You’ve probably heard the term “employee engagement” mentioned lately. It’s a hot topic right now, although it’s not a new concept, and if it’s not on your radar then you are definitely missing the boat. The good news is that it’s not too late to become an engagement leader.
The first thing to address is that most people don’t have a great definition for employee engagement, even those who regularly brag about their company culture on social media (more on them in a bit). So to demystify the issue, let me share with you Gallup’s definition: Employee engagement is the extent to which employees are involved in, committed to, and enthusiastic about their work and workplace.
Most everyone would agree that employees being involved in, committed to, and enthusiastic about their company is a positive thing. But Gallup has found that there are significant business outcomes which strongly correlate to highly engaged teams. According to their State of the Global Workplace report, teams who are the most engaged compared to those that are least engaged realize 21% higher profitability, 17% higher productivity, and 41% lower absenteeism (aka people not showing up for work) in addition to 24% lower turnover. Employee engagement is far more than a nice-to-have, it’s a game-changer when it comes to the bottom line.
The problem that many companies encounter when attempting to increase engagement is that go about it the wrong way. These are the firms who say they are all about their people and regularly post online about fancy uniforms, new equipment, company cookouts, baseball games, charity events, and celebration dinners complete with trophies and gift cards. To be clear, there isn’t anything inherently wrong with these things and they can be nice gestures for employees. But they don’t move the needle on employee engagement. In fact, they sometimes cost a lot of money and usually breed entitlement among staff who now regularly expect the next event. Worse yet, pulling back on them demotivates staff.
So, what drives employee engagement? Gallup has found a correlation between twelve psychological metrics and positive business outcomes. They are things like knowing what’s expected of me, having an opportunity to do my best at work, having a manager who cares about me, and feeling like growth and learning is occurring. The best part is measuring and developing these metrics is affordable and simple – no company sponsored picnics required!
The Gallup Q12 assessment is the gold standard when it comes to measuring engagement. The assessment takes minutes to complete, is entirely anonymous, allows for reporting by individual managers (or any other breakout like job function or branch), and only costs $15 per employee. When done on a regular basis and partnered with proper management coaching and accountability, the results of can be amazing.
One of my clients is a Snow Magazine Top 100 contractor who first took the Q12 in July of 2019. At the time, one workgroup responsible for sales scored quite poorly ranking in the bottom 14% of engaged teams in the world. After just a year of intentional conversations, helping them feel heard, aligning work around their natural talents, and focusing on development, the same work group just scored in the 93rd percentile, meaning there are only 7% of workgroups in the world more engaged then they are. At the same time, year to date sales KPIs show a 30% increase in bids with a 50% increase in signed contracts. Not to mention a similar increase in employee satisfaction despite cutting spending after the light winter on employee experiences.
The research on employee engagement actually has a very long history. In the 1960’s, psychologist Frederick Herzberg developed his two-factor theory. He found that workplaces can offer two types of characteristics called hygiene factors and motivation factors. Hygiene factors never lead to high employee satisfaction or motivation but removing or reducing them always reduces employee satisfaction and motivation.
Hygiene factors are things like good pay, workplace conditions, paid insurance, vacations, retirement benefits, and job security. A certain level is required by law and a certain level may be expected in a market to be competitive. However, providing a higher level doesn’t deliver employee engagement.
Motivation factors however always lead to increased motivation and satisfaction. They are things like challenging work, recognition for achievement, responsibility, opportunity to do something meaningful, and involvement in decision-making. These are never required but the lack of them are often the reason employees leave companies.
Despite the history and science, it’s amazing to me that so many conversations over engagement and their outcomes always end up focused on hygiene factors. Contractors are always reinventing their referral bonuses, commission structures, winter pay, or benefits package hoping to get better results with their labor only to be disappointed again and again.
If you’ve been frustrated with your employees’ performance, tenure, or level of engagement, it’s time to follow the science about human behavior instead of trying the same thing you’ve always done. You would never conduct business without reviewing financial reports to know where you stand, so why would you do so without an engagement report to know how your people feel? I’d be happy to help you get started.