Is high employee engagement really the Holy Grail?
There is no doubt that organisations are pushing to increase their employee engagement scores. Worryingly many organisations don’t appear to be looking at the wider picture when considering engagement.
You’ll be well aware by now that organisations with high engagement (top quartile) purport to have twice the profit, two and a half times growth, 18% higher productivity and 40% less employee turnover.
We are seeing many organisations looking to improve their engagement scores, this is absolutely the right thing to do but simply creating the right environment for engagement isn’t enough. This is where we are seeing a large proportion of organisations not looking at that bigger picture.
If you simply take engagement scores of face value (be it from a survey, from workshops or focus groups or however you are measuring engagement) they are not enough, even when comparing against other organisations employee engagement scores, and can actually be very misleading.
Here are two recent examples of where organisations have been mislead by their engagement scores:
We started working recently with an organisation that had already had some pretty impressive engagement scores (some teams were in the high 80’s for engagement). However, when we asked the organisation for metrics and information relating to performance for the top three most engaged teams, we ascertained very quickly that two of those teams were not performing, one was customer facing (externally) and one customer facing (internally). When we presented this back to the Leadership team, it came as quite a surprise.
In another recent project, we were working with a retail organisation and again, their engagement scores were high within their stores but much lower within head office. We linked back the engagement scores to store profitability and other specific metrics and the same with the teams within head office. Unsurprisingly we saw a similar pattern, for a large number of stores where engagement was high, this didn’t correlate with higher profitability, in fact some of the most highly engaged stores were the least profitable.
What is the common thread?
Poor performance management
In both instances, when we conducted further analysis, we could pinpoint the issues to this single area.
Interestingly managers were doing a lot right to create an environment where employees could become engaged and the employees themselves felt they were. However, as poor performance wasn’t being managed and dealt with – engagement scores remained high and positive but productivity and profitability were, in some cases, awful.
A recent study by Leadership IQ in the US reported that 42% of ‘low performers’ reported being more engaged!
What must organisations do?
Comparing engagement scores against other organisations (external benchmarking) is not enough. When looking at employee engagement it must be linked with other metrics within the business. From productivity, profitability and utilisation to staff turnover and absenteeism. By performing this kind of linkage analysis, you can obtain a much richer, rounder and deeper understanding of how employee engagement is affecting your organisation – and this approach truly allows you to monitor and track how engagement affects the business going forward.
The second is ensure that poor performance is managed, by including your engagement scores within say an appraisal process, you can begin that process. However, managers and leaders need the skills and expertise to do so. Ensure yours do!
So in essence, high employee engagement alone is not the Holy Grail and organisations that are not taking the time to link their engagement to other metrics and managing performance are setting themselves up for a fall.
Gary Cattermole is a Director at The Survey Initiative, a dedicated employee research organisation devoted to helping its clients gain insight and understanding into what drives employee engagement in their business. Gary has extensive expertise and experience in a range of employee research techniques from employees surveys and 360 degree feedback to workshop facilitation and action planning sessions, working with a diverse range of clients such as EPSON, Telegraph Media Group, Natural History Museum, AVEVA and Accor. Visit http://www.surveyinitiative.co.uk for more information.
I am a dedicated employee research expert with over 15 years experience in helping organisations gain deeper insight and understanding of what makes their employees tick.
Currently I am a Director at The Survey Initiative - a boutique employee research organisation. I have...