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NEW YORK CITY—Companies like Zappos and Whole Foods Market often win accolades for having highly engaged workforces and cultures that help attract top talent and that routinely propel them to the top of “best of” lists. One sells footwear, the other food. But it turns out they have more in common than you might think.
Research shows that companies earning high engagement marks that help attract and retain top talent use eight core building blocks when it comes to strategies, policies and practices. These building blocks include developing formal programs and policies that drive engagement to having a regular cadence for engagement assessment and follow-up.
And while engagement surveys are helpful, getting engagement right encompasses much more than simply surveying employees, speakers at a recent conference said.
“The survey is a read on the extent to which you’re creating the right environment,” Patrick Hyland, Ph.D., director of research and development for Sirota Survey Intelligence, told attendees April 24, 2015, at a strategic HR conference presented by The Conference Board. “But if engagement in your organization is just a survey, realize you are going down the wrong road.”
Speakers at the conference highlighted findings from DNA of Engagement: How Organizations Create and Sustain Highly Engaging Cultures, an October 2014 Conference Board report that Hyland co-authored based on a study conducted by The Engagement Institute, a research community launched in 2013 by The Conference Board, Deloitte Consulting and Sirota.
The research team looked at standout companies on six major published rankings of highly engaged organizations. Companies profiled in the study include Alcoa, Deloitte, Development Dimensions International (DDI), NASA, Quicken Loans, Southern New Hampshire University, Teach for America, U.S. Patent and Trademark Office, Whole Foods Market and Zappos.
Eight Core Elements
Core elements of the highly engaged organizations studied include the following:
*Alignment of business strategy and engagement strategy. These organizations spend a substantial amount of energy and resources on engagement and make a business case for it, said Rebecca Ray, Ph.D., executive vice president for knowledge organization and human capital practice lead for The Conference Board. “They see this not as a set-aside, but as part of their business strategy,” said Ray, also a co-author of the report. The majority (67 percent) have two or more full-time employees dedicated to engagement, and 83 percent invest more than $100,000 annually on engagement programs.
*An organizational philosophy that emphasizes a core purpose. These organizations focus on more than just making a profit. Mission and vision statements influence and even define engagement. Aspects of company culture are often visible in communications and in books, posters and talent development practices. Employees understand that they play a role in creating value for the business ecosystem, which includes employees, customers and the community.
Quicken Loans Founder and Chairman Dan Gilbert spends “an awful lot of time working with the culture,” Ray said. The company has a book of bumper-sticker-like ideals found throughout the mortgage lender’s offices. They include sayings like “Yes before no,” “Every client. Every time. No exceptions. No excuses,” and “Innovation is rewarded. Execution is worshipped.”
*Formal programs and policies that drive the engagement agenda. These companies recognize that engagement needs to be nurtured from the time someone is recruited through the end of their tenure with the organization. They’ve identified critical points in talent management processes and use those to drive engagement in a way that’s tailored to their unique cultures. Cultural fit is not an afterthought. DDI emphasizes cultural fit during the selection process. During new-hire orientation, the organization’s values and vision are explained using various scenarios. After orientation, employees discuss how their roles directly contribute to organizational outcomes.
“No matter where you are in the human capital continuum—whether that’s in learning and development, performance management or succession planning, leadership development or talent acquisition—all of these are designed to support engagement,” Ray explained.
*Open, proactive, leader-driven communication about engagement. These companies keep employees at all levels informed about organizational priorities and objectives and tend to proactively communicate engagement data and specifics on how they plan to act upon results. Stories and testimonials are used to share examples of mission-focused behaviors and are highlighted in employee communications and videos and on social media.
Alcoa hosts regular, companywide town hall meetings featuring engagement survey results, and company Chairman and CEO Klaus Kleinfeld chooses the next focus areas for building engagement. “Like everything else, tone at the top matters,” Ray observed.
*A workplace (physical and virtual) and organizational structure that promotes collaboration and inclusion. These organizations often empower employees to identify and act upon solutions that contribute to organizational objectives and are relatively free of red tape that inhibits innovation, cooperation or responsiveness.
Zappos CEO Tony Hsieh implemented a holacracy structure defined as “a comprehensive practice for structuring, governing and running an organization … [that] replaces today’s top-down, predict-and-control paradigm with a new way of achieving control by distributing power.” The company has nixed traditional team structures; de-emphasized titles, roles and levels; and emphasized agility.
Highly engaged organizations also often design offices to promote an engaging culture. And they tend to work to ensure that telecommuters have access to corporate programs and create a formal infrastructure to engage the virtual workforce.
*A regular cadence for assessment and follow-up. Highly engaged companies have a process for tracking engagement and a defined approach for acting on data and feedback. They figure out where interventions should occur and whether they help improve engagement.
Most companies surveyed measure engagement annually. Some benchmark against external organizations, coupling engagement surveys with culture diagnostics and ensuring demographic data so that insights can be generated for specific groups of employees, as well as at the organization level.
“Getting into a rhythm of conducting a regular engagement survey and following up with discussion and action plans is the best way to build momentum around engagement,” Hyland said. While many engagement surveys are designed by senior leaders or senior HR professionals, Hyland said NASA invites employees “to come up with items that are important to them. Those items are considered and vetted, and it really creates a tremendous amount of buy-in.”
*Leaders who are expected and empowered to build engagement. Driving engagement is viewed as a core responsibility of leaders, and such expectations are often clearly defined, measured, recognized and rewarded. The majority (82 percent) of highly engaged organizations integrate employee engagement programs with leadership development.
They also hold executives and senior management accountable for acting on surveys. Just over one-third (36 percent) also hold individual contributors accountable. And they encourage managers and front-line supervisors to “own” the results. Managers often personally lead forums for feedback about results.
*Demonstration of the business impact of engagement. Highly engaged organizations don’t measure engagement “simply to be informed,” the report noted. Many measure the impact of engagement on specific and meaningful performance indicators.
The report profiled 10 companies, although the original survey focused on a dozen companies. The survey found that 8 of the 12 measure engagement against turnover and retention. Seven measure it against diversity and inclusion, business unit performance, and brand and reputation. Half (six) measure it against well-being, individual-level performance, customer satisfaction and organizational performance.
Hyland said the key is making sure business leaders, managers and employees all understand the business imperative of employee engagement, particularly since research has shown that engagement can help boost the bottom line. Zeroing in on the linkage between engagement and critical drivers of business performance can pay off.
Whole Foods, for example, conducts linkage analysis that allows the company to really understand “at the store level what kind of environment they need to create to drive business success,” Hyland said. “They find that engagement is part of the equation, but there are other critical factors that really make for success—things like decision-making, support and development,” Hyland explained. “It’s not as simple as being a motivated workforce. It’s a motivated workforce that’s supported.”
Pamela Babcock is a freelance writer based in the New York City area.
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