by Fiona Robertson

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Fiona has worked in media for the past 20 years, predominantly in television, the music business and event production.  She was the original UK Editor of simply-communicate.com responsible for building a database of opver 1,000 articles on internal communications.

 

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If you’ve spent some time working in corporate communications, you’ll know how quickly management fads can come and go; no doubt you’ve become a bit jaded by the whole process. So when you first heard about measuring and managing employee engagement, you may have rolled your eyes and shrugged it off. These days, though, you do this at your peril. An ever-growing number of companies are learning how employee engagement contributes directly to a business’s profits. Put another way, engagement is starting to hit CEOs where they notice it most : on the bottom line. And if CEOs notice it, you too will be noticing it soon.

Here’s a quick overview to get you upto speed on the engagement phenomenon : how it began, what it means, why it’s important, and how you can harness it.

The rise of engagement

Back in the good old days of corporate America, things were pretty simple. Companies put people on career tracks straight out of college; they gave employees a job for life and waved them goodbye with a gold watch at retirement. The promise of the stable life as a company employee kept both morale and productivity high.

Then things changed. Competition increased, margins shrank and shareholders got more demanding. Suddenly, company staff were finding the very job security they’d counted on was disappearing, and at speed. This upheaval meant companies had to find new ways to motivate their employees in order to make them more productive since, without stability, employees were looking for something else from their employers. And thus, Engagement was born.

In itself, engagement isn’t really a new idea; owners and managers have been talking about engagement, in one form or another, for centuries… they just used different words to express it. In former times, engagement focused more on productivity and achieving results through threat of punishment or by means of reward. But common sense - and good communication - eventually won out and, today, organisations everywhere are spending serious money on all forms of employee engagement. Boiled down, it simply means ‘developing a happy and loyal workforce’. Enlightened managers now realise that any company as a whole will benefit when its employees know what’s going on and they feel part of the team. The tricky part is in defining what makes a workforce happy, and in understanding how this good will translates into company success.

Assessing Engagement

Over the past eight years, The Gallup Organisation has been conducting exhaustive studies of employee engagement to try and answer these fundamental questions. One of a handful of engagement evangelists, Gallup has promoted the value of measuring employee engagement through a series of books, seminars and programmes; it has also taken the lead in identifying and managing the factors that impact engagement levels.

In order to rate the engagement of a workforce, first Gallup assesses employees to determine whether they are engaged, not engaged or actively disengaged.

Engaged employees are the stars in a company. Passionate about what they do, they feel a strong connection to their company and perform at high levels every day while looking for ways to improve themselves and the company as a whole.

Not engaged employees, according to Gallup, are the company zombies who show up every day and put in just enough effort to meet the basic requirements of their jobs. Without passion or innovation, these employees neither commit to the company’s direction, nor do they work against it.

Actively disengaged employees are those who present a big problem for businesses. Negative by nature, these people are unhappy in their work and they compound their lack of productivity by sharing this unhappiness with those around them. They are the proverbial bad apples who revel in their discontent while undermining the accomplishments of others; as a result, not only do they achieve little themselves, they also prevent others from being productive too.

Having identified the workforce accordingly, Gallup can build up a picture of where the problems lie. They can then ascertain what’s behind these issues of dissatisfaction in order to address and eliminate them altogether.

Why engagement matters

Employee engagement is important because it affects everything - from retention and productivity to profitability and safety. It is central to every function of a business and its impact is critical at every level of an organisation, regardless of industry sector or geographic location. Why ? Because engagement is all about people … The workforce is not a disembodied entity; it comprises many individuals – each of whom has various needs and requirements.

In 1990, a study by the University of Sheffield showed that, when factory workers were given control over their work through increased training (a key engagement driver), on-the-job injuries decreased sharply while job satisfaction grew significantly. Employee engagement has direct benefits to a company’s overall financial health, whether it comes in the form of lower absenteeism and turnover, or fewer on-the-job accidents. This is because engaged employees make better decisions at work; they understand the mission of an organisation and how to pull in the same direction without punishments being administered.

So what of the converse situation ? Gallup estimates that roughly 16 % of ‘actively disengaged‘ American workers have the opposite effect : they cost the US economy a staggering $300 billion in lost productivity every year. Meanwhile, another study shows that greater disengagement increases employee sick time, thereby driving up health costs.

However, the effects of engagement extend far beyond obvious measurables like money. If a workforce isn’t engaged, or worse, it is actively working against the best interests of the business it is meant to serve, then a company simply can’t compete. Customers interact with ‘a workforce’ on the front line of customer service so if the people in customer-facing positions aren’t engaged, it’s likely customers won’t experience good service; as a result, they’ll take their business elsewhere. And any of the exchanges that take place between customers and employees can damage more than one-time transactions; active disengagement can poison customer relations to the point that it taints someone’s perception of an entire brand.

Building an engaged workforce

‘It’s not that I’m lazy; I just don’t care.’

If you’ve seen the TV show, ‘The Office’, you’ll know exactly what a disengaged workplace is like, full of under-challenged, under-motivated but over-managed staff. Though employees may be totally unengaged, often the problem doesn’t lie with the workforce… On the whole, people want to do a good job; they want to succeed and to be part of something bigger than themselves. The problem is that many companies make it hard for their staff to do well through a combination of meaningless rules, hollow attempts at team-building and a total disregard for their well-being.

For engagement to take hold, companies must accept that the old ‘command and control’ model of management is dead. It’s not enough for senior management to pass dictates down to front-line employees and expect them to jump to it. These days, managing a workforce means treating your staff like the people they are and not as mindless drones, living to serve a company’s ill-defined will.

Towers Perrin, a New York-based consulting firm, lists several of the key attributes that promote engagement in a business environment but the most critical criteria are that :

• A company offers its employees challenging work and the resources to get that work done;
• Employees have a clear vision of the business from senior management but the authority to make decisions on their own, within management’s guidelines.

The role of communicators

The single most important factor in employee engagement - the one thing that underpins it all - is open communication. Employees have to feel informed of, and involved in, a company’s direction in order to support and actively promote whatever that direction may be.

It is in fulfilling this function that communicators can make the biggest impact; while it needs to run deeper than just the internal communications department, corporate communicators can play a huge role in a company’s engagement efforts. So, if your company is embarking on an engagement drive, make sure the internal communication department is on the advance team. As professional communicators, they know the importance of open communication; they know how to craft messages; and they can prevent management from making mistakes in how such messages are communicated. In addition, communicators can ensure that employees are well informed, that they receive consistent messages, and that they get plenty of feedback opportunities.

Of course communicators have a role in the engagement process but engagement is simply too big to be purely a communications initiative. If you do engagement properly - and very few companies do - it involves everyone in the organisation. You need human resources, organisational development, strategists who can analyse survey numbers, communications, front-line supervisors, managers and senior leaders all actively involved in the process.

“If communicators want to see engagement succeed at their organisation, they have to start thinking of themselves as collaborators within the organisation,” says Roger D’Aprix. Unfortunately, a lot of communicators fail in their engagement initiatives. They treat the issue as a communications function but, because engagement needs to operate across the whole company, their departmental efforts don’t succeed. Instead, they should be cooperating with all the different divisions of an organisation so that, like cogs in a wheel, the whole company can turn together.

Accountability for Engagement

Several years ago, Coors Brewing started to survey its employees every year to determine whether or not they were engaged. They also started holding managers and supervisors accountable for their engagement survey results. Significantly, since they started making managers accountable for the engagement results of their direct reports, the survey numbers have gone up - so have the business results, including production numbers, safety participation, quality numbers and cost efficiency. Coors has therefore been able to show direct links between their annual engagement survey numbers and business performance.

Even so, it’s hard to prove the power of engagement; namely, whether the business numbers went up because the engagement numbers went up, or whether the engagement numbers rose because employees were doing so well with the business ? At Coors, the Communication department’s role in the engagement process is to communicate the survey, what’s being done around the survey, and the company’s success stories. They see their role as a small but vital piece in a complicated puzzle.

Leading from the front

As regards engagement, the important thing to remember is that it only develops with top-down commitment and constant follow-through; otherwise, engagement becomes just another business fad. Simply put, engagement requires buy-in from senior leadership. That may sound obvious but some communicators try to make engagement work before they sell the idea to senior management – but engagement can never work unless leadership is heavily involved from the beginning.

To really achieve success :

• Senior management needs to believe in the importance of engagement and to get involved, leading by example, while also forcing company leaders to participate.
• Managers need to take engagement survey results seriously (including the results of their own direct reports).
• The most effective way of doing this is to make managers accountable for the engagement scores of their staff.

Measurement

There are a number of ways in which to assess engagement and these are discussed in the article entitled, Measurement In Internal Communications. These methods cover the processes by which you can obtain feedback and generate scores. However, for any measurement study, it’s what you do with the results that is of singular importance.

It’s all very well getting engagement scores from each department; they tell you about your staff and your management, to an extent. But these static numbers are dead : in themselves, they do nothing to improve your company - unless you use them positively. In essence, if a company demonstrates that it is seriously heeding the feedback from its staff, engagement will rise, irrespective of the action that results. Whereas companies who survey but then ignore the results actively drive down the engagement scores of their staff.

If a company is prepared to act on the feedback it receives, then these numbers become powerful motivators for communication and maybe also for change. And seen with this point of view, bad results are of special benefit because they show where most work needs to be done !

Communication is the medium through which trust and engagement develop so make sure you tell your staff what you’re doing – explain what the surveys are and why you want feedback, then how the results will be used. Let your people know that their opinions are being heard; make them feel that management is listening. After they have experienced the process once and seen how their scores can affect change, the workforce will feel more directly connected with senior management; they will also feel empowered and valued – and engagement will begin to grow from there.

Engaged employees generate value

In successful companies, where engagement scores are high, it becomes possible to establish dynamic connexions between senior management and staff. A great example of just how powerful an engaged workforce can be is the Great Ideas programme run by HSBC North America, through which staff have generated millions of dollars for the business.

Since the early 1980s, HSBC has acknowledged its employees’ expertise in getting things done better, faster, cheaper and smarter by running suggestion programmes so that staff can share their inspired improvements with management. Over time, these have evolved to become the Great Ideas programme. Launched in 2002 at the request of the North America Chairman and CEO, Bill Aldinger, Great Ideas lets employees suggest business enhancements in return for generous cash, stock and merchandise rewards. To date, employees have submitted more than 3,000 ideas while, in under three years, they’ve saved the company almost $6 million.

“Beyond the employee communication and morale-boosting value that Great Ideas provides, there is the amazing direct value to the company simply for listening to its own employees,” says Sylvia Alston, Director of Employee Communications at HSBC North America’s head office.

Importantly, the programme has given HSBC employees the opportunity to take an active role in the future of the company. “In today’s environment, employees’ intellectual capital is many times an organisation’s greatest asset,” Alston says. “Therefore, it’s important companies not only attract the very best people but also that they retain them once they’re on board. One of the best ways to do this is to keep employee interest and involvement in the company high and to give them a real sense of ownership in helping the company run profitably and efficiently.”

Front-line employees are often “untapped” experts who alone know the intricacies of a product or process that they manage; consequently, they are often the best, if not the only, people to realise when things could be done better. Promoting this involvement in a company’s success, “Fosters ownership and pride in the company,” Alston concludes. “Employees ensure that the best products get to the market and the best services are developed and implemented. This combination results in the company gaining the market advantage - and it is driven by employee engagement.”

For an employee suggestion programme to succeed, as with all aspects of engagement, senior company leaders must support it fully; meanwhile communicators must promote it regularly to the workforce to keep it front-of-mind. “We often hear from employees and managers who are amazed that our large company so clearly encourages employees to play an active role in developing corporate growth and strategy,” Alston says. “We reinforce this message consistently throughout the year in our company newsletter, video communications, intranet and posters, as well as in letters from executives, our chairman and the CEO.” Alston uses internal HSBC media continually, to announce winners and to publicly recognise those employees who make suggestions. “Even the smallest award delivered with fanfare becomes a great prize.”

In addition, Great Ideas spawns countless stories that can be told internally via various media. For instance, in 2003, Janice Stanley was an underwriting director at HSBC. She was determined to streamline a consumer lending underwriting procedure using innovative technology and saw a way to convert the slow and unwieldy paper process into an online system. And, because she had researched the process extensively, she was put in charge of delivering the project. “Her idea was huge!” Alston says. “In its first year of implementation, the online underwriting process generated tangible savings of nearly $2 million.” For her considerable efforts, Stanley was awarded $100,000 by her business unit’s management and an additional $100,000 by CEO Aldinger.

However, even employees whose ideas are not adopted receive recognition from the company. “We recognise everyone who contributes by asking questions, giving feedback and making suggestions,” Alston says. In addition, the company tracks

the ever-growing number of employees who submit ideas and the awards paid for those that are accepted.

The net monetary benefit of all the suggestions made since the programme began ranges from £1.5 - £3 million, annually. Of the many companies who run suggestion programmes, few have transformed their feedback into such tangible results.

Clearly, it stands to reason that a happy, involved workforce that is allowed the freedom to work well and to be a little creative in the way it delivers is going to achieve far more than a strictured staff robbed of power, praise or accomplishment. Watson Wyatt has produced various studies that demonstrate the added value engagement can make to a business so whether you view this subject in people-terms or simply look at the bottom line, engagement makes sense. Time to get with the programme.

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