Employee Engagement is Not Enough

By Theresa Welbourne

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The topic of employee engagement is getting more attention today as leaders look toward 2010 and start to think about how to grow their businesses while simultaneously motivating and retaining high performing employees. The popularity and ease of using survey tools has led many firms to jump-start this effort using traditional employee survey data.

This brings technology front and center of many employee engagement initiatives because, in most cases, data are being collected from online surveys, and reports are provided using some form of technology. In this paper, I make the case that traditional employee engagement approaches may not be what you need. This is because, for some subsets of your employee population, working to increase traditional employee engagement survey scores may backfire and lower performance. In today's fragile economy, backfiring is not a good strategy. Lowering performance is particularly problematic. Thus, understanding the conditions under which employee performance may increase or decrease is key for success.

Valour Pulse is the name I’ve given to a diagnostic process developed from 20 years of work on the drivers of firm performance. Valour is an acronym that stands for the four key constructs:

The valour survey provides a diagnostic tool that shows the percentage of employees that are highly engaged, at risk of turnover, or disengaged. It also highlights those employees for whom small changes will lead to higher performance. Lastly, it shows what you do not get with traditional approaches to engagement, i.e., which percentage of your employees are in an entitlement state and are most likely to resist change. It is the last group, the entitled demographic, that will experience lower performance by increasing scores on traditional employee engagement items.

Engaged in What?

The valour survey work focuses on not just the question of how many employees in your organization are engaged, but what they are engaged in. This is critical because what employees are engaged in doing at work is more important than if they are, or, are not engaged. For those in the entitled group, you first have to lower their value, ownership, and rewards (val-o-r). By doing this, you instill a sense of urgency for change. Our experience to date with clients shows that urgency is more difficult to manage and change than val-o-r.

We have not met an organization or manager who can move the entitled person from entitled to fully engaged without first lowering val-o-r. That’s because the entitled individuals are accustomed to getting rewarded for not doing much at work. Why would they change? They need a burning platform, or some incentive to move and that does not come from giving them more rewards. Keep in mind that in a traditional employee engagement survey, a manager would be coached to simply raise the scores of these individuals because most engagement surveys do not assess urgency; they measure aspects that could be bundled into the val-o-r buckets.

This would explain why, recently, a company that won the Most Engaged Company of the Year award later that same week declared bankruptcy. "Engaged in what?" becomes the important question to answer. People with an entitlement mindset are engaged in doing less work, doing less focused activities and, perhaps, in resisting the type of changes needed to drive the company forward. They might be converted by using the intervention described above or they may need to be managed out of the organization.

Mass Confusion

In our ongoing studies within clients and in the Leadership Pulse work (a research study gathering and distributing data among 15,000 global leaders done since 2003), we have found that every year employees, managers and even the most senior leaders are getting more and more confused at work. That is why the "Engaged in what?" question is so critical. We also find that asking employees questions and doing survey work once a year simply is not enough if you want to manage your people well.

In balanced corporate cultures (high sense of urgency and val-o-r), employees were in ideal energy states. Think of a sports analogy first: when you exercise, you take your pulse to make sure you are "in the zone". You want to exert yourself enough so that you are optimally burning calories but not causing your body damage (working too hard so that you have a heart attack). Every person has his or her own target heart rate, which is a function of age, physical condition, and more. The goal of your exercise program is to get to the target heart rate and minimize variation, or stay in the zone to do your best.

The same rule applies to employee energy at work. In fact, in much of the motivation literature, you will see that motivation (which is related to energy) is an optimization construct. There can be too much energy exerted at a given effort. Too much energy exerted in exercise can cause a heart attack. Too much energy going into a light bulb makes it burn out fast. And too much energy being exerted day after day at work can lead to low performance, burnout, health problems, and more.

Since urgency fluctuates considerably, and energy is a proxy for urgency, our first experiments involved measuring energy, or taking an employee's pulse, on a weekly basis. What we learned in doing that work was the following:

1. Energy predicts performance. Starting with studies with students, energy predicted their test scores at the end of the semester. In the corporate world, energy predicted customer satisfaction scores, employee turnover, employee absenteeism, 360-degree performance scores, patient satisfaction scores in hospitals, quality and productivity output, and more.

The process of measuring energy and asking employees open ended comments about what was getting in their way and what was affecting their energy led to: a) positive changes led by managers receiving actionable data in close to real-time reports, and b) an intervention that made employees feel more valued, rewarded and gave them a better sense of ownership. This is because by listening to employees and giving them a new and additional form of voice managers created an intervention that employees valued.

2. Managers were held accountable for employee data in the same way they were being held accountable for sales, financial, and production data. In regular meetings, employee pulse data was simply added to the list of data to discuss. Companies were not creating big employee survey programs; the employee data was simply one more ongoing input into the way the business was managed.

3. Organizations using this approach had measurable and positive results. Turnover was reduced; revenue increased, and when calculated, the results were anywhere between 100% to 2,000% returns on investment in three-month to one-year time periods.

Data and Dialogue Driven Leadership

We also learned a critical lesson in our over 20 years of research: the data and dialogue process that grew from the valour measurement work gave employees voice in a way that was welcome and that led to immediate changes in the organization. The use of data and dialogue affected the sense of urgency and value and led to improved performance.

The key to performance was not the magic questions we developed, even though we have science and validation studies to support their use. The real magic is the dialogue. When managers used the data to have conversations with employees, the interventions that grew out of the dialogue were ones that led to short-term tactical performance wins and to long-term strategic growth.

Theresa Welbourne is the founder, president and CEO of eePulse, Inc. and an adjunct professor of Executive Education at the University of Michigan business school. As CEO of eePulse she leads an organization that delivers web-based leadership tools and research for continuous improvement and change management. Using eePulse's proprietary Web-based, enterprise-wide software suite called Measurecom (measurement and communication), organizations and leaders immediately improve their performance.

If you wish to participate her ongoing leadership study, which is available to you at no cost, please email info@eepulse.com and ask for more information about the project or how to sign up yourself or your team. To read findings from all the studies done to date, go to www.eepulse.com.