Vol. 49, No. 2
Half of your workforce may be just going through the motions. Here's how to energize employees to realize untapped potential.
Imagine working for an organization in which a fourth of the employees are totally turned off by their jobs, fully half the workers do just enough to get by, and only the remaining 25 percent are enthusiastic.
Think that such a company could survive? Think that any company actually has such a workforce?
Sadly, that’s the profile of the typical firm in the United States. If you believe that your organization simply couldn’t be like that, some experts suggest that you take a closer look. With strikingly similar statistics, several highly respected research and consulting organizations have found that there’s a huge population of workers—roughly half of all Americans in the workforce—who show up, do what’s expected of them, but don’t go that extra mile, don’t turn on the creative juices, don’t get inspired to create great products or services.
Perhaps the most significant finding: These are people, for the most part, who want to go above and beyond, to be an integral part of the company’s success. Something—often a disconnect with an immediate supervisor or a feeling that the organization doesn’t care about them—is getting in the way. There is a huge, untapped potential that many executives, managers and employees do not recognize and, therefore, have not addressed. And it’s sapping organizations’ potential.
“We’re running as an economy at 30 percent efficiency” because so many workers are not contributing as much as they could, says Curt Coffman, an author and the employee engagement global practice leader for the Gallup Organization’s consulting arm. “Just think of the impact if [only] 30 percent of a bank’s branches opened every day.”
“Engagement can make a huge difference in performance. It’s the ultimate prize for employers today,” says Charles H. Watts, a principal of consulting firm Towers Perrin in Boston.
Recognizing the engagement gap is the first step to improving it. But executives and HR professionals who walk the corridors of their organizations every day, greeting smiling and seemingly engaged workers, apparently are under the false impression that most of these people are giving their best effort.
“Most people [in management] don’t get it at all,” says Theresa M. Welbourne, president and CEO of survey firm eePulse Inc. and an HR professor at the University of Michigan Business School.
As an increasing number of organizations are discovering, improving employee engagement isn’t exceptionally difficult or expensive. “A lot of the drivers of engagement are subtle issues that don’t require a lot of capital outlay. They take work,” says Watts.
Much of that work must be done by first-line supervisors—those closest to teams and individual workers who interact with customers or move the basic gears of the organization.
Its All About Emotion
The engagement challenge has little to do with how much an employee is paid. It has little to do with employee satisfaction; some employees are highly satisfied to be under little pressure to produce.
The engagement challenge has a lot to do with how an employee feels about the work experience, about how he or she is treated. It has a lot to do with emotions. (See Factors That Drive Engagement.)
Improving engagement requires a willingness to do and say some things that might at first seem like “squishy HR” practices, but study after study indicates that employee emotions are fundamentally related to—and actually drive—bottom-line success in a company.
“The essence of effective people management is managing emotions,” James K. Clifton, chairman and CEO of the Gallup Organization, told the Society for Human Resource Management Foundation at its Thought Leaders retreat in 2002.
Organizations boost employee engagement first and foremost by showing that they care about workers, researchers say. Almost as important is providing employees with challenging work. There’s also demonstrating fairness, providing training and the opportunity for advancement, and sharing responsibility for decisions and outcomes.
There will always be people who never give their best effort—no matter how hard HR and line managers try to engage them. But for the most part, “employees want to commit to companies, because doing so satisfies a powerful and basic human need to connect with and contribute to something significant,” says Carol Kinsey Goman, an author, speaker and president of Kinsey Consulting Services in Berkeley, Calif.
“It’s about fair pay” more than how much pay, says Marc J. Drizin, vice president and loyalty specialist of Indianapolis-based research and consulting firm Walker Information. “It’s about treating the employee like a person. If more people understood it, employees would be a lot better off”—and so would their organizations.
Employees’ engagement has declined over the past generation during a fundamental shift in the employer-employee relationship that experts say many managers have not recognized.
For generations, U.S. employers maintained a paternalistic approach to the workforce, virtually guaranteeing lifetime employment to competent workers, providing predictable benefits and building the competencies of those deemed worthy of advancement.
Today, neither workers nor employers expect long-term relationships. Employees want to move from job to job, to take control of their careers, to bail out of unsatisfying situations, to leverage experience in one organization for a better job in the next. Employers, on the other hand, don’t want to be saddled with workers who don’t meet expectations or who become expendable as markets or internal strategies change.
“We haven’t changed how we manage employees in 100 years,” says Coffman. “The premise has been: ‘I, as the manager, have all the power. Just do it.’ ”
For many workers today, that’s a turnoff. Giving orders and implying economic threats can work—up to a point. But in an economy increasingly dependent on generating new ideas rather than making widgets, having workers planted in their seats isn’t always enough. Collaboration and empowerment, demonstrated regularly, are far more effective in most settings.
“The developing relationship between company and worker is changing from paternalism to partnership,” says Goman. “The death of old traditional loyalty opens opportunities for a new, enlightened form of loyalty based on shared values and goals and mutual caring and respect. Most of us continue to judge loyalty by old, outdated standards,” she says, adding, “The new generation didn’t sign up for the old deal.”
This approach might seem unnecessary at a time when millions of Americans are out of work, millions more fear losing their jobs to layoffs and productivity is rising virtually every year as organizations do more with fewer workers. But people rescued from unemployment typically don’t feel intense gratitude very long unless their job and boss inspire them.
A Tougher Battleground
“It ultimately comes down to people’s desire to give discretionary effort in their jobs,” says Watts. “Employees are reminding us that the heart is a tougher battleground than the mind.”
Smart CEOs and HR professionals “are realizing that they’ve wrung the rag of operational productivity almost dry,” says Rick Smith, an author and a director of consulting firm Spencer Stuart, based in Atlanta. However, the next step takes many managers into often-uncharted territory.
Statistics showing that the majority of workers aren’t fully engaged “present a wake-up call for employers and for HR,” says Sharon Wunderlich, a principal of Towers Perrin in Stamford, Conn. “There’s a real opportunity for employers to help shape employees’ emotional connection to their jobs in positive ways.”
Many employers naturally “feel fearful” about dealing with such inherently personal and seemingly unpredictable issues as employee emotions, she concedes. “They’re not sure how to proceed.”
The process of improving employee engagement typically starts with a basic step: Ask workers how they feel.
That might sound like a feel-good initiative to make everyone feel warm and fuzzy for a few minutes, but it’s not, experts insist. “It’s not squishy because it’s built around measuring important things, such as productivity,” says William C. Byham, president and co-founder of Development Dimensions International (DDI), a consulting firm based in Bridgeville, Pa. “I’m talking about simple things, such as the number of times customer service has to hand off a question because they don’t have the answer.”
The employee survey is the diagnostic tool of choice in the battle for the hearts of employees. Some companies ask workers about their work experiences as infrequently as every other year, looking for major trends. Others take the pulse of the people as often as every month to address the little things that get in the way of employees doing their jobs. Regardless of frequency, the most effective surveys ask questions that can lead to specific corrective actions and that demonstrate a long-term commitment to providing a rewarding work experience, as several organizations have found.
A Lot of Skepticism
Three years ago, executives at New Century Mortgage, a specialty mortgage lender based in Irvine, Calif., decided to find out how many employees were fully engaged and to identify where and how the company needed to improve. They brought in a consulting firm and sought help from other sources to validate the methodology.
“There was a lot of skepticism the first year,” recalls Brad Morrice, New Century’s president and CEO. “We spent a lot of time talking about definitions and questions” for the planned employee survey. “Many people would say, ‘Why is that question relevant?’ ”
In the months after the survey, managers underwent training, and then they and employees worked on plans to boost engagement based on problems identified in the survey. “Managers went back to their workplaces with what they were supposed to do. These stories started pouring in: ‘We’ve never had meetings like this.’ ”
After the plans were implemented, company officials tracked the revenue brought in by account executives and loan officers in various divisions. In the wholesale division, for example, account executives who were “actively disengaged” produced an average of 28 percent less revenue than those who were fully engaged. Employees in the large middle group—those who show up and go through the motions but who lack that extra spark—generated 23 percent less revenue than the top group. Similar results were found in other divisions. (While the surveys were taken anonymously, New Century’s consultant, the Gallup Organization, was able to correlate employees’ responses with their sales results and supply the company with aggregate data.)
The next year, a follow-up survey included two additional questions: Did your manager do impact plans based on the first survey? Did the plans have any impact on your workplace?
“The results were very striking,” says Morrice. “The managers who did this found that their staff engagement went up substantially.”
Now, employee engagement training “is the only program we have that every New Century manager goes through,” says Morrice. “This is not just something you read in a business book. This is something that is having an impact at New Century.”
As for those first-year questions about why certain survey questions are relevant: “You don’t hear that anymore. Engagement is now part of our culture. You hear it as a shorthand. It’s a common way of talking about things.”
At Saks Fifth Avenue, the luxury retailer based in New York, executives were looking for ways to boost service to customers in their highly competitive market. Saks officials decided to measure employee engagement and customer engagement at stores, with customer engagement including willingness to make repeat purchases and recommend the store to friends.
“We used both to pinpoint problem spots,” says Vice President Jay Redman. Saks found that “there absolutely is a correlation between employee engagement and customer engagement” and that customer engagement creates loyal, repeat customers and increased sales.
“We’ve seen 20 to 25 percent improvement in stores with great engagement,” he says. But it’s not just about higher sales figures. “How you get there is important.”
There’s been a major change in the nature of the dialog between management and the sales force, says Redman. Saks makes a point about asking employees what they need to do their jobs. Every time there is an initiative resulting from such dialog—for example, a flextime program was implemented recently, and many computers were upgraded—managers make sure to remind workers that this resulted from their suggestions.
“We’ve probably done 100 things over three years” in response to survey results, says Redman. “Some are as simple as opening a stairwell. People said they used to wait five to 10 minutes to go by elevator between floors” in a store.
A key message from Saks management to employees is that the dialog is intended to be a permanent feature. “The first year everyone thinks that it’s a program. It’s not a program anymore.”
A Constant Struggle to Win Trust
Pete Gritton, vice president of administration at Toyota Motor Manufacturing in Georgetown, Ky., Toyota’s largest U.S. plant, started with a blank slate when production began in 1988. From the outset, he and other officials explained the company’s guiding principles, including a corporate culture that supports individual creativity as well as the value of teamwork. The company is frequently cited by experts such as Gallup’s Clifton as consistently having levels of employee engagement about 10 percent higher than the U.S. average.
Even so, “every day is a constant struggle to win trust and establish credibility,” says Gritton. “You can have all of the programs in the world—all of it can be lost in a heartbeat if management does something to destroy the credibility it has built—for example, if an employee suggestion sits on my desk for a month.”
In the first months after the plant opened, employees were given time every day, on the clock, to discuss quality and safety issues—anything on their minds, recalls Gritton. Problem was, as the market tightened up, the company couldn’t afford to continue those breaks.
“The mistake we made is that we did not work very hard in making the team members understand the competitive situation we were in” and why the discussion breaks had to end. “We should have been doing more education about what the future might be for them.”
Gritton and other plant executives set about to re-earn high levels of engagement from workers -- but also to manage expectations. “People want to be involved in everything,” but not everything should be left to democratic vote, he says.
“We don’t gather around the break room singing ‘Kumbaya’ and talking about what color to paint every car,” says Gritton. Instead, upon hearing that employees wanted more time off, “We told groups of 10 to 15 people: ‘You tell us which holiday to add.’ Groups interacted. It really helped drive home lessons,” says Gritton.
“It’s a never-ending journey.”
Get to the Heart of the Issues
At Roche Diagnostics Corp., a diagnostic systems manufacturer based in Indianapolis, high turnover was a troublesome problem. Company officials did some research and concluded that they needed to define and treat the root cause of the too-frequent departures of key workers.
They had what Patty Ayers, vice president for HR, called “a gut feeling” why turnover was high, but employee engagement surveys pinpointed the reasons. The company discovered, for example, that employees had concerns about career development. They needed better computer resources in the field. They wanted to understand the company’s business strategy and where they fit in.
“When you get back hard data, it’s no longer HR coming in and saying that we’ve got some problems over here or there. You now have statistical data to support your observations, and you’ve got a safe way to open direct conversations with employees. You then really get to the heart of the issues.”
Many of the improvements that were implemented probably would have occurred without the engagement surveys, but the company made it clear to workers that certain changes were directly related to the feedback and the company’s intent that they succeed. With such a dialog, “people walk away feeling that they are being listened to,” says Ayers.
Today, “we are dramatically outperforming our competition,” she says. “Having this kind of employee commitment is the reason.”
She warns that it takes “a huge commitment in time and energy. But relative to some of the other investments you make, it has a pretty good return.” And she notes that anyone doing a survey to gauge employee engagement should “expect to hear bad things. If you’re only looking for positive feedback, you’re going to be disappointed.”
Mike Rude knew that something was going on in his highly decentralized organization. As vice president of HR at Stryker Corp., a manufacturer of surgical and medical products based in Kalamazoo, Mich., he could see “millions of dollars in differences” among regions in terms of business results. “About five years ago, the light bulb went on.”
Stryker surveys found that the regions with lots of highly engaged workers were the ones doing best financially. “It helped us focus on what’s really important,” he says. The company moved leaders around, spreading the mantra of employee engagement. Some of the hardest work was making sure that the practice of raising engagement was drilled down to the deepest levels of the organization.
For example, a manager indicated that one of his employees wasn’t being given the opportunity to use his particular talent in his job. The worker was shifted from product development to technical supervision, where he worked in a team that saved the company about $1 million in electronic component sourcing.
In another case, an engineer was too bogged down in paperwork to do his primary duties, so the administrative burden was spread around to team members.
“Engagement is a mutual contract between employer and employee,” says Rude. “The company is responsible for building a meaningful workplace. Employees have a responsibility for contributing to an engaging workplace.”
Stryker is so sold on engagement that “it’s part of the language now when we look at the succession planning process: ‘Who has this mind-set?’
“Some of it’s not rocket science. It’s rigorous accountability and follow-up,” he says. “You get better talent. You get better leadership. You can sense the difference when you walk in the facility.”
Such a Large Middle Group
HR and other business leaders who are striving to boost engagement in their organizations say they don’t want to give up on actively disengaged employees, but for the most part they say that the large middle group—those who aren’t excited about their jobs but could be—is where most of the improvement can be expected.
“I would like to think that everybody is born with a desire to be empowered and so forth, but a percentage of people have it acculturated out of them. If you get slapped down every time you have an idea,” you eventually give up, says DDI’s Byham. “It’s silly to worry about the bottom group when there’s such a large middle group.”
“There’s nothing really wrong with this [middle] group,” according to Gallup’s Clifton. “They get to work, but something is lacking.”
Part of the burden of becoming fully engaged will always rest with the employee, says Smith of Spencer Stuart. “We didn’t find that it requires completely reinventing who you are,” he says. “It starts with fundamentally understanding how you add value to your company and your customers.”
One of the paradoxes that many organizations discover when boosting engagement is that the kind of training that gives workers higher feelings of engagement also gives them more opportunities to leave your firm.
“You have to train your employees so they can leave—or they’ll leave,” states Walker Information’s Drizin. Another way to think about it: “What if you don’t train them and they stay?”
When losing a highly engaged worker, says Goman of Kinsey Consulting, “if the organization is smart, it will say: ‘Good luck with the new job. We’ll keep in touch. We hope you’ll return.’ ”
Another tricky aspect of managing employee emotions is empowerment. Front-line supervisors might feel threatened if they give workers more decision-making authority, but with training many supervisors will come to recognize the possibility that everyone will increase production and everyone will share credit. Plus, low-level employees given more responsibility should also face increased accountability.
“The most successful companies have broad bands of responsibility” rather than a strict hierarchical system, says Byham. “Be creative.”
Perhaps the most crucial element in improving engagement is finding, training and keeping good managers. “The decisions about who gets to become a manager are the most important decisions for a company’s long-term success,” Clifton told the SHRM Foundation retreat.
“I think the next decade is going to be about the emotional economy of the workplace,” he said. “HR has an enormous opportunity to provide organizational leadership by increasing the number of engaged workers....HR is the only one with the answers to increased worker engagement. The question is whether companies and organizations will now turn to HR for their strategic leadership in this area.”
Steve Bates is senior writer for HR Magazine. He can be reached at firstname.lastname@example.org