UPMC administers surveys to all 80,000 employees across 20 different hospital systems, doctors’ offices, clinics, and long-term care facilities to understand the employee voice.
Do Employee Engagement Initiatives Really Work? What’s the payoff?
We asked human resources executives and managers in over 200 organizations around the world about the return on investment from employee engagement initiatives and impact that employee engagement has on the organization.
When asked: How would you describe the impact of employee engagement on your organization overall?
The overall response was, “POSITIVE.” Some open-ended comments were:
“Huge impact!”
“It’s a work in progress and we have a long way to go still.”
“Very positive to our cultural goals.”
“It is vital to providing quality care and fulfilling our mission in the community, so we take it very seriously.”
When asked: Does your organization measure its return on investment (ROI) for employee engagement programs?
We found that only 9% of companies measure the ROI of their employee engagement programs.
When asked: Which of the following metrics are compared to employee engagement scores in your company? Please check all that apply: Employee Retention, Performance Metrics, Customer Satisfaction, Profitability, Product/Service Quality, Other.
We learned that most companies compare employee engagement survey scores to retention numbers followed by other performance metrics.
When asked: In what ways have you seen a return on the organization’s investment in employee engagement?
We found that companies report higher satisfaction, retention, and performance as a result of their investment in employee engagement.
When asked: How strongly do you agree with the following statement: “Our program(s) to improve employee engagement has (have) given us the ROI/results we hoped for.
Only 27% of companies believe that their programs to improve employee engagement have produced the ROI they hoped for.
The ROI from employee engagement most frequently reported is employee retention. Overall, the research shows that most companies aren’t doing a very good job at tracking ROI from their employee engagement initiatives, but most report positive benefits and outcomes, especially retention.
Employee engagement is an emotional state where employees feel passionate, energetic, and committed to their work. This translates into employees who give their hearts, spirits, minds, and hands to deliver a high level of performance to the organization.
When we first look to join an organization, we may be enticed by some salary promises, the company brand, or cool perks. Important? Of course. But these factors, called “satisfaction elements,” don’t increase employee engagement. Engagement goes beyond satisfaction. Employee engagement occurs when we find meaning, autonomy, growth, impact, and connection–MAGIC–in what we do.
Employee Engagement is collaborative.
Employee engagement is a 50-50 proposition–a two-way street. Yes, the organization is responsible for creating an environment where engagement can flourish, but the employee has an equal responsibility to CHOOSE to be engaged.
Employee Engagement is MAGIC
The data–lots and lots of data–is what sets ENGAGEMENT MAGIC apart. Over the years, DecisionWise has deployed assessments in thousands of organizations in more than 70 countries and in more than 30 languages.
What does it look like when engagement replaces satisfaction? Over the years I have had the opportunity to work with volunteers who do work in developing countries. These volunteers—typically university students—dedicate up to three months each summer in leaving their comfortable, US-based surroundings to work in locations where poverty is the norm. Their work may include bringing water to a small mountain village, working to prevent river blindness, teaching single mothers about nutrition, building latrines, or any number of other welfare and educational projects.
DecisionWise CEO Dr. Tracy Maylett (back center) working with a group from HELP International to bring water to Villachulucanas, Piura, Peru
These volunteers often live in unfamiliar conditions where, while not typically dangerous, they experience many of the hardships found in some parts of the world. This may include limited access to clean water, less-than-ideal nutrition, dirty conditions, and crowded living spaces (during my last visit to Peru we had 19 young people squeezed into two small rooms on the upper floor of a small, concrete home). These conditions were also similar to what I experienced in previous stays in Guatemala and El Salvador, yet these young people choose to do what they did.
Here we have 200+ students, all leaving the conveniences of life and family for a three-month period in order to work in conditions most of them have only seen on their 55-inch big-screen televisions or on their iPads. And what’s really amazing… they pay to do this! Each student is required to pay his/her own expenses, as well as part of the fees to support the projects in which they participate.
Let’s put this in perspective. Suppose I go to your employees and say, “Team (because when we call them “team” it makes them feel better about what I’m about to ask of them), we’re going to change working conditions a bit. First of all, you will pay me, rather than me paying you (I won’t break it to you yet that you’re going to put in some hard work and live in some pretty harsh conditions).”
Obviously, that ain’t gonna’ fly. Perhaps a bit of a stretch to emphasize a point, but let’s consider the intent. What makes 200 students willing to do what they do in this scenario? I make it a point to continually ask that question of each of the volunteers, who inevitably respond with variations on a central theme: they are willing to temporarily overlook the “satisfaction elements” because they have chosen to be engaged in what they do. They find meaning, autonomy, growth, impact, and connection (M-A-G-I-C) in what they do.
Employee Engagement Differs from Satisfaction
Let’s take a look at why this is the case, by examining how employee engagement differs from satisfaction. Certain elements must be present in order for me to be satisfied in my work. These elements may include safety, basic levels of respect, tools to do the work, training, and even appropriate compensation. However, these volunteers are willing to overlook these basic satisfaction elements for a temporary period (in this case, three months of the year) because the elements of engagement (ENGAGEMENT MAGIC) play a greater role for them than does the need for those things we generally consider factors that satisfy us in our work.
Are they satisfied? Yes. But not because what we consider “the basics” are in place. They’re satisfied because they are engaged.
Satisfaction is a transactional, quid-pro-quo (you give me x and, in return, I give you y) relationship, with some strings attached. With satisfaction, when I do something it’s because I know that I will receive something in exchange that makes my effort worth what I put into it. Satisfaction elements are generally the “price of admission.” We must have the tools we need to succeed. Our compensation must be fair, and we must be treated with dignity and respect. However, many companies stop there, assuming their employees will be engaged if each of these elements is in place. Further, the more I, as an employer, provide these for you (“let’s bring in a foosball table and hot chocolate machine for every floor!”), the more you’ll be satisfied. Right? Not quite.
Engagement differs from satisfaction in that engagement involves the heart, hands, and mind of the employee (or volunteer), rather than the transactional relationship brought about by satisfaction factors.
Engagement occurs when the ENGAGEMENT MAGIC elements of engagement—meaning, autonomy, growth, impact, and connection—are in place. The volunteers found ENGAGEMENT MAGIC® in what they did.
In the case of these students, each continually cited meaning (when the work has greater purpose beyond the task itself) and impact (when I can see the positive outcomes of my efforts) as primary reasons why they were involved in this work.
Not a single volunteer mentioned, “It pays well,” or “I like the foosball break room.” Obviously, not many of these satisfaction factors were present in their day-to-day working conditions. Yet, many businesses today ignore engagement factors, and focus solely on satisfaction. However, satisfaction factors do not bring hearts, hands, and minds into the game.
While satisfaction is important, it’s transactional, and reaches a point of diminishing returns. Foosball tables and free drinks only go so far—and we must continue to outdo what we’ve already done. Yet, as these volunteers can attest, MAGIC happens when we include hearts, hands, and minds.
These young volunteers were able to accomplish some pretty amazing things—and it was because they chose to do so. What are your employees choosing?
Many definitions are thrown around today to describe employee engagement. Some of these definitions include references or similarities to other common organizational behavior terms, to the point where “engagement” has become a catchphrase that includes all the positive feelings and qualities that we want in employees. If it’s a positive behavior, we lump it into the “engagement” category. However, this creates a good deal of confusion as many try to define engagement for their particular organization.
Download Employee Engagement Survey Sample
So, let’s take a different approach. Let’s address what employee engagement is not first:
Employee Engagement is not Satisfaction. Satisfied employees are content with their pay, working environment, and the job they do. Satisfaction must be in place for employees to be engaged (it’s the “price of admission”) but it does not cause an employee to be passionate about her job, nor does it cause an employee to throw his heart, hands, and mind into his work.
Employee Engagement is not Happiness. Employees can be happy at work but not necessarily engaged in their work. A fun working environment can contribute to engagement, but it may only make your employees happy without contributing to engagement. We’ve seen plenty of employees who are happy with their jobs (think “Dude, it’s so easy . . . I don’t have to do anything but sit all day and watch YouTube”), but are not engaged in their work.
Employee Engagement is not Motivation. Motivation is a component or result of engagement in one’s work. Engaged employees feel motivated to do their best because the conditions for engagement have been met. Additionally, motivation does not always equate to action (I’m motivated to diet, but that sure doesn’t mean I’m going to).
Employee Engagement is not Empowerment. Autonomy or empowerment is a component of engagement, but some mistake being empowered with being left alone. The opposite of this, of course, is to be powerless and micromanaged. Empowerment also often ignores the fact that engagement is a choice. While I may be empowered, once again, I may not act.
So what is engagement? Let’s keep it simple: employee engagement is a state and a behavior that makes employees feel passionate about their work, and give their hearts, hands, and minds to that work; it leads to employees caring more and contributing more to their work and their companies; it is driven by experiencing meaning, autonomy, growth, impact, and connection in one’s job.
Any other terms you would add to the list? How would you describe employee engagement?
Are your employees engaged? Look in the mirror. No matter what it says on your business card, you’re an employee and you have responsibility to be an engaged employee. But you may also be a manager, and as a manager you have some responsibility for the engagement of others as well. If your employees are engaged in the work they do, results will show. The same goes for a team that is disengaged.
Managers are accountable for the outcomes of the organization in which they work. They aren’t hired simply to make sure employees feel good and are happy. They are expected to deliver results. Organizations reward (or punish) managers for outcomes. While this is obviously appropriate (managers should be accountable for organizational performance), it’s only half the equation. What gets done is as important as how it gets done.
THE PROMOTION PROBLEM
Here’s where we run into one of the most common problems with effective managers: They keep getting promoted. In our coaching practice, our consultants often report experiences with “promoted doers.” In traditional organizations, employees considered good “doers” (people who have a talent for getting the job done) form the pool from which supervisors choose new managers when promotions come around. Now, that’s perfectly appropriate. However, it also creates a problem.
In our experience, when a former “doer” is abruptly handed a manager or supervisor title, he or she may not have the tools to lead. He or she may be an excellent software developer but lack the skills, background, tools, and learning needed to excel in a management role. Usually, one of three things happens: (1) This person adapts and gains the qualities needed to become a solid leader; (2) the new manager takes what he or she knows from experience and becomes a “super-doer,” forgetting that it’s now his or her job to lead and inspire others, not do everything; or (3) the newly promoted fails miserably, taking his or her team down with the ship.
We would like to think that most of the time the first scenario plays out—the manager learns, adapts, succeeds, and leads. Perhaps you have experienced this in your own career or worked alongside those who have.
However, the second and third scenarios are all too common. As many organizations work to pull themselves out of their managerial death spirals, they do so by focusing on results—and, possibly, results at any cost. After all, results are what the organization rewards. Right?
ENGAGED MANAGERS = ENGAGED TEAMS
You may be like the managers in the above scenario—a valuable individual contributor promoted into a position of leadership without the proper guidance or tools. Hopefully, you’re the manager who gets it. You get results and lead a strong, engaged team on the way to success. Whatever situation you’re in, as a manager you have a great deal of influence over the engagement of the people you supervise. While they must still choose to be engaged, you have more influence than probably anyone else in your organization. So, no pressure. The good news? Research shows that the more engaged you are as a manager, the more engaged your subordinates are likely to be.
As critical as managers are to the health of an organization, it would be surprising if the engagement level of managers didn’t impact the engagement level of the employees working under them. In fact, in research we conducted to see if there was a relationship between the engagement level of managers and the engagement level of their subordinates, we found that the more engaged managers are in their work and workplace culture, the more engaged their teams are.
Our research teams reviewed data files containing employee engagement survey results from twenty-two companies. After removing the results from all managers with fewer than four subordinates, we were left with survey responses from 2,300 managers and 18,913 rank-and-file employees. Careful analysis of the engagement scores of both groups revealed that:
Within the manager category, 35 percent of people fell into the Fully Engaged category, 50 percent were classified as Key Contributors (our “strong and steady” employees), 13 percent fell into the Opportunity Group (the “fence sitters”—neither engaged nor disengaged), and only 2 percent were Fully Disengaged.
The general employee population (non-managers) showed a somewhat similar distribution—27 percent of employees were Fully Engaged, 49 percent were Key Contributors, 20 percent of employees were in the Opportunity Group, and 5 percent were Fully Disengaged. Compare with the Employee Engagement Spectrum Infographic.
The percentage of employees who are Fully Engaged increases by 50 percent when the manager is Fully Engaged, instead of merely being a Key Contributor. The increase in engagement is even greater when compared with the teams of managers who are either in the Opportunity Group or Fully Disengaged: We see a 157 percent jump in the percentage of employees Fully Engaged in both categories.
Boiled down, the results of our research show that (1) engaged managers do affect the engagement level of their teams; and (2) engaged managers have more engaged teams. So, managers, the first step in engaging a team?
Negativity in the workplace has a stronger influence on an organization than positivity, so it is crucial to manage it quickly and effectively. In this infographic, learn the effects of negative attitudes in the workplace and how to better manage negative attitudes in your personal environment, or within the team you manage.
Fortunately, employee engagement is a win-win for the both the employee and employer. Here are a few reasons why we, as employees, should choose to be engaged in our work.
After the employee engagement survey results come in, you have all of this information. What do you do with it? The temptation is to try to tackle everything. So it’s important when doing an engagement survey, that you have a plan for what to do with the information.
When action is not taken—or when plans are disjointed and not cohesive, a company runs the risk of showing no improvement, and in some cases engagement dropping from one year to the next.
So it is critical that high level results are looked at, analyzed and acted upon by leaders in the company.
Listen as David Mason, Ph.D. discusses the five essential ENGAGEMENT MAGIC keys (Meaning Autonomy Growth Impact Connection) that managers need to cultivate lasting employee engagement with their teams.
These keys are taken from the book, ENGAGEMENT MAGIC: Five Keys to Unlock the Power of Employee Engagement.
In the corporate world, the revolving door for CEOs is constantly spinning. The same seems to be true for coaches of any sport, whether it is soccer, the NBA, or college football. Change is good. Too much change, however, is frustrating; not to mention disruptive and often counter productive.
Why, then, are fans and shareholders often anxious to replace the incumbent? The answer lies in the fact that a change at the top is the fastest way to modify, or even reset, an organization’s contract. Which contract? I am referring to the culture-defining contract that exists between the organization and its employees. This contract is so critical that when we talk about it, we use a capital “C.” An organization’s success is built on the Contract, and the organization’s chief executive officer is primarily responsible for building, maintaining, and modifying the Contract. This is item number one on the job description, and it’s the one aspect of his or her duties that cannot be overlooked.
The Contract is built on the unique relationships that exist between the organization and its employees. Some of those relationships are explicit (e.g., you work these many hours and the organization will you pay you for your services). Yet, like an iceberg, the explicit agreements communicate only a small portion of the story.
Like the ice under the water, it’s the implicit agreements (the psychological contracts) that represent the bulk of an organization’s Contract. When built and managed correctly, an organization’s Contract is foundational in creating great products, great values, great customer experiences, and great returns.
Hopefully, it is self-evident that it’s a risky proposition to hand this crucial obligation over to someone who is new, let alone to someone who is an outsider. Yet, when the wheels start coming off the bus, our instinct tells us that something is wrong with the Contract. And, instead of taking the time to diagnose and find the source of the problems, our knee-jerk reaction is to place the blame on the CEO’s abilities and look for someone new to manage the Contract. Forget about mending the Contract; everyone starts looking for someone new that has an established brand and brings with them a whole new Contract – one that is shiny and fresh.
But, is an outsider always the right decision? Sure, there are notable success stories. Steve Jobs’ second tenure at Apple immediately comes to mind. Nick Saban, the American college football coach who led challenged teams to three national titles, is a demigod in the state of Alabama. The problem is that success stories like these are outliers. They’re not the norm. Because they are wildly successful, popular media makes them a story, which then reinforces the public’s belief that choosing an outsider is the right approach. This is a classic example of the availability heuristic—the phenomenon that explains why our most recent memories impact our decisions1. Likewise, looking for a new CEO, coach, or leader can be neurologically rewarding. Participants experience the thrill of the hunt, secure in their belief that the next “big one” is right around the corner.
Endorphins are everywhere. The potential rewards seem enormous.
Yet, statistical averages tell us otherwise. Remember that most of us are average, and, by definition, half of us work for businesses that are underperforming. Why do we expect the list of game-changing leaders to be long enough to save all the companies that need help? There simply aren’t that many Phil Jacksons to go around to save every team in the NBA.
While choosing the right leader may be the shortest path to success, a CEO change is no guarantee of success. Consider Marissa Mayer’s tenure at Yahoo. Most believed the “wunderkind” from Google would surely save the tech giant’s future. After all, an executive-level Google pedigree is enough to turn any company around, right? The scorecard, however, for Ms. Mayer is incomplete, and there are signs that Yahoo still lacks focus and discipline2. Patience is a virtue that receives more lip service than practice. With the hype and intrigue associated with a new CEO, shareholders, analysts, and boards of directors seem reticent to give the newcomer the time he or she needs to tweak, or even rebuild, the company’s Contract.
When deciding on how to find the best candidate as your next CEO, you might consider the following before you choose. First, remember that an outsider may be at an immediate disadvantage. Expectations will already be too high. As such, a newcomer may not be afforded the time frame required to understand and define the changes that need to be made to the organization’s Contract. Second, an outsider might be set in their ways and too beholden to what worked at predecessor companies (i.e., forcing a square peg into a round hole). Or, third, statistics will rear an ugly head, and give you a candidate that is no better suited to the task than the three or four internal candidates that are available (and, quite possibly, have already developed a turnaround plan through an in-depth knowledge of the organization).
Extra care should be given when selecting an outsider. Can an outsider be successful? Absolutely! But for every Marissa Mayer, there is a Mary Barra.
Ms. Barra has been with General Motors for years, starting her career with GM as a co-op student when she was 18 years old. She moved through the corporate ranks to become GM’s first female CEO in January of 20143.
Recently, she has been praised for how she dealt with GM’s ignition scandal, and many have suggested that Volkswagen should follow her lead as they deal with their current emissions quagmire4. Success can come both ways – from the outside and from the inside. But, before the allure and appeal of an outsider clouds all judgment, it’s also important not to overlook what may very well be within the walls of the organization. Sometimes, an outsider really is the right option. But, bringing on an outsider also carries a good deal of risk. And it’s precisely that risk that many companies overlook in their quest for the next organizational hero.
Boiled down, the results of our research show that (1) engaged managers do affect the engagement level of their teams; and (2) engaged managers have more engaged teams. So, managers, the first step in engaging a team?
