Engaged Employees Are Your Business

To thrive in the Digital Economy, companies need committed, connected, and productive workers. Here’s how to help them flourish.

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The problem in the new hotel was invisible to guests, but it mattered to the people who worked there. So when the chairman of Winegardner & Hammons, a hotel development and management company, visited the new property in Cincinnati, the general manager took him to the spot where a trash chute emptied – right next to employees’ lockers.

The design of the small space is inadequate, the general manager explained. And it sends the wrong message to associates. The next day, the chairman ordered a guest room be taken offline to create a space for the workers away from the garbage chute.

This immediate response, says Kent Bruggeman, executive vice president of Winegardner & Hammons, demonstrates the company’s commitment to do right by its staff as part of a five-point mission: excelling in customer satisfaction, human resources, product quality, profitability, and growth. These points guide decision making for all 2,700 employees. They are principles embedded in the company’s workforce management, from hiring decisions to training programs and career paths. And they have led to growth at a company recognized for being a great place to work.

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Exception to the Rule

From the perspective of employees who don’t work for Winegardner & Hammons, however, this kind of rapid response is not only admirable, it’s unusual.

Many workplaces are experiencing a crisis of discontent. The great recession has passed, but employment has not recovered and the pressure to achieve greater results with the same or fewer resources is management’s mantra. Smart mobile devices and social media networks can be entertaining, but they also represent another 24×7 tether to bosses and colleagues. Young people struggle to find work as older workers elongate their careers. And even when the young people find their way in, they often encounter a bewildering array of up to four (and sometimes five) generations, each with their own expectations and tendencies, in the corporate cafeteria.

Researchers find that this mélange of forces disorients workers and loosens their ties to employers. Gallup reports that 70% of American workers are either emotionally disconnected or actively seeking to hurt their companies, costing a half-billion dollars annually in lost productivity. Sixty-nine percent of American adults say work is a major source of stress, according to the American Psychological Association. And Deloitte notes that more than half of global human resources executives report they lack the capabilities to help overwhelmed employees manage their information and work schedules.

Employers recognize that indicators like these require a response. Of the 2,500 executives surveyed by Deloitte, 79% rate employee retention and engagement as an important or urgent management issue.

Engagement Is Not a Strategy But a Set of Principles

Addressing employee engagement is not a strategy by itself, experts say, but rather a set of principles that when applied well make organizations not only better places to work but also more productive and profitable. When making organizational changes, questions such as “How does this affect how employees feel about working here?” and “How will this motivate people to perform their best?” should be part of the planning.

Connecting the answers to business strategy fosters a culture that benefits both employees and the company. “Engagement by itself doesn’t do anything, just like a full gas tank by itself doesn’t do anything. It has to be channeled in directions that organizations find valuable,” says Scott Brooks, vice president of OrgVitality, a consultancy that works with organizations on engagement.

The Never-Ending Campaign

This makes employee engagement a never-ending campaign. Even as corporate strategies evolve, so too does the need to motivate people to carry those strategies out and find the experience rewarding. It means putting the right people in positions where they can succeed, gauging their progress, and adjusting the organization’s efforts to motivate them. It also means creating opportunities for people to learn and grow, catering to individual needs while managing for results, and demonstrating that the work has a purpose.

Achieving the goal of a more engaged, productive workforce doesn’t just make employees happier, it also produces better business results. Top-performing companies create strong cultures, compete more effectively for talent, and achieve stronger business results, including revenue growth and shareholder value, reports Aon Hewitt.

Take the Winegardner & Hammons chairman’s decision at that hotel in Cincinnati. Removing a revenue-generating guest room from circulation made sense because the mistake and fix for it were both clear. “It was a commitment to our mission statement,” Bruggeman says. “At the core of successful organizations, you will find that the leadership is not confused about priorities.”

Our research has revealed five ways that companies can increase employee engagement. Engagement increases when:

Employees feel energized, committed, and focused on their work. “I want to do a good job because I feel better if I do a good job.”

Employees feel respected.

Employees feel that there’s a sense of challenge.

Work is a valuable part of employees’ lives—but not necessarily the center of their lives.

Employees get satisfaction and positive effects on their self-esteem from their work.

1. Recruit for Your Culture

Companies go to great lengths to lure people in, but what happens after ID cards have been issued matters just as much. Engagement starts with hiring the right people and putting them in a position to succeed. At Winegardner & Hammons, for example, Bruggeman notes that the company uses a proprietary selection tool that analyzes applicants for traits that will make them successful in a particular job, such as managing the reception desk. “People who are naturally talented in a given field of endeavor are going to be happier if they are given the chance to use that talent,” he says. And it makes them more likely to succeed.

Or take the recent college graduate with a background in healthcare marketing and performing arts hired to sell enterprise software. In a typical hiring cycle, this candidate’s potential might have been overlooked. But a recruiting process that included both interviews and an assessment designed to highlight candidates’ workplace behavioral tendencies and skills made her stand out. Such data can guide not only initial hiring decisions but also coaching conversations during an employee’s career. Does a person tend to hang back in groups or assert her point of view? Does she prefer to work alone or in groups? Is she patient? Does she perform better receiving big-picture project descriptions or detailed instructions? The answers can help match a person to a role and to an organization’s culture, says Tomiko Wolf, an early talent development specialist for North America at SAP.

Smartphone and laptop on kitchen table --- Image by © heshphoto/Corbis

The arts enthusiast entered a sales training program at SAP and, after some early challenges learning jargon and IT concepts, has performed well. The ability to discuss an employee’s abilities and working style is valuable during recruiting and later during career coaching discussions, Wolf says. “We can use that information to help our employees understand what they bring to the table and how they approach their work, whether that’s with their manager, teammates, direct reports, or customers. ‘Here’s what’s unique about you and how you can be successful,’” Wolf says. These talks can lead to identifying areas in a company that can use the employee’s contributions and identifying managers who will fit the employee’s working style, for example.

As with other techniques designed to drive employees’ best efforts, managers are in the best position to make these conversations happen.

2. Monitor Engagement for Ebbs and Flows

Measuring engagement traditionally involves annual employee surveys that ask questions about everything from employees’ faith in the company’s strategy, trust in leadership, and confidence in products to feelings about the working environment and the managers. These surveys are useful, but their annual rhythm isn’t enough to give a complete picture. Other sources, both internal and external, help leaders track the moods and movements of their people.

Monitor external sources of information. Josh Bersin, principal and founder of Bersin by Deloitte, notes that social media tools and networks offer insights into workers’ sentiments, posted for members (or the world) to see. App developers have created tools to gauge employees’ wellness and satisfaction on a daily basis so employers can make work more satisfying.

Look for patterns of movement within the company. Employees changing jobs within an organization also provide signals about their engagement. People who move to different areas of the organization demonstrate engagement with the company even as they seek opportunities to grow. People who change jobs only within their existing functions can indicate engagement only with internal turf. Motivated employees care about the company’s success and less about internal turf. If movement is only within a function, the company may be vulnerable to complaints about unproductive silos.

Use technology to prompt action. Software systems can give managers the means to set goals for their employees, track activities, and take actions that encourage positive performance and correct negative performance. Positive reinforcement encourages employees to repeat their good work and leads to higher engagement over time. And data will show a manager’s supervisors if there is enough interaction.

With effective managers, ongoing efforts to track engagement signals lead to conversations about employees’ careers. Managers can identify an individual’s strengths and talents and discuss how the individual can progress in the company, says Tracey Arnish, senior vice president of Talent at SAP. This fosters a culture in which managers recruit people for their teams from within the company, in addition to external candidates.

3. Give Employees the Opportunity to Grow Through Learning (and Teaching)

Making learning central to an organization’s culture is a proven path to giving employees the opportunity to pursue the careers they are most passionate about. And that passion leads to commitment, says Jenny Dearborn, senior vice president and chief learning officer at SAP.

People feel a sense of accomplishment not only from obtaining new knowledge and skills but also from teaching others. Many companies find that putting employees in a teaching role elicits self-esteem, bringing out as much passion as learning does. Dearborn says that, to be effective, organizations should create a culture that emphasizes both learning and teaching.

This is not about setting up a centralized schedule of classroom courses. Rather, the learning function should facilitate opportunities for employees to learn from one another, from corporate leaders, and from the world at large through short videos, game-like simulations, and peer communities that offer information sharing and informal coaching. For example:

  • Corporate leaders use videos to communicate important ideas on strategy and purpose, keeping employees updated about the organization’s vision and their role in it.
  • Salespeople experience a series of online training modules for a new sales program as a game in which they progress through the steps to achieve goals according to a checklist of actions and concepts.
  • Baby Boomers who may be used to training classrooms instead participate in more informal settings where they can share their expertise with younger workers. In this same setting, Millennials, who in surveys say they like mentoring better than group classes, gain access to experts in a more customized, coaching-like atmosphere.

Leaders of learning organizations indicate that, besides cultivating opportunities for motivated employees to grow in their careers, these kinds of efforts deliver business results. Dearborn cites research that says organizations with a strong learning culture outperform their peers, deliver higher-quality products, and are more likely to lead their market in profitability. That gets the CEO’s attention.

4. Manage for the Individual

Diversity was once about complying with rules designed to prevent discrimination. Now it’s an asset. Companies that demonstrate that they have highly inclusive teams—with members open to new ideas and with people from a range of backgrounds—are 1.8 times more productive than companies that are not inclusive, according to Bersin’s research. The ability to incorporate many perspectives in selling or marketing, for example, can reveal new business opportunities, Bersin adds.

Inclusive management is a principle of employee engagement; organizations need to create environments that bend and flex. There are three ways to do this:

Redefine work flexibility. The core notions of flexibility, such as the ability to work from home, to adjust work schedules to deal with personal obligations, or to take time off when needed, have expanded to include job sharing, sabbaticals, and arrangements that enable retirees to continue to work part time, according to the Future of Work Institute.

Workspaces are also important. Open office environments encourage idea sharing, author Steven Johnson notes. Bersin also cites providing employees with physical spaces, such as stand-up desks and rest areas for workers who exert themselves physically, as important elements.

Flexibility also refers to being able to move within the organization to take on new assignments in different geographies, divisions, and functions. For high-performing employees, it can be a form of recognition and grooming for future, higher positions. The key, experts say, is to set up a range of flexible options for everyone, an approach that only one in five companies currently pursues.

Demonstrate sensitivity to the needs of older employees. It is now common to find people working into their 70s because of improved healthcare, fitness, and diet, as well as for economic reasons. As a result, many Baby Boomers may report to managers who are younger than they are. Organizations need to be sensitive to the aging dynamic and how it plays out.

While findings examining generational differences in work values and preferences have been mixed, researchers agree that certain attitudes shift as a result of getting older. For example, researchers have found that in job performance meetings older workers pick up on nonverbal cues and are much more concerned with the way information is delivered than younger colleagues who focus on the content of the evaluation. That managers would require a high level of emotional intelligence is only now coming to light as the workforce matures, says Gabby Burlacu, a customer insights and alignment specialist at SAP who did her doctoral research on aging and work. Making managers aware of this issue can enable a better experience and more engaged employees.

Provide a level of autonomy. Authority over on-the-job decision making correlates positively to employee motivation. Researchers have found that giving workers power to take action increases productivity, performance, and job satisfaction. In one interesting study, for example, nurses in a maternity ward who managed and monitored their own work behavior felt “more vigorous, dedicated, and absorbed in their work,” even though they did not see hospital leaders regularly. Overall, giving workers autonomy makes them feel they can make a real difference on the job because leaders support them, and it boosts engagement ratings, according to a survey conducted by Gallup.

5. Create Purpose

The influx of Millennials has created a demand for companies to communicate a sense of purpose for the work they do—and their influence has spread. “I think you’d be hard-pressed to find an individual, whether they are 25, 35, 45, 55, or 65, who would say, ‘Well, I don’t really care what my purpose is at work. I’m just here to get paid,’” says Arnish. “I think more and more and more individuals really want to find a sense of meaning in what they’re doing, and as an organization, if we’re going to attract and retain the very best talent, we need to help people find that individual meaning.”

Experts cite a short list of considerations for injecting purpose into corporate cultures:

Clarity is essential. The companies that have highly engaged employees are the ones that concisely define their purpose: “Here’s what we’re trying to do and here is a set of actions you can take to fit into that goal.” It allows an employee to say, “I understand how I fit in to that.”

You don’t have to save the world. People find meaning in work when they understand how their actions positively impact others or affect things they value in their careers.

Create public service opportunities. Getting workers together to benefit nonprofit causes is the table stakes in today’s workplace environment. More ambitious, Peace Corps–like projects in developing countries are immersive and potentially inspiring experiences for top performers.

About the author:

Steven T. Hunt is vice president of customer research at SuccessFactors, an SAP company, and the author of Common Sense Talent Management: Using Strategic Human Resources to Improve Company Performance.

Karie Willyerd is vice president for learning and social adoption at SuccessFactors, an SAP company, and coauthor of 2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow’s Employees Today.

Phillip Booth is chief operating officer for human resources at SAP.

Michael S. Goldberg is an independent writer and editor focusing on management and technology issues.

SAP’s Jenny Dearborn, Tracey Arnish, Reiner Bildmayer, Mary Haskins, Eric Brunelle, Tomiko Wolf, and Gabby Burlacu contributed valuable insights to this piece.

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Executive Quarterly, Q3 2015