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The dos and don’ts for improving employee engagement, and your bottom line

You may have heard the term “employee engagement” a lot recently, whether it’s a webinar discussing employee engagement strategies, a company touting its engagement statistics or an article citing those organizations with the most engaged workers.

Why is employee engagement on everyone’s radar? The simple answer is, it’s good for business.

Numerous studies show that high employee engagement correlates with outcomes such as higher profitability, productivity and customer engagement for companies that achieve it. Alternatively, when people are unhappy with their jobs, they tend to contribute less, produce less and are less motivated than their peers.

In addition, according to a recent Gallup poll, just 30 percent of the 100 million Americans who work full time are actively engaged at work. As a result, disengaged employees are currently costing the U.S. an estimated $550 billion in lost productivity per year. With these kinds of numbers, it’s no wonder so many companies are making a bigger push toward employee engagement.

Here are six dos and don’ts for building an engaged workforce.

Do find your baseline

Most company leaders know if they have a highly disengaged workforce. But if you don’t know, it’s important to watch for signs of disengagement. Are people underperforming? Do you have attendance issues? Behavioral or attitude problems? Has your company had a decrease in the number of employee referrals? Any of these trends could indicate the need to perform an employee engagement survey, says Bob Kelleher, CEO of The Employee Engagement Group and author of Louder than Words – 10 Practical Employee Engagement Steps.

A companywide employee engagement survey helps organizations understand how engaged or disengaged employees are by comparing their results against internal and external benchmarks. This includes other companies in your industry — a third-party consultant can assist with this — or different offices and divisions within your organization.

“Many companies are afraid to do an employee survey based on fear that their employees actually are disengaged,” Kelleher says. “But determining where there is disengagement will tell you how to designate your efforts.”

Once you compile your survey results, form a cross-sectional task team of business units or departments to create an action plan, focusing on pockets of disengaged employees, starting at the bottom 20th percentile of engagement. Finally, measure your progress with a follow-up survey in 18 to 24 months, when your action plan has had time to gain traction.

“You will have great benchmarks because you now have a historical data point,” Kelleher says.

Don’t just reward with money

Ask any of your colleagues if they would take a salary bump, and you’d be hard pressed to find someone who says no. That’s because most people consider money to be an important factor in job satisfaction. The problem is that some employers treat it like it is the only factor.

“We have a tendency in the Western world to focus on one aspect as the measure of success: making money and other means of exchange,” says Marilyn Tam, a leadership coach, consultant and the author of The Happiness Choice. “That’s where we fall down.”

The reality is that a wide range of factors contribute to a person’s happiness, including money, but also relationships, community, body and spirit. The companies with high levels of engagement are the ones that build all of these factors into their culture, Tam says.

If money has been your primary way to compensate employees, for example, try implementing policies or programs that target other life factors. Offering flexible work hours, encouraging people to use their vacation days, supporting volunteerism and promoting employee wellness are all examples that contribute to employee happiness. By structuring the workplace in a way that keeps happiness factors in a dynamic balance, you increase employee happiness and, consequently, productivity.

“When a business only rewards and compensates people on one thing — money — you are not taking into account the whole human being,” Tam says. “Companies need to realize that employees are people, with consequences, with emotions, with relationships, with spiritual beliefs, perspectives and physical issues who connect to a bigger community.”

Do select the right managers

An employee survey can help you determine where there is disengagement in your company. But just as important, it can reveal if your organization has a leadership problem.

“In every study I’ve ever seen, the No. 1 driver of engagement or disengagement is an employee’s relationship with his/her boss,” Kelleher says. “If you have 10 business units in your company and one is significantly less engaged than the others, you probably have a leadership issue in that business unit.”

According to George Bradt, managing director of executive onboarding company PrimeGenesis, you can generally break engagement down into four levels: disengaged, compliant, contributing or committed.  Companies whose managers aren’t doing a good job managing or leading tend to have more disengaged employees, or employees who are engaged in the wrong things. Good managers will get you compliance, but not much else. To engage people at the highest levels, you need managers who can both lead and manage.

“Strong managers will get what they ask for,” Bradt says. “But if you want somebody to contribute or commit, you need to pull them in and get them to belong. You need to boost their self-esteem so they see you value what they are doing. Strong leaders engage people.”

How do you know if you have a leadership issue? Study the people in management roles and see where their direct reports fall in the engagement hierarchy. Low levels of engagement in one area will highlight an isolated issue. But if disengagement is widespread, you may need to modify your leadership selection and training processes.

Oftentimes, companies promote the best employees into management roles. But just because someone is a good accountant doesn’t mean he or she has the behaviors and traits to successfully manage and engage a workforce, Kelleher says. Do your due diligence to ensure you’re promoting and hiring right people and then training them with the soft people skills they need to lead your workforce.

“The people who manage your people are on the front lines of engagement,” Kelleher says. “If you do a crummy job selecting and promoting people to manage others, you are going to have an engagement issue.”

Don’t neglect face time

Today’s digital and online technologies have many positive benefits in the workplace, not only giving companies more ways to communicate with employees but making that communication mobile and immediate. However, employers also need to be careful that, as digital communication becomes more widespread, they don’t forget the value of face time.

“Technology is double-edged sword,” Tam says. “We have the ability to be more connected, but a lot of times we have very superficial connections. When we send an email or a text or a tweet, so many things are not considered.”

Companies with global offices may have employees who never meet face to face with colleagues or customers. But there can be a lot of nuance and meaning lost when you are communicating solely through emails, texting and social media, and this breakdown in communication can eventually impact how employees engage each other and engage with their work.

“Ultimately, we are still social beings, and we can’t forget that,” Tam says. “When you are dealing with certain matters, you need to look people in the eye, even if that’s hosting a video conference or getting face to face occasionally to bring people back together.”

For leaders, face-to-face communication with employees is also critical to getting buy-in for your initiatives, strategies or goals. Although sending an email is fine for day-to-day business, engaging people in your mission and vision requires emotional, direct communication — something you can’t get from a computer.

“People need to understand how you want them to contribute,” Bradt says. “This requires direct communication, looking them in the eye and saying, ‘I value you, we value you, you are important.’ You need to do that face to face.”

Do build an employer brand

Think about which behaviors and traits define you as an employer. Is it die-hard customer service? Community involvement? Creativity? Innovation? Now list the ways that you communicate those traits and values to employees. If you are at a loss, you may have a weak employer value proposition.

“Most companies spend a lot of time, money and resources on marketing products and services but undervalue the need to engage employees in their brand,” Kelleher says. “Often what I conclude is that you don’t have an engagement issue, you have a hiring issue. You’re hiring the wrong people to succeed in your culture.”

In addition to having a strong business value proposition, you need to decide which values you represent as an employer and make them part of your corporate DNA. Build your employer values into your hiring processes and training, then reward and compensate people around those values.

“Customers of Southwest Airlines experience a fun work environment, and that’s not by accident,” Kelleher says. “At Southwest, fun is part of the company’s employer value proposition. They have behavioral-based interviewing to ensure who they hire is a fun personality type that will fit with their culture.”

Nordstrom, Harley Davidson, Apply, T.J. Maxx and The Four Seasons are other examples of companies that practice what Kelleher calls co-branding, this process of aligning your business brand with your employment brand. By co-branding, you bring consistency to the values you embrace and live as a company, which allows you to do a better job of hiring people who fit with and can excel in your culture.

“If you have a very healthy employer value proposition, you are making that employment deal very clear,” Kelleher says. “In exchange for you being a high-performing employee and helping the company be successful, we’re going to do everything we can to help you be successful.”

Eventually, you will have employees who are more successful and more engaged in their jobs, leading to a third level of branding called tri-branding — when employees get customers to brand on your behalf by sharing their customer experiences. Social platforms such as Yelp, YouTube and TripAdvisor are common examples of tri-branding.

“The engaged workforce leads to a riveting customer experience, which leads to the customer creating free advertising for your brand,” Kelleher says. “It all starts with an engaged workforce.”

Don’t shoot for satisfaction

In your efforts to improve employee engagement, you may be looking to employees for ideas about what would make them satisfied at work. But before you add more vacation days and company happy hours, consider the fact that not all disengaged employees are actively disengaged.

According to Gallup data, 52 percent of disengaged employees are simply checked out and going through the motions, which means they may be satisfied at work but are just doing the bare minimum.

“The goal should not be employee satisfaction, because you can have a satisfied but underperforming employee,” Kelleher says. “That’s not a good business model.”

Instead of focusing your efforts on employee satisfaction, ask people what they need to be successful and to help your company be successful.

“You need to get employees engaged in the business in a way that they are aligned with the leadership team, the customers and stakeholders, so they will engage your product or business for you,” Kelleher says.

Think of it as the golden rule of business: How you engage with employees will determine how they engage with you. Thus, the best results come when you show people how their jobs impact the overall success of your company’s mission, vision and goals. Examples include tying employee compensation to contributions to organizational objectives, clearly sharing your mission, and training and developing people for future leadership roles.

“Sometimes in our quest of measuring everything by productivity, we often forget that meaning has to come into play,” Tam says. “All of the factors that influence people globally play in our lives and in our businesses at all levels. We need to recognize that and engage accordingly.”