, those scores are going to drop even further. But without the process of change, the organization is doomed to fail eventually. 

Lifting a team to embrace a constructive high performance culture will be hated by the wrong people - the ones who created the problem, and are happy to stay inside the problem because they don't know any better or they're afraid of change, or they're just simply too comfortable. But the right people will love it.

So how do you look at the engagement of the right people rather than the engagement of the wrong people? It's almost impossible, but it's a really interesting intellectual exercise if you want to consider it. 

3. When you focus on employee engagement scores it may promote the wrong leadership response 

Particularly if it's financially rewarded in KPIs! Remember, what gets measured gets managed and what gets rewarded gets done. Rewarding leaders for improving engagement is almost like saying, “Take the pressure off your people. Don't upset them, just make them happy. If they're happier this time next year than they are now, we'll pay you a bonus.” Now, in my humble opinion, this is probably one of the most misaligned targets that can be implemented in a performance incentive system. You may end up with really happy people who work for a company that is doomed to fail.

ENGAGEMENT VS CULTURE

You can see I lean away from employee engagement as the score we should all be chasing, but what are the better ways to work out what’s really going on? In my view, it's much more about culture than it is about engagement. As we've seen in my examples, you can be engaged in a good culture, or you can be engaged in a bad culture. Culture is the much more dominant predictor of long-term performance and success. 

What is culture? 

Culture is the shared norms and expectations that govern the way people approach their work and interact with each other. In simple terms, it's just the way we do things around here. It can be measured very quantitatively and scientifically. 

I was always a big fan of the Human Synergistics suite of culture measurement tools. It starts by defining your ideal culture - now this is as much as anything else capturing the values that you wish the organization to uphold.

One thing that's really important to understand about culture is that there is no ‘one culture’ in any organization. In some organizations I've been in, there have been dozens of different cultures, depending on the location, the function, and most importantly, the leader. What culture does that leader create? It's most dependent on the one who's running the show for that team. 

Now that we have work from home and hybrid work, you could find hundreds of different cultures in an organization simply because people do things differently depending on their location. And if people don't experience that strong leadership, that gives very clear guidelines for the values and behaviors that need to be observed, then you're going to get massive variation. 

Just as with employee engagement, you have to be really careful of what you lose in the averages. To broadly say, “We've just done a culture survey and our culture is excellent.” Okay, that's fine. But in some teams, it will be really excellent, and in other teams it will be woeful, so you don't want to lose that in the averages. 

Are you paying attention to your values and the leadership brand you’re creating for yourself? Find out with Episode #10: Are Company Values Meaningless and download your copy of 7 Ways to Set Values and Lead Through Them. 

WHAT DRIVES CULTURE?

In the Human Synergistics model, there are 31 causal factors that drive your operating culture. If there's a discrepancy between your ideal culture and the operating culture you have, looking at these causal factors will help you to work out what needs to be improved. These causal factors are separated into five broad categories:

1. Mission and philosophy 

This is the extent to which the organization has successfully defined its identity and values to its people. How clearly these are articulated and their focus with respect to key stakeholders, like customers. These causal factors are a direct outcome of leadership, quality and performance.

2. Structures 

This refers to the ways in which people, roles and activities are established to create the organization. How do these structures permit or restrict influence, empowerment and employee involvement? The causal factors in the structure category are a direct outcome of leadership, quality and performance. 

3. Systems 

These are the interrelated sets of procedures that an organization uses to support its core activities and to solve problems, including performance, appraisal, reinforcement, and goal setting systems. These causal factors are a direct outcome of leadership, quality and performance. 

4. Technology 

This is predominantly about job design characteristics and the degree of interdependence among people. These causal factors are a direct outcome of leadership, quality and performance. 

5. Skills and qualities 

This is the skills and qualities exhibited in terms of communication, leadership, and sources of power. These causal factors are a direct outcome of leadership, quality and performance. 

Has anyone picked up on the common theme here yet? How well your organization performs is directly linked to its culture - the way we do things around here. And that is dependent upon leadership. As we know, leadership drives culture, and culture drives performance.

Looking at the core question again, is employee engagement the right measure? Well, it's “a” measure, and it can tell you some things, but I'm much more interested in what's going on with the culture. A high engagement score doesn't always give you better performance. In fact, there are times when it delivers appalling performance. Engagement doesn't really give you the full picture. Your people can be highly engaged in a constructive high performance culture, and that's going to be a predictor of true long term success. On the other hand, they can be highly engaged in a poor culture where failure and mediocrity in the long term are virtually guaranteed. 

It starts with you and the leaders below you. If the Chief Executive isn't committed to doing the work, to create a strong culture, then finding a leader below that who'll go out on a limb to do it is extremely rare. Leadership is everything. If you simply pander to the whims of your people, you may end up getting a high employee engagement score - and you might even get paid a bonus - but you will never see your team perform.

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