A New Model for Employee Communication, Part 14: Employee Engagement

Posted on September 28, 2017 8:12 pm by | Internal | A Model for Employee Communication

A New Model for Employee Engagement, Part 14: Employee Engagement

This is the latest installment in a series of posts exploring a new model of employee communication, one designed to deliver measurable results that demonstrate the impact on the organization in ways that matter to leaders.

Revised Employee Communication Model

The series:
Part 1: Introduction Part 7: Channels
Part 2: Overview Part 8: Culture
Part 3: Alignment Part 9: Vision/Mission
Part 4: Listening Part 10: Values
Part 5: Consultation Part 11: Practices
Part 6: Branding Part 12: People
Part 13: Place

The four overlapping circles at the center of the model represent the best opportunities for employee communication to affect an organization on a day-to-day basis. This post introduces our discussion of the second circle, engagement.

The Engagement CircleAn engaged employee is one who gives her best to her employer every day. She is psyched to come to work and help the company succeed. She cares about her work and the company. Because the confines her job description is confining, she even makes discretionary efforts on the company’s behalf.

What company doesn’t want an employee like that?

After all, there is more than enough evidence that companies with large populations of engaged employees outperform their competitors. According to Aon Hewitt, organizations with high engagement levels…

  • Outperformed the total stock market index
  • Posted total shareholder returns 22% higher than average
  • Earned twice the annual net income

According to Gallup—the company that first identified engagement and developed the first survey to measure it—companies with engagement scores in the top quartile average 12% higher customer advocacy and 18% higher productivity. Nearly 60% of engaged employees say their job inspires their most creative ideas (only 3% of disengaged employees agree). Most important to leaders, companies with engagement scores in the top 25% had twice the annual net profit and revenue growth 2.5 greater than those in the bottom quartile.

But wait! There’s more!

  • The UK’s National Health Service says its data demonstrate that higher engagement levels lead to lower patient mortality rates.
  • The Royal Bank of Scotland found a 7 percentage point difference in customer service scores between the top 10% and bottom 10% of employees.
  • In the UK, engaged employees take an average of 2.7 sick days per year; disengaged staff members take 6.2 days.
  • PricewaterhouseCoopers finds a strong correlation between engagement and wellbeing. (You can also correlate better wellbeing with lower healthcare costs and fewer sick days.)
  • Gallup and TowersWatson both find companies with high levels of engagement have turnover rates 40% lower than companies with low engagement levels.
  • Improvements in engagement lead to better safety numbers (such as fewer lost-time incidents).

Believe it or not, these are just a few of the results from hundreds of studies that reinforce the importance of engagement. You would think that leaders would pull out the stops to build engagement.

The data says otherwise. As I noted in the very first installment of this series, between 2011 and 2015, employee engagement rose from 29% to 32%, according to Gallup. Despite the fact that businesses have likely invested hundreds of millions of dollars in improving engagement, the needle has barely moved. Three percentage points sounds more like a rounding error than an improvement.

Engagement Levels

Let’s be clear: If 32% of American employees are engaged, 68% are either not engaged or actively disengaged.

Why hasn’t engagement improved?

Employee engagement may be great in your company. There have to be companies with a lot of engaged employees; without them, how would we know that they outperform their competitors?

A few factors could be the culprit behind those companies suffering from low levels of engagement.

One is a misunderstanding of what engagement is. I have read more than one post on LinkedIn, in blogs, and other channels that suggest building engagement is as easy as paying good wages, providing good benefits, and paying attention to work-life balance. These, no doubt, are important. But they deliver job satisfaction, not engagement. They are two entirely different things. (We’ll look at job satisfaction when we get to the final circle of the model, Employee Experience.) As a result, some leaders implement solutions that solve a different problem.

Executives Angry at Low Engagement Survey ResultsIn other cases, CEOs angry with the results of their engagement surveys get on the phone to HR and demand fixes, leading HR to create programs, pump up their training efforts, add wellness programs, create new recognition programs, offer flex time arrangements, and a host of other programs.

Again, there’s nothing wrong with any of these. They are, in fact, fantastic. Given that people look first at how companies treat their employees when gauging how trustworthy those companies are, these kinds of programs can pay off in important ways.

Engagement, though, isn’t one of them. (I’ll explain why in just a minute.)

Another reason engagement levels remain low overall is that some companies expect too much from employees. Being engaged doesn’t mean sacrificing the rest of your life to the company. Some employees want to put in their eight hours and go home Is it right to dump them into the not-engaged category? Not if they’re giving their best while they’re at work. (Engagement levels were undoubtedly low at Cerner Corporation in 2001 when CEO Neal Patterson sent managers an email that dressed them down for allowing their teams to “think they had a 40-hour job. I have allowed YOU to create a culture which is permitting this. NO LONGER.” Patterson gave employees “two weeks to fix this. My measurement will be the parking lot: it should be substantially full at 7:30 AM and 6:30 PM…The lot should be half full on Saturday mornings.”)

Some engaged employees will want to put in extra hours. Others will want to do their best during regular hours and spend the rest of their time with their families, their friends, their hobbies, or other outside pursuits. These employees simply have different life goals. Both approaches to work are fine and organizations need to accommodate them.

In some companies, leaders believe engagement is high because survey results say they’re high when, in fact, employees are responding with the answers they know their managers expect. When the CEO erupts at managers because the survey results are bad, managers, in turn, berate employees, who respond by delivering results that keep the CEO calm.

Response rates to engagement surveys have declined, in part because employees haven’t seen anything change despite previous surveys (and the subsequent introduction of programs that don’t address the reasons engagement was low).

In addition, a lot of engagement surveys ask the wrong questions. I have never been a fan of the Gallup Q12 question that asks whether you have a best friend at work. As my colleague the four enablers of engagement promoted by the UK organization, Engage for Success:

  • Strategic Narrative—Where did the organization come from? How did it get to its current state? Where is it going? Where do I fit in that story? Can that story be made relevant by leaders and managers at all levels of the organization?

  • Engaging Managers—Do your managers focus the people who report to them, make them feel part of the team, show how their work contributes to the company’s goals, coach them, stretch them, bring out the best in them?

  • Employee Voice—Are your employees seen as central to the solution rather than as the problem? Are they involved, listened to, and invited to contribute their expertise and ideas?

  • Integrity—You’ve seen lists of values statements (I addressed values in the Culture section of this series). How often have you seen leaders behaving in ways that are in direct conflict with those values? How often are people rewarded for achieving results while violating the spirit of the company’s values? Integrity means leaders walk the talk, reflecting the values in their day-to-day behaviors.

Research identifies a host of other engagement drivers: relationships with co-workers, meaningful work, pride in the company, autonomy, access to the resources needed to do high-quality work, and more. What I like about the Engage for Success enablers is that employee communicators can easily communicate them.

The next four installments of this series will explore each of these enablers and how to build them into your communication strategies and tactics.

Up next is a closer look at strategic narrative, the biggest no-brainer of the enablers for employee communicators.

The graphics for this series were created by Brian O’Mara-Croft.

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  • 1.I appreciate the importance of employee engagement, but feel the path to success is more straightforward. Empowering employees to think and act like owners, driving and participating in the profitable growth of the company, is a proven way to drive results and engagement. Industry leaders like Southwest Airlines, Capital One and BHP Billiton and hundreds of private companies treat their employees like trusted business partners, enabling them to make more money for their company and themselves. They consistently see both profits and engagement soar. This Forbes article provides more background: http://www.forbes.com/sites/fotschcase/2016/05/31/engage-your-employees-in-making-money/

    Bill Fotsch | September 2017 | US

  • 2.There's nothing wrong with your suggestion, Bill. But what does it take to empower employees to think and act like owners? I have worked with companies that offered profit sharing and ESOPs, where employees were actual owners, but engagement levels were woefully low. To actually get employees to feel this way, I would argue it takes exactly what I listed in the post. Consider Springfield Remanufacturing, where employees were made to feel like owners probably more than any other organization on record. In addition to opening the books for them, and teaching them to see exactly how their work contributed to the financial health of the company (and to be able to better manage their own work), they saw leadership walk the talk, they knew where they fit in the company's story, they had enabling managers, and they had a voice (in fact, every employee knew they could find the CEO, Jack Stack, at the same seat in the same bar after hours and join him for a drink and talk about work). It's easy to say "empower them to feel and act like owners." But that takes work and very focused and targeted effort. I don't see anything inconsistent between that outcome and the work required to make it a reality.

    I would also suggest that the lowest-paid workers in the company will have a hard time getting excited about helping the higher-paid workers make money. They require incentives aligned with the outcomes they're expected to achieve.

    And finally, we have entered an era where workers expect more of their employer than profit. There is ample research demonstrating that a growing number of employees will take less salary to work for a company that aligns with their values (on issues ranging from sustainability to social causes). Employees want purpose in their work beyond profit.

    I worked at a company where morale was suffering. I did research and identified the root causes. I was told by an executive VP to spend money instead on a 90-day campaign called "Beat Acme" (substitute the name of the company's top competitor for Acme). "Everyone will be happy if the company is successful." But the root causes of the low engagement had nothing to do with the company's success.

    Getting most employees excited to come to work and contribute takes a strong culture, shared values, and a sense that the company genuinely cares about its people. Yes, empowering them to feel like owners is a factor. By itself, it's not enough.

    Shel Holtz | September 2017

  • 3.Shel, you are entitled to your opinion. Where you refer to Jack Stack, I did a joint venture with him and founded Great Game Coaching with him, where I helped over 400 companies apply open-book management principles for 19 years prior to launching my own company. Its not that your suggestions are bad. They are just needlessly complex, which is why I offered my post. I get that you are trying to sell a communication model. But a much more focused approach is something I have seen work, not only on my work with Jack but also from first hand experience I had working with companies ranging from Southwest Airlines, BHP and Capital One to hundreds of privately owned companies, including several NCEO ESOP companies.

    You might be interested in reading the series of over 50 Forbes articles John Case and I write. As you likely know, John Case coined the phrase Open-Book Management, and is author of 2 books and countless articles. The Forbes articles are available at: https://www.forbes.com/sites/fotschcase/
    While we are clearly competitors, hopefully we can share a lever of mutual respect and learn from one another.

    Bill Fotsch | September 2017 | US

  • 4.I certainly have no disrespect for you, Bill; none at all! I'm not trying to sell anything. I have been doing employee communication audits for more than 20 years led employee communications (and corporate communications overall) for two Fortune 400 companies, and spent time consulting for two global HR firms.The model is the result of what I have learned over those combined 40 years. If it were a product, I wouldn't be giving it away for free in a series of over 30 posts detailed posts, would I? (Not that I find any disrespect in the suggestion that this is all just a money-making ploy...)

    I would hasten to add that there is a massive body of research around engagement, and I have seen little in that research to suggest that a sense of ownership by itself creates it (at least, not under the definition I'm applying). Without any intended disrespect, I find the notion that giving employees a sense of ownership is all any company needs to do remarkably oversimplified. I don't see how a toxic culture and a sense of ownership go hand-in-hand...unless you're suggesting that the sense of ownership is part of a great culture, in which case, where do you have a problem with taking steps to build one? I also wonder if you think there's no need for employees to understand the customer (or if that's just another part of establishing a sense of ownership)?

    And what about incentives? My friend Jim Shaffer -- who also worked closely with Mr. Stack -- told me recently that he was able to address a client's on-time delivery problem by changing the incentives so they aligned with the goal.

    Jim also said that "opening the books is a good idea but it needs to be aligned with an infrastructure that can justify/support it." That infrastructure -- which can certainly lead to a sense of ownership -- comes in part from the kinds of leadership behaviors and communication activities I am suggesting. At least, that's the part good communicators can contribute.

    I also don't think there's anything needlessly complex about suggesting employees have a voice, that leadership walk the values talk, that managers enable their employees, or that employees understand the company narrative. Lots of companies do it without needless complexity. (That includes Southwest, by the way, which I have visited, whose HR and communications leaders I have known, and whose communications and leadership I have studied). At Southwest, the sense of ownership is accompanied by a host of other activities that cumulatively account for high levels of engagement.

    Nor do I believe there's anything overly complex about the overall model. It's mainly about having a mindset about the strategy that underlies communication, understanding how communication can lay the groundwork for change, and measuring the results.

    Finally, while I enjoyed your articles and took much from them, I don't equate Forbes bloggers to the work of, say, McKinsey or the journalism in an Inc., where journalists take a stab at objective reporting.

    Respectfully, yours...

    Shel Holtz | October 2017

  • 5.Shel, you are truly a communications audit specialist. I could share our Harvard Business Review articles, but why bother right? Your cheap shot about the Forbes articles communicates volumes, doesn't it? I would ask how many of the companies you have worked with, where you are paid based on results, as I am, but again, why bother? How many companies have you worked with that you have invested in, as I have? Having work with Jack Stack for 19 years, I suggest you do a little rereading of his book, Great Game of Business, the core focus of critical number and the power of an ownership culture to drive results.
    I know, you see it as a communications issue, When you are a hammer, everything looks like a nail. And your claim that you are not selling anything is a bit inconsistent with the model you are pitching in your article. I guess the standards at Holtz for bloggers are a bit less rigorous than Forbes. Who would have guessed?
    PS: I worked at Bain for 6 years after business school, which is just a bit more important than reading McKinsey articles.

    Bill Fotsch | October 2017 | US

  • 6.Bill, you seem to have a thin skin. I meant no cheap shot. I have, however, known a lot of people who write posts for Forbes for payment based on clicks, none of which are fact-checked or peer-reviewed. I'm just sayin. I'd be happy to read your HBR articles. (And I did note that I took value from the articles you shared.)

    No, Bill, I don't see it as a communications issue. But I do see where communications can play a pivotal role. I'm not alone. Read the widely respected works of Roger D'Aprix, for example.

    Jack Stack's work is to be widely admired. I'm just saying there's more to creating an ownership culture than saying you have one, and that they include engagement, connection with the customer, and other dimensions of business that communication can support. You are certainly welcome to disagree. (Or should I say: You're welcome to your opinion?)

    As for selling, again, if I'm giving it away in 30 some-odd posts, there's no much left to sell, is there? I'm happy to help a company that believes in what I've learned in 40 years apply it in their strategies, but I'm sharing this here on this blog and on LinkedIn absolutely free. But again, you're entitled to your opinion.

    Please provide the HBR links. I did enjoy your pieces, even if I question Forbes' authority. (And my reference to McKinsey is based on its rigorous research, not its articles.)


    Shel Holtz | October 2017

  • 7.Cheap shots, insults and no response to my questions, and I am supposed to forward information to you that you could look up on your own. Do the work if you are sincerely interested. And tell me, was your article, "fact-checked or peer-reviewed", and if so, by who? If it was not, I gather you suggest we should ignore it. (Tell me, what do they call some one who says one thing and does another?)
    The problem I have with your article is not that it is bad; it is simply not good. Consequently some may follow your not good advice. When they fail, they will tell others that focusing on engagement does not work. Really bad for them and the business community. It is not based on 400+ companies actions and results. One example is a long standing client of mine, captured in these two MSNBC videos, 6 years apart: https://www.youtube.com/watch?v=ev9JBmjjeCU
    Another larger client: https://www.youtube.com/watch?v=-RJAEHPOxPQ
    That said, let's end the debate, which must provide no end of comedy to the very few who might be reading this. Having seen your lengthy, non-responsive replies, I now question your communication skills. Suffice it to say I will not be calling, as your article invites. And you say it is not a sale pitch??? Comic stuff..

    Bill Fotsch | October 2017 | US

  • 8.Piling on insults and cheap shots while accusing me of same doesn't speak well of you, and responding to evidence and research with your credentials doesn't convince me of much.

    But you have a good idea about ending the debate. I am done. You're right: Companies don't need to communicate with employees. Engagement is purely a product of creating a sense of ownership.

    Best of luck to you Bill; I wish you nothing but success. Over and out.

    Shel Holtz | October 2017

  • 9.Highlighting ownership which could be stock options has not proven to be a sustainable motivator. Transactions highlight self-interest. The research of performance across industries and sectors suggest that transformation leadership practices are more effective to enable sustained engagement.

    On the premise of transformation leadership, it would be to transcend self-interest in the collective interest. In plain language, helping others is more likely to create sustained engagement than a financial reward. Entitlements like ownership have played a part in successful organizations like Southwest but only when they were not the primary focus but rather a symbol of shared value. Not intending to pick up a debate with Bill. Shel, you continue to be insightful and forever open to dialogue.

    Ryan | October 2017 | Delta, BC

  • 10.Isn't it odd the two individuals who have never worked at Southwest, declare themselves to be experts at what works at Southwest? You don't know how the option program began at Southwest do you? Hmmm... What does that tell us???

    Bill Fotsch | October 2017 | US

  • 11.I did study Southwest as part of my Master's program in business leadership. My professor at the time did work directly with Southwest and WestJet, which follows a similar business model.

    If 20 years of being a researcher and practitioner in employee engagement leads you to believe I am not informed about the concept, I'm curious: Who would be qualified to have this discussion?

    I did not declare myself an expert on Southwest. I made observations on their very well-documented and shared business model.

    Ryan Williams | October 2017

  • 12.Hi,

    Just wondering how a collaborative forum could get so off track so quickly and in such a personal manner. Doesn't look good for the experts in employee engagement to display behaviors and language that are just the opposite of what's needed or expected. Might help to give each other the benefit of the doubt and believe that each person is offering their insights and perspectives to foster discussion, add to the body of literature and ultimately help organizations enhance engagement of employees.

    Alternatively, it might be good for those who feel so strongly around these issues to take their discussion off line and have direct communications with each other. I actually felt deflated after reading the exchange of comments that seemed quite harsh.

    All the best.

    Gregory Clarke | October 2017 | Newark, DE

  • 13.My apologies, Gregory. You're absolutely right (though I had no interest in going one-on-one over this); I should have let it slide. Hopefully, we can get back on track with the next installment, which I'm about to post.

    Shel Holtz | October 2017

  • 14.The importance of employee communication continues to be badly under-rated by employers. Refreshing to read Shel's new model.

    I've been traveling for several weeks and have returned to read the exchange of views about engagement. I think using profit as the major engagement factor for employees is a narrow approach, reminiscent of Nobel Prize winner Milton Friedman's famous, but later discredited, claim in his New York Times article: "there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits..." (13 September 1970).

    OECD figures show at least 25% of US workers and up to 40% in successful European countries like Denmark and Norway don't work in the private sector. They are employed in government and non-profit organizations. Using profit sharing as the key engagement motivator is therefore totally irrelevant to a big chunk of the workforce.

    From my 30+ years in business, government, and consulting, I agree that "Getting most employees excited to come to work and contribute takes a strong culture, shared values, and a sense that the company genuinely cares about its people. Yes, empowering them to feel like owners is a factor. By itself, it's not enough."

    Kim Harrison | October 2017 | Perth, Western Australia

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