When an employee’s own self-interest is aligned with the interests of the organisation, that employee is engaged. So your workforce is engaged if a critical mass pro-actively furthers the interests of the business while simultaneously furthering their own interests.
That’s a working definition of employee engagement and while it won’t resonate with everyone, it is a good enough place to start.
Why Bother with Engagement?
90% of the employees at the World’s Most Admired Companies identified their company as very effective or effective at fostering high levels of employee engagement*. Reason enough to bother with engagement.
Employees can be excellent performers and deliver a real contribution without being engaged. A good teacher might be very unhappy with her employer and be poorly aligned with that employer’s strategic intent, but personal integrity and professional standards mean her students are really well taught. A cheerful, helpful shop assistant with a passion for selling will make his targets despite the fact that he feels undervalued by his employer. More common, however, when an employee feels marginalised is ‘just enough’ performance. That’s low grade dissatisfaction that permeates the working day and sours business operations. It isn’t poor enough to warrant a manager tackling it head on, but it isn’t good enough to......well, it isn’t really good enough.
And between these two ends of the spectrum are the workers who turn up, do a day’s work and go home.
Businesses the world over since organised work began, have been coping, surviving and sometimes succeeding without trying to engage these employees or trying and failing to engage them. So why is it a big deal; why bother to engage with the workforce when you can get by with half-heartedness? Why isn’t it enough just to pay the going rate and expect employees to deliver and, especially in these uncertain times, be grateful they’ve got a job at all?
Because it’s not. Employers need to bother with engagement because the workplace, the business results and the world are better if they do. In most organisations, it is really difficult at the outset to find a hard measure that conclusively (or even elusively) correlates employee engagement with organisation performance, be that profit or something else, so those with influence in the organisation have to start by believing it. It is necessary for the senior management in the organisation to know that engaged employees equal better business performance. And it’s not enough to just engage a few critical employees, though that is better than no-one at all. You need to get them all. The students who only work two hours a week, the people who have been there for 30 years or more and are notching off the months to retirement, the holders of low status posts, the high-flyers and the professional services crew - the whole shebang.
‘Engagement’ is cited by employers as one of the biggest HR challenges in the next 12 months**. Organisations need to bother because engagement is the holy grail of workplace relations. It is a virtuous circle: engaged employee; better results; deeper engagement.
Get Money Out of the Way
Clearly you need to pay people to come to work. It would be unlawful not to, and if you didn’t, they might not turn up. So decide on your benchmark, set out your payment stall and see who you get. Tune it until you get it as right as you can, the best balance for your organisation between budget and quality. And then leave it alone for a while unless there is a pressing need not to. Engagement is not really about money, although the right level of cash remuneration needs to be thought through as a precursor. Money cannot buy real engagement, although it can prevent high levels of active disengagement. But, in any case, most employers have limited room for remunerative manoeuvrability so mechanisms other than money need to be levered to deliver the engagement.
By way of illustration, consider bankers. Massive monetary rewards failed to align the self-interest of the employees with the interests of the organisation. On the other hand, take perhaps a partnership like John Lewis where salaries are not spectacular but employees have a real stake in the success of the business. So in terms of employee engagement, the answer isn’t simply to pay more - although if you are clearly under-paying in terms of either the market or your organisation’s financial performance, that is going to scupper the notion of an engaged workforce before it is out of its cradle.
What is it then?
Three Steps to Engagement Heaven
If you don’t need to keep it a secret, share it. This is easier in small organisations, but it is not impossible in large ones which tend to have better defined, if not better used, channels for disseminating information. What do people like to know? Well, most things really. This is where they come to work, spend much of their waking time, invest their professional hopes and most want very much to do a good job and have that acknowledged. If it irritates that the Government of the day frequently patronises the electorate with half-truths and platitudes, why don’t senior managers learn from that for their own companies? Tell people what is going on, good, bad, indifferent, uncertain, what-ifs and the rest. Ideally, tell them in person but, if not, use whatever is at your disposal. People don’t root for things they don’t understand or know about, so help them understand and they will start to care.
2. Front Line Management
These are the employees you most need on board. In any company it is likely there is one set of people with significant sway and, typically, it will be the first level of line managers. They will be managing new joiners, long stayers and staff who daily come into contact with customers or whose activities are vital for service delivery. These front liners will be powerful barometers of what’s up or down and are highly influential. If they are not with you, they might not be actively against you but you are at best missing out on their power as advocates and, at worst, alienating not only that group but the workforce who report to them.
3. Non Salary Benefits
Wrap employees in effective non-salary benefits that underscore the whole value of the psychological contract. Employees in the field can be more concerned about whether they’ve got an I-pod dock in their company car than a pay rise. Staff value benefits disproportionately highly to the cost of the benefit to the employer - which is good news because many benefits come at a relatively low price to the employer making them extremely cost-effective.
So, what sort of things should you consider?
• Awards and recognition - Long service (but do start at the right place) and performance: people really like their contribution to be recognised.
• Employee discounts - For a few pounds per head per year, your employees can save hundreds of pounds on everyday goods and services. You need to pay for a service to avoid your employees being used as a sales channel for retailers so get a scheme with choice, independence and full back-up service.
• Employee Assistance Programme - A minority of the workforce will use it but for them it is really valuable and those that don’t use it like to know that professional, independent help in tough times is provided by their employers. Again, a few pounds a year.
• Tax efficient salary sacrifice schemes - First, of course, pensions. If you don’t offer the opportunity for employees to salary sacrifice their pension contributions, start now. Put it top of your list. Then add in childcare vouchers and a cycle to work scheme and you’re away.
• Healthcare cash plans - You can either offer a fantastic scheme for employees to pay for themselves (which they can’t buy off-the-shelf) or, for a few pounds per head per month, you could provide it for them.
And, of course, there is a lot more you can do. Business leaders are increasingly coming to appreciate the value of reward and the recognition of the role benefits have to play in supporting wider commercial objectives and in delivering real employee engagement.
*WMAC list compiled by Hays and FORTUNE magazine March 2010
** Employee Rewards Watch