Is Your Company Ready?
“What is the single biggest thing that companies get wrong with employee engagement?” This was a group posting on LinkedIn. As I read through the comments I realized there were about 10 reasons listed why senior leadership and HR that can’t answer this question.
“Why does this matter?” you might ask especially given all the other priorities on your “to do” list.
It turns out research is demonstrating there are direct benefits to your net income if you can increase employee engagement scores. The Institute for Corporate Performance (i4cp),and Stanford University’s Center for Leadership Development and Research have produced a significant amount of research demonstrating improvements in market share growth, revenue growth, customer satisfaction and profitability.
Here are the 10 reasons why companies keep getting employee engagement wrong.
1. In general, executives ignore the impact employee engagement has on the business. The facts are high-performing organizations are 4.5 times more likely to measure the impact of engagement on revenue growth than low-performance organizations (63% vs. 13%). High performing organizations perform three times better in the market than low performing organizations. There’s a .49 correlation that employee engagement directly contributes to increased market performance.
2. Executives don’t hold HR professional accountable as performance advisors to the business.
HR professionals believe that they spend 25% of their time engaging in strategic activities such as strategic HR planning, organizational design and strategic change. However, non-HR professionals think that only 10% of HR time is spent on strategic activities. Forget the gap in perception. If we know there’s a correlation between employee engagement and higher performance “Why isn’t senior management demanding more on this issue?” See reason #3.
3. Engagement is not tied to the business and organizational goals. Apparently, CEOs and their boards are not serious about investing in employee engagement. The 2013 CEO Performance Evaluation Survey conducted by Stanford Center for Leadership Development and Research and the Miles Group reported only a 5% weighting for talent development and 2.5% for employee turnover and satisfaction.
One of the best employee engagement practices is to include engagement as a part of every manager’s performance review. High-performance organizations are twice as likely as low-performance organizations (40% vs. 19%) to do this.
4. What is engagement again? Employee engagement is an activity that measures the mindshare or emotional commitment employees have to achieve the organizations’ goals. It is not to measure employee satisfaction or happiness.
5. A focus on collecting data but not doing anything with it. There’s an old saying “want to know what’s really important to someone, check their bank book and calendar.” If something is really important to you then you’ll spend your time and resources on it.
Five other listed reasons
6. Using benchmark or best practices without customizing it for your culture/business.
7. Not investing the time, effort and attention to convince and hire managers who support the idea that employee engagement matters.
8. Creating overly complicated process to collect, monitor and evaluate the results.
9. Failure to include employees in the process. An important and interesting series of comments were made about having employees solve the issues. Allow them to create a process to increase engagement (hint: engagement is not happiness or satisfaction) among their peers. High performing companies encourage employee development beyond personal development plans.
10. Failure to use social media/technology to increase collaboration, share knowledge, fuel learning and identify “hot spots”.
The bottom line is this. Executives and employees at high performing companies have done the work to reap the benefits of higher financial performance. If you want to see innovation, increase customer satisfaction and higher profits, hold every manager accountable for improving their leadership skills. Start by including it on their performance reviews and tie their pay to improving engagement scores.
Isn’t it about time?
Why should you care if your leaders understand or embrace employee engagement? After all, 71% of employees are moderately engaged and that means you can do just enough to get by.
So what if you’re not a member of the Board of Directors or the CEO/Senior Executive Team?
Here are three reasons:
- Get a bigger piece of the salary increase pie. Salary and compensation budgets are designed to give about 10-20% to top performers. See how that number correlates to the 15-20% of highly engaged employees? Want a bigger salary increase? Then, learn how to be viewed as someone who is highly engaged.
- Take charge of your career growth. So you your boss is terrible at developing people. Stop waiting for your boss or company to provide you the road map for success. As we continue to see senior executives get paid for financials and not for growth, innovation, or customer service, employee engagement is even more critical. Learn how to thrive and be rewarded for your efforts.
- Take control. Our world is getting flatter and the competition is global. In companies that don’t invest in employee engagement, management uses cost-cutting to increase the bottom line. Your continued employment depends on your ability to lead and be effective in managing your career by smartly navigating the changing business landscape. Staying on top of your game means you can’t depend on your boss or even your company to protect your long term employment or job security.