Investing in  Employee Engagement Returns Big Dividends

Culture

Every organisation has its own unique personality, just like people do. This unique personality is referred to as the culture of the organisation and is generally described as “the way things are done around here.”

The problem with this description is that it doesn’t tell us what culture actually is, why it is important and what we need to do to change it.

So let’s delve a bit deeper: Culture is the system of shared assumptions, behaviours, values, beliefs, and reward systems that provide guidelines and boundaries to people on how to interact with each other and behave in the various situations that occur within their organisation.

Culture is created, driven, and communicated by top leadership in the organisation through their own actions and behaviours. It becomes embedded in the organisation through a myriad of processes, reward systems and behaviours that signal and support it. As these values, behaviours, beliefs, and assumptions becomes widely shared throughout the organisation they bind people together and have a strong influence on the way people work.

As for all behaviour and belief driven activities in organisations, supporting systems, processes and tools are vital. Without them people are unable to achieve the outcomes they want and, as a result, the initial energy and enthusiasm that comes from feeling aligned with and connected to the organisation flounders as the level of frustration builds. More on this later.

The drivers of culture are a complex mix of objective and subjective behaviours, values, signals, beliefs, and interpretations that are different for each person. Add to this the compounding complexity that comes from the way they combine and interact and you have huge variation in the way each individual feels about the organisation overall. Trying to assess how changes in culture affect performance are difficult and impractical for leaders to deal with. It is much easier to deal with engagement.

Engagement

Engagement is the result of an organisation’s culture which has been researched, defined, and measured much more scientifically over several decades. Most importantly, the effect on organisational performance of changing it can be measured and business leaders can make changes and measure the results.

If culture is “the way things are done around here,” engagement describes “how people feel about the way things are done around here.” It is a measure of the level of commitment they have to the organisation and the lengths to which they are prepared to go to make it successful.

The drivers of engagement

Gallup have done huge amounts of research world-wide on the key drivers of engagement and the impact they have on the commercial results that businesses achieve. Download the report here Their list of key drivers of engagement for people can be summarised as follows:

1. Knowing what is expected of them. Defining and clarifying the outcomes that are to be achieved is perhaps the most basic of all employee needs and manager responsibilities.
2. Having the necessary resources, tools and equipment to do their work. If the organisation does not provide this it signals to the employee that their work is not valued or understood.
3. Having the opportunity to do what they do best. Helping people get into roles where they can use their inherent talents and strengths
4. Recognition for good work. Employees need constant feedback to know if what they are doing is right and that it matters.
5. Having someone at work who cares about them and what they think and do.
6. Having someone who encourages their growth and development. Having a coach.
7. Being asked for their views and opinions and and having that input considered.
8. Explaining the purpose of their work and how it contributes to the purpose of the organisation and its outcomes.
9. Having work associates who are also committed to producing quality work. This creates common standards and a shared approach to quality.
10. Having a best friend at work. This comes from a climate of collegiality and getting to know one another, which in turn builds communication and trust.
11. Having someone discuss their progress, achievements and goals with them .
12. Having opportunities at work to learn and grow their knowledge and skills.

The impact of engagement on business results

Gallup have conducted nine employee engagement meta-analysis studies (a statistical integration and analysis of many different studies) which combine decades of employee engagement data to illustrate the connections between highly engaged teams and increases in business outcomes. The latest of these analyses in 2016 covered 339 research studies across 82,000 business/work units, 1.8 million employees, 49 industries and 73 countries.

It confirmed what has consistently been shown in the eight previous studies:

That employee engagement consistently affects key performance outcomes, regardless of the organisation's industry or company, on each of nine performance outcomes.

The impact on all nine performance metrics is huge!

The key findings were:

• Business/work units scoring in the top half on employee engagement nearly double their odds of success compared with those in the bottom half.
• Those at the 99th percentile have four times the success rate of those at the first percentile.
• Differences between the middle value of the top and bottom quartile units on the nine performance outcomes studied are shown below. The number of organisations who had studies that contributed to each measure are shown in brackets:  
  • 10% in customer ratings (94 organisations)
  • 21% in profitability (85 organisations)
  • 20% sales production, 17% in production records (140 organisations)
  • 24% in turnover (high-turnover organisations, where turnover >40% per annum), 59% in turnover (low-turnover organisations, where turnover <40% per annum) (106 organisations in total)
  • 70% in safety incidents (53 organisations)
  • 28% in shrinkage (11 organisations)
  • 41% in absenteeism (30 organisations)
  • 58% in patient safety incidents (9 healthcare organisations)
  • 40% in quality (defects) (16 organisations)

Gallup conclude that “The relationship between engagement and performance at the business/work unit level is substantial and highly generalisable across organisations”.

The scope for improvement is also huge

Gallup also found in their 2019 survey, that the percentage of engaged workers in the USA had reached 35%, the highest it has been since they first started measuring engagement in 2000. The percentage of workers who are "actively disengaged" -- those who have miserable work experiences and spread their unhappiness to their colleagues -- tied with the lowest level of 13% in 2018.

The remaining 52% of workers are in the "not engaged" category. They are the target group, the people who offer employers the opportunity to achieve the gains in the nine performance metrics shown above.

Gallup describe them as -- “those who are psychologically unattached to their work and company and who put time, but not energy or passion, into their work. Not engaged employees will usually show up to work and contribute the minimum required. They're also on the lookout for better employment opportunities and will quickly leave their company for a slightly better offer”.

Whilst this is US data, the breadth of the Gallup research for over two decades indicates that this same pattern is shown across the world, even though the numbers vary slightly from country to country.

Capturing these gains in your organisation

Maximising the potential gains means increasing engagement as widely as possible across the organisation. The problems most people have with this are:

• Knowing where to start. There are always more things to do than you have resources available for.
• The culture changes that give the greatest returns are the behaviour of leaders that signal the values, behaviours and style of the organisation that are important. These are the ones that take time and investment to develop. Changing behaviour in leaders, particularly those to do with the way they connect, coach, develop and lead their people, do not happen overnight.
• The new behaviours do not happen in isolation. They need to become embedded in the vital core processes of the business that are carried out each day. They do not sit on the periphery – they are right at the heart of the business.
• Leaders need tools that make it easy for them to apply their new behaviours to key business processes. The key is to find a tool that provides a mechanism for carrying out key business processes in ways that will cause engagement to change (such as regular conversations, feedback and clarity of what is expected). Leaders then use this tool to drive improvement in as many of the 12 drivers of engagement as possible.

Use this problem-solving technique to sort out where to start

What type of tool would provide the best support platform for leaders? One that would support the processes and allow them to add the leadership behaviours that would make a real impact on engagement and therefore the overall performance of the organisation.  So which processes are most critical to support?  Use the following process to find out.

Step 1. Simplify the problem using a simple problem-solving tool

We have used an affinity diagram technique to get a helicopter view of Gallup’s 12 drivers of engagement to see if there are some connections between them that will help us sort out where to start.  To give us some insight into the support leaders and managers need to deliver the performance gains we used the affinity diagram problem solving technique to sort the 12 drivers into groups, based on whether they have a natural connection to one another.

1. To do this we wrote each driver on a separate yellow Post It note (“a sticky”) and stuck them randomly on to a white board.
2. We then asked our team to move the stickies into columns so that all the stickies in each column seemed to be about the same thing. The rules were that any sticky could be moved to a different column by any person as many times as they wanted but the whole exercise was done in silence – there was no discussing, negotiating or debating what went where.
3. When nobody wanted to move any more stickies the sorting was completed. The exercise produced three columns but you can have as many as your team come up with. If there are more than about seven you should discuss merging columns to come up with a higher level view.
4. Then, the process leader read out each sticky in the first column and, as a group, we discussed what all the items were about. Then, as a group, we came up with a header that described the column. These are highlighted in yellow on the chart with a sub-header that describes the column in more detail.

Step 2. Test your support tool to see how it would help leaders improve engagement

We then tested which of the drivers of engagement Mariner7 (our support tool) could support. Our findings, shown in blue, show the features of Mariner7 that would support leaders as they work to improve each of the engagement drivers:

Our results showed that, of the 12 drivers, Mariner7 would support 11 of them

The exception was “having a best friend at work”

 The Mariner7 Tool

Mariner7 provides structure and processes around individual and team goal setting, feedback, and individual development, supported by on-line conversations, feedback, and links to learning and development platforms and other external modules such as remuneration.

It is totally customisable to the way you want it to look and work and it has a storytelling feature that gives people data on what others in your organisation are achieving and encourages them to use the tool themselves.

It is designed, built, hosted and supported in New Zealand and is scalable to large and small organisations in any industry.  

In their meta-analysis report Gallup say “defining and clarifying the outcomes that are to be achieved is perhaps the most basic of all employee needs and manager responsibilities”. By providing a mechanism that enables the drivers of engagement to be focused on the performance outcomes of the organisation  Mariner7 truly does “Bring out the best” for both individuals and organisations.